from cat events. The reinsurance is structured with a $4,000,000 retention/deductible from a single cat event. Any claim activity exceeding the deductible is 100% reinsured up to $72,500,000 in ultimate incurred losses and LAE. No single cat event in 2013 or 2012 exceeded our $4,000,000 retention and therefore, no losses were recovered under our catastrophe reinsurance program.
At December 31, 2013, the estimated reinsurance recoverable recorded was $1,501,000 compared to $1,541,000 for the same period last year. The Company does not anticipate any issues with collection of the recorded amount. In 2013, catastrophe reinsurance premiums ceded totaled $7,040,000 compared to $6,646,000 ceded in 2012. Catastrophe reinsurance premiums are based on a premium calculation applying the agreed upon rate to the earned premium of the covered lines of business. The increase in ceded premium in 2013 is attributable to a 2.4% increase in the rate applied. In addition to catastrophe reinsurance, the Company placed reinstatement premium protection (RPP) reinsurance during 2013 and 2012 totaling $1,367,000 and $1,346,000, respectively.
is discussed in Note 5 to the consolidated financial statements. Periodically, the carrying values of an individual investment may become temporarily impaired because of time value, volatility, credit quality and existing market conditions. Management evaluates investments to determine whether the impairment is other-than-temporary. Evaluation criteria include credit quality of security, severity of decrease between cost and market value, length of time of the impairment and likelihood that the impairment will reverse in the near future. This evaluation requires significant assumptions, estimates and judgments by management. If the impairment is determined to be other-than-temporary, the investment is written down to the current fair value and a realized loss is recorded on the income statement. We have very limited exposure to less liquid and difficult to value investments such as collateralized debt obligations.
Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,480,884 in 2013 and 2,466,600 in 2012.
Certain 2012 amounts have been reclassified from the prior year consolidated financial statements to conform to the 2013 presentation.
The Company holds a passive interest in a limited partnership that is considered to be a Variable Interest Entity (VIE) under the provisions of FIN 46(R). The Company is not the primary beneficiary of the entity and is not required to consolidate under FIN 46(R). The entity is a private placement investment fund formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnership. The carrying value of the
The Company's catastrophe reinsurance contract allows for one reinstatement. The Company maintains reinstatement premium protection (RPP) to cover reinstatement premiums incurred. The RPP further reduces risk from a major catastrophe and serves to strengthen the Company's capital position by reducing the modeled 100 year event net cost.
In 2013, cash dividends of $1.3 million were paid to the Registrant by its subsidiaries ($1.8 million in 2012). Also in 2012, timber property with a carrying value of $1.5 million was transferred to the Registrant from an insurance subsidiary.