felanders/preprocessed huggingface dataset:
Income before income taxes increased in 1995, as compared with 1994, primarily due to increased realized investment gains from the sale of UNUM's equity portfolio during the second quarter of 1995, partially offset by lower interest spread margins on TSAs. For 1994, the decrease in income before income taxes was primarily attributable to the declining income levels of the closed blocks of businesses.
NOTE 2. INVESTMENTS (CONTINUED) CHANGE IN UNREALIZED GAINS ON AVAILABLE FOR SALE SECURITIES - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
The amortized cost and fair value of fixed maturities at December 31, 1995, by contractual maturity date, are shown below. Expected maturities will differ from contractual maturities since certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
The fair values, which also represent carrying amounts, and the cost of equity securities available for sale were as follows at December 31, 1995:
Under UNUM's plans, the cost of covered health care benefits is assumed to increase 8.75% for retirees less than 65 years old, and 6.67% for retirees 65 years and older for 1996. These rates are assumed to decrease incrementally to 5.00% by 2001, and remain at that level thereafter. The weighted average discount rates used in determining the accumulated
NOTE 12. DIVIDEND RESTRICTIONS UNUM is subject to various state insurance regulatory restrictions that limit the maximum amount of dividends available from its United States domiciled insurance subsidiaries without prior approval. Under current law, during 1996 approximately $135 million will be available for payment of dividends to UNUM Corporation without state insurance regulatory approval. Dividends in excess of this amount may only be paid with state insurance regulatory approval. The aggregate statutory capital and surplus of the United States domiciled insurance subsidiaries of UNUM Corporation was approximately $1,149 million and $840 million, at December 31, 1995, and 1994, respectively. The aggregate statutory net income of UNUM Corporation's United States domiciled insurance subsidiaries was approximately $290 million, $70 million and $216 million for 1995, 1994 and 1993, respectively. State insurance regulatory authorities prescribe statutory accounting practices that differ in certain respects from generally accepted accounting principles. The significant differences relate to deferred acquisition costs, deferred income taxes, non-admitted asset balances, required investment risk reserves and reserve calculation assumptions.
Net favorable development for the insurance segment of $66.9 million of which $21.0 million was recognized on general casualty and $15.7 million on professional liability lines of business, primarily on the 2005 and 2006 years, and $30.2 million on the short tail property and aviation lines of business from the 2010 and 2009 years;
Net unfavorable development of $14.3 million arising from increases in reinsurance premium estimates. Changes in premium estimates occur on prior year contracts each year as we receive additional information on the underlying exposures insured and the associated loss is recorded, at the original loss ratio, concurrently with the premium adjustment. The unfavorable development was partially offset by an increase in earned premium net of acquisition costs of $12.9 million; and
or loss will be recognized in income. If, due to an unforeseen change in loss payment patterns, we need to sell any available for sale investments before maturity, we could realize significant gains or losses in any period, which could result in a meaningful effect on reported net income for such period.
Consolidated Results of Operations - For the years ended December 31, 2011, 2010 and 2009
annuity reinsurance segments. The lower premium volume in our insurance and reinsurance segments reflect expected reductions across several lines of business due to competitive market conditions, resulting in reduced writings because pricing did not meet our risk/return thresholds.
Net losses and loss expenses. The loss ratio for the year ended December 31, 2011 decreased by 9.5 percentage points compared to the year ended December 31, 2010. The net favorable and (unfavorable) development of prior year reserves in the years ended December 31, 2011, 2010 and 2009 by line of business was as follows:
Excluding the net favorable loss development (and after adding back the $9.5 million reduction to net premiums earned for the workers’ compensation contract discussed above), the loss ratio was 61.6% for the year ended December 31, 2010 compared to 73.9% for the year ended December 31, 2009. The decrease in the loss ratio for the year compared to the prior year was principally due to the inclusion of net premiums earned from the former Harbor Point companies since May 12, 2010 at a significantly lower loss ratio, which reduced the average loss ratio. Despite the increase in property catastrophe losses discussed below, the 2010 loss ratio on the net premiums earned related to the former Harbor Point portfolio of contracts does not include any significant property catastrophe losses other than from the New Zealand earthquake as most of the year’s property catastrophe loss events occurred prior to the Amalgamation;
(b) The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned.
- ------------------ (1) Results of operations for IDH after August 31, 1994 are included in historical results of operations for the Company on a consolidated basis for the years ended December 31, 1994, 1995 and 1996. See the Company's Consolidated Financial Statements and the Notes thereto. (2) Results of operations for US Dental after October 31, 1995 are included in historical results of operations for the Company on a consolidated basis for the years ended December 31, 1995 and 1996. See the Company's Consolidated Financial Statements and the Notes thereto. (3) Results of operations for AHP after January 31 1996, Independent and Association after September 30, 1996 and for KCDC and OraCare after October 31, 1996 are included in historical results of operations for the Company on a consolidated basis for the year ended December 31, 1996. See the Company's Consolidated Financial Statements and the Notes thereto.
In October 1996, the Company completed a public offering of 2,000,000 shares of its common stock for $30.00 per share (the "1996 Offering"), resulting in net proceeds of $56.2 million. The Company used a portion of the proceeds to complete the acquisitions of Independent, Association, OraCare and KCDC in 1996 and of United in 1997.
We participate in the life insurance market through our subsidiary, TSV, and in the property and casualty insurance market through our subsidiary, TSP. TSV and TSP represented approximately 5.5% and 4.3%, respectively, of our consolidated premiums earned, net for the year ended December 31, 2012 and 24.0% and 9.7%, respectively, of our operating income for that period.
Administrative Service Fees. Administrative service fees include amounts paid to us for administrative services provided to self-insured contracts. We provide a range of customer services pursuant to our administrative services only (“ASO”) contracts, including claims administration, billing, access to our provider networks and membership services. Effective November 1st, 2011, TSS entered into a new contract with the government of Puerto Rico, to administer the provision of the physical health component of the miSalud program (similar to Medicaid) in designated service regions in Puerto Rico. Administrative service fees are recognized in the month in which services are provided.
Consolidated claims incurred during the year ended December 31, 2012 increased by $203.5 million, or 11.9%, to $1.9 billion when compared to the claims incurred during the year ended December 31, 2011, mostly due to claims incurred in the Managed Care segment. The increased claims incurred of the Managed Care segment result from higher utilization and cost trends, particularly in the Medicare business. The Life and Property and Casualty segments also experienced increases in claims incurred. The consolidated loss ratio increased by 170 basis points to 85.2%.
The change in unearned premiums presented an increase of $4.0 million, to $7.7 million during the year ended December 31, 2011, primarily as the result of the lower volume of premiums written during this period.
We paid approximately $11.3 million under the 2010 stock repurchase program during the year ended December 31, 2011.
On December 21, 2005, we issued and sold $60.0 million of our 6.6% senior unsecured notes due December 2020 (the “6.6% notes”). The 6.6% notes were privately placed to various institutional accredited investors. The notes pay interest each month until the principal becomes due and payable. These notes can be redeemed after five years at par, in whole or in part, as determined by us. On October 1, 2010 we repaid $25.0 million of the principal of these senior unsecured notes.
For our audited consolidated financial statements as of December 31, 2012 and 2011 and for each of the three years ended December 31, 2012 see Index to financial statements in “Item 15. Exhibits and Financial Statements Schedules” to this Annual Report on Form 10-K.
The selected financial data in the table as of December 31, 1998 and 1997, and for the periods ended December 31, 1998, 1997 and 1996, are derived from the consolidated financial statements of the Company which have been audited by Deloitte & Touche, LLP, independent auditors, as indicated in their report included elsewhere in this Form 10-K. The audit report includes an explanatory paragraph regarding certain conditions which raise substantial doubt about the Company's ability to continue as a going concern. (See "Consolidated Financial Statements").
The Company's ability to achieve profitability is dependent principally on reducing its medical expenses as a percentage of its premium revenue (the "medical loss ratio" or "MLR"). Although WellCare has initiated programs to reduce the MLR, the actions have not yet generated improvements sufficient to return the Company to profitability. Effective January 1999, WCNY did not renew its Medicare Risk contract in four counties (approximately 4,000 members) after reviewing its medical loss ratio in each of these counties. Effective June 1, 1999, WCNY sold its commercial business, including approximately 25,000 members, to GHI.
Medical expenses decreased 7.1% or $9.7 million, to $126.3 million in 1997, from $136.0 million in 1996. There was a 11.1% increase on a PMPM basis and increase as a percentage of premiums earned (the "medical loss ratio") from 86.5% in 1996 to 88.8% in 1997. The decrease in medical expenses from 1996 is primarily due to decreased commercial membership partially offset by increases attributable to a change in product mix. Beginning in the third quarter of 1996 and throughout 1997, the Company made a major effort to improve the medical cost economics of the business. These initiatives principally revolved around renegotiated provider contracts and an improved effort in utilization management. The shift in the percentage of member months attributable to Medicare versus commercial has also affected medical costs. Medical expenses as a percentage of premiums in the commercial and Medicaid lines of business have decreased during the quarters, however; these gains were offset by higher than anticipated medical costs associated with the expansion of the Medicare business occurring principally in the fourth quarter of 1997.
As of June 30, 2003, OmniCare-TN's total enrollment was 130,080 members, compared to 120,000 at October 1, 2002. The increase in members is attributed to the assignment of 19,857 members by TennCare on June 1, 2002 offset by the loss of approximately 7,900 members as discussed in the previous paragraph.
Interest expense decreased $0.08 million (35%), to $0.14 million in the fiscal year ended June 30, 2003 from $0.22 million in the fiscal year ended June 30, 2002, due to debt reduction of $1.1 million and decreases in the prime rate.
Interest and other income decreased $0.2 million (10%) to $2.1 million in the fiscal year ended June 30, 2002 from $2.3 million in the fiscal year ended June 30, 2001.
Accounts receivable decreased by $2.0 million at June 30, 2003 compared to June 30, 2002, primarily because of TennCare's new ASO reimbursement system referred to above.
elsewhere that no incentive payments would be made because of that state's and TennCare's budget situation. TennCare stated at the inception of the ASO program that it intends to return to a full risk system after the end of the 18-month stabilization period at January 1, 2004. This remains the Company's current understanding of TennCare's intention in this regard.
Net investment income was $6.1 million in 1998 compared to $8.3 million in 1997 ($19.7 million in 1996). Included in the 1997 investment income is approximately $2.5 million of interest earned on the Manufacturers Life Mortgage Securities Corporation ("MLMSC") bonds which were repaid on March 1, 1997. The decrease in net investment income from 1996 to 1997 is due to the maturity of the MLMSC bonds in March 1997 on which interest of approximately $13.2 million was reported in 1996.
Policyholder benefits increased to $16.5 million in 1998, compared to $6.7 million in 1997 ($14.5 million in 1996). The increase in 1998 is primarily a result of increased reserves for the Taiwan business due to new business and a much slower run-off of reserves as lower surrenders were experienced compared to 1997.
In October 1997, the Manufacturers Life Mortgage Securities Corporation ("MLMSC"), a subsidiary of Holdco, was absorbed into Holdco subsequent to the maturity and repayment of the mortgage-backed US dollar bonds. All assets and liabilities of MLMSC were transferred to Holdco at their respective book values.
The Company's Taiwanese branch balance sheet and statement of income are translated at the current exchange and average exchange rates for the year respectively. The resultant translation adjustments are included in accumulated other comprehensive income.
The carrying values and the estimated fair values of certain of the Company's financial instruments at December 31, 1998 were as follows:
Reinsurance recoveries on ceded reinsurance contracts to affiliates were $NIL, $3,972 and $NIL during 1998, 1997 and 1996 respectively.
The Year 2000 risk is the result of computer programs being written using two digits, rather than four, to define the applicable year. Any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. The effects of the Year 2000 risk may be experienced before, on, or after January 1, 2000 and, if not addressed, could result in systems failures or miscalculations causing disruptions of normal business operations. It is not possible to be certain that the Company's Year 2000 program will fully resolve all aspects of the Year 2000 risk, including those related to third parties.
AMIC Ltd.’s ability to pay dividends to AmerInst is subject to the provisions of the Bermuda insurance and companies laws and the requirement to provide the ceding companies with collateral. Under the Companies Act, AMIC Ltd. would be prohibited from declaring or paying a dividend if such payment would reduce the realizable value of its assets to an amount less than the aggregate value of its liabilities, issued share capital, and share premium accounts. As of December 31, 2017, approximately $36.4 million was available for the declaration of dividends to shareholders. However, due to the requirement to provide the ceding companies with collateral, approximately $21.2 million was available for the payment of dividends to the shareholders. In addition, AMIC Ltd. must be able to pay its liabilities as they fall due after the payment of a dividend. Our ability to pay dividends to common shareholders and to pay our operating expenses is dependent on cash dividends from our subsidiaries. The payment of such dividends by AMIC Ltd., including its subsidiary Investco, to us is also limited under Bermuda law by the Insurance Act and Related Regulations which require that AMIC Ltd. maintain minimum levels of solvency and liquidity. For the years ended December 31, 2017 and 2016 these requirements have been met as follows:
The following tables set forth information about incurred and paid loss development information related to our professional liability business under the Reinsurance Agreement within the Reinsurance segment as at December 31, 2017. The information related to incurred and paid loss development for the years ended
The Company has not prepared loss development tables for CAMICO, which is in run-off, as its reserves for losses and loss adjustment expenses as at December 31, 2017 of $153,103 are not significant (1.4% of total net reserves) and therefore, presenting this information would not be meaningful. Reserves for CAMICO have been included as a reconciling item within the reconciliation of loss development information to the Company’s reserves for losses and loss adjustment expenses.
For three of these employees, including Mr. Nieman, the phantom shares initially granted, as well as any additional shares granted from dividends declared, vested on January 1, 2015. For the fourth employee, the phantom shares initially granted, as well as any additional shares granted from dividends declared, will vest on January 1, 2018. The liability payable to these employees under the phantom share agreements is equal to the value of the phantom shares based on the net book value of the Company’s actual common shares at the end of the previous quarter less the value of phantom shares initially granted and is payable in cash upon the earlier of the employee attaining 65 years of age or within 60 days of such employee’s death or permanent disability, including if such death or permanent disability occurs before January 1, 2018 for the fourth employee
The consolidated financial statements and supplementary data from pages 30 through 54, but not including the Report of Management from page 54 included in the Annual Report for the year ended December 31, 1997, is attached as Exhibit 13 hereto and are incorporated herein by reference.
Acquisition expenses were $33.0 million for the year ended December 31, 2008, compared to acquisition expenses of $36.6 million for the year ended December 31, 2007. The decrease in our acquisition expense is the result of a decrease in premiums.
losses are reported as a separate component of accumulated other comprehensive income in stockholders’ equity.
Liquidity Requirements of Specialty Underwriters’ Alliance, Inc. We are organized as a holding company and, as such, have no direct operations of our own. Our assets consist primarily of investments in our subsidiary, through which we conduct all of our insurance operations. As a holding company, we have continuing funding needs for general corporate expenses, taxes, the payment of principal and interest on future borrowings, if any, and the payment of other obligations as they come due. Funds to meet these obligations come primarily from dividends and other statutorily permissible payments from our operating subsidiary. The ability of our operating subsidiary to make payments to us is limited by the applicable laws and regulations of Illinois which limit and restrict the payment of dividends to us by our insurance subsidiary.
The commercial automobile product line is mostly liability coverage which is primarily long-tail coverage. Claims relating to physical damage to the automobile (property) and property damage (liability) are easier to estimate and are resolved more quickly. Claims relating to bodily injury take longer to formalize and are more difficult to estimate.
We determined the range of reserve estimates by reviewing various actuarial methods as well as testing the possible ultimate losses by applying simulated expected future loss development patterns. The probability that ultimate losses will fall outside of the ranges of estimates by line of business is higher for each line of business individually than it is for the sum of the estimates for all lines taken together. Although we believe our reserves are reasonably stated, ultimate losses may deviate, perhaps materially, from the recorded reserve amounts and could be above the high end of the range of actuarial projections. This is because ranges are developed based on known events as of the valuation date, whereas the ultimate disposition of losses is subject to the outcome of events and circumstances that may be unknown as of the valuation date.
(2) Includes future annuity and contract benefits, unearned premiums, liability for policy and contract claims, and other policyholder liabilities.
The following table sets forth the significant acquisitions made since 1996 that impact the financial comparisons of operating results for 1998 as compared to 1997 and 1997 as compared to 1996.
Amortization of intangibles for companies acquired before 1996 declined by $19 million in 1998 and $39 million in 1997 due to lower amortization of PVFP. PVFP is amortized, net of accreted interest, based on the incidence of gross profits for interest-sensitive life and annuity policies and gross premiums on non-interest-sensitive life and accident and health products.
involved in the Year 2000 effort necessarily involve estimates and projections of activities and resources that will be required in the future. These estimates and projections could change as work progresses.
The following table summarizes the Company's investment results for the periods indicated.
Due in one year or less ....................... $1,204 3.3% Due after one year through five years ......... 6,599 17.9 Due after five years through 10 years ......... 5,220 14.1 Due after 10 years............................. 15,972 43.3 Mortgage-backed securities .................... 7,903 21.4 ---------------------------
We have audited the accompanying consolidated balance sheets of GE Financial Assurance Holdings, Inc. and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of income, shareholder's interest, and cash flows for each of the years in the three-year period ended December 31, 1998. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
Short-duration contracts -- Acquisition costs consist primarily of commissions and premium taxes and are amortized ratably over the terms of the underlying policies. Direct response marketing costs are amortized on an accelerated basis over the expected life of the respective customer relationship.
Unamortized balance at December 31 1,400 945 498 Cumulative effect of net unrealized investment gains (82) (82) (10) ------------------------
Net life insurance in force as of December 31 are summarized as follows:
In connection with the acquisition of the operating infrastructure and initiation of operations at GE Edison Life Insurance Company, a subsidiary of the Company entered into certain long-term note agreements in the amount of (Y)6.5 billion ($56 at December 31, 1998), at 2.25%, due April 2008. In addition, the subsidiary of the Company entered into similar long-term note agreements, having the same interest rate and maturity, in the amount of (Y)3.5 billion ($27 at December 31, 1998), with certain affiliates of the Company. A guarantee fee of 0.50%, relating to the above long-term notes, is being paid annually to GE Capital as guarantor.
The following is a summary of geographic region activity for 1998.
Premiums for Retrocession, less cancellations Commissions, less Retrocession , . Claims paid Frs. 64,496,245.79 less Retrocession , 26,773,057.06 Premium Reserve, less Retrocession . . . . ". Reserve for unsettled Claims Reserve for extraordinary Losses . .
Capital (10,000 shares of Frs. 2000 each). . . • • • • • Reserve Fund Special Reserve Fund . . . . . . . . . . ... .... . . . Due to other Companies and Banks . '. .......... . . . Life and other funds deposited by ceding Companies . . . . . . . . . Sundry Creditors Reserves: Fire, Accident, Liability, Burglary, Fidelity, Surety and Marine Dep|2: Premium Reserve Frs. 89,080,526. — Reserve for unsettled Claims • . . . ... . . „ 22,243,141. — Reserve for extraordinary Losses . . . . . . . , 7,500,000. —
Life DeptPremium Reserve Frs. 82,767,657. — Annuity Fund . . . . „ 8,716,380 — Reserve for unsettled Claims , 1,681,489. —
The increasing loss and loss adjustment expense experienced on the business which the Registrant originates and cedes to its reinsurers may also adversely affect the Registrant's profitability in the future. In an effort to reduce it's reliance on reinsurance, the Registrant decreased the ceding percentage from 70% to 60% on certain lines effective January 1, 1996. If the Registrant's ratio of loss and loss adjustment expenses to earned premium does not improve, or continues to deteriorate, it is likely that over time the Registrant's cost of reinsurance would increase, and it is possible that at some future point the Registrant could not obtain reinsurance on economically viable terms.
The Company's three insurance subsidiaries, Fortune, Fortune Life, and Pegasus maintain certain deposits with state regulatory agencies as a statutory licensing requirement. The carrying value of the investments on deposit was $1,550,000 at December 31, 1996 and $1,544,762 at December 31, 1995. These deposits are included in the investment tables and exhibits of this report.
Summarized financial information by business segment for 1996, 1995 and 1994 is as follows:
Prior to its Demutualization on November 16, 1998, the Company had no common stock outstanding and, accordingly, did not report earnings per share. In accordance with GAAP, per share amounts presented for 1998, include only the results of operations for the period from November 16, 1998 (the effective date of demutualization) through December 31, 1998. On a pro forma basis, assuming the demutualization occurred January 1, 1998, basic and diluted earnings per share would have been $4.05 and $3.99, respectively, for the years ended December 31, 1998 and 1997.
Group Pension Profits were $30.7 million for the year ended December 31, 2001, a decrease of $6.4 million, or 17.3%, from $37.1 million for the year ended December 31, 2000. Group Pension Profits for the years ended December 31, 2001 and 2000, consisted of $27.4 million and $26.9 million, respectively, of Group Pension Payments and $3.3 million and $10.2 million, respectively, relating to adjustments required to reflect the earnings from such payments in accordance with GAAP. Such adjustments primarily relate to changes in the valuation allowances established to recognize impairment of assets supporting the business transferred in the Group Pension transaction as well as certain adjustments relating to policyholder liabilities. The decrease of $6.4 million in the Group Pension Profits is primarily due to lower operating income due to the run-off of the Group Pension business of $9.1 million, offset by higher realized gains on investment results in 2001 of $2.7 million.
Group Pension Profits were $37.1 million for 2000, a decrease of $25.9 million or 41.1% from $63.0 million reported in 1999. The decrease is due to lower investment gains of $20.1 million from lower gains on real estate sales and higher losses on sales of bonds in 2000, and lower operating income of $5.8 million due to the run off of the Group Pension business.
Amounts presented for 2001 and 2000 are net of approximately $208 million and $998 million, respectively, of exchanges to new product series.
New sales of variable annuities during 2000 were $421 million, a decrease of $2 million, or 0.5%, from $423 million reported for 1999. The Company’s exchange program, as described above, continues to be well received. Customers exchanged approximately $1 billion of assets to the new product series during 2000.
The underlying properties supporting the commercial mortgage loans at December 31, 2001 and 2000, respectively, consisted of 54.4% and 56.6% in office buildings, 9.7% and 10.2% in hotels, 10.4% and 9.3% in industrial buildings, and 25.5% and 23.9% in other categories, none of which exceeded 10.0% of total commercial mortgage loans.
The Company’s commercial mortgage loan portfolio is geographically diversified throughout the United States. At December 31, 2001 and 2000, the highest concentration was in the southeast region, comprising 26.6% and 25.6% respectively, of the total.
The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto.
Our insurance subsidiaries, in common with other insurers, are subject to extensive governmental regulation and supervision in the various states and jurisdictions in which it transacts business. The laws and regulations of the insurer's state of domicile have the most significant impact on its operations.
The table below sets forth, in summary form, selected financial data of the Company. This data, which is not covered in the reports of our independent registered public accounting firms, should be read in conjunction with our consolidated financial statements and notes, which are included elsewhere herein.
At December 31, 2009, investments in fixed maturity and equity securities were 86.9% of our total investments. All of our fixed maturities were classified as either available-for-sale or held-to-maturity securities at December 31, 2009. We had no fixed maturity or equity securities that were classified as trading securities at December 31, 2009 or 2008.
The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of December 31, 2009.
Our cash balances at our primary depositories were significantly in excess of Federal Deposit Insurance Corporation coverage at December 31, 2009 and December 31, 2008. Management monitors the solvency of all financial institutions in which we have funds to minimize the exposure for loss. Management does not believe we are at significant risk for such a loss. During 2010, we intend to continue to utilize short term agencies and U.S. Treasuries as a cash management tool to minimize excess cash balances.
A recoverability test that considers, among other things, actual experience and projected future experience is performed at least annually. These annual recoverability tests initially calculate the available premium (gross premium less benefit and expense portion of premium) for the next 30 years. The available premium per policy and the deferred policy acquisition costs per policy are then calculated. The deferred policy acquisition costs are then evaluated over two methods utilizing reasonable assumptions and two other methods using pessimistic assumptions. The two methods using reasonable assumptions illustrate an early-deferred policy acquisition recoverability period. The two methods utilizing pessimistic assumptions still support early recoverability of our aggregate deferred policy acquisition costs. Management believes that our deferred policy acquisition costs and related amortization for the years ended December 31, 2009, 2008 and 2007 limits the amount of deferred costs to its estimated realizable value. This belief is based upon the analysis performed on capitalized expenses that vary with and are primarily related to the acquisition of new and renewal insurance business, utilization of the factor method and annual recoverability testing.
Effective with changes in the United States federal income tax laws in 1997, the Company no longer provides for U.S. income taxes on the undistributed earnings of its foreign subsidiaries which are considered permanently invested outside the United States. At December 31, 1998, the Company had $21.8 million of undistributed earnings from its foreign subsidiaries which is a decrease of $5.4 million from the undistributed earnings at December 31, 1997. This decrease is due primarily to $7.7 million of aggregate dividend payments received by the Company from two of its foreign subsidiaries partially offset by the 1998 net earnings of its foreign subsidiaries. These dividend payments are subject to United States federal income tax which have been provided for by the Company. See Note 12 to the Consolidated Financial Statements. Although not considered available for domestic needs, the undistributed earnings generated by certain foreign subsidiaries referred to above may be used to finance foreign operations and acquisitions.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of
In 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities," which is effective for fiscal years beginning after June 15, 1999. Because of the Company's minimal use of derivatives, management does not anticipate that the adoption of SFAS 133 will have a significant effect on the Company's consolidated operating results or financial position.
The Company has a noncontributory defined benefit pension plan which covers substantially all domestic employees who have attained a specified age and one year of employment. Benefits under the plan are based on years of service and salary history. Plan assets consist primarily of common stocks and bonds invested under the terms of a group annuity contract managed by a life insurance company.
We lease our principal office in Austin, Texas to service all business entities and operations. We also lease space for our office in Bermuda related to CICA Ltd. In 2018, we owned properties in Austin and Buchanan Dam, Texas used for our general business operations and properties in Louisiana related to our Home Service segment and business operations. On February 15, 2019, we sold an owned building located at 400 East Anderson Lane and a nearby property in Austin to a third-party. Following the sales, we no longer own any property in Austin.
There has been a trend toward consolidation of domestic life insurance companies, due to significant losses incurred by the life insurance industry as a result of the low interest rate environment and related economic pressures, as well as increasing costs of regulatory compliance for domestic life insurance companies.
Amortization of Deferred Policy Acquisition Costs. Amortization of DAC totaled $34.2 million, $29.7 million and $28.5 million in 2018, 2017 and 2016, respectively, which primarily resulted from the AXIS actuarial system conversion impacting amortization by $3.7 million in 2018 and due to the higher surrender activity, including early duration elections to convert existing policies to reduced paid up ("RPU") or extended term insurance ("ETI") status in 2018 and 2017. There are higher deferred acquisition costs associated with early duration conversions to RPU or ETI, which, when converted, increases amortization expense. Amortization of deferred policy acquisition costs is impacted by persistency and the higher level of surrenders is impacting our amortization.
Most of our life insurance policies contain a policy loan provision, which allows the policyholder to use their accumulated cash value of a policy to pay premiums. These accumulated cash values can also be taken as a cash loan from the policy at the request of the policyholder and are secured by the policy values. The policy loan asset balance increased 9.6% year over year and remains at the same approximate ratio to life reserves as noted in prior years.
As of December 31, 2018, Citizens had fixed maturities available-for-sale of $41.7 million and cash of $11.8 million, which represents additional liquidity for future acquisitions, liquidity support for the life insurance companies and for general corporate purposes.
The NAIC utilizes a collection of analytical tools designed to assist state insurance departments with an integrated approach to screening and analyzing the financial condition of insurance companies operating in their respective states. One such set of analytical
The amendments in this guidance result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. Consequently, the amendments in the guidance change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in the guidance to result in a change in the application of the requirements in the Fair Value Measurements Topic. The guidance also clarifies the FASB’s intent about the application of existing fair value measurement requirements as well as changes to a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The Company adopted this guidance at January 1, 2012 and it did not have a material impact on the consolidated financial statements.
Included in other invested assets are two international private equity funds (“the funds”) that invest in equity securities of foreign issuers and are managed by third party investment managers. The funds had a fair value of $59.0 million and $52.6 million at December 31, 2012 and 2011, respectively, which was determined using each fund’s net asset value. The Company employs procedures to assess the reasonableness of the fair value of the funds including obtaining and reviewing each fund’s audited financial statements. There are no unfunded commitments related to the funds. The Company may not sell its investment in the funds; however, the Company may redeem all or a portion of its investment in the funds at net asset value per share with the appropriate prior written notice. The funds are disclosed in Level 2 within the hierarchy due to the Company’s ability to redeem its investment in the funds at net asset value per share at the measurement date.
See Note 3 for the valuation methods used by the Company for each type of financial instrument the plans hold that are carried at fair value. There were no transfers between level categorizations during the years ended December 31, 2012 and 2011.
As of December 31, 2012, there was $0.3 million of total unrecognized compensation cost related to non-vested restricted share compensation arrangements. The remaining cost is expected to be recognized over a period of 2.25 years.
Intrinsic value for stock options is defined as the difference between the current market value and the grant price. For the years ended December 31, 2012, 2011 and 2010, the total intrinsic value of stock options exercised was $0, $0.1 million and $1.4 million, respectively. The tax benefit for tax deductions from share-based awards totaled $0 for the years ended December 31, 2012 and 2011 and $0.3 million for the year ended December 31, 2010.
Acquired IHC Health Solutions effective January 2, 2007. IHC Health Solutions will serve as the Company’s primary distribution channel for strategic and private label marketing of its fully insured lines of business, principally through agents and brokers affiliated with other insurance carriers, and through large, national marketing organizations. Although nearly all of the business of IHC Health Solutions is administered by IAC, a significant portion of the business is not currently on Standard Security Life or Madison National Life paper.
The Company’s health reserves by segment are as follows (in thousands):
Interest expense increased $1.2 million primarily due to the issuance of $15.5 million of fixed rate subordinated debt during the fourth quarter of 2004. The Company had $38.2 million of fixed rate debt (including $25.7 million of junior subordinated debt) and $12.4 million of floating rate junior subordinated debt at December 31, 2005. The floating rate debt carried a weighted average interest rate of 7.3% in 2005 versus 5.5% in 2004.
Under the rollover approach described above, management did not consider this item to be material to the consolidated financial statements. However, under the dual approach required by SAB 108, this item is being adjusted effective as of January 1, 2006. The Company recognized an increase in due and unpaid premiums of $12,987,000; an increase in insurance reserves - health of $9,069,000; an increase in commissions payable of $3,060,000; an increase in income taxes payable of $300,000; and an increase in retained earnings of $558,000. These amounts were recorded as adjustments of January 1, 2006 opening balances for these accounts and the impact, net of tax, was reflected as a cumulative effect adjustment to retained earnings.
market began to "soften" in 2003, and less favorable conditions continued through 200
See Index to Consolidated Financial Statements and Schedules on page 55.
Earnings were CHF 175 per share, up 20.7%, due in part to the reduction in shares outstanding in 1998.The return on equity was 13.6%, down slightly from last year, owing to a higher adjusted equity base.This is within Swiss Re’s target return.
Europe 53.0% USA/Canada 32.2% Asia/Pacific 8.6% Latin America 2.6% Africa 2.7% Others 0.9%
Capital is a global equity investment firm dedicated to making minority and majority investments exclusively in insurance and related companies.
The spate of mergers and acquisitions which took place in the insurance sector in the year under review was concentrated mainly in Europe. This activity has significantly changed the face of insurance, especially amongst the top players in the industry.
VIII Other liabilities 1. Creditors arising out of reinsurance operations 2. Debentures 3. Amounts owed to banks 4. Other creditors
As auditors of the Group, we have audited the consolidated financial statements (balance sheet, profit and loss account, cash flow statement and notes) on pages 16 to 35 of the Swiss Re Group for the year ended 31 December 1998.
At the General Meeting of Shareholders on 26 June 1998, a capital reduction in the amount of the 312 350 shares repurchased was approved, thus reducing the nominal share capital of the company to CHF 147309 510, consisting of 14 730 951 registered shares with a par value of CHF 10. For the 1998 business year,14 307 811 registered shares are entitled to dividend.
Subordinated liabilities comprise a multi-currency perpetual step-up loan in the value of CHF 1001 million which combines elements of debt and equity and is included in solvency calculations.
The currency exchange rates applicable for key currencies are shown on page 24.
Income from subsidiaries and affiliated companies includes CHF 92 million of pledged dividends still outstanding (1997: CHF 308 million).
After deduction of the Federal Withholding Tax of 35%, the dividend will be paid from 1 July 1999 by means of dividend order to shareholders recorded in the share register or to their deposit banks.
M e th o d o f co n so li d a ti o n
Swiss Re Asset Management Ltd. m 100 – – – –
Swiss Re Investors (Ireland) Ltd. m 100 – – – –
Claims incurred: All claims payments plus the adjustment in the outstanding claims provision of a business year.
Motor insurance: Insurance against accident and liability as well as against accidental collision damage in connection with motor vehicles.
Property insurance: Collective term for fire and business interruption insurance as welI as burglary, fidelity guarantee and allied lines.
The difference between the market value and cost of shares and premises is stated separately as part of the shareholders’ capital and reserves after deduction of all due taxes.
Swiss Re registered shares 1 Per share entitled to dividend 2 Includes published unrealised capital gains, ie based on market value 3 Closing rates – Source: Datastream 4 1999: price on 4 May 1999 5 On the stock exchanges of Zurich, Basle and Geneva or the Swiss Exchange 6 Based on shares entitled to dividend
The Shanghai offices have been leasing from a third party since December 2007. For expansion purpose, another flat in the same building is leased from another third party starting in December 2010.
Operating expenses: Total operating expenses were $4,907,965 for 2011, as compared to $4,311,028 for 2010. The increase of $596,937 or 14% was mainly due to increases in salaries, travel expenses, rents, depreciation and amortization and other general and administrative expenses during the year. The reasons for the increases in the major items are as follows:
We made allowance for doubtful accounts based on a review of all outstanding amounts on a monthly basis. We analyze the aging of receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness or weakening in economics trends could have a significant impact on the collectability of receivables and the allowance. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances will be made.
Note 9 - Fair Value of Marketable Securities Investment and Investment Income
The aggregate value of this award was $310,860, as determined by multiplying the number of shares times the fair value of the Company’s stock on June 1, 2010, the date of the grant award. The fair value is based on discounted free cash flow analyses, which involve management’s best estimate of future revenue, operation expenses, investing activities, and financing activities. In the valuation, the free cash flow is projected for five years and is determined by using the Company’s historical figures such as revenue and operation expenses which are compounded annually with 5% growth rate. Free cash flow occurring beyond the five-year projection period is assumed to be in perpetuity and determined by using the Perpetuity Growth Model in which the project net cash flow is divided by the risk-free rate. The sums of the five-year free cash flow together with the perpetual free cash flow are then discounted by the risk free rate. As a result, the fair value of the Company’s stock on the date of the grant award is $1.57 per share. When determining the risk-free rate, Hong Kong unsecured long term loan rate, 7.25%, in effect at the time of grant is used in the calculation.