the key factors that affected our financial performance during the previous two years included : losses and lae decreased 3 % in 2016 and 5 % in 2015 , each compared to the previous year ; underwriting and other operating expenses increased 1 % in 2016 and 5 % in 2015 , each compared to the previous year ; net realized gains ( losses ) on investments of $ 11.2 million , $ ( 10.7 ) million , and $ 16.3 million in 2016 , 2015 , and 2014 , respectively ; and income tax expense was $ 34.0 million , $ 5.0 million , and $ 5.9 million in 2016 , 2015 , and 2014 , respectively . we continue to execute a number of ongoing business initiatives , including : focusing on internal and customer-facing business process excellence ; accelerating the settlement of open claims ; diversifying our risk exposure across geographic markets ; utilizing a multi-company pricing platform ; utilizing territory-specific pricing ; and leveraging data-driven strategies to target , price , and underwrite profitable classes of business across all of our markets . 28 the following noteworthy items were included in our 2016 results of operations : ( 1 ) favorable prior year accident year loss development of $ 18.4 million , including $ 17.0 million of favorable development on our voluntary business and $ 1.4 million of favorable development on our assigned risk business , which decreased our losses and lae by the same amount ; ( 2 ) favorable development in the estimated reserves ceded under the lpt agreement , which resulted in a $ 3.1 million cumulative adjustment to the deferred gain and reduced our losses and lae by the same amount ( lpt reserve adjustment ) ; and ( 3 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 1.8 million cumulative adjustment to the deferred gain , and reduced our losses and lae by the same amount ( lpt contingent commission adjustment ) . collectively , these items increased our net income before taxes by $ 23.3 million for the year ended december 31 , 2016. the following noteworthy items were included in our 2015 results of operations : ( 1 ) favorable prior year accident year loss development of $ 7.2 million , including $ 9.0 million of favorable development on our voluntary business , partially offset by $ 1.8 million of unfavorable development on our assigned risk business , which decreased our losses and lae by the same amount ; ( 2 ) favorable development in the estimated reserves ceded under the lpt agreement that resulted in a $ 6.4 million lpt reserve adjustment ; ( 3 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 2.6 million lpt contingent commission adjustment ; and ( 4 ) a reallocation of $ 56.3 million of losses and lae reserves from non-taxable periods prior to january 1 , 2000 , which reduced our effective tax rate by 15.4 percentage points . collectively , these items increased our net income before taxes by $ 16.2 million and decreased our income tax expense by $ 15.3 million for the year ended december 31 , 2015. the following noteworthy items were included in our 2014 results of operations : ( 1 ) favorable development in the estimated reserves ceded under the lpt agreement , which resulted in a $ 31.1 million lpt reserve adjustment ; ( 2 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 10.8 million lpt contingent commission adjustment ; and ( 3 ) a reallocation of $ 13.1 million of losses and lae reserves from non-taxable periods prior to january 1 , 2000 , which reduced our effective tax rate by 3.4 percentage points . collectively , these items increased our net income before taxes by $ 41.9 million and decreased our income tax expense by $ 3.6 million for the year ended december 31 , 2014. the comparative components of net income are set forth in the following table : replace_table_token_16_th ( 1 ) lpt reserve adjustments result in a cumulative adjustment to the deferred gain , which is recognized in losses and lae incurred on our consolidated statements of comprehensive income , such that the deferred gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the lpt agreement . ( see note 2 in the notes to our consolidated financial statements . ) ( 2 ) lpt contingent commission adjustments result in a cumulative adjustment to the deferred gain , which is recognized in losses and lae incurred on our consolidated statements of comprehensive income , such that the deferred gain reflects the balance that would have 29 existed had the revised contingent profit commission been recognized at the inception of the lpt agreement . ( see note 2 in the notes to our consolidated financial statements . ) ( 3 ) we define net income before impact of the lpt agreement as net income before the impact of : ( a ) amortization of the deferred gain ; ( b ) adjustments to the lpt agreement ceded reserves ; and ( c ) adjustments to the contingent commission receivable –lpt agreement . the deferred gain reflects the unamortized gain from the lpt agreement . under gaap , this gain is deferred and is being amortized using the recovery method in which amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the lpt agreement , except for the contingent profit commission , which is amortized through june 30 , 2024. the amortization is reflected in losses and lae . story_separator_special_tag prior to the privatization , the fund was part of the state of nevada and therefore was not subject to federal income tax . accordingly , our pre-privatization loss and lae reserve adjustments , lpt reserve adjustments and deferred gain amortization impact our net income but do not change our taxable income . income tax expense was $ 34.0 million , $ 5.0 million , and $ 5.9 million for the years ended december 31 , 2016 , 2015 , and 2014 , respectively , representing effective tax rates of 24.2 % , 5.0 % , and 5.5 % for the years ended december 31 , 2016 , 2015 , and 2014 , respectively . for 2016 , tax-advantaged investment income , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 15.3 million . for 2015 , tax-advantaged investment income , pre-privatization loss and lae reserve adjustments , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 29.8 million . for 2014 , tax-advantaged investment income , pre-privatization loss and lae reserve adjustments , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 31.4 million . for additional information regarding our income tax expense see note 8 in the notes to our consolidated financial statements . liquidity and capital resources holding company liquidity we are a holding company and our ability to fund our operations is contingent upon existing capital and the ability of our insurance subsidiaries ' to pay dividends up to the holding company . payment of dividends by our insurance subsidiaries is restricted by state insurance laws and regulations , including laws establishing minimum solvency and liquidity thresholds . we require cash to pay common stock dividends , repurchase common stock , make interest and principal payments on any outstanding debt obligations , provide additional surplus to our insurance subsidiaries , and fund our operating expenses . our insurance subsidiaries ' ability to pay dividends to their parent is based on reported capital , surplus , and dividends paid within the last 12 months . for 2017 , eicn and epic can not pay any dividends without prior regulatory approval ; ecic can pay $ 4.6 million of dividends through june 21 , 2017 and $ 38.1 million thereafter without prior regulatory approval , provided that no dividends are paid prior to june 21 , 2017 ; and eac can pay $ 18.0 million of dividends beginning july 6 , 2017 without prior regulatory approval . total cash and investments at the holding company were $ 57.3 million at december 31 , 2016 , consisting of $ 41.4 million of cash and cash equivalents and $ 16.0 million of fixed maturity securities . we do not currently have a revolving credit facility because 33 we believe that the holding company 's cash needs for the foreseeable future will be met with its cash and investments on hand , as well as dividends available from its insurance subsidiaries . operating subsidiaries ' liquidity the primary sources of cash for our insurance operating subsidiaries are premium collections , investment income , sales and maturities of investments and reinsurance recoveries . the primary uses of cash for our insurance subsidiaries are payments of losses and lae , commission expenses , underwriting and other operating expenses , ceded reinsurance , investment purchases and dividends paid to their parent . total cash and investments held by our operating subsidiaries was $ 2,560.5 million at december 31 , 2016 , consisting of $ 23.9 million of cash and cash equivalents , $ 16.0 million of short-term investments , $ 2,328.4 million of fixed maturity securities and $ 192.2 million of equity securities . sources of immediate and unencumbered liquidity at our operating subsidiaries as of december 31 , 2016 consisted of $ 20.3 million of cash and cash equivalents , $ 142.0 million of publicly-traded equity securities whose proceeds are available within four business days , and $ 1.3 billion of highly liquid fixed maturity securities whose proceeds are available within four business days . we believe that our subsidiaries ' liquidity needs over the next 24 months will be met with cash from operations , investment income , and maturing investments . each of our insurance subsidiaries became a member of the federal home loan bank ( fhlb ) in january 2016. membership allows our subsidiaries access to collateralized advances , which may be used to support and enhance liquidity management . the amount of advances that may be taken is dependent on statutory admitted assets on a per company basis . currently , none of our subsidiaries has advances outstanding under the fhlb facility . we purchase reinsurance to protect us against the costs of severe claims and catastrophic events . on july 1 , 2016 , we entered into a new reinsurance program that is effective through june 30 , 2017 . the reinsurance program consists of one treaty covering excess of loss and catastrophic loss events in four layers of coverage . our reinsurance coverage is $ 190.0 million in excess of our $ 10.0 million retention on a per occurrence basis , subject to certain exclusions . we believe that our excess of loss reinsurance program currently meets our needs . our insurance subsidiaries are required by law to maintain a certain minimum level of surplus on a statutory basis . surplus is calculated by subtracting total liabilities from total admitted assets . the amount of capital in our insurance subsidiaries is maintained relative to standardized capital adequacy measures such as risk-based capital ( rbc ) , as established by the national association of insurance commissioners . the rbc standard was designed to provide a measure by which regulators can

capital resources as of december 31 , 2016 , the capital resources available to us consisted of : ( i ) $ 32.0 million of notes payable consisting of surplus notes maturing in 2034 ; ( ii ) $ 840.6 million of stockholders ' equity ; and ( iii ) the $ 174.9 million deferred gain . the following outlines each component of our total capital resources : notes payable . the surplus notes bear interest at a fixed rate of between 405 and 425 basis points in excess of the 90-day libor per annum , payable quarterly . we may redeem the surplus notes at any time at their face value of $ 32.0 million , plus accrued and unpaid interest . the surplus notes mature in 2034. both the payment of interest and repayment of the surplus notes are subject to the prior approval of the florida department of financial services . 35 stockholders ' equity . the following table summarizes our beginning and ending stockholders ' equity balance and the changes thereto for each of the years ended december 31 , 2016 , 2015 , and 2014 : replace_table_token_21_th deferred gain . the deferred gain , which totaled $ 174.9 million and $ 189.5 million as of december 31 , 2016 and 2015 , respectively , reflects the unamortized gain from the lpt agreement . see note 2 in the notes to our consolidated financial statements . contractual obligations and commitments . the following table identifies our long-term debt and contractual obligations as of december 31 , 2016 . replace_table_token_22_th ( 1 ) notes payable includes payments of the principal and estimated interest expense on our surplus notes outstanding based on libor plus a margin . the interest rates used ranged from 4.9 % to 5.1 % . ( 2 ) estimated losses and lae reserve payment patterns have been computed based on historical information .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```capital resources as of december 31 , 2016 , the capital resources available to us consisted of : ( i ) $ 32.0 million of notes payable consisting of surplus notes maturing in 2034 ; ( ii ) $ 840.6 million of stockholders ' equity ; and ( iii ) the $ 174.9 million deferred gain . the following outlines each component of our total capital resources : notes payable . the surplus notes bear interest at a fixed rate of between 405 and 425 basis points in excess of the 90-day libor per annum , payable quarterly . we may redeem the surplus notes at any time at their face value of $ 32.0 million , plus accrued and unpaid interest . the surplus notes mature in 2034. both the payment of interest and repayment of the surplus notes are subject to the prior approval of the florida department of financial services . 35 stockholders ' equity . the following table summarizes our beginning and ending stockholders ' equity balance and the changes thereto for each of the years ended december 31 , 2016 , 2015 , and 2014 : replace_table_token_21_th deferred gain . the deferred gain , which totaled $ 174.9 million and $ 189.5 million as of december 31 , 2016 and 2015 , respectively , reflects the unamortized gain from the lpt agreement . see note 2 in the notes to our consolidated financial statements . contractual obligations and commitments . the following table identifies our long-term debt and contractual obligations as of december 31 , 2016 . replace_table_token_22_th ( 1 ) notes payable includes payments of the principal and estimated interest expense on our surplus notes outstanding based on libor plus a margin . the interest rates used ranged from 4.9 % to 5.1 % . ( 2 ) estimated losses and lae reserve payment patterns have been computed based on historical information .
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 Suspicious Activity Report : the key factors that affected our financial performance during the previous two years included : losses and lae decreased 3 % in 2016 and 5 % in 2015 , each compared to the previous year ; underwriting and other operating expenses increased 1 % in 2016 and 5 % in 2015 , each compared to the previous year ; net realized gains ( losses ) on investments of $ 11.2 million , $ ( 10.7 ) million , and $ 16.3 million in 2016 , 2015 , and 2014 , respectively ; and income tax expense was $ 34.0 million , $ 5.0 million , and $ 5.9 million in 2016 , 2015 , and 2014 , respectively . we continue to execute a number of ongoing business initiatives , including : focusing on internal and customer-facing business process excellence ; accelerating the settlement of open claims ; diversifying our risk exposure across geographic markets ; utilizing a multi-company pricing platform ; utilizing territory-specific pricing ; and leveraging data-driven strategies to target , price , and underwrite profitable classes of business across all of our markets . 28 the following noteworthy items were included in our 2016 results of operations : ( 1 ) favorable prior year accident year loss development of $ 18.4 million , including $ 17.0 million of favorable development on our voluntary business and $ 1.4 million of favorable development on our assigned risk business , which decreased our losses and lae by the same amount ; ( 2 ) favorable development in the estimated reserves ceded under the lpt agreement , which resulted in a $ 3.1 million cumulative adjustment to the deferred gain and reduced our losses and lae by the same amount ( lpt reserve adjustment ) ; and ( 3 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 1.8 million cumulative adjustment to the deferred gain , and reduced our losses and lae by the same amount ( lpt contingent commission adjustment ) . collectively , these items increased our net income before taxes by $ 23.3 million for the year ended december 31 , 2016. the following noteworthy items were included in our 2015 results of operations : ( 1 ) favorable prior year accident year loss development of $ 7.2 million , including $ 9.0 million of favorable development on our voluntary business , partially offset by $ 1.8 million of unfavorable development on our assigned risk business , which decreased our losses and lae by the same amount ; ( 2 ) favorable development in the estimated reserves ceded under the lpt agreement that resulted in a $ 6.4 million lpt reserve adjustment ; ( 3 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 2.6 million lpt contingent commission adjustment ; and ( 4 ) a reallocation of $ 56.3 million of losses and lae reserves from non-taxable periods prior to january 1 , 2000 , which reduced our effective tax rate by 15.4 percentage points . collectively , these items increased our net income before taxes by $ 16.2 million and decreased our income tax expense by $ 15.3 million for the year ended december 31 , 2015. the following noteworthy items were included in our 2014 results of operations : ( 1 ) favorable development in the estimated reserves ceded under the lpt agreement , which resulted in a $ 31.1 million lpt reserve adjustment ; ( 2 ) an increase in the contingent commission receivable under the lpt agreement , which resulted in a $ 10.8 million lpt contingent commission adjustment ; and ( 3 ) a reallocation of $ 13.1 million of losses and lae reserves from non-taxable periods prior to january 1 , 2000 , which reduced our effective tax rate by 3.4 percentage points . collectively , these items increased our net income before taxes by $ 41.9 million and decreased our income tax expense by $ 3.6 million for the year ended december 31 , 2014. the comparative components of net income are set forth in the following table : replace_table_token_16_th ( 1 ) lpt reserve adjustments result in a cumulative adjustment to the deferred gain , which is recognized in losses and lae incurred on our consolidated statements of comprehensive income , such that the deferred gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the lpt agreement . ( see note 2 in the notes to our consolidated financial statements . ) ( 2 ) lpt contingent commission adjustments result in a cumulative adjustment to the deferred gain , which is recognized in losses and lae incurred on our consolidated statements of comprehensive income , such that the deferred gain reflects the balance that would have 29 existed had the revised contingent profit commission been recognized at the inception of the lpt agreement . ( see note 2 in the notes to our consolidated financial statements . ) ( 3 ) we define net income before impact of the lpt agreement as net income before the impact of : ( a ) amortization of the deferred gain ; ( b ) adjustments to the lpt agreement ceded reserves ; and ( c ) adjustments to the contingent commission receivable –lpt agreement . the deferred gain reflects the unamortized gain from the lpt agreement . under gaap , this gain is deferred and is being amortized using the recovery method in which amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the lpt agreement , except for the contingent profit commission , which is amortized through june 30 , 2024. the amortization is reflected in losses and lae . story_separator_special_tag prior to the privatization , the fund was part of the state of nevada and therefore was not subject to federal income tax . accordingly , our pre-privatization loss and lae reserve adjustments , lpt reserve adjustments and deferred gain amortization impact our net income but do not change our taxable income . income tax expense was $ 34.0 million , $ 5.0 million , and $ 5.9 million for the years ended december 31 , 2016 , 2015 , and 2014 , respectively , representing effective tax rates of 24.2 % , 5.0 % , and 5.5 % for the years ended december 31 , 2016 , 2015 , and 2014 , respectively . for 2016 , tax-advantaged investment income , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 15.3 million . for 2015 , tax-advantaged investment income , pre-privatization loss and lae reserve adjustments , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 29.8 million . for 2014 , tax-advantaged investment income , pre-privatization loss and lae reserve adjustments , lpt reserve adjustments , deferred gain amortization and certain other adjustments reduced our income tax expense computed at a statutory 35 % rate by $ 31.4 million . for additional information regarding our income tax expense see note 8 in the notes to our consolidated financial statements . liquidity and capital resources holding company liquidity we are a holding company and our ability to fund our operations is contingent upon existing capital and the ability of our insurance subsidiaries ' to pay dividends up to the holding company . payment of dividends by our insurance subsidiaries is restricted by state insurance laws and regulations , including laws establishing minimum solvency and liquidity thresholds . we require cash to pay common stock dividends , repurchase common stock , make interest and principal payments on any outstanding debt obligations , provide additional surplus to our insurance subsidiaries , and fund our operating expenses . our insurance subsidiaries ' ability to pay dividends to their parent is based on reported capital , surplus , and dividends paid within the last 12 months . for 2017 , eicn and epic can not pay any dividends without prior regulatory approval ; ecic can pay $ 4.6 million of dividends through june 21 , 2017 and $ 38.1 million thereafter without prior regulatory approval , provided that no dividends are paid prior to june 21 , 2017 ; and eac can pay $ 18.0 million of dividends beginning july 6 , 2017 without prior regulatory approval . total cash and investments at the holding company were $ 57.3 million at december 31 , 2016 , consisting of $ 41.4 million of cash and cash equivalents and $ 16.0 million of fixed maturity securities . we do not currently have a revolving credit facility because 33 we believe that the holding company 's cash needs for the foreseeable future will be met with its cash and investments on hand , as well as dividends available from its insurance subsidiaries . operating subsidiaries ' liquidity the primary sources of cash for our insurance operating subsidiaries are premium collections , investment income , sales and maturities of investments and reinsurance recoveries . the primary uses of cash for our insurance subsidiaries are payments of losses and lae , commission expenses , underwriting and other operating expenses , ceded reinsurance , investment purchases and dividends paid to their parent . total cash and investments held by our operating subsidiaries was $ 2,560.5 million at december 31 , 2016 , consisting of $ 23.9 million of cash and cash equivalents , $ 16.0 million of short-term investments , $ 2,328.4 million of fixed maturity securities and $ 192.2 million of equity securities . sources of immediate and unencumbered liquidity at our operating subsidiaries as of december 31 , 2016 consisted of $ 20.3 million of cash and cash equivalents , $ 142.0 million of publicly-traded equity securities whose proceeds are available within four business days , and $ 1.3 billion of highly liquid fixed maturity securities whose proceeds are available within four business days . we believe that our subsidiaries ' liquidity needs over the next 24 months will be met with cash from operations , investment income , and maturing investments . each of our insurance subsidiaries became a member of the federal home loan bank ( fhlb ) in january 2016. membership allows our subsidiaries access to collateralized advances , which may be used to support and enhance liquidity management . the amount of advances that may be taken is dependent on statutory admitted assets on a per company basis . currently , none of our subsidiaries has advances outstanding under the fhlb facility . we purchase reinsurance to protect us against the costs of severe claims and catastrophic events . on july 1 , 2016 , we entered into a new reinsurance program that is effective through june 30 , 2017 . the reinsurance program consists of one treaty covering excess of loss and catastrophic loss events in four layers of coverage . our reinsurance coverage is $ 190.0 million in excess of our $ 10.0 million retention on a per occurrence basis , subject to certain exclusions . we believe that our excess of loss reinsurance program currently meets our needs . our insurance subsidiaries are required by law to maintain a certain minimum level of surplus on a statutory basis . surplus is calculated by subtracting total liabilities from total admitted assets . the amount of capital in our insurance subsidiaries is maintained relative to standardized capital adequacy measures such as risk-based capital ( rbc ) , as established by the national association of insurance commissioners . the rbc standard was designed to provide a measure by which regulators can

