felanders/preprocessed huggingface dataset:
During 2017 and 2016, realized gains were offset by other-than-temporary impairments of approximately $762,000 and $466,000, respectively. The other-than-temporary impairments were taken as a result of Management's assessment and consideration of the length of time the securities have remained in an unrealized loss position and as a result of management's analysis and determination of value. The investments were written down to better reflect their current estimated fair value.
Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy. For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon management's assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.
The following table presents the Company's assets and liabilities measured at fair value in the consolidated balance sheet on a recurring basis as of December 31, 2017.
The following is Management's discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the "Company") for the years ended December 31, 2013 and 2012. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report.
Net cash provided by financing activities was $1.3 million and $7 million in 2013 and 2012, respectively. Proceeds from notes payable decreased by approximately $13.3 million in 2013 compared to 2012. During 2012, a majority owned subsidiary of UG, HPG Acquisitions, LLC ("HPG") obtained a $12 million note, which represents a substantial portion of the proceeds from notes payable reported by the Company. Net cash provided by financing activities was further enhanced in 2012 by $2.5 million in cash received from the reinsurance recapture. See Note 12 - Other Cash Flow Disclosures in the Notes to the Consolidated Financial Statements for further information regarding the reinsurance recapture.
Benefit reserves for universal life insurance and interest sensitive life insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims in excess of related policy account balances. Interest crediting rates for universal life and interest sensitive products range from 4.0% to 5.5% as of December 31, 2013 and 2012.
The following table provides a summary of fixed maturities by contractual maturity as of December 31, 2013. Actual maturities could differ from contractual maturities due to call or prepayment provisions:
The fair value of investments with sustained gross unrealized losses at December 31, 2013 and 2012 are as follows:
The UTG Avalon line of credit issued on March 28, 2013 currently carries interest at a rate of 4.0% with interest payable in two semi-annual payments. The interest rate is a variable rate that will be 0.50% above the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal. The interest rate is subject to change monthly and changes in the interest rate will take effect on the first day of the month following the rate change.
The Corporate and Other segment consists of several small insurance lines of business, net investment income and other operating expenses not identified with the preceding business segments (including interest on substantially all debt). Pretax losses for this segment were $5.5 million higher in 1995 as compared to 1994. The segment's 1994 results include approximately $8.2 million received in settlement of litigation relating to an acquisition made in 1974. All other expenses decreased approximately $2.7 million in 1995 as compared to 1994.
As discussed in Note A to the Consolidated Financial Statements, the Company changed its method of accounting for certain investments in debt and equity securities in 1993.
Protective operates separate accounts, some in which Protective bears the investment risk and others in which the investments risk rests with the contractholder. The assets and liabilities related to separate accounts in which Protective does not bear the investment risk are valued at market and reported separately as assets and liabilities related to separate accounts in the accompanying consolidated financial statements.
In 1995, gross gains on the sale of investments available for sale (fixed maturities, equity securities and short-term investments) were $18.0 million and gross losses were $11.8 million. In 1994, gross gains were $15.2 million and gross losses were $16.4 million. In 1993, gross gains on the sale of fixed maturities were $8.3 million and gross losses were $0.4 million.
At December 31, 1995 and 1994, Protective had bonds which were rated less than investment grade of $75.7 million and $82.5 million, respectively, having an amortized cost of $82.2 million and $89.4 million, respectively. Additionally, Protective had bank loan participations which were rated less than investment grade of $206.0 million and $195.1 million, respectively, having an amortized cost of $206.0 million and $195.1 million, respectively.
Protective leases furnished office space and computers to affiliates. Lease revenues were $3.1 million in 1995, $2.8 million in 1994, and $2.8 million in 1993. Protective purchases data processing, legal, investment and management services from affiliates. The costs of such services were $38.1 million, $29.8 million, and $20.4 million in 1995, 1994, and 1993, respectively. Commissions paid to affiliated marketing organizations of $10.9 million, $10.1 million, and $5.8 million in 1995, 1994, and 1993, respectively, were included in deferred policy acquisition costs.
SCHEDULE IV -- REINSURANCE PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES (DOLLARS IN THOUSANDS)
Realized net capital gains on the disposition of investments totaled $82.8 million in 1999, $120.9 million in 1998 and $32.9 million in 1997. The high levels of realized net capital gains in 1999 and 1998 as compared to 1997 were caused, in 1999, by the redeployment of a portion of the equity portfolio
Risk-based capital (RBC) standards, promulgated by the National Association of Insurance Commissioners (NAIC), relate an individual company's statutory policyholders' surplus to the risk inherent in its overall operations and sets thresholds at which certain company and regulatory corrective actions are mandated. At December 31, 1999, the statutory surpluses of TRC and Putnam each significantly exceeded RBC requirements.
In February 1997, the FASB issued SFAS No. 128, 'Earnings Per Share.' As compared to the prior standard, SFAS No. 128 simplified computational guidelines, revised disclosure requirements and increased earnings per share (EPS) comparability on an international basis.
converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed similarly to fully diluted EPS from the prior standard.
TRANSATLANTIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1999 AND 1998
TRANSATLANTIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(e) EQUITIES: Gross gains of $109,404,000, $122,685,000 and $35,507,000 and gross losses of $22,000,000, $10,874,000 and $6,132,000 were realized on sales of equities in 1999, 1998 and 1997, respectively. At December 31, 1999 and 1998, net unrealized appreciation of equities (before applicable income taxes) included gross gains of $150,576,000 and $160,160,000 and gross losses of $23,024,000 and $6,199,000, respectively.
- --------- * A significant portion of this product grouping includes more complex risks such as professional liability (other than medical malpractice), directors' and officers' liability, errors and omissions and environmental impairment liability.
The following table shows default statistics as of December 31, 2007, 2006 and 2005:
Our strategy for managing our investment portfolio is to optimize investment returns while preserving capital and liquidity and adhering to regulatory and rating agency requirements. We invest for the long term, and most of our investments are held until they mature. Our investment portfolio includes primarily fixed income securities, and the majority of these are tax-preferred state and municipal bonds. We have established a formal investment policy that describes our overall quality and diversification objectives and limits. Our investment policy and strategies are subject to change depending upon regulatory, economic and market conditions as well as our existing financial condition and operating requirements, including our tax position. Although we invest for the long term, we classify our debt and equity securities with readily determinable market values as available for sale. This classification allows us the flexibility to dispose of securities in order to pursue our investment strategy and meet our operating requirements. Investments classified as available for sale are carried on our balance sheet at fair value. Investments without readily determinable market values are classified as other investments and are also carried at fair value.
the amount of insurance written could be adversely affected by changes in federal housing legislation, including changes in the Federal Housing Administration loan limits and coverage requirements of the GSEs, Freddie Mac and Fannie Mae;
decreases in persistency, which are affected by loan refinancings in periods of low interest rates, may have an adverse effect on results of operations;
Management fees to UA-TN were further impacted during the quarter ended June 1996 by an agreement reached between UA-TN and OmniCare-TN during that quarter but, effective November 1995, pursuant to which OmniCare-TN agreed to reimburse UA-TN approximately $8.7 million for start-up costs and other expenses incurred for the period January 1994 through September 1995 which were unrelated to OmniCare-TN's TennCare business and which were over and above the amounts which OmniCare-TN could reimburse UA-TN out of the capitation payments received by OmniCare-TN under the TennCare contract. Further, UA-TN agreed to convert its claim for these additional amounts owed to it by OmniCare-TN into approximately 8.7 million shares of preferred stock of OmniCare-TN as complete and final settlement of such obligation. Despite the fact that UA-TN and OmniCare-TN each took certain actions relating to this settlement agreement, the transaction was not sufficiently documented so as to allow recognition of same on the Company's financial statements for the quarter ended December 31, 1995, resulting in a reduction of management fee revenues by the Company during such quarter. See further discussion under contract settlement expense.
The Company's management of Ultramedix also contributed to the increase in management fees. Under the Ultramedix management agreement, which became effective February 1, 1994, the Company was reimbursed the administrative cost to manage the plan plus a percentage of the Plan's income before income taxes and extraordinary expenses. Effective February 1995, the management agreement was amended to provide the Company with reimbursement of the administrative cost to manage the plan plus 3/4 of 1% of the plan's gross revenues. In 1995 the Company recognized $5.0 million in management fees compared to $1.3 million in 1994, an increase of $3.7 million.
The $1.2 million (80%) increase in depreciation and amortization from $1.5 million in 1994 to $2.6 million in 1995 was due to depreciation taken on approximately $5.3 million of furniture and equipment acquired over the past twenty-four months and the amortization of goodwill related to investments in affiliates of approximately $.6 million
The $.8 million (109%) increase in depreciation and amortization from $.7 million in 1993 to $1.5 million in 1994, was due to the increase in the amortization of intangibles related to the CHF acquisition of $.5 million, and depreciation on approximately $4.3 million of furniture and equipment acquired over the past three years.
Included in the year ended December 31, 2012, results are the following significant items: (1) a $142.2 million pre-tax operating loss in our Kentucky health plan, including a $41.5 million pre-tax premium deficiency reserve for our Kentucky health plan contract covering the period from January 1, 2013 through July 5, 2013; (2) a pre-tax impairment loss of $28.0 million for the write down of goodwill and intangible assets in the Celtic reporting unit; (3) a $19.4 million pre-tax gain on the sale of investments; and (4) a $5.8 million state income tax benefit. These items are discussed in further detail below.
Missouri. In July 2012, our joint venture subsidiary, Home State Health Plan, began operating under a new contract with the Office of Administration for Missouri to serve Medicaid beneficiaries in the Eastern, Central, and Western Managed Care Regions of the state.
The following table identifies the Company's dual eligible membership by line of business. The membership tables above include these members.
Cost of services expense includes the pharmaceutical costs associated with our pharmacy benefit manager's external revenues and certain direct costs to support the functions responsible for generation of our service revenues. These expenses consist of the salaries and wages of the professionals who provide the services and associated expenses.
The State of Georgia maintains a reconciliation process associated with membership eligibility and has continued to reconcile membership from previous periods as far back as 2006. The amount of any reduction to revenue related to this review is subject to consideration of rate adequacy calculations, as part of actuarially sound standards, for the appropriate periods. We have estimated the revenue impact related to reconciliation adjustments to the retroactive eligibility reductions due to the state and have adjusted our accrual in our consolidated financial statements. There can be no assurance that future adjustment of amounts related to membership reconciliations will not have a material adverse effect on the Company.
Investment income. The decrease in investment income in 2011 reflects the continued low market interest rates, partially offset by an increase in investment balances.
Shown below is a condensed schedule of cash flows for the years ended December 31, 2012, 2011 and 2010, used in the discussion of liquidity and capital resources ($ in millions).
The Company has 10,000,000 authorized shares of preferred stock at $.001 par value. At December 31, 2012, there were no preferred shares outstanding.
Effective July 1, 2004, together with AMIC, acquired a 75% interest in a medical stop-loss MGU with approximately $41 million of annualized premium;
Investment portfolio continues to have an average AA rating and remains highly liquid; and
The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ("GAAP") and to general practices within the insurance industry. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. A summary of the Company's significant accounting policies is provided in Note 1 of the Notes to the Consolidated Financial Statements included in Item 8. Management has identified the accounting policies described below as those that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's consolidated financial statements and management's discussion and analysis.
Equity income from AMIC increased $4.2 million to $2.3 million in 2003, compared to a $1.9 million loss for 2002. The Company purchased a 19.9% equity interest in AMIC on July 30, 2002. On April 22, 2003, IHC completed a cash tender offer and acquired 1 million shares of AMIC. On December 22, 2003, IHC acquired an additional 613,401 shares of AMIC, bringing IHC's total ownership percentage to 39%. IHC accordingly recorded its percentage of AMIC's net income under the equity method of accounting. The loss of $1.9 million in 2002 relates to the wind-down of AMIC's previous Internet operations. The 2003 income is due to positive results from AMIC's insurance operations.
The results of the model specify whether the investments and their related cash flows can support the related current insurance cash flows. Additionally, various scenarios are developed changing interest rates and other related assumptions. These scenarios help evaluate the market risk due to changing interest rates in relation to the business of the Insurance Group.
Total Corporate liquidity (cash, cash equivalents, resale agreements, fixed maturities, equity securities and partnership interests) amounted to $37.6 million at December 31, 2004. During 2004, IHC repurchased 300,780 shares of common stock for $5.9 million under its common stock repurchase program.
See Index to Consolidated Financial Statements and Schedules on page 42.
(c) Represents an estimate of the number of additional preference shares that would be issued under the subscription agreement entered into in connection with the capital infusion in the event that, on or prior to September 19, 2005, the closing price of our common shares is at least $30.00 per share for at least 20 out of 30 consecutive trading days or a change of control occurs.
(4) "Diluted" information gives effect to the Dilutive Shares and the issuance of 1,689,629 restricted shares issued as part of the capital infusion but does not include the issuance of any Contingently Issuable Shares. Such information excludes the effects of our outstanding stock options (4,068,311) at December 31, 2001.
On October 24, 2001, we announced the launch of a new underwriting initiative to meet current and future demand in the global insurance and reinsurance markets. Simultaneously with the launch of this new underwriting initiative, we entered into agreements with the Warburg Pincus funds and the Hellman & Friedman funds and certain members of management to purchase from us in a private placement, for $763.2 million in cash, 35,687,735 series A convertible preference shares and 3,776,025 class A warrants. This capital infusion was consummated on November 20, 2001. The proceeds of the capital infusion were primarily contributed to our Bermuda and U.S. subsidiaries to support the new underwriting initiative.
On May 21, 2001, we formed our wholly owned Bermuda-based reinsurance subsidiary, Arch Re (Bermuda). Under the Insurance Act of 1978, Arch Re (Bermuda) is registered as a Class 4 and long-term insurer and reinsurer and, in December 2001, Arch Re (Bermuda) and Arch Re (US), our wholly owned U.S.-based reinsurance subsidiary, were assigned ratings of "A-" (Excellent) by A.M. Best.
We are exposed to equity price risks on the private equity securities included in our investment portfolio. All of our privately held securities were issued by insurance and reinsurance companies or companies providing services to the insurance and reinsurance industry. We typically do not attempt to reduce or eliminate our market exposure on these securities. Investments included in our private portfolio include securities issued by privately held companies that are generally restricted as to resale or are otherwise illiquid and do not have readily ascertainable market values. Investments in privately held securities issued by privately held companies may include both equity securities and securities convertible into, or exercisable for, equity securities (some of which may have fixed maturities).
We currently classify all of our publicly traded fixed maturity, short-term investments and equity securities as "available for sale" and, accordingly, they are carried at estimated fair value. The fair value of publicly traded fixed maturity securities and publicly traded equity securities is estimated using quoted market prices or dealer quotes.
DEFAULTED INVESTMENTS, comprising all investments that are in default as to the payment of principal or interest, totaled $1.8 million, including $0.9 million of bonds and $0.9 million of mortgage loans at December 31, 1999, and constituted 0.1% of total invested assets. At December 31, 1998, defaulted investments totaled $3.7 million, including $2.5 million of bonds and $1.2 million of mortgage loans, and constituted 0.2% of total invested assets.
Annuity deposits relate to annuity contracts not containing life contingencies. Compared to prior years, deposits decreased 37% for the year-ended December 31, 2001 and 16%, for the year-ended December 31, 2000 due to a decrease in individual annuity sales.
ITEM 7. MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS (continued) INVESTMENT MANAGEMENT SERVICES (continued)
Separate Accounts liabilities are carried at fair value, except for those relating to the guaranteed interest option. Reserves relating to the guaranteed interest option are maintained at fund value and reflect interest credited at rates ranging from 3.0% to 14.0% in 2001 and 3.8% to 14.0% in 2000.
The operating results of the domestic individual life insurance business are presented as Discontinued Operations. Premiums ceded and reinsurance recoveries made for domestic individual life insurance in 2001 totaled $334.9 million and $363.7 million, in 2000 totaled
In conjunction with the sale of Aetna, Inc. to ING AIH, the Company was restricted from paying any dividends to the its parent in 2001 without prior approval by the Insurance Commissioner of the State of Connecticut. This restriction continues for a two year period from the date of the sale.
As of December 31, 2001, the Company does not utilize any statutory accounting practices, which are not prescribed by state regulatory authorities that, individually or in the aggregate, materially affect statutory capital and surplus.
9. SEVERANCE AND FACILITIES CHARGES (continued) Severance actions related to the liability established in December 2000 are expected to be substantially complete by March 31, 2002.
At December 31, 2005, Harleysville Group Inc. (Company) was approximately 56% owned by Harleysville Mutual Insurance Company (Mutual). Harleysville Group Inc. and its wholly owned subsidiaries (collectively, Harleysville Group) are engaged in property and casualty insurance. These subsidiaries are: Harleysville-Atlantic Insurance Company, Harleysville Insurance Company, Harleysville Insurance Company of New Jersey, Harleysville Insurance Company of New York, Harleysville Insurance Company of Ohio, Harleysville Lake States Insurance Company, Harleysville Preferred Insurance Company, Harleysville Worcester Insurance Company, Mid-America Insurance Company, and Harleysville Ltd., a real estate partnership that owns the home office.
changes in the prices of equity securities generally and those held by the Company specifically
earned premium. The combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A ratio of less than 100 percent generally indicates underwriting profitability. Harleysville Group’s statutory combined ratio decreased to 102.2% for the year ended December 31, 2005 from 105.9% for the year ended December 31, 2004. Such decrease was due to improved underwriting results in both commercial lines and personal lines, primarily resulting from improved loss experience and lower catastrophe losses in 2005. The improved loss experience reflects lower claim severity in general and lower claim frequency in property coverages.
Because this agreement does not relieve Harleysville Group of primary liability as the originating insurer, there is a concentration of credit risk arising from business ceded to Mutual. However, the reinsurance pooling agreement provides for the right of offset, and the amount of credit risk with Mutual was not material at December 31, 2005 and 2004. Mutual has an A. M. Best rating of “A-” (Excellent).
Rental expense under leases with non-affiliates amounted to $2,753,000, $3,073,000 and $2,960,000 for 2005, 2004 and 2003, respectively. Operating lease commitments were not material at December 31, 2005.
Operating earnings for ACMAT contracting are operating revenues less cost of contract revenues and identifiable general and administrative expenses. Operating earnings for the bonding and liability insurance segments are revenues less losses and loss adjustment expenses, amortization of policy acquisition costs and identifiable general and administrative expenses.
Revenues increased $1,663,262 or 30% in 2003 and decreased $905,019 or 14% in 2002.
The terms of the Company's note agreements contain limitations on payment of cash dividends, re-acquisition of shares, borrowings and investments and require maintenance of specified ratios and minimum net worth levels, including cross default provisions. The Company was in compliance with all of these covenants at December 31, 2003.
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets in 2002.
- Management review of for other-than-temporary impairments based on the investee's current financial condition, liquidity, near term recovery prospects and other factors, as well as consideration of other investments that were not recommended for other-than-temporary impairments;
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2003 and 2002 are presented below:
Effective January 1, 2000, the Company adopted the ACMAT 401(k) plan for the benefit of non-union employees. The Company contributed $75,000 to the ACMAT 401(k) Plan in 2003, 2002 and 2001. Costs associated with operating the Plan are borne by the Company and were insignificant for each of the years ended December 31, 2003, 2002 and 2001.
Depreciation and amortization expenses increased $433,000 (48%) from $905,000 in 1995 to $1,338,000 in 1996. The increase is largely attributable to increased depreciation expense on assets purchased for the new operating center in Silver Spring, Maryland to service the Bell Atlantic Corporation contract as well as increased amortization expense on the goodwill acquired in the purchase of CRS.
Merger costs and expenses of $436,000 recorded during 1995 consist primarily of professional fees, investment advisor services and printing expenses associated with the completed CMI/PRA Merger. This was a $678,000 decrease from the $1,114,000 recorded during 1994.
For the year ended December 31, 1996, the Company's cash and cash equivalents increased by $3,276,000. For this period, operating activities used $632,000 primarily due to increases in accounts receivable of $1,558,000 and other current assets of $548,000, offset by net income of $144,000 and depreciation and amortization of $1,564,000. The Company's investing activities used $12,140,000 of cash, primarily due to net purchases of investments available-for-sale of $6,887,000 and $4,590,000 used to fund equipment and furniture purchases and leasehold improvements. Approximately 40% of the equipment and furniture purchases and leasehold improvements is attributable to the opening of a new operating center in Silver Spring, Maryland. The Company's financing activities provided $16,047,000 for this period primarily due to the proceeds from the secondary public offering of $16,821,000. A portion of the public offering proceeds were used to pay for offering costs of approximately $500,000.
Other considerations, net of reinsurance, increased 7% compared to one year ago. Other considerations consists of administrative charges on universal life and interest sensitive life insurance products. The insurance in force relating to these types of products continues to increase as marketing efforts are focused on universal life insurance products.
During 1995, the Company reported a non-recurring write down of value of agency force of $8,297,000. The write down is directly related to the Company's change in distribution systems. The Company has changed its focus from primarily a broker agency distribution system to a captive agent system. Business produced by the broker agency force in recent years did not meet Company expectations. With the change in focus of distribution systems, most of the broker agents were terminated. The termination of most of the agents involved in the broker agency force caused management to re-evaluate the value of the agency force and write-off the remaining value carried on the balance sheet.
Each year the NAIC calculates financial ratio results (commonly referred to as IRIS ratios) for each company. These ratios compare various financial information pertaining to the statutory balance sheet and income statement. The results are then compared to pre- established normal ranges determined by the NAIC. Results outside the range typically require explanation to the domiciliary insurance department.
Management continued applying a 3% discount to the market value of the ProLogis REIT shares through June 29, 1999 because of a restriction which limits the number of shares that can be publicly traded during any six month period. The application of the 3% discount was discontinued on June 30, 1999 because this restriction no longer applied.
Our loss and LAE reserves represent management’s best estimate of the amounts we expect to pay out in the future on account of all insured claims and incidents as of the end of the period. The liability comprises estimated case reserves on reported claims plus estimates of insured losses and LAE incurred but not yet reported. Also implicit in our loss and LAE reserves is a provision for case reserve development, which represents an estimate of the aggregate difference between our individually estimated case reserves and the amount for which they will ultimately be settled. This provision, which is included in our total IBNR reserves, comprises the majority of such reserves given our claims-made only policy coverage.
While we believe that our estimates for ultimate projected losses and LAE in total are adequate, there can be no assurance that our estimates will not change in the future given the many variables inherent in such estimates and the extended period of time that it can take for claim patterns to emerge.
Newly reported claims and incidents decreased 29% to 2,189 for the year ended December 31, 2004 from 3,063 for the year ended December 31, 2003. The significant decrease was primarily related to a speed up in claims reporting that was experienced during 2003. This resulted in a higher than usual number of claims reported in 2003, as plaintiffs’ attorneys accelerated case filings to precede the effective date of tort reform legislation passed in Florida in the fall of 2003, which was followed by lower reported claims in subsequent periods.
Direct title revenue information is presented below (in $ millions, except % change):
For the year ended December 31, 2020, title losses increased $30.8 million, or 36%, compared to 2019, primarily due to increased title premiums, higher loss provisioning rate driven by an overall uncertainty related to incurred losses resulting from the COVID-19 pandemic, and unfavorable loss experience in our Canadian operations. For the year ended December 31, 2019, title losses increased $12.9 million, or 18%, compared to 2018, primarily due to unfavorable loss experience in 2019, resulting in a higher current year policy provisioning rate and increased loss provisions in portions of our non-Canadian international operations, and a $4.0 million prior policy year reserve reduction during 2018.
Income taxes. Our effective tax rates for 2020, 2019 and 2018 were 24.0%, 25.3% and 22.1%, respectively, based on income before taxes (after deducting noncontrolling interests) of $203.7 million, $105.3 million and $61.0 million, respectively. Refer to Note 7 to our audited consolidated financial statements for details on the effective tax rates and income tax accounts.
Effect of changes in foreign currency rates. The effect of changes in foreign currency rates on the consolidated statements of cash flows was a net increase (decrease) in cash and cash equivalents of $3.3 million, $2.9 million and $(3.8) million in 2020, 2019 and 2018, respectively. Our principal foreign operating unit is in Canada, and the value of the Canadian dollar, on average and relative to the U.S. dollar, appreciated during 2020 and 2019, while it declined during 2018.
The following investments are reported at values other than fair value on the Balance Sheets and are therefore not categorized in the fair value hierarchy:
§ Additional factors considered for structured securities such as RMBS, CMBS and other ABS include, but are not limited to, quality of underlying collateral, anticipated loss severities, collateral default rates, and other collateral characteristics such as vintage, re-payment terms, and the geographical makeup of the collateral.
Contract owners may periodically exchange one contract for another, or make modifications to an existing contract. These transactions are identified as internal replacements and are accounted for in accordance with current US GAAP guidance for DAC related to modifications or exchanges of insurance contracts.
§ How derivative instruments and related hedged items are accounted for under US GAAP for derivative and hedging activities; and
Contract owners may periodically exchange one contract for another, or make modifications to an existing contract. Beginning January 1, 2007, these transactions are identified as internal replacements and are accounted for in accordance with current US GAAP guidance for DAC related to modification or exchange of insurance contracts.
The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. Rather, the VIEs are accounted for using the cost or equity method of accounting. The Company provided no non-contractual financial support and its carrying value represents the Company’s exposure to loss. The carrying value of collateralized loan obligations (“CLOs”) of $2.7 and $2.3 at December 31, 2010 and 2009, respectively, is included in Limited partnerships/corporations on the Balance Sheets. Income and losses recognized on these investments are reported in Net investment income on the Statements of Operations.
5.5%, based on management’s best estimate of the long term credited rate of return
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in Current income taxes and Income tax benefit on the Balance Sheets and Statement of Operations, respectively. The Company had accrued interest of $0.0 and $4.4 as of December 31, 2010 and 2009, respectively. The decrease during the tax period ended December 31, 2010 is primarily related to the settlement of the 2004-2008 federal audits.
facility at 5780 Powers Ferry Road, N.W., Atlanta, GA (the “Atlanta Office”) in exchange for ING North America’s payment of the Company’s direct and indirect costs for the Atlanta Office.
We also own land in the municipality of Ponce, Puerto Rico, in which we plan to build a multi-segment customer service center. In addition to the properties described above, we or our subsidiaries are parties to operating leases that are entered into in the ordinary course of business.
The following table sets forth our consolidated operating results for the years ended December 31, 2013, 2012 and 2011. Further details of the results of operations of each reportable segment are included in the analysis of operating results for the respective segments.
Premiums earned, net for the segment increased by $5.9 million, or 4.7%, to $130.6 million during the year ended December 31, 2013 as compared to the year ended December 31, 2012, primarily as the result of new sales in the Cancer and Individual Life businesses during the period. Of the increase experienced year over year, $1.4 million is related to premiums earned by ASICO, the insurance company acquired by TSV in November 2013.
Premiums earned, net for the segment increased by $11.7 million, or 10.4%, to $124.7 million during the year ended December 31, 2012 as compared to the year ended December 31, 2011, primarily as the result of higher sales in the Cancer, Individual Life and Group Life lines of business during the period.
On September 29, 2010, we announced the immediate commencement of the 2010 stock repurchase program. The program is conducted using available cash through open-market purchases and privately-negotiated transactions of Class B shares only, in accordance with Rules 10b-18 and 10b5-1 under the Securities Exchange Act of 1934, as amended. On March 23, 2013, we discontinued our 2010 stock repurchase program.
In July 29, 2013 the Company’s Board of Directors authorized an $11.5 million repurchase program of its Class B common stock.
Management continually evaluates the potential for changes in its claim liabilities estimates, both positive and negative, and uses the results of these evaluations to adjust recorded claim liabilities and underwriting criteria. Our profitability depends in large part on our ability to accurately predict and effectively manage the amount of claims incurred, particularly those of the managed care segment and the losses arising from the property and casualty and life insurance segment. Management regularly reviews its premiums and benefits structure to reflect our underlying claims experience and revised actuarial data; however, several factors could adversely affect our underwriting results. Some of these factors are beyond management’s control and could adversely affect its ability to accurately predict and effectively control claims incurred. Examples of such factors include changes in health practices, economic conditions, change in utilization trends, healthcare costs, the advent of natural disasters, and malpractice litigation. Costs in excess of those anticipated could have a material adverse effect on our results of operations.
• Equity securities are considered to be impaired when a position is at an unrealized loss for a period longer than 6 months.
We believe that a focus on rate adequacy, selective underwriting and effective claims management is required if we are to achieve our ROE targets. We closely monitor premium revenues, losses and loss adjustment costs, and acquisition, underwriting and insurance expenses. Our investment portfolio is managed in order to meet the liquidity and profitability needs of each insurance company as well as to maximize after-tax investment returns on a consolidated basis. We engage in activities that generate other income; however, such activities, principally fee generating and agency services, do not constitute a significant source of revenues or profits.
Our long-term debt at December 31, 2005 is comprised of the following:
All long-term debt is assumed to be settled at its contractual maturity. Interest on long-term debt is calculated using interest rates in effect at December 31, 2005 for variable rate debt. For more information see Note 10 to our Consolidated Financial Statements. The anticipated payout of loss and loss adjustment expenses is based upon our historical payout patterns. Both the timing and amount of these payments may vary from the payments indicated. Our operating lease obligations are primarily for the rental of office space, office equipment, and communications lines and equipment.
The Company owns three office buildings in Tarrant County, Texas, with approximately 190,000 square feet. The Company's United CreditServ subsidiary owns one building in Sioux Falls, South Dakota, with approximately 106,000 square feet. In addition, the Company and its subsidiaries rent office space at various locations, including its principal executive office located at 4001 McEwen Drive, Dallas, Texas. EFG owns an office building in Swansea, Massachusetts, with approximately 35,000 square feet.
United CreditServ generated revenues from interest income, credit card fees and other fee income in the amount of $227.4 million and $123.2 million in 1999 and 1998, respectively. United CreditServ incurred an operating loss of $145.3 million in 1999 compared to an operating profit of $43.5 million in 1998. The significant operating loss in 1999 was due primarily to increases in the reserves for credit card loan losses and the write off of the $35.9 million purchase price of the UMMG minority interest, both of which were attributable to the unprofitable
National Motor Club. Operating income for the National Motor Club was $5.1 million in 1998 compared to operating income of $2.0 million in 1997. The Company acquired the National Motor Club in the third quarter of 1997. Revenue for the twelve months ended December 31, 1998 was $27.3 million compared to revenue of $10.3 million for the five months ended December 31, 1997.
other things, appropriate risk management, internal control, management information and data processing systems. Under the terms of the Consent Order, UCNB is generally prohibited from increasing its assets in the future unless the OCC has approved a capital plan submitted by UCNB and UCNB is in compliance with the capital plan.
Included in the fixed maturity portfolio is a concentration of mortgage-backed securities such as collateralized mortgage obligations and mortgage-backed pass-throughs. To limit its credit risk, the Company invests in mortgage-backed securities which are rated investment grade by the public rating agencies. The Company's mortgage-backed securities portfolio is a conservatively structured portfolio that is concentrated in the less volatile tranches, in the form of planned amortization classes, sequential payment and commercial mortgage-backed securities. The Company's objectives are to minimize prepayment risk during periods of declining interest rates and minimize duration extension risk during periods of rising interest rates. The Company has less than 1% invested in the more volatile tranches.
In 2013, we completed a private placement of our voting common stock, selling units consisting of 50 shares of common stock and one detachable warrant to purchase 10 shares of common stock at an exercise price of $6.50 per share exercisable through December 31, 2016 for gross proceeds of $353,700.
The Company performed the first step of the goodwill quantitative analysis to determine if the fair value of the reporting unit was in excess of the carrying value. As of December 31, 2013, the fair value of the Company’s reporting units exceeded the carrying value of the net assets assigned to that unit and the Company was not required to perform further testing for impairment. Management's determination of the fair value of each reporting unit incorporates multiple inputs including discounted cash flow calculations, peer company price to earnings multiples, and assumptions that market participants would make in valuing the reporting unit. Other assumptions can include levels of economic capital, future business growth, and earnings projections.
Net realized gains on investments: Net realized gains on investments in the year ended December 31, 2013 was $5,736 compared to $134,120 in the year ended December 31, 2012. The Company sold more securities in 2012 to reposition its available for sale portfolio and to take advantage of gains due to favorable interest rate positions.
Other expenses: Other expenses (general administrative expenses, licenses and fees, and other expenses) were $2,556,094, in the year ended December 31, 2013 compared to $3,059,773 in the year ended December 31, 2012. The Company’s other operating expenses during the year ended December 31, 2013 decreased compared to the same period in 2012 as a result of the deconsolidation of Hot Dot, which accounted for approximately $408,000 of other operating expense during the year ended December 31, 2012 as well as a decrease in non-recurring legal and consulting expenses of approximately $274,000 related to the Company’s Form 10 filing as it became a public company during the first quarter of 2012.
At December 31, 2013, the Company had cash and cash equivalents totaling $3,377,978. The Company believes that its existing cash and cash equivalents will be sufficient to fund the anticipated operating expenses and capital expenditures for at least twelve months. The Company has based this estimate upon assumptions that may prove to be wrong and the Company could use its capital resources sooner than they currently expect. The growth of our insurance subsidiaries is uncertain and will require additional capital if they continue to grow.