Retrospectively Rated Contracts

3 Months Ended

Mar. 31, 2014

Insurance [Abstract]

Retrospectively Rated Contracts

10. RETROSPECTIVELY RATED CONTRACTS

On October 1, 2003, SeaBright began selling workers’ compensation insurance policies for which the premiums varied based on loss experience. Accrued retrospective premiums are determined based upon the loss experience of business subject to such experience rating adjustment, and are determined by and allocated to individual policyholder accounts. Accrued retrospective premiums are recorded as additions to written or earned premium, and return retrospective premiums are recorded as reductions from written or earned premium. During the period from February 7, 2013, the date of acquisition, to March 31, 2014, none of the Company’s direct premiums written related to retrospectively rated contracts. The Company accrued $8.9 million (December 31, 2013: $8.8 million) for retrospective premiums receivable and $28.2 million (December 31, 2013: $27.5 million) for return retrospective premiums as at March 31, 2014.