felanders/preprocessed huggingface dataset:
The medical claims incurred of the Commercial business increased by $4.3 million, or 0.6%, during 2016, mostly reflecting the impact of prior period reserve developments, partially offset by lower member months enrollment. The Commercial MLR was 85.2%, which is 100 basis points higher than the MLR for the prior year. Excluding the effect of prior period reserve developments in 2016 and 2015, the MLR would have decreased by 270 basis points, reflecting the continuity of our underwriting discipline and premium trends higher than claims trends.
The medical claims incurred of the Medicare business increased by $53.8 million, or 6.2%, during the 2015 period due to higher enrollment and lower MLR in 2015 was 84.6%, which is 170 basis points lower than the MLR for the prior year. Excluding the effect of prior period reserve developments and risk-score adjustments in the 2015 and 2014 periods, the MLR presents a decrease of 260 basis points, largely reflecting the impact of initiatives implemented last year and a non-recurring adjustment in 2014.
At December 31, 2016, claim liabilities for the life insurance segment amounted to $42.9 million and represented 8.8% of total consolidated claim liabilities and 3.2% of our total consolidated liabilities.
The costs of acquiring new life business, principally commissions, and certain variable underwriting and policy issue expenses of our life insurance segment, have been deferred. These costs, including value of business acquired (“VOBA”) recorded upon our acquisitions of GA Life (now TSV) and TSB, are amortized to income over the premium-paying period of the related whole life and term insurance policies in proportion to the ratio of the expected annual premium revenue to the expected total premium revenue, and over the anticipated lives of universal life policies in proportion to the ratio of the expected annual gross profits to the expected total gross profits. The expected premiums revenue and gross profits are based upon the same mortality and withdrawal assumptions used in determining the liability for future policy benefits. For universal life and deferred annuity policies, changes in the amount or timing of expected gross profits result in adjustments to the cumulative amortization of these costs. The effect on the amortization of deferred policy acquisition costs of revisions to estimated gross profits is reported in earnings in the period such estimated gross profits are revised.
The company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions for short periods of time. Initial collateral, primarily cash, is required at a rate of 102% of the market value of a loaned domestic security and 105% of the market value of a loaned foreign security. The collateral is deposited by the borrower with a lending agent, and retained and invested by the lending agent according to the Company's guidelines to generate additional income. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. At December 31, 1997 and 1996, the Company loaned securities (which are reflected as invested assets) with a market value of approximately $385.1 million and $444.7 million, respectively.
paid and received on such agreements is reported in net investment income. There is no recognition in the Consolidated Balance Sheets for changes in the fair value of the agreement.
Warrants are instruments giving the Company the right, but not the obligation to buy a security at a given price during a specified period. As of December 31, 1997 and 1996, the Company had open warrants to purchase equity securities with a fair value of $0.6 million and $0.3 million, respectively.
1997 1996 1995 ---- ---- ---- (millions) Debt securities Gross unrealized capital gains $140.6 $101.7 $179.3 Gross unrealized capital losses (18.4) (23.8) (1.3) ----- ----- ----- 122.2 77.9 178.0 Equity securities Gross unrealized capital gains 21.2 16.3 27.2 Gross unrealized capital losses (0.1) (0.8) (1.2) ---- ---- ----- 21.1 15.5 26.0
(3) Excludes net unrealized capital gains (losses) of $551.5 million, $366.4 million and $797.1 million at December 31, 1997, 1996 and 1995, respectively.
Maxicare Health Plans, Inc., a Delaware corporation (“MHP”), is a holding company that owns various subsidiaries, primarily in the field of managed care. As of January 1, 2002 substantially all operations of MHP and its subsidiaries were terminated. Additionally, as of December 31, 2001 we were operating with a substantial capital deficiency (see “Liquidity” below).
During 1999, we sold available-for-sale marketable securities having a book value of $3.0 million, realizing a net gain of approximately $2,500.
Other income includes the recognition of $4.1 million in 1999 related to a settlement reached by us in connection with the operation of a Medicaid managed care program from 1986 through 1989.
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
At April 1, 2001, the 1997 Froelich Note in the approximate amount of $2.9 million became due. The 1997 Froelich Note had not been paid as of March 28, 2002. We commenced an action in California state court to collect on the note, and on October 18, 2001 the court granted summary adjudication in our favor. We cannot give assurance that we will recover all or a significant portion of this note.
As of December 31, 2007, we had deferred income tax assets of $29.8 million related to general business tax credit carryovers, which are expected to expire between the years 2022 and 2026.
Asset Management segment net income improved in 2007 to a gain of $3.6 million, from a loss of $25.8 million in the prior year. The main driver of this improvement was an impairment charge on intangible assets taken in 2006 that did not recur in the current year. However, we also saw a modest improvement of $6.2 million in fee revenues from higher average assets under management, resulting mainly from mutual fund assets. Assets under management at December 31, 2007 were $42.5 billion, down slightly from the prior year primarily due to net redemptions from our managed accounts and institutional products, as well as negative performance in institutional products. Asset Management had net outflows of $513.1 million in 2007, an improvement over net outflows of $4,030.8 million in the prior year.
Universal life insurance revenue increased due to higher cost of insurance fees from growth of in-force business, increased investment earnings from higher funds on deposit and increased fees from higher sales in 2006.
Variable universal life pre-tax operating income decreased due to a deferred policy acquisition cost unlocking in 2006 that did not recur in 2007, partially offset by increases in cost of insurance charges and asset-based fees from higher funds under management and lower death benefits.
Annuities pre-tax operating income decreased primarily due to lower interest earned and higher amortization of deferred policy acquisition costs, partially offset by lower interest credited and lower operating expenses. Interest earned and interest credited decreased due to lower funds on deposit, primarily related to discontinued products. The increase in amortization of deferred policy acquisition costs was due to the effects of unlocking which increased amortization by $15.3 million in 2006 compared to an increase of $10.7 million in 2005.
Separate account assets increased 14% primarily due to favorable investment performance and new deposits. Separate account liabilities increased by a corresponding amount.
At December 31, 2007, Phoenix Life’s Total Adjusted Capital level was in excess of 400% of Company Action Level and each of its insurance subsidiaries’ levels were in excess of 350%.
Net premiums written increased $871 million or 35% in 1999, primarily attributable to the acquisitions of GE Re and Medical Protective and core growth in various product lines, partially offset by continued competitive market conditions and an increase in contingently payable ceded premiums relating to recorded recoveries under aggregate excess retrocession programs. Net premiums written increased $690 million or 38% in 1998, primarily attributable to growth in various product lines, including new property and casualty business associated with the acquisition of the renewal rights of business from IRI and Coregis and the acquisitions of GE Re and Medical Protective, partially offset by continued competitive market conditions.
Consistent with experience in the domestic property and casualty business, the significant increase in the combined ratio in 1999 reflects an increase in the frequency and severity of large loss events occurring in 1999 and, to a lesser extent, adverse development on prior year recorded losses. The lower combined ratio in 1998 primarily reflects a general reduction in incurred losses caused by a decline in both the frequency and overall severity of claims, partially offset by an increase in aviation, hurricane and other weather-related catastrophe losses.
Two changes in accounting standards may affect future financial statements. The Financial Accounting Standards Board ("FASB") has issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (Statement 133), effective for the Company on January 1, 2001. Upon adoption, all derivative instruments (including certain derivative instruments embedded in other contracts) will be recognized in balance sheets at fair value, and changes in such fair values must be recognized immediately in earnings unless specific hedging criteria are met. Changes in the values of derivatives meeting these hedging criteria will ultimately offset related earnings effects of the hedged items; effects of qualifying changes in fair value are to be recorded in equity pending recognition in earnings. Certain significant refinements and interpretations of Statement 133 are being deliberated by the FASB, and the effects on accounting for the Company's financial instruments will depend to some degree on the results of such deliberations. Management has not determined the total probable effects on its financial statements of adopting Statement 133, and does not believe that an estimate of such effects would be meaningful at this time.
Operating earnings in 1995 increased 36% to $129 million, primarily due to a 32% increase in assets under management. Growth in assets under management is attributable to the continued growth in premiums and deposits received by the Company. In addition, the strong performance of both the stock and bond markets during 1995 had a significant impact on the growth of assets held in separate accounts, which are reported at fair value. Assets fees assessed against policyholder account balances increased 44% over 1994. During 1995, interest margins, the difference between what the Company earns on its general account investments and what policyholders are credited, remained comparable to 1994. Total operating expenses increased 20% in 1995 due to the increased volume of business.
Effects of accounting standards to be adopted --------------------------------------------- The FASB issued SFAS No. 121 - Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. This statement requires impairment losses be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The statement also addresses the accounting for long-lived assets that are expected to be disposed of. The Company will adopt this statement in 1996 and the impact on the consolidated financial statements is not expected to be material.
UG is a member of the Federal Home Loan Bank ("FHLB"). This membership allows the Company access to additional credit up to a maximum of 50% of the total assets of UG.. To be a member of the FHLB, the Company was required to purchase shares of common stock of FHLB. Borrowing capacity is based on 50 times each dollar of stock acquired in FHLB above the "base membership" amount. The Company had no borrowings on this line of credit during 2014 or 2013. The FHLB offers a wide range of borrowing options to its members. Since the Company did not utilize their FHLB line of credit during the past two years, the Company did not renew the line of credit. The Company has the capability of accessing the FHLB's various borrowing options shall the need arise at a later date.
Director Compensation - Effective September 18, 2013, each outside Director will annually receive $8,000 as a retainer and $1,000 per meeting attended. The compensation, however, shall be paid in UTG common stock. The value will be determined annually on the close of business December 20th or the next business day should December 20th be a weekend or holiday, based on the activity of the year just ending. UTG's director compensation policy also provides that Directors who are employees of UTG or its affiliates do not receive any compensation for their services as Directors except for reimbursement for reasonable travel expenses for attending each meeting. In December of 2014, the Company issued 4,755 shares of its common stock as compensation to the Directors. The shares were valued at $14.50 per share, the market value at the date of issue. During 2014, the Company recorded $68,948 in operating expense related to the stock issuance. In December of 2013, the Company issued 3,162 shares of its common stock as compensation to the Directors. The shares were valued at $10.75 per share, the market value at the date of issue. During 2013, the Company recorded $33,992 in operating expense related to this stock issuance.
During 1988, the Company purchased a 587 acre parcel of land in Caledonia Township (southeast of Grand Rapids) and constructed a 260,000 square foot corporate headquarters building on part of this property. Approximately 36 acres of this parcel is used for the corporate headquarters and the balance is held as investment property. The Company also leases a 51,000 square foot facility in Cascade Township near Grand Rapids, which it uses for distribution, printing and warehouse. The Company has other short-term leasehold interests in real property used for its claim service offices and captive agencies throughout the country.
The Company will continue to focus the majority of its resources on profitable opportunities in the mobile home and recreational vehicle product lines, although the Company is pursuing opportunities to write auto and homeowners insurance on a direct basis. The exclusive endorsement of the Company by the American Association of Retired Persons (AARP), to offer mobile home insurance to its members, has continued to produce good results.
The Company and its subsidiaries are routinely engaged in litigation in the normal course of their business. In the opinion of management, all litigation matters, as well as the litigation described above, are not expected to have a material adverse effect on the Company's consolidated financial position, operating results and cash flow. See Note 12 in
Other Income (Expense). We recorded other expense of $11.7 million in 2011 and other income of $12.1 million and $0.4 million in 2010 and 2009, respectively. The changes were primarily due to fluctuations in the amortization of deferred gains on retroactive reinsurance agreements with affiliates and fluctuations in currency exchange rates for the corresponding periods.
Stockholder's equity increased by $269.0 million to $3,127.7 million at December 31, 2010 from $2,858.8 million at December 31, 2009, principally as a result of $265.4 million of net income, $27.0 million of foreign currency translation adjustments and $6.6 million of share-based compensation transactions, partially offset by $28.2 million of unrealized depreciation on investments, net of tax, and $1.8 million of pension adjustments.
Interest expense of $7.3 million was incurred in 1997 compared to $5.5 million in 1996 reflecting an increase in the average borrowings outstanding under the Company's line of credit under a bank credit agreement (as amended, the "Credit Agreement") in 1997 compared to 1996.
increased 24.2% to $3.69 in 1997, while diluted operating earnings per share increased 22.1% to $3.54 in 1997. The Company defines operating earnings as net income, less the effect of net realized capital gains and losses and foreign exchange gains and losses.
The Company's insurance operating expense ratio for 1996 was 49.2% compared to 50.9% in 1995. Policy acquisition costs, which vary with and are directly related to the generation of new and renewal premiums, totaled $26.7 million and $21.1 million in 1996 and 1995, respectively, representing 34.5% and 33.4% of premiums earned in those respective periods. Other operating expenses decreased marginally to $10.5 million in 1996 from $10.6 million in 1995.
Payment of dividends to Enhance Financial by the Insurance Subsidiaries are subject to restrictions relating to statutory capital and surplus and net investment income. Enhance Re and Asset Guaranty declared and paid a total of $22.0 and $2.0 million, respectively, in dividends in 1997. As of December 31, 1997, under the Insurance Law, the Insurance Subsidiaries had an additional $14.4 million available for dividends to Enhance Financial compared with $21.2 million available as of December 31, 1996. Payments of dividends by Enhance Financial to its shareholders are further restricted by the terms of the Credit Agreement. At December 31, 1997, the maximum amount of dividends which may be paid by Enhance Financial to its shareholders in compliance with the terms of such agreement was $35.1 million. Enhance Financial paid dividends of $8.2 million to shareholders in 1997.
Beginning in the fourth quarter of 1997, in accordance with SFAS No. 128, "Earnings per Share," the Company reports "basic" and "diluted" earnings per share ("EPS"). Basic EPS is determined by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if securities such as employee stock options were exercised. All prior period EPS data has been restated to conform to the new standard. Diluted EPS is computed using the treasury stock method to determine the weighted average number of common stock equivalents outstanding during each year. For all periods presented common stock equivalents are comprised of outstanding options pursuant to the Company's stock option programs.
In January 1998, C-BASS entered into a revolving credit facility agreement with a major commercial bank. Pursuant to this agreement, Enhance Financial has guarantied repayment of up to $25 million of the amount outstanding. At February 17, 1998, Enhance Financial has guaranteed $25 million under this facility.
The composition of the Company's insurance in force by type of issue and by state of issue was as follows:
As a result of the Company’s inability to satisfy its obligations, certain parties have claimed that the Company is in breach of its agreements. As a consequence, such parties have sought and others may seek remedies for such claimed breaches by the Company, and the Company may be required to enter into arbitration or litigation proceedings with those parties. The Company was also served with a statutory demand under Bermuda law related to the Company’s alleged failure to satisfy certain obligations. On March 21, 2003, the Bermuda Supreme Court held in the Company’s favor and issued an injunction preventing that party from commencing winding up proceedings based upon that demand. If another creditor of the Company successfully pursues this statutory process and the Company is unable to discharge its obligations, proceedings seeking to wind up the Company’s business could be commenced against the Company.
The Company has classified as insurance licenses the cost in excess of fair value of net assets acquired in a purchase transaction. Prior to January 1, 2002, the Company had been amortizing these insurance licences on a straight-line basis over 20 years. The amount carried at December 31, 2002 and 2001 was $2,128,000. Amortization for the years ended December 31, 2001 and 2000 was $116,000 and $58,000, respectively.
One of the Company’s major shareholders is affiliated with The Prudential Investment Corporation, which serves as one of the Company’s investment managers. The Company has agreed to pay a fee for investment management services to The Prudential Investment Corporation based upon the amount of funds managed. The fee is based upon a sliding scale and has been determined on an arms-length basis. The Company also has entered into a life reinsurance agreement with the Prudential Insurance Company of America and annuity reinsurance agreements with XL Mid Ocean Reinsurance, Ltd and XL Re Ltd, subsidiaries of XL Capital, Ltd. Both Prudential and XL Capital are major shareholders of the Company. These contracts have been negotiated under normal commercial terms.
The term of the options granted under the Plan will not be more than ten years from the date of grant. Unless otherwise provided in the option agreement related to a specific grant, options granted under the Plan will be exercisable in three equal annual installments, commencing on the first anniversary of the grant date.
The Company applies APB Opinion No. 25 and FASB Interpretation No. 44 in accounting for the Plan. Accordingly, no compensation cost has been recognized as the intrinsic value of the options was $nil at the measurement date.
Since 2007, the mortgage industry has experienced a rise in mortgage delinquencies and foreclosures, particularly among lower quality exposures (“sub-prime” and “Alt-A”). As a result, many securities with underlying sub-prime and Alt-A mortgages as collateral experienced significant drops in market value. Infinity has only modest exposure to these types of
In evaluating the profit performance of Infinity’s business, the Company’s management reviews underwriting profitability using statutory combined ratios. Accordingly, the discussion of underwriting results that follows will focus on these ratios and the components thereof, unless otherwise indicated.
Overall, the statutory combined ratio for the year ended December 31, 2010 of 88.4% deteriorated by 1.2 points from 87.2% for 2009. The twelve months ended December 31, 2010 benefited from $73.9 million of favorable development on loss and LAE reserves compared to $65.4 million for 2009. Bodily injury coverage in California, Connecticut, Florida and Pennsylvania as well as the Commercial Vehicle product related to accident years 2009, 2008 and 2007 drove favorable development during 2010. (See Critical Accounting Policies - Insurance Reserves for a more detailed discussion of loss reserving and development.) Excluding the favorable development from both years, the combined ratio increased from 94.9% in 2009 to 96.6% in 2010. The GAAP combined ratio for 2010 increased by 1.1 points from 88.5% at December 31, 2009 to 89.6% in 2010. Excluding the effect of favorable development, the GAAP combined ratio for 2010 was 97.7%, compared to 96.2% for 2009. Infinity expects the GAAP combined ratio, excluding redundancy releases, to be between 98.0% and 99.0% during 2011.
Investment income primarily includes gross investment revenue and investment management fees as shown in the following table (in thousands):
The results for the year ended December 31, 2001 were affected by the merger of ILCO with and into a subsidiary of FIC on May 18, 2001. For a description of the merger transaction, see "
o A decrease in the expense related to the amortization of deferred policy acquisition costs of $33,000 in 2001 and an increase of $11,000 in 2000 due to adjustments in assumptions to calculate amortization factors;
The ability of Family Life and Investors Life to pay shareholder dividends is and will continue to be subject to restrictions set forth in the insurance laws and regulations of Washington, their domiciliary state. Washington limits how and when Family Life and Investors Life can pay shareholder dividends by (a) including the "greater of" standard for payment of dividends to shareholders, (b) requiring that prior notification of a proposed dividend be given to the Washington Insurance Commissioner and (c) requiring that cash dividends be paid only from earned surplus. Under the "greater of" standard, an insurer may pay a dividend in an amount equal to the greater of: (i) 10% of the policyholder surplus or (ii) the insurer's net gain from operations for the previous year. In 2002, Investors Life paid a dividend to its parent corporation, ILCO, of $8,556,104 (based upon earned surplus of $48.4 million and net gain from operations of $8.56 million in the year 2001). ILCO, a holding company, does not have any restrictions on payments of dividends and paid a dividend of $8,556,104 to FIC in January, 2003. Investors Life had earned surplus of $42.3 million and a net gain from operations of $3.6 million for 2002 and Family Life had earned surplus of $1.5 million and a net gain from operations of $0.13 million in 2002.
Cumulative Effect of Accounting Changes. During the first quarter of 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations." SFAS No. 141 eliminates the practice of amortizing and deferring excess of fair value of net assets acquired over cost and requires unallocated negative goodwill to be recognized immediately. In accordance with the standard, FIC ceased negative goodwill amortization on January 1, 2002 and recognized the unamortized balance of $10.4 million of negative goodwill acquired in the Merger.
o A monetary judgment against Mr. Mitte for the amount of personal expenses which he improperly caused FIC to pay or reimburse him;
The following Financial Statements of the Registrant have been filed as part of this report:
Self-Insured Claim Revenue - Self-insured claim revenue increased approximately $5,970,000, or 46.8%, from approximately $12,754,000 in 2006 to approximately $18,724,000 in 2007. This increase is due to the 34.9% increase in self-insured dental HMO membership along with a 6.0% increase in self-insured claim revenue on a per member per month basis in 2007 as compared to 2006.
Investment income increased approximately $71,000, or 35.9%, from approximately $198,000 in 2006 to approximately $269,000 in 2007. This increase is primarily attributable to a shift of funds from short term to higher yield long term investments, higher interest bearing cash balances, and an increase in prevailing interest rates during 2007.
Reflects estimated potential changes in incurred claims payable liability caused by annualized claims trend used for the estimation of the per member per month incurred claims for the most recent month.
The Company’s Class A and Class B redeemable common shares are owned by participating providers and Company directors. Only participating providers in the original eight county area are eligible to own Class A voting redeemable common shares (See Note 10). All participating providers, Company directors and Company employees are eligible to own the Class B non-voting redeemable common shares. As of December 31, 2005 to comply
As discussed in Note 1 to the consolidated financial statements, in 2005 the Company changed its reporting for redeemable common shares as a result of becoming a Securities and Exchange Commission registrant.
During 2007, 2006, and 2005, four customers accounted for approximately 22%, 27%, and 21%, respectively, of the Company’s fully-insured premiums revenue. Additionally, two customers accounted for approximately 50%, 65%, and 69% of the Company’s net self-insured administration and claims revenue at December 31, 2007, 2006, and 2005, respectively.
Management believes it is more likely than not that deferred tax assets will reduce future income tax payments. Significant factors considered by management in its determination of the probability of the realization of the
Other income was $7.7 million and $2.3 million for the years ended December 31, 2006 and 2005, respectively. Other income represents fees charged for cost of insurance and administrative service fees. The increase was primarily due to higher volume of individual life insurance business.
The following provides a summary of operations by segment for the years ended December 31, 2006 and 2005 (in 000’s):
Net realized investment losses - were $3.1 million and $4.2 million for the years ended December 31, 2006 and 2005, respectively. Sales of investments generally are made to maximize total return and take advantage of prevailing market conditions. The Wealth Management Segment incurred no write-downs of fixed maturities for other-than-temporary impairments for the year ended December 31, 2006. This segment incurred write-downs of $5.5 million for the year ended December 31, 2005.
Other operating expenses - were $8.4 million and $10.3 million for the year ended December 31, 2006 and 2005, respectively. The $1.9 million decrease in other operating expenses were due to decreased fixed annuity administration expenses.
DAC is also adjusted for amounts relating to unrealized investment gains and losses. This adjustment, net of tax, is included with unrealized investment gains or losses that are recorded in accumulated other comprehensive income. DAC was (decreased) increased by $(0.5) million and $0.8 million at December 31, 2006 and 2005, respectively, relating to this adjustment.
The Company has made funding commitments of mortgage loans on real estate and other loans into the future. The outstanding funding commitments for these mortgages amounted to $7.8 million and $2.5 million at December 31, 2006 and 2005, respectively.
The Company has an agreement with an unrelated company whereby the unrelated company reinsures the mortality risks of the Company’s group life contracts. Under this agreement, certain group life mortality benefits are reinsured on a yearly- renewable term basis. The agreement provides that the unrelated company will reinsure amounts above $700,000 per claim for group life contracts ceded by the Company.
The Company participates in a savings plan that qualifies under Section 401(k) of the Internal Revenue Code ("the 401(k) Plan") sponsored by Sun Life U.S. for which substantially all employees of at least age 21 are eligible to participate at date of hire. Employer contributions are matched up to a specified amount of the employee’s contributions to the 401(k) Plan. The Company’s portion of this employer contribution was $45,000, $16,000 and $19,000 for the years ended December 31, 2006, 2005 and 2004, respectively.
As discussed in Note 1 to the consolidated financial statements, effective January 1, 2004, the Company adopted the provisions of the American Institute of Certified Public Accountants’ Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts."
We maintain office facilities around the world including in North America, Bermuda, the U.K., Europe, Latin America, Asia, and the Far East. Most of our office facilities are leased, although we own major facilities in Bermuda and Philadelphia. Management considers its office facilities suitable and adequate for the current level of operations.
• the valuation of derivative instruments related to guaranteed minimum income benefits (GMIB);
Our assumed paid and reported development patterns provide a benchmark against which the actual emerging loss experience can be monitored. Where possible, development patterns are selected based on historical loss emergence by origin year with appropriate allowance for changes in business mix, claims handling process, or ceded reinsurance that are likely to lead to a discernible difference between the rate of historical and future loss emergence. For product lines where the historical data is viewed to have low statistical credibility, the selected development patterns will also reflect relevant industry benchmarks and/or experience from similar product lines written elsewhere within ACE. This typically arises for product lines that are relatively immature or with high severity/low frequency portfolios and for which our historical experience exhibits considerable volatility and/or lacks credibility. The paid and reported loss development methods convert the assumed loss emergence pattern to a set of multiplicative factors which are then applied to actual paid or reported losses to arrive at an estimate of ultimate losses for each period. Due to their multiplicative nature, the paid and reported loss development methods magnify deviations between actual and expected loss emergence. Therefore, these methods tend to be favored for more mature origin periods and for those portfolios where the loss emergence has been relatively consistent over time.
Reinsurance recoverable includes the balances due to us from reinsurance companies for paid and unpaid losses and loss expenses, and is presented net of a provision for uncollectible reinsurance. The provision for uncollectible reinsurance is determined based upon a review of the financial condition of the reinsurers and other factors. Ceded reinsurance contracts do not relieve our primary obligation to our policyholders. Consequently, an exposure exists with respect to reinsurance recover-
During the fourth quarter of 1999, the Board of Directors authorized the repurchase of some or all of the Debentures, which were issued in July 1999 to fund the purchase of two million shares of WellPoint Common Stock from the California HealthCare Foundation. The extraordinary gain from this repurchase was $1.9 million, after tax, and is reported in the results of operations for the year ended December 31, 1999.
Capital Re Corporation (the "Corporation") was incorporated in the State of Delaware in December 1991, and is the successor by merger to a Maryland corporation incorporated in 1986. The Corporation is an insurance holding company and has as operating subsidiaries six wholly-owned operating subsidiaries. Capital Reinsurance Company ("Capital Reinsurance"), domiciled in the state of Maryland, commenced operations in January 1988. Capital Reinsurance is engaged in the business of financial guaranty reinsurance, primarily the reinsurance of municipal and nonmunicipal bond obligations. Capital Mortgage Reinsurance Company ("Capital Mortgage"), a New York domiciled company, commenced operations in February 1994. Capital Mortgage reinsures only residential mortgage guaranty insurance obligations originating principally in the United States and the United Kingdom. KRE Reinsurance, Ltd. (formerly Capital Mortgage Reinsurance Company (Bermuda) Ltd.) ("KRE"), a Bermuda domiciled company, commenced operations in March 1994. KRE is engaged in the business of reinsuring financial guaranty, mortgage guaranty, financial insurance, trade credit and other specialty lines of insurance policies both as a direct reinsurer of third party primary insurers and as a retrocessionaire of Capital Reinsurance, Capital Mortgage, Capital Credit Reinsurance Company, Ltd. ("Capital Credit") and Capital Title Reinsurance Company ("Capital Title"). Capital Credit, also a Bermuda domiciled insurance company, commenced operations in February 1990. Capital Credit reinsures trade credit and other specialty insurance lines from primary insurers whose business is concentrated in Western Europe and the United States. Capital Credit is also a retrocessionaire of Capital Reinsurance and Capital Mortgage. Capital Title, a New York domiciled insurance company, commenced operations in March 1996. Capital Title is engaged in the business of reinsuring title insurance policies.
Stock Based Compensation: The Corporation grants stock options to certain employees for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Corporation accounts for stock option grants in accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees," and, accordingly, recognizes no compensation expense for the stock option grants.
During 1997, 1996 and 1995, the Corporation paid total interest of approximately $7.4 million, $6.9 million and $6.9 million, respectively.
The 10% price differential approximates the marketing and realtor fees the Company anticipated incurring to dispose of the property had it placed the property for sale to the general public. The transaction is scheduled to close in May 2000.
The Company writes homeowner's and other property insurance, both through its primary insurance subsidiary and through an excess and surplus lines insurance subsidiary. Direct written premiums on property insurance in 1999 totaled $7.0 million, compared to $6.0 million in 1998 and $6.5 million in 1997. In August 1999 the Company determined that its reinsurance to cover catastrophe losses in its property business was inadequate. As a result the Company ceased writing property insurance in Dade, Broward and Palm Beach counties and implemented a 25% rate increase in November in its excess and surplus lines business.
market has developed, the Company has encouraged the purchase of both nursing home care and home health care coverage, and has introduced new life insurance products as well, thus providing policyholders with enhanced protection while broadening the Company's policy base. In late 1994, the Company introduced an Independent Living policy which provides coverage over the full term of the policy for services furnished by a homemaker or companion who is not a qualified or licensed care provider. In 1995, long-term nursing home care and home health care policies accounted for approximately 93% of the Company's annualized premiums in force and nearly 87% of its consolidated revenues.
The Company and the Insurers are subject to the insurance laws and regulations of each state in which they are licensed to write insurance. These laws and regulations govern matters such as payment of dividends, settlement of claims and loss ratios. Premiums charged for insurance products must be approved by state regulatory authorities. In addition, the Company and the Insurers are required to establish and maintain reserves with respect to reported and incurred but not reported losses, as well as estimated future benefits payable under the Company's insurance policies. These reserves must, at a minimum, comply with mandated standards.
Investment income. The Company's investment portfolio consists primarily of high-grade fixed income securities. Income generated from this portfolio is largely dependent upon prevailing levels of interest rates. A small percentage of the Company's investment portfolio (1.8%) is committed to high quality large capitalization common-stocks.
Net Policy Acquisition Costs Deferred. The net deferred policy acquisition costs in 1995 increased 100.2% to $15,303,161 compared to $7,642,875 in 1994, consistent with the growth of the Company's business. This deferral is net of amortization, which decreases or increases as the Company's actual persistency is better or worse than the persistency assumed for reserving purposes. The Company believes that amortization decreased in 1995 relative to 1994 as a result of better persistency.
Renewal Commissions. Renewal commissions on accident and health business increased 27.1% to $9,964,110, compared to $7,840,877 in 1994, consistent with the increase in renewal premium discussed above. The ratio of renewal accident and health commissions to renewal accident and health premiums was 16.0% in 1995 compared to 15.0% in 1994. This ratio fluctuates in relation to the age of the policies in-force and the rates of commissions paid to agents.
Realized investment gains and losses, including provisions for market declines considered to be other than temporary, are included in income. Gains and losses on sales of investment securities are computed on the specific identification method.
The Company remains contingently liable in the event that the reinsuring companies are unable to meet their obligations.
Interest and Other Income. Interest and other income increased to $0.9 million for the year ended December 31, 2010 from $0.8 million for the year ended December 31, 2009.
Net Income. Net income for year ended December 31, 2010 increased by approximately $15.8 million over the same period in 2009 to $81.0 million. The increase in net income was primarily a function of increased gross margin, reduced by an increase in selling, general and administrative expenses.
Net Income. Net income for year ended December 31, 2009 increased by approximately $14.8 million over the same period in 2008 to $65.2 million. The increase in net income was primarily a function of increased gross margin, reduced by an increase in selling, general and administrative expenses.
Our operating activities generated $112.1 million of cash from operations in 2009, a $33.5 million increase from the $78.6 million generated in 2008. This $112.1 million in cash provided by operating activities in 2009 reflects $65.2 million in net income, plus $19.9 million in non-cash charges and $27.0 million net increase in cash from changes in working capital and other assets and liabilities. This $27.0 million net increase in working capital, net of effects of acquisitions, was primarily due to changes in accounts receivable of $18.3 million, accounts payable of $13.0 million, rebates payable of $13.3 million, accrued liabilities of $9.1 million, income tax receivable of $1.2 million and inventory of $1.3 million, offset by changes in rebates receivable of $25.9 million and other assets of $3.3 million.
This analysis of the results of operations and financial condition of Southern Security Life should be read in conjunction with the Selected Financial Data and Financial Statements and Notes to the Financial Statements included in this report.
Net investment income decreased by $68,000, or 1.7%, to $3,867,000 for fiscal year 2001 from $3,935,000 for fiscal year 2000. Investment yield slightly decreased for the fiscal year 2001 from 7.8% in 2000 to 7.65% in 2001.
The Company is subject to risk based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. At December 31, 2001 and December 31, 2000, the Company exceeded the regulatory criteria.
The Company has leased approximately 94% of the available space in its principal office building and does not anticipate significant capital expenditures to the rental space.
Statement of Cash Flows - years ended December 31, 2001, 2000 and 1999........................................21
2001 2000 1999 ---- ---- ---- Deferred policy acquisition costs at beginning of year $ 13,211,413 $ 12,874,219 $ 13,583,956 Policy acquisition costs deferred: Commissions 1,249,453 1,384,782 1,223,187 Underwriting & issue costs 269,070 398,622 440,200 Other 380,448 422,721 421,051 Change in unrealized appreciation (depreciation) 61,405 (71,611) 235,048 ------------ ------------ ------------ 1,960,376 2,134,514 2,319,486 Amortization of deferred policy acquisition costs (2,197,399) (1,797,320) (3,029,223) ------------ ------------ ------------ Deferred policy acquisition costs at end of year $ 12,974,390 $ 13,211,413 $ 12,874,219 ============ ============ ============
Income tax expense (benefit) for the years ended December 31, 2001, 2000, 1999 differs from "expected" tax (computed by applying the U.S. federal income tax rate to pretax income) as a result of the following:
Dilutive potential common shares -- -- -- Denominator for diluted earnings per share weighted average shares and assumed conversions 1,907,989 1,907,989 1,907,989 Basic earnings per share $.04 $.08 $.33 Diluted earnings per share $.04 $.08 $.33
We believe that MBT Ranch Storage is currently Vidler's most significant individual asset.
- - $1.1 million in income from Nevada Land & Resource Company, on revenues of $7.1 million, excluding an extraordinary gain of $670,000, before taxes;
Lease and other revenues include land leases, principally for grazing, agricultural, communications and easement purposes. In 1999, revenues from land leases increased by $500,000 to $1.3 million, compared to $800,000 in 1998. This increase was due to the inception of new leases and increased royalties. The $500,000 decrease from 1997 to 1998 resulted largely from a reduction in geothermal royalties.
Year Ended December 31, ----------------------- 1999 1998 1997 ---- ---- ---- (in millions) REVENUES - WATER RIGHTS AND WATER STORAGE: Sale of water rights $ 0.3 $ 0.2 Water service revenue 0.2 0.2 $ 0.2 Agricultural leases 0.5 0.2 0.1 Other income 0.1 --------- --------- --------- Segment Total Revenues $ 1.1 $ 0.6 $ 0.3 ========= ========= =========
Since the withdrawal of Physicians and Professionals from their personal automobile and homeowners lines of business in the late 1980's, medical professional liability has been these two companies' only sources of insurance premiums.
The following table presents the development of balance sheet liabilities for 1989 through 1999 for all property and casualty lines of business including medical professional liability insurance. The "Net liability as originally estimated" line shows the estimated liability for unpaid losses and loss adjustment expenses recorded at the balance sheet date on a discounted basis for each of the indicated years. Reserves for other lines of business that Physicians ceased writing in 1989, which are immaterial, are excluded. The "Gross liability as originally estimated" represents the estimated amounts of losses and loss adjustment expenses for claims arising in all prior years that are unpaid at the balance sheet date on an undiscounted basis, including losses that had been incurred but not reported.
The Model Act is not expected to cause any material change in any of the insurance companies' future operations. All companies' risk-based capital results as of December 31, 1999 exceed the requirements of PICO Action Level except for Physicians which was at the Company Action Level. Physicians has been in communication with the Ohio Department of Insurance and will submit a plan of corrective action within the prescribed period. The Ohio Department may require additional action to be taken based upon its ongoing regular triennial examination of Physicians that began March 15, 1999. While up from the December 31, 1998 level, Physicians' Risk-Based Capital level fell below the target level primarily due to the decline in the market value of PICO common stock.
On April 23, 1997, Global Equity and PICO acquired 100% of the membership interest of Nevada Land, a Delaware limited liability company. The total purchase price was approximately $48.6 million.