Common use of Growth Clause in Contracts

Growth. The following comparative data reflects the growth of the Company during the period covered by this examination: 2012 2013 2014 2015 Bonds $ 64,181,807 $ 87,833,214 $111,475,425 $149,929,441 Cash and equivalents 40,175,902 30,143,244 11,113,348 12,240,657 Admitted assets 112,803,209 127,913,794 148,623,692 217,114,798 Claims unpaid 55,417,625 58,769,534 66,716,264 98,541,596 Total liabilities 70,664,551 78,324,301 88,228,004 139,996,184 Capital and surplus 42,138,658 49,589,494 60,395,692 77,118,614 Premium income 316,554,793 375,446,914 422,784,338 603,013,777 Total benefits 273,501,378 318,780,200 356,116,275 558,263,421 Net investment income 1,759,396 1,651,403 2,381,174 3,502,860 Net income 8,570,279 13,952,465 11,076,318 (4,188,700) The following financial statements are based on the statutory financial statements filed by the Company with the Nebraska Department of Insurance and present the financial condition of the Company for the period ending December 31, 2015. The accompanying comments on financial statements reflect any examination adjustments to the amounts reported in the annual statements and should be considered an integral part of the financial statements. A reconciliation of the capital and surplus account for the period under review is also included. Bonds $149,929,441 $149,929,441 Cash, equivalents and short-term investments 12,240,657 12,240,657 Other invested assets 947,498 947,498 Receivables for securities 383 383 Subtotal, cash and invested assets $163,117,979 $163,117,979 Investment income due and accrued 1,468,810 1,468,810 Uncollected premiums and agents’ balances In the course of collection 15,823,643 $ 468,929 15,354,714 Accrued retrospective premiums and contracts subject to redetermination 502,874 502,874 Amounts recoverable from reinsurers 17,644,527 17,644,527 Amounts receivable relating to uninsured plans 2,269,348 2,269,348 Net deferred tax asset 4,348,050 284,085 4,063,965 Furniture and equipment 163,555 163,555 Receivables from parent, subsidiaries and affiliates 9,929,747 9,929,747 Health care and other amounts receivable 311,348 311,348 State income tax receivable 1,344,815 1,344,815 Prepaids 26,866 26,866 Deposit 4,500 4,500 Other assets 1,183,638 76,967 1,106,671 Prior year correction of AHM management fee – expense (7,209,140) (7,209,140) Prior year correction of AHM management fee - surplus 7,209,140 7,209,140 Totals $218,139,700 $1,024,902 $217,114,798 Claims unpaid $ 98,541,596 Accrued medical incentive pool and bonus amounts 2,352,768 Unpaid claims adjustment expenses 1,615,057 Aggregate health policy reserves 18,067,780 Aggregate health claim reserves 591,831 Premiums received in advance 6,701,039 General expenses due or accrued 2,069,905 Current federal income tax payable 955,864 Remittances and items not allocated 596,025 Amounts due to parent, subsidiaries and affiliates 7,680,094 Liability for amounts held under uninsured plans 717,206 Other liabilities 53,081 Abandon property liability 53,938 Total liabilities $139,996,184 Estimated health insurer fee accrual $ 11,070,000 Common capital stock 5,000 ▇▇▇▇▇ paid in and contributed surplus 119,018,452 Unassigned funds (surplus) (52,974,838) Total capital and surplus $ 77,118,614 Totals $217,114,798 Net premium income $603,013,777 Change in unearned premium reserves and reserve for rate credits 370,000 Other revenue 1,138 Totals $603,384,915 Hospital/medical benefits $489,548,771 Other professional services 5,266,276 Emergency room and out-of-area 20,229,958 Prescription drugs 40,114,643 Incentive pool, withhold adjustments and bonus amounts 3,103,773 Subtotal $558,263,421 Net reinsurance recoveries 25,647,729 Total hospital and medical $532,615,692 Claims adjustment expenses $ 11,111,575 General administrative expenses 66,277,998 Total underwriting deductions $610,005,265 Net underwriting gain (6,620,350) Net investment income earned $ 3,502,860 Net realized capitalized gains (872,339) Net investment gains $ 2,630,521 Regulatory fines $ (30,303) Federal income taxes incurred 168,568 Net income $ (4,188,700) Capital and surplus, beginning $32,501,218 $42,138,658 $49,589,493 $60,395,686 Net income Change in net unrealized capital gains $ 8,570,279 $13,952,465 $11,076,318 (68,789) $(4,188,700) (185,949) Change in net deferred income tax (9,752) 740,519 (373,673) 1,184,047 Change in nonadmitted assets 1,076,913 1,257,851 172,337 200,290 Dividends to stockholders Paid in (8,500,000) (8,500,000) 15,000,000 Prior year correction to management fee Prior year correction to federal income tax incurred (2,761,426) 7,209,140 (2,523,200) Prior year correction to current income taxes 27,300 Prior year correction of amount due to parent, subsidiary and affiliates 2,761,426 Re-class prior year dividend to paid-in capital 8,500,000 Net change for the year $ 9,637,440 $ 7,450,835 $10,806,193 $16,722,928 Capital and surplus, ending $42,138,658 $49,589,493 $60,395,686 $77,118,614 Unassigned funds (surplus) in the amount of $(52,974,838) as reported in the Company's 2015 Annual Statement, has been accepted for examination purposes. Examination findings, in the aggregate, were considered to have no material effect on the Company’s financial condition.