felanders/preprocessed huggingface dataset:
The quarterly adjustments for market performance referred to above reflect the impact of changes to our estimate of total gross profits to reflect actual fund performance. A significant portion of gross profits for our variable annuity contracts are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn, costs we incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts, as well as other sources of profit. Returns that are higher than our expectations for a given period produce higher than expected account balances, which increase the fees we earn and decrease the costs we incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts. The impact of increased fees results in higher expected future gross profits and lower DAC and DSI amortization for the period. The opposite occurs when returns are lower than our expectations. The changes in future expected gross profits are used to recognize a cumulative adjustment to all prior periods’ amortization.
(1) Amounts reflect (charges) or benefits for (increases) or decreases, respectively, in the amortization of DAC, and other costs.
The following is a brief year-to-date comparison of the Partnership's results of operations for the periods ended December 31, 2002, 2001, and 2000.
The following table presents a year-to-date comparison of the Partnership's sources of net investment income, and realized and unrealized gains or losses by investment type.
Real estate partnerships are valued at the Partnership's equity in net assets as reflected in the partnership's financial statements with properties valued as described above.
Incurred losses and LAE decreased by 2.6% to $1,319.6 million in 2015 compared to $1,354.1 million in 2014, primarily due to a decrease in prior years attritional losses of $58.1 million. The $4.7 million of prior years losses was comprised of $79.8 million of losses from the insurance segment, partially offset by $75.1 million of favorable development from the reinsurance segments. This $79.8 million of loss development in the insurance segment largely related to umbrella business and construction liability on run-off programs non-renewed by the Company several years ago. The $75.1 million of favorable development related primarily to casualty and property treaty business and was net of $30.9 million of development in asbestos reserves. Current year catastrophe losses were $43.1 million in 2015 and related to the 2015 Chilean earthquake ($17.4 million), Northern Chile storms ($9.6 million), the 2015 US Storms ($8.1 million) and the New South Wales storms ($8.0 million). The $41.8 million of current year catastrophe losses for the year ended December 31, 2014 represented 2.0 points and related to the Japan snowstorm ($13.9 million), the 2014 Chilean earthquake ($10.4 million), Hurricane Odile ($10.1 million) and the Brisbane hailstorm ($7.5 million). The $11.2 million of favorable development in prior years catastrophes related primarily to Typhoon Fitow.
Commission, brokerage, taxes and fees increased by 15.5% to $339.4 million in 2014 compared to $293.9 million in 2013. These changes were primarily due to the impact of the increase in premiums earned, higher contingent commissions and changes in the mix of business.
Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $35.4 million, $38.0 million and $45.5 million in 2015, 2014 and 2013, respectively. The decreases were primarily due to the redemption of $329.9 million of trust preferred securities in May, 2013 and the maturity of $250.0 million of senior notes on October 15, 2014, partially offset by the impact of the issuance of $400.0 million of senior notes in June, 2014.
In each year reflected in the table, we have estimated our reserve for losses utilizing the actuarial methodologies discussed in critical accounting estimates. These techniques are applied to the data in a consistent manner and the resulting projections are evaluated by management to establish the estimate of reserve.
Factors that have contributed to the variation in loss development are primarily related to the extended period of time required to resolve medical malpractice claims and include the following:
Amounts for 2006 include PIC Wisconsin net gains (losses) of $761,000.
Interest expense increased approximately $1.5 million during 2006 as compared to 2005 due to debt we assumed in our acquisitions of NCRIC (principal of $15.5 million in August 2005) and PIC Wisconsin (principal of $12.0 million in August 2006). Interest expense also increased because our Subordinated Debentures carry variable rates based on LIBOR and the LIBOR reset rate for our outstanding debt increased an average of approximately 2 percentage points in 2006 as compared to 2005. Interest expense by debt obligation is provided in the following table:
The "Management's Discussion and Analysis" section on pages 15 through 20 of the Company's annual report to security holders for the fiscal year ended December 31, 1997, is incorporated herein by reference.
At December 31, 2001, a maximum of $8,100,000 was available to the Parent as dividends from its regulated subsidiaries without regulatory approval. Additional amounts may be available to the Parent in the form of loans or cash advances from regulated subsidiaries, although no amounts were outstanding at December 31, 2001 or borrowed to date in 2002. There are no restrictions on distributions from non-regulated subsidiaries. The Parent also receives tax sharing payments from subsidiaries included in its consolidated income tax return, including certain regulated subsidiaries. Payments from regulated subsidiaries for dividends, tax sharing payments and other services totaled $9,400,000 for the year ended December 31, 2001.
The Company records a valuation allowance to reduce its deferred taxes to the amount that is more likely than not to be realized. If the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment would increase income in such period. Similarly, if the Company were to determine that it would not be able to realize all or part of its net deferred taxes in the future, an adjustment would be charged to income in such period. In addition, the Internal Revenue Service ("IRS") is in the process of concluding its audit of the Company's consolidated federal income tax returns for the years 1996 through 1999. The IRS has issued Notices of Proposed Adjustments that, if sustained, would result in approximately $80,000,000 of tax, plus interest. The Company is contesting these proposed adjustments. The Company believes that it is adequately reserved for this exposure.
Investment and other income declined in 2000 as compared to 1999 primarily due to gains recognized in 1999 from the sale of Caja de Ahorro y Seguro S.A. ($120,800,000), The Sperry & Hutchinson Company, Inc. ($18,700,000), its Russian joint venture with PepsiCo, Inc. ($29,500,000), and an equity interest in an associated company ($8,700,000). Investment and other income also decreased in 2000 due to a reduction in investment income ($11,500,000), resulting primarily from the payment of the Dividend and debt repurchases in 1999 and decreased rent income and gains from sales of real estate properties related to Fidei ($18,500,000). This decrease was partially offset by increased net gains from sales and foreclosures of various domestic real estate properties ($50,800,000), a prepayment penalty related to certain promissory notes ($7,500,000) and revenues relating to MK Gold ($12,300,000), which the Company began consolidating in the fourth quarter of 1999.
Personnel expenses increased from $13.7 million in 1994 to $16.9 million in 1995, an increase of $3.2 million or 23.4%. The increase in personnel expenses is due to staff additions in response to the volume increases in the Flood inquiry and Tracking fee based business and staff additions in the information systems departments in an effort to enhance the new systems technology.
Liquidity is a measure of a company's ability to secure sufficient cash to meet its contractual obligations and operating needs. National is a holding company with no operations and no sources of income itself except
Consolidated stockholders' equity at December 31, 1996, totaled $28.6 million or $7.33 per share compared to $32.9 million or $7.03 per share at December 31, 1995. As a result of the repurchase of the Company's common shares of stock, stockholders' equity decreased approximately $5.0 million; however, the equity per share increased approximately $.30. See Note 22 to Notes to Consolidated Financial Statements.
The Company’s results of operations for the year ended December 31, 2010 and financial condition as of such date are being restated from those previously reported. As restated, the Company is now recognizing an other than temporary impairment on certain equity securities as of December 31, 2010. The resulting impairment charge of $2,312 is reflected in realized investment gains (losses), net for the year ended December 31, 2010, resulting in a reported net realized investment loss in that period of $741 versus a previously reported net realized investment gain of $1,571 in that period. Income before income taxes, income tax expense and net income for the year ended December 31, 2010 have all been restated to reflect the impact of this impairment charge on the 2010 results of operations. Because the Company classifies its investments as available for sale, and accordingly carries them at fair value, the impact of the restatement on the balance sheet is to reduce retained earnings by $1,503 at December 31, 2010, with a corresponding reduction of the same amount in accumulated other comprehensive loss at that date. The following table presents each item within the Company’s consolidated statements of operations impacted by the restatement, including the previously reported amounts, the adjustments thereto arising from the restatements, and the reported amounts as restated.
Liabilities for life insurance future policy benefits are based upon assumed future investment yields, mortality rates, and withdrawal rates after giving effect to possible risks of unexpected claim experience. The assumed mortality and withdrawal rates are based upon the Company’s experience. The interest rates assumed for life, accident and health are generally: (i) 2.5% to 5.5% for issues prior to 1977, (ii) 7% graded to 5.5% for 1977 through 1979 issues, (iii) 9% for 1980 through 1987 issues, (iv) 5% to 7% for 1988 through 2009 issues, and (v) 4% for 2010 and 2011 issues.
The Parent’s primary insurance subsidiaries operate with relative autonomy and each company is evaluated based on its individual performance. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. All segments derive revenue from the collection of premiums, as well as from investment income. Substantially all revenue other than that in the corporate and other segment is from external sources.
Ordinary benefits and claims in 1998, 1997 and 1996 were $158.9 million, $144.3 million and $111.0 million, respectively. 1998 and 1997 included $25.6 million and $25.4 million, respectively, of benefits and claims from CUL operations. The increase each year was also the result of growth in first year and renewal business, and increased interest credited to policyholder account balances.
The Company's legal department includes a compliance area headed by an officer who is a lawyer with regulatory experience. The compliance area reviews and approves marketing material, policy filings and other areas that are the subject of market conduct compliance requirements of the various state insurance departments.
(5) Insurance Liabilities: The liabilities for future policy benefits for traditional life and accident and health contracts (which represent the excess of the present value of future benefits to be paid on behalf of or to policyholders over the present value of future net premiums) are computed by a net level premium method using assumptions deemed appropriate at the date of issue (or as of the date of acquisition for acquired blocks of business). Estimated future investment yield assumptions range from 3.75% to 8.00%; withdrawals are based on Company experience; mortality and morbidity from recognized morbidity and mortality tables are modified for anticipated company experience, with reasonable provisions for
Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without penalties.
At December 31, 1998, the Company had six stock-based compensation plans, which are described below. The Company applies Accounting Principles Board Opinion No. 25 "Accounting for Stock issued to Employees" and related interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its fixed option plans. The compensation that has been charged against income for the long-term incentive plan stock, employee stock purchase and agents stock purchase plans (in thousands) was as follows:
The Company maintains a stock purchase plan under which its agents can purchase shares of its common stock in the open market through an unaffiliated plan administrator. Pursuant to the plan, 101,353 shares had been purchased as of December 31, 1998. During the years ended December 31, 1998 and 1997, 15,307 shares and 18,930 shares, respectively, were purchased pursuant to the plan. The plan provides for monthly deductions from commissions payable by participating subsidiaries of the Company to their participating agents with a minimum monthly deduction of $500 and maximum of $2,000. The participating subsidiary contributes, at the time of each purchase, an amount equal to five percent (5%) of its agent's deduction for purchases from commissions payable.
Selected financial data on page 27 of the 1995 Annual Report to Shareholders are incorporated herein by reference.
Income from our investment portfolio is primarily comprised of interest on fixed maturity investments net of investment expenses, dividends received on our equity investments, and to a lesser extent from realized gains and losses on the sale of investments.
• High premium rate levels coupled with the relatively low levels of catastrophe/large loss frequency affecting our porfolio;
Reinsurance premiums ceded for the years ended December 31, 2003 and 2002 were $31.7 million and $41.8 million, respectively. Reinsurance purchased by the QQS syndicates with respect to the contracts in which we participate accounted for $3.2 million and $41.8 million, respectively, of the reinsurance premiums ceded during the years ended December 31, 2003 and 2002. The lower level of QQS inuring reinsurance premiums ceded in 2003 as compared to 2002 is directly related to the level of QQS gross premiums written as discussed above. As part of our reinsurance arrangements with Aspen Re which became effective in 2003, we recorded $6.6 million of inuring reinsurance premiums ceded during 2003. In addition, in 2003 we purchased retrocessional protection on our own account for our direct insurance and facultative reinsurance programs and our property reinsurance programs, excluding most Other Specialty lines in the amount of $20.5 million. The remainder of the reinsurance premiums ceded during the year ended December 31, 2003 of $1.4 million related to inuring reinsurance on some smaller programs.
Net premiums earned for the years ended December 31, 2003 and 2002 were $705.4 million and $329.9 million, respectively. Approximately 32.7% of net premiums earned during the year relates to the 2002 underwriting year and the remainder to business written in 2003.
ALCO rents a portion of its facilities from companies owned by the directors of ALCO and rents a portion of its facilities from third parties. As of December 31, 2009, ALCO leased approximately 6,084 square feet of office space for its operations. Its current leased properties are:
The Company has bank and cash equivalents of approximately $6,587,876 as at December 31, 2009. The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months. During the year end of December 31, 2009, the Company had $0 of commitments for capital expenditures and off-balance sheet arrangements as well as lease commitments of $270,324.
Under the terms of the Agreement for the Share Exchange, Lotus has agreed to acquire all of the issued and outstanding stock of AL Marine and $50,000 in a share exchange transaction, in return for the issuance of 9,766,480 shares of stock of Lotus. Upon closing under the Agreement for Share Exchange, AL Marine would become a wholly-owned subsidiary of Lotus.
In January 2010, the FASB issued guidance requiring additional disclosures regarding fair value measurements. The amended guidance requires entities to disclose additional information regarding assets and liabilities that are transferred between levels of the fair value hierarchy. This guidance also clarifies existing guidance pertaining to the level of disaggregation at which fair value disclosures should be made and the requirements to disclose information about the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. These disclosures will be effective for us beginning in the first quarter of 2010. The guidance also requires entities to disclose information in the Level 3 rollforward about purchases, sales, issuances and settlements on a gross basis. These disclosures will be effective for us beginning in the first quarter of 2011. The Company is currently evaluating this guidance to determine additional disclosures, if any, that will be required.
Expenses increased due to a $10 million charge to cancel the aggregate excess stop loss agreement for the 1999 treaty year, an increase of approximately $3.5 million in the allowance for doubtful accounts and a $0.3 million restructuring charge related to the closing of one of the Company's Health Care Division Offices.
The 9.8% growth in the surety line was primarily attributable to expanded writings of license and permit bonds, service contract bonds, customs bonds, lost instrument bonds, self insured workers' compensation bonds, landfill bonds and subdivision bonds. The growth in the Surety Division was partially offset by decrease in the contract bond business for small contractors due to price competition.
warning tool to identify, for the purpose of initiating regulatory action, insurance companies that potentially are inadequately capitalized. In addition, the formula defines minimum capital standards that supplement the current system of low fixed minimum capital and surplus requirements on a state-by-state basis. Regulatory compliance is determined by a ratio of the enterprise's regulatory total adjusted capital, as defined by the NAIC, to its authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specific corrective action. The levels and ratios are as follows:
Effective January 1, 1995, the Company entered into a stop loss reinsurance agreement with Zurich Reinsurance (North America), Inc. ("Zurich N.A."), formerly Centre Reinsurance Company of New York for accident years commencing 1995. Under the agreement, Zurich N.A. provides reinsurance protection within certain accident year and contract aggregate dollar limits for losses and LAE in excess of a predetermined ratio of these expenses to net premiums earned for a given accident year for all subject business. The loss and LAE ratio above which the reinsurance provides coverage is 66%, 65%, and 64% for accident years 1995 through 1997, respectively. The maximum amount recoverable for an accident year is 175% of the reinsurance premium paid for the accident year, or $162.5 million in the aggregate for the three years. As of December 31, 1998, the Company had exceeded the aggregate limits of the contract. (See Note I of the Notes to the Consolidated Financial Statements.)
Savers Marketing leases approximately 6,000 square feet in an office building located at 8064 North Point Boulevard, Winston- Salem, North Carolina, under the terms of a lease, which expires on September 30, 2001.
The percentage of future expected net amortization of the beginning balance of the present value of future profits before the effect of net unrealized gains and losses, based on the present value of future profits at December 31, 2000 and current assumptions as to future events on all policies in force, are expected to be between 8% and 10% in each of the years 2001 through 2005.
Variances Between Actual and Expected Profits. Actual experience on purchased and produced insurance may vary from projections due to differences in renewal premiums collected, investment spreads, mortality costs, persistency, administrative costs and other factors. Variances from original projections, whether positive or negative, are included in net income as they occur. To the extent that these variances indicate that future experience will differ from the estimated profits reflected in the capitalization and amortization of the cost of policies purchased or the cost of policies produced, current and future amortization rates may be adjusted.
Consolidated realized investment gains (losses) before income taxes 				 (2,164) 78 353
SMC's 2000 operating earnings were $7.3 million, or 89 cents per diluted share, up 40% and 37%, respectively, compared to 1999. Operating earnings increased as a result of i) increased net spread revenue due to higher weighted average insurance liabilities from growth in sales in recent periods and ii) increased fees from separate accounts due to higher weighted average separate account liabilities for the period. In addition, operating earnings were favorably impacted by the utilization of net operating loss carryforwards. These increases were somewhat offset by i) unfavorable mortality and ii) increased DAC amortization due to gross profit realization.
The following are characteristics of the Amended Credit Agreement at December 31, 2000:
Factors That May Affect Future Results SMC is subject to a number of factors affecting its business, including intense competition in the industry and the ability to attract and retain agents and employees. If SMC is unable to respond appropriately to any of these factors, business and financial results could suffer.
The following table provides the estimated changes in the liability and related payments made for the calendar years ended December 31, 2009 and 2008:
Same hospital adjusted discharges-hospitals is calculated by multiplying discharges by the sum of gross hospital inpatient and outpatient patient revenues and then dividing the result by gross hospital inpatient revenues for all hospitals owned for the full twelve months of both years presented.
Same hospital emergency room visits represent the number of patient visits to receive treatment at a hospital or freestanding emergency room owned for the full twelve months of both years presented, regardless of whether an overnight stay is subsequently required.
On January 3, 2003, in connection with the BHS acquisition, we expanded our 2001 credit facility by adding a $150.0 million term loan facility to our existing revolving loan facility. We utilized the proceeds of the $150.0 million in term loans to fund a portion of the purchase price paid to the Seller. The revolving loan facility
ILIAC is a stock life insurance company domiciled in the state of Connecticut. ILIAC and its wholly-owned subsidiaries are providers of financial products and services in the United States. ILIAC is authorized to conduct its insurance business in all states and in the District of Columbia.
We have audited the accompanying consolidated balance sheets of ING Life Insurance and Annuity Company and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
the capital structure of the borrower, the presence of guarantees, and the Company’s evaluation of the borrower’s ability to compete in their relevant market. Using this data, the model generates estimated market values, which the Company considers reflective of the fair value of each privately placed bond.
The Company also engages in reverse repurchase agreements. At December 31, 2008 and 2007, the Company did not have any reverse repurchase agreements.
The estimated amount of DAC to be amortized, net of interest, is $50.8, $59.0, $61.7, $59.6, and $58.5, for the years 2009, 2010, 2011, 2012 and 2013, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.
The State of Connecticut Insurance Department (the “Department”) recognizes as net income and capital and surplus those amounts determined in conformity with statutory accounting practices prescribed or permitted by the Department, which differ in certain respects from accounting principles generally accepted in the United States. Statutory net (loss) income was $(428.4), $245.5, and $138.3, for the years ended December 31, 2008, 2007, and 2006, respectively. Statutory capital and surplus was $1,524.6 and $1,388.0 as of December 31, 2008 and 2007, respectively. As specifically permitted by statutory accounting policies, statutory surplus as of December 31, 2008 included the impact of the $365.0 capital contribution received on February 24, 2009.
Investment Advisory agreement with ING Investment Management LLC (“IIM”), an affiliate, in which IIM provides asset management, administrative, and accounting services for ILIAC’s general account. ILIAC incurs a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2008, 2007, and 2006, expenses were incurred in the amounts of $58.4, $60.5, and $62.2, respectively.
Services agreement between ILIAC and its U.S. insurance company affiliates dated January 1, 2001, and amended effective January 1, 2002 and December 31, 2007. For the years ended December 31, 2008, 2007, and 2006, net expenses related to the agreement were incurred in the amount of $19.6, $21.7, and $12.4, respectively.
An accumulated other comprehensive loss of $2,246,575 was recorded at December 31, 1999 as a result of the unrealized losses on bonds available for sale. This was primarily attributable to the general increase in interest rates.
Beginning in 1988, the Company implemented several changes to its claims procedures including the establishment of increased levels of authority within the Claims department for approval of reserves and settlement of claims. The Company believes that these changes resulted in (i) earlier
OTHER OPERATING EXPENSES Other operating expenses increased $1.7 million, or 13.7%, to $14.3 million in 1996 from $12.6 million in 1995. This increase was principally attributable to increases in policy
The primary sources of the Company's liquidity are insurance premiums, net investment income, recoveries from reinsurers and proceeds from the maturity or sale of invested assets. Funds are used to pay losses, LAE, operating expenses, reinsurance premiums and taxes. The Company has also paid significant dividends, in the form of premium credits, to its members in each year since 1980. The Company paid $9.9 million, $9.5 million and $11.2 million of such dividends during the years ended December 31, 1996, 1995 and 1994, respectively. The Board of Governors has declared a final dividend to members of the Exchange, amounting to $9.0 million, which will be paid principally in the form of premium credits during 1997. Except for this final dividend, after the Reorganization, the Company will cease paying such premium credit dividends to its policyholders.
The Company's Financial Statements, including supplementary data, are set forth in the "Index" on page 44 hereof.
• Medical premiums generated by the Commercial business decreased by $53.4 million, or 5.7%, to $882.4 million. This fluctuation is primarily the result of a decrease in fully-insured member month enrollment by 477,997, or 8.7%, mainly in our rated groups and individual accounts products and reflecting pricing sensitivity, cancellation of several commercial accounts and attrition in existing accounts as a result of Puerto Rico’s challenging economic situation. The effect of the decreased membership is partially offset by a 3.3% year over year increase in average premium rates.
Underwriting and other expenses for the segment increased by $1.2 million, or 1.7%, to $70.0 million during the year ended December 31, 2015, mostly related to increased commissions and general expenses, expenses related to the development of the Costa Rica operations, partially offset by a lower DAC and VOBA amortization reflecting improved portfolio persistency when compared to the same period of last year. As a result of the increase in premiums during this period, the segment’s operating expense ratio improved 100 basis points from 48.3% in 2015 to 47.3% in 2015.
Given the inherent unpredictability of these matters, it is possible that an adverse outcome in certain matters could, from time to time, have an adverse effect on our operating results and/or cash flows. See “Item 3. Legal Proceedings.”
future minimum lease payments. Each of the office facilities occupied by the Company and its subsidiaries are in good condition and adequate for present operations.
The selected financial data for the five years ended December 31, 2000 under the caption "Financial Highlights" is in the 2000 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report. The information should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2000 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report.
The Company occupies office space in Shelton, Connecticut, which is leased from an affiliate, Prudential Annuities Information Services and Technology Corporation, as described under “Expense Charges and Allocations” in Note 13 to the Financial Statements.
We establish reserves for future policy benefits to, or on behalf of, policyholders in the same period in which the policy is issued or acquired, using methodologies prescribed by U.S. GAAP. The reserving methodologies used for our business include the following:
For certain reserves, such as our contracts with guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), we utilize current best estimate assumptions in establishing reserves. The reserves are subject to adjustments based on annual reviews of assumptions and quarterly adjustments for experience, including market performance, and the reserves may be adjusted through a benefit or charge to current period earnings.
Year ended December 31, (Amounts in thousands) ------------------------------ 2001 2000 1999 ------ -------- -------- Net realized investment gains (losses): Fixed maturities ...................... $4,561 $ 549 $ 67 Equity securities ..................... 1,951 3,395 (11,996) ------ -------- -------- $6,512 $ 3,944 $(11,929) ====== ======== ========
The transaction was accounted for using the purchase method of accounting, and resulted in a small amount of goodwill. As required by SFAS No. 142, the Company has assessed the asset which at December 31, 2001 was $7.3 million and determined that it is not impaired. Also, per SFAS No. 142, the Company will no longer amortize this asset after 2001. Total amortization expense in 2001 related to this asset was $0.9 million.
In addition to the commitments above, the Company will be investing approximately $10 million in 2002 for construction of a 100,000 square foot office building in Rancho Cucamonga, California. Completion of the project is projected for early 2003.
Cost of Outsourcing Services. Cost of outsourcing services increased $4.9 million, or 22.2%, to $26.9 million in 1998 from $22.0 million in 1997. The increase in cost of outsourcing services was primarily attributable to (i) increases in staffing due to the expansion of the services provided to BIG to include policy administration for certain of BIG's automobile lines of insurance, (ii) increases in information services
replacement software, conversion of data, and personnel training. Management does not expect these costs to materially adversely affect the Company's business or financial condition.
Report of Independent Certified Public Accountants. Consolidated Balance Sheets as of December 31, 1997 and 1998. Consolidated Statements of Income for the years ended December 31, 1996, 1997 and 1998. Consolidated Statement of Shareholders' Equity for the years ended December 31, 1996, 1997 and 1998. Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998. Notes to Consolidated Financial Statements.
On November 30, 2001, First Fortis Life Insurance Company ("FFLIC") acquired 100% of the issued and outstanding common stock of Bankers American Life Assurance Company ("BALAC") from American Bankers Insurance Group, Inc. ("ABIG") for a total purchase price of $32 million. FFLIC paid the purchase price in cash using internally generated working capital.
REGULATION The Company is subject to the laws and regulations established by the New York State Insurance Department governing insurance business conducted in New York State. Periodic audits are conducted by the New York Insurance Department related to the Company's compliance with these laws and regulations. To date, there have been no adverse findings regarding the Company's operations.
Infinity continually evaluates potential liabilities and reserves for litigation using the criteria established by the Loss Contingency topic of the FASB Accounting Standards Codification. Under this guidance, reserves for loss may only be recorded if the likelihood of occurrence is probable and the amount is reasonably estimable. Management considers each legal action and records reserves for losses in accordance with this guidance. Infinity believes the current assumptions and
The combined ratio improvement in the Focus States for the year ended December 31, 2008 as compared with 2007 is primarily a result of favorable development on LAE reserves in many of Infinity’s Focus States. Excluding favorable development the combined ratio in the Focus States increased in 2008 compared with 2007 primarily as a result of an increase in the loss and LAE ratio in California, Infinity’s largest state in terms of premium and underwriting profits. During 2008, Infinity took a 10.4% rate reduction as required by the new fair rate of return regulations which reduced average earned premium and increased the combined ratio. The 2008 combined ratio, excluding favorable development, did improve compared with 2007 in states such as Arizona, Florida, Pennsylvania and Texas primarily as a result of rate increases taken in the states to improve profitability.
On February 9, 2010, our Board of Directors authorized a new repurchase program for up to $400 million of ordinary shares. The authorization covers the period to March 1, 2012.
liabilities, the Company considers both the results of actuarial point estimates of loss reserves as well as the potential variability of these estimates as captured by a reasonable range of actuarial reserve estimates. In determining the appropriate best estimate, the Company reviews (i) the position of overall reserves within the actuarial reserve range, (ii) the result of bottom up analysis by accident year reflecting the impact of parameter uncertainty in actuarial calculations, and (iii) specific qualitative information on events that may have an effect on future claims but which may not have been adequately reflected in actuarial mid-point estimates, such as the potential for outstanding litigation or claims practices of cedants to have an adverse impact.
Conversely if the ultimate liabilities equate to the estimated 90th percentile, then the impact from the change in loss reserves would be to reduce net income before tax by $64.4 million (being the difference above between the selected loss reserves of $3,331.1 million and the 90th percentile value of $3,395.5 million), although the impact of such a change is again unlikely to be recognized in one calendar year.
The gross expense ratio in 2008 decreased by 0.5 percentage points when compared to 2007, mainly as a result of the reduction in profit commissions payable to policyholders which reduced from $17.9 million in 2007 to $7.3 million in 2008. The increase in operating and administrative expenses was attributable to our investment in new business lines offset by a reduction in accruals for bonus and long-term incentive charges, in addition to a weakening of the British Pound against the U.S. Dollar.
Our fixed income portfolio duration decreased from 4.6 years in 2008 to 3.3 years during 2009.
Alternative-A securities. We define Alternative-A (“alt-A”) mortgages as those considered less risky than sub-prime mortgages, but with lower credit quality than prime mortgages. At December 31, 2009, we had $9.3 million invested in alt-A securities (December 31, 2008 - $8.7 million).
As at December 31, 2009 and 2008, Aspen Holdings held $33.5 million and $32.4 million, respectively, in cash and cash equivalents which, taken together with dividends declared or expected to be declared by subsidiary companies and our credit facilities, management considered sufficient to provide Aspen Holdings liquidity at such time.
On October 6, 2009, Aspen U.K. and Aspen Bermuda entered into a $200 million secured letter of credit facility with Barclays Bank plc. All letters of credit issued under the facility will be used to support reinsurance obligations of the parties to the agreement and their respective subsidiaries. We had $53.8 million of outstanding collateralized letters of credit under this facility as at December 31, 2009.
seek to take both these factors into account when setting reserves for any events where we think they may be material.
Income from operations before surplus note interest, equity in income of subsidiaries and federal income taxes was $12,499,000 in 1994 versus a loss of $10,818,000 in 1993. The increase in income is a result of reinsurance agreements with the parent which decreased income from operations by approximately $31,327,000 in 1994 and $54,567,000 in 1993. The relatively flat change in income before reinsurance results from a combination of factors: realized losses on investments decreased by $6,237,000; mortality and expense risk charges increased by $9,357,000; general expenses increased by $8,061,000 and approximately $6,000,000 of additional surplus strain (selling costs and reserves required on new business in excess of the premium) was incurred reflecting the increased volume of new sales.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Effective January 1, 1991, the Company entered into an agreement with the parent company under which certain individual life insurance contracts issued by the parent company were reinsured by the Company on a 90% coinsurance basis. Also, effective January 1, 1991, the Company entered into an agreement with the parent company which provides that the parent company will reinsure the mortality risks in excess of $500,000 per policy for the individual life insurance contracts assumed by the Company in the reinsurance agreement described above. Such death benefits are reinsured on a yearly renewable term basis. These agreements had the effect of increasing income from operations by approximately $11,821,000 in 1995, and decreasing income by approximately $29,188,000, and $43,591,000 for the years ended December 31, 1994 and 1993, respectively.
Assets and liabilities of the separate accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contract holders are shown as separate captions in the financial statements. Assets held in the separate accounts are carried at market values.
Investments in non-insurance subsidiaries are carried at their stockholders' equity value, determined in accordance with generally accepted accounting principles. Investments in insurance subsidiaries are carried at their statutory surplus values.
In Fire Insurance the margin of profit was approximately the same as in the previous year and the result can be regarded as favourable. With the prolongation and intensifi­ cation of hostilities, losses due to sabotage which are not covered by normal fire policies but which are frequently difficult to determine, have gained in significance. In certain countries a form of cover for this risk has been introduced on a mutual basis.
The Company's Consolidated Financial Statements and Report of Independent Auditors are contained on pages 5-30 of The Liberty Corporation Annual Report to Shareholders and is filed as Exhibit 13 on pages 49-74 of this report and are incorporated in this Item 8 by reference. Quarterly Results of Operations are contained on page 23 of The Liberty Corporation Annual Report to Shareholders and is included in Exhibit 13 on page 67 of this report and are incorporated in this Item 8 by reference
Income Tax Expense. The provision for Federal income taxes for the year ended December 31, 1998 increased to $15.4 million compared with $12.2 million for the same period in 1997. The effective tax rate was 31.6% and 30.1% for the years ended December 31, 1998 and 1997, respectively. The principal factor in the decline below the statutory rate of 35% for both periods results from the benefit recognized on investments in tax-exempt securities.
Service Operations Revenue from service operations, exclusive of net investment income, increased to $33.1 million for the year ended December 31, 1997 compared to $6.9 million for the same period in 1996. The improvement reflects increases in advisory fee revenues, equity in the earnings of investee companies and the inclusion, for the first time, of profit commissions and fees from CMA operations. In March 1998, NLC notified Chartwell Advisers that it chose not to renew the Advisory Agreement after its contractual expiration on December 31, 1998. In 1997, the Advisory Agreement produced base fees of $1.7 million and a profit commission of $0.7 million for Chartwell Advisers. Following expiration of the Advisory Agreement, Chartwell Advisers will continue to earn profit commissions on the open years of account (1996, 1997 and 1998) to the extent such years are profitable.
Foreign Currency Exchange Rate Risk: Foreign currency risk is the risk that Chartwell will incur economic losses due to adverse changes in foreign currency exchange rates. This risk arises from Chartwell's international operations, debt obligations denominated in foreign currencies and foreign equity investments. At December 31, 1998, Chartwell had a net investment of approximately $33.2 million in foreign subsidiaries, $26.8 million in debt obligations denominated in foreign currencies and $3.3 million in foreign equity investments. A portion of Chartwell's reinsurance operations is denominated in international currencies, particularly the British pound sterling and the Canadian dollar. This exchange rate exposure is somewhat mitigated by investing the premiums received in currencies in which the liabilities are denominated. Based upon data as at December 31, 1998, management estimates that a 10% immediate unfavorable change in each of the foreign currency exchange rates to which Chartwell is exposed would decrease the fair value of its foreign denominated instruments by approximately $2.9 million. Chartwell's net exposure to exchange rates consist of $19.7 million to the British pound sterling, $5.3 million to the Canadian dollar and an aggregate of $3.7 million to all other foreign currencies.
Reported net premiums from specialty commercial insurance increased by 9% in 1999 compared with a 1% increase in 1998. Excluding premiums written by Executive Risk, premium growth was 4% in 1999. After adjusting 1997 reported net premiums for the effects of the termination of the reinsurance agreement with Sun Alliance, premium growth in 1998 was 3% compared with 1997.
Real estate operations resulted in a loss before taxes of $4 million in both 1999 and 1998 and $9 million in 1997, which amounts are included in the corporate and other results for those respective years.
Foreign currency risk is the sensitivity to foreign exchange rate fluctuations of the market value and investment income related to foreign currency denominated financial instruments. The functional currency of our foreign operations is generally the currency of the local operating environment since their business is primarily transacted in such local currency. We reduce the risks relating to currency fluctuations by maintaining investments in those foreign currencies in which we have loss reserves and other liabilities. Such investments have characteristics similar to our liabilities in those currencies. At December 31, 1999, the property and casualty subsidiaries held foreign investments of $1.5 billion supporting their international operations. Such foreign investments have quality and maturity characteristics similar to our domestic portfolio. The principal currencies creating foreign exchange rate risk for the property and casualty subsidiaries are the Canadian dollar and the British pound sterling. The table below provides information about those fixed maturity investments that are denominated in these two currencies. The table presents cash flows of principal amounts in U.S. dollar equivalents by expected maturity dates at December 31, 1999 and 1998. Actual cash flows could differ from the expected amounts.