Note 4 - Reserve for Title Claims

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Insurance Disclosure [Text Block]

4. 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 (“IBNR”). 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 March 31, 2026. 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 three-month periods ended March 31, 2026 and 2025 is as follows (in thousands): 

	For the Three			For the Three
	Months Ended			Months Ended
	March 31, 2026			March 31, 2025
Beginning Reserves	$	705		$	637
Provision for claims related to:
Current year		56			17
Prior years		(1	)		-
Total provision for claim losses		55			17
Claims paid related to:
Current year		(10	)		-
Prior years		(5	)		(12	)
Total title claims paid		(15	)		(12	)
Ending Reserves	$	745		$	642

At March 31, 2026, there were no reinsurance recoverables on paid claims or unpaid reserves.

For the three months ended March 31, 2026, the Company recognized favorable title claims loss and loss adjustment expense development of $1,000 attributable to insured events of the prior years as a result of estimation of the reserve for claims loss and loss adjustment expenses. For the three months ended March 31, 2025, 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 of ultimate loss exposures are decreased or increased as additional information becomes known during the adjustment process regarding individual claims.

A summary of the Company’s loss reserves at March 31, 2026 and December 31, 2025 is as follows (in thousands):

	As of March 31, 2026		As of December 31, 2025
Known title claims	$	88	$	66
IBNR title claims		657		639
Total title claims		745		705
Non-title claims		-		-
Total reserve for title claims	$	745	$	705