• $0.5 million related to the tornadoes that occurred in the first quarter of 2006.
• a $2.6 million increase in our net loss reserves on the oil pipeline claim during 2006 as we were required by the relevant environmental agencies to extend our remediation activities.
Premiums ceded were $28.6 million for the year ended December 31, 2007, a decrease of $49.6 million, compared to $78.2 million for the year ended December 31, 2006. The decrease in premiums ceded primarily reflects the reduction in gross premiums written.
General and administrative expenses. General and administrative expenses were $7.7 million for the period ended December 31, 2006, compared to $9.1 million for the year ended December 31, 2005 and consisted primarily of personnel related expenses.
Other income. Other income was $0.8 million for the year ended December 31, 2006 compared to $2.0 million for the year ended December 31, 2005, and related to income, including fees, recognized on non-traditional reinsurance contracts.
Acquisition expenses. Acquisition expenses were $12.5 million for the year ended December 31, 2006 compared to $42.7 million for the year ended December 31, 2005. The decrease in acquisition expenses was due to the decrease in the number of reinsurance contracts we entered into and the associated net premiums earned. These acquisition expenses primarily represented brokerage and ceding commissions.
Our acquisition expense ratio was 26.8% for the year ended December 31, 2006, compared to 25.6% for the year ended December 31, 2005. The increase reflects certain contracts with higher commission rates that were written during the first and second quarters of 2006 in our property, casualty and marine, technical risk and aviation reinsurance product lines and the impact of ceded premiums and ceded reinstatement premiums reducing our specialty reinsurance run-off segment’s net earned premium.
Technical services revenues. Technical services revenues were $3.3 million for the year ended December 31, 2006, compared to $19.0 million for the year ended December 31, 2005. The decrease is due to a significant portion of remediation of our QLT Buffalo LLC environmental liability assumption program occurring during the second and third quarters of 2005. The remediation was close to being completed and, as a result, did not generated technical services revenues to the same extent as it did in 2005.
During the year ended December 31, 2007, we commuted several assumed reinsurance contracts which resulted in a reduction of our gross loss and loss expense reserves amounting to $47.1 million. We also experienced net favorable loss development in our insurance and reinsurance segments amounting to $31.1 million and net favorable loss development in our Lloyd’s segment amounting to $8.0 million. We further reduced our net loss reserves by $5.1 million through cancellation of insurance contracts with our clients, primarily as a result of cancellations in our HBW program. This was partially offset by our net losses and loss expenses incurred during the year ended December 31, 2007, which include $9.8 million of losses incurred in our Lloyd’s segment relating to our exposure to the subprime mortgage developments in the United States during the latter part of 2007.
In the near term, our other principal cash requirements are expected to be losses and loss adjustment expenses and other policy holder benefits, including those related to policy cancellations and commutations, expenses to implement our run-off plans, including legal, professional, severance
We establish reserves for losses and loss expenses for estimates of future amounts to be paid in settlement our ultimate liabilities for claims arising under our contracts of insurance and reinsurance that have occurred at or before the consolidated balance sheet date. The estimation of ultimate loss and loss expense liabilities is a significant judgment made by management and is inherently subject to significant uncertainties.
security) and was therefore bifurcated and accounted for as a derivative under SFAS 133. This security was sold during the year ended December 31, 2005. We have not designated any of our derivative instruments as hedging instruments.