felanders/preprocessed huggingface dataset:
TALNY conducts its business primarily in the annuity markets and to a lesser extent in the life insurance markets of the financial services industry. During 2009, the Company, in addition to not issuing life insurance products, ceased issuing variable annuity and market value adjusted annuity products. The Company offered the following guaranteed benefits within its variable annuity product suite: guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”) and guaranteed minimum withdrawal benefits (“GMWB”).
For the years ended December 31, 2010 and 2009, the Company recorded an OTTI in income, with no value of business acquired amortization of $0.1 million and $0.9 million, respectively. For the year ended December 31, 2008, the Company recorded an OTTI in income, net of value of business acquired amortization of $0.5 million.
ASC 815, Derivatives and Hedging - guidance that amended and expanded the disclosure requirements related to derivative instruments and hedging activities to provide users of financial statements with an enhanced understanding of the instruments - adopted January 1, 2009.
Policy and contract surrenders were $54.4 million, $59.4 million and $78.5 million for the years ended December 31, 2010, 2009 and 2008, respectively. The decrease from 2008 to 2009 was primarily due to the decline in the equity markets in late 2008 and early 2009.
The Company’s total gross unrealized loss on RMBS is $0.1 million. The pace of deterioration in the housing market began to stabilize in late 2009 and continued in 2010. Even with the stabilization, fundamentals in RMBS continue to be weak, which impacts the magnitude of the unrealized loss. Delinquencies and severities in property liquidations remain at an elevated level, while prepayments remain at historically low levels. Due to the weak fundamental situation, reduced liquidity, and the requirement for higher yields due to market uncertainty, credit spreads remain elevated across the asset class.
The insurer financial strength rating scales of S&P, A.M. Best, and Fitch Ratings (“Fitch”) are characterized as follows:
Amortization of VOBA was $1.2 million for the year ended December 31, 2010, which included favorable unlocking of $0.6 million. Amortization and impairment of VOBA was $10.8 million for the year ended December 31, 2009, which included unfavorable unlocking of $0.5 million. Favorable unlocking during 2010 was primarily driven by the favorable equity market in the latter half of the year, while in 2009 poor equity market performance during the first quarter resulted in unfavorable unlocking. In addition, during 2009, an impairment charge for $7.2 million was recorded as estimated future gross profits were less than the unamortized balance at March 31, 2009.
Reinsurance premiums ceded decreased $1.0 million during 2009 as compared to 2008. Effective second quarter of 2008, the Company began to recapture the majority of its reinsurance resulting in the decreased reinsurance premiums, which is expected to be finalized in 2010.
(c) The decrease in taxes, licenses and fees is primarily due to a tax refund related to NY franchise taxes.
The following is a reconciliation of the beginning and ending balance of investments measured at fair value on a recurring basis using significant unobservable (Level 3) inputs for the year ended December 31, 2014 and 2013.
Accrued expenses and other liabilities primarily represent premiums payable by APSL to C&F under the Agency Agreement and expenses accrued relating largely to professional fees. The balance increased from $1,779,595 at December 31, 2013 to $2,409,771 at December 31, 2014, an increase of $630,176 or 35.4%. The increase in the balance was attributable to an increase in premiums payable by APSL to C&F under the Agency Agreement. This balance fluctuates due to the timing of the premium payments to C&F and payments of professional fees.
The “cumulative redundancy (deficiency)” represents the aggregate change in the estimates over all prior years. For example, the 2007 liability has developed a $9,663,000 redundancy which has been reflected in income in subsequent years as the reserves were re-estimated.
With the exception of APSL, AmerInst and its other direct and indirect subsidiaries have no employees. Their operating activities, as well as certain management functions, are performed by contracted professional service providers. Cedar Management Limited provides AmerInst and AMIC Ltd. certain management, administrative and operations services under the direction of AmerInst’s Board of Directors pursuant to an agreement. The agreement may be terminated by either party upon not more than 90 days nor less than 60 days prior written notice. Mr. Stuart Grayston, our President, was formerly a director and officer of Cedar Management Limited, and Mr. Thomas R. McMahon, our Treasurer and Chief Financial Officer, is a shareholder, officer, director and employee of Cedar Management Limited. The Company paid Cedar Management Limited $330,000 and $320,000 in fees during 2014 and 2013, respectively.
The following selected financial data have been derived from the Company's audited consolidated financial statements and should be read in conjunction with the consolidated financial statements, related notes and other financial information included elsewhere herein. It should be noted that the selected financial data for the year ended December 31, 1994 has been restated (See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Prior Period Restatement").
Income (loss) before income taxes, extraordinary credit and cumulative effect of a change in accounting principle . . . . . . . 2,789 5,862 6,118 2,362 (2,458)
Weighted average shares outstanding. . . . . . . . . . . . . . . . . 6,250 6,226 5,022 4,257 3,565
Depreciation and amortization by approximately $700,000 to $2.3 million in 1995 as a result of amortization of preoperational costs associated with service area and product line expansions.
With respect to other income, income from affiliates decreased by $1.2 million, or 85.6%, in 1994 from 1993, principally, as a result of the acquisition of Mid-Hudson on December 30, 1993, and the resultant cessation of management fee revenues from Mid-Hudson. Interest and investment income increased by $.4 million, or 100.0%, from $.4 million in 1993 to $.8 million in 1994 due primarily from the investment to the net proceeds generated from the initial public offering of the Company's Common Stock in August 1993.
At December 31, 1995, the Company had total mortgage indebtedness of $6.1 million outstanding on four of its office buildings, of which approximately $800,000 is due February 1, 1999, approximately $4.5 million balance on January 1, 2000 and approximately $800,000 is due March 1, 2000. In February 1996, the Company incurred additional mortgage indebtedness of $335,000 due March 1, 2001.
Cash used in investing activities was ($8,030,000), ($28,595,000) and ($22,041,000), for 1995, 1994 and 1993, respectively. The most significant aspect of investing activities is the fixed maturity transactions. Fixed maturities account for 76%, 78% and 88% of the total cost of investments acquired in 1995, 1994 and 1993, respectively. The Company has not directed its investable funds to so-called "junk bonds" or derivative investments. The cash used by investing activities in the last three years was provided by investing excess cash and cash equivalents and financing activities.
The payment of cash dividends to shareholders is not legally restricted. At December 31, 1995, substantially all of the consolidated shareholders equity represents net assets of its subsidiaries. UTI does not have significant day to day operations of its own. Cash requirements of UTI primarily relate to the payment of expenses related to maintaining the Company as a corporation in good standing with the various regulatory bodies which govern corporations in the jurisdictions where the Company does business. UTI is able to meet its cash needs through its management agreement with UII and its income received on invested assets and cash balances. Insurance company dividend payments are regulated by the state insurance department where the company is domiciled. UG's dividend limitations are described below.
Other policyholder funds decreased 4% in 1995 compared to 1994. The decrease can be attributed to a decrease in premium deposit funds. Premium deposit funds are funds deposited by the policyholder with the insurance company to accumulate interest and pay future policy premiums. The change in marketing from traditional insurance products to universal life insurance products is the primary reason for the decrease. Universal life insurance products do not have premium deposit funds. All premiums received from the policyholder are credited to the life insurance policy and are reflected in future policy benefits.
Notes payable decreased $600,000 in 1995 compared to 1994. On January 31, 1996, the Company prepaid $1,500,000 of the $3,900,000 principal payment due on June 1, 1996. The Company's long term debt is discussed in more detail in Note 11 of the Notes to the Financial Statements.
The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards No. 121 entitled "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". This Statement, becomes effective for financial statements for fiscal years beginning after December 31, 1995, with early adoption encouraged.
Gross premiums written in 1996 of $110,000,103 were 2% above the $108,071,871 recorded in 1995. In 1995, gross premiums written increased 10% over the 1994 level. Texas accounted for the small growth rate by contributing 4 percentage points (points) of decrease. The following table compares the major product lines between the years for gross premiums written:
In October 1995, the FASB issued Statement 123, "Accounting for Stock-Based Compensation." The Statement is effective for years beginning after December 15, 1994, if awards are granted in the fiscal year. The Company granted stock options during 1996 to its directors and officers (see Note 7 of Notes to Consolidated Financial Statements).
• The inherent uncertainty of the estimated duration of the paid and reporting loss development patterns beyond the historical record requires that professional judgment be used in the determination of the length of the patterns based on the historical data and other information;
In 2000, we began writing casualty lines of reinsurance in the United States, and to a lesser extent, Europe, Asia, and Australia. Given the long-tail nature of this business, these new lines have both increased the amount of reserves in the Global Reinsurance segment as well as the uncertainty in the loss estimation process. For our casualty reinsurance business, we generally rely on ceding companies to report claims and then use that data as a key input to estimate unpaid losses and loss expenses. Due to the reliance on claims information reported by ceding companies, as well as other factors, the estimation of unpaid losses and loss expenses for assumed reinsurance includes certain risks and uncertainties that are unique relative to our direct insurance business. These include, but are not necessarily limited to, the following:
(3) Includes the results of American Insurance Administration Group, Inc. since its acquisition on January 6, 2000, and Capitated Health Care Services, Inc. since its acquisition on August 10, 2000.
Effective July 1, 2003, we entered into an agreement with Swiss Re and its newly acquired subsidiary, Guarantee Reserve Life Insurance Company ("Guarantee Reserve"), to acquire Guarantee Reserve's marketing organization including all rights to do business with its field force. The primary product sold by this marketing organization is low face amount whole life insurance, primarily for seniors.
Volatile conditions continue to characterize the overall financial markets. The low interest rate environment we have experienced in recent years has impacted the profitability of certain products we offer as well as returns on the investment portfolio backing our insurance liabilities.
Reinsurance recoverables increased by $3.001 billion from $2.727 billion at December 31, 2010 to $5.728 billion at December 31, 2011 primarily driven by an increase in universal life ceded reserves and ceded policyholders’ account balances arising from an affiliated coinsurance transaction executed in 2011 with PAR U. Also contributing to the increase in reinsurance recoverables was higher term reserves ceded under existing affiliated reinsurance agreements due to business growth, and an increase in the mark-to-market of reinsurance recoverable related to the reinsured liability for variable annuity living benefit embedded derivatives primarily resulting from an increase in the present value of future expected benefit payments driven by lower interest rates. See Note 13 to the Consolidated Financial Statements for additional information regarding affiliated reinsurance transactions.
Policyholders’ account balances increased $300 million from $7.509 billion at December 31, 2010 to $7.809 billion December 31, 2011 primarily driven by continued universal life sales and in force growth, growth in retained asset account balances, and the impact of the annual review of assumptions used in our estimate of total gross profits which forms the basis for amortizing unearned revenue reserves, partially offset by the impact of unrealized gains on unearned revenue reserves.
Offsetting these increases was a decrease in net realized investment gains of $206 million from a benefit of $96 million in 2010, to a loss of $110 million in 2011, primarily driven by an unfavorable variance in the mark-to-market related to the embedded derivatives associated with our non-reinsured living benefit features and related hedges driven by unfavorable markets in 2011.
The following table provides a summary of income from operations by segment, which is discussed more fully below.
Relevant systems were identified and their components inventoried, needed resolutions were documented, timelines and project plans were developed, and remediation and testing were completed. All of the Company's critical systems were assessed, fixed where necessary, tested, and, based on those tests, are considered to be Year 2000 compliant. The Company regards Year 2000 compliance as meaning that its business systems will have passed tests that indicate they will operate accurately before, during, and after January 1, 2000 with respect to Year 2000 issues.
Bonds are carried at cost, adjusted for amortization of premium or accrual of discount. Investments in mortgage backed securities are generally carried at amortized cost. Changes in prepayment assumptions and resulting cash flows are confirmed retrospectively. The adjusted yield is used to calculate investment income in future periods. If current book value exceeds future undiscounted cash flows, a realized capital loss is recorded and amortized through the Interest Maintenance Reserve (IMR). Investments in non-insurance subsidiaries are carried on the equity basis. Investments in insurance subsidiaries are carried at their statutory surplus values. Mortgage loans acquired at a premium or discount are carried at amortized values and other mortgage loans are carried at the amounts of the unpaid balances. Real estate investments are carried at the lower of cost, adjusted for accumulated depreciation or appraised value, less encumbrances. Short-term investments are carried at amortized cost, which approximates fair value. Depreciation of buildings and improvements is calculated using the straight-line method over the estimated useful life of the property, generally 40 to 50 years.
Assets and liabilities of the separate accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contract holders, are shown as separate captions in the financial statements. Assets held in the separate accounts are carried at market value as determined by quoted market prices of the underlying investments.
Certain prior year amounts have been reclassified to conform to amounts as presented in the current year.
The net investment is included in "Other invested assets" on the balance sheet.
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Results for 2001 were positively impacted by approximately $15 million of favorable development of prior period estimates of medical costs and recoveries from the New York State Market Stabilization Pools (the “Pools” or “New York Stabilization Pools”). Results for 2000 were adversely affected by charges related to recapitalization transactions. An extraordinary charge of $20.3 million, net of income tax benefits of $13.9 million, was recorded in 2000 in connection with the prepayment of the Term Loan Agreement, dated as of May 13, 1998 (the “Term Loan”) and the repurchase or tender of $200 million of its 11% Senior Notes due 2005 (the “Senior Notes”). The extraordinary charges include premiums paid, transaction costs and the write-off of unamortized original issuance debt costs. In addition, the Company completed an exchange and repurchase agreement for all of its outstanding Series D Cumulative Preferred Stock, par value $0.01 per share, and Series E Cumulative Preferred Stock, par value $0.01 per share (together, the “Preferred Stock”) and incurred costs of approximately $41.1 million related to the write-off of unamortized Preferred Stock discount and costs from the original issuance in 1998 and related transaction fees in 2000. Results for 2000 were also positively impacted by approximately $86 million of favorable development of prior period estimates of medical costs, claims recoveries and Pool recoveries. The Company’s results for 1999 were adversely affected by significant restructuring charges and included a charge of $24 million for the purchase of insurance policies for litigation matters. Net income for 2001, 2000 and 1999 was favorably affected by the reversal of $21 million, $10 million and $225 million, respectively, of deferred tax valuation allowances.
As of December 31, 2000, the Company had federal net operating loss carryforwards for tax purposes of approximately $202 million, which, if unused, will begin to expire in 2012.
In December 2001, the Company signed a definitive agreement to acquire MedSpan, Inc. (“MedSpan”), a provider-sponsored managed healthcare organization, for cash of approximately $19 million. MedSpan’s network services approximately 52,000 commercial members and 22,000 self-funded members in Connecticut and had total commercial HMO revenues of approximately $128.1 million in 2001. The transaction, which is subject to customary conditions including regulatory approvals, is anticipated to close by the end of the first quarter of 2002. The acquisition of MedSpan is not expected to have a material effect on the Company’s financial condition or results of operations in 2002.
Merrill Lynch Life defines credit spreads as the interest rate spread between the 5-year U.S Treasury Bond Index and the 5-year Corporate Industrial Bond Index. During 2001, credit spreads contracted approximately 32 basis points to end the year at 146 basis points.
There are several standard indices published on a daily basis that measure performance of selected components of the U.S. equity market. Examples include the Dow Jones Industrial Average ("Dow"), NASDAQ Composite Index ("NASDAQ") and the Standard & Poor's 500 Composite Stock Price Index ("S&P Index"). Despite a rebound in the U.S. equity market during the fourth quarter 2001, all three indices closed significantly lower from their respective levels at December 31, 2000. During 2001, the Dow, NASDAQ and S&P Index decreased 7.1%, 21.1% and 13.0%, respectively. Although the investment performance in the underlying mutual funds supporting Merrill Lynch Life's variable products do not replicate the returns on any specific U.S. equity market index; investment performance will generally increase or decrease with corresponding increases or decreases in the overall U.S. equity market.
Merrill Lynch Life's operating results are categorized into two business segments: Life Insurance and Annuities. Merrill Lynch Life's Life Insurance segment consists of variable life insurance products and interest-sensitive life products. Merrill Lynch Life's Annuity segment consists of variable annuities and interest-sensitive annuities. Other earnings represent earnings on assets that do not support contract owner liabilities. Net earnings by segment were as follows:
to fully recover our cost basis. We reviewed all of our securities and determined that we did not need to record impairment charges at December 31, 2015. Similarly, we did not record impairment charges at December 31, 2014.
Revenues for the year ended December 31, 2014 increased $72,150,000, or 35%, to $280,230,000, from $208,080,000 for the twelve months ended December 31, 2013. The increase in revenues primarily resulted from a $67,472,000, or 34%, increase in net premiums earned. The growth in net premiums earned for the year was driven by continued growth in new business production in Florida and other states.
General and administrative expenses increased $5,455,000, to $20,007,000 compared to $14,552,000 in 2013 due primarily to an increase in salaries and related expenses to support our growth.
We have evaluated recent accounting pronouncements that have had or may have a significant effect on our financial statements or on our disclosures.
In December 2014, we began funding our investment in the Kayne Anderson Senior Credit Fund II (KSCF). KSCF is a private placement offered by Kayne Anderson Capital Advisors, L.P., an S.E.C. registered investment advisor with approximately $25 billion in assets under management. KSCF will deploy its assets across a variety of loan types with three to five year maturities in senior secured positions to support acquisitions, growth, add-ons, recapitalizations, restructuring and
We have reported our insurance affiliates' assets, liabilities and results of operations in accordance with GAAP, which varies from statutory accounting principles prescribed or permitted by state laws and regulations, as well as by general industry practices. The following items are principal differences between statutory accounting and GAAP:
The Company's real estate information subsidiary, First American Real Estate Information Services, Inc. ("FAREISI"), houses its national operations in a leased 231,000 square foot office building in Dallas, Texas. FAREISI's corporate headquarters are housed in a leased office building located in St. Petersburg, Florida. The Company has acquired approximately 17 acres of land in Poway, California, and is constructing two office buildings totaling approximately 152,000 square feet. It is anticipated that the buildings will be completed in March, 1999 and will be occupied primarily by various subsidiaries of FAREISI. In addition, FAREISI and its subsidiaries lease office space in more than 75 locations throughout the United States, principally for their respective operations.
Assurances - The costs to implement the Year 2000 plan and the target dates for completion of the various phases of the Year 2000 plan are based on current estimates. These estimates reflect numerous assumptions about future events, including the continued availability of certain resources, the timing and effectiveness of third party renovation plans and
The Company provides for claim losses relating to its home warranty business based on the average cost per claim as applied to the total of new claims incurred. The average cost per claim is calculated using the average of the most recent 12 months of claims experience.
FATICO maintained statutory capital and surplus of $301.6 million and $210.3 million at December 31, 1998 and 1997, respectively. Statutory net income for the years ended December 31, 1998, 1997 and 1996 was $137.3 million, $35.9 million and $34.6 million, respectively.
The fair value of notes receivable was $12.2 million and $12.5 million at December 31, 1998 and 1997, respectively, and was estimated based on the discounted value of the future cash flows using the current rates at which similar loans would be made to borrowers of similar credit quality.
The Company leases certain office facilities, automobiles and equipment under operating leases, which for the most part are renewable. The majority of these leases also provide that the Company will pay insurance and taxes. In 1998, the Company satisfied its obligation under the terms of a sale- leaseback agreement with regard to certain furniture and equipment.
During 2001, the Financial Services segment had an overall increase in its net income. The increase is due primarily to the realized investment gains increase of $612 thousand in 2001, as a result of realized gains on fixed maturities. The additional earnings in 2000 reflected an increased asset base, an increase in investment margins, and additional realized gains on fixed maturities.
As an insurance company domiciled in the State of New York, the Company is required to maintain a minimum of $6,000 of capital and surplus. In addition, the maximum amount of dividends, which can be paid to stockholders, is subject to restrictions relating to statutory surplus and statutory adjusted net investment income. The Company should be able to pay dividends of $3,341 in 2002. The Company paid no dividends in 2001 and 2000. Dividends are paid as determined by the Board of Directors.
Summarized segment financial information for the year ended and as of December 31, 2001 was as follows:
Expenses for our insurance operation during 2000, 1999 and 1998 consisted principally of benefits paid or accrued, commissions on the sale of policies and general and administrative costs associated with life insurance company operations. Although general and administrative costs have increased in accordance with the growth in our business, we believe our infrastructure will support increasing levels of internal revenue growth without the need for general and administrative expenses to increase at a similar rate.
The following table compares selected financial information for 2000 and 1999 that has been adjusted to consistently reflect the impact of SAB 101 for both years on the cemetery segment of the business. The revenue recognition adjustments due to SAB 101 below are adjusted for the year in which they occurred versus the one-time year 2000 adjustment shown in amounts for financial presentation in other parts of this document. The impact of SAB 101 for 1998 was not significant.
Our loss before income taxes increased from income of $80,218 at December 31, 1998 to a loss of $1.1 million for the year ended December 31, 1999. The change was due primarily to the addition of the 45% interest in Hollywood Forever. The operating income/loss as a percentage of revenues, however, changed from 3.7% in 1998 to (38.7%) in 1999. This was due to the increase in sales, general and administrative expenses noted above.
Our premium income increased approximately $3.4 million, or 8.3%, in the year ended December 31, 1999, compared to 1998. The increase reflected higher overall volume of policies in force and new policies issued compared to the previous year.
Goodwill decreased approximately $100,000 from $2.4 million at December 31, 1999 to $2.3 million at December 31, 2000.
Commencing in 2015, the Company initiated a strategic build out of its insurance platform through the investment in key leadership hires which in turn has brought significant underwriting talent and stronger direction in achieving its insurance program strategic goals of increased premium volume and improved underwriting results. Recent growth is coming from highly diversified areas including newly launched lines of business, as well as, product and geographic expansion in existing lines of business. The Company is building a world-class insurance platform capable of offering products across lines and geographies, complementing its leading global reinsurance franchise.
Net Investment Income. Net investment income increased 13.3% to $356.2 million in 2019 compared with net investment income of $314.4 million in 2018. Net pre-tax investment income as a percentage of average invested assets was 3.2% in both 2019 and 2018. The increase in income was primarily the result of higher income from our growing fixed maturity portfolio, partially offset by lower income from our limited partnerships and lower dividend income from our equity portfolio.
The following table shows the components of net investment income for the periods indicated:
Gross written premiums increased by 16.2% to $3,014.3 million in 2018 from $2,593.1 million in 2017, primarily due to an increase in treaty property and treaty casualty writings as well as growth in the mortgage business. Net written premiums increased by 84.3% to $2,093.1 million in 2018 compared to $1,135.6 million in 2017. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the impact of changes in affiliated reinsurance contracts, including the non-renewal of the quota share agreement with Bermuda Re as of December 31, 2017 and the implementation of an aggregate stop loss agreement with Bermuda Re for 2018. Premiums earned increased 130.7% to $1,979.9 million in 2018 compared to $858.2 million in 2017. The change in premiums earned relative to net written premiums is partially due to the impact of the non-renewal of the quota share contract between Everest Re and Bermuda Re and is also the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Added 10 additional licenses, bringing total to 33 states and District of Columbia.
Began reinsuring 20% of IHC's DBL business in the third quarter of 2004.
Employer Medical Stop-Loss policy approved in 24 states and Provider Excess Loss policy approved in 13 states.
Income Taxes. The Company made no provision for federal income taxes for the quarter ended December 31, 2002 and 2001, as a result of the Company's continuing losses. For the quarter ended December 31, 2002, the Company recorded a $1,000 provision for state and local taxes attributed to IAHC.
On February 13, 2003, the shareholders of the Company voted in favor of a one-for-three reverse stock split. The purpose of the reverse stock split was to increase the Company's stock price to over $5.00 per share in order to avoid a delisting of the Company's common stock from the Nasdaq National Market. Although currently listed on the NASDAQ National Market, the Company was required to comply with NASDAQ's initial listing requirements because of the discontinuation of its prior business and acquisition of its current insurance operations. The effect of the reverse split has been reflected in all periods in the accompanying consolidated financial statements and notes thereto.
The amortized cost and fair value of fixed maturities at December 31, 2004, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The average life of mortgage backed securities is affected by prepayments on the underlying loans and, therefore, is materially shorter than the original stated maturity.
The following table summarizes, for all securities in an unrealized loss position at December 31, 2004, the aggregate fair value and gross unrealized loss by length of time, those securities have continuously been in an unrealized loss position (in thousands):
Independence American reinsures a portion of its provider excess loss business in order to limit the assumption of disproportionate risks. Amounts not retained are ceded to other companies on an automatic basis. Independence American is contingently liable with respect to reinsurance in the unlikely event that the assuming reinsurers are unable to meet their obligations. The ceding of reinsurance does not discharge the primary liability of the original insurer to the insured. At December 31, 2004, Independence American ceded to three highly rated reinsurers.
Commissions and selling expenses as a percent of gross premiums written increased to 22.2% in 1997 due to an increase in the commission rates paid on the commercial line of business. This percentage was 21.2% in 1996 and 27.6% in 1995. The decrease from 1995 to 1996 is the result of the commercial auto business becoming a larger part of the product mix.
EQUIPMENT AND DEPRECIATION: Equipment is carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over an estimated useful asset life of five years.
EARNINGS PER COMMON SHARE: Net income and net loss per common share are computed using the weighted average number of common shares outstanding during the period. Effective December 31, 1997, the Company adopted SFAS No. 128, Earnings per Share. This standard, which did not have an effect on net income, establishes standards for computing and presenting earnings per share. Earnings per share for all years presented have been restated to comply with SFAS No. 128.
The vehicle extended service contract business sold to Lyndon Property and ANSC were components of the Company's property/casualty business segment, and therefore are included in continuing operations for all periods presented. The Company continues to write property/casualty insurance products. The sale resulted in a gain of $10.3 million which is included in "Other income" in the 1997 consolidated statement of operations.
In June 1996, ACCEL stockholders approved the adoption of the 96 Plan. The 96 Plan provides for stock options, stock appreciation rights, restricted stock, phantom stock and performance awards. No award may be granted after June 11, 2006, the expiration date of the 96 Plan. The total number of shares of common stock available under the 96 Plan is 1,000,000 shares and up to 100,000 shares may be issued pursuant to the exercise of outside directors' stock options.
By complaint dated February 5, 1998, the Superintendent of Insurance of the State of New York, as Liquidator of Galaxy and Administrator of the Guaranty Fund, sued ANIC in New York State Supreme Court. The complaint alleges, among other things, breach of contract and demands that ANIC specifically perform its alleged obligations under the Certificates. The complaint seeks an amount in excess of $6.5 million in damages.
Mr. Friedberg joined the Company on May 23, 1995, when he was appointed Chairman, President & CEO. Prior thereto, he was Chairman, President and CEO of Ranger Insurance Company, Houston, Texas for more than five years and was a director of the Company for five years..
Incorporated by reference to "11-Year Summary of Selected Financial Data" on pages A-2 and A-3 of the 1998 Proxy Statement.
The Company's principal executive offices are approximately 37,000 sq. ft. in size and are located in New York City. The lease for the Company's principal executive offices expires December 30, 2003. The minimum annual rent under the lease is $1,184,000 from 2001 until the expiration of the lease. The lease included an initial cash payment by the lessor to the Company of $1,853,000, the benefit of which was deferred and is being amortized over the lease term.
- --------------------------- (1) Earnings per share data prior to 1997 have been restated as required under Statement of Financial Accounting Standards No. 128, "Earnings Per Share."
Financing activities occurred as a result of borrowings under the Company's revolving credit agreement and unsecured credit facility. The Company borrowed approximately $5,000,000 in 1998 to assist in the payment of gross losses of the Company and to repurchase the Company's Common Stock. Borrowings under the unsecured credit facility were fully repaid after collecting recoverables due from reinsurers on such losses and repayments under the Company's existing loan were made at $1,250,000 per quarter over the past three years through December 31, 2000.
The following table sets forth certain historical selected consolidated financial data of the Company which has been derived from the audited consolidated statements of the Company for and as of the end of each of the years ended December 31, 1993, 1994, 1995, 1996 and 1997.
During 1995, the Company ceded non-flood insurance losses of $6,600 to reinsurers, and for which it has been fully reimbursed. The Company did not cede any losses to reinsurers in 1996 or 1997 for non-flood insurance losses. The Company seeks to limit its exposure with respect to any failure by a reinsurer to fulfill its obligations by evaluating the financial condition and rating of members of its reinsurance pool (the Company's policy is to purchase reinsurance with U.S. insurers rated in the "A" categories by A.M. Best Company) at the time of such purchase and by diversifying the reinsurance pool.
The majority of tax service revenues earned by PinTax are from "life of loan" servicing contracts, which require customers to pay an up-front, one-time fee to receive Real Estate Tax Services over the life of a loan. The revenue from
All other expenses increased from $14.2 million in 1996 to $16.9 million in 1997, an increase of $2.7 million, or 19.0%. Approximately $1.4 million of the 1996 expenses was as a result of retention agreements entered into with certain executives in June 1996. The purpose of the agreements was to ensure the availability and employment of those executives through the transition following the change of control of the Company which occurred in July 1996. The
Real estate information services revenue increased from $10.6 million in 1995 to $18.5 million in 1996, an increase of $7.9 million or 74.6%. The addition of new customers contributed approximately $6 million of the increase. A change in estimate of deferred revenue related to Pinnacle's future servicing obligations for its life of loan services contributed approximately $900,000 of the increase. Interest rates have remained generally favorable for real estate borrowers with loan origination volumes increasing with Pinnacle's existing customers.
In September 1996, the Company concluded a note agreement with the Company's primary commercial bank providing $2.0 million for the purpose of partially financing the repurchase of 705,300 shares of its common stock. As of December 31, 1997 the unpaid balance of this note was approximately $333,000. The total purchase price of the stock was approximately $5.0 million. See Note 7 of Notes to Consolidated Financial Statements. A second repurchase of 100,000 shares was made on October 22, 1996. The shares were acquired through a private transaction at a price of $6.95 per share. The total purchase price of that stock was approximately $700,000.
ss u ra n ce s is n o w o n e o f
cq ui ri n g a s ha re ho ld in g w ill g iv e
ss ur a n ce s a cq ui re d a s ta ke in
Employees were invited to build a team or to join one via a dedicated web platform. Each team mapped out its project and launched a campaign promoting it internally to amass as many votes as possible. No stone was left unturned, with posters, videos, posts on the business social network and technical guidance sheets all used to persuade colleagues to like their favourite project. To take the challenge to the next level, we brought in customers by asking the 5OO members of our You & Us community to support the ideas they wanted to see pursued.
A: Yes, it can. It is already well-advanced in Brazil where Youse, our 1OO% digital insurance subsidiary, is innovating at the right pace on an affinity basis with Yousers, helping to make joint decisions. We intend to roll out this particularly novel approach in Europe, too.
d el ig ht in th e hy p er p er so na lis at io n of li fe ’s jo ur ne y fr om th os e w ho w ill b e le ft by th e w a ys id e.
The consistency of the Group’s strategic management is underpinned by the fact that at least one Executive Committee member sits on the boards of directors of the main subsidiaries in France and at least half the directors of subsidiaries outside France are appointed by CNP Assurances. Thanks to its robust and predominantly public-sector ownership structure, CNP Assurances can take a long-term view of its development.
Underwriting expenses, consisting of commission expense plus operating expenses, increased 17.9% to $533.5 million for the year ended December 31, 1996, from $452.4 million in 1995. This increase was primarily due to an increase in commission expense of 21.0% to $390.1 million for the year ended December 31, 1996, from $322.4 million in 1995. This increase was primarily due to the increase in writings of pro rata treaty premiums. Operating expenses increased 10.3% to $143.4 million for the year ended December 31, 1996, from $130.1 million in 1995, due to an increase in overhead expenses.
The Company realized net income to common stockholders of $111.7 million for the year ended December 31, 1996, compared to a net loss of $87.6 million in 1995. Due to the Acquisition by Munich Re, earnings per share data is not considered applicable for the year ended December 31, 1996.
The Company experienced a net loss to common stockholders of $87.6 million for the year ended December 31, 1995, compared to net income of $97.5 million in 1994. Due to the Acquisition by Munich Re, earnings per share data is not considered applicable.
Many factors influence the financial results of the property and casualty insurance industry, several of which are beyond the control of the Company. These factors include, among other things, changes in severity and frequency of claims; changes in applicable law and regulatory reform; changes in judicial attitudes toward liability claims; and changes in inflation, interest rates and general economic conditions.
For a number of years, the insurance industry generally, and the healthcare liability insurance industry in particular has faced a soft insurance market. There are indications that the market is gradually hardening, particularly in assumed reinsurance. The Company still faces severe price competition in all of its direct markets, particularly in California for coverage of physicians and medical groups.
Premiums earned from other healthcare facilities and providers increased to approximately $6.0 million in 2000 from $2.8 million in 1999. Premiums earned from managed care errors and omissions, directors and officers liability and other miscellaneous coverages totaled slightly more than $2.0 million in 2000, an increase of approximately $1.0 million over 1999.
The Company has significantly increased its writings of assumed reinsurance. As of December 31, 2000, the Company had treaties in effect that are estimated to produce more than $75.0 million in premiums earned in 2001.
Premiums Earned. Premiums earned decreased approximately $4.8 million, or ---------------- 3%, to $153.2 million in 1999 from $158.0 million in 1998. Medical malpractice premiums from physicians and medical groups decreased to approximately $133.0 million in 1999 from $143.2 million in 1998. Of this decrease, approximately $4.5 million was attributable to additional ceded premiums under the Company's reinsurance treaties to reflect premium adjustments and additional premiums resulting from some significant excess losses borne by the reinsurers in 1999. The decrease in premiums was also attributable to the loss of physician insureds during the second and third quarters of 1999 in medical specialties that experienced 1999 rate increases. Hospital medical malpractice premiums were approximately $9.2 million in 1999 compared to $8.8 million in 1998. Assumed reinsurance premiums, other than those received in fronting arrangements, were approximately $6.8 million in 1999 compared to $5.5 million in 1998. Other healthcare provider-related liability premiums totaled $4.0 million in 1999 compared to $0.9 million in 1998.
The Company maintains a portion of its investment portfolio in high- quality, short-term securities to meet short-term operating liquidity requirements, including the payment of losses and LAE. Short-term investments totaled $84.5 million, or 12.5% of invested assets, at December 31, 2000. The Company believes that all of its short-term and fixed-maturity securities are readily marketable.
Beginning in the first quarter of 2007 through the fourth quarter of 2008 we experienced negative internal revenue growth each quarter due primarily to the “soft market,” and, in the second half of 2008, due to the decline in insurable exposure units which further reduced our commissions and fees revenues. Part of the decline in 2007 was the result of the increased governmental involvement in the Florida insurance marketplace as described below in “The Florida Insurance Overview.” One industry segment that was hit especially hard during these years was the home-building industry in southern California, and to a lesser extent, Nevada, Arizona and Florida. We have a wholesale brokerage operation that focuses on placing property and casualty insurance products for that homebuilding segment and a program operation that places errors and omissions professional liability coverages for title agents. Both of these operations’ revenues were negatively affected by these national economic trends throughout 2008. During 2008, the “soft market” conditions continued in most parts of the United States, but were more prevalent in the southeast and southwest regions of the country.
For the second consecutive year, we recorded negative internal revenue growth of our commissions and fees revenues as a direct result of the continuing “soft market,” the competitiveness of Citizens, and the general weakness of the economy in the second half of 2008. Our total commissions and fees revenues excluding the effect of recent acquisitions, profit-sharing contingencies and sales of books of businesses over the last twelve months, had a negative internal growth rate of (5.5)%. Offsetting the negative internal growth rate was our best year of acquisitions, in terms of number of transactions. During 2008, we completed 62 transactions with estimated annual revenues of $120.2 million.
As of December 31, 2008, our contractual cash obligations were as follows:
Notes to Consolidated Financial Statements for the years ended December 31, 2008, 2007 and 2006
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2008 of the Company and our report dated March 2, 2009 expressed an unqualified opinion on those financial statements.
Our commercial insurance business produced near breakeven underwriting results in each of the past three years. The combined loss and expense ratio was 100.7% in 1997 compared with 99.7% in 1996 and 99.3% in 1995.
Prepayment risk refers to the changes in prepayment patterns that can either shorten or lengthen the expected timing of the principal repayments and thus the average life and the effective yield of a security. Such risk exists primarily within our portfolio of mortgage-backed securities. We monitor such risk regularly. We invest primarily in those classes of mortgage-backed securities that are less subject to prepayment risk.
The Corporation filed a shelf registration statement which the Securities and Exchange Commission declared effective in June 1995, under which up to $400 million of various types of securities may be issued by the Corporation or Chubb Capital. No securities have been issued under this registration statement.