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Notes to Consolidated Statements of Income

December 31, 2002, 2001 and 2000

7   Statutory Financial Information

At December 31, 2002, $405.5 million of consolidated statutory policyholders' surplus represents net admitted assets of the Company's insurance subsidiaries and affiliates that are required to meet minimum statutory surplus requirements in such entities' states of domicile. The companies may be licensed in states other than their states of domicile, which may have higher minimum statutory surplus requirements. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed.
During 2002, the insurance subsidiaries paid aggregate cash dividends of $34.5 million to the parent company. Based on the dividend laws currently in effect, the insurance subsidiaries may pay aggregate dividends of $455.5 million in 2003 without prior approval from regulatory authorities.
Statutory policyholders' surplus was $3,370.2 million and $2,647.7 million at December 31, 2002 and 2001, respectively. Statutory net income was $557.4 million, $469.5 million and $33.8 million for the years ended December 31, 2002, 2001 and 2000, respectively.
The Company files statutory-basis financial statements with state insurance departments in all states in which the Company is licensed. On January 1, 2001, significant changes to the statutory basis of accounting became effective. The cumulative effect of these changes was recorded as a direct adjustment to statutory surplus. The effect of adoption increased statutory surplus by $340.5 million.

continue to Note 8 Employee Benefit Plans