Reserves for unpaid losses and loss adjustment expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses:



	March 31,
	2018			2017
	(in thousands)
Net reserves for unpaid losses and loss adjustment expenses, beginning of year	$	267,493		$	194,602
Commutation of MLQS	—			27,929
Adjusted net reserves for losses and loss adjustment expenses, beginning of year	267,493			222,531
Incurred losses and loss adjustment expenses:
Current year	30,183			27,211
Prior years	(1,284		)	(5,104		)
Total net losses and loss adjustment expenses incurred	28,899			22,107

Payments:
Current year	340			333
Prior years	17,516			11,566
Total payments	17,856			11,899
Net reserves for unpaid losses and loss adjustment expenses, end of period	278,536			232,739
Reinsurance recoverable on unpaid losses	49,673			40,262
Gross reserves for unpaid losses and loss adjustment expenses, end of period	$	328,209		$	273,001

During the three months ended March 31, 2018, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2017 developed favorably by $1.3 million. The favorable development was primarily attributable to the 2017 accident year of $2.5 million and the 2016 accident year of $1.2 million, which resulted from reported losses emerging at a lower level than expected. This favorable development was offset in part by adverse development from the 2011 through 2015 accident years of $2.4 million.

During the three months ended March 31, 2017, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2016 developed favorably by $5.1 million. The favorable development was attributable primarily to the 2016 accident year of $3.3 million and the 2015 accident year of $2.5 million, which was due to reported losses emerging at a lower level than expected. The favorable development was offset in part by adverse development of $0.9 million for the 2013 accident year.

Multi-line quota share reinsurance

Effective January 1, 2017, the Company commuted its multi-line quota share treaty ("MLQS") covering the period January 1, 2015 to December 31, 2015, which reduced reinsurance recoverables on unpaid losses by approximately $27.9 million. The commutation did not have any effect on the Company's results of operations or cash flows for the applicable period.