9.Reinsurance

The Company cedes insurance to CAR and to other reinsurers. The Company has a property catastrophe excess of loss agreement and a casualty excess of loss agreement that qualify as reinsurance treaties and are designed to protect against large or unusual loss and LAE activity. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies.

At December 31, 2016, our total expected reinsurance recovery from reinsurers under our catastrophe reinsurance program related to the 2015 snow is $67,934. Amounts recoverable from reinsurers are billed to the reinsurer as claims are paid by the Company. The current reinsurance recoverable related to the 2015 snow event is $31,701.

The Company is subject to concentration of credit risk with respect to reinsurance ceded. At December 31, 2016, reinsurance receivables on paid and unpaid loss and LAE with a carrying value of $70,623 and ceded unearned premiums of $26,964 were associated with CAR. At December 31, 2015, reinsurance receivables on paid and unpaid loss and LAE with a carrying value of $57,833 and ceded unearned premiums of $21,594 were associated with CAR. The Company assumes a proportionate share of the obligations from CAR. The Company makes an estimate of its share of assumed activity from the most recent quarter reported by CAR and records adjustments to the reported activity to reflect its anticipated final assumed obligations. The Company’s participation in CAR resulted in assumed net losses of $2,341, $365 and $1,278 for the years ended December 31, 2016, 2015 and 2014, respectively.

CAR has been, with few exceptions, required by law to issue a policy to any applicant who seeks it. As a servicing carrier of CAR, this requirement has applied to the Company.

The effect of assumed and ceded premiums on net written and earned premiums and losses and LAE incurred is as follows.


	Years Ended December 31,
	2016		2015		2014
Written Premiums
Direct	$	811,559	$	785,730	$	765,685
Assumed		30,424		28,322		25,602
Ceded		(75,513)		(67,872)		(56,373)
Net written premiums	$	766,470	$	746,180	$	734,914

Earned Premiums
Direct	$	796,366	$	776,633	$	747,786
Assumed		29,544		25,819		23,724
Ceded		(70,150)		(64,288)		(54,635)
Net earned premiums	$	755,760	$	738,164	$	716,875

Loss and LAE
Direct	$	515,506	$	688,793	$	486,649
Assumed		23,343		22,306		18,144
Ceded		(45,416)		(98,530)		(28,427)
Net loss and LAE	$	493,433	$	612,569	$	476,366