felanders/preprocessed huggingface dataset:
Incorporated herein by reference to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page A-4 of the Proxy Statement.
Cash and cash equivalents and short-term investments are higher by $451 million resulting from accumulated portfolio cash flows and, in part from asset sales, in anticipation of redeployment.
Other income increased $1.7 million. Madison Life had an increase of $1.4 million due to fee income earned by the managing general underwriter ("MGU") in which Madison Life acquired a controlling interest effective December 31, 1997; such fee income was offset by expenses described below in general and administrative expenses. Other income at Standard Life increased $.3 million due to an increase in fees earned from higher gross stop loss premiums.
The Company had net receivables from reinsurers of $105.7 million at December 31, 1999. Substantially all of the business ceded to such reinsurers is of short duration. All of such receivables are either due from highly rated companies or are adequately secured. Accordingly, no allowance for doubtful accounts was necessary at December 31, 1999.
Selected financial data for the four years ended December 31, 2002, 2001, 2000, 1999, the three month period ended December 31, 1998, and the year ended September 30, 1998, is incorporated by reference to pages 2 and 3 of the 2002 Annual Report to Shareholders filed in Exhibit 13.1 filed with this Form 10-K.
The Company does not anticipate that inflation will significantly impact its business and does not believe that its business is seasonal.
Total benefits and expenses for fiscal 1995 aggregated approximately $143.5 million, as compared to approximately $136.9 million for fiscal 1994 and approximately $149.2 million for fiscal 1993. This represents an increase of approximately 4.8% comparing fiscal 1995 to fiscal 1994 and a decrease of approximately 8.2% comparing fiscal 1994 to fiscal 1993. The reasons for these changes will be discussed under the respective components below.
The Insurance Company is subject to Regulation 130 adopted and promulgated by the NYSDI. Under this Regulation, the Insurance Company's ownership of below investment grade debt securities is limited to 20.0% of total admitted assets, as calculated under statutory accounting practices. As of December 31, 1995, approximately 7.4% of the Insurance Company's total admitted assets were invested in below investment grade debt securities.
For purposes of this Discussion, premiums and losses and loss expenses are stated net of reinsurance ceded.
Revenues from the six identifiable non-insurance business segments of $1,922.9 million increased $147.8 million (8.3%) from the prior year. The overall operating profit from these business segments of $267.2 million increased $34.0 million (14.6%). The following is a discussion of significant matters impacting comparative results for each of the non-insurance business segments.
As more fully discussed in Note 2, on January 2, 1996, GEICO Corporation ("GEICO") became a wholly-owned subsidiary of Berkshire. Prior to January 2, 1996, Berkshire owned approximately 51% of the outstanding common stock of GEICO. Previously the investment in GEICO common stock had been classified as an available-for-sale security and was carried in Berkshire's Consolidated Balance Sheet at fair value.
Ultimate payment amounts with respect to prospective contracts are determined from (i) individual case estimates, (ii) estimates of incurred but not reported losses, based on past experience, and (iii) reports of losses from ceding insurers.
Berkshire management has estimated the fair value of USAir Preferred shares to be $322.2 million at December 31, 1996. The increase of $232.7 million in the estimated fair value over the amount recorded at December 31, 1994, is included as a component of the increases during 1995 and 1996 in unrealized appreciation of investments.
Losses and loss adjustment expenses for the year December 31, 2011 included $7.9 million in net unfavorable loss reserve development on prior accident years primarily due to $11.7 million of unfavorable development in general liability lines resulting from asbestos and environmental exposure, $4.6 million of unfavorable development on legacy PXRE claims primarily related to Hurricanes Katrina, Rita and Wilma, and unfavorable development related to the unwinding of the workers compensation reserve discount. The unfavorable development was partially offset by favorable development on workers compensation including the collection of a contribution settlement from another insurer for a California indemnity claim, and favorable development in other lines. The asbestos and environmental unfavorable development was primarily attributable to $8.2 million for asbestos losses driven by increasing severities, defense costs and the settlement of a disputed reinsurance recoverable matter, and $3.5 million for environmental losses driven by one significant environmental loss.
The following table represents the components of gross loss reserves for the Run-off Lines for each of the years in the three-year period ended December 31, 2011:
Our product and geographic diversification differentiates us from the vast majority of our competitors and has been a source of stability during periods of industry volatility. Our long-term business strategy focuses on sustained growth in book value achieved through a combination of underwriting and investment income. By doing so, we provide value to our clients and shareholders through use of our substantial capital base in the insurance and reinsurance markets.
While we believe that our reserve for unpaid losses and loss expenses at December 31, 2018, is adequate, new information or emerging trends that differ from our assumptions may lead to future development of losses and loss expenses that is significantly greater or less than the recorded reserve, which could have a material effect on future operating results. As noted previously, our best estimate of required loss reserves for most portfolios is judgmentally selected for each origin year after considering the results from a number of reserving methods and is not a purely mechanical process. Therefore, it is difficult to convey, in a simple and quantitative manner, the impact that a change to a single assumption will have on our best estimate. In the examples below, we attempt to give an indication of the potential impact by isolating a single change for a specific reserving method that would be pertinent in establishing the best estimate for the product line described. We consider each of the following sensitivity analyses to represent a reasonably likely deviation in the underlying assumption.
MEEMIC sells its insurance contracts through over 90 sales representatives associated with MEIA Agency, which is the exclusive distributor of MEEMIC's products. On September 22, 1997, MEEMIC purchased the operations of its exclusive sales agency, including the exclusive right to sell and market MEEMIC products, and formed MEIA Agency. On December 30, 1999 upon approval from the Michigan Insurance Bureau, MEEMIC paid a dividend consisting of MEIA Agency to Holdings. This dividend rearranged the organizational structure of Holdings, such that MEEMIC and MEIA Agency are sister corporations as opposed to a parent/subsidiary relationship. As of December 31, 1999, we had over 120,000 policies in force, representing 161,133 insured vehicles and 35,309 homeowner units.
The majority of our assets consist of bonds, real estate, some preferred stocks, cash and short-term investments that in total were $168.4 million at December 31, 1999 and $128.9 million at December 31, 1998. We primarily invest in high quality bonds with the objective of providing stable income while maintaining liquidity at appropriate levels for our current and long-term requirements. The portfolio consists primarily of government bonds, municipal bonds, collateralized mortgage obligations, and investment grade corporate bonds. The modified duration of investments was 3.97 years at December 31, 1999 compared to 2.7 years at December 31, 1998. As of December 31, 1999 and 1998, the portfolio had an average Standard & Poor's security quality rating of AA (Excellent), and there were no securities in default concerning the timely payment of interest and principal. Our gross unrealized gains and gross unrealized losses in investments in securities were $488,000 and $3.2 million, respectively, at December 31, 1999 and $2.9 million and $70,000, respectively, at December 31, 1998. These changes in our gross unrealized gains and losses are a result of fluctuating bond market values due to volatility of interest rates in the marketplace.
Net investment income before interest expense was $7.0 million for 1998 compared to $6.7 million for 1997. Interest expense on the surplus note was $1.8 million for 1998 and $1.3 million for 1997. The net increase in net investment income was due principally to increases in invested assets because of positive cash flows from operations. The tax equivalent total rate of return, which includes both income and changes in market value of securities, was 7.49% for 1998 and was 7.74% for 1997. The weighted average tax equivalent book yield of the fixed maturity portfolio was 6.83% for 1998 compared to 7.08% for 1997.
While we have experienced no Year 2000 related problems during the transition to the Year 2000, we are maintaining our normal disaster recovery plan in the event that any problems arise going forward.
Consolidated Statements of Stockholders' Equity - December 31, 2000, 1999 and 1998
We currently do not purchase or hold life settlement or life insurance policies but, rather, previously held a contractual right to receive the net insurance benefits, or NIBs, from a portfolio of life insurance policies held by a third party (“the Owners” or “the Holders”). These NIBs represent an indirect, residual ownership interest in a portfolio of individual life insurance policies and they allowed us to receive a portion of the settlement proceeds from such policies, after expenses related to the acquisition, financing, insuring and servicing of the policies underlying our NIBs have been paid.
The Company files United States Federal and State income tax returns. The income tax returns of the Company are subject to examination by taxing authorities for three to five years from the date they are filed. The Company has tax returns subject to examination for 2013-2018.
The accompanying consolidated financial statements and related discussion include the accounts of the Company and its wholly-owned insurance subsidiary, MDA, and have been consolidated with the Company in a manner similar to a pooling of interests to reflect the conversion of MDA to a wholly-owned subsidiary of the Company. Cash flow within the Company consists of investment income and operating expenses. The Company does not have any significant revenue producing operations of its own other than through its ownership of MDA. MDA is licensed in Missouri to write medical professional liability insurance and MDA is one of the leading writers of medical professional liability insurance in the state of Missouri. Also included in the accompanying consolidated financial statements are MDA's wholly-owned subsidiaries, Medical Defense Services Corp. ("MDS") and Medical Defense Insurance Company ("MDIC"). MDS is a wholly-owned subsidiary of MDA and provides management services primarily to MDA. MDIC is a wholly-owned subsidiary of MDS and is a stock insurance company organized under Chapter 379 RSMo for the purpose of providing protection against loss from medical professional liability claims. During the past 12 months, MDIC has written a small amount of premium, less than $100,000, entirely in the state of Kansas.
We have audited the accompanying consolidated balance sheets of Medical Defense Holding Co. and Subsidiaries (the "Company") as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
Securities on Deposit With Statutory Authorities: MDA had a U.S. Treasury Note with a par value of $1,400,000 at December 31, 1996, on deposit with the state of Missouri. In addition, MDA had on deposit U.S. Treasury Notes with a par value totaling $5,000,000 at December 31, 1996, on deposit with the state of Missouri in compliance with a joint custody agreement with the Missouri Department of Insurance. This joint custody agreement relates to the release of MDA's former members' assessment liabilities relative to assessable insurance policies issued by MDA prior to the conversion date (Note 1).
The valuation allowance represents the difference betw een the total deferred tax asset related to loss reserve discounting required by the Internal Revenue Service and the amount that is more likely than not to be realized. Medical malpractice is a long tail line of business. The Company's payout pattern as well as the industry payout pattern for this line of business is expected to be 15 years or longer.
Net income per common share for the two years ended December 31, is as follows:
RESERVES FOR LOSSES AND LOSS EXPENSES: The reserves for losses and loss expenses are determined using case basis evaluations and statistical analyses and represent estimates of the ultimate cost of all reported and unreported losses which are unpaid at year end. These reserves include estimates of future trends in claim severity and frequency and other factors which could vary as the losses are ultimately settled. Although it is not possible to measure the degree of variability inherent in such estimates, management believes that the reserves for losses and loss expenses are adequate. The estimates are continually reviewed and as adjustments to these reserves become necessary, such adjustments are reflected in current operations.
Approximately 29% of purchases and 45% of sales of investments during the three years ended December 31, 1998 were made through securities broker-dealers in which certain directors of the Company were officers, directors or owners. Fees earned by affiliated investment advisors were $590, $604 and $932 in 1998, 1997 and 1996, respectively.
Loss reserves on certain permanent total disability workers' compensation reserves have been discounted to present value at pre-tax rates not exceeding 3.5%. At December 31, 1998 and 1997, loss reserves have been reduced by approximately $5,272 and $5,431, respectively. Discounting is applied to these claims since the amount of periodic payments to be made during the lifetime of claimants is fixed and determinable.
Net income of the insurance subsidiaries, as determined in accordance with statutory accounting practices, was $18,048, $24,975 and $20,249 for 1998, 1997 and 1996, respectively. Consolidated statutory shareholder's equity for these subsidiaries was $256,290 and $248,154 at December 31, 1998 and 1997, respectively.
Participating business comprises approximately 4% of the individual life insurance in force and 4% of the individual life insurance premium income. Policyholder dividends totaled $2.6 million in 1994, 1993, and 1992.
NOTE I -- REDEEMABLE PREFERRED STOCK (CONTINUED) dividends of $50 per share, and noncumulative participating dividends to the extent American Foundation's statutory earnings for the immediately preceding fiscal year exceed $1 million. Dividends of $0.9 million, $1.5 million, and $1.4 million were paid to PLC in 1994, 1993, and 1992, respectively.
The following table shows Infinity’s bonds and redeemable preferred stocks, by NAIC designation and comparable Standard & Poor’s Corporation rating as of December 31, 2004.
The financial statements required by this item are contained in the Company's 1999 Annual Report to Stockholders on the pages indicated below and are incorporated herein by reference.
Financial Statements: Page No. --------------------- -------- Report of Independent Auditors 31
Our expenses are primarily policyholder benefits, selling, underwriting and general expenses, interest expense and distributions on preferred securities of subsidiary trusts.
On May 3, 2004, we sold the assets of our WorkAbility division of CORE, Inc. (“CORE”). We recorded a pre-tax loss on the sale of $9,232, which was included in the Corporate and Other segment.
The persistency of Hartford Life Insurance Company's annuity and other interest-sensitive life insurance reserves is enhanced by policy restrictions on the withdrawal of funds. Withdrawals in excess of allowable penalty-free amounts are assessed a surrender charge during a penalty period, which is usually at least seven years. Such surrender charge is initially a percentage of either the accumulation value or considerations received, which varies by product, and generally decreases gradually during the penalty period. Surrender charges are set at levels to protect Hartford Life Insurance Company from loss on early terminations and to reduce the likelihood of policyholders terminating their policies during periods of increasing interest rates, thereby lengthening the effective duration of policy liabilities and improving the Company's ability to maintain profitability on such policies.
Additionally, investments were shifted from mortgage backed securities - agency to collateralized mortgage obligations to increase the prepayment protection of the portfolio.
The Company also maintains credit policies regarding the financial stability and credit standing of its major derivatives' counterparties and typically requires credit enhancement provisions to further reduce its credit risk. Credit risk for derivatives contracts is limited to the amounts calculated to be due to the Company on such contracts based on current market conditions and potential payment obligations between the Company and its counterparties. Credit exposures are generally quantified weekly and netted. Collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds exposure policy thresholds.
We have prepared the following selected financial data as of and for the Successor period from December 1, 2017 to December 31, 2017, the Predecessor period from October 1, 2017 to November 31, 2017, the Predecessor period from October 1, 2016 to December 31, 2016, and the Predecessor years ended September 30, 2017, 2016, 2015, 2014, and 2013.
As a result of the business combination ("Business Combination"), for accounting purposes, FGL Holdings is the acquirer and FGL is the acquired party and accounting predecessor. Our financial statement presentation includes the financial statements of FGL and its subsidiaries as “Predecessor” for the periods prior to the completion of the Business Combination and FGL Holdings, including the consolidation of FGL and its subsidiaries and FSR Companies, as "Successor" for periods from and after the Closing Date. FGL Holdings was determined to be the Successor company as it is the surviving company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia or any territory thereof (and in the case of the Company, Bermuda or the Cayman Islands). Prior to the acquisition, FGL Holdings reported under a fiscal year end of December 31, and the Predecessor companies reported under a fiscal year end of September 30. Subsequent to the acquisition, the Successor company will report under a fiscal year end of December 31.
Some of our products include guaranteed minimum crediting rates, most notably our fixed rate annuities. As of December 31, 2017 (Successor), the Company's reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $4 billion and 3%, respectively. We are required to pay these guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates for a longer period in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly. Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.
General insurance (property and liability) and level-term credit life insurance premiums are reflected in income on a pro-rata basis. Earned but unbilled premiums are generally taken into income on the billing date, and adjustments for retrospective premiums, commissions and similar charges are accrued on the basis of periodic evaluations of current underwriting experience and contractual obligations. Title insurance premiums are recognized as income upon the substantial completion of the policy issuance process. Title abstract, escrow, service, and other fees are taken into income at the time that the services are performed. First year and renewal mortgage guaranty premiums are recognized as income on a straight-line basis except that a portion of first year premiums received for certain high risk policies is deferred and reported as earned over the estimated policy life, including renewal periods. Single premiums for mortgage guaranty policies covering more than one year are earned on an accelerated basis over the policy term. Ordinary life and annuity premiums are recognized as revenue when due. Decreasing term credit life and credit disability/accident & health insurance premiums are generally earned on a sum-of-the-years-digits or similar method.
Service cost $ 3.0 $ 2.9 $ 2.5 Interest cost 6.7 6.2 5.7 Return on assets (8.0) (10.5) (9.2) Net amortization and deferral (1.7) 1.4 1.0 Net cost (credit) $ - $ - $ .1
Our losses and loss adjustment expenses decreased by 57.9% to $1,261,347 in 2008 from $2,993,065 in 2007. These amounts included favorable development of prior years’ estimates of losses and loss adjustment expenses of $4,553,000 in 2008 and $2,790,997 in 2007. Our loss ratio, calculated as the ratio of losses and loss adjustment expenses to net premiums earned, was 15.1% in 2008 and 37.5% in 2007. The reason for the favorable development of prior years’ estimates is discussed in more detail on page 25 under the caption “Losses and Loss Adjustment Expenses.”
The Consolidated Financial Statements of the Company, along with the related notes, supplementary data and report of independent accountants, are incorporated by reference from the Company’s Annual Report to Shareholders, which is included as Exhibit 13 to this Annual Report on Form 10-K.
Facility Monthly Location (Sq. Ft.) Leased/Owned Base Rent - -------- --------- ------------ --------- Chattanooga, TN........................ 196,400 Leased $227,000 Raleigh, NC............................ 185,000 Leased $133,000 Concord, NH (2 bldgs.)................. 100,000 Leased $ 55,000 Chattanooga, TN........................ 100,000 Owned N/A Charleston, SC......................... 70,000 Owned N/A Freeport, ME........................... 60,000 Leased $ 50,700 Worcester, MA.......................... 55,000 Leased $ 67,400 Indianapolis, IN....................... 36,800 Leased $ 44,000 Little Rock, AK........................ 33,300 Leased $ 37,000
Because the Company currently writes little new traditional business, traditional premiums will decrease as the amount of in-force traditional business decreases. Excluding the traditional premiums of $27.8 million in 1996 and $8.7 million in 1995 attributable to the Acquisitions, traditional premiums decreased $2.8 million from 1995 to 1996. Policy revenues consist of mortality, administration and surrender charges on interest sensitive life and annuity products. Excluding the policy revenues of the Acquisitions of $12.5 million in 1996 and $2.3 million in 1995, policy revenues decreased $1.0 million from 1995 to 1996. Policy revenues in 1995 included $0.4 million of nonrecurring surrender charges related to certain group life annuities. Collected premiums on interest-sensitive and annuity products increased by $69.4 million from 1995 to 1996. This increase in collected premiums is not reflected in premiums and policy revenues because GAAP requires that premiums collected on these types of products be treated as deposit liabilities rather than revenue.
Subsequent Event. In January 1997, the Company entered into a stock purchase agreement to acquire The Ohio State Life Insurance Company ("Ohio State") and Investors Guaranty Life Insurance Company ("IGL") from an unrelated party for a purchase price of approximately $330.0 million, subject to certain purchase price adjustments. The acquisition will be financed by a combination of internal funds and reinsurance. At December 31, 1996, Ohio State and IGL had assets of $1,099.0 million and liabilities of $767.0 million. The closing of the acquisition is contingent upon obtaining regulatory approvals from applicable state insurance departments.
Net Income before tax and minority interest: Net income before tax and minority interest for the year ended December 31, 2008 was $2,006,912 compared to $1,989,887 for the whole year of 2007. The increase of $17,025 or 0.9% was mainly due to an increase of revenue during the year. The increase was partially offset by an increase in operating expenses which will be discussed in the section below and a decrease in other income. For the other income, the decrease was mainly due to the interest rate cut in the market resulting interest income decreased.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2008 AND 2007
Typically there is inherent uncertainty around the length of paid and reporting development patterns, especially for certain casualty lines such as excess workers’ compensation or general liability, which may take up to 30 years to fully develop. This uncertainty is accentuated by the need to supplement client development patterns with industry development patterns as justified by the credibility of the data. The underlying source and selection of the final development pattern can thus have a significant impact on the selected net loss and loss expense ultimate. For example, a ten percent slowing or quickening of the development pattern for US long-tail lines could cause the ultimate loss derived by the reported Bornhuetter-Ferguson method for these lines to change by as much as four percent, or $46 million.
i) To sell protection to customers as either the writer of a derivative financial instrument or an insurance or reinsurance contract that meets the definition of a derivative under FAS 133. For 2005 and 2004, the reinsurance of guaranteed minimum income benefits (GMIBs) in our life reinsurance operation was our primary product falling into this category. We believe that the most meaningful presentation of these derivatives is to reflect cash inflows or revenue as net premiums earned, and to record estimates of future cash outflows as incurred losses. When we determine that a future cash payment is probable, we establish reserves for the loss. Other components of fair value are reflected in other assets or other liabilities in the balance sheet and related changes in fair value reflected in net realized gains (losses) in the income statement. We generally hold these derivative contracts to maturity. Where we hold a derivative to maturity, the cumulative unrealized gains and losses will net to zero if we incur no losses on that contract. Refer to Note 6(c) to our Consolidated Financial Statements for a description of this product and related accounting treatment; and
The incorporation of a large number of new companies during and after the war has led to increased competition, in consequence of which old and sound business prin­ ciples have, in many cases, been abandoned.
Marine and Inland Transport business is passing through a very trying period, partly as a direct consequence of the war; conditions in this business, however, particularly reflect the general economic situation and a serious improvement can only be hoped for when a revival of the world's trade will have created a greater demand for tonnage. Our results are correspondingly unsatisfactory. We have always been particularly reserved in this business; our net marine premium in 1921 amounts to Frs. 2,700,000 only.
Mortality Risk - In quantifying mortality risk directly associated with the Attacks, ML of New York has not experienced a material financial impact due to reported death claims and does not anticipate a material financial impact of death claims incurred but not reported. Mitigating factors of direct mortality risk include i) the average age of ML of New York's contract owners is low to mid-70s, thus it is unlikely that a large concentration were working at the Attack sites, and ii) ML of New York has minimal exposure to mortality risks assumed from other life insurance companies.
Net realized investment losses increased $2.4 million during 2001 as compared to 2000. The increase in net realized investment losses is due to an increase in credit related losses. Current period credit related losses were due to asset sales and book value writedowns of one security holding.
The majority of the Company's assets are in investments which were $91,310,781, after a net unrealized holding gain of $1,174,528, before taxes, (see below), or 78% of the total assets at December 31, 1995. Fixed
Liabilities accrued for future policy benefits and policy claims payable increased 4%, or about $2.6 million to $65,317,522 primarily because of a strengthening of reserves and increased premiums. Shareholders' equity increased $8,770,248 after paying dividends of $1,937,952 and an increase of $6,202,243 for a net unrealized holding gain.
At December 31, 1995, short term investments include a repurchase agreement with a carrying value of $400,000. The repurchase agreement is collateralized by U. S. Treasury Notes and Bonds with a market value in excess of $400,000.
The Federal income tax returns for the Company and its subsidiaries have been examined by the Internal Revenue Service (IRS) for 1991 and 1992. During the third quarter of 1994, the IRS issued a proposal for adjustments to the Company's returns for 1991 and 1992. The proposed deficiencies are approximately $2.4 million of which $215,303, pertaining to some non deductible expenses and certain assets expensed and not capitalized, was agreed to and paid in 1994. The balance primarily deals with whether or not the Company's subsidiary, Central, qualified as a life company, for tax purposes. The Company intends to vigorously protest
Liabilities for future benefits on traditional life insurance, principally term and whole life insurance, are based on the net level premium method, using anticipated mortality, policy persistency and interest earning rates. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy persistency rates vary by policy form, issue age and policy duration with persistency on level term and cash value plans generally anticipated to be better than persistency on yearly renewable term insurance plans. Anticipated interest rates range from 4% to 10%, depending on policy form, issue year and policy duration.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Insurance Investors & Holding Co. and subsidiaries as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1994, in conformity with generally accepted accounting principles. Also in our opinion, the related 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.
The Company and C I Agency, Inc. file a consolidated federal income tax return, while Central Investors Life Insurance Company of Illinois files a separate federal income tax return.
(12) Accumulated other comprehensive income includes the after tax net unrealized gain (loss) on available for sale securities and unrealized foreign exchange gain (loss).
Commissions and other operating expenses increased by approximately $17.1 million, or 54%, in 2002 compared to 2001. The following table details the components of commission and other operating expenses:
The decrease in the operating loss from our corporate segment for 2002 was due primarily to the reduction in interest cost. This reduction was due to a combination of the declining balance of debt outstanding as a result of principal repayments and reductions in the weighted average interest rates for the year, compared to 2001. During 2002, we repaid $10.7 million of our term loan, resulting in a weighted average balance outstanding of $55.7 million compared to $65.5 million for 2001. Additionally, the weighted average interest rate on our debt decreased to 5.4% in 2002 from 7.8% in 2001. (See "Liquidity and Capital Resources" for additional information regarding our credit facility). The increase in other parent company expenses was due to an increase in legal fees relating to litigation and an increase in the allocation of salaries and related costs for corporate activity relating to merger and acquisition efforts.
In addition to the above, Pennsylvania Life is the named lessee on approximately 40 properties occupied by Career Agents for uses as field offices. Rent for these field offices is reimbursed by the agents. Total annual rent obligation for these field offices is approximately $633,000.
Liquidity is also affected by unscheduled benefit payments including death benefits, benefits under accident and health insurance policies and interest-sensitive policy surrenders and withdrawals. The amount of surrenders and withdrawals is affected by a variety of factors such as credited interest rates for similar products, general economic conditions and events in the industry that affect policyholders' confidence. Although the contractual terms of substantially all of our in force life insurance policies and annuities give the holders the right to surrender the policies and annuities, we impose penalties for early surrenders. As of December 31, 2002 we held reserves that exceeded the underlying cash surrender values of our in force life insurance and annuities by $18.3 million. Our insurance subsidiaries, in our view, have not experienced any material changes in surrender and withdrawal activity in recent years.
For the year ended December 31, 2010, net loss attributable to common stockholders was $13.5 million, or $0.24 per share, as compared to a net loss attributable to common stockholders of $12.4 million, or $0.22 per share, for the year ended December 31, 2009, and a net loss attributable to common stockholders of $32.9 million, or $0.58 per share, for the year ended December 31, 2008.
Depreciation and Amortization Expense. Depreciation and amortization expense was $2.0 million for the year ended December 31, 2009, as compared to $2.1 million in 2008.
At December 31, 2010, we had $138.4 million of outstanding indebtedness. It consists of the following: $90.9 million, or 66%, of our total indebtedness is fixed rate and $47.5 million, or 34%, is variable rate. At December 31, 2010, we had the following indebtedness outstanding with the following repayment obligations (in thousands):
Dividends to policyholders increased approximately 26% when comparing 1995 to 1994. USA continued to market participating policies through most of 1994. Management expects dividends to policyholders will continue to increase in the future. A significant portion of the insurance in force is participating insurance. A significant portion of the participating business is relatively newer business, and the dividend scale for participating policies increases in the early durations. The dividend scale is subject to approval of the Board of Directors and may be changed at their discretion. The Company has discontinued its marketing of participating policies.
Mortality remained at the same level in 1994 compared to 1993. Changes in mortality can have a significant impact to life benefits.
Value of agency force and cost in excess of net assets purchased decreased 6% in 1995 compared to 1994. The decrease is directly attributable to normal amortization during the period. The Company did not recognize any impairments during the period.
The Unitrin Specialty Lines Insurance segment leases facilities with an aggregate square footage of approximately 148,000 at 3 locations in 3 states. The latest expiration date of the existing leases is June 30, 2013.
The historical consolidated financial data presented below as of and for each of the periods ended December 31, 2001, 2000, 1999, 1998, and 1997 were derived from our consolidated financial statements which are incorporated herein by reference to the Annual Report. The selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes thereto, and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” also contained in the Annual Report and incorporated herein by reference.
Crusader generates a significant amount of cash as a result of its holdings of unearned premium reserves, reserves for loss payments, and its capital and surplus. Crusader's loss and loss adjustment expense payments are the most significant cash flow requirement of the Company. These payments are continually monitored and projected to ensure that the Company has the liquidity to cover these payments without the need to liquidate its investments. Cash and investments (excluding unrealized gains) at December 31, 1997, were $92,530,294 compared to $80,929,348 at December 31, 1996, a 14% increase. Crusader's cash and investments at December 31, 1997, was $88,456,803, or 96% of the total held by the Company compared to $77,833,104 or 96% of the total held by the Company at December 31, 1996.
Health and Life Insurance Program - --------------------------------- Commission income from the health and life insurance sales of NIB and AIB is as follows:
Operating Expenses - ----------------- Policy Acquisition Costs consist of commissions, premium taxes, inspection fees, and certain other underwriting costs which are related to and vary with the production of Crusader insurance policies. These costs include both Crusader expenses and allocated expenses of other Unico subsidiaries. On certain reinsurance treaties, Crusader receives a ceding commission from its reinsurer which represents a reimbursement of the acquisition costs related to the premium ceded. Policy acquisition costs, net of ceding commission, are deferred and amortized as the related premiums are earned. Policy acquisition costs, net of ceding commission, are as follows:
NOTE 19 - EARNINGS PER SHARE - ---------------------------- A reconciliation of the numerator and denominator used in the basic and diluted earnings per share calculation is presented below:
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s consolidated balance sheets.
Warrants-Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company follows the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
As described in Note 1, the Company consummated the Mergers on January 7, 2021.
Our Second Restated Credit Agreement with Frost Bank (“Frost”) dated June 30, 2015, as amended to date, provides a $15.0 million revolving credit facility (“Facility A”), with a $5.0 million letter of credit sub-facility. The outstanding balance of the Facility A bears interest at a rate equal to the prime rate or LIBOR plus 2.5%, at our election. We pay an annual fee of 0.25% of the average daily unused balance of Facility A and letter of credit fees at the rate of 1.00% per annum. All principal and accrued interest on Facility A becomes due and payable on June 30, 2020. As of December 31, 2018, we had no outstanding borrowings under Facility A.
In 1998 the Company repurchased 406,400 of its own shares for treasury at an average price of $9.95 per share, utilizing approximately $4.04 million of cash. Despite the net use of cash in 1998, the Company's level of cash and cash equivalents remains significantly higher than the historical norm. This high level of cash and cash equivalents is primarily the result of gross proceeds from the sale of Kingsway common stock amounting to $67.7 million in 1997. A portion of these proceeds were used to extinguish debt, increase the statutory
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
All fixed maturities and equity securities are classified as available-for-sale and reported at fair value. Unrealized gains and losses are excluded from earnings and reported directly in stockholders' equity net of deferred income taxes.
Gains and losses on sales of investments are computed on the specific identification method and are reflected in net income. Fair values are based upon quoted market prices or values obtained from independent pricing sources.
The home office of the California insurance subsidiaries and the Company's computer facilities are located in Brea, California in an 80,000 sq.ft. office building owned by the Company.
Investment income in 1994 was $54.6 million, compared with $54.1 million in 1993. The after-tax yield on average investments of $727.9 million (fixed maturities at cost, equities at market) was 6.84%, compared with 7.05% on average investments of $683.9 million in 1993. The effective tax rate on investment income was 8.8% in 1994, compared with 10.9% in 1993, reflecting an increase in the proportion of tax-exempt interest income. The decline in realized investment yields reflects principally the redemption and maturity of bonds and preferred stocks acquired in higher interest rate environments.
Net cash provided from operating activities in 1995 was $136.6 million, while funds derived from the sale, redemption or maturity of investments was $484.5 million, of which approximately 75% was represented by the sale of equity securities. The amortized cost of fixed-maturity investments increased by $85.6 million during the year. Equity investments, including perpetual preferred stocks, increased by $21.8 million at cost, and short-term cash investments increased by $5.8 million. The amortized cost of fixed-maturities available for sale that were sold, called or matured during the year was $118.8 million.
As of December 31, 1995, the Company had no commitments for capital expenditures.
During 2005, the Company experienced unfavorable development in its commercial package and general liability products amounting to $3,594,000 related to accident years prior to 2002, due to greater than anticipated incurred loss development.
The ratio of amortized deferred policy acquisition costs and other underwriting expenses to net premiums earned increased to 43.9% for 2005 from 40.5% for 2004. A $2,081,000 or 14% decrease in the amortization of deferred acquisition costs was partly offset by a $520,000 or 6% increase in other underwriting expenses. Other underwriting expenses included $3,320,000 (6.8 percentage points of the expense ratio) of retrospective commission expense related to the Reinsurance Pooling Agreement, which provides for retrospective commission income or expense based on actual experience compared to a targeted loss and LAE ratio. The commission is owed to Mutual based on a decrease during 2005 in the estimated cumulative loss and LAE ratio on the “pooled” business since the inception of the Reinsurance Pooling Agreement.
ACE is conducting its own internal investigation that encompasses the subjects raised by the NYAG, the other state attorneys general and the SEC. It is being conducted by a team from the firm of Debevoise & Plimpton LLP. The team is headed by former United States Attorney Mary Jo White and operates under the direction of the Audit Committee of the Board of Directors. The Audit Committee of the Board of Directors has retained Cleary Gottlieb Steen & Hamilton, special outside counsel, to advise it in connection with these matters. We have terminated two employees, one of which has pleaded guilty to a misdemeanor, and have suspended three other employees as a result of our internal investigation.