Note 16. Segment Reporting

9 Months Ended

Sep. 30, 2016

Notes

Note 16. Segment Reporting

Note 16.          Segment Reporting

The Company has renamed its “Fully Insured” segment “Specialty Health”.  Specialty Health more accurately reflects the niche nature of the products that IHC markets in this segment and continues to expand into since its exit from the major medical market.

The Insurance Group principally engages in the life and health insurance business. Information by business segment is presented below for the periods indicated (in thousands):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2016		2015		2016		2015
Revenues:
Medical Stop-Loss (A)	$	5,433	$	53,320	$	21,397	$	160,310
Specialty Health		44,684		45,193		126,454		141,356
Group disability, life and DBL		26,196		24,404		77,409		65,879
Individual life, annuities and other (A)		717		7,987		2,053		25,287
Corporate		620		45		2,350		137
		77,650		130,949		229,663		392,969
Gain on sale of subsidiary to joint venture		-		10,161		-		10,161
Net realized investment gains (losses)		2,367		(1,109)		3,945		2,991
Net impairment losses recognized in earnings		(1,475)		(228)		(1,475)		(228)
Total revenues	$	78,542	$	139,773	$	232,133	$	405,893
Income from continuing operations
before income taxes:
Medical Stop-Loss (A)	$	2,176	$	5,218	$	13,926	$	14,176
Specialty Health (B)		1,369		2,399		3,754		5,231
Group disability, life and DBL		5,323		4,400		13,533		10,774
Individual life, annuities and other (A)(C)		(410)		3,623		(1,888)		1,238
Corporate		(1,908)		(2,111)		(7,106)		(5,308)
		6,550		13,529		22,219		26,111
Gain on sale of subsidiary to joint venture		-		10,161		-		10,161
Net realized investment gains (losses)		2,367		(1,109)		3,945		2,991
Net impairment losses recognized in earnings		(1,475)		(228)		(1,475)		(228)
Interest expense		(440)		(444)		(1,366)		(1,354)
Income from continuing operations
before income taxes	$	7,002	$	21,909	$	23,323	$	37,681

(A)                Substantially all of the business in the segment is coinsured. The current year’s activity primarily reflects income or expenses related to the coinsurance and the run-off of any remaining blocks that were not coinsured.

(B)                 The Specialty Health segment includes amortization of intangible assets. Total amortization expense was $366,000 and $425,000 for the three months ended September 30, 2016 and 2015, respectively, and was $1,057,000 and $1,070,000, respectively, for the nine months ended September 30, 2016 and 2015. Amortization expense for the other segments is not material to their operating results.

(C)                The Individual life, annuities and other segment includes amortization of deferred charges in connection with the assumptions of certain ceded life and annuity policies amounting to $296,000 and $213,000 for the three months ended September 30, 2016 and 2015, respectively, and $1,949,000 and $629,000 for the nine months ended September 30, 2016 and 2015, respectively.