EIG
#Good questions, <UNK>.
First of all, in terms of investment income, I think we are experiencing the same pressures that pretty much every insurance company is with regards to reinvestment yields.
So reinvestment yields, because of the movement in the 10-year Treasury rate, which has come down let's see almost 70 or 80 basis points since the year-end, have been very, very challenging.
As a result of that, we have deliberately taken the decision to accumulate cash and presently we don't see compelling opportunities to deploy that cash.
So if that situation doesn't correct itself over the near term, then we may continue to see some continued pressure on investment income.
Our expectation though is that what we've seen in the most recent quarter is probably in line with where we will continue, but I would emphasize that we may choose to hold higher levels of cash balances than we've typically held to really identify compelling opportunities to put that cash to work.
The tax rate, I think the tax rate is in line with our overall expectation.
The effective tax rate fell slightly in the current quarter by virtue of the LPT reserve adjustment, the $5 million adjustment.
It impacted the effective tax rate by 2.7 percentage points, but our best estimate right now, notwithstanding any of these adjustments in the second half of the year, is that we should remain in line with what we reported.
Let me deal with what we booked for the current quarter.
<UNK> may choose to add some color in terms of our prior-year reserves.
But the 1.2 percentage point favorable development in the loss ratio is driven by a release of assigned risk of residual business reserves from 2015.
So it does not relate to our voluntary book of business.
With regards to prior-year reserves ---+.
Yes, I will take that one, <UNK>.
I guess I would just summarize it very generally as we are not experiencing any pressure on prior-period reserves.
Years will flutter up and down.
Sometimes it might be related to an individual claim in some of the more mature years, but there's no pressure on prior-period reserves.
There is no pressure to take them up.
The concern for some time has been the adequacy of our reserves, and frankly that's not been a real issue for us.
But as we are looking at it ---+ in the more current periods, somewhat more favorable.
Again, that can be offset by individual claims in some of the older years, but overall a very stable reserve picture.
Very good.
Thank you, everyone, for joining us today.
We appreciate your questions and your interest, and we look forward to speaking to you again in the fall with our third-quarter results.
Thank you.
