- -------- (1) During the first quarter of 1993, Vesta adopted FASB Statement Number 109, which resulted in a one-time addition to after-tax earnings of $2,321,000. Vesta also adopted FASB Statement No. 106 which resulted in a one-time after tax charge to earnings of $382,000. The implementation of these standards is not expected to have a material impact on future earnings. (2) Effective as of January 1, 1993, the Company adopted FASB Statement Number 113. The prior periods have not been restated. See Note J of Notes to Consolidated Financial Statements. (3) Statutory data have been derived from the financial statements of the Company prepared in accordance with SAP and filed with insurance regulatory authorities. (4) The statutory industry data are taken from the A. M. Best Company, Aggregates and Averages, 1996 Edition. (5) 1996 estimate by A. M. Best, Reviews and Previews, January 1997 Edition. (6) Restated for 3-for-2 stock split paid on January 22, 1996.
Gross premiums written for reinsurance increased by $192.7 million, or 45.6%, to $615.4 million for the year ended December 31, 1996, from $422.7 million for the year ended December 31, 1995. This growth was largely attributable to an increase in gross premiums written on pro rata business. The growth in pro-rata reinsurance gross premiums written was largely due to growth in existing accounts as well as the addition of new accounts in the 1996 period as compared to the 1995 period. Net premiums written for reinsurance increased $87.8 million, or 24.5%, to $446.1 million for the year ended December 31, 1996, from $358.3 million for the year ended December 31, 1995.
Gross premiums written for reinsurance increased by $180.7 million, or 74.7%, to $422.7 million for the year ended December 31, 1995, from $242.0 million for the year ended December 31, 1994. This growth was attributable to an increase in gross premiums written on pro rata business. The growth in pro- rata reinsurance gross premiums written was due to growth in existing accounts as well as the addition of new accounts in the 1995 period as compared to the 1994 period. Net premiums written for reinsurance increased $165.2 million, or 85.6%, to $358.3 million for the year ended December 31, 1995, from $193.1 million for the year ended December 31, 1994.
placement transaction to qualified institutional buyers under Rule 144A and were not registered under the Securities Act of 1933. A portion of the proceeds from the sale of these capital securities were used to repay indebtedness under the Company's existing lines of credit and the remainder will be used for general corporate purposes.
Waddell & Reed Asset Management Company, a wholly owned subsidiary of Torchmark ("WRAMCO"), provides investment advice and services to the Company and its subsidiaries in connection with the management of their respective portfolios pursuant to an Investment Services Agreement. The Company paid $127 thousand, $222 thousand and $409 thousand in fees to WRAMCO pursuant to the Investment Services Agreement in 1994, 1995 and 1996, respectively.
Pro forma information regarding net income and earnings per share is required by FAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for 1995 and 1996, respectively; risk-free interest rates of 6.33 percent and 6.37 percent; dividend yields of 0.37 percent for both years; volatility factor of the expected market price of the Company's common stock of 0.34 for both years; and a weighted-average expected life of the options of ten years for both years.