The Phoenix Companies, Inc. (NYSE:PNX) Provides Third Quarter 2013 Highlights of Unaudited Statutory Results and Estimated Operating Metrics
Statutory net gain from operations of $8.7 million
Statutory surplus and asset valuation reserve of $785.0 million
Estimated risk-based capital ratio of 349%
HARTFORD, Conn.--(BUSINESS WIRE)--
The Phoenix Companies, Inc. (NYSE:PNX) today provided third quarter 2013
unaudited statutory results for its principal operating subsidiary,
Phoenix Life Insurance Company (PLIC), and estimated third quarter 2013
"We continue to focus on maintaining solid fundamentals and growing our
businesses as we work to complete the GAAP restatement," said James D.
Wehr, president and chief executive officer.
THIRD QUARTER 2013 STATUTORY RESULTS FOR PHOENIX LIFE INSURANCE
PLIC today filed its unaudited statutory financial results for the
quarter ended Sept. 30, 2013 with the New York Department of Financial
Services. The following are highlights from that filing:
Statutory net gain from operations was $8.7 million, and statutory net
income was $4.4 million for the quarter ended Sept. 30, 2013.
Statutory surplus and asset valuation reserve was $785.0 million at
Sept. 30, 2013, reflecting the following actions in the third quarter
PLIC paid a $29.2 million dividend to the parent holding company.
As a result of the previously announced GAAP restatement process
and the statutory and GAAP audits, $(1.6) million of net prior
period adjustments were recorded in PLIC's statutory surplus. Net
prior period adjustments of $(0.5) million in the carrying value
of insurance company subsidiaries are reflected in the change in
net unrealized capital gains.
Risk-based capital ratio was estimated to be 349% at Sept. 30, 2013.
THIRD QUARTER 2013 ESTIMATED OPERATING METRICS FOR THE PHOENIX
The following are currently estimated operating metrics for the third
quarter of 2013:
Annuity deposits of $165.8 million for the third quarter of 2013.
Net annuity flows (deposits less surrenders) of $13.7 million for the
third quarter of 2013.
Annuity funds under management of $5.4 billion at Sept. 30, 2013.
Life insurance annualized premium of $0.6 million for the third
quarter of 2013.
Gross life insurance in-force of $106.5 billion at Sept. 30, 2013.
Third quarter 2013 mortality was favorable compared with expectations.
Open block experience was favorable, driven by universal life results,
and closed block experience was slightly unfavorable.
Third quarter 2013 total individual life surrenders at an annualized
rate of 4.0%, and closed block life policies at an annualized rate of
Third quarter 2013 annuity surrenders at an annualized rate of 11.6%.
Holding company cash and securities totaled $200.9 million at Sept.
Saybrus Partners EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization), including inter-company revenues, was $0.7 million
for the third quarter of 2013.
YEAR-TO-DATE 2013 CHANGES TO PHOENIX LIFE INSURANCE COMPANY STATUTORY
SURPLUS AND ASSET VALUATION RESERVE
PLIC's statutory surplus and asset valuation reserve was $785.0 million
at Sept. 30, 2013 and $922.5 million at Dec. 31, 2012. The statutory
surplus and asset valuation reserve at Sept. 30, 2013 reflects the
following actions in the first nine months of 2013:
PLIC paid a total of $49.2 million in dividends to the parent holding
company in the first nine months of 2013.
PLIC and its subsidiary, PHL Variable Insurance Company, initiated a
hedge to protect surplus against the impact of rising interest rates
in the first quarter of 2013. The hedge also positions The Phoenix
Companies, Inc. to utilize tax benefits related to expiring capital
loss carryforwards maintained at the holding company. The transaction
decreased statutory surplus by $55.2 million and increased holding
company assets by $48.0 million, enhancing liquidity and capital
A $23.1 million decrease in statutory surplus is due to lower admitted
deferred tax assets on the balance sheet of PLIC and its insurance
company subsidiaries at Sept. 30, 2013.
PLIC made $(28.0) million of net prior period adjustments during the
nine months ended Sept. 30, 2013 as a result of the previously
announced GAAP restatement process and statutory and GAAP audits.
$(36.8) million of net prior period adjustments were recorded in
Net prior period adjustments of $8.8 million in the carrying value
of insurance company subsidiaries are reflected in the change in
net unrealized capital gains.
The principal components of the net prior period adjustments are
reductions for an increase in taxes owed resulting from underreporting
of taxable income in prior periods, primarily in partnership
investments, a decrease in net investment income, and the
establishment of a reserve arising from a 1996 class action lawsuit
settlement, partially offset by a decrease in the incurred but not
reported claim reserve.
PLIC's statutory results are not indicative of, and are not a
replacement for, the consolidated GAAP results of The Phoenix Companies,
Inc. Variances between PLIC's statutory financial results and its or The
Phoenix Companies, Inc.'s GAAP financial information are likely to be
Due to the differences between the statutory and GAAP accounting
principles, the statutory adjustments discussed above may not be
the same as the adjustments made to the GAAP financial statements as a
result of the restatement, and such differences could be material.
RESTATEMENT AND FILING OF GAAP FINANCIAL STATEMENTS
Phoenix reported on Oct. 15, 2013 that it believes it is in the final
phases of the restatement work, and it is preparing its corrective and
delayed filings. Once the filing timetable is established, the company
expects to provide a further update on the restatement.
As previously reported, Phoenix is restating historical annual and
interim GAAP financial statements. Phoenix has not yet filed with the
SEC its third quarter 2012 Form 10-Q and its subsequent periodic reports.
On Nov. 8, 2013, Phoenix filed a Notification of Late Filing on Form
12b-25 with the SEC disclosing that it will not file its third quarter
2013 Form 10-Q on or before the Nov. 12, 2013 due date and that it does
not expect to file it within the five day extension period offered by
Rule 12b-25 of the Securities Exchange Act of 1934, as amended.
In addition, Phoenix previously reported that the completion of the 2012
audited statutory financial statements of its insurance company
subsidiaries would be delayed because they are dependent on substantial
completion of the GAAP restatement process, the evaluation of the
control environment related to the statutory and GAAP financial
statements and the related audit processes, and that the situation
remains fluid as additional issues are identified and resolved. The
company's insurance company subsidiaries have received extensions from
their respective domiciliary state insurance regulators for filing their
2012 audited statutory financial statements and intend to seek further
extensions as required.
Unaudited statutory financial results for the third quarter of 2012,
full year 2012 and first three quarters of 2013 were filed on time with
state insurance regulators.
RELIANCE ON STATUTORY FINANCIAL RESULTS
The company advised that full year 2012 and first, second and third
quarter 2013 unaudited statutory financial results for its insurance
company subsidiaries filed with their domiciliary state insurance
regulators can continue to be relied upon after taking into
consideration the $(28.0) million of net prior period adjustments
reported above. However, that situation can change.
The company noted that there are errors arising from the GAAP
restatement process and the statutory and GAAP audits that have been
identified, some of which have been quantified while others have not yet
been fully assessed and quantified. These errors, along with additional
errors that may be identified, could, individually or in the aggregate,
materially and adversely impact the previously disclosed 2012 and 2013
unaudited statutory financial results, and the 2012 audited annual
statutory financial statements, when completed, could materially and
adversely vary from the 2012 unaudited annual statutory results.
The Phoenix Companies, Inc. (NYSE:PNX) helps financial professionals
provide solutions, including income strategies and insurance protection,
to families and individuals planning for or living in retirement.
Founded as a life insurance company in 1851, Phoenix offers products and
services designed to meet financial needs in the middle income and mass
affluent markets. Its distribution subsidiary, Saybrus Partners, Inc.
offers solutions-based sales support to financial professionals and
represents Phoenix's products among key distributors, including
independent marketing organizations and brokerage general agencies.
Phoenix is headquartered in Hartford, Connecticut, and its principal
operating subsidiary, Phoenix Life Insurance Company, has its statutory
home office in East Greenbush, New York. For more information, visit www.phoenixwm.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The foregoing contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. We
intend for these forward-looking statements to be covered by the safe
harbor provisions of the federal securities laws relating to
forward-looking statements. These forward-looking statements
include statements relating to, or representing management's beliefs
about, our future transactions, strategies, operations and financial
results, including, without limitation, our expectation to provide
information within anticipated timeframes. Such forward-looking
statements often contain words such as "will," "anticipate," "believe,"
"plan," "estimate," "expect," "intend," "is targeting," "may," "should"
and other similar words or expressions. Forward-looking
statements are made based upon management's current expectations and
beliefs and are not guarantees of future performance. Our ability
to provide updated information about the restatement in the anticipated
timeframe, complete the restatement and resume a timely filing schedule
with respect to our SEC filings reflecting the restatement is subject to
a number of contingencies, including but not limited to, whether we
continue to identify errors in our consolidated financial statements,
whether existing systems and processes can be timely updated,
supplemented or replaced, and the number and complexity of, and periods
covered by, the periodic reports that we will have to file with the SEC
to reflect the restatement. Our actual business, financial condition or
results of operations may differ materially from those suggested by
forward-looking statements as a result of risks and uncertainties which
include, among others, those risks and uncertainties described in any of
our other filings with the SEC. Certain other factors which may
impact our business, financial condition or results of operations or
which may cause actual results to differ from such forward-looking
statements are discussed or included in our periodic reports filed with
the SEC and are available on our website at www.phoenixwm.com
under "Investor Relations". You are urged to carefully consider
all such factors. We do not undertake or plan to update or revise
forward-looking statements to reflect actual results, changes in plans,
assumptions, estimates or projections, or other circumstances occurring
after the date of this news release, even if such results, changes or
circumstances make it clear that any forward-looking information will
not be realized. If we make any future public statements or
disclosures which modify or impact any of the forward-looking statements
contained in or accompanying this news release, such statements or
disclosures will be deemed to modify or supersede such statements in
this news release.
The Phoenix Companies, Inc.
Alice S. Ericson, 860-403-5946
Naomi Baline Kleinman, 860-403-7100
Source: The Phoenix Companies, Inc
News Provided by Acquire Media
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