felanders/preprocessed huggingface dataset:
The net loss and loss adjustment expense ratios increased to 117.1% in 1998 from 82.1% in 1997 due to losses incurred in the commercial auto line and the resulting reserve strengthening. The net loss and loss adjustment expense ratios remained relatively consistent at 82.1% in 1997 compared to 81.4% in 1996. See Table I following the narrative in Management's Discussion and Analysis for further information on key operating ratios and see Table III for reserve development for the preceding ten years and a reconciliation of the beginning and ending liability for unpaid losses and loss adjustment expense.
The Company's general and administrative expenses increased in 1998 by $.8 million or 18% and increased $1 million or 25% between 1997 and 1996. A factor affecting the comparison of general and administrative expenses in 1998 to previous years was the allocation of overhead expenses in previous years among the Company and its subsidiaries sold effective December 31, 1997. In 1998, the overhead expenses were fully absorbed by the Company. The increase in 1998 was primarily due to increased salaries of $.6 million of which the majority related to the change in allocation as previously discussed, increased legal fees of $.2 million, increased underwriting costs and association dues of $.1 million each which were both the result of increased commercial auto premium writings since 1996 and various other expenses totaling $.3 million. These increases were offset by decreased consulting fees of $.2 million and $.3 million in expense reimbursements received from Lyndon in connection with Lyndon's usage of the Company's information systems.
The Company maintains liquidity in its investment portfolio to generally correspond with the liabilities outstanding on its lines of business. At December 31, 1998, the estimated duration of the Company's fixed income investment portfolio was 2.3 years while the estimated liability duration was approximately 1.4 years. Currently, an interest rate change of 1% would impact the fair value of the fixed maturity portfolio and stockholders' equity by a decline of approximately $.8 million if interest rates rose and an increase of approximately $.7 million if interest rates declined.
In June 1997, the FASB issued SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, which changes the way public companies report information about operating segments. SFAS No. 131, which is based on the management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report entity-wide disclosures about products and services major customers, and the material countries in which the entity holds assets and reports revenue. The Company adopted SFAS No. 131 as of January 1, 1998. Comparative information for 1997 and 1996 has been restated.
Our principal offices in Allentown, Pennsylvania occupy two contiguous buildings, occupying approximately 30,000 square feet of office space in a 40,000 square foot building and all of an 8,000 square foot facility. We own both buildings. We also lease additional office space in Florida, California, Michigan, Texas and New York.
We own a 2.42 acre undeveloped parcel of land, which is located across the street from our home offices.
Policy premium levels. We attempt to set premium levels to ensure profitability, subject to the constraints of competitive market conditions and state regulatory approvals. Premium levels are reviewed on new product filings, as well as for rate increases as claims experience warrants.
In addition, American Network, which we acquired on August 30, 1996, generated disability premiums of $6,715 during 1998, down from $6,822 recognized in 1997.
Total annuity considerations and life insurance premiums increased to approximately $111.5 million in fiscal 2001 from approximately $62.6 million in fiscal 2000, an increase of approximately 78.1%. Of this amount, annuity considerations increased to approximately $97.4 million in fiscal 2001 from approximately $55.2 million in fiscal 2000, an increase of approximately $42.1 million. In accordance with GAAP, sales of single premium deferred annuities are not reported as annuity considerations, but rather as additions to policyholder account balances. Sales of single premium annuities were approximately $700.1 million, $350.4 million and $186.1 million in fiscal 2001, 2000 and 1999, respectively. Management believes that the increase in annuity considerations is due to the successful expansion of our Marketing Department. Beginning in 1996, the Company added regional sales directors in various states. These regional sales directors have added new general agents, which have generated sales.
In September 2001, the Emerging Issues Task Force issued No. 01-10, "Accounting for the Impact of the Terrorist Attack of September 11, 2001" (EITF 01-10 requires that losses or cost resulting from the September 11th events be classified as part of income from continuing operations in the statement of operations. Application of EITF 01-10 did not have a material impact on the Company's consolidated financial statements.
Depreciation and amortization. Depreciation and amortization as well as capital expenditures are summarized in Note 15 to the consolidated financial statements.
Insurers are generally not subject to state income or franchise taxes. However, in lieu thereof, a "premium" tax is imposed on certain operating revenues, as defined by statute. Tax rates and bases vary from state to state; accordingly, the total premium tax burden is dependent upon the geographical mix of title insurance and home warranty operating revenues. Premium taxes for title insurance increased 22.4% in 1996 over 1995 and decreased 12.5% in 1995 from 1994. These changes correspond to the relative changes in title insurance operating revenues. Premium taxes as a percent of title insurance operating revenues remained relatively constant at approximately 1.2%. Premium taxes for home warranty increased 22.6% in 1996 over 1995 and 5.3% in 1995 over 1994. These changes reflect the level of home warranty premiums written during the respective periods.
The Company classifies its debt and equity securities portfolio as available-for-sale and, accordingly, includes unrealized gains and losses, net of related tax effects, as a separate component of stockholders' equity. Realized gains and losses on investments are determined using the specific identification method.
Selected financial information about the Company's operations by segment for each of the past three years is as follows:
On February 26, 2019 the Company declared a regular quarterly cash dividend of $0.25 per share payable on March 22, 2019 to shareholders of record as of March 8, 2019.
We follow FASB ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a fair value hierarchy and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As disclosed in Note 18 of the financial statements, our securities available-for-sale are classified using Level 1, 2 and 3 inputs. We did not elect the fair value option prescribed under FASB ASC Topic 825, Financial Instruments, for any financial assets or financial liabilities in 2017 or 2018.
In December 2017, the SEC issued Staff Accounting Bulletin (SAB) 118 which provided guidance on accounting for tax effects of the Tax Act. Among many changes of the Tax Act which affected Property and Casualty Insurers, the Tax Act required property and casualty taxpayers to discount loss reserves based solely on IRS factors and no longer by reference to historical payment patterns. In December 2018, the IRS released its guidance for determining the Tax Act transition adjustment along with its 2018 loss reserves discounting factors. The Company has completed its analysis for the tax effects relating to the Tax Act. During the period ended December 31, 2018, the Company recognized an increase in the deferred tax balance of $1.5 million to the provisional amounts recorded at December 31, 2017.
A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at December 31, 2018, by contractual maturity, is as follows:
The AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”) is administered by the Compensation Committee of the Board and was designed to provide incentive compensation to executive officers and other key management personnel. The 2005 Incentive Plan permitted awards in the form of incentive stock options, as defined in Section 422(b) of the Internal Revenue Code of 1986, non-qualified stock options, restricted shares of common stock and restricted stock units. In connection with the approval of the 2012 Equity and Incentive Compensation Plan by the Company’s shareholders, no further grants will be made under the 2005 Incentive Plan. All grants made under the 2005 Incentive plan will continue in effect, subject to the terms and conditions of the 2005 Incentive Plan.
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017 are as follows:
The following table presents summary information regarding changes in the fair value of assets measured at fair value using Level 3 input.
The stores from our Retail Business discontinued operations received commissions from insurance companies for their services. Prior to July 1, 2009, neither we nor the stores served as an insurance company and therefore we did not assume underwriting risks.
Our insurance underwriting business reported on a standalone basis for the year ended December 31, 2010 (“2010”) and for the period from July 1, 2009 (date of KICO acquisition) through December 31, 2009 (“2009”) follows:
The table below summarizes the credit quality of our fixed-maturity securities as of December 31, 2010 and 2009 as rated by Standard and Poor’s.
As a holding company, we are dependent on the results of operations of Kingstone Insurance Company (“KICO”); there are restrictions on the payment of dividends by KICO.
KICO was a member of the New York Mutual Underwriters Pool (the “NYMU”) and is responsible for its proportionate share of losses with respect to accident dates through October 31, 1997. During 2006 and 2007, the NYMU received a disproportionately large number of lead paint claims (approximately 50) for accident dates prior to October 31, 1997. KICO’s liability for each claim is $11,667 (assuming full reinsurance recovery). Since 2007, far fewer lead paint claims have been filed against the NYMU. We believe that, as of December 31, 2010, KICO is fully reserved for all reported claims and that its provision for IBNR for future claims is adequate (in each case giving effect to the collectability of reinsurance); however, we do not have any control over the claims made against the NYMU. Accordingly, future results may be adversely affected from losses over which we have no control.
Consolidated Statements of Shareholders' Equity - Years Ended December 31, 2001, 2000, and 1999 26
Schedule II. Condensed Financial Information of Registrant - December 31, 2001 and 2000 49
The Companys securities are classified in two categories and accounted for as follows:
In September 2000 the FASB issued SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of SFAS No. 125. SFAS No. 140 revises the standards for accounting for securitizations and other transfers of financial assets. This Statement is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001.
For 2001, gross gains of $1,785,394 ($2,715,057 for 2000) and gross losses of $323,829 ($774,196 for 2000) were realized on sales of available-for-sale-securities.
Income (loss) before income taxes: Individual life and accident and health insurance $ 586 $1,667 $2,556 Property and casualty insurance 5,440 3,917 2,365 Other (313) (473) (110) ------ ------ ------ 5,713 5,111 4,811 (243) (267) (295) ------ ------ ------ Interest expense $ 5,470 $4,844 $4,516 ====== ====== ======
THE NATIONAL SECURITY GROUP, INC. SCHEDULE III. SUPPLEMENTARY INSURANCE INFORMATION (CONSOLIDATED) (Amounts in thousands)
In spite of the war, the unfavourable repercussions of which this Company, with its international business, has in various ways felt during the past year, the technical result was in the aggregate satisfactory.
The Company achieved record revenues and earnings (before a $124.8 million acquisition and restructuring charge net of related tax effects recorded in the second quarter) for the fiscal year ended June 30, 1995. The growth in revenues during fiscal year 1995 was primarily driven by commercial enrollment gains, especially from the Company's individual and Medicare risk products, additional Medicaid enrollment as a result of the acquisition of the Florida Medicaid HMO, growth in net earned workers' compensation premium due to sales and recapture of ceded premium and commencement of health care delivery under the Washington/Oregon Contract during the third quarter. This growth was offset by the January 31, 1994 expiration of the CRI Contract. Fiscal year 1994 revenues included $431.3 million in revenues related to the CRI Contract. Revenues in fiscal year 1994 exceeded fiscal
As a result of the factors described above and despite expiration of the CRI Contract in January 1994, income before income taxes and minority interest grew from $149.4 million in fiscal year 1993 (before acquisition and restructuring costs) to $165.9 million in 1994. After acquisition and restructuring costs, income before income taxes and minority interest was $137.0 million in fiscal year 1993. In fiscal year 1995, income before income taxes and the minority interest grew to $203.3 million (before acquisition and restructuring costs). After acquisition and restructuring costs, income before income taxes and minority interest was $78.5 million in fiscal year 1995.
Through the combination of the factors described above, net income grew from $82.5 million or $1.72 per share in fiscal year 1993 (before the $12.4 million acquisition and restructuring costs net of related tax effects) to $93.6 million or $1.92 per share in fiscal year 1994. After the acquisition and restructuring costs net of related tax effects in fiscal year 1993, net income was $73.3 million or $1.53 per share. In fiscal year 1995, net income increased to $128.8 million or $2.35 per share (before the $124.8 million acquisition and restructuring costs net of related tax-effects). After such charge net of related tax effects, net income for fiscal year 1995 was $49.4 million or $.90 per share.
and numerous other external influences may affect the Company's operating results. Accordingly, past financial performance is not necessarily a reliable indicator of future performance, and investors should not use historical records to anticipate results or future period trends.
The anticipated level of capital expenditures in fiscal year 1996 for construction of health care centers and corporate facilities has been impacted as a result of the Company's $60 million tax-retention operating lease financing with NationsBank of Texas, N.A., as Administrative Agent for the
At December 31, 1998 the liability for deferred annuity contracts amounted to approximately $1.3 billion.
The Company expects mortality to be fairly constant over long periods of time, but it will fluctuate from period to period. Reserve levels will in part be determined by the Company's experience and overall mortality trends.
The consolidated financial statements include the accounts of Holdings and its subsidiary, Annuity Reassurance. All significant inter-company accounts and transactions have been eliminated upon consolidation.
The Company accounts for stock option grants in accordance with APB opinion No. 25, "Accounting for Stock Issued to Employees." Compensation expense for stock option grants is recognized to the extent that the fair value of the stock exceeds the exercise price of the option at the measurement date. Any resulting compensation expense is recorded over the shorter of the vesting or service period.
The Company's policy is to implement hardware and software that is certified as Year 2000 compliant by the relevant manufacturer. As a result, the Company does not expect to incur significant costs related to the Year 2000 problem. As at December 31, 1998, the phases of the Year 2000 process which address the Year 2000 readiness of the Company's computer systems, and of third parties, such as customers, business partners and others, are ongoing. However, it is not possible to be certain that all aspects of the Year 2000 Issues affecting the Company, including those related to the service providers, business partners, or other third parties, will be fully resolved.
The foregoing does not include numerous investment properties held by Aetna in its general and separate accounts.
We conduct our business through our executive office, located in Provo, Utah, with approximately 3,000 square feet of office space. We also lease approximately 1,000 square feet of office space located in Irvine, California. We believe that the leases to which we are subject are generally on terms consistent with prevailing market terms, and none of the leases are with our affiliates. We believe that our facilities are in good condition and are adequate to meet our operating needs for the foreseeable future.
Cash and Cash Equivalents, For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
The reconciliation between the basic and diluted weighted-average number of common shares for the years ended March 31, 2016 and 2015, is summarized as follows:
The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not of being sustained if the position were to be challenged by a taxing authority. The Company has examined the tax positions taken in its tax returns and determined that there are no uncertain tax positions. As a result, the Company has recorded no uncertain tax liabilities in its balance sheet.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
The liquidated damages claim is secured by all of the assets transferred to the Company under the Del Mar ATA and a Collateral Pledge Agreement executed by Del Mar on June 5, 2013, pledging all of Del Mar’s remaining assets to the Company unless and until Del Mar completes all of its obligations under the Del Mar ATA. The Company is unsure what, if any, assets are currently held by Del Mar.
The following table sets forth selected unaudited quarterly data for the periods shown as revised:
Financial Pacific Insurance Company leases approximately 25,000 square feet for the Group’s west coast operations headquarters in Rocklin, California. Financial Pacific also owns 2.9 acres of land adjacent to its office building, valued at $1.3 million.
The following table sets forth selected consolidated financial data for Mercer Insurance Group, Inc. at and for each of the years in the five year period ended December 31, 2005. You should read this data in conjunction with the Company’s consolidated financial statements and accompanying notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this report.
As a California domiciled insurance company, dividends payable by Financial Pacific Insurance Company are subject to a restriction similar to that described above. As of December 31, 2005, the amount available for payment of dividends from Financial Pacific Insurance Company in 2006, without the prior approval of the California Insurance Department, is approximately $3.9 million.
In connection with a continuing retaliatory tax controversy, in 2003 and 2004 the Company paid an aggregate of $3.2 million, plus interest, to the New Jersey Division of Taxation (the “Division”) in retaliatory tax. The retaliatory tax generally is imposed on foreign insurers when the foreign company’s home state (i.e., its state of incorporation or domicile) has a higher rate of premium tax than the state imposing the tax, in this case New Jersey. The payments were made in response to notices of deficiency issued by the Division to the Company.
For 2003, earnings and earnings per share are presented for the post-conversion period of December 16 to December 31, 2003. See footnote (13), Earnings Per Share, for further information.
The amortized cost and estimated fair value of fixed-income securities at December 31, 2005, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Refer to the Selected Financial Data on pages 18 through 19 of the Annual Report to Shareholders for the year ended December 31, 1996 attached in Exhibit 13.
All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. Please see the Introductory Note and Item 1A “Risk Factors” of this Form 10-K for a discussion of factors that could cause our actual results to differ materially from those in the forward-looking statements. However, the risk factors listed in Item 1A “Risk Factors” or discussed in this Form 10-K should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our management’s analysis only as of the date they are made. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Our fixed income portfolio is invested in accordance with a written Investment Policy Statement adopted by our Board of Directors. We engage professional advisors to manage day-to-day investment matters under the oversight of our Investment Committee.
We evaluated the assumptions used by the Company’s independent actuary to estimate the liability for unpaid losses and loss adjustment expenses.
As of December 31, 2020 and 2019, there were 3 and 8 fixed income securities in an unrealized loss position with an estimated fair value of $789,106 and $2,873,251, respectively. Of these fixed income securities as at December 31, 2020 and 2019, none and 2 had been in an unrealized loss position for 12 months or greater, respectively. As of December 31, 2020, none of the fixed income securities were considered to be other than temporarily impaired. The Company has the intent to hold these fixed income securities and it is not more likely than not that the Company will be required to sell these fixed income securities before their fair values recover above the adjusted cost. The unrealized losses from these fixed income securities were not a result of credit, collateral or structural issues.
Earnings per common share - Note 3 - - - - ----------------------------------
2001 $ - $ - 2002 - 2005 22,147 20,980 2006 - 2010 119,146 119,632 2011 and thereafter 767,706 772,043 ---------- -------- Total $ 908,999 $912,655 ========== ========
The following analysis provides a reconciliation of the activity in the reserve for unpaid losses and loss adjustment expenses (LAE):
Homeowner policies renewed February 15, 1997, through December 31,1999, are covered in full by quota share reinsurance agreements with three reinsurers as follows: National Union Fire Insurance Co. of Pittsburgh, PA (50%), a subsidiary of AIG, St. Paul Fire & Marine Insurance Company Re (25%) and Folksamerica Re Company (25%). The Company's insurance subsidiaries earn a commission on ceded premiums based on a sliding scale dependent on the incurred loss ratio.
The aggregate number of common shares issued and issuable under the Plan currently is limited to 4,000,000. At December 31, 2000, 1,179,693 common shares remain available for future grants. All options granted have ten-year terms. As a consequence of AIG's acquiring a controlling interest in the Company, vesting was accelerated for all options previously granted through July 27, 1998. Options granted after July 27, 1998, vest over various future periods.
As a result, MLLIC follows AUSA’s accounting policies subsequent to the Acquisition Date. This new basis of accounting is referred to as the “successor basis”, while the historical basis of accounting is referred to as the “predecessor basis’’. In general, Balance Sheet amounts at December 31, 2007 are representative of the successor basis of accounting while Statements of Earnings, Comprehensive Income, and Cash Flows amounts for 2007 are representative of the predecessor basis of accounting. Financial Statements included herein for periods prior and subsequent to the Acquisition Date are labeled “Predecessor” and “Successor”, respectively. Since the actual results between the period December 28, 2007 and December 31, 2007 were not material, MLLIC has utilized December 31, 2007 as the Acquisition Date herein.
At December 31, 2007 and 2006, approximately $12.4 million (or 1%) and $17.5 million (or 1%), respectively, of fixed maturity securities were considered below investment grade. Below investment grade securities are speculative and are subject to significantly greater risks related to the creditworthiness of the issuers and the liquidity of the market for such securities. These investment grade holdings were the result of ratings downgrades on existing securities as MLLIC does not purchase below investment grade securities. MLLIC closely monitors such investments.
MLLIC receives claims paying ability ratings from various rating agencies. The following table summarizes MLLIC’s ratings prior to (Predecessor) and subsequent to (Successor) the Acquisition Date:
MLLIC paid a cash dividend during 2007 of $193.7 million to MLIG, of which $41.6 million was considered an ordinary dividend and $152.1 million was extraordinary. MLLIC paid a cash dividend during 2006 of $180.0 million to MLIG, of which $39.8 million was considered an ordinary dividend and $140.2 million was extraordinary. MLLIC did not pay a dividend during 2005.
The decrease in life insurance benefit expense is primarily due to period-to-period differences in variable life reinsurance activity.
As a reinsurer of property catastrophe-type coverages in the worldwide market place, PXRE's operating results in any given period depend to a large extent on the number and magnitude of natural and man-made catastrophes such as hurricanes, windstorms, floods, earthquakes, spells of severely cold weather, fires and explosions. While PXRE may, depending on market conditions, purchase catastrophe retrocessional coverage for its own protection, the occurrence of one or more major catastrophes in any given period could nevertheless have a material adverse impact on PXRE's results of operations and financial condition and result in substantial liquidation of investments and outflows of cash as losses are paid.
Premiums on reinsurance business assumed are recorded as earned on a pro rata basis over the contract period based upon estimated subject premiums. Management must estimate the subject premiums associated with the treaties in order to determine the level of earned premiums for a reporting period. Such estimates are based on information from brokers, which can be subject to change as new information becomes available. Because of the inherent uncertainty in this process, there is the risk that premiums and related receivable balances may turn out to be higher or lower than reported.
Gross premiums written for 1999 increased 62.5% to $221,349,000 from $136,215,000 for 1998. Net premiums written for the year ended December 31, 1999 increased 56.5% to $138,845,000 from $88,694,000 for 1998. Net premiums earned for the year ended December 31, 1999 increased 39.1% to $128,503,000
All amounts classified as reinsurance recoverable at December 31, 1999 are considered by management of PXRE to be collectible in all material respects.
Service fees earned during 1996 increased 28% over 1995 due to increases in the number of policies administered for the FAJUA and FRPCJUA/PMSC, fees earned on business produced by the Registrant's managing general agency subsidiary and continued growth in the number of policies financed by the Registrant's premium financing subsidiary. Investment income increased 7% from $5,562,074 for 1995 to $5,935,194 in 1996. This increase is attributable to an increase in interest rates on taxable fixed assets combined with a repositioning of securities from tax exempt to taxable investments in the Registrant's principal property and casualty insurance subsidiary. Net realized gains on the sale of investments increased 107% from $252,153 in 1995 to $521,995 in 1996.
Cash dividend and capital expenditure requirements continue to be provided by funds generated from operations. The Registrant maintains sufficient liquidity to meet operational needs. The Registrant's investment policy continues to emphasize high quality securities matched closely with the Registrant's short liability duration.
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Also in June 1997, the FASB issued Statement No. 131, "Disclosure about Segments of an Enterprise and Related Information". This Statement establishes standards for the way enterprises report information about operating segments and also establishes standards for related disclosure about products and services, geographic area and major customers. The Company will adopt Statement 131 in 1998 and, based on current circumstances, does not believe the effect of adoption will be material.
The Company believes, that based upon its lengthy and consistent history of profitable operations, it is probable that the deferred tax asset will be realized and no deferred tax allowance is deemed necessary at December 31, 1997.
Our URR is reported as a component of “Policyholders’ account balances”, gross of reinsurance with a partial offset in “Reinsurance recoverables.” The URR balance was $721 million as of December 31, 2015. This reserve primarily relates to variable and universal life products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and are generally amortized over the expected lives of the contracts in proportion to the products’ estimated gross profits, similar to DAC as discussed above.
Reinsurance recoverables increased $1,952 million from $20,594 million at December 31, 2014 to $22,546 million at December 31, 2015. The increase was primarily driven by the impact of term and universal life business growth and the Hartford GUL business ceded to PARU, which increased ceded reserves and ceded policyholders’ account balances. Also contributing to the increase was the mark-to-market of the reinsurance recoverable related to the reinsured liability for variable annuity living benefits reflecting unfavorable equity market performance in the current year.
Adjustments to the reserves for the GMDB and GMIB features of our products and the amortization of DAC, DSI, and URR, included the impact from changes in the profitability of the business. These adjustments resulted in a net benefit of $75 million in 2015 compared to an amortization expense of $85 million in 2014. The net benefit in 2015 primarily reflected the net impact of equity market performance on contractholder accounts relative to our assumptions, as well as a net benefit resulting from our annual review and update of assumptions. The net charge in 2014 primarily reflected the impact of lower expected rates of return on fixed income investments within contractholder accounts and on future expected claims relative to our assumptions, which more than offset a net favorable impact from equity market performance. Partially offsetting this net charge was a net benefit resulting from the annual review and update of assumptions performed in that year.
2015 to 2014 Annual Comparison. Revenues decreased $231 million, primarily driven by a $323 million decrease in realized investment gains, primarily reflecting an unfavorable variance in the mark-to-market of the no-lapse guarantee reinsured to UPARC in our life products. Partially offsetting this decrease was an increase of $85 million in policy charges and fee income, consisting primarily of mortality and expense and other insurance charges, assessed on contractholders’ account balances.
Repurchased approximately 441 thousand shares in 2016 at an aggregate cost of $8.5 million.
Due to the uncertainties involved, the ultimate cost of losses may vary materially from recorded amounts, which are based on our best estimates. The liability for unpaid losses and LAE at December 31, 2016 is $58.5 million.
As of December 31, 2016, the Company held approximately $11.6 million equity securities that were in an unrealized loss position twelve months or longer. The unrealized loss on these securities was $2.9 million. Based on our analysis, the company believes each security will recover in a reasonable period of time and the Company has the intent and ability to hold them until recovery. There were no OTTI losses recognized in the periods on the equity portfolio.
On May 23, 2013, UVE entered into a $20 million unsecured term loan agreement and related term note (the “Term Loan”) with RenaissanceRe Ventures Ltd. (“RenRe Ventures”).
Set forth is the following reconciliation of the net incurred and paid claims development tables to the liability for unpaid losses and LAE in the consolidated Balance Sheet as of December 31, 2016 (in thousands):
Estimates of unpaid losses for hurricane experience are developed using a combination of company-specific and industry patterns, due to the relatively infrequent nature of storms and the high severity typically associated with them. Development patterns and other benchmarks are based on consideration of all reliable information, such as historical events with similar landfall statistics, the range of estimates developed from industry catastrophe models, and claim reporting and handling statistics from our field units. It is common for the company to update its projection of unpaid losses and LAE for a significant hurricane event on a monthly, or even weekly basis, for the first 6-months following an event.
All of the assets of the Account are invested in the Partnership. Accordingly, the liquidity and capital resources and results of operations for the Account are contingent upon those of the Partnership. Therefore, this management’s discussion and analysis addresses these items at the Partnership level. The partners in the Partnership are Prudential, Pruco Life Insurance Company, and Pruco Life Insurance Company of New Jersey (collectively, the “Partners”).
(1) Net investment income for the year ended December 31, 2005 reflects partial period results for the
The retail properties recorded an aggregate net unrealized gain of $3.0 million for the year ended December 31, 2005, compared to an aggregate net unrealized gain of $2.1 million for the prior year period. The 2005 unrealized gains were primarily due to (a) continued investor demand for retail centers that resulted in combined net unrealized gains of $6.4 million at the Hampton, Virginia and Ocean City, Maryland properties and (b) the completion of a redevelopment at the retail center in Roswell, Georgia that recorded a net unrealized gain of approximately $1.7 million. Partially offsetting these gains was a net unrealized loss of $5.1 million recorded at the retail centers located in Kansas City, Kansas and Kansas City, Missouri. The retail centers located in Kansas City, Kansas and Kansas City, Missouri were marketed for sale during 2005 which resulted in a value decline of $5.1 million reflective of offers received in connection with the marketing efforts and an estimate of the prepayment penalties related to the existing debt.
* Does not include off-balance sheet assets managed by ARM Capital Advisors for institutional clients and the State Bond Mutual Funds. Total fee-based assets under management at December 31, 1996 and 1995 were $3,937.9 million and $2,443.7 million, respectively, and total assets under management at December 31, 1996 and 1995 were $7,553.0 million and $5,364.2 million, respectively, including such assets.
Sales for spread-based products include premiums and deposits received under products issued by the Company's insurance and face-amount certificate subsidiaries. Sales for fee-based products include premiums and deposits for the investment portfolio options of variable annuity products issued by the Company's insurance subsidiaries.
investment advisory services for the State Bond Mutual Funds to Federated Investors for $4.5 million. The State Bond Mutual Funds had aggregate assets of $236.9 million on December 13, 1996.
Total cash and investments were 96% and 93% investment grade or equivalent as of December 31, 1996 and 1995, respectively. Investment grade securities are those classified as 1 or 2 by the NAIC or, where such classifications are not available, having a rating on the scale used by Standard & Poor's Corporation ("S&P") of BBB- or above. Yields available on non-investment grade securities are generally higher than are available on investment grade securities. However,
Ocean marine - net premiums earned grew by 60% during 2002 when compared to 2001 and reflect higher ocean marine rates across the various ocean marine classes, particularly in the rig class, and additional production within the various marine classes of business. Net premiums in the ocean marine class are expected to rise in 2003 as premium rates are expected to remain firm, but premium increases are expected to be substantially lower in 2003 than they were in 2002.
Ocean marine - net premiums earned and net premiums written in this line grew by 19% and 41%, respectively, in 2001 and reflect firmer marine rates and additional production mainly in the rig, hull and cargo classes.
Total income taxes for the years ended December 31, 2001 and 2000 included increases of $5.2 million and $3.7 million, respectively, in the valuation allowance for deferred income taxes with respect to tax loss carryforwards.
Impairment of investments, included in realized investment gains or losses, results from declines in the fair value of investments which are considered by management to be other than temporary. Management reviews investments for impairment based upon specific criteria that include the duration and extent of declines in fair value of the security below its cost or amortized cost. Approximately $1.5 million and $4.4 million were charged to results from operations in 2002 and 2001, respectively, resulting from fair value declines considered to be other than temporary. Gross unrealized gains and losses on fixed maturity investments amounted to approximately $.6 million and $ 0, respectively, at December 31, 2002. There were no unrealized gains or losses on equity securities at December 31, 2002.
Derivatives are financial instruments in which the value changes in response to an underlying variable, that require little or no net initial investment and are settled at a future date. The Company has entered into exchange traded derivatives, such as futures and total return swaps, to hedge minimum guarantees on variable annuity contracts. All derivatives are recognized on the Balance Sheet and are carried at fair value with changes in fair value recognized as a component of net derivative gains (losses) in the Statements of Income.
ASC 740, Income Taxes - ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, requires that the liability related to certain unrecognized tax benefits should be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryfoward if such settlement is required or expected in the event the uncertain tax position is disallowed - early adoption September 30, 2013.
The following tables provide the ABS subprime mortgage exposure by rating and estimated fair value by vintage at December 31, 2013 and 2012:
For the years ended December 31, 2012 and 2011, the Company recorded net income of $7.2 million and $6.2 million, respectively. The increase in income during 2012 as compared to 2011 was primarily due to lower policy benefits, partially offset by net realized losses in 2012 compared to net realized gains in 2011.
The Company generally requires each Corporate Risk Management client to indemnify it against an underwriting loss and the client normally provides collateral for at least the difference between the funds available in that client's account and the level of expected losses as actuarially determined by the Company, although in certain circumstances the collateral level is below the level of expected losses. The Company faces a credit exposure in the event that losses exceed their expected level and the client is unable or unwilling to honor its indemnity to the Company. The Company also faces credit exposure on both Program and Corporate Risk Business if its clients or brokers fail to pay the premium due and through failure of reinsurers to honor their obligations.
At the end of 1997 and 1996, 70% and 68% respectively, of the Company's Total marketable investments were held by the Company's policy-issuing subsidiaries in the United States. These companies are restricted by regulation in the amount of dividends they can pay without prior regulatory approval to $21.9 million in 1998 (based on 1997 results) and will continue to face these restrictions in the future. During 1997 they paid a dividend of $2 million. They are also required to maintain certain deposits with or supply letters of credit to regulatory authorities which totaled $135 million at December 31, 1997 ($51 million of deposits and $84 million of letters of credit) as compared to $126 million at December 31, 1996 ($44 million of deposits and $82 million of letters of credit).
The Company uses its positive cash flow primarily to purchase debt and equity securities. Net investment income decreased 4% in 2002 compared to 2001, increased 2% in 2001 compared to 2000, and increased 9% in 2000 compared to 1999. The decrease in 2002 is primarily a result of a decrease in the annualized average yield to 5.9% compared to 6.7% for 2001 and 7.2% for 2000, which occurred as a result of lower interest rates. The decreases in average yields are partially offset by growth in the average investment portfolio.
Future policy benefits on life insurance policies are computed using a net level premium method based upon various assumptions as to investment yields, withdrawals, morbidity, and mortality. Future policy benefits on universal life insurance policies and annuities represent the contract’s accumulated account value.
Changes in the U.S. equity market directly affect the values of the underlying U.S. equity-based mutual funds supporting separate accounts assets and, accordingly, the values of variable contract owner account balances. Since asset-based fees collected on inforce variable contracts represent a significant source of revenue, ML of New York’s financial condition will be impacted by fluctuations in investment performance of separate accounts assets. Fluctuations in the U.S. equity market also directly impact ML of New York’s exposure to guaranteed minimum death benefit (“GMDB”) provisions contained in the variable annuities it manufactures. Negative investment performance generally results in greater exposure to GMDB provisions, to the extent there is an increase in the number of variable contracts (and amount per contract) in which the GMDB exceeds the variable account balance. Prolonged periods of negative investment performance may result in greater GMDB expense because it may change ML of New York’s assumptions regarding the long term cost of GMDBs. If ML of New York increases its estimated long term GMDB cost, it will result in establishing greater GMDB reserves as compared to current practice. GMDB expense is recorded as a component of policy benefits.
The costs of acquiring business, principally commissions, certain expenses related to policy issuance, and certain variable sales expenses that relate to and vary with the production of new and renewal business, are deferred and amortized in accordance with SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments. Deferred policy acquisition costs (“DAC”) are subject to recoverability testing at the time of policy issuance and loss recognition testing at the end of each reporting period. At December 31, 2004, variable annuities and variable life insurance accounted for $19.0 million (or 68%) and $9.1 million (or 32%), respectively, of ML of
The future policy benefit reserves at December 31, 2005 represented 6% of our total liabilities and relate primarily to term life, variable, and universal products and are determined in accordance with GAAP as the present value of expected future benefits to or on behalf of policyholders plus the present value of future expenses less the present value of future net premiums. The expected future benefits are based on mortality, lapse, maintenance expense and interest rate assumptions. Reserves for new business are based on best estimate assumptions as of the date the policy is issued with provisions for the risk of adverse deviation. After our reserves are initially established, we perform premium deficiency tests using best estimate assumptions as of the testing date without provisions for adverse deviation. If reserves determined based on these best estimate assumptions are greater than the GAAP liabilities (i.e., reserves net of any DAC asset), the existing GAAP liabilities are adjusted to the greater amount. Our best estimate mortality assumptions are generally based on the Company’s historical experience or standard industry tables, as applicable; our expense assumptions are based on current levels of maintenance costs, adjusted for the effects of inflation; and our interest rate assumptions are based on current and expected net investment returns. We review our mortality assumptions annually and conduct full actuarial studies every three years. Generally, we do not expect our mortality trends to change significantly in the short-term and to the extent these trends may change we expect such changes to be gradual over the long-term.
Asset management fees increased by $2 million in 2005 as a result of an increase in average separate account balances from continued market appreciation and positive cash flows.