Bank Line of Credit

9 Months Ended

Sep. 30, 2011

Bank Line of Credit

Bank Line of Credit

Note 8.  Bank Line of Credit

As of September 30, 2011, Indemnity has available a $100 million line of credit that expires on December 31, 2011.  There were no borrowings outstanding on the line of credit as of September 30, 2011.  Bonds with a fair value of $137 million were pledged as collateral on the line at September 30, 2011.

On November 3, 2011, Indemnity entered into a new five year revolving credit facility for the same amount which expires on November 3, 2016.

As of September 30, 2011, the Exchange has available a $200 million revolving line of credit that expires on September 30, 2012.  There were no borrowings outstanding on the line of credit as of September 30, 2011.  Bonds with a fair value of $262 million were pledged as collateral on the line at September 30, 2011.

On October 28, 2011, the Exchange amended its revolving credit facility increasing the amount available from $200 million to $300 million and extending the term five years, which expires on October 28, 2016.

Securities pledged as collateral on both lines have no restrictions and are reported as available-for-sale fixed maturities in the Consolidated Statements of Financial Position as of September 30, 2011.  The banks require compliance with certain covenants, which include minimum net worth and leverage ratios for Indemnity’s line of credit and statutory surplus and risk based capital ratios for the Exchange’s line of credit.  We are in compliance with all covenants at September 30, 2011.