
	December 31,
	2021		2020
Unpaid loss and LAE as of January 1	$	46.3	$	28.2
Less: Reinsurance recoverable(1)	36.3		18.5
Net unpaid loss and LAE as of January 1	10.0		9.7
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year	73.2		54.8
Prior years	(1.3)		(0.1)
Total incurred	71.9		54.7
Deduct: Paid losses and LAE, net of reinsurance, related to:
Current year	49.2		44.6
Prior years	7.5		9.8
Total paid	56.7		54.4
Foreign currency translation gain (loss)	—		—
Unpaid loss and LAE, net of reinsurance recoverable, as of December 31	25.2		10.0
Reinsurance recoverable as of December 31(1)	72.7		36.3
Unpaid loss and LAE, gross of reinsurance recoverable, as of December 31	$	97.9	$	46.3

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders' equity. Additional variability exists due to accident year allocations of ceded amounts in accordance with reinsurance agreements, which is not expected to result in any changes to the ultimate liability. The Company had favorable development on net loss and LAE reserves of $1.3 million and $0.1 million as of December 31, 2021 and December 31, 2020. No additional premium or returned premium have been accrued as a result of prior year effects.

For the year ended December 31, 2021, current accident year incurred loss and LAE included $6.9 million of net incurred loss and LAE from the severe winter storm (“Uri”) that affected our customers in Texas and Oklahoma, and $0.8 million relating to wildfires in Colorado. The net incurred loss and LAE from Uri and from the wildfires as of December 31, 2021 represents the Company's best estimates based upon information currently available.

The Company compiles and aggregates its claims data by grouping the claims according to the year in which the claim occurred (Accident Year) when analyzing claim payment and emergence patterns and trends over time. For the purpose of defining claims frequency, the number of reported claims is by loss occurrence and includes claims that do not result in a liability or payment associated with them.

The following is information about incurred and paid loss development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities included within the net incurred loss amounts. The Company separates home and renters claim experience from its pet claim experience when analyzing incurred and paid loss and allocated loss adjustment expenses, as there are distinct differences in the development and claim count emergence patterns. The information about incurred and paid claims development for the years ended prior to December 31, 2021, is presented as unaudited supplementary information.


													December 31, 2021
															Cumulative Number of Reported Claims
	December 31,
	2016		2017		2018		2019		2020		2021		IBNR
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident Year
2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	8
2017	—		1.7		1.7		1.7		1.7		1.7		—		1,758
2018	—		—		15.0		13.5		13.4		13.4		—		10,528
2019	—		—		—		46.0		46.0		46.2		—		19,483
2020	—		—		—		—		53.2		51.8		1.1		30,212
2021	—		—		—		—		—		59.4		11.1		50,821
Total incurred losses and ALAE, net											$	172.5	$	12.2	112,810

Amounts in accident year 2016 for the years ended December 31, 2016, 2017, 2018, 2019, 2020 and 2021 were less than $0.1 million, respectively. IBNR as of December 31, 2021 for accident years 2018 and 2019 was less than $0.1 million.


	December 31,
	2016		2017		2018		2019		2020		2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident Year
2016	$	—	$	—	$	—	$	—	$	—	$	—
2017	—		1.6		1.7		1.7		1.7		1.7
2018	—		—		13.2		13.4		13.4		13.4
2019	—		—		—		36.4		46.1		46.2
2020	—		—		—		—		42.9		50.0
2021	—		—		—		—		—		37.9
Total paid losses and ALAE, net											$	149.2
Total unpaid loss and ALAE reserves, net											$	22.9
Ceded unpaid loss and LAE											66.7
Gross unpaid loss and LAE											$	89.6

Cumulative paid loss and ALAE, net of reinsurance related to accident year 2016 was less than $0.1 million during the years ended December 31, 2016, 2017 , 2018, 2019, 2020, and 2021, respectively.


					December 31, 2021
							Cumulative Number of Reported Claims

	2020		2021		IBNR
	(unaudited)
Accident Year
2020	$	0.3	$	0.2	$	—	20,415
2021	—		10.0		2.1		173,379
Total incurred losses and ALAE, net			$	10.2	$	2.1	193,794


	December 31,
		2020		2021
		(unaudited)
Accident Year
2020		$	0.4	$	0.7
2021		—		7.5
Total paid losses and ALAE, net				$	8.2
Total unpaid loss and ALAE reserves, net				$	2.3
Ceded unpaid loss and LAE				6.0
Gross unpaid loss and LAE				$	8.3

The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and development tables with respect to the current accident year is as follows ($ in millions):


	2021 Current Accident Year				2021 Prior Accident Year
	Incurred		Paid		Incurred		Paid
Rollforward table
Home	$	62.2	$	40.6	$	(1.2)	$	7.2
Pet	10.9		8.5		(0.1)		0.3
Car	0.1		0.1		—		—
	73.2		49.2		(1.3)		7.5
Development table
Home	59.4		37.9		(1.2)		7.2
Pet	10.0		7.5		(0.1)		0.3
	69.4		45.4		(1.3)		7.5
Others	—		—		—		—
Variance	$	3.8	$	3.8	$	—	$	—
Unallocated loss adjustment expense	$	3.8	$	3.8

U.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices that differ from prescribed practices. Statutory accounting practices ("SAP") prescribed or permitted by regulatory authorities for statements of the Company's insurance subsidiary are (a) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for purposes of determining surplus under SAP, (c) investments in fixed income securities are carried at amortized cost under SAP, whereas such securities are carried at fair value under GAAP, and (d) the criteria for recognizing net deferred tax assets ("DTAs") and the methodologies used to determine such amounts are different under SAP and GAAP.

Risk-based capital (“RBC”) requirements promulgated by the National Association of Insurance Commissioners require property/casualty insurers to maintain minimum capitalization levels determined based on formulas incorporating various business risks of the insurance subsidiaries. LIC’s statutory capital and surplus amounted to $99.4 million and $61.4 million as of December 31, 2021 and 2020, respectively. The Company’s capital and surplus exceeded its authorized control level RBC of $18.2 million and $10.9 million as of December 31, 2021 and 2020, respectively.