Stockholders Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Stockholders' Equity

NOTE 10.  STOCKHOLDERS’ EQUITY

Our authorized share capital consists of 50,000,000 common shares with a par value of $0.10 per share and 1,000,000 preferred shares with a par value of $0.10 per share. Our Company has not issued any preferred shares as of December 31, 2016.

The following table represents changes in our Company’s issued and outstanding common shares for the periods indicated. We completed a two-for-one stock split on January 20, 2017. All share and per share data has been retroactively restated on a post-split basis.

	Years Ended December 31,
amounts in thousands	2016		2015		2014
Beginning balance		28,862		28,562		28,396
Vested stock grants		220		254		118
Employee stock purchase plan		42		42		38
Stock options exercised		—		4		10
Ending balance		29,124		28,862		28,562

On December 6, 2016, our Board of Directors declared a two-for-one stock split of The Navigators Group, Inc. Common stock, to be effected in the form of a stock dividend. Stockholders of record at the close of business on December 30, 2016 received one additional share of Common stock for every share of Common stock held. All disclosures of shares and per share data have been retroactively adjusted to reflect the stock split for all periods presented.   

On July 15, September 30, and December 29, 2016, our Company paid dividends of $0.045 per share to stockholders of record of our Company’s Common stock as of June 20, August 19, and November 18, 2016, respectively.

The declaration and amount of any future dividend will be at the discretion of the Board of Directors, and will depend upon our Company’s financial condition, results of operations, business requirements, regulatory and legal constraints and any other factors the Board of Directors deems relevant. Refer to Footnote 16 – Subsequent Events.

NIC may pay dividends to our Parent Company out of its statutory earned surplus pursuant to statutory restrictions imposed under the New York insurance law.  As of December 31, 2016, the maximum amount available for the payment of dividends by NIC without prior regulatory approval is $102.7 million.  NIC paid a dividend to our Parent Company of $5.0 million in 2016. NIC did not pay any dividends to our Parent Company in 2015.

NCUL may pay dividends to our Parent Company up to the extent of available profits that have been distributed from the Syndicate.  The Syndicate’s capital and surplus as filed with Lloyd’s consists of undistributed profits on closed and open UWYs.  In connection with the business plan approved in November 2015, NCUL posted all of the available undistributed profits on closed years of $141.9 million to support a portion of the FAL requirement and therefore that amount is not available for distribution to NCUL, which ultimately is not available to our Parent Company in the form of a dividend.  As of December 31, 2016, NCUL has the ability to pay up to $3.0 million, consisting of distributed profits on closed UWYs from the Syndicate, to the Parent Company in the form of dividends.

The amount and nature of net assets that are restricted from payment of dividends as of December 31, 2016 and 2015 are presented in the following table:

	As of December 31,
amounts in thousands	2016		2015
Restricted net assets:
NIC and NSIC:
Fixed maturities at fair value (amortized cost: 2016, $9,820; 2015, $9,950)	$	10,690	$	11,277
Short term investments, at fair value		290		290
Cash		7,168		6,208
Total NIC and NSIC (1)	$	18,148	$	17,775
NHUK:
Fixed maturities at fair value (amortized cost: 2016, $457,225; 2015, $458,558)	$	452,053	$	448,666
Short term investments, at  fair value		63,729		71,320
Cash		—		3,262
Total NHUK (2)	$	515,782	$	523,248
Total Restricted Net Assets	$	533,930	$	541,023

(1) - The restricted net assets for NIC and NSIC primarily consist of fixed maturities on deposit with various state insurance departments.  The cash as of December 31, 2016 and 2015, as presented in the table above, was on deposit with a U.K. bank to comply with the regulatory requirements of the Prudential Regulation Authority for the underwriting activities of the U.K. Branch.  

(2) - The restricted net assets for NHUK consists of fixed maturities and cash held in trust for the benefit of syndicate policyholders and short term investments primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries.