$10.0 million capital contribution from the holding company. Meadowbrook also has the ability to supplement statutory insurance company surplus with contributions from the earnings of our non-regulated subsidiaries, which was $4.4 million in 2005.

At December 31, 2005, our debt-to-equity ratio was 34.4%, compared to 26.5% at December 31, 2004. Without the interest-only, 30-year debentures, the debt-to-equity ratio would be 2.8% at December 31, 2005, compared to 5.4% at December 31, 2004.

At year-end 2005, on a statutory combined basis, the gross and net written to surplus premium leverage ratios were 2.4 to 1.0 and 1.8 to 1.0, respectively. This compares to our targets of 2.8 to 1.0 gross, and 2.25 to 1.0 on a net basis.

The Value of Relationships.
Clients are our lifeblood! We are fortunate to have strong, long-term relationships with our various client groups and constituents. Our commitment to them has been reciprocated and is evidenced by very high retention and long-lasting partnerships. Many of our clients average 15-20 years with Meadowbrook.

AM Best Rating.
In April 2005, A.M. Best Company upgraded the ratings of three of Meadowbrook's four insurance company subsidiaries to "B++" (Very Good). AM. Best's positive assessment of Meadowbrook's financial condition helps us to continue to attract and retain quality business.

While we are pleased with the decision to upgrade our ratings, we are working diligently toward obtaining a further upgrade. Our growth in underwriting profits, strong balance sheet and cash flows should lead to that result.

New Business.
In 2005. we added new profitable insurance programs, fee-based programs, and expanded our existing insurance programs. True to our approach of underwriting for defined trade groups, these new programs represent a variety of industries including site improvement contractors, pharmacies, hardware stores, security firms and manufactured housing communities. Our pipeline of new business prospects remains robust.

Acquisition Update.
We regularly evaluate acquisition opportunities with a focus on fee or commission-based businesses, such as third party administrators, general agents, and retail and wholesale agencies.

In November 2005, we acquired the business of "Insurance & Benefits Consultants" (IBC), a Florida-based retail agency specializing in group and individual health insurance products and personal financial planning services. BC is one of the oldest Blue Cross Blue Shield general agencies in Florida, with over 27 years of experience.

Consistent with Meadowbrook's goal to increase and diversify its fee and commission revenue, the BC acquisition geographically expands our agency operations and broadens our product offerings in the health and benefits field.

We will continue to explore acquisitions that fit our overall strategic plans.

Industry Challenges.
The 2005 hurricane season was especially devastating for our country and our industry, causing billions of dollars of property damage and loss of life. Since Meadowbrook's business model is designed to avoid geographic concentration of risk that might lead to natural or intentionally caused catastrophic events, the hurricanes did not materially affect our underwriting results.