felanders/preprocessed huggingface dataset:
We are one of the most significant players in the managed care industry in Puerto Rico and have over 55 years of experience in this industry. We offer a broad portfolio of managed care and related products in the Commercial, Medicaid and Medicare Advantage markets. In the Commercial market we offer products to corporate accounts, U.S. federal government employees, local government employees, individual accounts and Medicare Supplement. We also participate in the Government of Puerto Rico Health Reform (a managed care program for the medically indigent funded by the Puerto Rico and U.S. federal governments that is similar to the Medicaid program in the U.S.) (Medicaid). The Island is divided in eight regions and we served all of them on an administrative service only basis (ASO) until March 31, 2015. Effective April 1, 2015, the government changed the Medicaid delivery model from an ASO to a risk-based model and we elected to participate as a fully-insured provider in only two regions of Puerto Rico.
Net investment income increased $3.7 million, or 8.2%, to $48.9 million mostly as a result of higher invested balances.
Purchase obligations represent payments required by us under material agreements to purchase goods or services that are enforceable and legally binding and where all significant terms are specified, including: quantities to be purchased, price provisions and the timing of the transaction. Other purchase orders made in the ordinary course of business for which we are not liable are excluded from the table above. Estimated pension plan contributions amounting to $2.0 million were included within the total purchase obligations. However, this amount is an estimate which may be subject to change in view of the fact that contribution decisions are affected by various factors such as market performance, regulatory and legal requirements and plan funding policy.
Management expects that substantially all of the development of the 2017 estimate of medical claims payable will be known during 2018.
To pay interest and principal on borrowings and other holding company costs, GAFRI (parent) and AAG Holding use primarily capital distributions from their directly-owned insurance subsidiaries, (Great American Life Insurance Company ("GALIC") and GA Life of Puerto Rico ("GAPR")), bank borrowings and cash and investments on hand. Capital distributions from GAFRI's insurance subsidiaries are subject to regulatory restrictions relating to statutory surplus and earnings. The maximum amount of dividends payable by GALIC and GAPR in 2003 without prior regulatory approval is $41.9 million and $25.8 million, respectively. In 2002, GALIC paid $23.0 million in dividends and GAPR paid $2.5 million in dividends. Also in 2002, GAFRI made capital contributions to GALIC of $34.0 million.
Nearly half of GAFRI's fixed annuity liabilities at December 31, 2002, were two-tier in nature in that policyholders can receive a higher amount if they annuitize rather than surrender their policy, even if the surrender charge period has expired. At December 31, 2002, the average stated crediting rate on GAFRI's principal fixed annuity products was approximately 4.3% and current stated crediting rates (excluding bonus interest) on GAFRI's active products generally range from 3.0% to 3.6%. GAFRI estimates that its effective weighted-average crediting rate, on its inforce business over the next five years will approximate 4.3%. This rate reflects actuarial assumptions as to: (i) expected investment spread (ii) deaths; (iii) annuitizations; (iv) surrenders and (v) renewal premiums. Actual experience and changes in actuarial assumptions may result in different effective crediting rates than those above.
Life products in 2002 include premiums of $14 million and benefits of $19 million related to Manhattan National Life which was acquired in June 2002. The 2001 increase in supplemental insurance premiums and benefits is due primarily to the November 2000 reinsurance of a block of accident and health insurance business.
Net investment income increased in 2001 as a result of higher average invested assets.
Reflects litigation costs included in other expenses for "Life and annuity products" ($17.3 million) and "Supplemental insurance products" ($1.0 million); reflects litigation costs included in annuity benefits for "Life and annuity products" ($14.2 million).
No compensation cost has been recognized for stock option grants. The weighted-average fair value per option granted was $6.09, $6.21 and $5.88 in 2002, 2001 and 2000, respectively.
Agreement of Allocation of Payment of Federal Income Taxes ("Great American Financial Resources Tax Allocation Agreement"), dated December 31, 1992, between American Financial Corporation and the Registrant incorporated herein by reference to Exhibit 10.12 to the Registrant's Registration Statement on Form S-2 dated January 7, 1993.
annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Notes receivable are stated at the estimated collectible amounts, net of an allowance for bad debts. The Company continuously monitors its collection of payments on the notes receivable, and maintains a reserve for estimated bad debt losses. The amount of the reserve is based primarily on the Company's historical experience in collecting similar notes receivable that are no longer outstanding, and any available information about the financial condition of the note issuers, although the Company has access to very little such information. The Company believes its reserve for bad debt losses is adequate as of December 31, 2001. However, there can be no assurance that the Company will realize the carrying amount of its notes receivable.
The Company's accounting for income taxes is in accordance with SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109 requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that are recognized in the Company's financial statements in different periods than those in which the events are recognized in the Company's tax returns. The measurement of deferred tax liabilities and assets is based on current tax laws as of the balance sheet date. The Company records a valuation allowance related to deferred tax assets in the event that available evidence indicates that the future tax benefits related to the deferred tax assets may not be realized. A valuation allowance is required when it is more likely than not that the deferred tax assets will not be realized.
Recently, the Company was informed that certain Clients will not be renewing their contracts with the Company in 1996 due to competitive pricing, the effect of which will negatively impact future quarterly revenues by approximately $6 to $8 million for fiscal 1996. Further, it is anticipated that the pharmacy benefits management industry will continue to experience ongoing competitive pricing pressure. The Company regularly bids on customer accounts of various sizes, with its success ratio varying based upon a multitude of factors and market forces then in effect. The Company was recently informed that it was not awarded the business from a sizeable, potential account that would have commenced mid-1996. The Company continues to maintain its policy of pricing its bids at a profit, therefore electing not to buy certain accounts in the marketplace.
Management has already taken steps in the first quarter of 1996 to appropriately size its overhead structure to match the newly expected volume of prescriptions, thus minimizing to the extent possible, the reduction in future profits from lower revenues. A restructuring charge to earnings of approximately $1.6 million will be taken in the first quarter of 1996 as a result of these organizational and facility changes.
The Company's financial position remained solid throughout the year. Working capital at December 31, 1995 was $27.9 million, an increase of $1.3 million over the prior year amount. Included in the prior year working capital balance was $2 million of working capital from the Company's former Irish subsidiary, Newport Synthesis Ltd., which was sold in March 1995. Consequently, the actual rise in working capital for comparable year end balances was $3.3 million. This increase in working capital was mainly the result of higher cash and cash equivalents attained through improved accounts receivable management, and increased inventory at the mail service pharmacy attributable to the implementation of the new mail service pharmacy automated dispensing technology. Cash flow from operations in 1995 was $4.9 million, and was primarily comprised of cash provided by earnings and depreciation, collections of accounts receivable and the timing of accounts payable. The rise in accounts payable of $783,000 was attributable to increased levels of inventory maintained, as noted above.
Change in fair value of conversion derivative liability. Change in fair value of conversion derivative liability embedded in the Convertible Notes was zero for the year ended December 31, 2015 compared to $6.8 million for the year ended December 31, 2014. ASC 815, Derivatives and Hedging, required the Company to bifurcate the embedded conversion option that was valued on February 21, 2014 and June 5, 2014, which resulted in a fair value loss of approximately $6.8 million for the year ended December 31, 2014. During that year, the conversion derivative liability was reclassified to additional-paid-in-capital, accordingly there will be no further adjustment to the fair value of this derivative liability reflected in the Company’s financial statements. See Note 10, “8.50% Senior Unsecured Convertible Notes,” to the accompanying consolidated financial statements.
At December 31, 2015, we had approximately $20.3 million of cash and cash equivalents; of this amount, approximately $12.9 million was available to pay premiums on the 39 unencumbered policies and other overhead expenses, with approximately $7.4 million restricted to the Revolving Credit Facilities. We expect to meet our liquidity needs for the foreseeable future primarily through a combination of the receipt of death benefits from life insurance policy maturities, borrowings under the Revolving Credit Facilities, strategic capital market raises, policy sales (subject to the asset sale restrictions in our debt arrangements) and cash on hand.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A,” addresses the consolidated financial condition of Pruco Life Insurance Company as of December 31, 2006, compared with December 31, 2005, and its consolidated results of operations for the years ended December 31, 2006 and 2005.
Losses and loss expenses payable are based on formula and case-basis estimates for reported claims, and on estimates, based on experience, for unreported claims and loss expenses. The liability for unpaid losses and loss expenses, net of estimated salvage and subrogation recoverable of $8,265,000 and $7,378,000 at December 31, 1996 and 1995, respectively, has been established to cover the estimated ultimate cost of insured losses. The amounts are necessarily based on estimates of future rates of inflation and other factors, and accordingly there can be no assurance that the ultimate liability will not vary from such estimates. The estimates are continually reviewed and adjusted as necessary; such adjustments are included in current operations (see note 4). Salvage and subrogation recoverables are estimated using historical experience.
impairment existed. As a result of this determination, the Company recorded an impairment charge against earnings in the fourth quarter of 2005 amounting to $3.75 million.
MILLION TELEPHONE CALLS FROM OUR INSURED WERE DEALT WITH IN FRANCE IN 2O15
The general availability of additional health cover for all companies provided by the national inter-professional agreement on 1 January 2016 has turned the focus of insurance onto SMEs and on self-employed persons and has unleashed fierce competition in terms of services available and prices. Nearly 2.5 million employees ar e affected. Along with its partners, CNP Assurances has decided to maintain the quality both of the wide range of modular services that it offers, and of its personalised method of distribution, which is advicedriven. The result is additional insurance that complies with the responsible health contract defined by the State, enriched with options and services that are as diverse as those available to large companies. Additional optional cover even allows nearly 100% of expenses to be paid for. This will increase the feeling of security of the insured and their trust in CNP Assurances.
The partnership concluded in December 2015 with AG2R La Mondiale, the 2nd largest provider
Increased foothold in Europe The partnership with Banco Santander, the leading consumer credit company, strengthens the Group’s European foothold. The common subsidiary CNP Santander Insurance has access to ten countries including seven that are new for CNP Assurances: the Nordic countries, Austria, Poland and above all, Germany. Germany becomes the Group’s second largest European market (excluding France) after Italy. In Southern Europe, the Group is continuing with its development, in particular in partnership with CNP UniCredit in Italy, and using an open model via CNP CIH in Cyprus, and CNP Partners in Italy, Spain and Portugal.
This radical change arises primarily from Italy where the proportion of unit-linked products has almost doubled. In its first full year, CNP Santander Insurance has kept its promises. It has generated premium income of €492 million in consumer credit insurance, more than half of this in Germany.
We have the chance to be a major fi nancial group and, at the same time, to be a business of human size, agile and responsive. These are major advantages against a background of rapid changes that are diffi cult to predict.
Total revenue (net premium income + income on own account) In France, net premium income increased by 4.6% to €1,386 million, supported by a positive dynamic in all segments.
CNP Assurances pays its shareholders and fi nances its growth using the profi t generated by its activities and its balance sheet.
Dividend per share, in cash submitted to the vote of the shareholders at the General Meeting on 28 April 2016.
Ratings are as assigned by Moody's when available, or by S&P and converted to the generally comparable Moody's rating.
(4) At December 31, 1997, represents balances of $13.1 million outstanding against a $20.0 million revolving line of credit.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in NOTE 2 to the financial statements, the Company has suffered recurring losses from operations during the year ended December 31, 1997 and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in NOTE 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Year Ended December 31, ----------------------- 1997 1996 1995 ----- ----- ----- (in thousands)
Proceeds from sales of investments in fixed maturity securities were approximately $34.0 million in 1997 and $57.9 million in 1996. Gross gains of $654,000 and gross losses of $119,000 were realized on fixed maturity investment sales during 1997. Gross gains of $535,000 and gross losses of $681,000 were realized on fixed maturity investment sales during 1996.
Profits and losses of LifeStyles Marketing are allocated 50% to WMC and 50% to the President of LifeStyles Marketing. However, because of the Company's voting and financial control, the operations of the joint venture are consolidated with the Company's operations and, accordingly, all significant intercompany accounts and transactions are eliminated.
In February 1994, NFL sold at par value, to an unrelated party, the $5 million par value of the Debentures held in its portfolio. This transaction has been accounted for, on a consolidated basis as an issuance of debt.
Dividends paid by the Insurance Subsidiaries to Westbridge are determined by and subject to the regulations of the insurance laws and practices of the insurance departments of their respective state of domicile. NFL, a Delaware domestic company, may not declare or pay dividends from any source other than earned surplus without the Delaware Insurance Commissioner's approval. The Delaware Insurance Code defines earned surplus as the amount equal to the unassigned funds as set forth in NFL's most recent statutory annual statement including surplus arising from unrealized gains or revaluation of assets. Delaware life insurance companies may generally pay ordinary dividends or make distributions of cash or other property within any twelve month period with a fair market value equal to or less than the greater of 10% of surplus as regards policyholders as of the preceding December 31 or the net gain from operations for the twelve month period ending on the preceding December 31. During 1998, NFL is precluded from paying dividends without the prior approval of the Delaware Insurance Commissioner as its earned surplus is negative. Further, NFL has agreed to file for the prior approval of any dividends declared or paid for the foreseeable future.
Loans Receivable - For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $5 million and $2 million as of December 31, 2020 and December 31, 2019, respectively.
Fair Value Measurements. The Company’s fixed maturity available for sale securities, equity securities, and its trading account securities are carried at fair value. Fair value is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date". The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair value of the vast majority of the Company’s portfolio is based on observable data (other than quoted prices) and, accordingly, is classified as Level 2.
Reserves for losses and loss expenses are an accumulation of amounts determined on the basis of (1) evaluation of claims for business written directly by the Company; (2) estimates received from other companies for reinsurance assumed by the Company; and (3) estimates for losses incurred but not reported (based on Company and industry experience). These estimates are periodically reviewed and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments are reflected in the statements of income in the period in which they are determined. The Company discounts its reserves for excess and assumed workers' compensation claims using a risk-free or statutory rate. (See Note 13 of Notes to Consolidated Financial Statements.)
At December 31, 2020 and 2019, investments in fixed maturity securities were as follows:
During the year ended December 31, 2020, the Company decreased the allowance for expected credit losses utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to the disposition of securities which previously had an allowance recorded.
The following tables present the assets and liabilities measured at fair value as of December 31, 2020 and 2019 by level:
extended reporting period claims) improved to 95.8% in 1997, compared to 100.6% in 1996. This decrease arose mainly from the MEEMIC book of business and was offset somewhat by the professional liability book of business, as further discussed below.
On April 4, 1997, Professionals Group borrowed $22.5 million under a seven-year unsecured bank term loan, bearing interest at an adjustable rate of LIBOR plus 62.5 basis points (5.87% at December 31, 1998), and payable quarterly (the "Credit Agreement"). The remaining principal payments are due on April 30 of each year as follows: 1999 - $2,500,000; 2000 - $3,000,000; 2001 - $3,000,000; 2002 - $3,500,000; 2003 - $3,500,000; and 2004 - $4,500,000. The principal payment of $2.5 million due on April 30, 1998 was paid timely. Professionals Group used $20.0 million of the proceeds of this loan to make a capital contribution to ProNational, which in turn, used the proceeds to purchase a $21.5 million Surplus Note from MEEMIC.
Intangible assets are comprised mainly of goodwill, which represents the excess of cost over the fair value of assets acquired, and the cost of a purchased book of business. Intangible assets are being amortized on a straight-line basis over ten years. The carrying value of intangible assets is periodically reviewed by the Company based on the expected future undiscounted operating cash flows of the related item. Based upon its most recent analysis, the Company believes that no material impairment of intangible assets exists at December 31, 1998.
Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130 "Reporting Comprehensive Income." This standard establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of SFAS No. 130 had no impact on the Company's results of operations or shareholders' equity. SFAS No. 130 requires unrealized gains or losses on the Company's available-for-sale securities, which prior to adoption were reported separately in shareholders' equity, to be included in other comprehensive income. Prior period financial statements have been reclassified to conform to the requirements of SFAS No. 130.
The significant components of Federal income tax expense (benefit) are as follows:
On May 1, 1996, in a transaction approximating $1,244,000, the Company paid $309,000 and issued 44,000 shares of common stock held in treasury (valued at $935,000) in exchange for all of the issued and outstanding shares of American Insurance Management Corporation. The acquisition was accounted for as a purchase business combination. The effect of the acquisition was not material to the Company's consolidated results of operations.
On May 15, 2015, Till acquired all of the issued and outstanding shares of Omega Insurance Holdings, Inc. (“Holdings”), a privately-held Toronto, Canada based holding company, including its subsidiaries, Omega General Insurance Company ("Omega"), a fully licensed insurance company, and Focus Group, Inc. ("Focus"), an insurance consulting and services company. Holdings offers innovative and customized solutions in a cost-effective manner for insurers/reinsurers exiting the market and organizations with unique insurance needs.
Prior to 2016, Till prepared its financial statements under International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), for reporting as required by securities regulators in Canada, and as permitted in the United States ("U.S.") based on Till's status as a foreign private issuer as defined by the U.S. Securities and Exchange Commission (the "SEC") for foreign private issuers. During 2016, Till determined that it no longer qualified as a foreign private issuer under the SEC rules. As a result, beginning with Till's annual report on Form 10-K for the year ended December 31, 2016, Till is required to comply with all of the periodic disclosure and current reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, applicable to U.S. domestic issuers. Under the Toronto Securities Exchange Venture ("TSX-V") regulations,Till is permitted in Canada to prepare its consolidated financial statements in accordance with U.S. GAAP.
In February 2016, the FASB issued ASU Topic 2016-02, Leases, that provides guidance that affects the recognition, measurement, presentation, and disclosure of leases. This guidance requires substantially all leases to be reported on the balance sheet as right-to-use assets and lease liabilities, as well as additional disclosures. The standard is effective as of January 1, 2019, and early adoption is permitted. While Till has limited leasing activities, Till is in the early stages of evaluating the impact of the new guidance on its consolidated financial statements, but does not expect this accounting standard to have a significant effect on its financial statements or related disclosures.
Cumulative paid losses and loss adjustment expenses, net of reinsurance and excluding portfolio transfer transactions:
• 24 months from Closing: $300,000 cash and 500,000 common shares and expenditures of $250,000
Till's Board of Directors may, from time to time and in its sole discretion, issue warrants to acquire shares of the restricted voting stock of Till. At December 31, 2017, Till has 179,500 warrants outstanding with a weighted average exercise price of Cdn$9.92 (US$7.91) and a weighted average remaining term of 1.94 years.
We lease 40,858 square feet of office space in Nashville, Tennessee for our corporate headquarters and 32,202 square feet of office space in Memphis, Tennessee for our executive offices and a claims center. We also lease an aggregate of 134,806 square feet of office space for additional claims centers in Columbia, South Carolina, Knoxville, Tennessee and Tampa, Florida and for our administrative and customer service center located in Baton Rouge, Louisiana. In addition, we lease office space for our numerous neighborhood sales offices, none of which is material to our business.
• premiums we earn from sales of direct and assumed non-standard personal automobile and term life insurance policies, which we refer to in this report as gross premiums, less the portion of those premiums that is ceded to other insurers, which we refer to in this report as ceded premiums, with the difference being what we refer to as net premiums;
• interest and fees earned on the financing of insurance policies; and
• Introduced Direct Prepaid Visa® - with 75,000 cards issued through January 2005 and loads totaling more than $6 million;
We also expect results in Florida to improve in 2005, as the percentage of business attributable to the Miami market decreases. That decrease is expected to continue to have a positive effect on results in 2006.
For the year ended December 31, 2003, we received net proceeds from the issuance of common stock of $72.5 million and increased our borrowings on the premium finance revolving credit facility by $33.0 million. During the year, we repaid all outstanding principal under our term loans totaling $10.2 million, paid interest on outstanding indebtedness of $5.3 million, interest on the Series A redeemable preferred stock of $0.3 million, dividends on the Series B preferred stock of $0.3 million, and dividends on common stock of $0.9 million. The Series A redeemable preferred stock and Series B preferred stock were converted to common stock in connection with our initial public offering in August 2003.
Contractual Obligations. The following table summarizes estimated payments under our contractual obligations as of December 31, 2004.
At December 31, 2004, investments carried at market value of $11,957,000 and cash of approximately $126,000 were on deposit with regulatory authorities. Additionally, investments carried at market value of $3,710,000 were pledged to an unaffiliated insurer to secure our assumed reinsurance obligations.
The provision for income taxes in the accompanying consolidated statements of income differed from the statutory rate of 35% as follows:
At December 31, 2000, the Bond Portfolio included $89.3 million of bonds that were not investment grade. These non-investment-grade bonds accounted for approximately 4.0% of the Company's total assets and approximately 6.0% of its invested assets.
The Company's Consolidated Financial Statements together with the Report of Independent Public Accountants thereon appearing on pages 22 through 32 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 1994 is incorporated herein by reference.
The Company leases 15,662 square feet of office space in Jacksonville, Florida, for its executive offices, under a lease expiring in 1997, with an option for one to five additional years. In addition, the Company leases 16,000 square feet of office space in Phoenix, Arizona, for its life insurance operations under a lease expiring in 1997 with an option for two additional years. Circle would assume full responsibility for the leased office space in Phoenix, Arizona upon completion of the Life Insurance Reorganization.
(1) Includes net realized investment gains (losses) of ($234,000), ($182,000) and $4,147,000 in 1995, 1994 and 1993, respectively. 1995 includes other income of $600,000 related to the settlement of a disputed financing proposal. 1994 includes other income of $558,000 from the sale of the Company's 13% subordinated notes and a gain on sale of a former subsidiary to Wickes of $613,000. (See Note 12 of Notes to the Consolidated Financial Statements included elsewhere herein.) Includes equity in earnings (loss), net of tax, of Wickes of ($5,849,000), $8,274,000 and $1,525,000 for 1995, 1994 and 1993 respectively. The Company's equity in Wickes earnings (losses) include losses of ($3.8) million related to restructuring charges incurred in 1995 and $4.2 million of tax benefits related to reversal of a deferred tax valuation allowance established in a prior year in 1994.
Gross profit decreased $13 million to 22.7% of net sales in 1995 compared with 23.7% of net sales in 1994. Wickes estimates that deflation in lumber prices caused $7.6 million of the decrease and that the additional week of sales in 1994 contributed approximately $3.3 million of additional gross profit in 1994.
Realized gains on sales of Dependable's investments included in discontinued operations were $31,000, $91,000, and $7,651,000 in 1995, 1994 and 1993, respectively.
During 2003, ML of New York discontinued manufacturing variable life insurance products. As a result, Merrill Lynch Life currently does not manufacture, market, or issue life insurance products.
Credit spreads represent the credit risk premiums required by market participants for a given credit quality, i.e. the additional yield that a debt instrument issued by a AA-rated entity must produce over a risk-free alternative (e.g., U.S. Treasury instruments). Changes in credit spreads have an inverse relationship to the value of investments.
The products that comprise the Annuity and Life Insurance segments generally possess similar economic characteristics. As such, the financial condition and results of operations of each business segment are generally consistent with ML of New York’s consolidated financial condition and results of operations presented herein.
ERI's executive offices are located in an approximately 250,000 square foot building owned by the Company in Simsbury, Connecticut. The building consists of two wings: an older 120,000 square foot, two-
Net investment income increased by $14.6 million, or 31%, to $61.7 million in 1998 from $47.1 million in 1997. The increase resulted principally from growth in the Company's investment portfolio, measured on an amortized cost basis, from $1.0 billion at December 31, 1997 to $1.2 billion at December 31, 1998. The Company's equity investment balances were $79.2 million and $61.7 million at December 31, 1998 and 1997, respectively, and the cash and short-term investment balances were $34.3 million and $88.5 million, respectively, on the same dates.
The Company's entire investment portfolio is classified as available for sale, and is reported at fair value, with the resulting unrealized gains or losses included as a separate component of stockholders' equity (within accumulated other comprehensive income) until realized. The market value of the portfolio was 105% and 104% of amortized cost at December 31, 1998 and December 31, 1997, respectively. At December 31, 1998 and 1997, stockholders' equity was increased by $21.9 million and $19.5 million, respectively, to record the Company's fixed maturity investment portfolio at fair value net of tax. At December 31, 1998, the Company owned no derivative instruments, except for $139.9 million (fair value) invested in mortgage and asset backed securities, including $5 million in AAA-rated interest only commercial mortgage-backed securities.
situated insurance companies. If the Company's principal computer systems were not made Y2K compliant, many of its business operations, including its policy issuance, premium billing and collections, claims handling, investment and accounting functions, could be materially adversely affected, with negative financial consequences and damage to the Company's reputation.
We calculate and maintain reserves for estimated future claims payments to policyholders using actuarial assumptions in accordance with industry practice and GAAP. Many factors affect these reserves, including mortality trends, policy persistency and investment returns. We establish our reserves based on estimates, assumptions and our analysis of historical experience.
Benefit expenses are recorded in our Insurance Segment. Benefit expenses include claims paid or payable on in-force insurance policies, as well as the change in our reserves for future policy benefits during the period. Benefit expenses are reduced by amounts ceded to reinsurance companies with whom we contract to share policy risks.
The block where there are no dividends expected had a significant number of policies issued in December 1999 which had level premiums for the first 20 durations, followed by premiums which increased significantly in duration 21 as the premiums from that point forward go to an annually increasing scale. The approximate increase in premiums going from the 20th to the 21st duration is 1300%. Direct policies are a mixture of annual, semi-annual, quarterly, and monthly premium payment modes, whereas ceded policies are all annual premium mode. Therefore, both direct and ceded premiums increased significantly in the fourth quarter of 2019 on the Closed Block compared to the prior year as this group of policies ended their level term with larger impacts affecting ceded premiums more than direct premiums as a result of these modal differences.
Liquidity guidelines that limit the amount of illiquid assets that can be held at any time, and
Amounts due from reinsurers to reimburse claims paid are usually paid at some date after the claim has been paid.
The Company’s loss reserve estimates gradually blend in the results from development and frequency/severity methodologies over time. For general liability estimates, more credibility is assigned to the Company’s own loss experience approximately 60 to 72 months after the beginning of an accident year. For property business, the Company’s loss reserve estimates also blend in the results from development and frequency/severity methodologies over time. In contrast to general liability estimates, full credibility is assigned to the Company’s loss experience approximately 24 to 36 months after the beginning of an accident year, where loss reporting and claims closing patterns settle more quickly. The Company’s loss experience receives partial weighting in the estimates 12 to 24 months after the beginning of the accident year.
Loss reserves at December 31, 2009 were $609.6 million, including $227.9 million of reserves attributable to the trade capital providers, compared to loss reserves at December 31, 2008 of $449.7 million, including $183.3 million of reserves attributable to the trade capital providers.
Losses and loss adjustment expenses for the year ended December 31, 2007 included $23.1 million in net unfavorable development on prior accident years. The unfavorable development included $26.0 million for the Company’s asbestos and environmental exposure. Workers compensation claims resulted in $7.0 million in unfavorable development, primarily due the settlement of one claim for $5.5 million, coupled with $2.0 million due to the unwinding of the reserve discount. Loss reserves for involuntary pools and unallocated loss adjustment expenses increased $0.8 million for prior accident years. Favorable development of $8.7 million was recognized on the general liability and automobile lines, primarily related to the 2000 through 2004 accident years. Favorable development on the general liability lines includes reserve take downs due to the Company closing its last open construction defect claim and the corresponding reversal of the construction defect bulk reserve.
Life Insurance and Annuity Reserves - Life insurance and annuity policy reserves with life contingencies are computed on the basis of estimated mortality, investment yield, withdrawals, future maintenance and settlement expenses, and retrospective experience rating premium refunds. Annuity contract reserves without life contingencies are established at the contractholder's account value.
Net income for the Financial Services division (excluding the Canada Life activity discussed above) decreased $10 million or 7% from 2002. The decrease was primarily related to a decrease in interest margins on fixed or general account products (see discussion below) and poor mortality (death benefits exceed actuarial reserves released) experienced on the individual insurance lines in 2003.
CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
No dividends were paid on preferred stock in 2003, 2002 and 2001. Dividends of $75,711, $170,572 and $187,633, were paid on common stock in 2003, 2002 and 2001, respectively. Dividends are paid as determined by the Board of Directors, subject to restrictions as discussed below. The Company's net income and capital and surplus, as determined in accordance with statutory accounting principles and practices, for December 31 are as follows:
Premium revenue decreased $10.1 million in the three months ended March 31, 2012 compared with the three months ended March 31, 2011 as a result of lower renewal premiums on traditional life lines of business, as well as lower paid up additions on policies within the closed block due to a change in the dividend scale in 2011.
Net investment income decreased by $10.3 million to $200.3 million for the three months ended June 30, 2012 compared to $210.6 million for the three months ended June 30, 2011. The decrease was due primarily to declines in investment income from direct equity investments and mezzanine debt and higher bond premium amortization.
The table below shows the interest rate sensitivity of our derivatives measured in terms of fair value, excluding derivative liabilities embedded in products. These exposures will change as our insurance liabilities are created and discharged and as a result of ongoing portfolio and risk management activities.
Cash flows used for investing activities increased $703.0 million during the year ended December 31, 2011 compared to the year ended December 31, 2010. The primary driver of this fluctuation was an increase in purchases of available-for-sale debt securities which was directly attributable to the increase in deposits related to fixed indexed annuities. In addition, sales of available-for-sale debt securities declined as a result of lower withdrawals. See Note 9 to our consolidated financial statements under “Item 8: Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional information on investing activities.
Our principal needs at the holding company level are debt service (net of amounts due on bonds repurchased), income taxes and operating expenses. Interest expense on senior unsecured bonds for the years ended December 31, 2012, 2011 and 2010 was $19.2 million, $19.3 million and $19.3 million, respectively. As of December 31, 2012, future minimum annual principal payments on senior unsecured bonds are $252.7 million in 2032.
We have agreements with certain of our employees that provide for additional retirement benefits. In the year ended December 31, 2012, the estimated liability for these benefits was $18.4 million.
Capsure's insurance companies invest funds provided by operations predominantly in high-quality, short-duration, taxable fixed income securities. The preservation of capital and utilization of the Company's available NOLs are Capsure's principal investment objectives. Beginning in 1994, the Investment Committees of the Board of Directors of the Company and its insurance subsidiaries have approved the investment of up to $26 million in the aggregate by the insurance subsidiaries and at the parent company level in publicly traded nonaffiliated real estate investment trust ("REIT") equity securities. At December 31, 1995 and 1994, the carrying value of the Company's REIT portfolio was approximately $20.4 million and $24.3 million, respectively.
ANALYSIS OF OTHER OPERATIONS Net investment gains (losses) were $(1.7) million, $0.9 million and $2.1 million for the years ended December 31, 1995, 1994 and 1993, respectively. Net investment gains on securities held at the parent company level were $1.0 million in 1995, $1.3 million in 1994 and $3.1 million in 1993. Net investment losses were $(2.7) million, $(0.4) million and $(1.0) million, respectively, from the insurance operations. The net investment losses from the insurance operations in 1995 reflect the write-down of the carrying value for two asset-backed securities from the same issuer which experienced an other than temporary decline in fair value. The net investment losses from the insurance operations in 1993 were primarily due to a $2.5 million write-down to fair value of two interest-only securities reflecting lower future expected cash flows of these securities as a result of an accelerated level of mortgage prepayments, partially offset by $1.5 million of net investment gains from the sale of other securities.
The Company continues to pursue acquisitions of financial services businesses with a particular focus on the insurance industry. Although the emphasis has been on acquisitions in financial services and insurance, the Company may consider other alternatives that would further enhance shareholder value.
We believe that the implementation of higher premiums caused employer groups, many of which had high health care cost trends, to leave our health plans and obtain coverage elsewhere, which resulted in an overall 8% decrease in commercial health plan enrollment from December 31, 2003 to December 31, 2004. The losses were greatest in our California and Northeast health plans. We expect these declines to extend into the first half of 2005.
The TRICARE contract for the North Region covers Connecticut, Delaware, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin and the District of Columbia. In addition, the contract covers a small portion of Tennessee, Missouri and Iowa. Health care delivery began on the new North Region contract on July 1, 2004 for the area that was previously TRICARE Regions 2 and 5 (now
Effective December 31, 2002, MedUnite, Inc., a health care information technology company in which we had invested $13.4 million, was sold. As a result of the sale, our original investments were exchanged for $1
Effective July 1, 2002, we sold our claims processing subsidiary, EOS Claims Services, Inc., to Tristar Insurance Group, Inc. In connection with this sale, we received $500,000 in cash.
Net cash from investing activities increased by $77.4 million for the year ended December 31, 2003 compared to the same period in 2002 due to the following:
Citizens, Inc. pursuant to a Stock Purchase Agreement, purchased from Jansen Enterprises, Inc., a Texas corporation, 100% of the issued and outstanding shares of National Security Life and Accident Insurance Company (NSLIC) for $1,700,000, consisting of $1,000,000 cash, and restricted shares of Class A Common Stock valued at $700,000 in a transaction that closed on November 20, 1997. NSLIC is a Texas-domiciled life and A&H insurer with assets of approximately $5 million and annual revenues of approximately $5 million.
It is management's belief that CICA, utilizing the marketing representatives who previously represented ALLIC, is better served to continue to exploit its niche selling specialty accident and health life products through existing distribution channels. The acquisition of USLIC and NSLIC also bring capable sales forces that have historically sold similar products; therefore management believes that the ability to "cross-sell" products between companies is high.
The inability of computers, software and other equipment utilizing microprocessors to recognize and properly process data fields containing a two-digit year is generally referred to as the Year 2000 compliance issue. As the year 2000 approaches, such systems may be unable to accurately process certain date-based or date-sensitive information.
The year 2006 marked the sixth consecutive year of record premium revenue for the Company. Our premium revenue for 2006 increased 9.9% over levels achieved in 2005. However, premium revenue in 2005 was reduced by catastrophe reinsurance reinstatement premium totaling $2,400,000 as a result of reinstatement provisions of our catastrophe reinsurance contract triggered by Hurricane Katrina. We did not incur any hurricane losses in 2006 and therefore incurred no reduction in earned premium due to charges for catastrophe reinstatement premium. Without the impact of the reduction in 2005 premium revenue for catastrophe reinstatement premium, year over year premium revenue increased by 5.4%. While the rate of growth is significantly below our 17% annualized growth rate experienced since 2000, the reduction of our growth rate has been necessitated by market conditions and a more moderate growth rate is to be expected over the next two years as we work to build capital and recover from the adverse operating conditions caused by the unprecedented hurricane activity experienced in 2005 and 2004. Life segment revenue accounted for 11.1% of consolidated premium revenue while property and casualty segment revenue accounted for 88.9% of consolidated premium, virtually unchanged from the same period last year.
The primary line of business in which we are continuing to adjust rates in order to improve profitability is our homeowners line of business. This line of business composes 23% of our total property and casualty premium revenue. The line of business has not performed to our expectations with a combined ratio of 112% in 2006. Improving profitability in this line of business will be a primary focus of our rate and underwriting review efforts in 2007.
Except as discussed in Note 15 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.
Receivable from agents, less allowance for credit losses (2006 - $110; 2005 - $110)
The effect of reinsurance on premiums written and earned was as follows: