Statutory surplus and dividend restrictions

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Statutory surplus and dividend restrictions

Statutory surplus and dividend restrictions. A substantial portion of the consolidated retained earnings at each year end was related to Guaranty, which owns a majority of all 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 (TIC). Guaranty paid dividends of $150.0 million and $293.9 million (including an extraordinary dividend of $135.0 million) in 2022 and 2021, respectively. The maximum dividend that can be paid, on a rolling twelve-month period and subject to the timing of dividends paid in 2022, without the TIC's approval in 2023 is approximately $158.1 million, based on the greater of 2022 net operating income or 20% of statutory surplus as December 31, 2022.

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 (total statutory capital and surplus) for Guaranty was $790.4 million and $826.9 million at December 31, 2022 and 2021, respectively. Statutory net income for Guaranty was $144.9 million, $188.8 million and $133.2 million in 2022, 2021 and 2020, 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 $2.0 million for all of the Company’s underwriter subsidiaries) at December 31, 2022, and each of its underwriter entities was in compliance with such requirements as of December 31, 2022.