COVID-19

6 Months Ended

Jun. 30, 2020

Extraordinary And Unusual Items [Abstract]

COVID-19

13. COVID-19

The Company’s operations and business have experienced disruptions due to the conditions surrounding the COVID-19 pandemic spreading throughout the United States.  These disruptions include, but are not limited to, office closures and difficulties in maintaining operational continuance during remote operations required by illness, social quarantining, and work from home orders that were in force.  The Company’s management has devoted substantial time and attention to assessing the potential impact of COVID-19 and those events on the Company’s operations and financial position and developing operational and financial plans to address those matters.

As a result of the COVID-19 pandemic, the Company has seen premium decreases due to policy endorsements associated with doctors electing to work part time, take a leave of absence or retire.  In addition, some of our insureds have elected to temporarily change their areas of practice and/or specialties.  For example, a doctor may choose to drop from orthopedic surgery to office-only status due to the lack of elective surgeries.  The Company has received notification for such requests from our policyholders which went into effect on June 30, 2020 and necessary reimbursements or credits against future payments have been applied.  During the second quarter, the Company recorded approximately $160,000 in return premium adjustments, or reductions in direct premiums written, associated with these policy endorsements.

In terms of collections, prior to the pandemic, the Company’s policy was to cancel any insurance policies for which premiums had not been received within 60 days subsequent to policy effective date, with notice of intent to cancel sent to the insured after 30 days post-inception date, or post-payment due date.  As a result of COVID-19, the Company has updated this policy and suspended cancellations of insurance contracts resulting from non-payment of premium and deferred payments until June 30, 2020 for invoices due after April 1, 2020.  Due to this change in policy, the Company recorded an allowance for uncollectible premium of approximately $150,000 at June 30, 2020 based on the aging of outstanding premiums receivable.