felanders/preprocessed huggingface dataset:
For the fiscal year ended December 31, 1998, income before taxes increased by $1,765,865 (16%) and net income increased by $1,054,307 (14%) compared to the fiscal year ended December 31, 1997. The increase in pre-tax income was primarily due to an increase of $1,347,619 (21%) in the underwriting profit (net earned premium less losses and loss adjustment expenses and policy acquisition costs) from Crusader and an increase in investment income of $735,642 (15%) (excluding realized investment gains).
Investment interest and dividends earned (excluding net realized gains) increased $762,891 (18%) in the fiscal year ended December 31, 1997, compared to the twelve month period ended December 31, 1996, primarily as a result of additional invested assets from operating activities. Average invested assets in the fiscal year ended December 31, 1997 (at amortized value) increased $10,979,066 (15%) compared to the twelve month period ended December 31, 1996. Investment income return based on average invested assets was 5.77% for the fiscal year ended December 31, 1997, compared to 5.59% for the twelve month period ended December 31, 1996. Tax exempt securities decreased to $38,361,279 (41% of total investments) at December 31, 1997, compared to $39,634,159 (49% of total investments) at December 31, 1996.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, THE FISCAL YEAR ENDED DECEMBER 31, 1997, AND THE NINE MONTHS ENDED DECEMBER 31, 1996
NOTE 12 - REINSURANCE - - --------------------- A reinsurance transaction occurs when an insurance company transfers ("cedes") a portion of its exposure on business written by it to a reinsurer which assumes that risk for a premium ("ceded premium"). Reinsurance does not legally discharge the Company from primary liability under its policies. If the reinsurer fails to meet its obligations, the Company must nonetheless pay its policy obligations. The Company's reinsurance agreements help protect Crusader against liabilities in excess of certain retentions, including major or catastrophic losses which may occur from any one or more of the property and/or casualty risks which Crusader insures. The Company continually monitors and evaluates the liquidity and financial strength of its reinsurers to determine their ability to fulfill obligations assumed under the reinsurance contracts.
primarily due to the significant decrease in refinance transactions experienced during the second half of 1999. The increase in 1998 over 1997 was primarily due to the continuation of lower mortgage interest rates which led to an increase in overall transaction volume nationwide (including California, a state highly concentrated with direct operations) and increases in the Company's title insurance national market share. The average revenues per order closed were $953, $907 and $860 for 1999, 1998 and 1997, respectively, representing increases of 5.1% in 1999 over 1998 and 5.5% in 1998 over 1997. These increases were primarily attributable to appreciating home values, an increased mix of resale activity and a resurgence in commercial real estate transactions. Operating revenues from agency title operations increased 12.6% in 1999 over 1998 and 37.9% in 1998 over 1997. These fluctuations were primarily attributable to the same factors affecting direct operations mentioned above, compounded by the inherent delay in the reporting of transactions by agents.
Provision for title losses and other claims - A summary by segment of the Company's provision for title losses and other claims is as follows:
Depreciation and amortization - Depreciation and amortization, as well as capital expenditures, are summarized in Note 19 to the consolidated financial statements.
In connection with settlement of title insurance and other claims, the Company sometimes purchases mortgages, deeds of trust, real property, or judgment liens. These assets, sometimes referred to as "salvage assets," are carried at the lower of cost or fair value less costs to sell.
Location Company Size (sq. ft.) - -------- ------- -------------- Cherry Hill, New Jersey Admiral 42,000 Lincoln, Nebraska Union 43,000 Lincoln, Nebraska Continental Western 20,000 Luverne, Minnesota Tri-State 33,000 Meridian, Mississippi Great River 30,000 Scottsdale, Arizona Nautilus 34,000 Urbandale, Iowa Continental Western 80,000 Westbrook, Maine Acadia 54,000
SELECTED FINANCIAL DATA FOR THE FIVE YEARS ENDED DECEMBER 31, 1998
The answer to this Item is incorporated by reference to pages 7 through 9 of the Company's Annual Report to Stockholders for the year ended December 31, 1996, which is included as Exhibit (13) to this Form 10-K Report.
The Insurance Companies restructured their portfolios away from preferred stock and toward common stock in 1996. At December 31, 1996, the Insurance Companies' preferred stock holdings as a percentage of invested asset balances was 6.3% compared to 10% at December 31, 1995, while common stock holdings as a percentage of invested asset balances increased to 8.4% at December 31, 1996 compared to 4.7% at December 31, 1995. This restructuring resulted in a 29.8% decrease in dividend income from preferred stock and a 38.3% increase in dividend income from common stock for the year ending December 31, 1996 compared to the year ending December 31, 1995.
Cash and cash equivalents are carried at cost which approximates market value. The Group considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
The preparation of the accompanying combined financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the results of their operations during the period. The combined financial statements include estimates the most significant of which are the net deferred tax asset, reserve for losses and loss adjustment expenses, deferred policy acquisition costs and reinsurance recoverables. Actual results may differ from those estimates.
Property and equipment consisted of the following at December 31, 1996 and 1995:
During 1995, the insurance companies of the Group obtained a $7,000,000 credit facility which provides for a five-year term borrowing capacity at the prime interest rate less 1/2%. The credit facility is expected to be used in connection with future acquisitions. During the year or at December 31, 1996, $1,550,000 was outstanding under this credit facility (see Note 15A).
The credit facility of $1,550,000 as of December 31, 1996 (see Note 9) of Group was repaid with proceeds from the conversion.
In October 1996, OGIHC executed a letter of understanding with a second Delaware domiciled property and casualty insurance company (see Note 14) and its sole shareholder to acquire 80% of the stock of the insurance company for approximately $4.8 million. The letter also provides for the insurance company to secure insurance management services from CIMI. The agreement became effective February 14, 1997 for $3.3 million for the acquisition of 80% of the stock of the insurance company.
After-tax operating income (loss), net of realized investment gains and losses $(1,838) $ 216 $ (611) $ 882
(4)The sum of the GAAP net loss and loss adjustment expense ratio and the total underwriting expense ratio.
•net loss and loss adjustment expenses ratio-This ratio compares our insurance losses and claim settling and adjusting expenses after deducting reinsurance to our net premiums earned and indicates how much we are paying to policyholders for claims compared to the amount of premiums we are receiving from them. We discuss five components of the net loss and loss adjustment expenses ratio that relate to the five categories of insurance losses in our business: automobile liability losses, automobile physical damage losses, homeowners losses, boat losses and umbrella losses. The lower the percentage, the more profitable our insurance business is.
Net investment income before interest expense was $11.2 million for 2001 compared to $10.8 million for 2000. The increase in net investment income before interest expense was due principally to increases in invested assets because of positive cash flows from operations, that were partially offset by declining interest rates. Additionally, a $1.5 million loss was recognized in June 2001 on three securities issued by California electric utilities deemed to have other than temporary declines in fair value. Consistent with 2000, investment income for 2001 was earned primarily from interest income and not from realized capital gains and losses. The tax equivalent total rate of return, which includes both income and changes in market value of securities, was 8.22% for 2001 and 9.80% for 2000. The decreased return in 2001 compared to 2000 was due to declining interest rates and the downturn in the U.S. economy. The weighted average tax equivalent book yield of the fixed maturity portfolio was 6.93% for 2001, compared to 7.13% for 2000.
The Company has a qualified defined contribution 401(k) plan which covers substantially all of its employees. The Company matches 50% of employees' contributions up to a maximum rate of 2.5% of eligible compensation. In addition, the Company is required to make an elective contribution on behalf of each participant in an amount determined annually by the Company's Board of Directors. However, such elective contribution for a year may, at the discretion of the Company, be omitted in a year in which a net loss is experienced. The charge to income under this plan was $679,000, $688,000, and $609,000 for 2001, 2000 and 1999, respectively.
The Company operates as a single segment offering four insurance products-personal automobile, homeowners and as of March 1, 2000, boat and umbrella policies. Revenue is from unaffiliated customers. Direct premiums written and net premiums earned from each of these products is as follows:
The decrease in revenue for non-PBM services for the year ended December 31, 2001 from December 31, 2000 is primarily due to our sale of our Infusion Services subsidiary on June 12, 2001, partially offset by the additional volume in SDS. The increase in revenue for non-PBM services during 2000 compared to 1999 is primarily due to additional volume within SDS resulting from a new contract that took effect during the fourth quarter of 1999.
o An extraordinary loss on the early retirement of debt during the second and third quarters of 1999 totaling $11,642,000 ($7,150,000 net of tax)
We use interest rate swap agreements to manage our interest rate risk on future variable interest payments under our bank credit facility. As of December 31, 2001, we have only one outstanding swap agreement to fix the variable interest payments on approximately $98 million of our variable rate debt under our credit facility. Under this interest rate swap agreement, we agree to receive a floating rate of interest on the notional principal amount of approximately $98 million based upon a three month LIBOR rate in exchange for payment of a fixed rate of 6.25% per annum. The notional principal amount will increase to $100 million in October 2002 and beginning in April 2003, it will reduce to $60 million and in April 2004, it will reduce to $20 million until maturing in April 2005.
Our present interest rate swap agreement is a cash flow hedge as it requires us to pay fixed-rates of interest, which hedges against changes in the amount of future cash flows associated with variable interest obligations. Accordingly, the fair value of our swap agreement is reported on the Consolidated Balance Sheet in other liabilities ($5,798,000 pre-tax at December 31, 2001) and the related deferred loss on this agreement is recorded in shareholders' equity as a component of other comprehensive income (a $3,589,000, net of taxes, reduction at December 31, 2001). This deferred loss is then recognized as an adjustment to interest expense over the same period
To the Board of Directors and Stockholders of Express Scripts, Inc.
New accounting guidance. During July 2001, the Financial Accounting Standards Board issued FAS 141, "Business Combinations" and FAS 142, "Goodwill and Other Intangible Assets". FAS 141 requires that all business combinations be accounted for using the purchase method of accounting. FAS 141 also defines acquired intangible assets and requires that a reassessment of a company's preexisting acquired intangible assets and goodwill be evaluated and adjusted to conform with that definition. We do not believe that FAS 141 will have a significant impact on our consolidated financial position, consolidated results of operations, and/or our consolidated cash flows once implemented.
Our business strategy is to grow our CEPS each year. We may accomplish this goal through a combination of the following strategies: (1) maximizing organic revenue growth, (2) improving operating efficiencies and (3) completing and integrating select strategic acquisitions.
Our consolidated financial statements are prepared in accordance with GAAP, which require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Some of our accounting policies require management’s judgment to estimate values of assets, liabilities, revenues or expenses. In addition, it may require significant judgment to apply complex principles of accounting to certain transactions, such as acquisitions, to determine the most appropriate accounting treatment. We believe the following significant accounting estimates and policies are material to our results of operations and are subject to a higher degree of subjectivity and/or complexity. We continually evaluate our estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. If actual performance should differ from historical experience or if our assumptions were to change, it may materially impact our results of operations.
We record commission income on premiums billed and collected directly by insurance companies (“direct bill”) on the policy effective date for personal and commercial P&C insurance placements and on the effective date of each installment for employee benefit insurance placements.
Future events could cause management to conclude that impairment of our goodwill or other intangible assets exists, which may have a material adverse effect on our results of operations. Please refer to Note 3, “Goodwill and Other Intangible Assets” in our Consolidated Financial Statements included in Part II, Item 8 of this report.
The table below summarizes our contractual obligations as of December 31, 2006:
Loss and loss adjustment expenses incurred for 1997 increased $89.9 million from 1996 primarily due to the acquisition of American Reliance. The increase was partially offset by lower loss and loss adjustment expenses incurred due to the declining premium volume excluding American Reliance.
Underwriting Expenses. Underwriting expenses for 1998, 1997 and 1996 were $141.8 million, $115.6 million and $56.5 million, respectively. The underwriting expense ratio for 1998, 1997 and 1996 was 36.5%, 37.0% and 37.1%, respectively. Elimination of the non-recurring premium related to the Stop Loss Agreement and certain retrospectively rated policies resulted in an expense ratio of 41.8% for 1998. The increase reflects the higher costs associated with the problems implementing the policy issuance system and resulting decrease in premium volume.
As a holding company, Highlands Group's principal requirements for funds are to pay operating expenses, franchise and other taxes, debt service and dividends. Operating expenses and franchise and other taxes imposed
The Company is developing a new processing platform for its Texas business that is Year 2000 compliant. The new platform is composed of policy administration and claim administration subsystems. The policy administration component, in part internally developed but substantially purchased, has been partially implemented and commenced processing of business on a new and renewal basis in May 1998. Conversion to the new system is expected to be completed by July 1999. The claim administration component has been purchased and is planned for completion in September 1999.
The Company has made and will continue to make significant efforts to ensure that it and its material third party vendors are Year 2000 compliant. The effect, if any, on the Company's financial position and results of operations from the failure of these efforts to become Year 2000 compliant cannot be reasonably estimated.
INTEREST EXPENSE. Wickes' interest expense increased to $24.4 million in 1995 from $21.7 million in 1994. This increase was the result of an increase in average outstanding debt, due primarily to acquisitions made in 1995 and late 1994, and to a lesser degree, an increase in the average effective interest rate on Wickes' total debt of 7 basis points compared with 1994.
Revenues of the Parent Group (excluding investment income) for 1996, 1995 and 1994 were approximately $848,000, $1,057,000 and $1,596,000, respectively. The Parent Group's income primarily
Realized gains on sales of Dependable's investments included in discontinued operations were $31,000 and $91,000 in 1995 and 1994, respectively.
Effective June 1, 2005, AMIC Ltd. entered into a 5% share in CAMICO Mutual Insurance Company’s first excess layer of $2,000,000 excess of $1,000,000. CAMICO is a California-based writer of accountants’ professional liability business. This contract renewed on June 1, 2006 and further renewed on June 1, 2007 with AMIC Ltd. entering into a 2.5% share of the $4 million excess $1 million layer of risk.
As a result of the change in estimates of insured events in prior years, the provision for losses and loss expenses decreased by $2,790,997 and $3,072,636 in 2007 and 2006, respectively. The 2007 decrease related mainly to positive loss development in the policy years 1994 to 2002. The 2006 decrease related mainly to positive loss development in the policy years 1994 to 2001.
On January 31, 2006 we completed the acquisition of GA Life (now TSV). The results of operations and financial condition of GA Life are included in this table for the period following the effective date of the acquisition. See note 17 to the audited consolidated financial statements for the years ended December 31, 2007, 2006 and 2005.
This financial discussion contains an analysis of our consolidated financial position and financial performance as of December 31, 2007 and 2006, and consolidated results of operations for 2007, 2006 and 2005. This analysis should be read in its entirety and in conjunction with the consolidated financial statements, notes and tables included elsewhere in this Annual Report on Form 10-K.
We participate in the managed care market through our subsidiary, TSI. Our managed care subsidiary is a BCBSA licensee, which provides us with exclusive use of the Blue Shield brand in Puerto Rico. We offer products to the Commercial, including corporate accounts, U.S. federal government employees, local government employees, individual accounts and Medicare Supplement, Reform and Medicare (including Medicare Advantage and PDP) markets.
Consolidated premiums earned, net and administrative service fees increased $131.1 million, or 9.4%, to $1,525.7 million in 2006 compared to 2005. On a comparable basis, including GA Life’s results from both periods, consolidated earned premiums, net and administrative service fees increased by $69.5 million, or 4.8%. These increases were primarily due to an increase in the operating revenues of our managed care segment, which was attributable principally to strong growth from our Medicare Advantage and PDP products, offset in part by the Reform sector due to the loss of the Metro-North region.
of the contract for the Metro-North region, the tightening of membership restrictions by the Puerto Rico government, and the shift in membership of dual eligibles to Medicare Advantage policies offered by us and our competitors. The member months enrollment of the Metro-North region was 2,040,714 during the year ended December 31, 2006. The effect of this decrease in membership was mitigated by an increase in premium rates, effective July 1, 2007, of approximately 8.7% and a retroactive increase in rates of approximately 6.7% effective November 1, 2006.
Proceeds from long-term borrowings amounted to $35.0 million during 2006 as a result of the issuance and sale of our 6.7% senior unsecured notes during the first quarter of 2006. These proceeds were used for the acquisition of GA Life.
Investing in our Ordinary Shares involves a high degree of risk. Potential investors should consider carefully the following risk factors, in addition to the other information set forth in this Form 10-K, prior to investing in the Ordinary Shares.
additional changes in the tax laws that reduce or eliminate any remaining favorable tax treatment for these products would adversely affect the market for such products.
The future rate of return assumptions used in establishing reserves for GMDBs and GMIBs related to variable annuity contracts are derived using a reversion to the mean approach, a common industry practice. For additional information regarding our future expected rate of return assumptions and our reversion to the mean approach see, “-Deferred Policy Acquisition and Other Costs.” The following table provides a demonstration of the sensitivity of the reserves for GMDBs and GMIBs related to variable annuity contracts relative to our future rate of return assumptions by quantifying the adjustments to these reserves that would be required assuming both a 100 basis point increase and decrease in our future rate of return. The sensitivity includes an increase and decrease of 100 basis points to both the near-term future rate of return assumptions used over the next four years, and the long-term expected rate of return used thereafter. While the information below is for illustrative purposes only and does not reflect our expectations regarding future rate of return assumptions, it is a near-term, reasonably likely change that illustrates the potential impact of such a change. This information considers only the direct effect of changes in our future rate of return on operating results due to the change in the reserve balance and not changes in any other assumptions such as persistency, mortality, or expenses included in our evaluation of the reserves, or any changes on DAC or other balances, discussed above in “-Deferred Policy Acquisition and Other Costs.”
The $5 million of charges and $1 million of benefits in 2011 and 2010, respectively, relating to the quarterly market performance adjustments shown in the table above are attributable to changes to our estimate of total gross profits to reflect actual fund performance. The following table shows the actual quarterly rates of return on variable annuity account values compared to our previously expected quarterly rates of return used in our estimate of total gross profits for the periods indicated.
Benefits and expenses increased $117 million from $33 million in 2010 to $150 million in 2011.
For other debt securities, an other-than-temporary impairment charge is taken when the Company does not have the ability and intent to hold the security until the forecasted recovery or if it is no longer probable that the Company will recover all amounts due under the contractual terms of the security. Many criteria are considered during this process including, but not limited to, the current fair value as compared to cost or amortized cost, as appropriate, of the security; the amount and length of time a security’s fair value has been below cost or amortized cost; specific credit issues and financial prospects related to the issuer; management’s intent to hold or dispose of the security; and current economic conditions.
See Part II, Item 7 - MD&A - Business Segments for an analysis of sales by product and segment.
The decrease in total sales in 2005 primarily was due to lower fixed annuity sales in the Individual Investments segment related to deliberate actions by the Company as described earlier. In addition, sales in the Retirement Plans segment continued to decline as a result of the movement of pension business to the NFS trust platform. The overall decline partially was offset by increased COLI sales in the Individual Protection segment.
A listing of our owned acute hospitals is included in Item 1 of this report under the caption “Business-Facilities”. We also own or lease space for outpatient service facilities complementary to our hospitals and own and operate certain medical office buildings (some of which are joint ventures) associated with our hospitals that are occupied primarily by physicians who practice at our hospitals. We also own approximately 23 acres of vacant land in the western part of metropolitan Phoenix, Arizona, on which we have begun the construction of a new 73-bed acute care hospital.
Minority interests and other. Minority interests represent the third party portion of certain non-wholly owned affiliates of the Company included in the Company’s consolidated statements of operations. Minority interests increased from $0.1 million to $0.8 million during 2001. Other non-operating expenses include equity method income or loss and gains or losses on the sale of assets.
Acquisitions. We have acquired and plan to continue acquiring businesses with prior operating histories. Acquired companies may have unknown or contingent liabilities, including liabilities for failure to comply with health care laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws.
Information with respect to this Item is contained in our consolidated financial statements indicated in the Index on Page of this Annual Report on Form 10-K.
The Company regularly reviews the collectability of reinsurance receivables. An allowance for uncollectible reinsurance receivable is recognized based on the financial strength of the reinsurers and the length of time any balances are past due. Any changes in the allowance resulting from this review are included in income during the period in which the determination is made. During 2013, there was no change in the Company’s uncollectible reinsurance reserve. During 2012, the Company decreased its uncollectible reinsurance reserve by $1.0 million, due to write-offs of receivables deemed to be uncollectible and a decrease in the amount of carried reinsurance receivables.
Accumulated other comprehensive income, net of tax, as of December 31, 2013 and 2012 was as follows:
A summary of the Company’s insurance enhanced municipal bonds that are backed by financial guarantors, including the pre-refunded bonds that are escrowed in U.S. government obligations, as of December 31, 2013, is as follows:
prepayment/spread/yield/price adjustment model is utilized. CMOs are categorized with mortgage-backed securities in the tables listed above. For ABSs, a multi-dimensional, collateral specific spread / prepayment speed tables is utilized. For both asset classes, evaluations utilize standard inputs plus new issue data, monthly payment information, and collateral performance. The evaluated pricing models incorporate security set-up, prepayment speeds, cash flows, and treasury swap curves and spread adjustments.
In 2011 and 2012, the Board of Directors authorized the Company to repurchase up to $125.0 million of its A ordinary shares through share repurchase programs. The Company repurchased and retired an aggregate 5,371,419 of its A ordinary shares in the open market and in privately negotiated transactions at an aggregate price of $112.2 million or an average of $20.89 per share. The Company does not have authorization from the Board of Directors to repurchase any additional A ordinary shares as of December 31, 2013. The excess cost of the repurchased shares over their par value was classified to additional paid-in capital as of December 31, 2013.
The following tables summarize the range of exercise prices of options outstanding at December 31, 2013, 2012, and 2011:
(4) Comprised of Wind River Reinsurance’s total assets less its investment in subsidiaries.
An investment of CHF100 000 in the total Swiss market at the end of 1990 would have increased in value to
Ulrich Bremi Walter B. Kielholz Chairman of the Board of Directors Chief Executive Officer
Swiss Re looks forward to good overall growth in the life sector, including its Administrative ReinsuranceSM business. Margins are expected to remain stable, which should lead to a further increase in Swiss Re’s life result.
Banking clients, for example, are offered coverage specifically designed for their operational risks. Until now, the insurance industry has addressed these risks piecemeal. The new solution is a high-excess-risk transfer policy with a single aggregate limit offering a comprehensive range of coverages.
United States, Swiss Re New Markets is expanding its business to Europe and Canada, thereby improving the long-term profitability of its weather book. Swiss Re’s risk appetite for this business gives it an advantage over many of its competitors while also further diversifying the Group’s overall portfolio.
Other prepayments and accrued income contain a surplus of CHF 406 million (1998: CHF 316 million) accumulated in previous years from paid-in employer’s contributions for the obligations towards employee pension funds existing on 31 December.
Provisions for long latent injury claims outstanding on 31 December 1999 reflect the carefully estimated future trend of claims payments and claims settlement charges. Due to the inherent uncertainties and assumptions on which these estimates are based, however, we cannot exclude the need to make further additions to these provisions in the future.
Contingent liabilities, mainly towards Group companies, amounted on 31 December 1999 to CHF 2 149 million (1998: CHF2 024 million). In addition there were eleven unlimited guarantees; eight of these are for obligations towards Group companies. No payments are expected under these guarantees.
Technical provisions in relation to net earned premiums. This ratio enables the assessment of provisions in the non-life business.
The Company also owns a one-story brick building containing approximately 92,000 square feet of training facilities, office and warehouse space in Mayfield Village, Ohio.
The Progressive Corporation is a holding company and does not have any revenue producing operations of its own. It receives cash through borrowings, equity sales, subsidiary dividends and other transactions, and may use the proceeds to contribute to the capital of its insurance subsidiaries in order to support premium growth, to repurchase its Common Shares and other outstanding securities, to redeem its outstanding securities and for other business purposes. During 1995, the Company repurchased .1 million of its 9 3/8% Serial Preferred Shares, Series A, at a cost of $2.3 million.
Fixed maturities include bonds, notes and redeemable preferred stocks. Fair values of investments in fixed maturities are based on quoted market prices or dealer quotes or, if these are not available, discounted expected cash flows using market rates commensurate with the credit quality and maturity of the investment. Also included in fixed maturities are loan-backed and structured securities, which are amortized using the retrospective method. Fixed maturities are classified as "available for sale" and are reported at fair value, with unrealized investment gains and losses, net of income taxes, charged or credited directly to shareholder's equity.
On January 3, 1995, the Company and MetLife and certain of their affiliates, formed the MetraHealth joint venture by contributing their group medical businesses to MetraHealth, in exchange for shares of common stock of MetraHealth. No gain was recognized as a result of this transaction . Upon formation of the joint venture, the Company owned 42% of the outstanding capital stock of MetraHealth, TIGI owned 8% and the other 50% was owned by MetLife and its affiliates. In March 1995, MetraHealth acquired HealthSpring, Inc. for common stock of MetraHealth resulting in a reduction in the participation of the Company and TIGI, and MetLife in the MetraHealth venture to 48.25% each. As the medical insurance business of the Company came due for renewal, the risks were transferred to MetraHealth and the related operating results for this medical insurance business were reported by the Company in 1995 as part of discontinued operations.
Total reinsurance recoverables at December 31, 1997 and 1996 include $697 million and $720 million, respectively, from MetLife in connection with the sale of the Company's group life and related businesses. See Note 2.
The Company's statutory capital and surplus was $4.12 billion and $3.44 billion at December 31, 1997 and 1996, respectively.
The off-balance sheet risks of equity options, forward contracts, and interest rate swaps were not significant at December 31, 1997 and 1996.
Had the Company applied FAS 123 in accounting for Travelers Group stock options, net income would have been the pro forma amounts indicated below:
During fiscal 2014, the Company has focused its primary efforts on the development and marketing of its surety business in West Virginia and Ohio, securing potential strategic relationships that will accelerate the progression of the Company’s business plan and raising additional capital to increase the capital base of its insurance subsidiary, First Surety Corporation (FSC), to facilitate entry into other state markets.
Accordingly, the payment of ordinary dividends is no longer restricted but cash, marketable investments, and other receivables held by FSC are restricted from the Company’s use to fund operations or meet cash needs outside of the insurance company’s domain. As of May 31, 2014, such assets amounted to approximately $9.60 million.
Revenue from the surety insurance segment, consisting of FSC and TSA, decreased 10%, with $1,040,703 in fiscal 2014 as compared with $1,150,621 for the prior year. Revenues attributable to the insurance segment are as follows:
At May 31, 2014, the Company’s insurance subsidiary had securities and short term investment with a fair value of $1,051,556 on deposit with the State insurance department to satisfy regulatory requirements. In connection with regulatory approval of the Company’s acquisition of its insurance subsidiary, certain restrictions were imposed on the ability of the Company to withdraw funds from FSC without prior approval of the state Insurance Commissioner.
As the result of the acquisition of FSC on December 30, 2005, in exchange for the purchase price of $2,900,000, the Company received cash and investments held by FSC with a fair value of $2,750,000, with the difference of $150,000 being attributed to the property and casualty licenses of FSC in the states of West Virginia, Ohio and Indiana. Such licenses have indefinite lives and are evaluated annually, or more frequently if circumstances indicate that a possible impairment has occurred, for recoverability and possible impairment loss. No impairment has been recorded in fiscal years ended May 31, 2014 and 2013.
In fiscal 2013, the Company issued 8,947,444 shares of the Company's common stock in connection with the semi-annual issuance of shares under terms of the bridge-financing arrangement. The shares were valued at approximately $.00505 per share based on the average quoted closing price of the Company's stock for the 20-day period preceding the date of the transaction and totaled $45,185.
The Company’s insurance subsidiary files calendar year financial statements prepared in	accordance with statutory accounting practices prescribed or permitted by regulatory authorities. The principal differences between statutory financial statements and financial statements prepared in accordance with generally accepted accounting principles are that statutory financial statements do not reflect deferred policy acquisition costs and certain assets are non-admitted.
Membership in our Medicare Risk and Medicaid remained relatively stable at December 31, 2005 compared to December 31, 2004.
Commercial premium revenues, including ASO, decreased by $140.7 million, or 2.0%, for the year ended December 31, 2005 as compared to the same period in 2004 due to membership losses in large and small groups. The decline in commercial premium revenues related to membership decline was partially offset by an increase in premium rates attributable to our implementation of higher rates in our large and small group markets in all of our health plans to account for higher health care costs. The increase in the commercial premium PMPM was 10.9% for the year ended December 31, 2005 over the same period in 2004.
Amortization and depreciation expense decreased by $10.6 million for the year ended December 31, 2005 as compared to the same period in 2004 primarily due to the sale of assets in the sale-leaseback transaction we consummated in June 2005. See “Investing Activities” for further information on the sale-leaseback transaction.
Litigation Expense. Litigation expenses of $1.2 million in 1999 included expenses associated with the collection of accounts receivable, as well as penalties or settlements to be paid in connection with various legal matters.
INSpire's business, financial condition, cash flows, and results of operations may be impacted by a number of factors, including, but not limited to, the following, any of which could cause actual results to vary materially from current and historical results or INSpire's anticipated future results.
Dependence on major customers. INSpire derives a substantial portion of its revenues from outsourcing services provided to a few large customers, including Millers Group, Arrowhead, and Clarendon. Any loss of or material decrease in the business from any of these customers could have a material adverse effect on the Company's business, financial condition, cash flows, and results of operations. See "Business -- Customers."
Dependence on key personnel. INSpire's future success will depend largely on the efforts and abilities of its executive officers and certain key technical, managerial, and sales employees. The loss of any of these key employees could have a material adverse effect on the Company's business, financial condition, cash flows, and results of operations. INSpire cannot assure that it will be successful in retaining key personnel. See the 2001 Proxy Statement under the caption "Management."
At December 31, 1999, AAG's mortgage-backed securities ("MBSs") portfolio represented less than one-third of its fixed maturity investments. AAG invests primarily in MBSs which have a lower risk of prepayment. In addition, the majority of MBSs held by AAG were purchased at a discount. Management believes that the structure and discounted nature of the MBSs will reduce the effect of prepayments on earnings over the anticipated life of the MBS portfolio.
Net core operating earnings per common share (diluted) $ 1.78 $ 1.74 $ 1.58
AAG operates in three major segments; (i) retirement products, (ii) life, accident and health insurance and (iii) corporate and other. AAG's retirement product companies sell primarily tax-deferred annuities to employees of primary and secondary educational institutions, hospitals and in the non-qualified markets. More than one-fourth of AAG's retirement annuity premiums came from California in 1997 through 1999. No other state accounted for more than 10% of premiums. Sales from AAG's top two Managing General Agencies accounted for 11% and 5% of retirement annuity premiums in 1999.
(a) Decrease in "Corporate and other" reflects sale of Funeral Services Division in 1998. (b) Includes gain on sale of subsidiaries in 1998. (c) Includes realignment expenses for retirement products ($1.5 million), life, accident and health ($0.4 million) and corporate and other ($8.1 million).
Maturity 1999 One year or less 5% After one year through five years 23 After five years through ten years 23 After ten years 17 Mortgage-backed securities 32 100%
The distribution of maturities based on amortized cost is generally the same. Mortgage-backed securities had an estimated average life of approximately six years at December 31, 1999.
Realized $ 6.1 $ 1.7 ($2.6) ($ 1.8)$ 3.4 Change in unrealized 142.0 17.2 - (55.7) 103.5
1999 1998 Direct obligations of AAG $ 2.2 $ 1.2 Obligations of AAG Holding (guaranteed by AAG): 6-7/8% Senior Notes due 2008 100.0 100.0 Bank Credit Line 97.0 27.0 Other subsidiary debt 2.1 2.8 Total $201.3 $131.0
The gross deferred tax asset has been reduced by a valuation allowance based on an analysis of the likelihood of realization. Factors considered in assessing the needs for a valuation allowance include: (i) applicable statutory carryforward periods and (ii) the likelihood of generating larger amounts of taxable income in the future. The likelihood of realizing this asset is reviewed periodically.
Contract revenues were $9,415,734 in 1996 compared to $11,614,632 in 1995. During the past several years, the Company has focused on fewer, more profitable projects. Construction revenue is difficult to predict in 1997 and depends greatly on the successful securement of contracts bid.
During 1996, the Company purchased, in the open market and privately negotiated transactions, 42,207 shares of its Common Stock at an average price of $18.81. The Company also repurchased, in open market and privately negotiated transactions, 872,975 shares of its Class A Stock at an average price of $13.24 per share.
On December 31, 1996, the Company's insurance subsidiaries had securities with an aggregate book value of approximately $9.8 million on deposit with various state regulatory authorities.
Realized capital gains (losses) for the years ended December 31, 1996, 1995 and 1994 follows:
A summary of receivables at December 31, 1996 and 1995 follows:
Policy acquisition costs as a percentage of net premiums earned remained relatively constant at a ratio of 50% or $45,952,000 in 1997 and 51% or $53,806,000 in 1998.
As of December 31, 1999, the Company had total cash and cash equivalents and investments of $136,425,000. Included in these amounts is an aggregate of $50,271,000 in funds held which are shown as a liability on the Company's consolidated balance sheet. As of December 31, 1999, the Company's investment balances were comprised of $100,892,000 in fixed maturities held at market, $4,199,000 in common equity securities, $5,073,000 in preferred equity securities, $7,749,000 in other invested assets and $2,691,000 in short-term investments.
The increase in net investment income for the year ended December 31, 2002 was primarily the result of Rockwood contributing investment income for the complete twelve-month period, as opposed to the four month-period since acquisition in 2001. For the year ended December 31, 2002, Rockwood reported $6.9 million of investment income, compared to $2.2 million for the four months since acquisition in 2001. Investment income was negatively impacted by lower yields which was partially offset by an increase in invested assets due to positive cash flow.
Losses and loss adjustment expenses for the year ended December 31, 2002 resulted in a loss ratio of 70.3% compared to 72.8% for 2001. Net loss reserves for the public entity segment were $6.7 million and $5.6 million as of December 31, 2002 and 2001, respectively.
The decision to strengthen asbestos reserves was the result of an evaluation and review of exposure to asbestos claims, particularly in light of recent industry and litigation trends, actual claims experience, and actuarial analysis by the Company's consulting and internal actuaries.
o Reserve increases for asbestos and environmental liabilities; o Declines in the fair value of the equity portfolio; o High rate of growth in gross written premiums; and o Losses in the specialty workers' compensation segment.
On March 20, 2003 a subsidiary of Argonaut Insurance Company, AGI Properties, Inc. sold a parcel of real estate in Torrance, California for approximately $24.0 million. AGI Properties received $4.5 million in cash and issued a note receivable for the remainder. The note is due November 30, 2004 and bears interest at 3.5% annually. The sale of this property resulted in a realized gain of approximately $20.0 million which was included in Argonaut Insurance Company's statutory surplus and RBC as of December 31, 2002 as a permitted practice authorized by the California Department of Insurance.
Reserves for Losses and Loss Adjustment Expenses. The Company establishes reserves for the estimated total unpaid costs of losses and loss adjustment expense ("LAE"), which cover events that occurred in 2002 and prior. These reserves reflect the best estimates of the total cost of claims that have been reported, but not yet paid. The process of establishing loss reserves is complex and imprecise as it reflects significant judgmental factors, such as past loss experience, current claim trends and the prevailing social, economic and legal environments. Reserves are established for claims that have been incurred but have not been reported based on actuarial estimates.
The following table lists the hospitals owned, except as otherwise indicated, by Triad as of December 31, 2000.
Supply costs remained constant as a percentage of revenues in the year ended December 31, 2000 compared to the year ended December 31, 1999. For the year ended December 31, 1999, supplies for the facilities sold or closed were $39.1 million compared to $7.6 million in the year ended December 31, 2000. Supplies for ongoing operations increased 0.2% as a percentage of revenue in the year ended December 31, 2000 compared to the year ended December 31, 1999. This increase was attributable to higher patient acuity, price increases and $3.2 million from the acquisition of two facilities in the fourth quarter of 2000. Additionally, an unfavorable adjustment of $1.1 million was recorded at one facility from write-offs of certain expenses that were previously capitalized during the year ended December 31, 2000.
Equity in earnings (loss) of affiliates was $(1.4) million for the year ended December 31, 2000 compared to $(3.1) million for the year ended December 31, 1999. This was due to reduction in losses of $3.7 million for one non- consolidating entity which opened in May 1999. This was offset by $1.1 million of unfavorable adjustments for various changes of estimates and other adjustments at one non-consolidating entity during the year ended December 31, 2000.
In January 1999, Triad entered into a 15-year lease with an unaffiliated party for the operations of two acute care hospitals and three ambulatory surgery centers, with lease payments of approximately $17.0 million per year. The lessee has an option to purchase the facilities exercisable annually beginning in January 2001 for approximately $130.0 million in January 2001. The lessee did not exercise its option in January 2001, although it may do so in the future.
In July 1999, Olsten Corporation and its subsidiary, Kimberly Home Health (neither of which is affiliated with HCA), announced that they would pay $61 million to settle allegations that both companies defrauded the Medicare program. Kimberly pled guilty to three separate felony charges (conspiracy, mail fraud and violating the Medicare Anti-Kickback statute) filed by the U.S. Attorneys in the Middle and Southern Districts of Florida and the Northern District of Georgia. While HCA was not specifically named in these guilty pleas, the guilty pleas refer to the involvement of a "Company A" or a "company not named as a defendant." HCA has disclosed that it believes these references refer to HCA or its subsidiaries.
The financial statements and notes appear on pages 20-46 in the Annual 	Report to the Stockholders for the year ended December 31, 2006 and are 	incorporated herein by reference. See Part IV, Item 15.