felanders/preprocessed huggingface dataset:
Effective January 1, 2018, the Company adopted ASU No. 2016-01 and equity securities are no longer classified as available-for-sale with unrealized gains and losses recognized in other comprehensive income, rather, changes in fair value of equity securities are now recognized in net income. Prior periods have not been restated to conform to the current presentation. See Note 1 of the notes to consolidated financial statements.
On February 20, 2003, UG purchased $4 million of a trust preferred security offering issued by First Southern Bancorp, Inc. (“FSBI”). The security has a mandatory redemption after 30 years with a call provision after 5 years. The security pays a quarterly dividend at a fixed rate of 6.515%. The Company received dividends of $283,151 and $259,138 during 2018 and 2017, respectively. On March 30, 2009, UG purchased $1 million of FSBI common stock. The sale and transfer of this security is restricted by the provisions of a stock restriction and buy-sell agreement. During 2018, the Company received a preferred pay down of $440,000 leaving a cost basis of $3,560,000.
The Company reimbursed expenses incurred by employees of FSNB relating to salaries, travel and other costs incurred on behalf of or relating to the Company and received reimbursements from FSNB. The Company paid $571,648 and $186,251 in 2018 and 2017, respectively to FSNB in net reimbursement of such costs. In addition, the Company reimburses FSNB a portion of salaries and pension costs for Mr. Correll and Mr. Ditto. The reimbursement was approved by the UTG Board of Directors and totaled $307,645 and $346,486 in 2018 and 2017, respectively, which included salaries and other benefits.
The combined ratio is one means of measuring the underwriting experience of a property and casualty insurer. The combined ratio, consisting of the ratio of losses and loss adjustment expenses to premiums earned (the "loss ratio") plus the ratio of underwriting expenses to premiums written (the "expense ratio") reflects relative underwriting profit or loss. The Company's insurance subsidiaries' loss ratios under generally accepted
Risk-based capital requirements are used as early warning tools by the National Association of Insurance Commissioners and the states to identify companies that require further regulatory action. The ratio for each of the Company's insurance subsidiaries as of December 31, 1999 was significantly above the level which might require regulatory action.
Consolidated Schedules included in Part II of this Report - Years ended December 31, 1999, 1998 and 1997:
ACMAT's Insurance Group includes United Coastal Insurance, ACSTAR and AMINS, Inc. United Coastal Insurance is an excess and surplus lines property and casualty insurer providing specialty general and environmental liability insurance to specialty trade and environmental contractors, property owners, storage and treatment facilities and allied professionals, as well as professional liability insurance to architects, engineers and consultants. ACSTAR is licensed as an admitted insurer in 50 states and the District of Columbia and provides surety bonding for specialty trade, environmental remediation and asbestos abatement contractors. AMINS, Inc. is an insurance agency which acts primarily as a general agent for ACSTAR and United Coastal Insurance. United Coastal Insurance participates in a number of reinsurance arrangements with other companies on a quota share basis. These arrangements primarily cover marine and other property catastrophic risks.
Realized capital gains (losses) for the years ended December 31, 1999, 1998 and 1997 follows:
On September 1, 1999, the Company replaced a $5,000,000, five-year term loan that was obtained from a financial institution on December 9, 1998. The loan agreements contained certain limitations on borrowings, minimum statutory capital levels and require maintenance of specified ratios. The proceeds, along with internal funds, were used to refinance existing debt which existed at December 31, 1998.
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share ("EPS") computations for the years ended December 31, 1999, 1998 and 1997:
The Company has, together with many other defendants, been named as a defendant in actions brought by injured or deceased individuals or their representatives based on product liability claims relating to materials containing asbestos. No specific claims for monetary damages are asserted in these actions. Although it is early in the litigation process, the Company does not believe that its exposure in connection with these cases is significant.
We focus on the large and under-penetrated segment of the U.S. population who are uninsured or underinsured, which includes individuals who are unable to afford traditional IMM premiums, individuals not covered by employer-sponsored insurance plans, such as those who are self-employed as well as small business owners and their employees, and underserved “gap populations” that require insurance due to changes caused by life events, such as new graduates, divorcees, early retirees, military discharges, the unemployed, part-time and seasonal employees and temporary workers. Our target market consists of approximately 64 million Americans, including approximately 50 million Americans who were uninsured in 2010, according to the U.S. Census Bureau, and approximately 14 million non-elderly Americans who purchased individual health insurance plans in 2010, according to a 2010 Kaiser Family Foundation survey. As of December 31, 2012, we had 23,747 STM members. We expect the number of uninsured and underinsured to significantly increase due to the rising costs and burdensome underwriting requirements of traditional IMM plans and a decline in employer-sponsored health insurance programs.
Depreciation and amortization expense is primarily a function of amortization of the intangible assets acquired as a result of the Acquisition described above as well as depreciation of property and equipment used in our business.
Term Loan Agreement. In September 2011, we entered into a bank loan agreement with a third-party bank with a principal amount of $4,250,000. The purpose of this bank loan was to finance the Acquisition of the remaining 50% interest in Health Plan Intermediaries, LLC. Borrowings under the loan were secured by all of our assets and by a personal unlimited guarantee by Mr. Kosloske and Lori Kosloske, our Chief Broker Compliance Officer and Mr. Kosloske’s wife, and certain real properties owned by Mr. Kosloske and Mrs. Kosloske.
(5) Represents adjustments to reflect the allocation of offering proceeds between controlling and noncontrolling membership interests.
purposes of establishing loss reserves, the Company relies upon the advice of MIC. Loss reserve projections are used to estimate loss reporting patterns, loss payment patterns and ultimate claim costs. An inherent assumption in such projections is that historical patterns can be used to predict future patterns with reasonable accuracy. Because many variables can affect past and future loss patterns, the effect of changes in such variables on the results of loss projections must be carefully evaluated. The evaluation of these factors involves complex, subjective judgments, which may significantly impact the financial statements. Insurance liabilities are, therefore, necessarily based on estimates, and the ultimate liability may vary from such estimates. These estimates are regularly reviewed by management and adjustments to such are included in income on a current basis. See Note 4 to the Financial Statements.
Accounting Standards In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, effective for fiscal years beginning after June 15, 1999. In the second quarter of 1999, the FASB issued SFAS No. 138 which amends SFAS No. 133 and delayed implementation of SFAS 133 until fiscal years beginning on or after June 15, 2000. The new standard requires that all companies record derivatives on the balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The Company adopted this standard on January 1, 2001. The impact of the adoption of this standard did not have a potential impact on the Company's financial position or results of operation.
original maturities of less than 90 days are classified as cash equivalents. Unrealized appreciation (depreciation) is included in accumulated other comprehensive income.
Medicaid Health Plans. Membership increased by 156,000, or 6.5%, compared with December 31, 2015, primarily due to the membership acquired from Care1st Arizona and Advicare during 2016, as well as organic membership growth in New York and Missouri. These increases were partially offset by a membership decline in Georgia.
As discussed under "Key Developments and Accomplishments," in December 2015, President Obama signed the Consolidated Appropriations Act, 2016 which, among other provisions, included a one-year moratorium on the ACA industry fee for 2017, and, as a result, eliminated the associated ACA industry fee. Accordingly, we did not incur ACA industry fee expense for the year ended December 31, 2017, compared with $228.4 million for the same period in 2016.
Medicaid total premiums increased $1.2 billion, or 12.9%, for the year ended December 31, 2017 compared with the same period in 2016, primarily driven by membership acquired from our Arizona acquisitions, our new Nebraska Medicaid plan and our participation in Missouri's Medicaid program statewide expansion. The increase is also attributable to net rate increases in certain of our existing Medicaid markets. These increases were partially offset by the effect of the previously noted ACA industry fee moratorium for 2017, which resulted in the elimination of any associated Medicaid ACA industry fee reimbursements from our state government partners.
Additionally, in January 2016, $200.0 million of the Revolving Credit Facility (described below) was drawn upon and, along with $100.0 million in cash, used to repay our $300.0 million Term Loan. In September 2016, we repaid $100.0 million of the $200.0 million borrowed under the 2016 Revolving Credit Facility. Debt-related activity for the year ended December 31, 2015 includes net proceeds of $308.9 million resulting from the issuance of $300.0 million aggregate principal amount of our Senior Notes.
Net income in 2002 decreased 30.1% to $4.9 million compared to last year due to an increase in realized capital losses and decreased net investment income. Net income decreased to $7.0 million in 2001 from $7.9 million in 2000, due primarily to increased realized capital losses in 2001.
Realized capital losses were $4.1 million in 2002, compared to $1.4 million and $95 thousand in 2001 and 2000, respectively. In 2002, gains on sales of fixed income securities of $239 thousand were more than offset by write-downs on fixed income securities of $4.3 million. The capital losses in 2001 and 2000 resulted from sales of fixed income securities. Period to period fluctuations in realized capital gains and losses are the result of timing of sales decisions reflecting management's decision on positioning the portfolio, assessments of individual securities, overall market conditions and write-downs when the Company determines that a decline in the value of a security is other than temporary.
The following table describes the components of pre-tax realized capital gains and losses.
Shareholder's equity increased $10.8 million during the year ended December 31, 2002 when compared to December 31, 2001, due to an increase in Unrealized net capital gains resulting in other comprehensive income of $5.9 million and Net income of $4.9 million. Shareholder's equity increased during 2001, as well as 2000, due to Net income of $7.0 million and $7.9 million, respectively, and an increase in Unrealized net capital gains of $2.8 million and $3.1 million, respectively. In December 2000, the Company received a $10 million capital contribution from ALIC.
In addition, GAFRI issued just over $86 million of senior debt in January 2004 and used the proceeds to retire higher coupon rate trust preferred securities.
In recent years, the Company has entered into several reinsurance transactions in connection with certain of its life and supplemental insurance operations. These transactions provided additional capital and liquidity and were entered into in the normal course of business in order to exit certain lines, fund an acquisition and transfer risk. The Company may enter into additional reinsurance transactions in the future.
maturities with an objective of optimizing interest yields while maintaining an appropriate relationship of maturities between GAFRI's assets and expected liabilities.
Insurance acquisition expenses include amortization of DPAC as well as a portion of commissions on sales of insurance products. Insurance acquisition expenses also include amortization of the present value of future profits of businesses acquired amounting to $8.5 million in 2003, $11.8 million in 2002 and $9.2 million in 2001.
Under revised Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities" ("VIEs") issued by the Financial Accounting Standards Board in December 2003, GAFRI is required to deconsolidate two wholly-owned subsidiary trusts because they are VIEs in which GAFRI is not considered to be the primary beneficiary. These subsidiary trusts were formed to issue preferred securities and, in turn, purchase a like amount of subordinated debt from their parent company, which provides interest and principal payments to fund the respective trust obligations. Accordingly, the subordinated debt due to the trusts is shown as a liability in the Balance Sheet beginning December 31, 2003, and the related interest expense will be shown in the Income Statement as "Interest on subsidiary trust obligations" beginning in the first quarter of 2004. Prior to these dates, these items were included in the Balance Sheet as "Mandatorily redeemable preferred securities of subsidiary trusts" and in the Income Statement as "Trust preferred distribution requirement." Implementation of FIN 46 with respect to the preferred securities had no effect on earnings.
In the first quarter of 2004, GAFRI redeemed all of its 9-1/4% trust preferred securities at face value and repurchased a portion of its 8-7/8% preferred securities. (See Note R)
Other income includes approximately $0.4 million in 2001 of payments from a subsidiary of AFG for the rental of an office building owned by GALIC. This building was sold in 2001 to an unaffiliated party.
2014 compared to 2013. Other operating and general expenses increased $1.2 million, or 6.3%, to $21.0 million during the year ended December 31, 2014 compared to $19.7 million for the same period in 2013, attributable primarily to growth in our employee headcount and related personnel expenses. As a percentage of premiums earned, such expenses were flat at 3.8% for both years ended December 31, 2014 and 2013.
The following discussion describes key assumptions and important variables that affect the estimate of the reserve for loss and LAE of our two most significant lines of business, which represent 87.2% of our total reserves and explains what caused them to change from assumptions used in the preceding period. Management has not made any changes in key assumptions used in calculating current year reserves based on historical loss development patterns.
We recorded favorable prior year loss development of $4.8 million in 2015 and unfavorable prior year loss development of $2.8 million and $1.2 million in 2014 and 2013, respectively. Due to the long-tail nature of this business it is difficult to predict ultimate liabilities until a higher percentage of claims have been paid and the ultimate impact of these decisions can be estimated with more precision. Management continues to review the frequency, severity, and loss and LAE ratios implied by the indications from the standard tests while considering the uncertainties of future costs in determining the appropriate reserve level.
The Company is a 51.1% owned subsidiary of Great American Insurance Company (“Great American”), a wholly-owned subsidiary of American Financial Group, Inc. (“AFG”).
Net income increased $2,037, or 18%, to $13,441 for the year ended December 31, 2006 from $11,404 for the year ended December 31, 2005. This increase was primarily driven by growth in business written through our Disability Reinsurance Management Services (“DRMS”) distribution channel and approximately $1,400 of income related to a refund of previously paid policyholder benefits. These increases were offset by a reduction in amortization of deferred gains on disposal of businesses.
Investment income (and the related yields on average invested assets) totaled $119.7 million (5.67%) in 2003, compared with $97.3 million (6.74%) in 2002 and $101.0 million (7.07%) in 2001. The decrease in the investment yield in 2003 compared to 2002 primarily reflects a lower prevailing interest rate environment. Investment income has been reduced by expenses incurred to manage the investment portfolio of $0.7 million in 2003, $0.6 million in 2002 and $1.2 million in 2001. These expenses are included as a reduction of investment income in the statement of income and comprehensive income.
ANNUAL COMMISSIONS totaled $1.0 million in 2003, compared with $0.8 million in 2002 and $0.7 million in 2001. Annual commissions represent renewal commissions paid quarterly in arrears to maintain the persistency of certain of the Company’s variable annuity contracts. Substantially all of the Company’s currently available variable annuity products allow for an annual commission payment option in return for a lower immediate commission.
The Company seeks to enhance its spread income with dollar roll repurchase agreements (“Dollar Roll Repos”). Dollar Roll Repos involve a sale of MBS by the Company and an agreement to repurchase substantially similar MBS at a later date at an agreed upon price. The Company also seeks to provide liquidity by investing in MBSs. MBSs are generally investment-grade securities collateralized by large pools of mortgage loans. MBSs generally pay principal and interest monthly. The amount of principal and interest payments may fluctuate as a result of prepayments of the underlying mortgage loans.
Management is aware that prevailing market interest rates may shift significantly and has strategies in place to manage either an increase or decrease in prevailing rates. In a rising interest rate environment, the Company’s average cost of funds would increase over time as it prices its new and renewing annuities to maintain a generally competitive market rate. Management would seek to place new funds in investments that were matched in duration to, and higher yielding than, the liabilities assumed. The Company believes that liquidity to fund withdrawals would be available through incoming cash flow, the sale of short-term or floating-rate instruments or Dollar Roll Repos on the Company’s substantial MBS segment of the Bond Portfolio, thereby avoiding the sale of fixed-rate assets in an unfavorable bond market.
UNITED TRUST GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three Years Ended December 31, 2003
Retained earnings (accumulated deficit) Balance, beginning of year, as previously reported 1,774,535 $ 435,740 $ (1,435,335) Prior period adjustment - reinsurance premiums 0 0 (437,021) ----------- ----------- ------------- Balance, beginning of year, as restated 1,774,535 435,740 (1,872,356) Net income (loss), as restated for 2002 and 2001 (6,396,490) $ (6,396,490) 1,338,795 $ 1,338,795 2,308,096 $2,308,096 ----------- ----------- ------------- Balance, end of year $(4,621,955) $ 1,774,535 $ 435,740 =========== =========== =============
We anticipate that commercial and senior membership will increase in 2004.
Commercial Margin. Our commercial margin increased 34%, or $195 million, to $773 million for the year ended December 31, 2003, compared to $578 million for the same period in the prior year as follows:
Government - Senior Medical Loss Ratio. Our government - senior medical loss ratio decreased to 84.2% for the year ended December 31, 2003 compared to 86.9% for the prior year. The decrease was driven by rate increases, benefit reductions and decreased utilization attributable to our medical management programs that outpaced an increase in health care services and other expenses on a per member per month basis.
$28 million for the redemption premium and other write-offs associated with our redemption of $175 million in principal of our 10 3/4% senior notes in December 2003 with no comparable activity in the prior year,
Specialty and Other Revenue. Specialty and other revenue increased 11%, or $41 million, for the year ended December 31, 2002, compared to the same period in the prior year. The increase was primarily due to increased unaffiliated membership and mail order revenues of our pharmacy benefit management subsidiary.
Net Investment Income. Net investment income decreased 42%, or $47 million, to $64 million for the year ended December 31, 2002, from $111 million for the year ended December 31, 2001.
Ordinary Course Legal Proceedings. From time to time, we are involved in legal proceedings that involve claims for coverage and tort liability encountered in the ordinary course of business. The loss of even one of these claims, if it results in a significant punitive damage award, could have a material adverse effect on our business. In addition, our exposure to potential liability under punitive damage theories may significantly decrease our ability to settle these claims on reasonable terms.
imposing guidelines for pharmaceutical manufacturers that would cause pharmaceutical companies to restructure the financial terms of their business arrangements with PBMs, HMOs or other health plans;
adding further restrictions and administrative requirements on the use, retention, transmission, processing, protection and disclosure of personally identifiable health information; and
We have substantial indebtedness outstanding and have available borrowing capacity under our senior credit facility of up to $150 million. We may also incur additional indebtedness in the future.
The ability of Blue Capital Re to pay dividends is dependent on its ability to meet the requirements of applicable Bermuda law and regulations. Under Bermuda law, Blue Capital Re may not declare or pay a dividend to the Company if there are reasonable grounds for believing that Blue Capital Re is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of Blue Capital Re's assets would thereby be less than the aggregate of its liabilities and its issue share capital and share premium accounts. Further, Blue Capital Re, as a regulated insurance company in Bermuda, is subject to additional regulatory restrictions on the payment of dividends or distributions. In light of the Company's decision to enter run-off and return capital to its shareholders, on October 25, 2019, the BMA amended the license of Blue Capital Re to require Blue Capital Re to obtain the written approval of the BMA prior to the declaration and/or payment of any dividends and/or the making of any capital contributions to Blue Capital Re’s parent, shareholders or affiliates. Accordingly, Blue Capital Re will be obligated to seek the BMA’s advance approval in order to provide the Company with the funds required for each distribution to the Company’s shareholders in connection with the run off of the Company. To the extent Blue Capital Re is unable to obtain the BMA’s approval, distributions to the Company's shareholders may be prevented or delayed until such time as Blue Capital Re receives the BMA’s approval.
During the seven months ended July 31, 2019, releases of cash from funds held by ceding companies partially offset by payments of general and administrative expenses was the primary contributor to the cash from operating activities of $5.7 million. In addition, we also paid $2.6 million in dividends to holders of Common Shares and RSUs, and repaid outstanding debt of $4.0 million.
Prior to the transition to the liquidation basis of accounting, we believe the items that required the most subjective and complex estimates were: (i) our loss and LAE reserves; and (ii) our written and earned reinsurance premiums. Our accounting policies for these items are of critical importance to our Consolidated Financial Statements.
Subsequent to the adoption of the liquidation basis of accounting, all assets are stated at their estimated liquidation value and liabilities, including estimated costs associated with implementing the run-off and liquidation of the Company, are stated at their estimated settlement amounts over the remaining estimated liquidation period. Prior to the expiry of all our reinsurance treaties, the liquidation value of the Company's in-force treaties was based on management's estimate of future earned premium net of acquisition expenses together with an estimate for expected loss and loss adjustment expense liabilities to be incurred associated
Net Investment Income 5,563,573 1,227,816 2,700,242 2,522,712 1,792,947 _________ _________ _________ _________ _________ Total Income 34,364,262 22,544,501 18,129,853 15,527,896 12,085,735
Accounting Change. FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities" is effective for years beginning after December 15, 1993 and required the Company to classify its securities holdings into three categories (trading, available for sale, and held to maturity). The Company adopted Statement No. 115 in 1994 and classified its securities portfolio as available for sale. Adoption of the statement did not have a material effect on the Company's financial position and results of operations.
4. Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 ............
Other 370,394 284,103 334,245 _______ _______ _______ TOTAL EXPENSES 27,462,338 20,825,943 15,425,146 __________ __________ __________
Sales and maturities of investment securities 170,936,769 54,189,043 45,038,810 ___________ __________ __________
Effective January 1, 1994, the Company adopted the requirements of Financial Accounting Standards Board Statement No. 115 "Accounting for Certain Investments in Debt and Equity Securities" and the Company's investments have been classified as available for sale. The Company had previously accounted for its investment securities at market value, with the resulting unrealized gains and losses included as a separate component of stockholders' equity. Accordingly, the adoption of Statement No. 115 had no material effect on the Company's financial position and results of operations.
Dividends paid -- (2,021,504) (2,021,504) _____ ___________ ___________ Balance (Deficit), December 31, 1993 (8,274) 6,220,252 6,211,978
Expenses were $3,099,567 for the year ended December 31, 2019, an increase of $1,105,059 from $1,994,508 for the year ended December 31, 2018.
Management has evaluated subsequent events for recognition and disclosure in the financial statements through the date the financial statements were available to be issued. Due to the current Health Pandemic and the disruption in the bond markets the Company’s fixed securities portfolio has incurred a decrease in value of approximately $665,000 through March 27, 2020. The Company has the ability to hold the fixed securities until maturity.
The Company utilizes the ratio of the carrying value of individual mortgage loans compared to the individual appraisal value to evaluate the credit quality of its mortgage loans on real estate (commonly referred to as the loan-to-value ratio). The Company’s mortgage loans on real estate by credit quality using this ratio as of December 31, 2019 and 2018 are summarized as follows:
Net earnings were $3,156,893 in 2002, $1,706,588 in 2001 and $2,224,317 in 2000. The increase in 2002 net earnings reflects the net effect of life insurance proceeds net of related obligations, due to the death of the Chairman and President of the Company and the related tax benefits offset by an increase to loss reserves due to two large losses reported in current year, additional remediation expenses incurred on a construction project that significantly exceeded the original estimate and lower capital gains. The decrease in 2001 net earnings compared to the 2000 net earnings was due primarily to a decrease in earned premiums and an increase in the loss ratio partially offset by an increase in realized capital gains.
Operating earnings for ACMAT contracting are operating revenues less cost of contract revenues and identifiable selling, general and administrative expenses. Operating earnings for the bonding and liability insurance segments are revenues less losses and loss adjustment expenses, amortization of policy acquisition costs and identifiable selling, general and administrative expenses.
Revenues for the ACSTAR Bonding segment were $5,360,871 in 2002, $5,487,683 in 2001 and $6,284,212 in 2000. The 2002 decrease in revenue is primarily due to a decrease in investment income and capital gains offset in part by a 5% increase in earned premium. The 2001 decrease in revenue is primarily due to a 24% decrease in earned premiums and partly offset by an increase in investment income and realized gains.
Consolidated Schedules included in Part II of this Report -- Years ended December 31, 2002, 2001 and 2000
Prior to adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (FAS 142) on January 1, 2002, intangibles were stated at amortized cost and amortized using the straight-line method. Intangibles include insurance operating licenses and goodwill, which represents the excess of cost over the fair market value of net assets acquired. These intangible assets were amortized over periods ranging from 15 to 25 years.
December 31, 2002. There were no gross gains or losses realized on equity security sales for the year ended December 31, 2000.
While management continually evaluates the potential for changes in loss estimates, due to the uncertainty inherent in the surety business, the emergence of net favorable development may or may not continue to occur. Management believes that the reserves for losses and loss adjustment expense are adequate to cover the unpaid portion of the ultimate net cost of losses and loss adjustment expenses, including losses incurred but not reported.
Income taxes received from subsidiaries during the years ended December 31, 2002, 2001 and 2000 were $694,197, $516,173, and $118,150, respectively. Interest paid during the years ended December 31, 2002, 2001 and 2000 was $1,977,661, $2,933,115 and $3,023,070, respectively. Interest paid in 2001 and 2000 included $128,188 and $207,194, respectively, paid to subsidiaries for intercompany loans.
Our results of operations for the years ended December 31, 2011 and December 31, 2010 are discussed below.
Obligations of state and political subdivisions: Comprised of fixed income obligations of state and local governmental municipalities. The fair values of these securities are based on quotes and current market spread relationships, and are included in the Level 2 fair value hierarchy. AmerInst considers that there is a liquid market for the types of securities held. Broker quotes are not used for fair value pricing.
Pursuant to the reinsurance agreements, AMIC Ltd. is required to provide the ceding companies with collateral to secure its obligations to them. At December 31, 2011 and 2010 AMIC Ltd. provided CAMICO with a Letter of Credit held by Comerica Bank with supporting investments with a carrying value of $2,813,484 and $2,713,631, respectively. Also, at December 31, 2011 and 2010, AMIC Ltd. had provided C&F with a Section 114 Trust, held by Comerica Bank, with restricted cash and cash equivalents and investments with a carrying value of $7,321,378 and $7,039,652, respectively.
Property and equipment, associated with APSL, at December 31, 2011 and 2010 at cost, less accumulated depreciation and amortization, totaled $745,784 and $716,230, respectively as follows:
The liability relating to these phantom shares is recalculated quarterly based on the net book value of the Company’s common shares at the end of each quarter. As a result of the overall decrease in the book value of the Company’s common shares since the grant dates, no liability has been recorded by the Company relating to these phantom shares at December 31, 2011.
Shareholders for the year ended December 31, 2006, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated herein by reference.
with our consolidated financial statements and accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere herein.
At December 31, 2000, approximately 25% of our mortgage backed investment portfolio consisted of planned amortization class ("PAC"), target amortization class ("TAC") and sequential instruments, as compared with 19% at December 31, 1999. These investments are designed to amortize in a more predictable manner by shifting the primary risk of prepayment of the underlying collateral to investors in other tranches ("support classes") of the CMO.
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted, or the information is presented in the consolidated financial statements or accompanying notes.
A deferred tax liability of $94,641 at December 31, 2000 (1999: $nil) has been provided against unrealized gains on fixed interest securities which has been presented as a separate component of accumulated other comprehensive income.
(b) The following table sets forth certain information regarding the investment ratings of the Company's fixed interest securities portfolio at December 31, 2000 and 1999.
The net changes in the fair value of derivatives resulted in an expense of $9.6 million and $9.7 million for the years ended December 31, 2010 and 2009, respectively, and were attributed to the derivative agreement with Topiary that was used to manage our exposure to certain underwriting risks.
Our non-U.S. government bond portfolio consists of securities issued by governments, provinces, agencies and supranationals as well as debt issued by financial institutions that is guaranteed by non-U.S. governments.
In addition, on June 30, 2011, our reinsurance subsidiaries entered into a letter of credit facility in the maximum aggregate amount of $100.0 million (the “LOC Facility”) that expires on December 31, 2013. Under the terms of the LOC Facility, up to $100.0 million is available for the issuance of letters of credit to support reinsurance obligations of our reinsurance subsidiaries. The LOC Facility contains customary representations, warranties and covenants. We are in compliance with the covenants under the LOC Facility. We also have the ability to request a supplemental letter of credit facility for up to $150.0 million subject to agreement with the lender.
Net premiums earned for the Surety Division continued to grow in most programs due to geographic expansion and the acquisition of several bond agencies with a 14% increase from $65 million in 1997 to $74 million in 1998. This growth occurred primarily in the custom bonds, subdivision bonds, license and
The increase in interest expense was due to increased amounts borrowed under the Deutsche Bank credit facility.
In December 1999, on a procedural motion in the Court of Claims, the Court linked the 1997 adverse decision on the duty to defend litigation to the Company's right to reimbursement and ruled that the Supreme Court decision would govern the future outcome of any cases in the Court of Claims. Although the Company is continuing to seek recovery from the State in the Court of Claims, the December 1999 ruling may have a significant adverse impact on the Company's ability to recover amounts paid by the Company on behalf of SUNY physicians. As a result, at December 31, 1999 the amount of subrogation recoverables recorded by the Company related to the SUNY litigation was approximately $1.5 million, reflecting an approximate $15.5 million reduction from the amount recorded at December 31, 1998.
The costs of acquiring business, principally commissions, certain expenses related to policy issuance, and certain variable sales expenses that relate to and vary with the production of new and renewal business, are deferred and amortized in accordance with SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments. Deferred policy acquisition costs (“DAC”) are subject to recoverability testing at the time of policy issuance and loss recognition testing at the end of each reporting period. At December 31, 2005, variable annuities and variable life insurance accounted for $181.9 million (or 61%) and $103.2 million (or 35%), respectively, of Merrill Lynch Life’s DAC asset. At December 31, 2004, variable annuities and variable life insurance accounted for $211.4 million (or 54%) and $170.2 million (or 43%), respectively, of Merrill Lynch Life’s DAC asset.
Merrill Lynch Life maintains a conservative general account investment portfolio. Merrill Lynch Life has no mortgage or real estate holdings and its investment in below investment grade fixed maturity securities are below the industry average. The following schedule identifies Merrill Lynch Life’s general account invested assets by type for the years ended December 31:
Fluctuations in the U.S. equity market also directly impact Merrill Lynch Life’s exposure to GMDB and GMIB provisions contained in the variable annuities it manufactures. Minimal or negative investment performance generally results in greater exposure to GMDB and GMIB provisions, to the extent there is an increase in the number of variable contracts (and amount per contract) in which the GMDB and GMIB exceeds the variable account balance. Prolonged periods of minimum or negative investment performance may result in greater GMDB and GMIB expense because it may change Merrill Lynch Life’s assumptions regarding the long term cost of GMDB’s and GMIB’s. If Merrill Lynch Life increases its estimated long term cost of GMDB’s and GMIB’s, it will result in establishing greater GMDB and GMIB liabilities as compared to current practice. GMDB and GMIB expenses are recorded as a component of policy benefits.
The investment performance of the underlying U.S. equity-based mutual funds supporting Merrill Lynch Life’s variable products do not replicate the returns of any specific U.S. equity market index. However, investment performance will generally increase or decrease with corresponding increases or decreases of the overall U.S. equity market. There are several standard indices published on a daily basis that measure performance of
Changes in the corporate credit environment directly impact the value of Merrill Lynch Life’s investments, primarily fixed maturity securities. Merrill Lynch Life primarily invests in investment-grade corporate debt to support its fixed rate product liabilities.
The following table summarizes Merrill Lynch Life’s contractual obligations as of December 31, 2005:
The Financial Statements (including their related notes and the report of KPMG LLP) are incorporated herein by reference and filed as Exhibit 13.1 hereto.
We do not know whether, or the extent to which, any pending investigations and related litigation discussed above under “Part I - Item 3 - Legal Proceedings” will result in our payment of fines, penalties or damages, any of which would require us to incur additional expenses and could have an adverse affect on our results of operations. Furthermore, if as a result of the resolution of these matters we are subject to operating restrictions, revocation of our licenses, termination of one or more of our contracts and/or exclusion from further participation in Medicare or Medicaid programs, our revenues and net income could be adversely affected.
Other amounts included in this balance as a reduction of premium revenue represent the return of premium associated with certain of our Medicaid contracts. These contracts require the Company to expend a minimum percentage of premiums on eligible medical expense, and to the extent that we expend less than the minimum percentage of the premiums on eligible medical expense, we are required to refund all or some portion of the difference between the minimum and our actual allowable medical expense. The Company estimates the amounts due to the state as a return of premium each period based on the terms of the Company’s contract with the applicable state agency.
The net cash inflow from operations for the years ended December 31, 2007, 2006, 2005 and 2004 was primarily due to increased revenues from increased membership, improved profitability and changes in the receivables and liabilities due to timing of cash receipts and payments. Because we generally receive premium revenue in advance of payment for the related medical care costs, our cash typically has increased during periods of premium revenue growth.
The following table presents selected consolidated financial data for and as of each of the five years ended December 31, 2001. The financial data presented for each of the five fiscal years has been derived from audited financial statements.
(b) an incentive payment of $40,000 per calendar year (for a maximum of $320,000) so long as UMC provides a minimum average of 40 FTEE employed in its Pampa operations center during each of the eight calendar years of the Agreement commencing with the year ending December 31, 2001. UMC recognized $40,000 in revenue from this incentive for 2001.
WAGES AND BENEFITS expense increased $114,000 or 7% primarily due to increased headcount as a result of increased business placements during 2001. As of March 15, 2002, UMC had a total of 73 full time and 5 part time employees in Pampa, and 4 full time employees in Dallas. Assuming no significant change in the Company's core services, management expects that wages and benefits should remain at approximately 63% of revenues in 2002.
Management believes that current cash and cash equivalents and projected cash flows from operations together with the Company's factoring agreement, incentives under the Economic Development and Incentive Agreement, capital lease and other potential financing should be sufficient to support projected growth in revenues through fiscal 2002.
Interest paid was $8,177,000 in 1996, $9,089,000 in 1995 and $8,499,000 in 1994.
Proceeds from sales of investments in fixed maturities totaled $49,488,000 in 1996, $66,544,000 in 1995 and $42,417,000 in 1994. Gross gains of $893,000, $708,000 and $947,000 and gross losses of $499,000, $1,209,000 and $1,405,000 were realized on those sales in 1996, 1995 and 1994, respectively.
At December 31, 1996, $76.9 million of consolidated shareholders' equity represents net assets of the Company's insurance subsidiary that cannot be transferred in the form of dividends, loans or advances to the parent company.
The Company exercised its right to call the warrants for redemption and all of the 2.4 million warrants with an exercise price of $2.50 per warrant were exercised and resulted in net cash proceeds to the Company of more than $6 million. As a result of the exercise, the number of outstanding shares of the Company's common stock increased to 20,545,661 shares from 18,120,171. The proceeds from the exercise of the warrants have been invested in short term obligations of the U.S. Treasury and other government agencies and will be used primarily for the payment of commission advances upon the sale of new contracts.
The Company has a stock option plan under which the Board of Directors may grant options to purchase shares of the Company's Common Stock. Options to purchase shares of the Company's Common Stock at an average price of $5.29 per share (market price at time of issuance) have been granted to three officers of the Company, as shown below.
Approximately $16 million ($9 million, or $0.23 diluted loss per share, net of tax) of other charges were recorded for contracts for which the anticipated future health care costs exceed the premiums. Approximately $13 million ($8 million, or $0.19 diluted loss per share, net of tax) related to PacifiCare of Utah due to the continuing losses anticipated by the plan. The remaining charge for loss contract accruals pertains to a workers' compensation insurance company and an HMO plan.
Properties The Company's Bermuda offices are located at 44 Church Street, Hamilton, Bermuda, and the telephone number is (441) 296-8560. The principal offices of the Company's U.S. subsidiaries are located at 1845 The Exchange, Suite 200, Atlanta, Georgia 30339, and the telephone number is (770) 916-1908.
Net Investment Income. Net investment income decreased 9.5% from $2.9 million in 1999 to $2.6 million in 2000 as a result of higher levels of short term investments to enable the Company to fund its stock repurchase programs. The average annual pre-tax yield on investments was 5.8% in 1999 and 4.8% in 2000. The average annual after-tax yield on investments was 5.4% in 1999 and 4.0% in 2000.
Workers’ compensation is subject to inflationary pressures. Worker’s compensation is subject to both medical and wage inflation. The cost of medical care has increased in recent years faster than inflation, in excess of 10%. This has resulted in reduced profitability in the workers’ compensation insurance line. New medical procedures could evolve and new legal theories developed that could cause older claims to re-open and increase expense. See further discussion under “Claim and Claim Settlement Expenses”.
2004 Outlook: We expect that claim and claim settlement expenses will be affected by the following factors:
At this time, we do not know the ultimate result of these factors on 2004 claim and claim settlement expenses as a percent of premiums earned.
The 2003 results include a $6.7 million decrease in prior years’ reserves for unpaid claim and claim settlement expenses compared to the 2002 results which include an $8.4 million decrease in prior years’ reserves for unpaid claim and claim settlement expenses. Our estimate for unpaid claim and claim settlement expenses decreased in 2003 due to the following: (i) the frequency of claims reported in 2003 for 2002 and prior years was less than anticipated when we determined our liability in 2002; and (ii) our estimate of the liability for unpaid claim and claim settlement expenses is difficult and volatile due to our relatively limited historical claim data and small claim population.
Fair Value of Financial Instruments - A number of our significant assets and liabilities (including reinsurance recoverables, deferred policy acquisition costs, furniture and equipment and unpaid claim and claim settlement expenses) are not considered financial instruments for disclosure purposes. Our premiums
Premiums Earned - Premiums on workers’ compensation insurance policies are our largest source of revenue. The premium we charge a policyholder is a function of its payroll, industry and prior workers’
In June 2001, we entered into an agreement with St. Paul RE effective January 1, 2001. Key provisions of this agreement included ceding 50% of the subject net earned premium to SPR in exchange for various levels of paid claim reimbursement through several loss corridors as defined in the agreement. In December 2002, we negotiated the termination of this agreement with SPR. In connection with the termination, we received $28.8 million in cash in December 2002 representing a return of all deposits made under the agreement less claim reimbursements for claims paid through December 2002. In 2002, we recorded a gain on the termination totaling $1.0 million representing the difference between the deposit receivable balance and the amount received from SPR.