Reserve for Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2016

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Reserve for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“LAE”) for the three months ended March 31:



($ in thousands)	2016			2015
Reserve for losses and LAE at beginning of period	$	17,760		$	8,427
Less: Reinsurance recoverables	—			—
Net reserve for losses and LAE at beginning of period	17,760			8,427
Add provision for losses and LAE, net of reinsurance, occurring in:
Current period	5,080			2,705
Prior years	(1,349		)	(706		)
Net incurred losses during the current period	3,731			1,999
Deduct payments for losses and LAE, net of reinsurance, occurring in:
Current period	1			—
Prior years	1,020			361
Net loss and LAE payments during the current period	1,021			361
Net reserve for losses and LAE at end of period	20,470			10,065
Plus: Reinsurance recoverables	—			—
Reserve for losses and LAE at end of period	$	20,470		$	10,065

Loans in default at end of period	1,060			505

For the three months ended March 31, 2016, $1.0 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $1.3 million favorable prior year development during the three months ended March 31, 2016. Reserves remaining as of March 31, 2016 for prior years are $15.4 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the three months ended March 31, 2015, $0.4 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There had been a $0.7 million favorable prior year development during the three months ended March 31, 2015. Reserves remaining as of March 31, 2015 for prior years were $7.4 million as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the favorable prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year defaults in the default inventory, including the impact of previously identified defaults that cured. Original estimates are increased or decreased as additional information becomes known regarding individual claims.