Note 12 - Insurance Reserves

6 Months Ended

Jun. 30, 2015

Insurance Loss Reserves [Abstract]

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

12. Insurance Reserves

The establishment of reserves for estimated losses associated with insurance policies issued by Allegiant and re-insurance agreements issued by StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns depending on the business conducted, and changing regulatory and legal environments.

The table set forth below summarizes the insurance reserve activity for the three and six months ended June 30, 2015 and 2014. The insurance reserve is included as a component of accrued liabilities in the financial services section of the accompanying consolidated balance sheets.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Balance at beginning of period	$	50,015		$	49,076		$	50,470		$	49,637
Expense provisions		1,576			1,737			2,849			3,047
Cash payments, net of recoveries		(2,702	)		(1,450	)		(4,430	)		(3,321	)
Adjustments		(1,500	)		-			(1,500	)		-
Balance at end of period	$	47,389		$	49,363		$	47,389		$	49,363

The $1.5 million adjustment to decrease our insurance reserve during the three and six months ended June 30, 2015 primarily resulted from a decrease in insurance claim payment severity and frequency relative to prior period estimates. No such adjustment was required for the three or six months ended June 30, 2014.

In the ordinary course of business, we make payments from our insurance reserves to settle litigation claims arising primarily from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three and six months ended June 30, 2015 and 2014 are not necessarily indicative of what future cash payments will be for subsequent periods.