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Condensed Financial Information of Registrant
 12 Months Ended
Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract]  
Condensed Financial Information of Registrant
 December 31,
 20232022
 (Amounts in thousands)
ASSETS
Investments, at fair value:
Fixed maturity securities (amortized cost $9,979; $10,908)
$9,949 $10,907 
Equity securities (cost $17,227; $35,041)
28,027 51,416 
Short-term investments (cost $571; $27,057)
571 27,059 
Investment in subsidiaries2,084,346 1,833,372 
Total investments2,122,893 1,922,754 
Cash4,698 6,218 
Accrued investment income141 149 
Amounts receivable from affiliates503 516 
Current income taxes5,148 55,777 
Deferred income taxes1,544 1,072 
Income tax receivable from affiliates15,161 12,865 
Other assets1,499 1,493 
Total assets$2,151,587 $2,000,844 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable$573,729 $398,330 
Amounts payable to affiliates2,753 90 
Income tax payable to affiliates21,209 75,079 
Other liabilities5,751 5,214 
Total liabilities603,442 478,713 
Commitments and contingencies
Shareholders’ equity:
Common stock98,947 98,947 
Retained earnings1,449,198 1,423,184 
Total shareholders’ equity1,548,145 1,522,131 
Total liabilities and shareholders’ equity$2,151,587 $2,000,844 
 
SCHEDULE II, Continued

MERCURY GENERAL CORPORATION
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS
 Year Ended December 31,
 202320222021
 (Amounts in thousands)
Revenues:
Net investment income$2,998 $2,696 $2,560 
Net realized investment gains (losses) 1,431 (12,969)26,523 
Total revenues4,429 (10,273)29,083 
Expenses:
Other operating expenses2,526 2,446 2,627 
Interest24,129 17,178 17,088 
Total expenses26,655 19,624 19,715 
(Loss) income before income taxes and equity in net income (loss) of subsidiaries(22,226)(29,897)9,368 
Income tax (benefit) expense(4,379)(10,234)4,930 
(Loss) income before equity in net income (loss) of subsidiaries(17,847)(19,663)4,438 
Equity in net income (loss) of subsidiaries114,183 (493,009)243,499 
Net income (loss)$96,336 $(512,672)$247,937 
SCHEDULE II, Continued

MERCURY GENERAL CORPORATION
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
 Year Ended December 31,
 202320222021
 (Amounts in thousands)
Cash flows from operating activities:
Net cash (used in) provided by operating activities$(14,703)$225 $(36,662)
Cash flows from investing activities:
Capital contribution to subsidiaries(150,000)— — 
Capital distribution from subsidiaries— 3,431 — 
Distributions received from special purpose entities6,210 2,904 5,199 
Dividends received from subsidiaries— — 191,000 
Fixed maturity securities available for sale in nature
Purchases— (11,905)— 
Sales— 1,000 — 
Calls or maturities955 — — 
Equity securities available for sale in nature
Purchases(1,172)(5,307)(13,151)
Sales25,848 48,215 38,092 
Decrease (increase) in short-term investments26,481 (6,268)(16,172)
Other, net183 667 791 
Net cash (used in) provided by investing activities(91,495)32,737 205,759 
Cash flows from financing activities:
Dividends paid to shareholders(70,322)(105,482)(140,226)
Proceeds from stock options exercised— — 215 
Proceeds from bank loan175,000 25,000 — 
Net cash provided by (used in) financing activities104,678 (80,482)(140,011)
Net (decrease) increase in cash(1,520)(47,520)29,086 
Cash:
Beginning of year6,218 53,738 24,652 
End of year$4,698 $6,218 $53,738 
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid $22,959 $16,611 $16,590 
Income taxes paid (refunded), net $1,630 $(14,102)$18,841 
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.
Distributions received from Special Purpose Investment Vehicles

From time to time, the Company forms special purpose investment vehicles to facilitate its investment activities involving derivative instruments such as total return swaps, or limited partnerships such as private equity funds. For the three years ended December 31, 2023, the Company had two such special purpose investment vehicles: Fannette Funding LLC and Animas Funding LLC. These special purpose investment vehicles are consolidated into the Company. Creditors have no recourse against the Company in the event of default by these special purpose investment vehicles. The Company had no implied or unfunded commitments to these entities at December 31, 2023 and 2022. The Company's financial or other support provided to these entities and its loss exposure are limited to its collateral and original investment. Mercury General received distributions of $6.2 million, $2.9 million, and $5.2 million in 2023, 2022, and 2021, respectively, from these special purpose investment vehicles.
Dividends received from Subsidiaries

Dividends of $0, $0 and $191 million were received by Mercury General from its 100% owned insurance subsidiaries in 2023, 2022 and 2021, respectively, and were recorded as a reduction to investment in subsidiaries.
Capitalization of Insurance Subsidiaries

Mercury General made capital contributions to its insurance subsidiaries of $150 million, $0 and $0 in 2023, 2022 and 2021, respectively. In addition, Mercury General received a capital distribution from its insurance subsidiaries of $0, $3,431,433, and $0 in 2023, 2022 and 2021, respectively. The capital distribution for 2022 was related to the dissolution of an insurance subsidiary in November 2022, pursuant to which Mercury General received the complete return of its invested capital.
Notes Payable

On March 8, 2017, Mercury General completed a public debt offering issuing $375 million of senior notes. The notes are unsecured senior obligations of Mercury General, with a 4.4% annual coupon payable on March 15 and September 15 of each year commencing September 15, 2017. These notes mature on March 15, 2027. The Company used the proceeds from the notes to pay off the total outstanding balance of $320 million under the existing loan and credit facility agreements and terminated the agreements on March 8, 2017. The remainder of the proceeds from the notes was used for general corporate purposes. Mercury General incurred debt issuance costs of approximately $3.4 million, inclusive of underwriters' fees. The notes were issued at a slight discount of 99.847% of par, resulting in the effective annualized interest rate, including debt issuance costs, of approximately 4.45%.

On March 31, 2021, the Company entered into an unsecured $75 million five-year revolving credit facility. On November 18, 2022, the Company entered into the First Amendment to this credit facility. The First Amendment extended the maturity date of the loan to November 16, 2026 from March 31, 2026 with possible further extension if certain conditions are met, increased the aggregate commitments by all the lenders to $200 million from $75 million, and replaced the LIBOR with the term SOFR. On November 30, 2023, the Company entered into the Second Amendment to this credit facility, which further increased the aggregate commitments by all the lenders to $250 million from $200 million. The interest rates on borrowings under the credit facility are based on the Company's debt to total capital ratio and range from Term SOFR plus 112.5 basis points when the ratio is under 20% to Term SOFR plus 150.0 basis points when the ratio is greater than or equal to 30%. Commitment fees for the undrawn portions of the credit facility range from 12.5 basis points when the ratio is under 20% to 22.5 basis points when the ratio is greater than or equal to 30%. The debt to total capital ratio is expressed as a percentage of (a) consolidated debt to (b) consolidated shareholders' equity plus consolidated debt. The Company's debt to total capital ratio was 27.1% at December 31, 2023, resulting in a 17.5 basis point commitment fee on any undrawn portion of the credit facility. As of February 13, 2024, a total of $200 million was drawn under this facility on a three-month revolving basis at an annual interest rate of approximately 6.84%, with $50 million available to be drawn. The Company contributed $150 million of the
total amount drawn to the surplus of its consolidated insurance subsidiaries, and used the remainder for general corporate purposes.
Federal Income Taxes

The Company files a consolidated federal income tax return for the following entities:
 
Mercury Casualty CompanyMercury Indemnity Company of America
Mercury Insurance CompanyMercury Select Management Company, Inc.
California Automobile Insurance CompanyMercury Insurance Services LLC
California General Underwriters Insurance Company, Inc.AIS Management LLC
Mercury Insurance Company of IllinoisAuto Insurance Specialists LLC
Mercury Insurance Company of GeorgiaPoliSeek AIS Insurance Solutions, Inc.
Mercury Indemnity Company of GeorgiaAnimas Funding LLC
American Mercury Insurance CompanyFannette Funding LLC
American Mercury Lloyds Insurance CompanyMercury Plus Insurance Services LLC
Orion Indemnity CompanyMercury Information Technology Services LLC
Mercury County Mutual Insurance CompanyMercury (Shanghai) Information Technology Services Co., Ltd.

The method of allocation between the companies is subject to an 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.