Travelers 2010 Annual Report Download - page 224

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. SHAREHOLDERS’ EQUITY AND DIVIDEND AVAILABILITY (Continued)
In January 2011, the board of directors approved a share repurchase authorization that added an
additional $5 billion of repurchase capacity to the $1.51 billion of capacity remaining at December 31,
2010.
The Company’s Amended and Restated 2004 Stock Incentive Plan provides settlement alternatives
to employees in which the Company repurchases shares to cover tax withholding costs and exercise
costs. During the years ended December 31, 2010 and 2009, the Company purchased $66 million and
$65 million, respectively, of its common stock under these plans.
Common shares acquired are reported as treasury stock in the consolidated balance sheet.
Dividend Availability
The Company’s insurance subsidiaries are subject to various regulatory restrictions that limit the
maximum amount of dividends available to be paid to their parent without prior approval of insurance
regulatory authorities. A maximum of $3.61 billion is available by the end of 2011 for such dividends
without prior approval of the Connecticut Insurance Department. The Company may choose to
accelerate the timing within 2011 and/or increase the amount of dividends from its insurance
subsidiaries in 2011, which could result in certain dividends being subject to approval by the
Connecticut Insurance Department. The holding company received $6.59 billion of dividends from its
domestic insurance subsidiaries in 2010, including $5.26 billion of dividends that were subject to
regulatory approval, primarily due to the Company’s request for the accelerated timing of payment.
Statutory Net Income and Surplus
Statutory net income of the Company’s domestic and international insurance subsidiaries was
$3.69 billion, $3.90 billion and $4.10 billion for the years ended December 31, 2010, 2009 and 2008,
respectively. Statutory capital and surplus of the Company’s domestic and international insurance
subsidiaries was $20.07 billion and $23.20 billion at December 31, 2010 and 2009, respectively.
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