Note 9 - Reserve for Title Claims

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Insurance Disclosure [Text Block]

9.         Reserve for Title Claims

NCTIC’s reserves for unpaid losses and loss adjustment expenses are established using estimated amounts required to settle claims for which notice has been received (reported) and the amount estimated to be required to satisfy claims that have been incurred but not yet reported . Despite the variability of such estimates, management believes that the total reserve for claims is adequate to cover claim losses which might result from pending and future claims under title insurance policies issued through December 31, 2022. We continually update loss reserve estimates as new information becomes known, new loss patterns emerge or as other contributing factors are considered and incorporated into the analysis of reserve for claim losses. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that additional reserve adjustments may be required in future periods in order to maintain our recorded reserve within a reasonable range of our actuary's central estimate.

A reconciliation of the activity in the reserves account for the years ended December 31, 2022 and 2021 is as follows (in thousands):

	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021
Beginning Reserves	$	231	$	209
Provision for claims related to:
Current year		56		22
Prior years		-		-
Total provision for claim losses		56		22
Claims paid related to:
Current year		-		-
Prior years		-		-
Total title claims paid		-		-
Ending Reserves	$	287	$	231

At December 31, 2022, there were no reinsurance recoverables on paid claims or unpaid reserves.

For the year ended December 31, 2022, there was no development of the net provision for claims attributable to insured events of the prior year as a result of estimation of the reserve for claims. Original estimates are decreased or increased as additional information becomes known regarding individual claims.

A summary of the Company’s loss reserves at December 31, 2022 and 2021 is as follows (in thousands):

	As of December 31, 2022		As of December 31, 2021
Known title claims	$	3	$	-
IBNR title claims		284		231
Total title claims		287		231
Non-title claims		-		-
Total title claims reserves	$	287	$	231