CORE, a Florida-domiciled reciprocal insurance exchange, is owned by its policyholders, referred to as subscribers, and was organized to offer commercial residential multiple peril and wind insurance products. Each subscriber owns part of CORE by buying an insurance policy and making a surplus contribution. CORE is managed by CRM, an AIF company which is a wholly-owned subsidiary of HCI. At the formation date of CORE, management determined that CORE is a variable interest entity (“VIE”).

HCI is required to assess whether it has a controlling financial interest in CORE. A controlling financial interest exists if an entity has both: 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses from or the right to receive benefits of the VIE that could potentially be significant to the VIE. Under U.S. GAAP, an entity meeting these requirements is considered to be the primary beneficiary of a VIE and is required to consolidate the VIE. Since in the judgment of management, HCI meets these requirements via the management and service agreements and the subordinated surplus note, HCI is required to consolidate CORE.

Further, as HCI has no equity at risk, CORE’s equity and results of operations are included in noncontrolling interests. In the event of dissolution, subscribers will participate in the distribution of any remaining equity without being liable for any shortfall in CORE's equity.

CORE’s assets are legally restricted for the purpose of fulfilling obligations specific to CORE. The creditors of CORE have no legal right to pursue additional sources of payment from the Company. The following table summarizes the assets and liabilities related to CORE, a consolidated VIE, which are included in the accompanying consolidated balance sheets:


	June 30,		December 31,
	2024		2023
Assets:
Cash and cash equivalents	$	48,109	$	24,635
Restricted cash		302		300
Income taxes receivable		2,820		—
Premiums receivable		3,792		—
Assumed premiums receivable		11,014		—
Prepaid reinsurance premium		6,512		—
Deferred policy acquisition costs		1,426		—
Other assets		504		65
Total assets	$	74,479	$	25,000
Liabilities:
Losses and loss adjustment expenses	$	1,111	$	—
Unearned premiums		39,093		—
Advance premiums		265		—
Ceded reinsurance premiums payable		796		—
Accrued expenses		1,128		—
Deferred income taxes, net		1,440		—
Other liabilities		165		—
Total liabilities	$	43,998	$	—