For information regarding fair value measurements of our investment portfolio, refer to Item 1-Financial Statements, Note 5, Investments, of this Form 10-Q.
Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended March 31, 2020 increased by $144, or 3.5%, to $4,229 from $4,085 for the comparable 2019 period.
Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses incurred for the three months ended March 31, 2020 decreased by $5,281, or 4.2%, to $120,746 from $126,027 for the comparable 2019 period expense. The decrease is primarily due to favorable winter weather related activity in 2020.
Our GAAP loss ratio for the three months ended March 31, 2020 decreased to 61.0% from 64.8% for the comparable 2019 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended March 31, 2020 was 51.7% compared to 56.3% for the comparable 2019 period. Total prior year favorable development included in the pre-tax results for the three months ended March 31, 2020 was $9,584 compared to $11,980 for the comparable 2019 period.
Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended March 31, 2020 increased by $2,648, or 4.4%, to $63,082 from $60,434 for the comparable 2019 period. Our GAAP expense ratio for the three months ended March 31, 2020 increased to 31.9% from 31.1% for the comparable 2019 period. The increase is driven by costs associated with various system modernization in our claims, billing and underwriting areas as well as a decrease in certain expense allowances offered under the Servicing Carrier program that have decreased with the related written premium as noted above.
Interest Expense. Interest expense was $47 for the three months ended March 31, 2020 compared to $22 for the comparable 2019 period. The credit facility commitment fee included in interest expense was $19 for the three months ended March 31, 2020 and 2019.
Income Tax (Benefit) Expense. Our effective tax rate was 29.7% and 17.0% for the quarters ended March 31, 2020 and 2019, respectively. The effective tax rate for the quarter ended March 31, 2020 is higher than the statutory rate due to the tax benefit related to the impact of stock-based compensation which increased the tax benefit. The effective tax rate for the quarter ended March 31, 2019 was lower than the statutory rate primarily due to the effects of tax-exempt investment income and the impact of stock-based compensation.
Net (Loss) Income. Net loss for the three months ended March 31, 2020 was $1,990 compared to net income of $29,946 for the comparable 2019 period. The decrease is driven by the change in unrealized gains on equity investments during the quarter.
Non-GAAP Operating Income. Non-GAAP operating income as defined above was $24,182 for the three months ended March 31, 2020 compared to $20,927 for the comparable 2019 period. The increase in Non-GAAP operating income was primarily the result of a decrease in loss and loss adjustment expenses compared to the prior period.
Liquidity and Capital Resources
As a holding company, Safety’s assets consist primarily of the stock of our direct and indirect subsidiaries. Our principal source of funds to meet our obligations and pay dividends to shareholders, therefore, is dividends and other permitted payments from our subsidiaries, principally Safety Insurance. Safety is the borrower under our credit facility.