Mercury Insurance 2010 Annual Report Download - page 123

Download and view the complete annual report

Please find page 123 of the 2010 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

SCHEDULE II, Continued
MERCURY GENERAL CORPORATION
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL INFORMATION
The accompanying condensed financial information should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements included in this report.
Dividends
Dividends of $128,000,000, $110,000,000, and $140,000,000 were received by the Company from its
wholly-owned subsidiaries in 2010, 2009, and 2008, respectively, and are recorded as a reduction to investment
in subsidiaries.
On December 16, 2010, the California DOI notified the Company that MCC was authorized to pay a $270
million extraordinary dividend to Mercury General in 2011. Mercury General intends to use the proceeds from
the dividend to repay the $125 million senior notes and to fund shareholder dividends.
Capitalization of Subsidiaries
Mercury General made capital contributions to its insurance subsidiaries of $125,000 in 2010, and $0 in
2009 and 2008.
Guarantees
The borrowings by MCC, a subsidiary, under the $120 million credit facility and $18 million bank loan are
secured by approximately $167 million of municipal bonds owned by MCC, at fair value, held as collateral. The
total borrowings of $138 million are guaranteed by the Company.
Federal Income Taxes
The Company files a consolidated federal income tax return with the following subsidiaries:
Mercury Casualty Company Mercury Insurance Company of Florida
Mercury Insurance Company Mercury Indemnity Company of America
California Automobile Insurance Company Mercury Select Management Company, Inc.
California General Underwriters Insurance Company, Inc. American Mercury MGA, Inc.
Mercury Insurance Company of Illinois Concord Insurance Services, Inc.
Mercury Insurance Company of Georgia Mercury Insurance Services LLC
Mercury Indemnity Company of Georgia Mercury Group, Inc.
Mercury National Insurance Company AIS Management LLC
American Mercury Insurance Company Auto Insurance Specialists LLC
American Mercury Lloyds Insurance Company PoliSeek AIS Insurance Solutions, Inc.
Mercury County Mutual Insurance Company
The method of allocation between the companies is subject to agreement approved by the Board of
Directors. Allocation is based upon separate return calculations with current credit for net losses incurred by the
insurance subsidiaries to the extent it can be used in the current consolidated return.
See accompanying Report of Independent Registered Public Accounting Firm
S-7