Total expenses have decreased consistent with the related premium decreases; although not directly proportionate. Insurance benefits and losses and commissions and underwriting expenses as a percentage of premiums were 95.9%, 93.4% and 93.0% in 2008, 2007 and 2006, respectively.
Contingent commissions, if contractually applicable, are ultimately payable to agents based on the underlying profitability of a particular insurance contract or a group of insurance contracts, and are periodically evaluated and accrued as earned. Approximately 88% of American Southern’s business provides for contractual commission arrangements which compensate the company’s agents in relation to the loss ratios of the business they write. By structuring its business in this manner, American Southern provides its agents with an economic incentive to place profitable business with American Southern. In periods when loss reserves reflect favorable development from prior years’ reserves, there is generally a highly correlated increase in commission expense also related to the prior year business. Accordingly, favorable loss development from prior years, while anticipated to continue in future periods, is not an indicator of significant additional profitability in the current year.
The fair values for fixed maturity and equity securities are largely determined by either independent methods prescribed by the NAIC, which do not differ materially from nationally quoted market prices, when available, or independent broker quotations.
The Company’s investments in fixed maturity securites of General Motors and fixed maturity securities and non-redeemable preferred stock of General Motors Acceptance Corporation exceeded 10% of shareholders’ equity at December 31, 2008. The carrying value of these investments at December 31, 2008 was $5,731 with an adjusted cost basis of $8,028.
The Company initiated an employees’ savings plan qualified under Section 401(k) of the Internal Revenue Code in May 1995. The plan covers substantially all of the Company’s employees, except employees of American Southern. Under the plan, employees generally may elect to contribute up to 16% of their compensation to the plan. The Company generally makes a matching contribution on behalf of each employee in an amount equal to 50% of the first 6% of such contributions. The Company’s matching contribution is in Company common stock and had a value of approximately $147, $136, and $135 in 2008, 2007, and 2006, respectively. During 2007, an additional matching contribution was made by the Company to the plan in an amount equal to 50% of the first 6% of an employee’s contribution to the plan. The additional contribution in 2007 was in cash and was $141. Effective January 1, 2009, the Company initiated a safe harbor employees’ savings plan qualified under Section 401(k) of the Internal Revenue Code. The plan will cover all of the Company’s employees. Under the plan, employees may defer up to 50% of their compensation, not to exceed the statutory maximum allowed contribution. The Company will make a matching contribution on behalf of each employee in an amount equal to 100% of the first 4% of such contributions.
In accordance with terms of the stock purchase agreement with Columbia, certain investments held by the discontinued operations were required to be disposed of at any time prior to the completion of the sale. On March 11, 2008, the Parent acquired 166,354 shares of Gray Television, Inc. (“Gray”) Class A common stock, 56,000 shares of Gray common stock, 11,177 shares of Triple Crown Media, Inc. (“Triple Crown”) common stock, and 1,180 shares of Triple Crown Series A preferred stock held by the discontinued operations at their quoted or estimated market values for an aggregate purchase price of $1,994. Effective November 30, 2007, an investment in a real estate joint venture was sold by Georgia Casualty to an affiliate of the Company’s Chairman Emeritus. In connection with the sale, management obtained an independent appraisal of the underlying real estate assets.
The following table sets forth a summary of the quarterly unaudited results of operations for the two years in the period ended December 31, 2008: