Statutory surplus and dividend restrictions

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Statutory surplus and dividend restrictions

Statutory surplus and dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty, which owns directly or indirectly all of the subsidiaries included in the consolidation.

Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend that can be paid after such approval in 2016 is $100.4 million. Guaranty paid $15.0 million and $25.0 million in dividends in 2015 and 2014, respectively, and none in 2013.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

Surplus as regards policyholders (sum of statutory capital plus surplus) for Guaranty was $501.8 million and $525.8 million at December 31, 2015 and 2014, respectively. Statutory net income for Guaranty was $83.2 million, $53.2 million and $43.0 million in 2015, 2014 and 2013 respectively.

The amount of statutory capital and surplus necessary to satisfy regulatory requirements for Guaranty was $2.0 million (and in the aggregate less than $15.0 million for all of the Company’s underwriter entities) at December 31, 2015, and each of its underwriter entities was in compliance with such requirements as of December 31, 2015.