POLICY ACQUISITION COSTS

12 Months Ended

Dec. 31, 2015

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)	2015		2014		2013
Deferred policy acquisition costs (DAC), beginning of year	$	65,123	$	61,508	$	52,344
Deferred:
Direct commissions	$	146,507	$	142,887	$	134,770
Premium taxes		11,087		10,727		10,442
Ceding commissions		(17,403)		(20,483)		(20,186)
Net deferred	$	140,191	$	133,131	$	125,026
Amortized		135,485		129,516		115,862
DAC/VOBA*, end of year	$	69,829	$	65,123	$	61,508
Policy acquisition costs:
Amortized to expense - DAC	$	135,485	$	129,346	$	115,442
Amortized to expense - VOBA		—		170		420
Period costs:
Ceding commission - contingent		(1,834)		(1,956)		(2,126)
Other underwriting expenses		107,427		101,723		96,915
Total policy acquisition costs	$	241,078	$	229,283	$	210,651

*Includes asset for value of business acquired (VOBA) in CBIC acquisition, which was fully amortized at the end of 2014.