Our goodwill asset, $7.3 million as of December 31, 2003, resulted from the 1999 acquisition of three businesses which now operate as divisions of the Practice Management Services Segment. We completed our initial goodwill impairment testing under SFAS 142 and concluded that the goodwill asset was not impaired as of the date of implementation of SFAS 142, nor was it impaired as of December 31, 2003.
for premiums earned under basic medical professional liability insurance and $2.5 million for excess limits coverage. Extended reporting endorsements premium is earned in the same period as it is written.
Current year reinsurance premiums ceded decreased by $1.6 million, or 11.4%, to $12.8 million for the year ended December 31, 2003 from $14.4 million for the year ended December 31, 2002. This decrease was due to lower reinsurance premium rates charged by reinsurers as a result of the increase in NCRIC's retention level to $1 million from $500,000, partially offset by the increase in gross earned premiums.
The mix of business produced directly by us versus by agents has changed between years as shown on the following chart of new gross written premiums:
Other income increased $411,000, or 68%, to $1,013,000 for the year ended December 31, 2002 from $602,000 for the year ended December 31, 2001. The increased revenue resulted primarily from increased brokerage reinsurance treaty commission income generated by the increased current year reinsurance ceded premiums and from services fees generated by premium installment payments. In late 2001 we began offering an
Of the 11 plaintiff verdicts in 2003, four verdicts were awarded in excess of our $500,000 retention, and one verdict was in excess of our $1 million retention limit. Under the clash protection provided by our reinsurance program, our exposure to the retention limit was limited to three of the five verdicts. Of the five plaintiff verdicts in 2002, three verdicts were awarded in excess of our $500,000 retention. Of the five plaintiff verdicts in 2001, one verdict was awarded in excess of our $500,000 retention.
Practice management and related expenses decreased $252,000, or 4%, to $5.8 million for the year ended December 31, 2002 compared to $6.1 million for the year ended December 31, 2001. Expense decreased due to the cessation of goodwill amortization with the implementation of SFAS 142 effective January 1, 2002 partially offset by additional expenses associated with the transition of client service for two of the former owners as they moved towards the expiration of their employment contracts at the end of 2002 and other transitional costs associated with the continued integration of the purchased companies.
Concentrations of Credit Risk - Financial instruments that potentially expose the Company to concentrations of risk consist principally of cash equivalent investments, investments in securities and reinsurance recoverables. Concentrations of credit risk for investments are limited due to the large number of such investments and their distributions across many different industries and geographical areas. Concentrations of credit risk for reinsurance recoverables are limited due to the large number of reinsurers participating in the program.
The Company and its subsidiaries have entered into four employment agreements with certain key employees. These agreements include covenants not to compete and provide for aggregate annual compensation of $992,250.
Stock Option Plan - NCRIC Group, Inc. has a stock option plan for directors and officers of the Company and its subsidiaries whereby awards granted vest evenly over a three to five year period from the date of grant. The options have terms of ten years and an exercise price equal to the fair market value of the common stock at the date of grant.