6. Property and Casualty Insurance Activity (Tables)

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Schedule of Earned Premiums

Premiums written, ceded and earned are as follows:

	Direct	Assumed	Ceded	Net
Six months ended June 30, 2015
Premiums written	$    42,655,494	$           21,870	$(18,667,737)	$  24,009,627
Change in unearned premiums	(3,654,318)	2,377	893,828	(2,758,113)
Premiums earned	$    39,001,176	$           24,247	$(17,773,909)	$  21,251,514
Six months ended June 30, 2014
Premiums written	$    36,597,945	$           16,302	$(21,527,803)	$  15,086,444
Change in unearned premiums	(4,872,810)	6,351	2,135,699	(2,730,760)
Premiums earned	$    31,725,135	$           22,653	$(19,392,104)	$  12,355,684
Three months ended June 30, 2015
Premiums written	$    23,166,065	$           13,959	$(10,048,331)	$  13,131,693
Change in unearned premiums	(3,181,987)	(1,535)	917,544	(2,265,978)
Premiums earned	$    19,984,078	$           12,424	$  (9,130,787)	$  10,865,715
Three months ended June 30, 2014
Premiums written	$    20,250,500	$             8,655	$(11,757,974)	$    8,501,181
Change in unearned premiums	(3,739,282)	3,697	1,663,777	(2,071,808)
Premiums earned	$    16,511,218	$           12,352	$(10,094,197)	$    6,429,373

Schedule of Loss and Loss Adjustment Expenses

The following table provides a reconciliation of the beginning and ending balances for unpaid losses and loss adjustment expense (“LAE”) reserves:

	Six months ended
	June 30,
	2015	2014
Balance at beginning of period	$  39,912,683	$  34,503,229
Less reinsurance recoverables	(18,249,526)	(17,363,975)
Net balance, beginning of period	21,663,157	17,139,254
Incurred related to:
Current year	11,747,214	6,975,731
Prior years	86,816	357,162
Total incurred	11,834,030	7,332,893
Paid related to:
Current year	5,121,409	2,691,199
Prior years	5,597,256	3,132,536
Total paid	10,718,665	5,823,735
Net balance at end of period	22,778,522	18,648,412
Add reinsurance recoverables	18,470,298	21,055,876
Balance at end of period	$  41,248,820	$  39,704,288

Schedule of line of business

	Treaty Year
	July 1, 2015	July 1, 2014	July 1, 2013
	to	to	to
Line of Busines	June 30, 2016	June 30, 2015	June 30, 2014
Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded	40%	55%	75%
Risk retained	$         450,000	$         360,000	$        300,000
Losses per occurrence subject to quota share reinsurance coverage	$         750,000	$         800,000	$     1,200,000
Excess of loss coverage above quota share coverage	$      3,750,000	$      3,200,000	$     1,700,000
	in excess of	in excess of	in excess of
	$         750,000	$         800,000	$     1,200,000
Total reinsurance coverage per occurrence	$      4,050,000	$      3,640,000	$     2,600,000
Losses per occurrence subject to reinsurance coverage	$      4,500,000	$      4,000,000	$     2,900,000
Expiration date	June 30, 2016	June 30, 2015	June 30, 2015
Personal Umbrella
Quota share treaty:
Percent ceded - first million dollars of coverage	90%	90%	90%
Percent ceded - excess of one million dollars of coverage	100%	100%	100%
Risk retained	$         100,000	$         100,000	$        100,000
Total reinsurance coverage per occurrence	$      2,900,000	$      2,900,000	$     1,900,000
Losses per occurrence subject to quota share reinsurance coverage	$      3,000,000	$      3,000,000	$     2,000,000
Expiration date	June 30, 2016	June 30, 2015	June 30, 2014
Commercial Lines:
General liability commercial policies, except for commercial auto
Quota share treaty:
Percent ceded (terminated effective July 1, 2014)	None	None	25%
Risk retained	$         425,000	$         400,000	$        300,000
Losses per occurrence subject to quota share reinsurance coverage	None	None	$        400,000
Excess of loss coverage above quota share coverage	$      4,075,000	$      3,600,000	$     2,500,000
	in excess of	in excess of	in excess of
	$         425,000	$         400,000	$        400,000
Total reinsurance coverage per occurrence	$      4,075,000	$      3,600,000	$     2,600,000
Losses per occurrence subject to reinsurance coverage	$      4,500,000	$      4,000,000	$     2,900,000
Commercial Auto:
Risk retained	$         300,000	$         300,000	$        300,000
Excess of loss coverage in excess of risk retained	$      1,700,000	$      1,700,000	$     1,700,000
	in excess of	in excess of	in excess of
	$         300,000	$         300,000	$        300,000
Catastrophe Reinsurance:
Initial loss subject to personal lines quota share treaty	$      4,000,000	$      4,000,000	$     4,000,000
Risk retained per catastrophe occurrence (1)	$      2,400,000	$      1,800,000	$     1,000,000
Catastrophe loss coverage in excess of quota share coverage (2) (3)	$  176,000,000	$  137,000,000	$   86,000,000
Severe winter weather aggregate (3)	Yes	Yes	No
Reinstatement premium protection (4)	Yes	No	No

Schedule of Single maximum risks under treaties

The single maximum risks per occurrence to which the Company is subject under the treaties that expired on June 30, 2015 and 2014 are as follows:

	July 1, 2014 - June 30, 2015		July 1, 2013 - June 30, 2014
Treaty	Extent of Loss	Risk Retained	Extent of Loss	Risk Retained
Personal Lines	Initial $800,000	$360,000	Initial $1,200,000	$300,000
	$800,000 - $4,000,000	None(1)	$1,200,000 - $2,900,000	None(1)
	Over $4,000,000	100%	Over $2,900,000	100%
Personal Umbrella	Initial $1,000,000	$100,000	Initial $1,000,000	$100,000
	$1,000,000 - $3,000,000	None(1)	$1,000,000 - $2,000,000	None(1)
	Over $3,000,000	100%	Over $2,000,000	100%
Commercial Lines	Initial $400,000	$400,000	Initial $400,000	$300,000
	$400,000 - $4,000,000	None(1)	$400,000 - $2,900,000	None(1)
	Over $4,000,000	100%	Over $2,900,000	100%
Commercial Auto	Initial $300,000	$300,000	Initial $300,000	$300,000
	$300,000 - $2,000,000	None(1)	$300,000 - $2,000,000	None(1)
	Over $2,000,000	100%	Over $2,000,000	100%
Catastrophe (2)	Initial $4,000,000	$1,800,000	Initial $4,000,000	$1,000,000
	$4,000,000 - $141,000,000	None	$4,000,000 - $90,000,000	None
	Over $141,000,000	100%	Over $90,000,000	100%

The single maximum risks per occurrence to which the Company is subject under the new treaties effective July 1, 2015 are as follows:

	July 1, 2015 - June 30, 2016
Treaty	Extent of Loss	Risk Retained
Personal Lines	Initial $750,000	$450,000
	$750,000 - $4,500,000	None(1)
	Over $4,500,000	100%
Personal Umbrella	Initial $1,000,000	$100,000
	$1,000,000 - $3,000,000	None(1)
	Over $3,000,000	100%
Commercial Lines	Initial $425,000	$425,000
	$425,000 - $4,500,000	None(1)
	Over $4,500,000	100%
Commercial Auto	Initial $300,000	$300,000
	$300,000 - $2,000,000	None(1)
	Over $2,000,000	100%
Catastrophe (2)	Initial $4,000,000	$2,400,000
	$4,000,000 - $180,000,000	None
	Over $180,000,000	100%

Schedule of Ceding Commission Revenue

Ceding commissions earned consists of the following:

	Three months ended		Six months ended
	June 30,		June 30,
	2015	2014	2015	2014
Provisional ceding commissions earned	$  2,964,924	$  3,629,871	$   5,879,953	$   7,006,747
Contingent ceding commissions earned	690,598	76,178	864,973	80,585
	$  3,655,522	$  3,706,049	$   6,744,926	$   7,087,332