Note 18. Commitments and Concentration of Credit Risk

12 Months Ended

Dec. 31, 2012

Notes

Note 18. Commitments and Concentration of Credit Risk

Note 18.          Commitments and Concentration of Credit Risk

            Certain subsidiaries of the Company are obligated under non-cancelable operating lease agreements for office space. Total rental expense for the years 2012, 2011 and 2010 for operating leases was $3,750,000, $4,016,000 and $4,942,000, respectively.

The approximate minimum annual rental payments under operating leases that have remaining non-cancelable lease terms in excess of one year at December 31, 2012 are as follows (in thousands):

2013	$	2,981
2014		2,696
2015		2,576
2016		2,070
2017		784
2018 and thereafter		462
Total	$	11,569

At December 31, 2012, the Company had no investment securities of any one issuer or in any one industry which exceeded 10% of stockholders' equity, except for investments in obligations of the U.S. Government and its agencies and mortgage-backed securities issued by GSEs, as summarized in Note 4.

Fixed maturities with a carrying value of $12,468,000 and $11,406,000 were on deposit with various state insurance departments at December 31, 2012 and 2011, respectively.

At December 31, 2012, the Company had net receivables of $44,045,000 and $34,236,000 from two different reinsurers, Alterra Bermuda, Inc. and RGA Reinsurance Company, respectively, which are rated A and A+, respectively, by A.M. Best.  These are the only reinsurers with net receivables that individually exceed 10% of the stockholders' equity of the Company. The Company believes that these receivables are fully collectible.     

We are involved in legal proceedings and claims that arise in the ordinary course of our businesses. We have established reserves that we believe are sufficient given information presently available relating to our outstanding legal proceedings and claims.  We do not anticipate that the result of any pending legal proceeding or claim will have a material adverse effect on our financial condition or cash flows, although there could be such an effect on our results of operations for any particular period.

On January 2, 2013, Madison National Life was named one of several defendants in a lawsuit related to certain provisions of a particular health insurance plan whereby Madison National Life was the insurance carrier during one of the years in question. Because legal discovery has not commenced and many aspects of the lawsuit are as yet unknown, it is not possible to provide a meaningful estimate of the lawsuit’s ultimate financial effect, if any, on the Company.