Universal life revenues consist of the monthly mortality charges and administrative fees earned by the Company on its in-force universal life insurance, excluding net surrender charges on terminating policies. Such revenues increased 10.8% from $180.0 million in 1993 to $199.5 million in 1994. The increase in revenues is a result of increased sales of universal life policies. The Company's gross annualized premiums on new life insurance sales for individual life insurance increased 23.4% from $74.8 million in 1993 to $92.3 million in 1994.
In order to meet its obligations under the surplus debentures, Wabash uses funds obtained from its insurance operations, including primarily cash flows from operations and dividends and tax sharing payments from Massachusetts General, Philadelphia Life, Lamar Life, and other subsidiaries. Wabash received $25 million in dividends from its subsidiaries during 1995, $17.0 million during 1994, and $43.5 million during 1993. See "Business -- Regulation" for a description of certain dividend restrictions imposed by state insurance laws and orders. Wabash received or accrued $14.6 million, $11.8 million, and $7.3 million in tax sharing payments during 1995, 1994 and 1993, respectively.
LIFE PARTNERS GROUP, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Effective December 31, 1993, the Company adopted Statement of Financial Accounting Standard No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES ("SFAS 115") issued by the Financial Accounting Standards Board ("FASB"). Under SFAS 115, fixed-maturity securities classified as investments held-to-maturity are carried at amortized cost because the Company has the intent and the ability to hold such securities to maturity. Although the Company has the ability and intent to hold these investments to maturity, infrequent and unusual conditions could occur under which certain investments designated as held to maturity would be sold. Such conditions include unforeseen changes in asset quality, significant changes in tax law affecting the taxation of securities, significant business acquisitions or dispositions, and changes in regulatory capital requirements or permissible investments. Fixed-maturities that may be sold prior to maturity are included in the Company's available-for-sale account at fair value. The classification of investments is determined at the date of purchase and is reevaluated at each balance sheet date.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) assumptions are impacted by several factors, including factors outside the control of management such as movements in interest rates. It is reasonably possible that conditions impacting the estimates and assumptions will change and that changes may result in future adjustments to deferred policy acquisition costs. At December 31, 1995, the Company reassessed its expectations of future gross profits and losses resulting in an additional net change in deferred acquisition costs, deferred policy fees and provision for losses of $66.6 million. This change in estimate related to deferred expenses and fees, and provision for losses was included as an expense in the 1995 Consolidated Statement of Operations.
As of December 31, 1995, the Company had substantially completed the move of the primary life, annuity and corporate functions of Lamar from its location in Jackson, Mississippi, to the Company's headquarters in Englewood, Colorado. In connection with this move, the Company has incurred and anticipates certain additional closing and moving costs, costs to involuntarily terminate or relocate employees, and terminate or renegotiate certain contracts. Management has estimated these costs to total approximately $3.8 million, and has included such estimated costs in the allocation of the acquired net assets of Lamar. Such costs may be revised in future periods if actual costs deviate significantly from the estimates.
The amortized cost and estimated fair values of debt securities classified as investments available-for-sale are as follows (in thousands):
For borrowings under the senior loan agreement and the bank credit facility, which are subject to floating rates of interest, the outstanding balance is a reasonable estimate of fair value. Fair value of borrowings under the senior subordinated notes due in 2002 equals quoted market price at the reporting date.
On March 31, 1993, as a result of the receipt of proceeds from the issuance of common stock through an initial public offering, all outstanding shares of Series A Exchangeable Preferred Stock and accrued PIK Dividends were redeemed. There were no outstanding shares at December 31, 1995 and 1994 (See Note 9).
In 1993, the Company paid GE Capital a quarterly agency fee of $100,000 and a loan administration fee of $221,000 for its capacity as agent under the Senior Loan Agreement. Additionally, GE Capital was paid $1.1 million in Senior Loan consent fees in connection with the March 1993 public offering.
16. SUPPLEMENTAL DATA TO CONSOLIDATED STATEMENTS OF CASH FLOWS Cash payments for interest expense and income taxes were as follows (in thousands):