-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VFvqJiAvYdOQ06dOKqcJQ5GcXBYgfW3Hr9rtv+4zvBBKnfp4H0l7p6XEX+ZEa3HB LwNTb2B7Iwm2dMid+ttirQ== 0000277269-95-000010.txt : 19951119 0000277269-95-000010.hdr.sgml : 19951119 ACCESSION NUMBER: 0000277269-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FARM FAMILY MUTUAL INSURANCE CO CENTRAL INDEX KEY: 0000277269 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 141415410 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-57299 FILM NUMBER: 95591148 BUSINESS ADDRESS: STREET 1: P O BOX 656 CITY: ALBANY STATE: NY ZIP: 12201-0656 BUSINESS PHONE: 5184369751 MAIL ADDRESS: STREET 1: P O BOX 656 CITY: ALBANY STATE: NY ZIP: 12201-0656 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 1995 Commission File No. 2-57299 FARM FAMILY MUTUAL INSURANCE COMPANY A New York Corporation IRS No. 14-1415410 344 Route 9W, Glenmont, New York 12077-2910 Registrant's telephone number: (518) 436-9751 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY INDEX Part I. Financial Information Item 1. Financial Statements (unaudited) Consolidated Statements of Admitted Assets, Liabilities and Policyholders' Surplus - Statutory Basis September 30, 1995 and December 31, 1994 Consolidated Statements of Income - Statutory Basis Nine months and three months ended September 30, 1995 and 1994 Consolidated Statements of Cash Flow - Statutory Basis Nine months ended September 30, 1995 and 1994 Notes to Consolidated Statutory Financial Statements Item 2. Management's Discussion and Analysis of the Consolidated Statutory Statements of Income - Statutory Basis Part II. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY Consolidated Statements of Admitted Assets, Liabilities and Policyholders' Surplus - Statutory Basis (In Thousands) ADMITTED ASSETS (Unaudited) September 30, 1995 Dec. 31, 1994 Investments: Fixed maturities, at NAIC value (NAIC Market Value: $169,61 and $157,409) 172,917 160,475 Equity securities, at NAIC market value (Cost: $7,853 and $7,503) 10,630 10,156 Mortgage loans, at cost 1,840 1,890 Short-term investments, at cost 5,287 3,013 Other invested assets 1,132 1,572 TOTAL INVESTMENTS: 191,806 177,106 Cash 3,383 4,507 Premiums receivable (Net of balance of $396 and $303 outstanding 90 days or more) 24,481 17,616 Accrued investment income 3,546 4,047 Reinsurance recoverable on paid losses 357 1,176 Equities & deposits in pools & assoc. 1,930 1,236 Other Assets 0 899 TOTAL ADMITTED ASSETS: 225,503 206,587 LIABILITIES & POLICYHOLDERS' SURPLUS Liabilities: Reserve for losses and loss adjustment expenses 110,531 103,660 Unearned premiums 53,485 46,948 Reinsurance balances payable 4,749 8,286 Accrued expenses and other liabilities 8,205 4,823 TOTAL LIABILITIES: 176,970 163,717 Policyholders' Surplus: Special contingent surplus 1,300 1,300 Net unrealized appreciation of equity securities 3,226 2,433 Debentures issued and outstanding 1,250 1,265 Subordinated surplus certificates issued and outstanding 1,460 1,484 Unassigned surplus 41,297 36,388 TOTAL POLICYHOLDERS' SURPLUS: 48,533 42,870 TOTAL LIABILITIES & POLICYHOLDERS' SURPLUS: 225,503 206,587 FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY Consolidated Statements of Income - Statutory Basis (In Thousands) Nine Months Three Months Ended September 30, Ended September 30, 1995 1994 1995 1994 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Net Premiums earned $ 87,022 74,576 29,958 26,172 Net investment income 10,702 10,525 3,692 3,761 Realized gain on investments 198 1,585 306 178 Other income, net 463 362 141 112 98,385 87,048 34,097 30,223 Operating Expenses: Losses and loss adjustment expenses 62,320 61,537 21,103 20,818 Underwriting expenses 27,489 22,221 9,029 7,578 Interest on debentures & subordinated surplus certificates 220 223 0 0 90,028 83,981 30,132 28,396 Income before federal income taxes and dividends to policyholders Income before Federal Income Taxes & Dividends to policyholders 8,357 3,067 3,965 1,827 Dividends to policyholders 51 122 51 122 Income before federal income taxes 8,306 2,945 3,914 1,705 Federal income tax expense 3,994 1,159 1,749 555 Net Income statutory basis: $ 4,312 1,786 2,165 1,150 FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY CONSOLIDATED STATEMENTS oF CASH FLOW - STATUTORY BASIS Nine months ended September 30, 1995 and 1994 (In Thousands) 1995 1994 Cash provided: From operations: Premiums collected, net $ 84,180 76,112 Loss and loss adjustment expenses paid, net (54,630) (56,988) Underwriting expenses paid (26,289) (23,303) Investment income collected, net 11,245 10,272 Other income 463 361 Dividends paid to policyholders (51) (122) Federal income taxes paid (2,475) (1,484) Net cash provided from operations 12,443 4,848 From investments sold, matured or redeemed: Fixed maturities 32,267 32,827 Equity securities 1,296 812 Mortgage loans 49 41 Other invested assets 440 2,988 Investment proceeds 34,052 36,668 Other sources of cash: Decrease in receivable from affiliates 921 8 Sale of data processing equipment 0 0 Other sources 132 2,527 Total cash provided 47,548 44,051 Cash used: Cash used to acquire investments: Fixed maturities 43,802 44,274 Equity securities 1,028 375 Mortgage loans 0 0 44,830 44,649 Other uses of cash: Increase in due from affiliates 4 1 Repurchase of debentures and subordinated surplus certificates 0 0 Interest paid of debentures and 0 subordinated surplus certificates 0 0 Miscellaneous, net 1,565 223 Total cash used 46,399 44,873 Net cash provided (used) 1,149 (822) Cash and short-term investments at beginning of year 7,521 6,738 Cash and short-term investments at end of year $ 8,670 5,916 FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY Notes to Consolidated Statutory Financial Statements - Statutory Basis 1. The accompanying unaudited consolidated statutory financial statements have been prepared in conformity with insurance accounting practices prescribed or permitted by the Insurance Department of the State of New York which vary in some respects from generally accepted accounting principles. Significant variations include: (1) stocks are carried at market values and no provision is made for income tax on the unrealized appreciation of such investments; (2) certain assets designated as "non-admitted assets" (principally direct premiums "overdue" and balances due from agents and employees) are excluded from the consolidated balance sheet through charges to policyholders' surplus; (3) salvage and subrogation recoveries are not recorded until cash is received; (4) premiums written are taken into operations on a pro-rata basis over the periods covered by the policies, whereas related policy acquisition costs are charged to operations when incurred; (5) federal income taxes are provided on the basis of amounts currently payable or refundable. No provision is made for deferred income taxes relating to timing differences between financial reporting and taxable income. 2. The consolidated statutory financial statements included the accounts of Farm Family Mutual Insurance Company (the Company) and its wholly-owned subsidiary Rural Agency and Brokerage, Inc. (RAB) and its subsidiaries. The subsidiaries of RAB are Rural Insurance Agency and Brokerage of Massachusetts, Inc. (100%-owned by RAB), R.A.A.B. of W. Va., Inc.. (100%-owned by RAB) and Rural Agency and Brokerage of New Hampshire, Inc. (25%-owned by RAB). The minority interest in the capital and net income of Rural Agency and Brokerage of New Hampshire, Inc. is immaterial. All significant intercompany accounts and transactions have been eliminated in consolidation. 3. The management of the Company believes the accompanying unaudited consolidated statutory financial statements contain all adjustments necessary to present fairly the financial position as of September 30, 1995 and the results of operations and changes in financial portion for the period then ended. 4. The results of operations for the periods ended September 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. 5. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. FARM FAMILY MUTUAL INSURANCE COMPANY & SUBSIDIARY Management's Discussion and Analysis of the Consolidated Statements of Income - Statutory Basis (In Thousands) The following is management's discussion and analysis of certain significant factors which have affected the Company's net income during the periods included in the accompanying statements of income. A summary of the period to period changes in the principal items included in the statutory consolidated statements of income is shown below: Comparison of 9 Months Ended September 30, 1995 and September 30, 1994 3 Months Ended September 30, 1995 and September 30, 1994 Amount Percent Amount Percent Premiums earned $ 12,446 16.69 $ 3,786 14.47 Net investment income 177 1.68 (69) (1.83) Losses incurred 56 0.11 500 2.86 Loss adjustment expenses 727 8.49 (215) (6.47) Underwriting expenses 5,268 23.71 1,451 19.15 Net Income: $ 2,526 141.43 $ 1,016 88.35 COMPARISON OF THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 & SEPTEMBER 30, 1994 PREMIUMS EARNED The increase of $12,446,000 is the net result of (1) an increase of $6,189,000 in voluntary auto; (2) an increase of $1,620,000 in the SFP-"10" policy, which is the Company's farm property and liability package policy; (3) an increase of $882,000 in workers' compensation premium; (4) an increase of $1,403,000 in assigned risk auto; (5) an increase of $2,352,000 in all other lines. NET INVESTMENT INCOME Net investment income has increased due to an increase in invested assets. LOSSES INCURRED The increase of $56,000 includes an increase of $2,010,000 in voluntary auto, a decrease of $412,000 in workers' compensation, a decrease of $4,979,000 in the SFP-"10" policy, an increase of $1,868,000 in the assigned risk auto, and an increase of $1,569,000 in all other lines. LOSS ADJUSTMENT EXPENSES The increase of $727,000 is caused in part by an increase in the number of claims as a result of the increased amount of business written. UNDERWRITING EXPENSES The underwriting expense increase is due in part to the increase in commission and taxes paid due to the increase in direct written premiums. FEDERAL INCOME TAX EXPENSE The Company makes provision for federal income taxes based on pre-tax earnings for each of the periods. COMPARISON OF THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994 PREMIUMS EARNED The increase of $3,786,000 is the net result of (1) an increase of $2,163,000 in voluntary auto; (2) an increase of $531,000 in the SFP-"10" policy, which is the Company's farm property and liability package policy; (3) a decrease of $67,000 in workers' compensation premium; (4) an increase of $366,000 in assigned risk auto; (5) an increase of $793,000 in all other lines. NET INVESTMENT INCOME Investment income has decreased due to a reduction in interest rates earned on new investments. LOSSES INCURRED The increase of $500,000 includes a decrease of $836,000 in voluntary auto, a decrease of $673,000 in workers' compensation, a decrease of $396,000 in the SFP-"10" policy, an increase of $146,000 in the assigned risk auto, and an increase of $2,259,000 in all other lines. LOSS ADJUSTMENT EXPENSES The decrease of $215,000 is caused in part by a decrease in loss adjustment expenses paid for the residual market automobile and workers' compensation pools. UNDERWRITING EXPENSES The underwriting expense increase is due in part to the increase in commission and taxes paid due to the increase in direct written premiums. FEDERAL INCOME TAX EXPENSE The Company makes provision for federal income taxes based on pre-tax earnings for each of the periods. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which this report is filed. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FARM FAMILY MUTUAL INSURANCE COMPANY (Registrant) November 8, 1995 /s/ Philip P. Weber (Date) Philip P. Weber, Executive Vice-President & C.E.O. (Principal Administrative Officer) November 8, 1995 /s/ Charles E. Simon (Date) Charles E. Simon, Senior Vice President & C.F.O. (Principal Financial Officer) EX-27 2
7 0000277269 FARM FAMILY MUTUAL INSURANCE COMPANY 1,000 9-MOS DEC-31-1995 SEP-30-1995 172,917 172,917 178,600 10,630 1,840 0 191,806 3,383 357 0 225,503 110,531 53,485 0 0 0 0 0 0 3,226 225,503 87,022 10,702 198 463 62,320 27,489 0 8,357 3,994 4,312 0 0 0 4,312 0 0 103,660 66,050 (3,733) 25,162 30,286 110,529 0
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