2009, respectively. Any premium credits issued to class members as described above will be prorated over a twelve-month term not to extend beyond August 2011, and the class members will be entitled to the prorated premium credit only so long as their insurance premiums remain current during the twelve-month term.
At December 31, 2008, we accrued $5.2 million for premium credits available to class members who were actively insured by the Company. The following is a progression of the activity associated with the estimated premium credit liability (in thousands).
Insurance operating expenses decreased 12% to $87.1 million for the year ended June 30, 2009 from $98.4 million for the year ended June 30, 2008. The decrease was primarily a result of a reduction in costs (such as employee-agent commissions and premium taxes) that varied along with the decrease in premiums earned as well as savings realized from the closure of underperforming stores.
The expense ratio increased from 21.7% for the year ended June 30, 2008 to 24.7% for fiscal year 2009. The year-over-year increase in the expense ratio was due to the drop in revenues, which resulted in a higher percentage of fixed expenses (such as rent and base salary).
Litigation settlement costs for the year ended June 30, 2009 were $1.6 million, compared with $7.5 million for fiscal year 2008. The costs during the years ended June 30, 2009 and 2008 were incurred in connection with our settlement and defense of the litigation as described further in Note 16 to our consolidated financial statements. The year ended June 30, 2009 also included a $2.95 million insurance recovery from our insurance carrier regarding coverage for the costs and expenses we incurred relating to the settlement and reductions in expense related to the forfeiture of premium credits by Georgia and Alabama class members.
We recorded a non-cash, pre-tax goodwill impairment charge in fiscal year 2009 of $68.0 million. As a result of the adverse impact of difficult economic conditions on our customers and business and the resulting decline in its share price during the fourth quarter of fiscal year 2009, we estimated that a goodwill impairment charge at June 30, 2009 was probable. Accordingly, we recognized an estimated non-cash, pre-tax goodwill impairment charge of $68.0 million in the fourth quarter of fiscal year 2009. Due to the complexity of the fair value calculations involved, the analysis of the goodwill impairment charge recognized during the fourth quarter of fiscal year 2009 was finalized during the first quarter of fiscal year 2010 and the amount of the impairment did not differ from the initial estimate. The key assumptions used to determine the fair value of our reporting unit, from a market participant’s perspective, included (i) long-term revenue growth rates ranging from 5% to 10%, (ii) a discount rate of 14.5%, which was based on an estimated weighted average cost of capital adjusted for the risks associated with our operations and (iii) recent industry transaction trends in price to tangible book multiples and related returns on tangible equity. The estimated goodwill impairment charge did not have a materially adverse impact on the continuing operations, liquidity, or statutory surplus of the Company.
Our holding company requires cash for general corporate overhead expenses and for debt service related to our debentures payable. The holding company’s primary sources of unrestricted cash to meet its obligations are dividends from our insurance company subsidiaries and the sale of ancillary products to our insureds. The holding company also receives cash from operating activities as a result of investment income. Through an intercompany tax allocation arrangement, taxable losses of the holding company provide cash to the holding company to the extent that taxable income is generated by the insurance company subsidiaries. At June 30, 2010, we had $9.8 million available in unrestricted cash and investments outside of the insurance company subsidiaries. These funds and the additional unrestricted cash from the sources noted above will be used to pay our future cash requirements outside of the insurance company subsidiaries.
The weighted average estimated fair value of Stock Option Awards granted during the year ended June 30, 2008 was $1.90. There were no Stock Option Awards granted during the years ended June 30, 2010 and 2009. At June 30, 2010, the weighted average remaining contractual life of options outstanding and exercisable/vested is approximately 3.5 years and 3.0 years, respectively.
The fair values as presented represent the Company’s best estimates and may not be substantiated by comparisons to independent markets. The fair value of the debentures payable was based on current market rates offered for debt with similar risks and maturities. Certain financial instruments and all non-financial instruments are not required to be disclosed. Therefore, the aggregate fair values presented in the table do not purport to represent the Company’s underlying value.
At June 30, 2010 and 2009, on an unaudited consolidated statutory basis, capital and surplus was $120.3 million and $114.3 million, respectively. For the fiscal year ended June 30, 2010, 2009 and 2008, unaudited consolidated statutory net income as filed was $5.2 million, $7.3 million and $3.8 million, respectively.