Travelers 2015 Annual Report Download - page 129

deductible receivable for unpaid claims are presented in the consolidated balance sheet as
‘‘contractholder payables’’ and ‘‘contractholder receivables,’’ respectively. Most deductibles for such
policies are paid directly from the policyholder’s escrow which is periodically replenished by the
policyholder. The payment of the loss amounts above the deductible are reported within ‘‘Claims
and claim adjustment expenses’’ in the above table. Because the timing of the collection of the
deductible (contractholder receivables) occurs shortly after the payment of the deductible to a
claimant (contractholder payables), these cash flows offset each other in the table.
The estimated timing of the payment of the contractholder payables and the collection of
contractholder receivables for workers’ compensation policies is presented below:
Less than After
(in millions) Total 1 Year 1 - 3 Years 3 - 5 Years 5 Years
Contractholder payables/receivables ......... $4,374 $1,106 $1,231 $653 $1,384
(8) The amounts in ‘‘Loss-based assessments’’ relate to estimated future payments of second-injury
fund assessments which would result from payment of current claim liabilities. Second injury funds
cover the cost of any additional benefits for aggravation of a pre-existing condition. For loss-based
assessments, the cost is shared by the insurance industry and self-insureds, funded through
assessments to insurance companies and self-insureds based on losses. Amounts relating to second-
injury fund assessments are included in ‘‘other liabilities’’ in the consolidated balance sheet.
(9) The amounts in ‘‘Reinsurance contracts accounted for as deposits’’ represent estimated future
nominal payments for reinsurance agreements that are accounted for as deposits. Amounts payable
under deposit agreements are included in ‘‘other liabilities’’ in the consolidated balance sheet.
(10) The amounts in ‘‘Payout from ceded funds withheld’’ represent estimated payments for losses and
return of funds held related to certain reinsurance arrangements whereby the Company holds a
portion of the premium due to the reinsurer and is allowed to pay claims from the amounts held.
(11) The Company’s current liabilities related to unrecognized tax benefits from uncertain tax positions
are $296 million. Offsetting these liabilities are deferred tax assets of $275 million associated with
the temporary differences that would exist if these positions become realized.
The above table does not include an analysis of liabilities reported for structured settlements for
which the Company has purchased annuities and remains contingently liable in the event of default by
the company issuing the annuity. The Company is not reasonably likely to incur material future
payment obligations under such agreements. In addition, the Company is not currently subject to any
minimum funding requirements for its qualified pension plan. Accordingly, future contributions are not
included in the foregoing table.
Dividend Availability
The Company’s principal insurance subsidiaries are domiciled in the state of Connecticut. The
insurance holding company laws of Connecticut applicable to the Company’s subsidiaries requires
notice to, and approval by, the state insurance commissioner for the declaration or payment of any
dividend that, together with other distributions made within the preceding twelve months, exceeds the
greater of 10% of the insurer’s statutory capital and surplus as of the preceding December 31, or the
insurer’s net income for the twelve-month period ending the preceding December 31, in each case
determined in accordance with statutory accounting practices and by state regulation. This declaration
or payment is further limited by adjusted unassigned surplus, as determined in accordance with
statutory accounting practices. The insurance holding company laws of other states in which the
Company’s subsidiaries are domiciled generally contain similar, although in some instances somewhat
more restrictive, limitations on the payment of dividends. A maximum of $3.81 billion is available by
the end of 2016 for such dividends to the holding company, TRV, without prior approval of the
129