felanders/preprocessed huggingface dataset:
Other income decreased 12.5% to $41.7 million for the year ended December 31, 1997, from $47.5 million in 1996. The decrease in the 1997 period was attributable to a decrease in fee subsidiary revenue of $5.5 million. Other expenses increased substantially to $221.2 million for the year ended December 31, 1997 from $109.2 million in 1996. The increase in the 1997 period was primarily attributable to one-time charges incurred during the second quarter of 1997 of $38.2 million related to the write-down of the value of data processing equipment, one-time severance and other personnel related charges of $72.8 million, and $13.3 million of other miscellaneous charges primarily due to the Merger, compared to $36.1 million of acquisition-related expenses incurred during 1996. In addition to these one-time charges, the Company also incurred an expense of $20.3 million related to the Company's long-term incentive compensation program established in the 1997 period; there was no similar program in effect in 1996.
Total consolidated liabilities increased by 6.1% to $10,464.9 million at December 31, 1997, from $9,864.9 million at December 31, 1996. This increase was primarily due to increases in loss and LAE reserves of $316.6 million, loss balances payable of $75.9 million, and amounts payable for investment securities purchased of $139.9 million.
Flow insurance written for 2003 increased 36.0% to $16.6 billion from $12.2 billion in 2002. This increase was primarily the result of expanding relationships with national lenders, strong demand for risk-sharing arrangements and other product offerings, and a lower interest rate environment that contributed to a very strong refinance market.
Our effective tax rate was 30.9% for both 2002 and 2001.
Information about unrealized gains and losses is subject to changing conditions. Securities with unrealized gains and losses will fluctuate, as will those securities that we have identified as potentially distressed. The recent volatility of financial markets has led to an increase in both unrealized gains and losses. We consider all of the factors discussed earlier when we determine if an unrealized loss is other than temporary, including our ability and intent to hold the security until the value recovers. Our current evaluation of other-than-temporary impairments reflects our positive intent to hold certain securities until maturity. However, we may subsequently decide to sell certain of these securities in future periods within the overall context of our portfolio management strategies. If we make the decision to dispose of a security with an unrealized loss, we will write down the security to its fair value if we have not sold it by the end of the reporting period.
Fannie Mae has recently completed the process of revising its approval requirements for mortgage insurers. The new requirements require prior approval by Fannie Mae for many of Triad’s activities and new products, allow for other approved types of mortgage insurers rated less than “AA,” and give Fannie Mae increased rights to revise the eligibility standards of mortgage insurers. While continuing to study the final requirements, we do not see any material impact on our current or future operations as a result of the new rules, although a material impact could still occur if our interpretation is incorrect.
Employment Agreement between the Registrant and Kenneth C. Foster(3) (Exhibit 10.26)
Net income before income tax was $2,365,000 in 1999 compared to a pretax loss of $1,000,000 in 1998. An improvement in underwriting results and reduced litigation expenses were the major factors contributing to the improvement in pretax income.
Asset Portfolio Review: The life insurance and property/casualty subsidiaries primarily invest in highly liquid investment grade debt and equity securities. At December 31, 2000, the company's holdings in debt securities amounted to 66% of total investments and 57% of total assets. The following is a breakdown of the bond portfolio quality according to National Association of Insurance Commissioners (NAIC) Securities Valuation Office (SVO) rating standards, and the nationally recognized rating organization equivalents of Moody's and Standard and Poor's:
Except as discussed in Note O to the consolidated financial statements, the Company is aware of no known trends, events, or uncertainties reasonably likely to have a material effect on its liquidity, capital resources, or operations. Additionally, the Company has not been made aware of any recommendations of regulatory authorities, which if implemented, would have such an effect.
SFAS No. 107 excludes certain financial instruments, particularly insurance liabilities other than financial guarantees and investment contracts, from its disclosure requirements. In evaluating the Company management of interest rate and liquidity risk, the fair values of all assets and liabilities should be taken into consideration.
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) which vary in certain respects from reporting practices prescribed or permitted by insurance regulatory authorities. The significant differences for statutory reporting include: (a) acquisition costs of acquiring new business are charged to operations as incurred, (b) life policy liabilities are established utilizing interest and mortality factors specified by regulatory authorities, (c) the Asset Valuation Reserve (AVR) and the Interest Maintenance Reserve (IMR) are recorded as liabilities, (d) deferred income taxes are not provided, and (e) non-admitted assets (furniture and equipment, agents debit balances and prepaid expenses) are charged directly to surplus.
The Company and its subsidiaries operate primarily in the insurance industry. Premium revenues and operating income by industry segment for the years ended December 31, 2000, 1999 and 1998 are summarized below:
THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY) Notes to Condensed Financial Information of Registrant
IDS LIFE ACCOUNT RE OF IDS LIFE INSURANCE COMPANY N/S Associates, Monmouth Associates and 1225 Investment Corporation Unconsolidated Joint Ventures of IDS Life Account RE
1993 $ 119,650,000 $ 132,338,000 $ -- $ 3,437,000 $ 7,166,000
(A) The aggregate cost of real estate owned at December 31, 1995 for Federal Income tax purposes was approximately $465,315,000.
David R. Hubers, 53: Director, IDS Life, since September 1989; President and Chief Executive Officer, American Express Financial Corporation (AEFC), since August 1993, and Director since January 1984. Senior Vice President, Finance and Chief Financial Officer, AEFC, from January 1984 to August 1993.
Income from continuing operations for the years ended December 31, 1996 and 1995 was $633 million and $530 million, excluding Transport Life, respectively. Included in income from continuing operations are net after-tax portfolio gains of $42 million in 1996 and $71 million in 1995, excluding Transport Life. Excluding these items, income from continuing operations for the year ended December 31, 1996 increased 29% to $591 million, reflecting improved performance at both business units.
Travelers Life and Annuity should benefit from growth in the aging population who are becoming more focused on the need to accumulate adequate savings for retirement, to protect these savings and to plan for the transfer of wealth to the next generation. Travelers Life and Annuity is well-positioned to take advantage of the favorable long-term demographic trends through its strong financial position, widespread brand name recognition and broad array of competitive life, annuity and long-term care insurance products sold through the three established distribution channels.
Over the last few years, programs including sales and product training were begun that are designed to maintain high compliance standards, increase the number of producing agents and customer contacts and, ultimately, increase production levels. Insurance in force is continuing to grow and the number of producing agents is stable. A continuation of these trends could positively influence future operations.
At December 31, 1996, contractholder funds with defined maturities had a carrying value of $1.7 billion and a fair value of $1.7 billion, compared with a carrying value of $2.4 billion and a fair value of $2.5 billion at December 31, 1995. The fair value of these contracts is determined by discounting expected cash flows at an interest rate commensurate with the Company's credit risk and the expected timing of cash flows. Contractholder funds without defined maturities had a carrying value of $9.1 billion and a fair value of $8.8 billion at December 31, 1996, compared with a carrying value of $9.3 billion and a fair value of $9.0 billion at December 31, 1995. These contracts generally are valued at surrender value.
The Company sells structured settlement annuities to TAP in connection with the settlement of certain policyholder obligations. Such deposits were $40 million, $38 million and $39 million for 1996, 1995 and 1994, respectively.
The net deferred tax liabilities at December 31, 1996 and 1995 were comprised of the tax effects of temporary differences related to the following assets and liabilities:
Other operating income increased $37.2 million in 2006 and $20.4 million in 2005. The 2006 increase was due to net gains from trading securities and gains from the sales of strategic investments. The 2005 increase related primarily to gains from strategic investments, higher net gains from trading securities and a $4.3 million gain on the sale of a dormant subsidiary. Period to period comparisons in this category may vary substantially depending on market values of trading securities and other financial instruments and on income
Aviation - The growth in net written premium and net earned premium in 2006 is due to the effect of recapture of ceded unearned premium from a transfer of in force business. Retention also increased as a result of a reduction in proportional reinsurance. Retention levels are consistent between 2005 and 2004 after removing the effect of a similar recapture in 2004. The international aviation component of this line is very competitive with downward pressure on pricing, but margins on decreased premium volume are still acceptable. Our domestic business is very stable.
our position based on market conditions. Our portfolio turnover will fluctuate, depending upon opportunities to increase yields by replacing one security with another higher yielding security.
This table summarizes the estimated market value of our investments by type at December 31, 2006.
The following table presents a summary of our total contractual cash payment obligations by estimated payment date at December 31, 2006.
We accrue a loss related to our indemnifications when a valid claim is made by a buyer and we believe we have potential exposure. We currently have several claims under indemnifications that cover certain net losses alleged to have been incurred in periods prior to our sale of certain subsidiaries or otherwise alleged to be covered under indemnification agreements related to such sales. As of December 31, 2006, we have recorded a liability of $16.9 million and have provided $5.2 million of letters of credit to cover our obligations or anticipated payments under these indemnifications.
Other specialty lines - Total net reserves increased $46.9 million and the percentage of incurred but not reported reserves decreased in 2006 due to the maturing of claims related to a relatively new product in this line.
In October 1995, the Financial Accounting Standard Board issued Statement on Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." Under the provisions of SFAS No. 123, the Company is encouraged, but not required, to measure compensation costs related to its employee stock compensation plans under the fair value method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. If the Company elects not to recognize compensation expense under this method, It is required to disclose the pro forma net income and earnings per share effects based on the SFAS No. 123 fair value methodology. SFAS No. 123 applies to financial statements for fiscal years beginning after December 15, 1995. The Company will implement the requirements of SFAS No. 123 in 1996 and has yet to determine if it will adopt the measurement provision recommended by the statement or if it will adopt only the disclosure provisions of the statement. Accordingly, management has not determined the impact on the financial statements that SFAS No. 123 may have.
YEAR ENDED DECEMBER 31, 1993 VERSUS YEAR ENDED DECEMBER 31, 1994
Other Operating Expenses decreased $3.3 million for the year ended December 31, 2016 compared to the same period in 2015 due to decreases in project specific information technology and professional fee expenditures.
Net earned premiums increased $47.5 million for the year ended December 31, 2016 as compared to the same period in 2015. This was driven by growth in our P&C operating segment of $34.1 million, mostly due to increased production from our Property division related to expanded coverage for international exposures, and the newly formed Political Violence & Terrorism product. In addition our Professional Liability operating segment increased $21.0 million, mostly in our Financial Institutions product. These increases were partially offset by a decrease in our Marine operating segment and increased RRPs expense of $2.9 million in 2016 compared to a release of $4.0 million in 2015, which are fully earned when written.
The following tables present the impact of Net RRPs and Reserve Releases or (Development / Strengthening) on our Net Losses and LAE Ratio on our Net Losses and LAE Ratio for the years ended December 31, 2017, 2016 and 2015:
For the year ended December 31, 2017, our Reported Net Losses and LAE Ratio for our P&C operating segment decreased 7.3 points as compared to the same period in 2016, primarily driven by:
Partially offsetting the impact of the above items on the Reported Net Losses and LAE Ratio are favorable performance across certain key divisions and changes in the mix of business driving the 4.3 point decrease in Adjusted Net Losses and LAE Ratio.
For the year ended December 31, 2016, our Reported Net Losses and LAE Ratio decreased 1.5 points as compared to the same period in 2015. This was primarily driven by:
Our capital resources consist of funds deployed or available to be deployed to support our business operations. As of December 31, 2017 and 2016, our capital resources were as follows:
Net cash used in financing activities was $18.4 million for the year ended December 31, 2017 compared to $7.3 million for the same period in 2016. The increase in cash used in financing activities is primarily related to increased tax withholding payments on vested stock compensation in 2017 as compared with 2016. To a lesser extent 2017 financing cash flows were impacted by the institution of a quarterly stockholder dividend which was paid for the first time in the third quarter of 2016.
As at December 31, 2013, loan receivable was $3,012,000, which increased by $1,100,000 or 58% as compared to last year. The increase was due to the Company had provided a loan to a client. Tax receivable as at December 31, 2013 was $88,153, which decreased by $97,165 or 52% as compared to last year. The decrease is in relation to the provision of income tax for 2013.
The consolidated financial statements have been prepared in accordance with US GAAP and the instructions to Form 10-K and Regulation S-K. In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flows at December 31, 2013 and 2012 for all periods presented have been made.
An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.
Under the scheme, compensation up to a limit of HK$100,000 (US$12,821) per depositor would be paid from the scheme to depositor if the bank with which the depositor holds his/her eligible deposits fails. On October 14, 2008, the Hong Kong Government announced that they would use the Exchange Fund to guarantee the repayment of all customer deposits held in authorized institutions in Hong Kong, following the principles of the Deposit Protection Scheme. This action began on October 14, 2008 and expired at the end of 2010. Following the enactment of the Deposit Protection Scheme (Amendment) Ordinance 2010 in June 2010, the protection limit of the Deposit Protection Scheme is increased from HK$100,000 per depositor to HK$500,000 (approximately US$64,103) per depositor with effect from January 1, 2011.
On March 18, 2013, the Company’s subsidiary, Chang An Consultants Ltd., declared dividends of approximately $367,949. The Company has paid 40% of the dividends or $147,179 to the non-controlling shareholders.
Our investment portfolio is structured to preserve capital and provide us with a high level of liquidity. A large majority of our investments are invested in the fixed income markets and, therefore, our realized holding gains and losses on investments are highly correlated to fluctuations in interest rates. Therefore, as interest rates decline, we will tend to have realized gains from the turnover of our investment portfolio, and as interest rates increase, we will tend to have realized losses from the turnover of our investment portfolio, although the actual amount of realized gains (losses) on sales of investments can be reduced depending on which specific securities we choose to sell.
We have generated cash flows from operations in 2004, 2003 and 2002 significantly in excess of our operating commitments. Because a large portion of the coverages we provide typically can produce losses of high severity and low frequency, it is not possible to accurately predict our future cash flows from operating activities. As a consequence, cash flows from operating activities may fluctuate, perhaps significantly, between individual quarters and years.
At December 31, 2004, we held investments totaling $4.8 billion, compared to $4.2 billion in 2003.
In certain circumstances many of our contractual obligations may be accelerated to dates other than those reflected in the table, due to defaults under the agreements governing those obligations (including pursuant to cross-default provisions in such agreements) or in connection with certain changes in control of the Company, if applicable. In addition, in connection with any such default under the agreement governing these obligations, in certain circumstances these obligations may bear an increased interest rate or be subject to penalties as a result of such a default.
The amortized cost and estimated fair value of fixed maturity securities at December 31, 2002 and 2001, by contractual maturity, that were in an unrealized loss position are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage-backed and asset-backed securities provide for periodic payments throughout their lives, and are shown below as a separate line.
Traditional life and accident and health insurance premiums increased 5% to $13.7 million in 2002 and increased 19% to $13.1 million in 2001 from $11.0 million in 2000. The majority of our traditional life and accident and health insurance premiums consist of group policies sold to a particular market. These changes are principally attributable to corresponding changes in direct sales of life products.
Interest expense on General Agency Commission and Servicing Agreement decreased 37% to $3.6 million in 2002 and 5% to $5.7 million in 2001 from $6.0 million in 2000. These changes are principally attributable to corresponding decreases in the amount due to related party under the General Agency Commission and Servicing Agreement, which resulted from payments of renewal commissions by American Equity Life under this Agreement. See Note 8 of the Notes to Consolidated Financial Statements included elsewhere in this report.
in 2001 from $8.6 million in 2000. These increases are primarily due to (i) the growth in our annuity business as discussed above; (ii) the introduction of multi-year rate guaranteed products with shorter expected lives; and (iii) an increase of $1.4 million resulting from SFAS No. 133. See Notes 1 and 4 of the Notes to Consolidated Financial Statements included elsewhere in this report.
Our investment strategy is to maintain a predominantly investment grade fixed income portfolio, provide adequate liquidity to meet our cash obligations to policyholders and others and maximize current income and total investment return through active investment management. Consistent with this strategy, our investments principally consist of fixed maturity securities and short-term investments. We also have approximately 1% of our invested assets at December 31, 2002 in derivative instruments (equity market index call options) purchased in connection with the issuance of equity index annuities. Such options represent approximately 1.5% of the related equity index reserves.
Gross Life Insurance in Force Gross Collected Premiums (in millions of dollars) (in millions of dollars)
Notes payable were $242.6 million at December 31, 1997, $222.5 million at December 31, 1996, and $236.0 million at December 31, 1995. The Company's debt to capitalization ratio of 23.0% at December 31, 1997 is down from 23.9% and 31.5% at December 31, 1996 and 1995 respectively.
SCHEDULES: * I Summary of Investments - Other Than Investments in Related Parties 81 II Condensed Financial Information of Registrant 82-85 III Supplementary Insurance Information 86 IV Reinsurance 87 VI Supplemental Information Concerning Property - Casualty Insurance Operations 88
At December 31, 1997 and 1996, the fair value, amortized cost, and gross unrealized gains and losses of investments in held-to-maturity and available-for-sale securities consisted of the following:
Current tax benefits of approximately $4,339,000 related to the vesting of restricted stock were credited directly to additional paid-in capital in 1997.
Under the Non-Employee Directors' Stock Option Plan (Directors' Plan), directors' received 2,000 (post-split) options annually at prices equivalent to the fair market value of common stock on the grant date. The stock options were granted during the years 1994 through 1996. As of December 31, 1997, 78,000 (post-split) shares of common stock were subject to options granted under the Directors' Plan with option prices ranging from $11.28 to $20.19. During 1997, 8,000 (post-split) shares of common stock were issued upon exercise of options subject to the stock option plan, with option prices ranging from $11.28 to $20.19. As the result of the adoption of the EIP, no new grants will be made under the Directors' Plan.
AMERICAN BANKERS INSURANCE GROUP, INC. SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 (IN THOUSANDS)
Basic net loss per common share (“EPS”) is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.
The Company evaluates tax positions in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long term liabilities in the financial statements..
The executive offices of the Corporation are in Warren, New Jersey. The administrative offices of the P&C Group are located in Warren and Whitehouse Station, New Jersey. The P&C Group maintains zone, branch and service offices in major cities throughout the United States and also has offices in Canada, Europe, Australia, Latin America and Asia. Office facilities are leased with the exception of buildings in Whitehouse Station, New Jersey and Simsbury, Connecticut. Management considers its office facilities suitable and adequate for the current level of operations.
On our commercial property per risk treaty, we increased the reinsurance coverage at the top of the program by $100 million. This treaty now provides approximately $500 million of coverage per risk in excess of our $25 million retention.
Growth in our commercial classes in 2007 and 2006 was constrained due to an increasingly competitive marketplace. In 2006, renewal rates were generally stable but were under competitive pressure in some classes of business, particularly non-catastrophe exposed property risks and certain casualty risks. During 2007, rates were down modestly. Certain classes of business and geographic areas, such as non-catastrophe exposed property risks and large company risks, experienced more competitive pressure than others. Rate pressure increased in the second half of the year across all classes of business, particularly for new business. Multiple peril and property and marine premiums in 2005 were reduced by reinsurance reinstatement premium costs of $19 million and $66 million, respectively, related to Hurricane Katrina. In 2006, property and marine premiums benefited from a $20 million reduction of previously accrued reinsurance reinstatement premium costs. Excluding the reinsurance reinstatement premiums, multiple peril premiums declined 1% and property and marine premiums grew 5% in 2006 compared with the prior year.
We will continue to manage this type of catastrophic risk by monitoring terrorism risk aggregations. Nevertheless, given the unpredictability of the targets, frequency and severity of potential terrorist events as well as the very limited terrorism reinsurance coverage available in the market, the occurrence of any such events could have a material adverse effect on the Corporation’s results of operations, financial condition or liquidity.
"junk" bonds or what are generally considered high-yield type securities, and 97.5% of the bonds are of investment grade quality. In accordance with Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," the Company recorded a decrease in investments of $247,637 to reflect the reporting of investments classified as available for sale at fair value (estimated market value) which was lower than amortized cost. The amount is reflected in shareholders' equity as a "net unrealized holding loss". In addition to the fixed maturities, the Company also had $4.7 million in unrestricted cash and $11 million in short-term investments at December 31, 1996. Central also has an unused $1 million line of credit with a major bank. During 1996, total assets increased about $2 million, or 2% to $119,388,697, mainly due to a positive cash flow from operations during the year from premiums, and from investment income less the $247,637 net unrealized holding loss. The Company anticipates that future operating cash flow needs, including surrenders of annuity policies, can be provided from the current investment portfolio.
Liabilities accrued for future policy benefits and policy claims payable increased 17%, or about $11.3 million to $76,650,884 primarily because of increased reserves and premiums. Shareholders' equity decreased $11,833,183 due to the 1996 operating loss, dividends of $2,104,708 and a change of $1,022,835 in the net unrealized holding loss, on investments available for sale.
Net income tax as a percentage of pretax income was 24% in 1995 compared to 30% in 1994. The current portion of the tax decreased to $1,419,026 in 1995 from $1,535,817 in 1994. The main reason for the decrease was the decrease in pretax income. The decrease in the deferred tax expense is primarily due to the change in the valuation allowance due to an unrealized holding gain in 1995 compared to an unrealized holding loss in 1994.
At December 31, 1996, $16,595,497 of consolidated shareholders' equity represents net assets of the Company's insurance subsidiary which is subject to certain regulatory restrictions on paying dividends and making loans or advances to the parent company. Generally, the net assets of the Company's insurance subsidiary available for transfer to the parent company are limited to the amounts by which the insurance subsidiary's net assets, as determined in accordance with statutory accounting practices, exceed minimum statutory requirements. In addition, payments of such amounts as dividends are subject to approval by regulatory authorities when (i) any such dividend is proposed to be paid from other than earned surplus (as defined in the applicable statute) or (ii) the value of any such dividend, together with the value of other dividends paid or distributions made within the preceding 12 months, exceeds the greater of (a) ten percent of the insurer's surplus as regards policyholders as of the 31st day of December next preceding the dividend payment, or (b) the net income of such insurer for the 12-month period ended the December 31st next preceding the dividend payment.
(2) Reflects the repurchase of approximately .1 million shares in 1994, .2 million shares in 1993, and .3 million shares in 1992.
For the years ended December 31, (in millions, except per share data)
The Company leases its home office facility at One State Street under a long-term capital lease with the One State Street Limited Partnership. The lease obligation of $26.1 million was recorded at July 1, 1983 at an interest rate of 15 percent. Accumulated amortization was $8.6 and $7.8 million at December 31, 1994 and 1993, respectively. Terms of the lease require annual payments of approximately $4 million a year through June 30, 2018. In addition, the Company is required to pay over the lease term a proportional share of the facility's variable operating expenses. This amounted to approximately $2.8, $2.9 and $2.9 million for the years ended 1994, 1993 and 1992, respectively.
The Company maintains various types of pension plans covering employees of HSB and certain affiliates. The plans are non- contributory and benefits are based upon an employee's years of service and final average pay based upon the highest three out of five years. Vesting occurs after five years of service in compliance with the provisions of the Tax Reform Act of 1986. The Company's funding policy is to contribute an amount necessary to satisfy the minimum requirements under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code, plus such additional amounts as the Company determines appropriate.
General and administrative expenses totaled $2,562,000 during the year ended December 31, 2000 as compared to $1,061,000 for fiscal 1999, an increase of $1,501,000 or 141.5%. The increase is primarily due to increases in advertising costs ($881,000), staff costs and director's fees ($191,000), professional fees ($89,000) and depreciation and amortization charges ($73,000). The increase in advertising expense is the result of the Company's effort to promote its Web site and general brand recognition to the consumer market via radio, print and internet promotions. The increase in payroll costs is primarily due to the appointment of a Chief Financial Officer and a Chief Information Officer in June 2000. During fiscal 2000 the Company completed a registration statement on Form S-1 to facilitate the raising of additional capital resulting in an increase in legal fees of $49,000. The increase in depreciation and amortization charges is the result of depreciating the Company's web site software for a full year in fiscal 2000.
The Company did not generate any operating revenues until the fourth quarter of fiscal 1999, when Stamford commenced generating re-insurance premium revenues and the Company began the sale of its extended warranty/service contract products over the Internet. The Company's Internet business recorded gross revenues in fiscal 1999 of $11,000 resulting in earned revenues of $400 with the balance deferred over the life of the related contracts. Stamford generated gross revenues of approximately $300,000 of which $288,000 reflected as unearned revenue at December 31, 1999.
General and administrative expenses totaled $1,071,000 during the year ended December 31, 1999 as compared to $481,000 for the twelve months ended December 31, 1998, an increase of $590,000 or 122.7%. The increase is primarily due to increases in advertising costs ($253,000), staff costs ($173,000), Web site development ($98,000) and depreciation and amortization ($78,000). The increase in advertising is due to Internet Banner Ad promotions. The increase in payroll costs is primarily due to the appointment of a Chief Executive Officer in February 1999 and the President and his assistant for a full year. The website development and depreciation and amortization increases are due to a full year's activity in fiscal 1999.
As of December 31, 2000 the Company had cash and cash equivalents totaling $473,006. Additionally, it had Treasury Notes totaling $2,376,214. The company will continue to rely on its cash reserves and Treasury Note investments during the first half of fiscal 2001 to fund its operations. Thereafter, management anticipates that sufficient funds will be provided by ongoing operations to meet the Company's funding requirements.
Ceded premiums as a percentage of gross premiums decreased from 47.6% in 1994 to 45.6% in 1995 to 44.3% in 1996. This is due to growth in other non-reinsured products, such as the Company's HMO joint venture formed in the third quarter of 1994, NHP Holding Company, Inc. ("NHP"), with a physician hospital organization ("PHO"). At that time, the PHO included five leading hospitals and approximately 1,600 physicians in the South Florida geographic area and, through its existing HMO, provided medical coverage to approximately 11,000 people. By December 31, 1996, the network included 22 hospitals and approximately 3,500 physicians and the HMO covered approximately 81,000 covered lives. The Company's 50% share of the operating loss from start-up operations of NHP was $2.0 million and $0.8 million in 1995 and 1994, respectively. In 1996, the Company's 50% share of the operating profit of NHP was $2.1 million.
fund the annuity reinsurance transaction (as described above) coupled with the decreases in cash provided by operating and financing activities.
In 1996, Congress enacted HR 3103 ("Health Insurance Portability and Accountability Act", or "HIPAA"), also commonly referred to as the Kassenbaum-Kennedy Bill. HIPAA provisions applicable to both insured and self-funded employer group coverage include minimum standards for pre-existing condition exclusions, waiver of pre-existing condition exclusions for individuals meeting minimum prior coverage requirements and prohibition of health related exclusion of individuals from employer group coverage. HIPAA also provides guaranteed acceptance of small employers with 2 to 50 employees for insured coverage. In other respects, HIPAA's group and small group provisions are largely in line with state small group reform laws already enacted by the large majority of states. However, most of these states are expected to amend their laws to alleviate any inconsistencies. States which have not already enacted all of the HIPAA group and small group standards may enact state reforms consistent with HIPAA. The final outcome of state amendments or new legislation, as well as federal regulations addressing these provisions, cannot be predicted.
The Company's sources of funds consist primarily of premiums and investment income. Funds are applied primarily to the payment of CMAC's claims and operating expenses. The Company generated positive cash flows from operating activities in 1998, 1997 and 1996 of $132.3 million, $93.5 million and $84.5 million. The significant increases in operating cash flows reflect the growth in premiums written and insurance in force that has more than offset any increases in claims paid and other expenses. Positive cash flows are invested pending future payments of claims and other expenses; cash flow shortfalls, if any, are funded primarily through sales of short-term investments and other investment portfolio securities.
Investment income from fixed maturity securities accounted for approximately 84.9% of total investment income for the year ended December 31, 2014. We have increased our investment purchases of corporate and municipal securities over the past several years, focusing on utility service sectors in these security categories. In addition, we currently have $67.8 million invested in equity securities related to bond and stock mutual funds as these securities offer a competitive yield with a shorter duration.
These segments are reported in accordance with U.S. GAAP. The Company evaluates profit and loss performance based on net income before federal income taxes.
Commissions. Commission expense, excluding MGLIC amounts of $0.5 million, were comparable for all three periods presented based upon premiums collected. We consolidated some collection routes in 2012, which resulted in elimination of one district office and its related staffing thereby also reducing some commission expense.
The Company invests in municipal securities of issuers in the state of Louisiana and receives a credit that reduces its premium tax liability in that state. At December 31, 2014, total holdings of municipal securities in Louisiana represented 8.8% of all municipal holdings based upon fair value. The Company also holds 25.2% of its municipal holdings in Texas issuers.
Cash flows from our insurance operations historically have been sufficient to meet current needs. Cash flows from operating activities were $97.9 million, $81.4 million and $69.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. We have traditionally also had significant cash flows from both scheduled and unscheduled fixed maturity security calls, maturities, redemptions, and prepayments, which totaled $71.4 million, $92.7 million and $326.7 million in 2014, 2013 and 2012. These cash flows, for the most part, are reinvested in fixed income securities. Net cash outflows from investment activity totaled $104.0 million, $84.9 million and $50.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. The outflows from investing activities for the year ended December 31, 2014, primarily related to the investment of excess cash and cash equivalents generated from operations during 2014. The Company's cash flows from financing activities were $2.1 million in 2014, $1.7 million in 2013 and $3.8 million in 2012.
Premium revenue from Medicare supplement decreased by $2.6 million in 1999 -- $7.3 million decrease resulting from a 7.4% decrease in member months, partially offset by a $4.7 million increase because of a 5.0% increase in net premium rates. Membership in RightCHOICE's Medicare supplement products has decreased in part due to subscribers opting for Medicare-risk programs, similar to RightCHOICE's Blue
RightCHOICE continues the efforts initiated in 1998 to modify its pharmacy benefits management program and recontract with physicians and ancillary service providers. The drug cost trend increase ranged from approximately 10% to 20%, driven by a combination of factors, including:
Depreciation and amortization expenses decreased to $17.2 million in 1999 from $19.3 million in 1998. Amortization expenses for completed components of RightCHOICE's information and operations strategy project decreased by $1.3 million in 1999 compared to 1998. The decrease in amortization for the information and operations strategy project is due in part to RightCHOICE's change in the estimated useful life of the capitalized software from five to seven years.
. HMO competition in RightCHOICE's HMO service areas, . shifts in chosen benefit levels,
General and administrative expenses (excluding depreciation and amortization) increased $0.2 million in 1998 compared to 1997. RightCHOICE managed to keep general and administrative expenses relatively consistent from 1997 to 1998 despite the fact that HealthLink's comparable expenses increased by $6.5 million in 1998 as compared to 1997. This increase is directly attributable to HealthLink's geographic and member expansion efforts. RightCHOICE's 1997 general and administrative expenses include a write-off of $1.7 million for amounts due to BlueCHOICE from MedAmerica HealthNet, Inc., a physician hospital organization that filed for bankruptcy during the fourth quarter of 1997. RightCHOICE's general and administrative expense ratio (excluding depreciation and amortization) decreased to 18.3% in 1998 compared to 19.5% in 1997. Excluding depreciation, amortization and the $1.7 million charge, the general and administrative expense ratio for 1997 was 19.2%.
Sales of securities during the year ended December 31, 2016 resulted in realized gains on investments, net of impairment, of $2,555,767 compared to $195,796 during the year ended December 31, 2015, an increase of $2,359,971 or 1205.3%. The increase in realized gains primarily related to the increased sales of equity securities in an unrealized gain position in 2016 compared to 2015.
The following describes the valuation techniques we used to determine the fair value of investments held as of December 31, 2016 and what level within the fair value hierarchy each valuation technique resides:
AmerInst paid two semi-annual dividends of $0.25 per share during 2016 and 2015. During 2016, the total dividend amount was reduced by $19,720 which represents a write back of uncashed dividends issued prior to 2011 to shareholders that we have been unable to locate. During 2015, the total dividend amount was reduced by $12,056 which represents a write back of uncashed dividends issued prior to 2010 to shareholders that we have been unable to locate. Since AmerInst began paying consecutive dividends in 1995, our original shareholders have received approximately $21.37 in cumulative dividends per share, which when measured by a total rate of return calculation has resulted in an effective annual rate of return of approximately 8.69% from the inception of the Company, based on a per share purchase price of $8.33 paid by the original shareholders, and using a book value of $27.94 per share as of December 31, 2016.
At December 31, 2016 and December 31, 2015, the Company had investments in certificates of deposit (“CD”) in the amount of $490,000 and $980,000, respectively, comprising of fully insured time deposits placed with Federal Deposit Insurance Corporation (“FDIC”) insured commercial banks and savings associations. The FDIC, an independent agency of the United States government, protects depositors up to an amount of $250,000
The following tables set forth information about incurred and paid loss development information related to our professional liability business under the Reinsurance Agreement within the Reinsurance segment as at December 31, 2016. The information related to incurred and paid loss development for the years ended December 31, 2007 through 2015 is presented as supplementary information and is unaudited.
For the year ended December 31, 2001, our membership in Indiana declined due to a subcontracting provider organization terminating a percent-of-premium arrangement, which was our only contract of that type. Separately, we entered into agreements with Humana that resulted in the transfer to us of 35,000 members in Wisconsin and 30,000 members in Texas.
For the year ended December 31, 2001, we recorded income tax expense of $9.1 million based on a 41.5% effective tax rate. For the year ended December 31, 2000, we recorded an income tax benefit of $543,000 as a result of the reversal of our valuation allowance related to deferred tax assets.
Some of the health plans with which we compete have greater financial and other resources and offer a broader scope of products than we do. In addition, significant merger and acquisition activity has occurred in the managed care industry, as well as in industries that act as suppliers to us, such as the hospital, physician, pharmaceutical, medical device and health information systems industries. To the extent that competition intensifies in any market that we serve, our ability to retain or increase members and providers, or maintain or increase our revenue growth, pricing flexibility and control over medical cost trends may be adversely affected.
consolidated federal income tax returns. Effective January 1, 1993, the Company adopted SFAS No. 109, "Accounting for Income Taxes." Upon adoption of SFAS No. 109, the Company recorded a benefit of $16,881,000 which was principally attributable to deferred tax benefits that had not been recognized due to limitations under prior accounting standards. The Company's effective tax rates for 1995, 1994 and 1993 are less than the statutory tax rate of 35% primarily because of income derived from tax-advantaged securities. The tax rate for 1993 reflects a tax benefit of $450,000 from the effect of the increase in the federal tax rate on the Company's deferred tax asset.
On July 17, 1995, Orion issued 7 1/4% Senior Notes due 2005 with a face value of $100,000,000 in a public offering pursuant to a shelf registration filed with the Securities and Exchange Commission in 1994. The senior notes issued are non-callable to maturity, and were sold at 99.23% of par to yield
The Company's share of the undistributed earnings of Guaranty National after it was deconsolidated following the sale by the Company of a majority interest in a public offering on November 20, 1991, and Intercargo after acquiring an equity interest in 1993, were, in the aggregate, $24,867,000 as of December 31, 1995 and $22,874,000 as of December 31, 1994. Transactions with Guaranty National for 1995, 1994 and 1993 reported in the consolidated statement of earnings include interest income on the Guaranty National subordinated notes of $1,101,000, $1,640,000 and $1,843,000, investment management fee income of $595,000, $550,000 and $550,000, respectively, and interest expense on a mortgage participation loan of $407,000 in each year.
Rent expense amounted to $14,112,000, $11,519,000 and $11,976,000 net of sublease rentals of $9,000 in 1994 and $419,000 in 1993. Substantially all leases are for office space and equipment. A number of lease commitments contain renewal options ranging from one to thirty years.
Orion maintains a non-qualified defined benefit retirement plan for members of the Board of Directors who are not employees. Benefits are based on years of service and director fee levels at retirement. In 1995, Orion's stockholders authorized 100,000 shares for a stock option plan for non- employee directors. During 1995 Orion granted 54,000 stock options to directors at fair market value, which become exercisable one year from the date of grant and expire in ten years.
Expenses: Losses and loss adjustment expenses incurred 5,177 6,896 18,506 43,986 38,274 Acquisition expenses 1,192 894 3,693 10,431 12,545 Real estate expenses - - - 25,126 48,527 Other expenses 5,246 7,694 12,758 15,074 19,653 Expenses due to rescission - - 3,542 600 1,565
Net Investment Income 2,605 3,650 4,016 40.1 10.0 Interest on notes receivable 1,531 767 - (49.9) (100.0) Commission and fee income: Brokerage commission income 3,292 2,411 143 (26.8) (94.1) Management fees from affiliates 1,425 1,496 1,183 5.0 (20.9)