Losses and Loss Adjustment Reserve

Although the reinsurers are liable to the Company for amounts reinsured, Wright Flood remains primarily liable to its policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to Wright Flood when they become due. The effects of reinsurance on premiums written and earned are as follows:



(in thousands)	Period from January 1, 2015 to June 30, 2015
	Written		Earned
Direct premiums	$	288,055	$	306,045
Assumed premiums	—		18
Ceded premiums	288,049		306,057
Net premiums	$	6	$	6

All premiums written by Wright Flood under the National Flood Insurance Program are 100% ceded to FEMA, for which Wright Flood received a 30.8% expense allowance from January 1, 2015 through June 30, 2015. For the period from January 1, 2015 through June 30, 2015, the Company ceded $287.5 million of written premiums.

Effective April 1, 2014, Wright Flood is also a party to a quota share agreement whereby it cedes 100% of its gross excess flood premiums, which excludes fees, to Arch Reinsurance Company and receives a 30.5% commission. Wright Flood ceded $0.5 million for the period from January 1, 2015 through June 30, 2015. No loss data exists on this agreement.

Wright Flood also ceded 100% of the Homeowners, Private Passenger Auto Liability, and Other Liability Occurrence to Stillwater Insurance Company formerly known as Fidelity National Insurance Company. This business is in runoff. Therefore, only loss data still exists on this business. As of June 30, 2015, ceded unpaid losses and loss adjustment expenses for Homeowners, Private Passenger Auto Liability and Other Liability Occurrence was $11,198, $51,764 and $1,161, respectively. The incurred but not reported balance was $102 for Homeowners and $39,424 for Private Passenger Auto Liability.

The reinsurance recoverable balance as of June 30, 2015 was $381.8 million and was comprised of recoverables on unpaid losses and loss expenses of $79.2 million and prepaid reinsurance premiums of $302.6 million. There was no net activity in the reserve for losses and loss adjustment expense during the period January 1, 2015 through June 30, 2015, as Wright Flood's direct premiums written were 100% ceded to three reinsurers. The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, as of June 30, 2015 was $79.2 million.