The following is a discussion of the Company's results of operations and financial condition. This discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto presented under Item 8.
Basic net loss per share was $2.86 in 2000, as compared to basic net loss per share of $0.71 in 1999 and basic net income per share of $1.63 in 1998. Diluted net loss per share was $2.86 in 2000, as compared to diluted net loss per share of $0.71 in 1999 and diluted net income per share of $1.63 in 1998.
Other revenues includes primarily the Company's holding companies and other non-operating subsidiaries, as well as income earned or provisions against investments in non-consolidating affiliates. Other revenues of $0.9 million in 2000 consisted primarily of net investment income, and represented an increase of $0.2 million from other revenues of $0.7 million in 1999, which in turn reflected a decrease of $4.6 million from other revenues of $5.3 million in 1998. Loss before tax for the year was $3.6 million, compared to a loss before tax of $5.7 million in 1999 and income before tax of $3.2 million in 1998. The loss before tax for the year primarily reflects costs in respect of ongoing operating expenses and a provision against investments in associated companies.
We have audited the consolidated statements of income and comprehensive income, changes in shareholders' equity and cash flows of Stirling Cooke Holdings Limited and subsidiaires for the year ended December 31, 1998, before the restatement described in Note 3 to the financial statements. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company; consequently, allowances are established for amounts deemed uncollectible. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies. The Company has experienced substantial delays in collection of reinsurance recoverables from certain of its reinsurers. Realm National, a subsidiary of the Company, has commenced arbitration against two of these reinsurers. Management believes that approximately $6,742 and $9,342 of paid and outstanding losses recoverable from reinsurers for 1999 and 2000 respectively may prove uncollectible and has established a provision for doubtful recoveries accordingly. This provision of $6,742 for 1999 and $9,342 for 2000 against reinsurance recoveries of $32,346 in 1999 and $34,964 in 2000 represents management's best estimate at this time of a shortfall in recoveries. This provision is included in the balance sheet as a component of paid and outstanding losses recoverable from reinsurers. The provision is an estimate and amounts not collectible from reinsurers may ultimately be significantly greater or lesser than the provision established. It is possible that management will revise this estimate in the future. Any subsequent differences arising will be recorded in the period in which they occur.
With respect to its other main workers' compensation program for 1999 and prior, the business was subject to quota share reinsurance whereby Realm National retained 25% of the first $1,000 on any one risk and purchased excess of loss per occurrence reinsurance for limits above $1,000. A portion of Realm National's retention under its quota share treaties was further protected by excess coverage that reduced Realm National's net retention to under $3. In addition, Realm National purchased excess of loss reinsurance above the quota share treaty with limits of $100,000 or higher. For the year 2000 Realm National purchased excess of loss reinsurance above $1,000 up to limits of $50,000. In addition, Realm National purchased a 75% reinsurance cover to further protect part of the $1,000 net retention.
(c) Several arbitration proceedings currently are pending in England between reinsurers and ceding insurers relating to reinsurance transactions involving the personal accident excess of loss market in London ("LMX") for the account years 1993, 1994, 1995 and 1996. Although neither the Company nor its broker subsidiaries is a party to any of these arbitrations, certain of the Company's subsidiaries acted as a reinsurance broker for ceding insurer clients that are parties to certain of the arbitrations.