HomeMy WebLinkAboutM-81-0712P' k
AUtUCk1 filsur6hft
1001 N.W. Bath Wed
Miami, FYeMs 33127
t305) 711.1706 754•3431
mr. Mowara v. bary
City Manager
City of Miami
3600 Pan American Drive
Miami, Florida 33133
Dear Mr. Gary:
I am the Chairman of the Board of the Florida Mutual Insurance Compa
which has recently received a permit from the State of Florida to organi
as the first black property and Casualty Insurance Company in the State,
in the country.
We have been exploring the mechanisms for receiving a special grant of
$250,000 from funds provised by the Federal Department of H.U.D. to support
improvement of the insurance situation in the riot -affected parts of Dade
County, and especially in the underserved black areas of Miami.
We have received support in this from the Community Development staffs
of the County, which has a similar amount of money which they are giving
for this purpose, as well as the staff of the City. This money ($500,000)
is -to be used as seed capital in securing the $1.5 million capital and re-
serves necessary to license a Casualty Company.
We desire to present this to the City Commission at the July 23, 1981
meeting for their consideration and approval in order to meet an October,
1981 deadline for having the necessary funding in place. We thank you
for this opportunity:".
Yo s truly,
George A. Simpson, M.D.
GAS/bb
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ymorldatutual Insurarice
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1001 NA 54th Abld
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. Merritt Werheir� �w.>
County Ma g , Dade Count d
County Courthouse _
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Nar Mr. Stierheim:
I am the Chairman of the Board of the Florida Mutual Insurance Company,
which has recently received a permit from the State of Florida to organize
r
as the first black property and Casualty Insurance Company in the State, and
.l,
probably in the country. ^y
We have been exploring the mechanisms for receiving a special grant of
$250,000 from funds provided by the Federal Department of H.U.D. to support
improvement of the insurance situation in the riot -affected parts of Dade
County, and especially in the underserved black areas of Miami.
We have received support in this from the Community Development staffs
of the City, which has a similar amount of money which they are giving
for this purpose, as well as the staff of the County. This money ($500,000)
? is -to be used as seed capital in securing the $1.5 million capital and re-
serves necessary to license a Casualty Company.
We desire to present this to the County Commission at the July 21, 1981
meeting for their consideration and approval in order to meet an October, 1981
• deadline for having the necessary funding in palce. We thank you for this
opportunity.
Sincerely,
• Geroge A. impson, M.O.
• GAS/bb ,
V ; 'Florida Mutual Insurance Company
1001 N.W. 54th Street
Miami, Florida 33127
(305) 751-7706 — 754-3431
INTR0DUCTI0N
The Organizers and Director of FLORIDA MUTUAL INSURANCE COMPANY respectfully
petition the City of Miami and Metro Dade County Commissioners for consideration
in regard to a certain public assistance program known as "HUD Secretary's
Discretionary Grant Insurance Subsidy Program".
FLORIDA MUTUAL INSURANCE COMPANY was independently conceived and organized
by a local group of ten concerned black business and professional men and women
in July, 1980. Based upon the Organizer's acute personal insight, the vast amount
of statistical data available and the advice and counsel of professional insurance
consultants, a black owned and controlled mutual insurance company was determined
to be the most practical, immediately achievable, permanent solution to a major
segment of the black community crisis.
After completing necessary research and devising a comprehensive plan of
action, the Organizers obtained a Permit to Organize a Mutual Insurance Company
(owned by its policyholders) from the Florida Insurance Commissioner and the company
was incorporated in January, 1981. The Organizers have personally posted a $20,000
cash surety deposit with the State Treasurer and are now in process of assembling
the $1,500,000 statutory minimum starting capital. As soon as this is accomplished
the company will be issued a Certificate of Authority and commence doing business,
issuing insurance policies in and for the black community. ~
tZ
niters will obtain over $2,000,000 Capital from all sOUftft hr�ki
'plWed to secure an initial subscription in the form of a goverfnental Or
31
ti `z''rr�ate foundation loan or grant of up to $500000. This "seed capital" deposit
,:..
Will- imediately provide the company with the necessary leverage to obtain an
additional $1,50.0,000 through bank borrowing, major insurance company investment
participation and an organized appeal to private foundations, etc. As provide4 fo0
in the Florida Code, all monies will remain deposited in a bank trust account until
the company is licensed and becomes operational. a'
The City of Miami and Metro Dade County Commissioners can immediately provide
this essential seed capital subscription from the aforementioned HUD grant. This
will enable the company to proceed at once to negotiate for additional borrowed
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funds to complete its capitalization. Even though the actual grant funds may not
be deposited until a later date, announcement of a grant by the City and County of .
the required seed capital, with the attendant publicity which will naturally follow,
will. greatly enhance the company's negotiating position with establishment financial
institutions and lenders.
HISTORICAL OVERVIEW
The prohibitive cost of property and business insurance in the Black
Community is one of the greatest economic depressants affecting the area
today. It is an excessive cost of doing business there, which discourages
industry form locating new plants -- employment centers-- in the area, and the dim-
inished employment opportunities contributes to the problems of the areas.
Furthermore, the economic cash value represented by insurance premiums paid
in the areas is almost entirely removed from the black business community.
The County Managerissued-a report that stated the following problems
facing the Black Community after the May 17, 1980 riots.
1. The lack of adequate capital at reasonable interest rates to assist in
the formation of new businesses and job creation in general.
2. The inability of Black businesses in distressed areas to obtain
insurance thus making financing for development more difficult.
3. The limited opportunities for Blacks to obtain training in basic
business practices so as to conduct a business operation properly.
4. The low proportion of Black owned business. While the Black
population encompasses 15% of the overall population only 145% of
all businesses are Black owned.
5. While the unemployment rate in Dade County is approximately 6%, the
unemployment rate in the Black community is about 33% and even higher
among Black youth.
Reliance Managing Agency, Inc. was recently incorporated as a privately
capitalized black minority owned company to sponsor and bring into being, the
only black controlled property and casualty insurance company in Florida, to
be known as "Florida Mutual Insurance Company". As a mutual company, all of
its and profits belong to the policyholders, the vast majority of which
will reside in black communities throughout the State. The company (Reliance)
-t. Y
US--Woleted the feasihity research, assembled ten tified organizers, as
iPuired by Florida Statutes, and obtained a Permit to Organize a Mutual Insurance_
Company from the Florida Insurance Department. The company (Reliance) must now
Secure capital and surplus in excess of $1,500,000 for the insurance company,
which it will acquire from the government agencies, private foundations and financial
institutions in the form of grants and sale of subordianted debentures issued by
the insurance company.
Furthermore, a purely black owned and operated company insuring property
in the Black Community would constitute a highly visible identity and participation
incentive, which may exert a powerful peer -group influence upon the very small
segment of the population responsible for most of the loss -claims, particularly
during times of civil demonstration. An aggressive public relations program by
the company would reinforece this effect, while at the same time providing a
strong sales and advertising campaign emphasising pride of achievement.
Such a company would constitute a major financial institution in the
Black Community. It would provide about $1,000,000. annually in business and
employment income from the outset, rising to over $2,000,000 within 5 years.
Additionally, policyholders in the area would receive another $2,000,000 in
dividends. The Managing General Agency (the original organizing company) would
be a profitable operation for its owners and enable black casualty insurance
agencies to participate in all aspects of the business, now generally denied to
them.
CONCEPT
The presently prohibitive cost of property and business insurance in the
Black Community is one of the greatest fundamental economic depressants affecting
industry from locating employment centers there, where jobs are sorely needed. How-
ever, there is a large amount of highly profitable property and business insurance
risks in the areas, which pay excessive rates to offset exorbitant risk involved
with. other types of covtage in the area.
-Ir
The proposed black mutual company would
attempt to select the most favorable risks at a substantial saving to the insured
'and profit to the managing company. Furthermore, the cash value represented by
insurance premiums paid in the areas is almost totally removed from the Black Bus-
iness -Community at the present time, whereas the proposed company would retain
several million dollars of such funds annually in the community. After the second
year of operations, it might generate nearly $1,000,000 of sales commissions for
its black agents alone.
Such a company would immediately constitute a major financial insitution
in the Black Community, probably managing and investing over $6,000,000 in its
second vear of operations. In addition to $1,000,000 sales commissions, it might
generate another $500,000 in administrative payroll and perhaps another $1,000,000
in the form of policyholder dividends. Because it is predicated upon purely black
private ownership and control, regardless of the public financial programs it may
utilize for capitalization, the project will afford the organizers an, opportunity for
a considerable personal financial gain and profit, which would usually and otherwise
go to others outside the Black Business Community.
Although the mutual insurance company per se will be operated for the sole
benefit of its policyholders, it affairs will be managed by its Directors, who are
entitled to certain fees and expenses, and by their appointment of a "Managing Gen-
eral Agency", a private company owned by the original organizers. The M.G.A. will
contract with the mutual insurance company to sell and issue its policies, for which
it will be paid percentage of the total insurance premium income generated.
Formation of a mutual company instead of capital stock comapny was deliberately
elected for two reasons:
1. It was determined as more feasible to promptly obtain $ 2 million capital
through government guarantee programs and private foundation grants for a
(non-profit) mutual insurance company, and more practical than the time
and expense involved with registering a public offering and the selling
..���� involved with placement of a new issue underwriting in the black
unity. Furthermore, it provides greater investment leverage and
• control by the black entrepreneurs involved through Reliance Managing
Agency, Inc.
.2. A mutual company affords broad community involvement and individual
participation of the policyholders, along the lines of PrudentiallIs
"Own a piece of the rock" appeal. In conjunction with a distinctive,
well publicized "fire mark" plaque or decal displayed on each covered
property, it provides an excellent method of sales promotion and may
be an effective means to reduce losses from vandalism in the black
communities.
Reliance Managing Agency, Inc. and Florida Mutual Insurance Comapny were
formed specifically to capitalize upon certain clear business opportunities and
advantages available only to "minority owned businesses". These advantages are
derived from two sources.
1. Specific legislation (Public Law 95-507) which guarantees minority
participation in all projects involving any Federal funding -- which
includes all public projects. This law upheld by the U.S. Supreme
Court, which assures its continued effectiveness regardless of the
Reagan Administration policies.
2. A prevailing recognition of, and broad public responses to the demands
and just entitlement of minorities to participate in all profit aspects
of the national economy.
The property and casualty insurance business is essential to and necessarily
involved in virtually every business activity. The insurance industry comprises
one of the largest segments of institutional investment capital in our economy and
is notoriously profitable. The new circumstances related to minority companies
affords a unique opportunity for Reliance Managing Agency, Inc. to engage in the
insurance business, with a virtually assured market and profitability to its
stockholders. The company was expressly organized and structured for this
r Se and has obtaine he management expertice and onnel to implement its
iWfteasful operations.
Upon successful capitalization, Florida Mutual will be a major financial
institution in the Black Community, both locally and nationally. During is second
year of operations it should be managing and investing over $6,000,000 and may
reasonably anticipate a 50% annual growth rate during the first 5 years of its
operation.
OBJECTIVES
1. It will provide a permanent, expandable, major financial institution which
will constitute a "capital base" in the black community.
2. A mutual company can be established for the entire black community and
indefinitely expanded with borrowed capital, which is essential because
broad based private investment capital is simply non-existant in the black
community. However, a seed capital grant of $500,000 would constitute an
equity base of $2.00 for each black citizen of Dade County, upon which the
company can leverage borrowing of $6.00 more from establishment institutions.
3. Absolute control will be permanently retained by resident black Directors
dedicated to the long term best interests of the community. These Directors
can and will enjoy business advice, cooperation and assistance from the entire
area establishment.
4. Administration and marketing will be performed locally, by black personnel,
creating not only new jobs and income, but more importantly, creating entry
level opportunities for young people to acquire specialized skills and
experience which will allow them to move into the economic mainstream.
5. A mutual insurance company provides a simple means to lower insurance
premium costs in the black community. Excessive premiums will automatically
revert, as dividends, to its policyholders.
6, this company will greatly extend the availability of insurance coverage in the
black community. Being a part of the community, and situated therein, --the
company will be better qualified to accurately assess the risk involved.
_The Directors do emphasize that there can be no guarantee that -the company
will insure any and all risks, nor will any risks be knowingly underwritten
at actuarially unsound rates.
7. The company will immediately constitute a positive economic force by retaining
a major portion of all the premium dollars it receives everywhere in the
black community. Agency commissions now going outside will be paid to black
agencies and salesmen in the community. Premiums will be deposited in local
banks instead of being sent to New York, Hartford or Philadelphia.
T' 8. The insurance company will sponsor and finance an agressive community relations
program, particularly aimed at juveniles and young adults, to establish its
"black identity" and provide a symbol of black success. It will have a
direct, vested interest in forestalling future civil disorder as the most
effective method of mitigating its own claims and losses, the cost of which
are already included in prevailing rates being charged in the black community.
PROPOSED PLAN OF OPERATION
Certain questions have arisen pertaining to the proposed operational policies
of Florida Mutual, which are addressed below.
Florida Mutual Insurance Company will be operated and administered by its
officers and directors. Certain sales and administrative functions may be
contracted to Reliance Management Agency for their performance on behalf of
Florida Mutual.
_The relationship between Reliance and Florida Mutual is one of separate
corporate identity but with identical management and control. Profits accruing
to Florida Mutual after all expenses are paid, including sales commissions and
btrvice fees paid to Reliance and the debt service paid on its
borrowed capital (subordinated debentures), will be paid to the policyholders,
Meable to the amount of premium they paid in the earning period, in the form
bf dividends. -
Retention ratios and amounts will of necessity be determined by our evaluation
of the proposals submitted to us by the reinsurance market. Our catastrophe limit
will ultimately be a function of our surplus. Windstorm and riot exposures are
the contingencies we and prospective reinsurers are most concerned with.
Windstorm rates presently in effect in Florida are very adequate to provide
reinsurers a most profitable deal and still allow us to maintain a relatively low
catastrophe retention. Furthermore, the black communities where we will have the
largest habitational risk are nearly all located well inland and substantially
insulated from low level hurricane force winds.
Fire, vandalism and business rates which reflect the 1980 riot experience
are very substantial, and since Florida is not a "FAIR" plan state, federal
riot reinsurance is not available here. However, we believe we can substantially
inhibit future, selected riot related losses by means of an aggressive community
relations program emphasizing black ownership of the insurance company together
with judicious application of our "Fire Mark" program. There is reasonable
justification for this assumption based upon documented experience from the 1980
disorders.
Initally, we will secure catastrophe insurance in excess of $100,000 to
$150,000. On habitational risk we plan to Initally carry a net line of
$20,000 to $25,000 on individual risks. We will secure a quota -share or surplus
share treaty to cover us in excess of our net retention. We would adopt a similiar,
policy on comnercial accounts. If volume grows faster than presently anticipated,
we may quota -share a part of our -net retention, in order to keep our premium -to -
surplus ration within acceptable limits.
The company will extd its lines as it can afford recruit and develop
competent staff to do so. In the mandatory automobile insurance, habitational and -
small commercial property and casualty insurance areas, where we will initially
concentrate, we will not need high salaried special underwritting expertise, but
rather dependable, accurate clerical competence. We have determined that certain
established carriers and agencies will provide assistance in training our people
and expanding their competence as needed. With nominal outside help, we can
initially organize and staff an operation to properly process and account for all
the business our surplus limits will allow. The consultants have established a
minimal list of experienced black personnel capable of immediately establishing a
viable operation.
Reliance Management Agency will concentrate primarily upon acting as the
exclusive managing general agency for Florida Mutual Insurance Company, with
which its fortunes are inevitably connected. As each prospers, so shall the
other. Reliance will agressively recruit, train and develop an agency force,
first in South Florida and then throughout the State. Although Reliance will
initially operate predominately in the black communities and aggressively solicit
business from national companies operating plants and retail facilities there, it
will otherwise direct its efforts to the general market in any sector it can be
most effective.
In addition to its general agency operations, Reliance will establish a
"Special Agency Division" to expertly identify and exploit every suitable opportunity
to obtain business under the minority set -aside provisions of Public Law 95-507.
Florida Mutual will endevor to qualify to do business in other jurisdictions in
order to participate in minority set -aside business elsewhere.
On "set aside" business, we will retain very small percentages initially,
unless we can negotiate a satisfactory stop -loss reinsurance program, which will
be uniikely until we have established a satisfactory "track record" to convince,
reinsurors it was mutually advantageous. Until such a program can be established,
We will limit our exposure by faculative reinsurance.
We do not intend to act as a "fronting" company and this practice is not
generally acceptable to the Florida Department. Florida Mutual will not attempt
to instantly become a full multiple line carrier, but will concentrate its efforts
in those areas where it can do a competent job of providing needed coverages, within
the competence of its available executive staff.
Reliance Management Agency may ocassionaliy operate as a brokerage agency in
those instances where it can obtain significant business involving risks which
management may elect not to write or reinsurance in Florida Mutual.
A question was raised as to whether capitalization of $1.5 million would
permit the company to develop meaningful premium dollars and to insure values and
liability limits involved with government projects, developments or entities. This
might apply if Florida Mutual were not a true minority owned carrier. Just as some
successful black entrepreneurs acting as bid -contractors in the construction industry
are awarded set -aside contracts, which they, in turn, profitably subcontract to
others, in whole or in part, so does Florida Mutual intend'to operate, using the
reinsurance market as its source of sub -contracting to others at a profit.
$1.5 million is merely the minimum capitalization required by the State of
Florida to commence operations, and we will maintain a continuous effort to
secure as much capital as posible. However, commencing business on the basis
of minimum capitalization, we expect to show a profit both for Reliance and
Florida Mutual, even with a conservative net -premium -to -surplus ratio of 2} or
3 for the insurance company.
BENEFITS TO COMMUNITY
1. Provide essential property and casualty insurance coverage in and to
the black communities at fair, competitive premium costs, because the
excessive class rated premiums generally charged may be partially
-"` —ncd `^VV the policyholders in the form of dividends.
• �r V..iV•
enable and entitle the insurance company, as the on black minority
Y Y
property and casualty company in Florida, to participate (on a reinsur-
ance basis) in 10% of the insurance premium generated by federally funded
projects, provided as minority contractor set -asides by Federal Law.
Since there is presently no such minority company, the black community is
effectively prohibited from participation as provided by the Law.
3. Create a viable, permanent, expanding financial insitution in the
private sector of the black community, which will accumulate and retain
capital in the form of investment income, increased employment opportunity
and income, and an effective source of mortgage capital for business
development and individual home ownership.
LEGAL
s
UNDERWRITING
CLAIMS
UNDERWRITING
FLORIDA MUTUAL INSURANCE
ORGANIZATIONAL CHART
BOARD OF DIRECTORS
PROCESSING
PRESIDENT
ADMINISTRATION SALES AND MARKETING
ACCOUNTING
CLAIMS BROKERS SALARIED
AGENTS
ACCOUNTING
e
EXHIBIT I
THE ORGANIZERS AND DIRECTORS --
of Florida Mutual Insurance Comapny comprise a unique cross-section of age
and expertise from the black community. All are highly qualified achievers
with a demostrated capacity to manage and administer an insurance company as a
viable, permanent solution to a major aspect on the black community's present
dilemma, by establishing internal opportunity and upward mobility. Certainly
those individuals who have succeeded in the past are the most qualified to lead
others along the same path. The following brief resumes certify. these individuals.
GEORGF A. cTN'DgnN, M.D. (Chairman of the Board and Director)
is a practicing surgeon in Miami, surgical staff member of seven Miami Hospitals,
a faculty member of the University of Miami School of Medicine, former president of
the Miami branch N.A.A.C.P., original member of the Dade County Community Relations
Board, Chairman of the Board of Christian Hospital, Chairman of the Board of New
First Horizons Development, Inc. and is active in community housing and hospital
development.
MANLEY H. MCADAM (President and Director)
Was recruited by the organizers to serve as chief operating officer becase of his
eighteen years experience as a principal executive in the insurance industry,
including starting a highly successful new company, Life of Jamaica, in 1970,
where he served as a principal officer and member of the board of directors. Prior
to 1970, he agency director for North American Life Assurance Company. He
formerly was a director of Air Jamaica Airlines and other financial and commercial
enterprises in the Caribbean area.
GARTH C. REEVES, SR. (Vice -President, Treasurer and Director) r
is Editor and Publisher of the "Miami Times" newspaper. He served as Chairman
of the Socrd of the National Industrial Bank for twelve years, served also as its
president, and was a director of two other Miami banks. He has served on the Board
of TiubilCCz, ui J•iidmi-Dade Community College, Barry College and Christian
HGspitai and on the Board of Governors of the Dade Founda on, Downtown Development
Authority and the Dade County Red Cross. He is a member of the Greater Miami
Chamber of.Commerce, Vice-president of the South Florida Council, Boy Scouts of
America and the recipient of numerous national and local awards and recognition.
STANLEY D. SQUIRE (organizer, former Vice -President and Director)
is one of the few businessmen to concurrently hold a Florida Property and Casualty
insurance license, be a registered representative of the National Association of
Security Dealers and a licensed Real Estate Broker. He is a Director of the
Board of Management - Downtown Y.M. C.A. and the South Florida Coalition for Economic
Development Specialist I for Dade County's Office of Community and Economic Development.
KIMMBERLEY L. PARKER, ESQ (Secretary and Director)
is engaged in the private practice of law. She is also doing graduate work at the
University of Miami law school. She has six years experience with various
government agencies, both in Washington, D.C. and in Miami, where she was with the
City of Miami Planning Department until recently. Ms. Parker's inclusion as a
member of the Organizing group is an example of the deliberate outreach to involve
young black professionals.
RONALD E. FRAZIER, AIA (Director)
is president of his own successful firm of architects, urban designers and planning
consultants, located in Liberty City. He is a graduate of Howard University and
has a master's degree from Catholic University of America. He was a member of the
faculty of the University of Miami from 1971 - 1978. Mr. Frazier's highly specialized
expertise in urban problems will be an invaluable asset to the insurance company.
He is a member of Dade County Community Revitalization Board,a Director of the
Miami -Dade Chamber of Commerce, member of the Florida Board of Building Codes and
Standards, Dade County Unsafe Structures Board and other civic and_professional
organizations.
PRANCCNA B. THOMAS (organizer)
is Director of Minority Affairs and Women's Concerns at Florida International
University. She holds a master's degree from the University of Miami and is
currently a Doctorial candidate at Nova University. She as served on the
Federal Judicial Screening Commission for the Fifth Circuit, and as a consultant
to the U.S. Department of State. She is a member of the Dade Community Relations
Board, the Florida Equal Opportunity Advisory Council, the Dade County Council
for the Arts and Sciences, and the National Association of Affirmative Action
Officers.
DAZELLE DEAN SIMPSON, M.D. (Organizer:)
is a practicing pediatrician in Miami. She is a member of the Board of Trustees
of Meharry Medical College, member of the Dade County Medical Association -
School Health Committee and other professional association; past member of the
University of Miami School of Medicine Admissions Committee.
REV..ALFONZA C. MOZELL (Organizer)
is a communications specialist in, to and for the black community, which will be
essential to the insurance company's planned programs. He is presently employed
by the Dade County School Board as a news and publications specialist - administrator.
From 1964 - 1977 he was engaged as Director of Community and Public Affairs, news
director and operations manager of radio station WMBM in Miami. In addition to a
B.A. degree, he also holds a Bachelor's Degree in Theology and serves as the
Pastor of a local Baptist Temple.
JAMES W. EVANS (organizer)
holds a B.A. Degree in Political.Science from Florida International University and
will graduate form the University of Miami Law School (Juris Doctoc) in May 1981.
He has been associated with the Dade County Public Defender's Office since 1979
as an investigator and currently as an intern. Mr. Evans is another example of
r
the organizing group's determination to develop its human resources from emerging
you^; -r^fessionals in the black community who can make a positive contribution
to both the company and the community.
EXHIBIT II
Rella►nre Man-4,0 ne Arenry, 1r,c.
A �
• Proj'- c bud Net. 1 ncomu
(in thruwan;in of )
1281 1982 1983
Pm-n1u^►3 - r,Zular $2.000 $40000 $69000
premiums - 10v't. set —aside 1.00(1 3.000.. 5a(100
CommiLssions -regular
$ 500
$19000
$19500
^oirmisr, ions - -.ov't set -aside
25
75
125
Less: Commis-Aons to producers
(QUO)
600)
900)
Net commIsalons
225
475
725
Les:: Ojwr.- ting expenses
113
238
363
Ope.rltinC income
112
237
362
Interest incowne(Note 1)
1?
33
50
Interest expense (Note 2)
(10)
Pre-tax wt income
119
265
412
Income taxes (Note 3)
48
106
16�
Net Income
�_71
1 -9
24,E
Notes:
MIntcsnst on pr=wi-am b:lrinces
Interest on bank loan
$1(10,400 first year
50,000 second year
(3) Effectir, rate — 14,C%
- - - - -
-
- - - - - - - -
FLORIDA
MUTUAL
INSURANCE
COMPANY
pAOJECTED BALANCE
SHEETS 1981 1986
(thousands of dollars)
1981
1982
1983
1984
;Cash and bank deposits
.
225
2879
250
3888
250
46e6
'Investment securities
2000
2 000
3104
4138
4936
Tot cash & Inv assets
475
633
792
PrOmiums receivable
494
658
823
Prepaid expenses
25
25.
25
Other assets
1
2000
4097
'5454.
6575
Total assets
LIABILITIES
Unpaid losses
Unpaid loss adj expenses
,Unearned premiums
;Unpaid expenses
(ray .es,, litenses & fees
fDividend to,policyholdrs.
Fed & state income taxes
!Other liabilities
Total liabg except Cap
Capitals
Capital notes - 10%
Surplus (GAAP).
t Total
r.
]Total liab & Capital
jSurplus (statutory)'
r
26
1985
250
250
5367
6022
5617
6272
950
1108
987
1152
25.
25
7579
8557
361
751
806
.986
1166
45
94
101
123
146
•
1410
.1880
2350
2820
32.90
•
23
30
38
45
23
30
156
38
201
45
246
53
291
64
1926
2942
3534
4266
4999
1500
1500
1500
12B1
2032
955
2602
500
671
2171
1012
2512
.11500
541
3041
3313
3558
2000
2000
4097
5454
6575
7579
8557
2000
1(a78
1854
2219
2326
2406
V1
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s
' pL(JR I MUTUAL I NSUF' NO �� CC�'
. ,.PbktCAtl of INCOME and EOUI TY 1982 - 1986
(thousands of dal ars)
1982 1983 1984
at premiums written
2700
3600
4500
I ncr ) /deco` In unearned
- ..1410
-470
-470
premi ums earned
1290
3130
4030
Losses incurred
516
1252
1612
Operating expenses
Loss ad j expenses •
64
156
201
Commissions
750
1000
1250
Other underwriting esip
270
360
450
Taxes licenses & fees
90
120
ISO
Total
1174
•1636
2051
Underwriting gain/(loss)
-401
241
366
GAAP adjustments
494
165
165
Net investment income
293
406
514'
Other income/(loss,
0 •
0
0
Interest on cap notes
j -150
-150
-150
Dividends to p/holders
64
156
201
Net inc before inc tax.
171
341
529
Income taxes
Net income
171
341
529
Surpl us - ,beginng of yr
500 500
671
1012
Surplus adjustments
Capital notes retired
0
0
0
Surplus - end of year
500 671
1012
1541
OPERATING RATIOS %
Loss & LAE to a premiums
Und expenses to w prems
Combined ratio
GROWTH
Net premiums - comp grth
Net premiums - annual gr
Investment income
Net income
Assets
r1I SCELLANEOUS
Stat surplus/Net premium
1905
5400
-470
-49 0
1972
246
1500
540
ISO
2466
491
165
603
-139
246
709
709
1541
219
2032
i
w:
i986 .
6300
5030
2332
291 ;
1750
630
210
.2881
616
165
683
0
-112
291
896
896
2032
326
.2602
45.00
45.00
45.00
45.00
45.00
41.11
41'. 11
41.11
' 41.11
41.11
86.11
86.11
86.11
86.11
86. 11
33.33 29.10
33.33 25.00
38.69 26.71
• 99.16 55.27
.104.86 33.12
1.61 1.94 2.03
25.99 23.59
20.00 16.67
17.25 13.29
33.95 26.43
20.56 15.27
2.32 2.62
n-V" i i �IE31
T I CIO
1982
i' '
M4
1,9(a5
1986
. s i tten reg
3060
4000
ibc-1 +
6000
700
sot ati de
0
O
0
010
:: +�
•`04
4C�OO
5d�
bOb
•_
7t�00
� �e# asd il0
j `'Not oremi ums written
2700
3600
4500
.5400
6 300 i
% unearned/begin unearne 52.23
0
1410
1880
2350
2820
WE •premi tons — end of yr
1410
1880
2, 50
2820
3290
Itar-ned premiums
1290
3130
4030 -
4930
581.310
Lbss ratio
40
40
40
40
40
L exp ratio
5
5
5
5
5
Comm % r eg
25
25
25
25
25
Comm % set aside
5
5
5
5
5
i Other expense %
10
10
10
10
10
Tax l i c fees %
3
3
3
3
3
Investment expenses
5
5
•5
5
5 µ'
Losses incurred
516
1252'
1612
1972
2332 {
L paid %
30
40
50
50
50
o/s losses
361
751
806
986
1166
Yld (%) on inv assets
12
12
12
12
12
41
i
•
. .
FLO
i vA MUTUAL
I NSUF'iANCE
CONK
VORtCA5t
of INCOME
and EQUITY
1982 - 1986
"x'� '•
(thousands
of dollars)
.. =
1982
1983
1984
• 19135
1966
.Net premiums written
2700
3600
4500
5400
6300
Uncr) /decr in unearned
-1410
-470
-470
--470
+-410
Premi ums earned
1290
31,1110
4030
4930
5830
Losses incurred
516
1252
1612
1972
2332
Operating expenses
;
'Loss adj expenses •
64
156
201
246
291
Commissions
750
1000
1250
1500
1750
Other underwriting exp
270
360
450
540
630
Taxes licenses S< fees
90
120
ISO
180
210 '
Total
1174
•1636
2051
2466
.2881
Underwriting gain/(loss)
-401
241
366
491
616
GAAP adjustments
494
165
165
165
165
Net investment income
293
406
514•
603*
683
` Other income/(loss.
0
0
o
o
O
Interest on cap notes
-150 •
-150
-150
-139
-112
Dividends to p/holders
64
156
201
246
291
Net inc before inc tax.
171
341
529
709
896
Income taxes
Net income
171
341
529
709
896
Surplus - begi nng of yr
500
500
671
1012
1541
2032
Surplus adjustments
Capital notes retired
0
0
0
219
326
Surplus - end of year
500
671
1012
1541
2032
2602
OPERATING RATIOS %
Loss & LAE to a premi ums
45.00
45.00
45.00
45.00
45.00
Und expenses to w prems
41.11
41•. it
41.11
41.11
41.11
Combined ratio
86.11
86.11
86.11
86.11
86.11
GROWTH
Net premiums - comp grth
33.33
29.10
25.99
2,
Net premiums - annual gr
33.33
25.00
' 20.00
16.67
Investment income
38.69
26.71
17.25
13.29
Net income
99.16
55.27
33.95
26.43
Assets
.104.86
33.12
20.56
15.27 -
MISCELLANEOUS
Stat surplus/Net premium
1.61
•1.94
2.03
2.32
2.62
7W]
low
I INI
a • ad to
2100
1410
-had/bL60 n un@&"M*
10 logo
end Y,
- Lod Preimi Ums "416
n 40 40 40
ratio
:
L 'ago- rat i Ft, 25 25
.29'
Z:r6
rag
Oth
m -Y. SIA asi Om 10
10
10
other expense
3
3 3
Tax lic -Fees Y& 5
1972
Investmemt, expenses 332
1252 1642
Incurred so
Losses 30 40 so
L paid Y. 61 '751 006
986 �` Y
C/S losses 12
12
Vld (%
p,
Z�
4
t mxv 'A'
"i" -A" M
wn- i W
-z TI,.
it V�;
"A N
is
t.
:7
A