Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

3 Months Ended

Mar. 31, 2017

Notes

Liability for Future Policy Benefits and Unpaid Claims Disclosure

Note 10.    Policy Benefits and Claims 

Policy benefits and claims is the liability for unpaid loss and loss adjustment expenses. It is comprised of unpaid claims and estimated IBNR reserves. Summarized below are the changes in the total liability for policy benefits and claims for the periods indicated (in thousands).

		Three Months Ended
		March 31,
		2017		2016
Balance at beginning of year	$	219,113	$	245,443
Less: reinsurance recoverable		88,853		65,362
Net balance at beginning of year		130,260		180,081
Amount incurred, related to:
Current year		38,882		36,425
Prior years		(5,756)		(6,231)
Total incurred		33,126		30,194
Amount paid, related to:
Current year		7,258		7,238
Prior years		30,081		64,105
Total paid		37,339		71,343
Net balance at end of year		126,047		138,932
Plus:  reinsurance recoverable		56,245		108,968
Balance at end of year	$	182,292	$	247,900

Since unpaid loss and loss adjustment expenses are estimates, actual losses incurred may be more or less than the Company’s previously developed estimates and is referred to as either unfavorable or favorable development, respectively. The overall net favorable development of $5,756,000 in 2017 related to prior years consists of favorable developments of $1,636,000 in the Specialty Health reserves, $2,896,000 in the group disability reserves and $2,048,000 in the other individual life, annuities and other reserves, partially offset by an unfavorable development of $824,000 in Medical Stop-Loss reserves.  The overall net favorable development of $6,231,000 in 2016 related to prior years primarily consists of favorable developments of $2,109,000 in the Specialty Health reserves, $3,617,000 in the group disability reserves, and $494,000 in Medical Stop-Loss reserves.

Included in the preceding rollforward of the Company’s liability for policy benefits and claims are the policy benefits and claims activity associated with the Company’s health insurance lines. These are embedded within the Specialty Health segment. The table below summarizes the components of the change in the liability for policy benefits and claims that are specific to health insurance claims for the periods indicated (in thousands).

		Specialty Health Segment
		Health Insurance Claims
		Three Months Ended
		March 31,
		2017		2016
Balance at beginning of year	$	27,183	$	23,425
Less: reinsurance recoverable		1,179		1,362
Net balance at beginning of year		26,004		22,063
Amount incurred, related to:
Current year		11,776		10,196
Prior years		(1,200)		(5,232)
Total incurred		10,576		4,964
Amount paid, related to:
Current year		153		417
Prior years		10,338		7,957
Total paid		10,491		8,374
Net balance at end of year		26,089		18,653
Plus:  reinsurance recoverable		427		906
Balance at end of year	$	26,516	$	19,559

The liability for the IBNR plus expected development on reported claims associated with the Company’s health insurance claims was $26,089,000 at March 31, 2017.