The Company s operating subsidiaries rent or lease office space in the cities in which they are located. CCS and Qualex lease office space in Tampa, Florida from a company owned by Francis Williams, the Chairman of the Board of the Company, at a monthly rate of $7,254, pursuant to a lease that was executed March 1, 1997 and is effective through December 31, 2000.
Assumed, net 1,066,907 230,120 21.6% Assumed (pooling), net (29,348) (1,039,232) - -------------- --------------
During 1997, direct premiums written by CCS increased while assumed premiums decreased as a result of the marketing direction of the Company, which is to penetrate the direct market while decreasing the volume of reinsurance premiums assumed through Pooling Agreements. The following table reflects the written
Short-term investments primarily include certificates of deposit having maturities of more than three months when purchased, which are reported at cost which approximates fair value.
The following table provides a reconciliation of the beginning and ending liability balances, net of reinsurance recoverables, for the years ended December 31, 1998, 1997 and 1996, to the gross amounts reported in the Company s consolidated balance sheets: December 31 ---------------------------------- 1998 1997 1996 ---------------------- --------- Liability for losses and LAE, net of reinsurance recoverable on unpaid losses, at beginning of year . . . . . . . . . . . $ 1,392,931 $ 594,922 $1,052,547 Provision for losses and LAE for claims occurring in the current year, net of reinsurance . . . . . . . . 2,331,074 1,743,117 1,008,640 Increase in estimated losses and LAE for claims occurring in prior years, net of reinsurance . . . . 317,000 49,000 662,000 ---------------------- ---------- Incurred losses during the current year, net of reinsurance . . . . . . . . 2,648,074 1,792,117 1,670,640 Losses and LAE payments for claims, net of reinsurance, occurring during: 557,997 553,629 422,544 The current year . . . . 1,802,428 440,479 1,705,721 Prior years . . . . . . . ---------------------- ---------- 2,360,425 994,108 2,128,265 ---------------------- ---------- Liability for losses and LAE, net of reinsurance recoverables on unpaid losses, at end of year . . 1,680,580 1,392,931 $ 594,922 Reinsurance recoverables on unpaid losses at end of year . . . . . . . . . . . 1,539,877 1,157,369 1,396,874 ---------------------- ---------- Liability for losses and LAE, gross of reinsurance recoverables on unpaid losses, at end of year . . $ 3,220,457 $2,550,300 $1,991,796 ---------------------- ----------
December 31 ----------------------------- 1998 1997 -------------- -------------- Deferred tax liabilities: Deferred policy acquisition costs . . . . . . . . . . . $ 544,339 $ 305,836 Unrealized gains . . . . . . - 50,500 ---------------------------- Total deferred tax liabilities 544,339 356,336 ---------------------------- Deferred tax assets: Unrealized loss . . . . . . . 290,236 - Outside basis difference in investments . . . . . . . . 91,646 40,620 Amortization of intangibles 96,160 69,028 Unearned premiums . . . . . . 245,321 166,961 Losses and loss adjustment expenses . . . . . . . . . 54,885 19,050 Net operating loss carryforward . . . . . . . 85,789 232,012 Alternative minimum credit carryforward . . . . . . . 27,648 15,555 Surplus note . . . . . . . . 102,314 102,314 Other, net . . . . . . . . . 17,139 8,931 ---------------------------- 1,011,138 654,471 Less valuation allowance . . (466,799) (298,135) ---------------------------- Total deferred tax assets . . . 544,339 356,336 ---------------------------- Net deferred taxes . . . . . . $ - $ - ============================
The Company has net operating loss carryforwards as of December 31, 1998 of approximately $227,980 which generally expire in 2010 and 2011.
Under applicable state insurance statues, CCS must maintain minimum capital and surplus of $2,500,000 (as of December 31, 1998). In addition, under applicable state laws and regulations, CCS is restricted from paying dividends to the extent of surplus profits less any dividends that have been paid in the preceding twelve months or net investment income for the year, whichever is less, unless the Company obtains prior approval from the Florida Department of Insurance. As of December 31, 1998, no dividends from CCS are available for payment to the Company without the prior approval of the Department of Insurance.
Allowance for doubtful accounts $ 67,209 $ -0- $ -0- $67,209 $ -0- ========== ========== ========== ========== ==========