felanders/preprocessed huggingface dataset:
Pension Plans and Other Postretirement Benefits. The Company sponsors a qualified defined benefit pension plan covering substantially all employees and three nonqualified defined benefit plans covering certain senior officers. In addition, the Company also has postretirement health care benefits for certain senior officers. In accordance with prescribed accounting standards, the Company annually reviews plan assumptions.
Other operating expenses totaled $21.8 million in 2006 which reflects an increase of $5.0 million due to increased compensation costs resulting from the change in liability classification for the Company’s stock option plan. Compensation costs were $0.4 million in 2005 and 2004. Expenses for 2004 reflect a reduction of $6.5 million for a charge recorded in the prior year. A $9.7 million charge was initially recorded in 2003 relating to a litigation claim which involved certain annuity products, and actual settlement payments made were $3.2 million during 2004.
The Company's overall conservative investment philosophy is reflected in the allocation of its investments, which is detailed below as of December 31, and 2005. The Company emphasizes investment grade debt securities, with smaller holdings in mortgage loans and policy loans.
In March 2004, the Emerging Issues Task Force ("EITF") reached a final consensus on Issue 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments. This Issue establishes impairment models for determining whether to record impairment losses associated with investments in certain equity and debt securities and requires expanded disclosures related to securities with unrealized losses. It also requires income to be accrued on a level-yield basis following an impairment of debt securities, where reasonable estimates of the timing and amount of future cash flows can be made. The Company's current policy has generally been to record income only as cash is received following an impairment of a debt security. The application of this Issue was required for reporting periods beginning after June 15, 2004. In September 2004, the FASB approved FASB Staff Position EITF 03-1-1, which deferred the effective date for the recognition and measurement guidance contained in EITF 03-1 until certain issues were resolved. On November 3, 2005, the FASB issued FASB Staff Position ("FSP") Nos. SFAS 115-1 and SFAS 124-1 titled The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. This FSP nullifies certain requirements of EITF 03-1 and carries forward certain requirements and disclosures. The guidance in this FSP is to be applied to reporting periods beginning after December 15, 2005. The Company has adopted the disclosure provisions and has included the required disclosures. The Company adopted FSP Nos. SFAS 115-1 and SFAS 124-1 as of the beginning of fiscal year 2006, and the FSP did not have a material impact on the consolidated financial statements of the Company.
(1) Earnings and book value per share are adjusted for the dilutive effect of stock options outstanding.
Shareholders' equity decreased to $288.4 million at December 31, 2001, from $294.0 million at December 31, 2000, including the after tax $13.0 million estimated net loss related to the events of September 11, 2001. The change in shareholders' equity also included $5.0 million of cash dividends to shareholders, a $3.9 million decrease in unrealized net gains on investments and $2.2 million in treasury share purchases. Book value per common share outstanding decreased 1% to $23.73 at December 31, 2001 from $24.01 per share at December 31, 2000.
Other operating expenses for 2001, before credits for allowances from reinsurers, decreased $.3 million (1%) to $34.4 million despite the increase in premium volume described above. Personnel related expenses, including amounts allocated to loss expenses and investment income, increased less than 1% as staff reductions occasioned by the increased use of technology substantially offset wage increases and higher employee benefit expenses. Direct commission expense decreased $.4 million (5%) primarily as the result of lower direct premiums from the Company's private passenger automobile product which carries higher commission rates than the Company's remaining products. Substantially all large fleet trucking business is produced by direct sales efforts of Baldwin & Lyons, Inc. employees and, accordingly, this business does not incur commission expense on a consolidated basis. Ceding commission allowances from reinsurers increased $4.1 million (47%), resulting from increased premium volume ceded under reinsurance agreements covering Protective's fleet trucking business. The ratio of net operating expenses of the insurance subsidiaries to net premiums earned was 24.3% during 2001 compared to 28.0% for 2000, reflecting the higher ceding commission received from reinsurers. Including the agency operations, the ratio of other operating expenses to total revenue, adjusted to remove net realized gains, was 20.6% for 2001 compared with 26.0% for 2000.
Realized net capital gains were $12.5 million in 2000 compared to $5.6 million for 1999. The current year net gain consisted of gains on equity securities of $16.0 million and losses on fixed maturities and other investments of $3.5 million.
As a result of the factors mentioned above, net income from consolidated operations for 2000 was $19.7 million compared to $18.6 million for 1999. Diluted earnings per share increased to $1.57 in 2000 from $1.38 in 1999
Third quarter, 2001 results were impacted by the Company's exposure, under certain reinsurance assumed treaties, to the events of September 11, 2001. Losses and loss expenses incurred were increased by $20,000, net loss was increased by $13,000 and earnings per share were reduced by $1.07 as the result of this event.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred losses since inception, has accumulated a significant deficit, has negative cash flows from operations, and currently has no revenues. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As of April 30, 2020, the balances owed to Copper Hill and Apple ISports, Inc. totaled $43,757.
The Company evaluated subsequent events after April 30, 2020, in accordance with FASB ASC 855 Subsequent Events, through the date of the issuance of these financial statements, and has determined there have been no subsequent events for which disclosure is required other than as set out below:
The selected historical consolidated financial data for the years ended December 31, 2017, 2016, and 2015, and as of December 31, 2017 and 2016 have been derived from the financial statements of Safety Insurance Group, Inc. included in this annual report which have been audited. The selected historical consolidated financial data for the years ended December 31, 2014 and 2013 and as of December 31, 2015, 2014 and 2013 has been derived from Safety Insurance Group, Inc.'s consolidated financial statements not included in this annual report, which have been audited.
We have prepared the selected historical consolidated financial data in conformity with U. S. generally accepted accounting principles.
Losses and loss adjustment expenses incurred for the year ended December 31, 2017 increased by $10,454, or 2.1%, to $503,887 from $493,433 for the comparable 2016 period.
(1) The fair value per share of the restricted stock grant is equal to the closing price of our common stock on the grant date.
assessment to identify impairment; (3) requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and (4) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the notes to the financial statements. These amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The extent of the impact will depend upon the nature and characteristics of the Company’s portfolio at the adoption date.
The Company had no amounts outstanding on its credit facility at December 31, 2017 or 2016. The credit facility commitment fee included in interest expense was computed at a rate of 0.25% per annum on the $30,000 commitment at December 31, 2017 and 2016.
An unaudited summary of the Company’s 2017 and 2016 quarterly performance, and audited annual performance, is as follows.
Medical benefits ratio represents medical benefits expense as a percentage of premium revenue.
Through our licensed subsidiaries, as of December 31, 2006, we operated our Medicaid plans in Florida, New York, Connecticut, Illinois, Indiana, Missouri, Georgia and Ohio and our MCC plans in Florida, New York, Connecticut, Illinois, Louisiana and Georgia. We also operate stand-alone Medicare PDP plans in all states and the District of Columbia. On January 1, 2007, we ceased offering Medicaid plans in Indiana, but began offering PFFS plans to Medicare beneficiaries in 793 counties in 39 states and Washington, D.C.
Estimation of medical benefits expense is our most significant critical accounting estimate. See “-Critical Accounting Policies.”
Medicare. For the year ended December 31, 2005, Medicare segment premium revenue increased $169.7 million, or 51%, to $504.5 million from $334.8 million for the period ended December 31, 2004. Growth in premium revenue within the Medicare segment was primarily the result of membership increases. Membership within the Medicare segment grew by 23,000 members, or 50%, from 46,000 members at December 31, to 69,000 members at December 31, 2005.
Medical benefits expense. For the year ended December 31, 2005, medical benefits expense increased $386.5 million, or 34%, to $1,512.1 million from $1,125.6 million for the period ended December 31, 2004. The increase in medical benefits expense was due to the addition of members, the mix of these members between our product lines and the demographic mix of our membership. The medical benefits ratio, which represents our medical benefits expense as a percentage of premium revenue was 81.2% for the year ended December 31, 2005 compared to 80.9% for the period ended December 31, 2004.
Interest expense. Interest expense was $13.6 million and $10.2 million for the years ended December 31, 2005 and 2004. The increase primarily relates to the additional amount of debt outstanding for the full year of 2005 and the rising interest rate environment.
Performance Unit Plan (the “PUP”). The PUP was the Company’s primary executive long-term incentive scheme, until it was exhausted at December 31, 2004. Pursuant to the terms of the PUP, at the discretion of the Compensation and Nominating Committee of the Board of the Directors (the “Committee”), performance units were granted to executive officers and certain other key employees. Performance units entitle the recipient to receive, without payment to the Company, all, double, or a part of the value of the units granted, depending on the achievement of specific financial or operating goals. Performance units vest at the end of a three-year performance cycle, and are payable in cash, common shares or a combination thereof at the discretion of the Committee.
For the year ended December 31, 2004, the majority of reinsurance premiums ceded related to retrocessional protection purchased on our own account and inuring reinsurance as part of our reinsurance arrangements with certain ceding companies. The remainder related to reinsurance premiums ceded related to QQS business. As we have not written any QQS business for the 2004 underwriting year, we have not recorded a material amount of reinsurance premiums ceded in 2004 related to this business.
Management has determined that the best estimate for gross loss and loss adjustment expense reserves at December 31, 2004, 2003 and 2002 was $549.5 million, $249.8 million and $146.1 million, respectively.
Net realized gains (losses) on investments for the years ended December 31, 2004, 2003 and 2002 were $7.2 million, $7.6 million and $7.7 million, respectively, which were due to net gains (losses) realized from the sale of fixed maturity and equity investments and a realized loss of $1.0 million during 2003 which resulted from the termination of the interest rate swap contract, cancelled simultaneously with the repayment of the term loan facility on August 4, 2003.
Prospects: The future of the market for co-signing services in the United States appears strong for a variety of factors. Vacancy rates across the country are likely to stay at high levels as renters continue moving back in with family or other roommates in order to lower costs, leaving property owners with empty units. In addition, many current homeowners are now looking to rent their own unsold properties which will create even more vacancies in the rental market. Meanwhile, current unemployment rates and personal bankruptcies will create a large number of potential renters in the future that will suffer from low FICO scores and struggle to gain approval on many lease agreements. These factors point to an increasing need in the future among property owners to fill vacancies, while many renters will likely need assistance with their poor credit in order to successfully gain approval to live in these properties. We plan to expand our operations nationwide through the WECOSIGN™ Affiliates and Associates in 2010. There are currently 18 Affiliates and 32 Associates that are working to bring in new applicants around the country, and we plan to add an additional 30 Affiliates and 40 Associates through the end of 2010. This expansion, increased online traffic, and referrals from current customers and property owners are likely to help us reach our projected goals of 100 applications per month, and a total of 300 approved applicants living in rental properties by the end of 2010. It takes an individual many years to substantially improve his or her FICO credit scores. Therefore, our market capacity will not materially shrink as the economy improves. Even if the economy improves, there will always be a need for our services since bad credit transcends all socioeconomic status.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
Cost of Revenue: Our cost of revenue was $104,350 during the twelve months ended November 30, 2009, which primarily consisted of guarantee obligations reserves for defaulting tenants, underwriting payroll, and facilities. This increase is primarily attributable to the commencement of operations.
Under the 1990 Plan and 1995 Plan, options granted to date have been nonqualified stock options which expire no later than 10 years from the date of grant. Options granted to date have been at an exercise price equal to 100% of the fair market value of the stock at the date of grant.
The accompanying notes to financial statements are an integral part of these statements.
The fair value of the Bank's financial instruments (loans and deposits) is considered to approximate book value as of September 30, 1997. This is based upon the fact that the Bank had only been operating for approximately five months during the year and there have not been any significant interest rate variances in that time period.
B. Business Experience - The following is a brief description of the business experience of each Director and Executive Officer during at least the past five years:
Martin R. Durbin - Mr. Durbin was elected Treasurer of the Company in 1996, at which time he also became its Chief Financial Officer and the Director of Financial Services. He was originally employed by USPA in 1983 and was a field agent of the Company from 1991 through June, 1995, at which time he was again employed by USPA as Assistant to the Chairman of the Board.
The Company’s limited partnership investment totaling $19.7 in Powers Ferry Properties Ltd Partnership (“PFP”), an affiliate acquired on May 12, 2005, is accounted for using the equity method, as ING USA does not have substantive kick-out or participating rights and, therefore, cannot overcome the presumption of control by the general partner of PFP. As of December 31, 2005, the Company’s remaining investments in limited partnerships are generally considered variable interest entities under FIN 46R, and are accounted for using the cost or equity methods of accounting since the Company is not the primary beneficiary. Investments in limited partnerships are included in Other investments on the Balance Sheets.
FAS No. 155 is effective for all instruments acquired, issued, or subject to a remeasurement event, occurring after the beginning of the first fiscal year that commences after September 15, 2006. The Company is in the process of determining the impact of FAS No. 155.
Embedded derivatives within fixed maturity instruments are included in Fixed maturities on the Balance Sheets, and changes in fair value are recorded in Net realized capital gains (losses) in the Statements of Operations.
Reserves for deferred annuity investment contracts and immediate annuities without life contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon. Reserve interest rates varied by product up to 8.0% for 2005, 2004, and 2003.
Separate account assets supporting variable options under variable annuity contracts are invested, as designated by the contractowner or participant under a contract, in shares of mutual funds which are managed by the Company or its affiliates, or in other selected mutual funds not managed by the Company or its affiliates.
Separate account assets and liabilities are carried at fair value and shown as separate captions in the Balance Sheets. Deposits, investment income, and net realized and unrealized capital gains and losses of the separate accounts, however, are not reflected in the Statements of Operations (with the exception of realized and unrealized capital gains and losses on the assets supporting the guaranteed interest option). The Statements of Cash Flows do not reflect investment activity of the separate accounts.
The Company incurred amortization expense of the negative ceding commission of $14.2 for the year ended December 31, 2005, which is included in Other expenses in the Statements of Operations.
Pretax unrealized holding (losses) gains arising during the year were $(108.2), $(41.2), and $193.7, for the years ended December 31, 2005, 2004, and 2003, respectively.
Our revenues during the year ended December 31, 2008 in the amount of $21,799 represent investment income on the amounts American LAC retained on deposit which represented its statutory capital. As described elsewhere herein, we have discontinued the operations of and dissolved our American LAC subsidiary and the statutory capital of $512,000 plus accrued interest of $6,741 was released by the Arizona Department of Insurance to us during May 2008. Upon our receipt thereof, we used $359,200 to repay the obligations outstanding under the line of credit extended to us by our principal shareholder. We did not report any investment income during the year ended December 31, 2009.
Health Care Assurance Company, Ltd., our wholly-owned subsidiary, holds $0.2 million of our cash. The transfer of cash to MHP from Health Care Assurance Company, Ltd. requires the approval of regulatory authorities.
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents. Our funds are managed within the guidelines established by the board of directors, which, as a matter of policy, limit the amounts that may be invested in any one issuer. As of December 31, 2005, we believe that we had no significant concentrations of credit risk in our cash equivalents.
We have operating leases for certain equipment. The lease for our office space is on a month-to-month basis. Rental expense is recognized on a straight-line basis and totaled $27,000, $142,000 and $200,000 for the years ended December 31, 2005, 2004 and 2003, respectively.
As of December 31, 1996, Holdings had invested $3,702,501 in the Company through the purchase of 3,600,000 shares of the Company's Convertible Preferred Stock, Series B (the "Series B Preferred") and 102,501 shares of the Company's Common Stock. On March 31, 1997, Holdings increased its investment in the Series B Preferred to $5,100,000 funded by part of the proceeds of the "second" closing with TIG (see "Business Developments").
Effective October 1, 1995, the Fund entered into a 70% proportional quota-share reinsurance treaty with Underwriters which was assigned to the Company in December, 1995. Under the terms of the agreement, the Company cedes 70% of its net written premium to Underwriters with Underwriters assuming 70% of the Company's retained losses and loss adjustment expenses. To cover the costs of underwriting, Underwriters reimburses the Company for certain direct expenses incurred and pays the Company a ceding commission to cover other general expenses. Premium ceded for the three months ended December 31, 1995 amounted to approximately $4.5 million. Expense reimbursements and commissions amounted to approximately $1.4 million.
The Company's capital resources represent funds deployed or available to be deployed to support business operations and consist of common and preferred shareholders' equity. Table #10 on Page 33 summarizes the Company's GAAP capitalization as of December 31, 1996 and December 31, 1995 compared to the Fund's GAAP surplus as of December 31, 1994.
The Company has entered into a total 70% proportional quota share reinsurance contract with TIG and Underwriters and has granted TIG and Underwriters a continuing interest in such arrangements for so long as Holdings' debt is unpaid and for a lesser period in the case of Underwriters, respectively.
Holdings has granted Underwriters options to purchase the equivalent of up to an approximate 5% interest in Holdings common stock and has sold approximately 44% of its common stock to TIG.
Quota-share arrangements are a necessary feature in the Company's business plan with a continuing need for such arrangements forecasted in the Company's five year financial plan. In order for the Company to write new business, the Company must satisfy the writing ratio requirements of the Florida Insurance Code. The quota-share arrangements facilitate growth in the Company by maintaining these ratios above statutory minimums.
uncertainties and estimates related to the valuation of life insurance policy assets reflected on our financial statements.
As part of the redemption the Trust redeemed 6,526,269 units for $1.2 million from the Life Partners Creditors’ Trust. The Life Partners Position Holder Trust and the Life Partners Creditors’ Trust share the same Trust Governing Board. The redemption was executed to reduce the administrative burden of the Life Partners Position Holder Trust and to facilitate the expected termination of the Life Partners Creditor’s Trust. The units were redeemed at the same price per unit as all other redemptions performed at the same or similar time and in line with the Motion approved by the U.S. Bankruptcy Court for the North District of Texas.
In year ending December 31, 2019 the Trust did two partial redemptions of all remaining notes totaling 4/15th of the outstanding balance of those notes and the Trust redeemed in full all New IRA Notes having an outstanding balance of $7,500 or less. The amount paid in connection with the redemption was $11.6 million and only funds set aside in a sinking fund established pursuant to the Bankruptcy Plan for that purpose was used. Accrued interest on all New IRA Notes through the redemption dates was paid as well.
The amount of $422.0 million represents the estimated total future premiums payable by the Trust. The Trust is required to pay its portion to keep the life insurance policies in force during the life expectancies of all the underlying insured lives. The estimated total future premium payments could increase or decrease significantly to the extent that insurance carriers increase the cost of insurance on their issued policies or that actual mortalities of insureds differ from the estimated life expectancies. If the continuing fractional holders default on their future premium obligations, the Trust’s premium liability may increase.
The following management's discussion and analysis for the year ended December 31, 1995 excludes the acquisition of Capital Investors Life Insurance Company and Greer-Wilson Funeral Home.
Based on preliminary information, the Company plans to hold its fixed income securities, including high-yield securities, in its portfolio to maturity. Business conditions, however, may develop in the future which may indicate a need for a higher level of liquidity in the investment portfolio. In that event the Company believes it could sell short-term investment grade securities before liquidating high-yielding longer term securities.
The Company is subject to risk based capital guidelines established by statutory regulators requiring minimum capital levels based on the perceived risk of assets, liabilities, disintermediation, and business risk. At December 31, 1995 and 1994, the life subsidiary exceeded the regulatory criteria.
The accompanying consolidated financial statements include the accounts and operations of the Company. The Company's wholly-owned subsidiaries at December 31, 1995, are as follows:
Consolidated revenues increased by 12%, UnitedHealthcare revenues increased 12% and Optum revenues grew 11%.
Revenue and earnings from operations increased at OptumHealth primarily due to organic and acquisition-related growth in care delivery and behavioral health, digital consumer engagement and health financial services.
Share Repurchase Program. As of December 31, 2018, we had Board authorization to purchase up to 94 million shares of our common stock. For more information on our share repurchase program, see Note 10 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
The Company’s estimate of medical costs payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2018.
Other current liabilities include health savings account deposits ($7.5 billion and $6.4 billion as of December 31, 2018 and 2017, respectively), deposits under the Medicare Part D program, the RSF associated with the AARP Program, accruals for premium rebate payments under the ACA, the current portion of future policy benefits and customer balances.
The Company held $2.0 billion of equity securities as of December 31, 2018 and December 31, 2017. The Company’s investments in equity securities primarily consist of employee savings plan related investments, Brazilian real denominated
The Company’s unrealized losses from all securities as of December 31, 2018 were generated from approximately 19,000 positions out of a total of 31,000 positions. The Company believes that it will collect the principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. At each reporting period, the Company evaluates securities for impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. As of December 31, 2018, the Company did not have the intent to sell any of the securities in an unrealized loss position. Therefore, the Company believes these losses to be temporary.
The Company has $3.5 billion five-year, $3.5 billion three-year and $3.0 billion 364-day revolving bank credit facilities with 26 banks, which mature in December 2023, December 2021 and December 2019, respectively. These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of December 31, 2018, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. If amounts had been drawn on the bank credit facilities as of December 31, 2018, annual interest rates would have ranged from 3.2% to 3.6%.
During the year ended December 31, 1997 and 1996, investment income before capital gains was $408,050 and $403,919, respectively. Realized gains, net of realized losses, for the year ended December 31, 1997 and 1996 were $201,863 and $117,824, respectively. Investment income remained consistent for 1997 as compared to 1996.
The Company s effective tax (benefit) rate was -0- percent for 1996 and 1995. The deviation from statutory rates for 1996 and 1995 primarily relates to the Company s establishment of a valuation allowance on a portion of the net operating loss, the future realization of which is uncertain.
Incurred losses during the current year, net of reinsurance . . . . . . . . 1,792,117 1,670,640 1,245,546
Allowance for doubtful accounts 0 113,120 113,120 ========== ========== ========== ========== ==========
Deferred income tax valuation allowance . . . . $ 695,269 $ $ $ 187,853 $ 507,416 ========== ========== ========== ========== ========== /TABLE
Revenues from independent agencies decreased $140.3 million, or 13.4%, in 2014 and increased $39.0 million, or 3.9%, in 2013 compared to 2012. Revenues from independent agencies fluctuate based on the same general factors that influence revenues from direct title operations. Although we do not specifically know our agents’ order composition, we believe the proportion of their orders from refinancing transactions was higher than previously thought and higher than in our direct operations. Therefore, the decline in independent agency revenue relative to direct revenue is largely due to this higher proportion of refinancing transactions than in our direct operations, and, in 2014, the contribution of the acquisitions to our direct offices as well as agency revenue that is now recorded as direct revenue due to those acquisitions. Consistent with our strategy for this channel, our focus is on increasing profit margins in every state, increasing premium revenue in states where remittance rates are above 20%, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, remittance rates and risk mitigation.
In 2014, investment and other gains (losses) - net included realized gains of $5.6 million from the reduction in the fair value of a contingent consideration liability, $3.8 million from the sale of a business and $1.1 million from the sale of debt and equity investments available-for-sale, partially offset by charges of $1.9 million relating to office closure costs, $1.6 million relating to the impairment of an intangible asset and $1.0 million relating to the impairment of a cost-basis investment.
In our mortgage services segment, total employee costs as a percentage of operating revenue decreased to 63.5% from 65.0% in 2013. Actual costs increased $39.9 million, or 50.3%, in 2014. The employee costs were impacted by the increase in employees related to the 2014 acquisitions as well as the new service offering and contract. In 2013, actual costs increased $2.4 million, or 2.2%, primarily due to staff being retained while new contracts were solicited after existing contracts had expired. It was important to retain the knowledge base for servicing the new contracts. New contracts generally require several months to reach steady-state revenues and normalized margins.
Contractual obligations. Our material contractual obligations at December 31, 2014 were:
In 2013, net unrealized investment losses of $8.9 million, which increased our other comprehensive losses, were primarily related to temporary decreases in fair values of corporate, municipal and government bond investments, partially offset by increases in fair values of equity securities and deferred taxes. Changes in foreign currency exchange rates, primarily related to our Canadian operations, increased other comprehensive loss by $6.8 million, net of taxes, in 2013.
o the length of time and the extent to which the fair value has been less than cost, o the financial condition and near-term prospects of the issuer, o whether the debtor is current on contractually obligated interest and principal payments, and o the intent and ability of the Company to retain the investment for a period of time sufficient to allow for any anticipated recovery.
The Company's costs of new business produced, principally commissions, certain policy issue and underwriting expenses and certain variable agency expenses, are deferred and amortized over the estimated lives of the policies. The unamortized deferred costs are recorded on the Company's balance sheet as an asset referred to as deferred policy acquisition costs. The Company's deferred policy acquisition costs asset was $187.6 million at December 31, 2002.
Commissions. Commission expense increased $4.4 million, or 102.3%, to $8.7 million for the year ended December 31, 2001 from $4.3 million for the year ended December 31, 2000. The increase in commission expense in 2001 included an additional $1.4 million of expense accrued for commission bonus plans. In addition, commission expense was higher in 2001 as compared to 2000 due to the receipt in 2000 of approximately $1.5 million of nonrecurring reimbursements under reinsurance agreements, which reduced commission expense in 2000. These reimbursements were offset by higher ceded premiums on the same reinsurance agreements in 2000.
The principal sources of liquidity for the Company's insurance subsidiaries are premium and deposit receipts, net investment income received and net proceeds from investments that have been sold or matured or from mortgage loans that have been repaid. Cash flows from premiums received and investment income are generally sufficient to meet the subsidiaries' obligations, which consist of the payment of claims and benefits on insurance policies, purchases of investments and the payment of operating expenses. Although there is no intent to dispose of investments at this time, the Company's investments are predominantly in readily marketable securities.
The primary risk associated with the Company's MBS portfolio is that a changing interest rate environment might cause prepayment of the underlying mortgages at prepayment rates different than anticipated at the time of their purchase. Increases in prepayment speeds, which typically occur in a decreasing interest rate environment, generally increase the rate at which discount is accreted and premium is amortized into income. Decreases in prepayment speeds, which typically occur in an increasing interest rate environment, generally slow down the rate at which these amounts are recorded into income. The degree to which a security is at risk to either increases or reductions in yield is influenced by the difference between the Company's carrying value of the security and its par value, the relative sensitivity of the underlying mortgages to prepayment in a changing interest rate environment and the repayment priority of the securities in each securitization structure.
We have pleasure in laying before you the sixty-fourth Annual Report and Accounts for the year 1927.
Maintaining a combined ratio below 100%, which indicates that the company is making an underwriting profit, depends upon many factors including hurricane activity in the Gulf of Mexico, strict underwriting of risks, and adequate and timely premium rates. A major hurricane, such as Opal, hitting the coast of Alabama, Georgia, South Carolina, Mississippi, Louisiana, or Texas could cause the combined ratio to fluctuate materially from prior years. The fire & casualty subsidiary maintains catastrophe reinsurance to minimize the effect of a major catastrophe.
Omega One Insurance Company (property/casualty insurer), which began writing business in late 1995, has regulatory adjusted capital of $4.4 million and $5.2 million at December 31, 1997 and 1996, respectively, and a ratio of regulatory total adjusted capital to authorized control level RBC of 5.2 and 10.6 at December 31, 1997 and 1996 respectively. Accordingly, Omega One Insurance Company meets the minimum RBC requirements.
As of December 31, 1997 and 1996, the fair value of policy loans approximated their carrying amount of $648,000 and $622,000, respectively.
Net increase (decrease) in unrealized appreciation on available-for-sale securities before deferred income tax .... $ 6,266 $ 1,340 $ 3,356 Deferred income tax ......................... (1,711) (372) (630) ------- ------- ------- Net increase (decrease) in unrealized appreciation on available-for-sale securities ............................... $ 4,555 $ 968 $ 2,726 ------- ------- -------
Birmingham, Alabama February 20, 1998 Dudley, Hopton-Jones, Sims & Freeman PLLP
For further discussion of the components driving the Company’s financial indicators refer to the “Results of Operations” sections below.
Net premiums earned for the three months ended December 31, 2016 were $174.5 million compared to $203.9 million for the three months ended December 31, 2015, a decrease of $29.4 million or 14.4%. The decrease was driven primarily by the decline in gross premiums written in the marine lines and slower earnings patterns on longer-term contracts in the specialty lines during the twelve months ended December 31, 2016. Also contributing to the decrease was the impact of reinstatement premiums payable during the three months ended December 31, 2016.
Underwriting loss for the three months ended December 31, 2016 was $1.4 million compared to income of $36.1 million for the three months ended December 31, 2015, a decrease of $37.5 million, or 104.0%.
Results of Operations - Fourth Quarter 2016 - Western World Segment
The change in net unrealized losses on managed investments for the three months ended December 31, 2016 was $67.7 million compared to $34.5 million for the three months ended December 31, 2015, an unfavorable movement of $33.2 million, or 96.1%. The unfavorable movement was primarily driven by an increase in interest rates during the three months ended December 31, 2016.
The Company issued $150.0 million of preferred shares in June 2016. Dividends paid on preferred shares were $2.2 million for the three months ended December 31, 2016.
Gross premiums written for the year ended December 31, 2015 were $2,557.5 million compared to $2,358.9 million for the year ended December 31, 2014, an increase of $198.6 million, or 8.4%. The increase in gross premiums written was primarily driven by an increase in the Western World, AlphaCat and Validus Re segments and was partially offset by a decrease in the Talbot segment.
A decrease in gross premiums written in the property lines of $74.4 million, primarily due to a reduction in business written in the catastrophe excess of loss lines driven by reductions in participation on various programs due to market conditions; and
Losses and loss expenses for the year ended December 31, 2015 were $458.0 million compared to $307.3 million for the year ended December 31, 2014, an increase of $150.7 million or 49.0%, primarily as a result of an increase in attritional losses and losses from notable loss events during the year ended December 31, 2015.
Gross premiums written for the year ended December 31, 2016 were $970.7 million compared to $1,018.8 million for the year ended December 31, 2015, a decrease of $48.1 million, or 4.7%. The decrease in gross premiums written was primarily driven by:
Policy acquisition costs for the year ended December 31, 2016 were $177.1 million compared to $187.5 million for the year ended December 31, 2015, a decrease of $10.4 million, or 0.3 percentage points of the policy acquisition costs ratio.
We have adopted the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of a change in tax rates.
Operating income from our administrative services segment nearly doubled in 2000 compared to 1999, primarily as a result of the acquisitions of American Insurance Administration Group, Inc. in January 2000 and CHCS in August 2000.
Commissions and general expenses increased by approximately $5.5 million or 32% in 2001 compared to 2000. The following table details the components of commission and other general expenses:
Other than the lease obligations noted above, we do not have any contractual or other commitments involving off-balance sheet arrangements.
Cash generated by our insurance company subsidiaries will be made available to our holding company, principally through periodic payments of principal and interest on surplus notes. As of December 31, 2001, the principal amount of surplus notes owed to our holding company from our American Exchange subsidiary totaled $70 million. The notes pay interest to our parent holding company at LIBOR plus 375 basis points. We anticipate that the surplus notes will be primarily serviced by dividends from Pennsylvania Life, a wholly owned subsidiary of American Exchange, and by tax-sharing payments among the insurance companies that are wholly owned by American Exchange and file a consolidated Federal income tax return. During 2001, American Exchange paid $5.7 million in interest on the surplus notes to our parent holding company and paid $7.2 million in 2000. No principal payments were made during 2001 or 2000.
Premiums earned increased by 2.4% in 2000 to $6,544,342 from $6,388,323 in 1999. Premiums earned for 1999 increased by 8.2% from $5,901,939 reported in 1998. In 2000, 1999, and 1998 premiums earned includes $0, $182,959 and $131,250, respectively resulting from reductions in the ultimate estimated premium ceded pursuant to retrocession agreements in effect during 1989 through mid-1993. Ultimate premiums are dependent on loss experience under the agreements and are reevaluated as ultimate losses are reevaluated.
AIG continues to invest in high grade debt and equity securities.
During 2000, 1999 and 1998, the Board of Directors declared quarterly dividends of $0.65 per share totaling $855,681, $863,289 and $865,587, respectively. Continuation of quarterly dividend payments is subject to the Board of Directors' continuing evaluation of the Company's level of surplus vis a vis its capacity to accept more business. It is an objective of the Company to build surplus in anticipation of the next "hard market", that is to say, the next period in which accountants' professional liability insurance becomes difficult or impossible to obtain at reasonable prices, and to retain flexibility for any future business expansion.
Interest rate risk results from the Company's holdings in interest-rate- sensitive instruments. The Company is exposed to potential losses arising from changes in the level of volatility of interest rates on fixed rate instruments held. The Company is also exposed to credit spread risk resulting from possible changes in the issuer's credit rating. To manage its exposure to interest rate risk the Company attempts to select investments with characteristics that match the characteristics of the related insurance liabilities. Additionally, the Company generally only invests in higher-grade interest bearing instruments.
The increase in direct and assumed premiums written in 1999 was primarily due to the acquisitions of Anesthesiologists Professional Assurance Company ("APAC") and Tenere, which added $6.1 million and $6.2 million, respectively, and additional assumed premiums written of $12.1 million associated with the Company's participation as an assuming reinsurer of PRI.
The Partnership's investment policy allows up to 30% investment in cash and short-term obligations, although the Partnership generally holds approximately 10% of its assets in cash and short-term obligations. At December 31, 2001, 11.3% of the Partnership's assets consisted of cash and cash equivalents.
The Partnership made $22 million in distributions to the Partners during 2000, and on October 22, 2001, the Partnership made an $18 million distribution to the partners. Distributions made to the Partners during 2001 were based upon the percentage of assets invested in short-term obligations, taking into consideration anticipated cash needs of the Partnership including potential property acquisitions, property dispositions and capital expenditures. Management anticipates that its current liquid assets and ongoing cash flow from operations will satisfy the Partnership's needs over the next twelve months and the foreseeable future.
Dividend income from real estate investment trusts amounted to approximately $2.2 million for the twelve months ended December 31, 2001, an increase of approximately $0.5 million, or 23.7%, from approximately $1.7 million in the corresponding period in 2000. This increase was primarily due to an increase in the amount invested in REIT stocks subsequent to the 3rd quarter 2000.
Approximately half of the $3.3 million net unrealized loss in 1999 was attributable to the office building located in Oakbrook Terrace, IL, which experienced costs associated with re-leasing and expected vacancy resulting from the lease termination exercised by a tenant. The Beaverton, OR office property also experienced a net unrealized loss of approximately $0.8 million. This decline in value was partially attributable to an anticipated reduction in investor demand for suburban office properties. The Lisle, IL office property also experienced a net unrealized loss of approximately $0.7 million primarily due to capital expenditures on the property that were not reflected as an increase in market value.
As described above, the estimated market value of real estate and real estate related assets is determined through an appraisal process. These estimated market values may vary significantly from the prices at which the real estate investments would sell since market prices of real estate investments can only be determined by negotiation between a willing buyer and seller. Although the estimated market values represent subjective estimates, management believes these estimated market values are reasonable approximations of market prices and the aggregate value of investments in real estate is fairly presented as of December 31, 2001 and 2000. Further discussion surrounding our policies and procedures for valuing Real Estate Investments can be found in Footnote 2 to the Consolidated Financial Statements.