POLICY ACQUISITION COSTS

12 Months Ended

Dec. 31, 2013

POLICY ACQUISITION COSTS

POLICY ACQUISITION COSTS

3. POLICY ACQUISITION COSTS

Policy acquisition costs deferred and amortized to income for the years ended December 31 are summarized as follows:

(in thousands)	2013			2012			2011
Deferred policy acquisition costs (DAC), beginning of year	$	52,344		$	52,105		$	40,242
VOBA*, CBIC - Acquisition date	—			—			10,822
Deferred:
Direct commissions	$	134,770		$	129,765		$	116,206
Premium taxes	10,442			9,528			8,725
Ceding commissions	(20,186		)	(29,010		)	(24,721		)
Net deferred	$	125,026		$	110,283		$	100,210
Amortized	115,862			110,044			99,169
DAC/VOBA*, end of year	$	61,508		$	52,344		$	52,105
Policy acquisition costs:
Amortized to expense - DAC	$	115,442		$	107,482		$	91,499
Amortized to expense - VOBA	420			2,562			7,670
Period costs:
Ceding commission - contingent	(2,126		)	(1,940		)	(2,207		)
Other underwriting expenses	96,915			88,258			86,906
Total policy acquisition costs	$	210,651		$	196,362		$	183,868

*Includes asset for value of business acquired (VOBA) in CBIC acquisition.