felanders/preprocessed huggingface dataset:
Our insurance subsidiaries’ liability for losses and loss expenses by major line of business at December 31, 2019 and 2018 consisted of the following:
Our stockholders’ equity decreased by $49.8 million in 2018 as a result of our net loss, net unrealized losses within our available-for-sale fixed maturity investments and dividends we declared to our stockholders during the year. Our book value per share decreased to $14.05 at December 31, 2018, compared to $15.95 a year earlier.
In June 2016, the FASB issued guidance that amends previous guidance on the impairment of financial instruments by adding an impairment model that requires an entity to recognize expected credit losses as an allowance rather than impairments as credit losses are incurred. The intent of this guidance is to reduce complexity and result in a more timely recognition of expected credit losses. In November 2019, the FASB issued guidance that delays the effective date for “smaller reporting companies,” as defined in Item 10(f)(1) of Regulation S-K, to annual and interim reporting periods beginning after December 15, 2022 from December 15, 2019. We are in the process of evaluating the impact of the adoption of this guidance on our financial position, results of operations and cash flows.
In 2019, 2018 and 2017, we realized $64,765, $25,938 and $873,515, respectively, in tax benefits upon the exercise of stock options.
The following amounts represent reinsurance Atlantic States ceded to the pool during 2019, 2018 and 2017:
Our insurance subsidiaries and Donegal Mutual implemented a combined third-party reinsurance program effective January 1, 2019. The coverage and parameters of the fully consolidated program are common to all of our insurance subsidiaries and Donegal Mutual. Our insurance subsidiaries use several different reinsurers, all of which have an A.M. Best rating of A- (Excellent) or better or, with respect to foreign reinsurers, have a financial condition that, in the opinion of our management, is equivalent to a company with at least an A- rating from A.M. Best. The following information describes the external reinsurance our insurance subsidiaries had in place for 2019:
As many as 31 reinsurers provided coverage for 2019 on any one treaty with no reinsurer taking more than 40% of any one treaty. The amount of coverage provided under each of these types of reinsurance depended upon the amount, nature, size and location of the risks being reinsured. In order to write automobile insurance in the State of Michigan, MICO is required to be a member of the Michigan Catastrophic Claims Association (“MCCA”). The MCCA provides reinsurance to MICO for personal automobile and commercial automobile personal injury claims in the State of Michigan over a set retention.
15 - Reconciliation of Statutory Filings to Amounts Reported in the Consolidated Financial Statements
The Company occupies office premises under noncancellable operating leases expiring at various dates. These leases generally contain renewal options and escalation clauses based on increases in the lessors' operating expenses and other charges. The Company expects that most leases will be renewed or replaced upon expiration. See Note 8 of the "Notes to Consolidated Financial Statements" in the Company's 1996 Annual Report to Shareholders for additional information on the Company's lease commitments.
Information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 20-24 of the Company's 1996 Annual Report to Shareholders is incorporated herein by reference.
Information as to management's analysis of financial condition and results of operations is incorporated herein by reference to the material under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 1997 Annual Report to Shareholders.
Net realized investment gains decreased $4.2 million in 2010. These amounts include gains and losses from sales of fixed maturities and equity securities available-for-sale, trading securities and other investments. Decisions to sell securities are based on management's ongoing evaluation of investment opportunities and economic and market conditions, thus creating fluctuations in gains and losses from period to period. Net realized investment gains in 2010 were reduced by an additional loss of $3.3 million resulting from discussions in the fourth quarter of 2010 with the trustee in bankruptcy pertaining to the resolution of claims related to the non-affiliate broker-dealer that managed the trading accounts of the Company in 2008. The $3.3 million pre-tax loss consisted of: (i) the reversal of $.5 million of anticipated SIPC recoveries initially recorded by a subsidiary of IHC; (ii) the reversal of $.5 million of anticipated SIPC recoveries initially recorded by AMIC; and (iii) an additional $2.3 million of withdrawals by IHC and AMIC deemed subject to return. A settlement agreement was entered into with the trustee in the first quarter of 2011 and payment by the Company is expected to be made on or before July, 15, 2011. See Note 8 in the Notes to Consolidated Financial Statements included in the Item 8 of this report for more information about net realized investment gains and losses.
The increase in total equity is primarily the result of net income and the net change in unrealized gains on investment securities. In 2011, the Company acquired shares of AMIC, in multiple transactions, from noncontrolling interests with an aggregate value of $12.6 million, in exchange for the aggregate issuance of IHC common stock valued at $11.5 million and $1.0 million cash. These AMIC transactions, in addition to other less significant capital transactions, resulted in an increase to IHC’s stockholders’ equity and a decrease in the equity attributable to noncontrolling interests.
The information required by this item is included under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report and is incorporated herein by reference.
The Company's Specialty Brokerage business segment provides access to Alternative Risk Transfer insurers and reinsurers in Bermuda and Europe. Fees in this segment continued to grow despite declines in premium on new and renewal policies. Renewal rates remained high at 88% for 1998 compared to 85% for 1997 and 86% for 1996. Profit margins decreased to 25% from 31% in 1997 and 33% in 1996 primarily as a result of the declines in premium.
When the Company invests in non-U.S. dollar denominated financial instruments it is subject to exposure from exchange rate movements. This risk arises from the possibility that changes in foreign exchange rates will impact adversely upon the value of financial instruments. Due to the Company's limited holdings of non-U.S. dollar denominated investments, management does not believe the Company is exposed to a material risk from exchange rate movements.
On March 1, 1999, the Company acquired Captive Resources, Inc. ("CRI"), a provider of services to member-owned group captive insurance companies. CRI has long-term contracts with more than 20 well established captives.
In June 1998, the Financial Accounting Standards Board issued Statement 133, "Accounting for Derivative Instruments and Hedging Activities." The Statement requires recording all derivative instruments as assets or liabilities, measured at fair value. The Statement is effective for fiscal years beginning after June 15, 1999. The Company does not expect the Statement to have a material impact on its financial position or results of operations.
Consistent with management's classification of its investment in debt and equity securities as available for sale, such investments are carried at fair value with unrealized holding gains and losses reflected as a separate component of equity, net of applicable deferred taxes.
Short-term investments are principally money market funds backed by U.S. government securities and are recorded at cost which approximates fair value.
The Company owns a three-story office building at 195 Lake Louise Marie Road, Rock Hill, New York, in which its executive offices and insurance operations are located.
The Company leases approximately 3,325 square feet of office space in an office building in Los Angeles, California, under a lease expiring in February 2001 at a monthly rental of $4,489, at which Frontier Pacific conducts its insurance operations.
As of February 1, 2018, we leased 205,901 square feet of office space in 6 states, including our principal executive offices located in Reno, Nevada. We believe that our existing office space is adequate for our current needs. We will continue to enter into or exit lease agreements to address future space requirements, as necessary.
Various state laws and regulations require us to hold investment securities or letters of credit on deposit with certain states in which we do business. Securities having a fair value of $1,009.7 million were on deposit at each of December 31, 2017 and 2016. These laws and regulations govern both the amount and types of investment securities that are eligible for deposit. Additionally, certain reinsurance contracts require company funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities we assumed. The fair value of fixed maturity securities held in trust for the benefit of our ceding reinsurers was $24.5 million and $27.2 million at December 31, 2017 and 2016, respectively.
In February 2018, the Financial Accounting Standards Board (FASB) issued ASU Number 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Enactment. This update becomes effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for reporting periods for which financial statements have not yet been issued and should be applied in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. We elected to early adopt this update and, accordingly, reclassified $17.8 million of net tax effects resulting from Enactment from Accumulated other comprehensive income, net of tax, to Retained earnings at December 31, 2017.
Based on this assessment, management did not identify any material weaknesses in the internal control over financial reporting and management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2017.
The Company is required by various state laws and regulations to hold securities or letters of credit in depository accounts with certain states in which it does business. These laws and regulations govern not only the amount but also the types of securities that are eligible for deposit. As of both December 31, 2017 and 2016, securities having a fair value of $1,009.7 million were on deposit.
In July 2006, ASC 740-10-05, Accounting for Uncertainty in Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This interpretation prescribes a recognition threshold and measurement attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation is not expected to impact the Company's financial statements.
Incorporated herein by reference from pages 6 through 56 of the 2001 Annual Report to Shareholders.
The increase in net premiums earned in each of 1996 and 1995 compared to the respective prior year amounts resulted primarily from the significant growth in net premiums written in both years. Net investment income grew each year due to significant cash flow available for investment which was generated by operating activities. In 1996, the growth was offset, in part, by generally lower available yields on bonds purchased as compared to yields on bonds disposed of in the past year. In 1996, TRZ contributed $8.4 million to net investment income. (See Note 3 of Notes to Consolidated Financial Statements.)
3. INVESTMENTS (Continued) The amortized cost and market value of bonds at December 31, 1996 by contractual maturity, are summarized as follows. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investments in fixed maturities exclude short-term investments.
As of December 31, 1996, the AIG Group beneficially owned approximately 49% of the Company's outstanding common stock.
Approximately $232 million (18%), $189 million (17%) and $198 million (21%) of gross premiums written by TRH in 1996, 1995 and 1994, respectively, were attributable to reinsurance purchased by the AIG Group, for the production of which TRH paid ceding commissions to the AIG Group of $33 million, $40 million and $52 million, respectively, in such years. (See Note 10 for information relating to reinsurance ceded to related parties.)
Financial Statements and Supplementary Data. Incorporated by reference to pages 12 and 17 through 30 of the Registrant's 1997 Annual Report to Shareholders.
We and our insurance subsidiaries share headquarters with Donegal Mutual in a building in Marietta, Pennsylvania owned by Donegal Mutual. Donegal Mutual charges us and our insurance subsidiaries for an appropriate portion of the building expenses under an inter-company allocation agreement. The Marietta headquarters has approximately 172,600
Equity. Equity of the Bermuda operations increased to $52.6 million at the end of 2004 compared to $44.9 million at the end of 2003 and $16.6 million at the end of 2002. This increase is largely due to a public stock offering in 2003 which raised approximately $27 million in new equity, higher net income and increased net unrealized gains in the Company’s investment portfolio offset by a stock repurchase during the third quarter of 2004. Equity of the US operations was $56.1 million at the end of 2004, compared to $50.4 million at the end of 2003 and $45.9 million at the end of 2002. This increase was a result of higher net income and increased net unrealized gains in the Company’s investment portfolio.
For these purposes we have excluded routine purchase of services, including insurance, that are expected to be used in the ordinary course of our business. More information about our contractual obligations is in Note 8 to our consolidated financial statements. The above table includes interest payments through the expirations of interest rate swaps as discussed in Note 8 in the financial statements. At that time the Company may redeem the debt or continue with variable interest payments
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Fidelity & Guaranty Life Inc. (“FGL,” “we,” “us,” “our” and, collectively with its subsidiaries, the “Company”) should be read in conjunction with “Item 6. Selected Financial Data,” and our accompanying consolidated financial statements and related notes (the “Consolidated Financial Statements”) referred to in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K (the “Form 10-K”). Certain statements we make under this Item 7 constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. See “Forward-Looking Statements” at the beginning of Part I of this Form 10-K. You should consider our forward-looking statements in light of our Consolidated Financial Statements and other financial information appearing elsewhere in this Form 10-K and our other filings with the Securities and Exchange Commission (the “SEC”).
Income Taxes. The income tax expense was $4.6 million, $4.1 million and $3.0 million for 1997, 1996 and 1995, respectively. The effective tax rates for 1997, 1996 and 1995 were 27%, 20% and 19%, respectively. The increase in the 1997 rate was primarily due to not being able to utilize the losses from Somerset (UK) and Somerset Asia. The Company had a net operating loss carryforward of $3.0 million at December 31, 1995 which was fully utilized in 1996. The Company had alternative minimum tax ("AMT") carryforwards of $5.1 million, $5.8 million and $3.1 million at December 31, 1997, 1996 and 1995, respectively. The AMT carryforwards were primarily attributable to the tax benefits from the municipal bond interest. The Company has reduced its municipal bond portfolio in 1997 in order to utilize part of the AMT carryforwards.
The Company also has a $942,000 note payable to its major stockholder bearing interest at 7%.
derivative liability held for the Company's fixed-index products such that the net effect upon pretax earnings is negligible (i.e. net
Taxes, licenses and fees include premium taxes and licensing fees paid to state insurance departments, guaranty fund assessments, the Company portion of social security and Medicare taxes, state income taxes, and other state and municipal taxes. State income taxes are generally determined by apportioning the company's federal taxable income based upon premium generated from a particular state as a percentage of total premiums. Federal taxable income is derived from the company's statutory financial results. State income tax expense was $2.5 million, $0.7 million, and $0.5 million in 2017, 2016, and 2015, respectively. Premium tax expenses for the years ended December 31, 2017, 2016, and 2015 were $4.0 million, $2.6 million, and $2.9 million, respectively. The 2017 expense also includes withholding tax liabilities for international policy distributions not previously withheld on.
The Company does not recognize interest income on loans past due ninety days or more. The Company had no mortgage loans past due six months or more at December 31, 2017 and 2016. There was no interest income that was not recognized in 2017, 2016 and 2015.
Changes in interest rates typically have a sizable effect on the fair values of the Company's debt securities. During 2017, the market interest rate of the ten-year U.S. Treasury bond decreased roughly 4 basis points from 2.45% at year-end 2016 to 2.41% at year-end 2017. Therefore, the increase in unrealized gains was partially the result of the marginal decrease in interest rates. The Company's unrealized gain position primarily improved from the prior year-end due to the narrowing of corporate debt security spreads during 2017. However, since the majority of the Company's debt securities are classified as held to maturity, which are recorded at amortized cost, changes in fair values have relatively small effects on the Company's financial results.
lary and Fidelity Guarantee Deplf. Premium Reserve Frs. 9,178,800. — Reserve for outstanding losses and pro­
Cr. Fire, Accident, Lialbility, Marine, Burglary and Fidelity Guarantee DepS. Retrocession Premiums, less cancellations Commissions, less retrocession Losses paid Fr. 13,090,988.41 less retrocession , 5,218,298.17 Premium Reserve Reserve for outstanding losses and provision for extraordinary losses
In June 1999, the Financial Accounting Standards Board delayed the effective date of Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 replaces existing pronouncements and practices with a single, integrated accounting framework for derivatives and hedging activities. This statement requires that all derivatives be recognized on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in the fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Additionally, the change in fair value of a derivative which is not effective as a hedge will be immediately recognized in earnings. The delay was effected through the issuance of SFAS No. 137, which extends the SFAS No. 133 requirements to fiscal years beginning after June 15, 2000. As such, the Company expects to adopt the provisions of SFAS No. 133 as of January 1, 2001. The impact of this statement is dependent upon the Company's derivative positions and market
The shareholders of Centrus are eligible to receive additional consideration of up to $4,000,000, payable over three years, if certain financial targets are met over the first two years. The financial performance targets were achieved during the first year and $2 million has been earned. Of this amount, $1 million was paid in May 2003 and another $1 million will be paid in May 2004.
The Company has historically entered into two types of arrangements for the payment of administrative fees: fee for service (per claim charges) and capitation (per member per month charges). Under the fee for service arrangement, the Company is paid by its sponsors for the Company's contractually agreed upon rates based upon actual claims adjudicated plus a fixed transaction fee. Under the capitation arrangement, the fee is based on the number of participants per month; the Company pays for the cost of prescriptions filled and thus shares the risk of operating profit or loss with these plans. Since January 1, 2000, all services have been provided on a fee for service basis only.
The Trust Agreement provides that MetLife, Inc. shall pay, or reimburse directly, each of the Trustee and the Custodian for, all costs and expenses relating to the Trust, in the case of the Trustee, and relating to the holding of Trust Interests, in the case of the Custodian, including, but not limited to, the fees and expenses as provided in the Trust Agreement. MetLife, Inc. pays the Trustee an annual fee of $50 thousand. MetLife, Inc. paid to the Trustee $17 thousand, $24 thousand and $43 thousand for out-of-pocket expenses for the years ended December 31, 2014, 2013 and 2012, respectively. MetLife, Inc. paid to the Trust’s independent auditors $66 thousand for audit fees for each of the years ended December 31, 2014, 2013 and 2012. None of the aforementioned fees and expenses are included in the Trust’s financial statements. MetLife, Inc. also provides the Trustee with certain management and administrative services.
(2) The Company to the best of its knowledge has not made and does not have current plans to have any contacts with any governments or entities targeted by U.S. sanctions including those applicable to Sudan and Syria.
Our January 1, 2018 estimated single event loss exposures were within our underwriting guidelines. Namely, the estimated net impact from any one catastrophe loss event (excluding earthquake) at the 1 in 100 year return period for any one zone did not exceed 35% of our then-projected December 31, 2017 shareholders’ equity, and the estimated net impact from any one earthquake loss event at the 1 in 250 year return period for any zone did not exceed 35% of our then-projected December 31, 2017 shareholders’ equity.
During the year ended December 31, 2017, our premium collections, net releases of cash and cash equivalents from trusts established by Blue Water Re and cash inflows from other operating activities exceeded our payments of general and administrative expenses by $14.4 million. We also paid $13.1 million in dividends to holders of Common Shares and RSUs.
we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; and (iv) the date on which we are deemed to be a "large accelerated filer," as defined under the Exchange Act.
We believe that premium adequacy is critical to our long-term liquidity. We continually review rates, particularly professional liability rates, and submit requests for rate increases to state insurance departments as we consider necessary to maintain rate adequacy. We achieved average overall rate increases of 28% in 2003 and 2002. We are unable to predict whether we will continue to receive approval for our requests for higher rates.
(3) All years retroactively adjusted for stock dividends and stock splits effected as stock dividends as follows: two 5% in 1995, two 5% in 1994 and two 5% in 1993. All prior years have been restated to comply with Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
Unpaid claims and claim adjustment expenses increased largely as a result of increases to reserves on retained business as well as material increases from plan servicing and fronting reinsurance. Unearned premiums decreased because of the decrease in premiums written, offset to some extent by an increase in fronting reinsurance. Accounts payable decreased because of contingent payables based upon profitability levels that have decreased. Drafts payable increased because a large amount of drafts were issued in the fourth quarter of 1997 in an aggressive effort to bring specifically targeted claims to an early and fair conclusion. The Company's liquidity position remains strong as a result of cash flows from underwriting and investment activities.
During 1997, the Financial Accounting Standards Board issued Statement 130, "Reporting Comprehensive Income". The Statement is effective for fiscal years beginning after December 15, 1997 and will be adopted by the Company in the first quarter of 1998.
The Registrant and its wholly-owned subsidiary, Stewart Title Guaranty Company and its subsidiaries ("Guaranty"), own or lease the following principal properties:
21.6.2019 Helvetia insurance takes over Helvetic Warranty and in doing so strengthens its B2B2C business
Loss and Loss Adjustment Expenses. The Company's principal expense, loss and LAE related to the settlement of claims, was $160.8 million for the year ended December 31, 1997, a 6.8% increase compared to $150.6 million for the comparable period in 1996. The increase is principally attributable to the increase in net premiums written as noted above. Net losses and LAE expressed as a percentage of net earned premiums (the loss and LAE ratio) decreased to 65.5% for the year ended December 31, 1997 from 71.9% recorded for the same period in 1996. The improvement of 6.4 percentage points in the loss and LAE ratio for the year ended December 31, 1997 was a result of a change in the mix of business as well as the benefits of new reinsurance programs, including aggregate excess of loss reinsurance treaties, and the enhancement of existing reinsurance programs. In addition, the 1997 results were not materially affected by the run-off of reinsurance programs written by INSCORP prior to December 1995, a factor which impacted the 1996 results.
Radian maintains a mini-computer network from its corporate data center located in its headquarters building to support its data processing requirements for accounting, claims, marketing, risk management, underwriting and non-insurance operations. In 1997, Radian centralized all computer operations. All the service centers are linked to the home office in Philadelphia via a high speed frame-relay network. The centralized environment is based on the Business Recovery Server ("BRS") architecture. The BRS consists of two geographically dispersed, identical data centers. Each data center is currently running at 35% of capacity. Either data center is capable of supporting the entire company. The data centers are linked via a fibre-optic link allowing simultaneous data updates through disk shadowing. Each center is part of a separate
The Company will accelerate the process of expansion by targeting new markets, 5 subsidiaries will be established in 2011 to make the sales network covering all major medium to large cities of China. Additionally, the sales model will be diversified to comprehensively use the sales modes of call-center, internet and shop-at-home.
The Company provides guarantee services to corporations and individuals in issuing and obtaining surety or tendering guarantees for their business operations and/or personal use. In exchange for the Company’s guarantee services, the customers pay the Company a certain percentage of the surety amount as an upfront guarantee fee. Maturities of surety and tendering guarantees will generally range from 2 days to 2 years, and are secured by bank deposits made by the Company. If a customer fails to fulfill its performance obligations under surety or tendering guarantees, the bank will take possession of the Company’s deposit.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.
API's headquarters is located in leased premises of approximately 2,500 square feet in Sacramento, California. API or its subsidiary owns 30 properties in fee in California. Such properties are comprised of improved and unimproved commercial land (office, retail and industrial), improved and unimproved commercial and residential lots, and office, retail, commercial and residential buildings. In addition, the following properties are held by joint ventures in dissolution in which API has an interest, but the liquidation of such joint ventures has not yet been completed. API intends to dispose of all of these properties in an orderly fashion, which may take several years.
The information required by this Item 7 is incorporated by reference from pages 1 through 3, from pages 8 through 17, and from pages 20 and 21, of Alleghany's Annual Report to Stockholders for the year 1996, filed as Exhibit 13 hereto.
Net investment income. Net investment income increased to $65.1 million in 1995 from $48.0 million in 1994, an increase of $17.1 million, or 36%. The increase was due to both an increase in invested assets and an increase in the yield on invested assets. Invested assets increased to $931.3 million at December 31, 1995 from $835.2 million at December 31, 1994. During 1995, the Company extended the asset portfolio duration to more closely match the Company's target duration for its policy liabilities, which contributed to a higher yield on invested assets. Market yields on short term investments were also higher in 1995 than in 1994.
Deferred acquisition costs. Under generally accepted accounting principles ("GAAP"), certain policy acquisition costs may be deferred and amortized over the expected life of the policy. For all of the business in the Health Insurance segment, only the commissions and premium taxes related to the unearned premiums are deferred. This amount increased to $17.3 million at December 31, 1996 from $16.1 million at December 31, 1995, due to an increase in insurance issued or coinsured. As a result of an increase in insurance issued in the Life Insurance and Annuity segment, deferred acquisition costs increased to $28.7 million at December 31, 1996 from $19.6 million at December 31, 1995. The remaining deferred acquisition costs of $14.0 million at December 31, 1996 and $20.4 million at December 31, 1995 relates primarily to the cost of various blocks of insurance acquired. Amortization of the
The Medicare Advantage program (including PDP) provided us a significant opportunity for growth in membership. We commenced offering Medicare Advantage products in 2005, with the introduction of our Medicare Selecto and Medicare Optimo plans. Membership enrolled in our Medicare Advantage programs increased by 71.4% in 2008; from 38,070 as of December 31, 2007 to 65,243 members as of December 31, 2008. In January 2006, we launched our stand-alone PDP plan, FarmaMed, which as of December 31, 2008 and 2007 had 10,037 and 11,175 members, respectively. We expect our Medicare Advantage enrollment to continue to grow, but not at the same pace as we have seen in the past.
Consolidated claims incurred during the year ended December 31, 2008 increased by $211.1 million, or 17.2%, to $1.4 billion when compared to the claims incurred during the year ended December 31, 2007. This increase is principally due to increased claims in the managed care segment as a result of higher enrollment and utilization trends. The consolidated loss ratio increased by 2.1 percentage points, to 84.6% in the 2008 period, primarily due to higher utilization trends in the managed care segment for the period, particularly in the Medicare Advantage business.
Our life insurance segment establishes, and carries as liabilities, actuarially determined amounts that are calculated to meet its policy obligations when a policy matures or surrenders, an insured dies or
These retained earnings have for the most part been invested in equity and money market mutual funds. The equity mutual funds have been classified as noncurrent assets since there are no intentions to liquidate these investments during the next year.
Report of Independent Certified Public Accountants . . . . . . . . . 12
lower of aggregate cost or market. The investment securities portfolio at September 30, 1996, 1995 and 1994, is carried at market. The cumulative effect on October 1, 1993 of adopting this accounting principle was to increase stockholders' equity by $5,496,372.
On December 1, 1993, a cash dividend of $7.31 per share ($7,203,047) was paid by IRA, Inc. from retained earnings on its Class B common stock to its shareholders of record as of September 30, 1993.
Net premiums earned increased by $30.8 million to $123.1 million for 1998 from $92.3 million for 1997. This increase was due to the increase in insurance written and in force in 1998 as compared to 1997.
within the last three years and has not reached the peak claim paying period. Based on historical overall mortgage insurance industry experience, the majority of claims occur in the third through sixth year after loan origination. At December 31, 1997, Amerin Guaranty's default rate of 1.43% compares favorably to an industry equivalent seasoned rate of 1.72%. Because of its limited operating history, the Company expects it loss experience to increase as its policies age.
The Company has reviewed the Year 2000 initiatives of CMAC. CMAC has indicated they have experienced very few problems related to year 2000 testing. CMAC believes that it does not have material exposure to the Year 2000 issue with respect to its information systems since its existing systems correctly define the year 2000. CMAC's information systems will be used for the combined company's operations.
Net investment income was $13,295,000 in 2001, a decrease of 4% from $13,903,000 in 2000, primarily due to a decrease in average portfolio yield. Lower reinvestment rates in the Company's targeted maturity sector (2 years) led to the decrease in average portfolio yield.
In January 2003, FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities." FASB Interpretation No. 46 clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to certain-entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FASB Interpretation No. 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. The provisions of FASB Interpretation No. 46 are not expected to have any impact on the Company's consolidated financial statements.
The Company's and MNH's business and day-to-day operations are closely aligned with those of Mutual. This is the result of a combination of factors. Mutual has had a historical ownership interest in the Company and MNH. Prior to November 1986 MNH was a wholly-owned subsidiary of Mutual. Following the Company's initial public offering in November 1986 and until a secondary stock offering in July 1993 the Company was a majority-owned subsidiary of Mutual. At December 31, 2002 Mutual owned 12.1% of the Company's common stock. Under the Management Agreement, Mutual provides the Company and MNH with all facilities and with personnel to operate their business. With the exception of the Chief Operating Officer of MNH, the only officers of the Company or MNH who are paid full time employees are employees of Mutual whose services are purchased under the Management Agreement. Also, the operation of MNH's insurance business, which offers substantially the same lines of insurance as Mutual through the same independent insurance agents, creates a very close relationship among the companies.
From a historical standpoint, 2001 is generally regarded as one of the poorest years in terms of corporate defaults. The economic recession, the terrorist attack in September, and revelations of financial reporting irregularities by major companies converged to produce a crisis of confidence in corporate credit quality. Generally accepted accounting principles require that investments in debt securities be written down to fair value when declines in value are judged to be other than temporary. Since quoted market prices are readily available and understood by investors and creditors they are the most common source for fair value estimation. In some instances, quoted market prices may not be available for securities that have limited buyer demand. When the quoted market price is not available other valuation techniques such as discounted cash flow analysis and fundamental analysis may be used.
As with domestic operations, revenues from the international life insurance segment include both premiums on traditional type products and revenues from universal life insurance. A comparative detail of premiums and contract revenues is provided below:
Benefits and claims increased by $107,000, or 2.5%, to $4,454,000 for fiscal year 1999, from $4,347,000 for the comparable period in 1998. The increase was primarily due to additional death claims.
If market conditions were to cause interest rates to change, the market value of the fixed income portfolio (approximately $29.434 million) could change by the following amounts based on the respective basis point swing (the change in market values were calculated using a modeling technique):
j. Certain proceeds from a note payable (note 9) that are treated as shareholders' equity for statutory purposes are treated as a liability under generally accepted accounting principles.
Deferred policy acquisition costs at December 31, 1999, 1998 and 1997 consist of the following:
7. Reinsurance, continued ---------------------- meet its obligations under the reinsurance agreement in force, as the Company remains primarily liable for such obligations. Under reinsurance agreements exclusive of the MEGA agreement discussed below, the Company has ceded premium of $424,255, $415,080, and $432,486 included in reinsurance premiums ceded, and received recoveries of $162,871, $88,457 and $131,449 included in annuity, death and other benefits for the years ended December 31, 1999, 1998 and 1997, respectively.
The selected financial data in the following table has been derived from the audited consolidated financial statements of the Company. This data should be read in conjunction with such financial statements and notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations.
Selling, general and administrative ("SG&A") expenses increased by $782,000, or 2.2%, from $36.3 million in 1998 to $37.0 million in 1999. SG&A expenses as a percentage of premium revenue increased from 37.2% in 1998 to 38.5% in 1999. This increase is primarily due to increased expenses related to the Company's new corporate offices, which were first occupied during the third quarter of 1998 (see Note 6 to the consolidated financial statements).
The "Management's Discussion and Analysis of Financial Condition and Results of Operations" section from the Company's Annual Report to Stockholders for the year ended December 31, 1997, which is included as Exhibit 13(b) to this Form 10-K, is incorporated herein by reference.
ALCO rents a portion of its facilities from companies owned by the directors of ALCO and rents a portion of its facilities from third parties. As of December 31, 2012, ALCO leased approximately 12,868 square feet of office space for its operations. Its current leased properties are:
Implementation of the plans of enhancing marketing function, employee hiring and setting up new business will depend on the market situation, associated risk factors and our internal resources. There is no assurance that we will able to implement these plans within the foreseeable future.
The Company has bank and cash equivalents of approximately $8,101,875 as at December 31, 2012. The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months. As of December 31, 2012, the Company had $0 of commitments for capital expenditures and off-balance sheet arrangements. The company has lease commitments of $1,459,638.
The Company established a bank guarantee of HK$45,000 (approximately US$5,770) credit line with the China Construction Bank (Asia). The interest rate and charges are subject to change from time to time. The bank guarantee credit line is pledged of $6,410 fixed deposit included in Cash in bank - Fixed deposit as shown above. On December 31, 2012, a bank guarantee of $5,540.81 was provided and the detail is described in “Note 16 - Commitments and Contingencies” as below.
(2) The earnings per share amounts prior to 1997 have been restated as required to comply with SFAS no. 128. (3) Preliminary industry information for 2001 from A.M. Best.
- The Company is subject to numerous other factors which effects its operations, including, without limitation, the development of new insurance products, geographic spread of risk, fluctuations of securities markets, economic conditions, technological difficulties and advancements, availability of labor and materials in storm hit areas, late reported claims, previously undisclosed damage, utilities and financial institution disruptions, and shortages of technical and professional employees.
State Auto P&C's December 31, 1990 liability for losses and loss expenses of $65,464,000 has been guaranteed by Mutual. Pursuant to the guaranty agreement, all ultimate adverse development of the December 31, 1990 liability, if any, is to be reimbursed by Mutual to State Auto P&C in conformance with pooling percentages in place at that time. As of December 31, 2001, there has been no adverse development of the liability.
The following table presents the number of policies in force by product type as of December 31, 2013 and 2012:
Operating expenses consist of fees and commissions paid to distributors for selling our products to members, credit card or ACH processing fees, selling, general and administrative expenses, contract termination expense and depreciation and amortization.
Upon completion of the IPO, HII became a holding company, the principal asset of which is its interest in HPIH. All of our business is conducted through HPIH and its subsidiaries. We are the sole managing member of HPIH and have 100% of the voting rights and control. As of December 31, 2013, we have a 37.7% economic interest in HPIH, and HPI possesses 62.3% economic interest in HPIH. HPI’s interest in HPIH is reflected as a noncontrolling interest in our accompanying consolidated financial statements.
The aggregate gross proceeds from the IPO were $65.3 million with aggregate net proceeds of $60.8 million, after deducting an aggregate of $4.5 million in underwriting discounts and commissions paid to the underwriters and other fees incurred in connection with the IPO. Historically, we have funded our operations from cash flows from operations and, to a lesser extent, working capital and borrowings, as described below.
Our financing activities included the IPO, payments of IPO-related fees, repayments of debt, capital contributions from members and distributions to members of HPIH.
notional principal amount of the Total Return Agreements. (See "Asset-Liability Matching" for additional discussion of Total Return Agreements.)
products incorporate surrender charges, two-tiered interest rate structures or other limitations on when contracts can be surrendered for cash to encourage persistency. Approximately 86% of the Company's fixed annuity and GIC reserves had surrender penalties or other restrictions at September 30, 1996.
The Parent has guaranteed that its life insurance subsidiaries will receive the statutory carrying value of certain invested assets, primarily debt obligations and real estate, aggregating $127.9 million.
INCOME TAXES--The Company's effective income tax rate, which includes a provision for state income and franchise taxes for non-insurance subsidiaries, was 39.1%, 39.9% and 45.0% for 1997, 1996 and 1995, respectively. The differences in effective rate were primarily due to changes in the ratio of permanent differences to income before income taxes and changes in state income and franchise taxes resulting from fluctuations in the Company's non- insurance subsidiaries' contribution to pretax profits. Information regarding items included in the reconciliation of the effective rate with the federal statutory rate is contained in Note 9 to the consolidated financial statements.
Note A--After adjustment for 3-for-2 stock split effected January 15, 1998, and restatement for the adoption of Statement of Financial Accounting Standards No. 128, "Earnings per Share."
Note E--Amount represents elimination of reserve in connection with the expiration of the related temporary differences.
2. INVESTMENTS IN SUBSIDIARIES: The Company owns all of the outstanding shares of Sun Life Insurance and Annuity Company of New York (Sun Life (N.Y.)), Massachusetts Casualty Insurance Company (MCIC), Sun Investment Services Company (Sunesco), New London Trust, F.S.B. (NLT), Sun Life Financial Services Limited, Inc. (SLFSL), Sun Benefit Services Company, Inc. (Sunbesco), Sun Capital Advisers, Inc. (Sun Capital), and Sun Life Finance Corporation (Sunfinco).
4. SECURITIES LENDING: The Company has a securities lending program operated on its behalf by the Company's primary custodian, Chemical Bank of New York. The custodian has indemnified the Company against losses arising from this program. The total par value of securities out on loan was $51,537,000 and $250,729,000 and the income resulting from this program was $137,000, $2,000 and $26,000 at December 31, 1996, 1995 and 1994, respectively.
On December 19, 1995 the Company issued surplus notes totalling $315,000,000 to an affiliate, Sun Canada Financial Co., at interest rates between 5.75% and 7.25%. Of these notes, $157,500,000 will mature in the year 2007, and $157,500,000 will mature in the year 2015. Interest on these notes is payable semi-annually.
The Company is headquartered in Richmond, Virginia, where it owns a four-story building with 265,000 square feet. The Company also owns an office facility and warehouse in Roanoke, Virginia with 201,000 square feet and an office facility in Fayetteville, North Carolina with 71,000 square feet. The Company leases an additional 435,000 square feet at various other locations in Richmond, Virginia. The Company also leases space at two other facilities in Roanoke, Virginia comprising 52,000 square feet.