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_Peat Marwick LLP
225 Markol Slrool
Suilo 300
P,O, Box 1190
Harrisburg, PA 17108,1190
Independent Auditors' Report
The Board of Directors
Aegis Security Insurance Company:
We have audited the accompanying statutory statements of admitted assets, liabilitics, and capital and
surplus of Aegis Security Insurance Company as of December 31, 1996 and 1995. and the related
statutory statements of income, capital and surplus. and cash flow for the years then ended. 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.
We conducted our audits of the accompanying statutory financial statements in accordance with
generally accepted auditing standards. Thosc standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts anc disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We
believc that our audits provide a reasonable basis for our opinion.
As described more fully in note I to the financial statements, these financial statements were prcpared
in conformity with accounting practices prescribed or permitted by the Insurance Department of the
Commonwealth of Pennsylvania, which is a comprehensive basis of accounting other than generally
accepted accounting principles.
In our opinion, the financial statements referrcd to above present fairly, in all material respects, the
admitted assets, liabilities, and capital and surplus of Aegis Security Insurance Company as of
December 31. 1996 and 1995, and its income and its cash flow for the years then ended. on the basis
of uccounting described in note 1.
This report is intended solely for the information and use of the Board of Directors and management of
Aegis Security Insurance Company and for filing with insurance regulatory agencies and should not be
used for any other purpose.
(pM.6 ItA ~l,~
April 11, 1997
IIII M,,,",';,mo"PMG
AEGIS SECURITY INSURANCE COMPANY
Statutory Statcmcnts of Admitted Asscts, Liabilities,
and Capital and Surplus
December 31, 1996 and 1995
Admllled Assets 1996 1995
Bonds, at amortized cost (approximate market value $8,682,725
and $9,644,350) $ 8,324,366 9,172,513
Slocks, at slatemenl value:
Preferred, at market value (cost $1,548,194 and $1,393,948) 1,560,738 1,440,675
Common, at markel value (cost $4,080,416 and $3,507,(03) 4,024,095 3.589.909
Subsidiaries, at equity (cost $1,657,900 and $1,657,9(0) 2,220,155 2,480,345
Mortgage loans on real estate 336,622 858,844
Real estate, nel:
Occupied by Company 277,947 290,460 .
[nveslment 1,443,264 1.441.770
1.721.211 1.732,230
Cash and short-term investments (includes interest-
bearing accounts of $8,726,974 and $5.495,013) 7.341,039 4,271,093 .
Net investment in leases 742,384
.
Total cash and invested assets 25,528,226 24,287.993
Premiums in course of collection: .
Affiliates (net of ceded reinsurance balances payable
of $0 and $38,541) 1,175,315 919,210
Other (net of ceded reinsurance balances payable
of $1,204,365 and $1,105.956) 1,928,268 1,336,650
Data processing equipment, net 58,067 132,390 .
Reinsurance (eeovorable on loss and loss adjustment expense payments 1,809,505 1,002,285
Federal income tax recoverable 147,362 114,362
Accrued investment income 169,945 202,114
Accounts (eceivable - affiliate 52,062 80,821
$ 30,868,750 28.075,825 .
See accompanying notes to statutory financial statements,
2
.
.
AEGIS SECURITY INSURANCE COMPANY
Stalulory Statcmenls of Admiltcd Assels, Liabililies,
and Capital and Surplus
Llabllllles and Capital and Surplus 1996 1995
Losses $ 3,545,798 2,254.152
Loss adjustment expenses 804,131 718,133
4,349,929 2,972,285
Contingent commissions 52,087 162,300
Accrued taxes, licenses, and fees 288,806 271,347
Accounts payable and accrued expenses 593,152 7 14,484
Unearned premiums 10,045,425 9,790,545
Amounts withheld for accounts of others 9.860 56,429
Payable to subsidiaries 1.346,906
Total liabilities 16.686,165 13,967.390
Capital and surplus:
Common stock, par value $1 per share; authorized,
issued and outstanding 3,000,000 shares 3,000,000 3,000,000
Paid-in surplus 1,700,000 1,700,000
Unassi~ned surplus 9.482.585 9,408,435
Total capital and surplus 14,182,585 14,108.435
$
30,868,750
28,075,825
3
AEGIS SECURITY INSURANCE COMPANY
,
,
I
i '
i'(.:
Statutory Statemcnts of Income
\ 'I
Y cars ended Dccembcr 31. 1996 and 1995
/,
,
,
1996 1995
Underwriting income (loss):
Net premiums earned $ 24,643,722 25,091,743
Expenses:
Net losses Incurred 12,646,991 12,388.794
Net loss adjustment expenses incurred 2,127,668 2,0 I 8,456
Net commissions and brokerage 5,435.910 4,433,255
Other underwritin~ expenses 5,657,417 5,906.663
25,867.986 24.747,168
Net underwritln~ income (loss) (1.224.264) 344,575
Investment income:
Interest 891,222 1,010,226
Dividends 354,508 336,755
Real estate (includes Company occupancy of home office of $60.(00) 82,500 82.500
1,328,230 1,429,481
Investment expenses 196.884 209.275
1,131,346 1,220,206
Net realized capital ~ain 510.591 191.459
Net investment income 1.641.937 1,411.665
Other income:
Finance and service charges 99,331 47,874
Miscellaneous 18,665 17.990
117,996 65.864
Income before federal Income tox 535.669 1,822,104
Federal Income tox 27.921 344,513
Net income $ 507.748 1.477.591
See accompanying notes to statutory financial statements.
;,
"
4
AEGIS SECURITY INSURANCE COMPANY
Statutory Slatemcnts of Capital and Surplus
Years ended Deccmbcr 31,1996 and 1995
Common J'aid.ln Unassigned
stock surplus surplus Tolal
Balance, January I, 1995 $ 3,000.000 1 ,700,000 7.365.523 12,065,523
Nel income 1.477.591 1,477,591
Net unrealized capllal gain 565.321 565,321
Balance, December 31, 1995 3,000,000 1.700,000 9.408,435 14.108,435
Net income 507.748 507,748
Net unrealized caphalloss (413.598) (433.598)
Balance, December 31, 1996 $ 3,000.000 1,700,000 9.482.585 14.182,585
See accompanying noles 10 slatutory financial stnlemenlS,
5
AEGIS SECURITY INSURANCE COMPANY
Statutory Statcmcnts of Cash Flows
Ycars cndcd Deccmber 31. 1996 and 1995
Cash and shon-Ienn inveslmenls from operations:
Premiums collected, net
Loss and loss adjustment expenses paid. net
Underwriting expenses paid
Cash provided from underwriting
Net inveslmenl income
Other (loss) income
Federal income laxes paid
Net cash and shon-tenn investments (applied to) provided
from operations
Cash and shon-tenn investments from invest men IS:
Proceeds from investments sold or matured:
Bonds
Stocks
Mongage loans
Other invested assets
Total investment proceeds
Cost of investments acquired:
Bonds
Stocks
Mongage loans
Real estate
Other invested assets
Total investments acquired
Net cash provided from (applied to) investments
Cash and shon-Ienn investments from financing and miscellaneous sources:
Other cash and shon-tenn investments provided:
Net transfers from subsidiaries
Other cash provided
Tolal other cash and shon-tenn investments provided
Other cash and shon-tenn investments applied:
Net transfers 10 affiliates
Total other cash and shon.tenn investments applied
Net cash and shon-tenn inveslments provided from
financing and miscellaneous sources
Net, change in cash and shon.term investments
Cash and shon-tenn investments:
At beginning of year
At end of year
See accompanying notes to statutory tinancial statements.
6
1996
$ 24,050,879
(14,204.232)
(11,178,300)
(1,331.653 )
1,156,438
(57,768)
(60,921)
(293,904)
2,064,350
4,867,928
2,008,552
761,472
9.702.302
1,192,253
5,089,272
1,486,330
1,495
19,088
7.788,438
1.913.864
1.375,665
74,321
1,449,986
\,449.986
3,069,946
$
4,271.093
7.341.039
1995
25,225,761
(14.907,415)
(10,903,810)
(585,464)
1,194,133
65,864
(622,181)
52.352
797,308
9,724,493
1,190,512
400.764
12,\ 13,077
837,066
10,231,675
1,139,494
1,444
609,270
12.818.949
(705.872)
208,554
208,554
2,816
2,816
205.738
(447,782)
4.718,875
4.271.093
AEGIS SECURITY INSURANCE COMPANY
Notes to Statutory Financial Statcments
Deccmber 31. 1996 and 1995
(1) Summary of Significant Accounting Policies
Description of Business
Aegis Security Insurance Company writes propcrty and liability insurance and is Iiccnsed in 46
states. Products arc offered through independent insurance agents, two of which represcnt
37% of the Company's direct premium written for thc year endcd December 31, 1996.
Principles of Accounting
The accompanying financial statements have been prepared in conformity with accounting
practices prescribed or permitted by the Insurance Department of the Commonwcalth of
Pennsylvania. The Company has been examined by the Department of Insurance of the
Commonwealth of Pennsylvania through the five years ended December 31, 1995 without
adjustment.
Investments
'"",
Bonds and stocks are valued in accordance with valuations prescribed by the National
Association of Insurance Commissioners. Generally, bonds are carried at cost, adjusted where
appropriate for amortization of premium or accrual of discount computed on a straight-line
basis; stock of the Company's subsidiaries arc carried at their equity and all other stocks arc
carried at quoted market value with thc net unrealized gain or loss included in unassigned
surplus, Realized investment gains and losses arc reported in the statement of income based
upon the specific identification of securities sold.
Mortgage loans are carried at their unpaid principal balance.
Real estate occupied by the Company is carried at cost less accumulated depreciation while real
estate held for investment is carried at the lower of cost or market. Maintenance, repairs, and
minor renewals are charged to expense as incurred while expenditures which substantially
increase the useful life of the asset are capitalized, Depreciation is provided by using both the
straight-line and accelerated methods for financial reporting and accelerated methods for income
tax purposes,
Short-term investments include those securities which when purchased arc due to mature
within one year.
Leases, which are classified as sales-type leases, expire over the next three years, and relate to
various types of copying equipment. Leases have been assigned to the Company, with
recoursc, by a former affiliate,
Premium Revenue Recognition
t.J
Premium income is recognized in earnings over the periods covered by the policies, whereas
the related acquisition and commission costs arc expensed when incurred.
(Continued)
7
'"'
AEGIS SECURITY INSURANCE COMPANY
Notes to Statutory Financial Statemcnts
(I) Continued
Losses and Loss Adjustment Expenses
Thc liability for losscs includcs thc net amount for claims, aftcr deducting appropriate
reinsurance rccoveries, which havc been rcported to the Company and arc unpaid at stUlcment
date as well as provision for claims incurred but not rcportcd at statcment datc. The provision
for claims incurrcd but not rcported amounted to $350,038 and $430,650 at Deccmber 31.
1996 and 1995. respectivcly.
The liability for loss adjustment expenses is based upon the rclationship of paid adjustment
expenses to paid losses and includes provision for incurrcd but not reported adjustment
expenscs of $462,25 I and $494.619 at Dccember 31. 1996 and 1995, respcctively.
Salvage and subrogation are recordcd on a cash basis.
Managcment belicves that thc liabilities for losses and loss adjustment cxpenses at
Deccmber 31. 1996 are adequate to cover the ultimate net cost of losses and claims to date,
The liability for loss adjustment expenses is applicd as a percentage of the liability for losses
based on an annual ratio of paid adjustment expense to paid losses by line of business.
Projections of future ultimate losses and loss expenses are inherently unccrtain because of the
random nature of claims occurrences. They are also dependent upon future contingent events
and are affected by economic, legal. political. and social factors. These liabilities are subject to
continuing review by management and changcs in cstimales are reflected in earnings currently.
The chance of material liability from toxic lort and environmental impairment claims is remote,
as reported claim activity levels arc minimal and the Company primarily writes mobile
homcowners and small commercial business insurance.
Unearned Premiums
Unearned premiums are calculated gencrally using the daily pro,rata method and include
amounts received related to reinsurance assumed and arc rcported nct after deducting amounls
ccded to reinsurance companies.
Federal Income Taxes
Fcdcral income taxes are recorded when payable.
Use of Estimates
Management of the Company has madc a number of estimates and assumptions relating to the
rcporting of admitted assets and liabilities to prepare these financial statements in confonnity
with accounting practiccs prescribed or permitted by the Insurance Department of the
Commonwealth of Pennsylvania. AClual results could differ from those estimates.
(Continued)
8
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Stnlcments
(1) ContInued
Reclassification
Certain amounts from the previous year havc been rcclassificd to confonn with the current ycar
presentation,
(2) Investments
The amortized cost and cstimated market values of investments in bonds at December 31, 1996
and 1995 are as follows:
Gross Gross Estimated
Amonized unrealized unrealized market
cost 1!ains losses value
1996
U,S. Treasury securities and
obligations of
U.S. government
corporntions and agencies $ 1.077,330 49,610 740 1,126,200
Obligations of states and
political subdivisions 6.747,056 310,175 3,331 7,053.900
Industrial and miscellaneous 499,980 4,895 2.250 502,625
Totals $ 8,324.366 364.680 6,321 8,682,725
1995
U.S. Treasury securities and
obligations of
U.S. government
corporntions and agencies $ 2.075,465 114.735 2,190.200
Obligations of states and
political subdivisions 6.386,778 351.644 4,572 6,733,850
Industrial and miscellaneous 710.270 10,032 2 720.300
TOlals $ 9,172.513 476.411 4,574 9,644.350
(Continued)
9
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Statcments
(2) Continued
The amortized cost and estimatcd market valuc of bonds at December 31. 1996. by contractual
maturity. are shown below, Expectcd maturities will differ from contractual maturitics because
borrowers may have the right to call or prepay obligations with or without call or prepaymcnt
penalties.
Amortized
cost
ESlimaled
market value
Due in one year or less
Due after one year through five yenrs
Due after fi ve yenrs through len yenrs
Due after ten years
$ 399,842
3.481.571
2,363,700
2.079,253
405,000
3,637,041
2.473,684
2.167.000
$ 8.324.366 8.682.725
Proceeds from sales or maturities of bonds during 1996 and 1995 were $2.064.350 and
$797.308, respectively, Gross gains of $4.282 and $12.126 were realized on those sales or
maturities in 1996 and 1995. respectively.
Thc cost and estimated market value of investments in stocks as of Deccmbcr 31. 1996 and
1995 are as follows:
Gross Gross Estimnled
unrealil,ed unrealized markel
Cost J!ains losses value
1996
Preferred slock $ 1.548. 194 31,656 19.112 1.560.738
Common slack 4,080.4 I 6 1 50.783 207.104 4,024.095
Total $ 5,628.610 182.439 226.216 5.584.833
1995
Preferred stock $ 1,393.948 66.343 19.616 1,440.675
Common slack 3.507.003 247.136 164.230 3,589.909
Total $ 4.900,951 313.479 183.846 5,030.584
Proceeds. gross gains. and gross losses from sales of investments in stocks for the years
ended Dccember 31. 1996 and 1995 were as follows:
1996 1995
Proceeds $ 4.867.928 9,724.493
Gross gains 568,630 351.360
Gross losses 62.315 172.028
Investments with an aggregate carrying value of $4.812.953 at December 31. 1996 have been
deposited with insurance regulatory agcncies as required by law.
(Continued)
10
AEGIS SECURITY INSURANCE COMPANY
Notes to Statutory Financial Statcmcnts
(3) Real Estate
Thc following is a schedule of rcal eslatc at Dcccmbcr 31, 1996 and 1995:
Estimaled
1996 1995 uscfullives
Land:
Occupied by Company $ 107,965 107,965
Inveslment 1.443,264 1.441.770
Home office buildin~ 369.558 369.558 2-1/2 - 12-1/2%
1,920.787 1.919.293
Less accumulated depreciation 199,576 187.063
$ 1.721,211 1.732.230
Real estate depreciation amounted to $12.513 and $12,707 for 1996 and 1995, rcspectively.
(4) Liability for Losses and Loss Adjustment Expense
Activity in the liability for losses and loss adjustment expense is summarized as follows:
1996 1995
Net balance. Janunry I $ 2.972.285 3,352.787
Incurred related 10:
Currenl year 14,910.211 14,699.408
Prior years (135,552) (292.158)
Total incurred 14,774,659 14.407,250
Paid rclaled to:
Current ycar 11 ,524.330 12.655.918
Prior years 1,872.685 2,131.834
Total paid 13.397.015 14.787.752
Nel balance. December 31 $ 4.349.929 2.972,285
(Continued)
11
AEGIS SECURITY INSURANCE COMPANY
Notes to Statutory Financial Statements
(4) Continued
As a result of changes in cstimates for anticipated losscs and loss expenses related to insured
cvents of prior years, thc liability for losscs and loss adjustmcnt expenses decreased by
$135,552 in 1996 and $292,158 in 1995,
(5) Reinsurance
In the ordinary course of business, the Company seeks to limit its exposure to loss on
individual claims and from the effects of catastrophes by entering into reinsurance agreements
with other insurance companies, Reinsurance is ceded principally on a pro-rata basis with the
Company's retention at $56,250 per property occurrence and $75,000 per liability occurrence.
Insurance ceded by the Company does not relieve its primary liability as the originating insurer.
The Company also assumes business on a pro-rata basis.
The effect of reinsurance on premiums written and earned for 1996 and 1995 is us follows:
Direct
Assumed
Ceded
$
1996 1995
Wrilten Earned Wrilten Earned
37,029,926 34,841,807 35,133,982 35,842,886
1,732,958 1,256.672 980,581 1.289,595
13,864,282 11.454,757 11.709,657 12.040,738
24,898.602 24.643.722 24.404.906 25,091.743
Net premiums
$
The effect of reinsurance on unearned premiums as of Decembcr 31, 1996 and 1995 is as
follows:
Direct
Assumed
Ceded
$
1996 1995
15.136,226 12,948,107
879,3t 1 403,025
5.970,112 3.560,587
10.045.425 9.790.545
Net
$
(Continued)
12
.
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Statements
(5) Continued
The effect of reinsurancc on the liabilities for losscs and loss adjustment cxpenscs as of
Deccmber 31, 1996 and 1995 and losses and loss adjustment expcnsc incurred for 1996 and
1995 are as follows:
Liability for losses
and loss adjustment expense
1996 1995
Losses and loss
adjustment expense incurred
1996 1995
Direct
Assumed
Ceded
$
6.475,569
70,084
2,195,724
4,349.929
5,389,118
30.025
2.446,858
22,981.579
452.517
8,659.437
Net
$
2,972.285
14,774,659
19,739,120
656,200
5,988,070
14.407.250
At December 31, 1996, one reinsurer accounted for approximately $7,400,000 of the net
amount deducted from the liabilities for unpaid losses, loss adjustment cxpenses, and unearned
premiums and amounts recoverable for paid losses and loss adjustment expenses.
The Company cedes, on an earned/incurred basis, 10% of its homeowners business subject to
an annual limit of $1,200,000 of earned premiums to its wholly-owned subsidiary. Aegis
Indemnity Insurance Company. This agreement was terminated effective January I, 1997.
The following schedule summarizes the effects of the rcinsurance agreement for 1996 and
1995:
Premiums earned
Losses incurred
Loss adjustment expenses incurred
Commissions
1996
$ 1.200.000
588.434
76,201
487,363
1.151.998
$ 48.002
Net reinsurance cost
13
1995
1.200,000
408,667
50,682
539.999
999.348
200.652
(Continued)
.
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Statcmcnts
(5) Continued
The Company entered into a proportional rcinsurance agrcement with its wholly-owncd
subsidiary, Aegis Indemnity lnsurancc Company (Indcmnity) on Dcccmbcr 31, 1996. Under
the agreement, the Company assumcs 100% of lndcmnity's book of business and ccdes 15%
of thc Company's busincss to Indemnity, Thc following schcdule summarizes thc cffects of
the agreement for 1996:
i
I
\,
, I
Assumed unearned ptemium $ SI,978
Ceded unearned premium (\ .755,13\) ,
Net effect on unearned premium $ (\.703,153)
Assumed commission $ 9.522
Ceded commission (365,769)
Net effect on commission expense $ (356.247)
(6) Transactions with Affiliates
The Company and Mobile-Rec. Ine, are wholly-owned subsidiaries of Aegis Security, Inc,
Mobile- Rec, lnc, produced 21 % of the insurance business for the Company during 1996 and
1995, The Company paid commissions and expenses to Mobile-Rec, lnc, of $3,744,408 and
$3,378,109 in 1996 and 1995, respcctively, and charged rent of $22,500 to Mobile-Rec, Inc.
during 1996 and 1995 for use of the home office.
Texas Security General Insurance Agency is a 79% owned subsidiary of the Company and
writes business in the state of Texas, Commissions of $175,653 were paid to Texas Security
General Insurance Agency in 1996.
The Company paid various subsidiaries of Mobile-Rec, Inc., $271,735 and $273,198 in 1996
and 1995, respectively, related to ground and air transportation.
The Company purchased independent copier leases with recourse to Capitol Image Systems,
Inc., a former subsidiary of Aegis Security, Inc,. for $609,270 in 1995.
Amounts due (to) from affiliates at Deccmber 31,1996 and 1995 were as follows:
Mobile-Rcc.lnc,
Aegis Indemnity Insurance Company
Texas Security General Insurance Agency
1996
$ 1,222,190
(1,342,388)
(22,706)
1995
1,037,451
(37,420)
(Continued)
14
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Statcmcnts
(7) Major Agents
Thc Company produccd automobilc physical damagc busincss in the Statc of California
through a single agent. This busincss accounted for approximatcly 16% and 10% of thc
Company's total gross premiums written in 1996 and 1995, rcspectivcly. Additionally, the
Company produced approximately 21 % of its total gross prcmiums through Mobilc-Rcc, Inc,.
a related party, during 1996 and 1995,
(8) DIvidends
Dividend payments by the Company arc restricted by the insurance laws of the Commonwealth
of Pennsylvania. At December 3 I, 1996. the maximum amount of dividends that may be paid
without prior approval of the insurance commissioner is approximatcly $ I ,418,000.
The National Association of Insurance Commissioners has adoptcd risk-based capital (RBC)
requirements for property and casualty companies to calculate and report information under a
RBC formula. At Decembcr 31, 1996, the Company's capital was in excess of the RBC
requirement.
(9) Federal Income Taxes
The Company files a consolidated federal income tax return with its parcnt and affiliated
companies. Accordingly, incomc tax expense is allocated to thc Company in accordance with
provisions of the Internal Revenue Code.
Presented below is a reconciliation betwecn actual income tax expense and the amount
computed at the expected rate (34%):
Expected income tax expense
Tax exempt income
Dividend received deduction
Change in unearned premiums
Discounting of losses and loss adjustment expenses
Salvage and subrogation
Excess capital losses (canyforward)
Deprecialion
Pension expense
tRS audit adjustment of prior year
Adjustment of prior year accrual
Olher, nel
$
1996 1995
182,127 614,916
(136,587) (141,700)
(66,438) (72,130)
17,332 (46,705)
11,437 13.282
23,149 (48,957)
(14,232)
6.982 (4.704)
lO,tl2 4,038
12,815
(47,543)
14.535 40,705
27.92t 344.513
(Continued)
Income tax expense reported herein
$
15
\i
f'l
.~ J
,
AEGIS SECURITY INSURANCE COMPANY
Notcs to Statutory Financial Statemcnts
(10) Pension Plans
Aegis Security,lnc, maintains a Moncy Purchasc Pension Plan for all cligible employces of its
subsidiarics, Discrctionury contributions up to 10% arc madc each Deccmber 31 5t bascd upon
total wages during the plan ycar, All of the invcstments in thc Plan arc in Acgis Sccurity, Inc.
stock, a related party. Total cost to the Company was $162,040 and $130,540 for 1996 and
1995, respectively.
Aegis Security, Inc. also maintains an Employee Stock Ownership Plan for all cligiblc
employees of its subsidiaries, Contributions of 15% are madc each December 31st based
upon total wages during the plan ycar, Benefit distributions are made in cash each year,
reducing the amount of stock that could havc otherwise becn purchased. Total cost to the
Company was $167,942 and $183.371 for 1996 and 1995, respectivcly, Thc Plan held shares
of Aegis Security, Inc. as follows:
BaJance. beginning of year
Additions
BaJance. end of year
1996
21.049
6.600
27,649
1995
19,619
1.430
21.049
(11) Leases
The Company leases office and storage space under monthly leases requiring monthly
payments of $5,333. The Company also leases two regional sales offices under annual leases
requiring total monthly payments of$I,891 and expiring in July and September of 1997. Total
rent expense for 1996 and 1995 was $87,816 and $75,816, respectively.
16
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