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Schedule II - Condensed Financial Information of Registrant | 12 Months Ended
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Dec. 31, 2022
Condensed Financial Information Disclosure [Abstract] |
Schedule II - Condensed Financial Information of Registrant | CONDENSED FINANCIAL INFORMATION OF REGISTRANT Universal Insurance Holdings, Inc. (the “Parent Company”) had no guarantees or material contingencies as of December 31, 2022 and 2021. The following summarizes the major categories of the parent company’s financial statements (in thousands, except per share data): CONDENSED BALANCE SHEETS
|  | As of December 31,
|  | 2022 |  | 2021
ASSETS |  |  |  |
Cash and cash equivalents |  | $ | 83,022 |  |  | $ | 169,157 |
Investments in subsidiaries and undistributed earnings |  | 139,386 |  |  | 317,166 |
Available-for-sale debt securities, at fair value |  | 3,997 |  |  | — |
Equity securities, at fair value |  | 13,946 |  |  | — |
Income taxes recoverable |  | 1,507 |  |  | 16,960 |
Deferred income tax asset, net |  | 1,539 |  |  | 3,466 |
Intercompany note receivable |  | 143,792 |  |  | 20,415 |
Other assets |  | 398 |  |  | 140 |
Total assets |  | $ | 387,587 |  |  | $ | 527,304 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |
LIABILITIES: |  |  |  |
Accounts payable |  | $ | 50 |  |  | $ | 17 |
Dividends payable |  | 360 |  |  | 143 |
Long-term debt, net |  | 97,254 |  |  | 96,691 |
Other accrued expenses |  | 2,027 |  |  | 751 |
Total liabilities |  | 99,691 |  |  | 97,602 |
STOCKHOLDERS’ EQUITY: |  |  |  |
Cumulative convertible preferred stock, $.01 par value |  | — |  |  | — |
Authorized shares - 1,000 |  |  |  |
Issued shares - 10 and 10 |  |  |  |
Outstanding shares - 10 and 10 |  |  |  |
Minimum liquidation preference - $9.99 and $9.99 per share |  |  |  |
Common stock, $.01 par value |  | 472 |  |  | 470 |
Authorized shares - 55,000 |  |  |  |
Issued shares - 47,179 and 47,018 |  |  |  |
Outstanding shares - 30,389 and 31,221 |  |  |  |
Treasury shares, at cost - 16,790 and 15,797 |  | (238,758) |  |  | (227,115) |
Additional paid-in capital |  | 112,509 |  |  | 108,202 |
Accumulated other comprehensive income (loss), net of taxes |  | (103,782) |  |  | (15,568) |
Retained earnings |  | 517,455 |  |  | 563,713 |
Total stockholders’ equity |  | 287,896 |  |  | 429,702 |
Total liabilities and stockholders’ equity |  | $ | 387,587 |  |  | $ | 527,304 |
See accompanying notes to condensed financial statements CONDENSED STATEMENTS OF INCOME
|  | For the Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
REVENUES |  |  |  |  |  |
Net investment income |  | $ | 930 |  |  | $ | 2 |  |  | $ | 273 |
Net realized gains (losses) on investments |  | 1,462 |  |  | 405 |  |  | 38 |
Net change in unrealized gains (losses) of equity securities |  | (518) |  |  | — |  |  | — |
Management fee |  | 123 |  |  | 137 |  |  | 166 |
Interest income on intercompany note receivable |  | 9,686 |  |  | 415 |  |  | — |
Other revenue |  | 1 |  |  | — |  |  | 16 |
Total revenues |  | 11,684 |  |  | 959 |  |  | 493 |
OPERATING COSTS AND EXPENSES |  |  |  |  |  |
General and administrative expenses |  | 12,223 |  |  | 10,552 |  |  | 15,448 |
Total operating cost and expenses |  | 12,223 |  |  | 10,552 |  |  | 15,448 |
Interest and amortization of debt issuance costs |  | 6,437 |  |  | 525 |  |  | — |
LOSS BEFORE INCOME TAX EXPENSE (BENEFIT) AND EQUITY IN NET EARNINGS (LOSS) OF SUBSIDIARIES |  | (6,976) |  |  | (10,118) |  |  | (14,955) |
Income tax expense (benefit) |  | (670) |  |  | (2,800) |  |  | (215) |
LOSS BEFORE EQUITY IN NET EARNINGS (LOSS) OF SUBSIDIARIES |  | (6,306) |  |  | (7,318) |  |  | (14,740) |
Equity in net income (loss) of subsidiaries |  | (15,951) |  |  | 27,712 |  |  | 33,828 |
CONSOLIDATED NET INCOME (LOSS) |  | $ | (22,257) |  |  | $ | 20,394 |  |  | $ | 19,088 |
See accompanying notes to condensed financial statements CONDENSED STATEMENTS OF CASH FLOWS
|  | For the Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
Cash flows from operating activities: |  |  |  |  |  |
Net cash provided by (used in) operating activities |  | $ | 210,368 |  |  | $ | 151,952 |  |  | $ | 149,329 |
Cash flows from investing activities: |  |  |  |  |  |
Capital contributions to affiliates (1) |  | (129,490) |  |  | (95,498) |  |  | (118,897) |
Issuance of intercompany note receivable (1) |  | (114,000) |  |  | (20,000) |  |  | — |
Purchases of equity securities |  | (33,189) |  |  | — |  |  | — |
Purchase of available-for-sale debt securities |  | (4,026) |  |  | — |  |  | — |
Proceeds from sales of equity securities |  | 20,187 |  |  | — |  |  | — |
Proceeds from sales of available-for-sale debt securities |  | — |  |  | — |  |  | 787 |
Net cash provided by (used in) investing activities |  | (260,518) |  |  | (115,498) |  |  | (118,110) |
Cash flows from financing activities: |  |  |  |  |  |
Proceeds from issuance of long-term debt |  | — |  |  | 100,000 |  |  | — |
Debt issuance costs paid |  | (140) |  |  | (3,365) |  |  | — |
Preferred stock dividend |  | (10) |  |  | (10) |  |  | (10) |
Common stock dividend |  | (23,774) |  |  | (24,191) |  |  | (24,547) |
Purchase of treasury stock |  | (11,643) |  |  | (1,609) |  |  | (28,921) |
Payments related to tax withholding for share-based compensation |  | (418) |  |  | (1,056) |  |  | (1,315) |
Net cash provided by (used in) financing activities |  | (35,985) |  |  | 69,769 |  |  | (54,793) |
Net increase (decrease) in cash and cash equivalents |  | (86,135) |  |  | 106,223 |  |  | (23,574) |
Cash and cash equivalents at beginning of period |  | 169,157 |  |  | 62,934 |  |  | 86,508 |
Cash and cash equivalents at end of period |  | $ | 83,022 |  |  | $ | 169,157 |  |  | $ | 62,934 |
Supplemental information: |  |  |  |  |  |
Interest paid |  | $ | 5,625 |  |  | $ | — |  |  | $ | — |
(1) Eliminated in consolidation. See accompanying notes to condensed financial statements NOTE 1 – GENERAL The financial statements of the Registrant should be read in conjunction with the consolidated financial statements in “Item 8.” Nature of Operations and Basis of Presentation Universal Insurance Holdings, Inc. is a Delaware corporation incorporated in 1990. The Parent Company is an insurance holding company whose wholly-owned subsidiaries perform all aspects of insurance underwriting, distribution and claims. Through its wholly-owned subsidiaries, including Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC”), the Parent Company is principally engaged in the property and casualty insurance business offered primarily through a network of independent agents. Risk from catastrophic losses is managed through the use of reinsurance agreements. The Parent Company generates revenues from earnings on investments and management fees. The Parent Company also receives distributions of earnings from its insurance and non-insurance subsidiaries. Certain amounts in the prior periods’ consolidated financial statements have been reclassified in order to conform to current period presentation. Such reclassifications had no effect on net income or stockholders’ equity. Capital Contributions to Subsidiaries During the years ended December 31, 2022, 2021 and 2020, the Parent Company made capital contributions of $84.0 million, $92.0 million and $114.0 million, respectively, to UPCIC to increase UPCIC’s statutory capital and surplus. During the years ended December 31, 2022, the Parent Company made a capital contribution of $3.0 million to APPCIC to increase APPCIC’s statutory capital and surplus. There were no capital contributions by the Parent Company to APPCIC during the year ended December 31, 2021 and 2020. Dividends received from Subsidiaries The Parent Company received distributions from the earnings of its non-insurance consolidated subsidiaries of $231.9 million, $149.9 million and $151.0 million during the years ended December 31, 2022, 2021 and 2020, respectively. There were no dividends paid by UPCIC and APPCIC to the Parent Company during the years ended December 31, 2022, 2021 and 2020. NOTE 2 - INTERCOMPANY NOTE RECEIVABLE During the years ended December 31, 2022 and 2021, the Parent Company funded a $110.0 million and $20.0 million, respectively, Subordinated Surplus Debenture (“Surplus Debenture”) through PSI, the Insurance Entities’ parent company, to UPCIC to increase UPCIC’s statutory capital and surplus. During the year ended December 31, 2022, the Parent Company funded $4.0 million Surplus Debenture through PSI to APPCIC to increase APPCIC statutory capital and surplus. Intercompany note receivable is stated separately in the accompanying Condensed Consolidated Balance Sheets. Effective in 2021 for UPCIC and 2022 for APPCIC, the holding company has put in place an ongoing surplus note arrangement with the Insurance Entities, which has been approved by the Florida Office of Insurance Regulation as the Insurance Entities’ domestic regulator. Surplus debentures are unsecured debt issued by the Insurance Entities that are subordinated to all claims by policyholders and creditors, with interest and principal payments on the surplus note to the holding company being made only upon the FLOIR’s express approval. Surplus debentures are considered bonds in function and payout structure, but are accounted for as equity in the statutory reporting of the Insurance Entities. The holding company has outstanding with the Insurance Entities $134.0 million in surplus notes. Under the arrangement, interest accrues at a variable rate (currently 8.27%) on the outstanding surplus note balances and, if approved by the FLOIR, is payable annually to the holding company. In 2022, UPCIC received approval from its Florida regulator to permit UPCIC to pay interest accruing from surplus notes outstanding during 2021. NOTE 3 – LONG-TERM DEBT See “Part II—Item 8—Note 7 (Long-term debt)” for information relating to long-term debt. NOTE 4 – SUBSEQUENT EVENTS The Parent Company performed an evaluation of subsequent events through the date the financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the consolidated financial statements as of December 31, 2022. In February 2023, the Parent Company declared a quarterly cash dividend of $0.16 per share of common stock payable March 16, 2023, to shareholders of record on March 9, 2023. In February 2023, the Parent Company made statutory capital contribution of $72.0 million to UPCIC to increase UPCIC’s statutory capital and surplus. UPCIC included this contribution in their statutory capital and surplus at December 31, 2022 with the permission of the FLOIR under statutory accounting principles.

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(Schedule I)) -URI https://asc.fasb.org/extlink&oid=126898705&loc=d3e5864-122674 Reference 2: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI https://asc.fasb.org/extlink&oid=126929396&loc=d3e5283-111683 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04(a)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690 + Details
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