Following is the selected financial data of the Company for the five years ended December 31, 2000. This data should be read in conjunction with the audited consolidated financial statements and notes thereto appearing under Item 8 of this Form 10-K.
Net investment income increased $1,305,000 in 2000 from 1999 and decreased $8,000 in 1999 from 1998. Increasing yields on bonds and short-term investments from the upward movement in interest rates during 1999 and 2000 primarily caused the increase in net investment income in 2000. Also contributing to the increase were proceeds from the sales of equity securities used to pay Class A shareholders for stock restructure redemptions. The proceeds earned interest while held in short-term investments until stock restructure payments were made. The decrease in 1999 was largely driven by additional fees paid to equity managers due to the appreciation in the Company's equity securities.
Other revenues increased $1,509,000 from $2,823,000 in 1999 to $4,332,000 in 2000. Interest on federal tax refunds of $1,716,000 recorded by Midwest Medical in 2000 primarily caused the increase. Revenues from the new information technology consulting division of Solutions also contributed to the increase. Decreases in operating revenues from MedPower and income from Midwest Holding's officer life insurance policies partially offset the above increases.
The Minnesota Medical Insurance Exchange began operations in October 1980 as a reciprocal or inter-insurance exchange organized under Chapter 71A of the Minnesota Statutes. Minnesota Medical Management, Inc. was the Insurance Exchange's attorney-in-fact and was responsible for management of the Insurance Exchange.
Like the Class A shares, Class C shares are not publicly or privately traded. The Class C shares provide all shareholders with the same voting rights as the Class A shares. Class C shareholders, however, do not accrue additional shares and the Class C shares have no redemption value. Issuance of Class C shares will not be subject to any vesting requirements. In the event of a liquidation, sale or similar transaction, Class C shareholders would participate in the proceeds according to a distribution formula developed by the Board of Directors. This formula takes into account the underwriting risk classification and years of coverage of each shareholder. As this is the same distribution formula that was previously applicable to Class A shares, Class C shareholders will retain the same percentage ownership after the exchange as they had before the exchange. Class C shares are returned to Midwest Holding upon termination of the shareholder's insurance coverage with Midwest Medical.
Dividends that exceed the greater of 10% of Midwest Medical's prior year-end policyholder surplus or Midwest Medical's prior year net income excluding realized capital gains are considered extraordinary under Minnesota insurance statutes. Payment of extraordinary dividends is subject to the approval of the Commissioner of the Department of Commerce of the State of Minnesota. At December 31, 2000, the maximum dividend that may be paid by Midwest Medical in 2001 without regulatory approval is approximately $14,039,000. Cash dividends paid to Midwest Holding by Midwest Medical in 2000, 1999 and 1998 were $3,000,000, $2,050,000 and $2,000,000, respectively.