6. Property and Casualty Insurance Activity (Tables)

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Schedule of Earned Premiums

Premiums written, ceded and earned are as follows:

	Direct	Assumed	Ceded	Net
Nine months ended September 30, 2015
Premiums written	$  67,225,990	$  34,815	$(21,913,608)	$ 45,347,197
Change in unearned premiums	(6,984,651)	1,362	(3,982,790)	(10,966,079)
Premiums earned	$  60,241,339	$  36,177	$(25,896,398)	$ 34,381,118
Nine months ended September 30, 2014
Premiums written	$  56,729,057	$  39,263	$(24,013,732)	$ 32,754,588
Change in unearned premiums	(7,311,116)	(6,082)	(3,186,706)	(10,503,904)
Premiums earned	$  49,417,941	$  33,181	$(27,200,438)	$ 22,250,684
Three months ended September 30, 2015
Premiums written	$  24,570,496	$  12,945	$ (3,245,871)	$ 21,337,570
Change in unearned premiums	(3,330,333)	(1,015)	(4,876,618)	(8,207,966)
Premiums earned	$  21,240,163	$  11,930	$ (8,122,489)	$ 13,129,604
Three months ended September 30, 2014
Premiums written	$  20,131,112	$  22,961	$ (2,485,929)	$ 17,668,144
Change in unearned premiums	(2,438,306)	(12,433)	(5,322,405)	(7,773,144)
Premiums earned	$  17,692,806	$  10,528	$ (7,808,334)	$  9,895,000

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:

	Nine months ended
	September 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	17,353,585	11,043,919
Prior years	(469,361)	827,141
Total incurred	16,884,224	11,871,060
Paid related to:
Current year	9,083,229	4,725,526
Prior years	6,843,425	4,834,120
Total paid	15,926,654	9,559,646
Net balance at end of period	22,620,727	19,450,668
Add reinsurance recoverables	16,278,765	17,471,621
Balance at end of period	$ 38,899,492	$ 36,922,289

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 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%

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%

Schedule of Ceding Commission Revenue

Ceding commissions earned consists of the following:

	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
Provisional ceding commissions earned	$ 2,854,524	$ 2,653,690	$  8,734,477	$  9,660,437
Contingent ceding commissions earned	(210,993)	624,629	653,980	705,214
	$ 2,643,531	$ 3,278,319	$  9,388,457	$ 10,365,651