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 six months ended June 30:



($ in thousands)	2017			2016
Reserve for losses and LAE at beginning of period	$	28,142		$	17,760
Less: Reinsurance recoverables	—			—
Net reserve for losses and LAE at beginning of period	28,142			17,760
Add provision for losses and LAE, net of reinsurance, occurring in:
Current period	12,116			9,568
Prior years	(6,653		)	(2,873		)
Net incurred losses during the current period	5,463			6,695
Deduct payments for losses and LAE, net of reinsurance, occurring in:
Current period	97			112
Prior years	3,710			1,869
Net loss and LAE payments during the current period	3,807			1,981
Net reserve for losses and LAE at end of period	29,798			22,474
Plus: Reinsurance recoverables	—			—
Reserve for losses and LAE at end of period	$	29,798		$	22,474

Loans in default at end of period	1,776			1,174

For the six months ended June 30, 2017, $3.7 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $6.7 million favorable prior year development during the six months ended June 30, 2017. Reserves remaining as of June 30, 2017 for prior years are $17.8 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the six months ended June 30, 2016, $1.9 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $2.9 million favorable prior year development during the six months ended June 30, 2016. Reserves remaining as of June 30, 2016 for prior years were $13.0 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.