Reserve for Unpaid Losses

12 Months Ended

Dec. 31, 2012

Reserves [Abstract]

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

RESERVE FOR UNPAID LOSSES

We determine the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts for IBNR claims as of the balance sheet date.

The table below summarizes the activity related to our reserve for unpaid losses:

	2012		2011			2010
Balance at January 1	$	33,600	$	47,414		$	44,112
Less: reinsurance recoverable on unpaid losses	3,318		23,814			23,447
Net balance at January 1	$	30,282	$	23,600		$	20,665
Incurred related to:
Current year	57,739		43,019			41,527
Prior years	670		(4,158		)	1,006
Total incurred	$	58,409	$	38,861		$	42,533
Paid related to:
Current year	37,906		28,857			27,065
Prior years	17,028		3,322			12,533
Total paid	$	54,934	$	32,179		$	39,598
Net balance at December 31	$	33,757	$	30,282		$	23,600
Plus: reinsurance recoverable on unpaid losses	1,935		3,318			23,814
Balance at December 31	$	35,692	$	33,600		$	47,414

Based upon our internal analysis and our review of the statement of actuarial opinion provided by our actuarial consultants, we believe that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

As reflected by our losses incurred related to prior years, we had a reserve deficiency in 2012 compared to a reserve redundancy in 2011. Since we place substantial reliance on loss-development-based actuarial models when determining our estimate of ultimate losses, the deficiency in 2012 resulted from additional development on 2011 and prior accident years which caused our ultimate losses to increase whereas the redundancy we experienced in 2011 resulted from reductions to our estimate of ultimate losses because of continued favorable loss development on claims incurred in prior years.