Rental expense for the Company's operations was approximately $44,752,000, $38,179,000 and $33,003,000 for 2013, 2012 and 2011, respectively. Future minimum lease payments, without provision for sublease income, are $42,586,000 in 2014, $39,218,000 in 2015 and $276,628,000 thereafter.
and value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon the then current legal interpretation of coverage provided.
Favorable prior year development was $98 million in 2013 compared with $103 in 2012 and $181 in 2011.
Net Realized Gains on Investment Sales. The Company buys and sells securities on a regular basis in order to maximize its total return on investments. Decisions to sell securities are based on management’s view of the underlying fundamentals of specific securities as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized gains on investment sales were $128 million in 2013 compared with $201 million in 2012.
Net foreign currency gains of $10 million in 2013 (compared with $6 million in 2012) resulted from transactions denominated in a currency other than the operating unit’s functional currency.
From 2005 through 2010, the property casualty insurance market was highly competitive and insurance rates decreased across most business lines. Prices began to increase in 2011, and the rate of increase accelerated in 2012. However, overall loss costs are also generally increasing, and current market price levels for certain lines of business remain below the prices required for the Company to achieve its long-term return objectives. A summary of gross premiums written in 2012 compared with 2011 by line of business within each business segment follows:
Insurance-Domestic premiums increased 12% to $4,261 million in 2012 from $3,795 million in 2011. Gross premiums increased $184 million (19%) for workers' compensation, $125 million (11%) for other liability, $107 million (12%) for short-tail lines, $31 million (10%) for professional liability and $19 million (4%) for commercial auto.
Premiums earned increased 12% to $4,674 million in 2012 from $4,161 million in 2011. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly we expect to recognize recent rate increases over the upcoming quarters. Premiums earned in 2012 are related to business written during both 2012 and 2011.
Debt. At December 31, 2013, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of $2,032 million and a face amount of $2,054 million. The maturities of the outstanding debt are $5 million in 2014, $240 million in 2015, $30 million in 2016, $1 million in 2018, $450 million in 2019, $300 million in 2020, $426 million in 2022, $1 million in 2023, $1 million in 2029, $250 million in 2037 and $350 million in 2053.
The estimated payments for reserves for losses and loss expenses in the above table represent the projected (undiscounted) payments for gross loss and loss expense reserves related to losses incurred as of December 31, 2013. The estimated payments in the above table do not consider payments for losses to be incurred in future periods. These amounts include reserves for reported losses and reserves for incurred but not reported losses. Estimated amounts recoverable from reinsurers are not reflected. The estimated payments by year are based on historical loss payment patterns. The actual payments may differ from the estimated amounts due to changes in ultimate loss reserves and in the timing of the settlement of those reserves. In addition, as of December 31, 2013, the Company had commitments to invest up to $249 million in certain investment funds. These amounts are not included in the above table.
Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity's functional currency) are reported on the statements of income as other operating costs and expenses. Unrealized gains or losses resulting from translating the results of non-U.S. dollar denominated operations are reported in accumulated other comprehensive income. Revenues and expenses denominated in currencies other than U.S. dollars are translated at the weighted average exchange rate during the year. Assets and liabilities are translated at the rate of exchange in effect at the balance sheet date.
For OTTI of fixed maturity securities that management does not intend to sell or, more likely than not, would not be required to sell, the portion of the decline in value considered to be due to credit factors is recognized in earnings and the portion of the decline in value considered to be due to non-credit factors is recognized in other comprehensive income. The table below provides a roll-forward of the portion of impairments recognized in earnings for those securities that have been impaired due to both credit factors and non-credit factors.
There were no transfers between Levels 1 and 2 for the years ended December 31, 2013 and 2012.
The Company reinsures a portion of its exposures principally to reduce its net liability on individual risks and to protect against catastrophic losses. Estimated amounts due from reinsurers are reported net of reserves for uncollectible reinsurance of $1,385,000, $1,680,000 and $3,169,000 as of December 31, 2013, 2012 and 2011, respectively. The following table presents the amounts due from reinsurers as of December 31, 2013:
The significant variances between SAP and GAAP are that for statutory purposes bonds are carried at amortized cost, acquisition costs are charged to income as incurred, deferred Federal income taxes are subject to limitations, excess and assumed workers’ compensation reserves are discounted at different discount rates and certain assets designated as “non-admitted assets” are charged against surplus. The Commissioner of Insurance of the State of Delaware has allowed BIC to discount non-tabular workers' compensation loss reserves, which is a permitted practice that differs from SAP. The effect of using this permitted practice was to increase BIC’s statutory capital and surplus by $282 million at December 31, 2013.