Note 3 - Liability for Unpaid Losses and Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

3. LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

The following table presents a reconciliation of the beginning and ending balances for the liability for unpaid losses and loss adjustment expenses for the nine months ended September 30, 2021 and 2020:

	September 30, 2021			September 30, 2020
Liability—beginning of year	$	20,936,677		$	13,966,044
Incurred related to:
Current year		1,652,101			4,989,087
Prior years		(147,337	)		9,089,318
Total incurred		1,504,764			14,078,405
Paid related to:
Current year		(4,267	)		(1,392,687	)
Prior years		(22,395,890	)		(7,698,845	)
Total paid		(22,400,157	)		(9,091,532	)
Liability—end of period	$	41,284		$	18,952,917

Current year incurred losses for the nine months ended September 30, 2021 are derived by multiplying our estimated loss ratio of 64.0% and the net premiums earned as at March 31, 2021, which is the effective date of the Commutation Agreement, as discussed further in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Prior year incurred losses represent the net gain that resulted from AMIC Ltd.’s entry into Commutation Agreement, as also discussed further in Management’s Discussion and Analysis of Financial Condition and Results of Operations.