On December 14, 1994, the Company's Board of Directors approved the repurchase of an additional 250,000 shares of the Company's common stock on the open market. Through December 31, 1995, the Company had not repurchased any shares under this program.
stock and surplus as of the preceding December 31 or net income of the preceding calendar year. In 1996 the maximum amount legally available for distribution to the Company without prior approval is $44.1 million.
Dividend payments to common stockholders totaled $6.3 million for the year ended December 31, 1995, up from $5.4 million and $4.4 million in 1994 and 1993, respectively. In 1995, 1994, and 1993, the Company paid dividends of $3.7 million, $3.8 million, and $3.9 million, respectively, on the ESOP Series. In each year, the Company paid dividends of $3.5 million on the 6-3/4% Series preferred stock.
There were no sales or transfers from the held to maturity portfolio in 1995 and 1993. For the year ended December 31, 1994, gross realized losses of the held to maturity portfolio included a realized loss of $195 on the sale of an investment. The investment had an amortized cost of $4,937 and was disposed of due to the significant downgrade of the issuer's credit rating in 1994. Additionally, the Company sold from the held to maturity portfolio an investment with an amortized cost of $1,001 for a realized loss of $10. There were no transfers in 1994.
As of January 1, 1993, the property-casualty subsidiaries' underwriting accounts were adjusted to reflect their increased participation in the pool. The property-casualty subsidiaries received cash and securities for the transfer of reserves from ALLIED Mutual as of January 1, 1993. There was no income statement effect from this transaction as the amount received was offset by the increase in the reserves. Because the reserves transferred were necessarily based upon estimates, subsequent changes in the estimates are reflected in current operating results.
The property-casualty and excess & surplus lines subsidiaries cede insurance to other insurers in the ordinary course of business for the purpose of limiting their maximum loss exposure through diversification of their risks. See note 4 for discussion of reinsurance contracts with ALLIED Mutual. Reinsurance contracts do not relieve the Company from its obligations to policyholders as the primary insurer. 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 arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. As of December 31, 1995, reinsurance receivables and prepaid reinsurance premiums associated with three nonaffiliated reinsurers aggregated approximately $14,675, which represented a significant portion of the total prepaid reinsurance premiums and reinsurance receivables for losses and loss settlement expenses. The property-casualty subsidiaries also assume insurance as members of various pools and associations.
The Trustee is entitled to vote the ESOP Series on all matters submitted to a vote of the holders of the common stock of the Company, voting together with the holders of common stock and the 6-3/4% Series as one class. The ESOP Trust generally provides that each ESOP participant is entitled to direct the Trustee how to vote (or whether to tender or exchange) the shares of ESOP Series allocated to the participant's account. Each share of the ESOP Series is convertible into 1-1/2 shares of common stock and has 1-1/2 votes, subject to antidilution adjustments.
Excess & surplus lines--Primarily commercial casualty and commercial property lines of insurance coverages that standard insurers are unable or unwilling to provide.
On March 7, 1996, the ESOP Trust converted all of its shares of ESOP Series to 4,402,797 shares of common stock. The conversion increased the number of common shares outstanding to approximately 13,949,000 shares.