The following table summarizes the aggregate workers’ compensation reserve activity (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Beginning balance
Workers' compensation claims liabilities	$	362,663		$	445,310		$	357,746		$	438,986
Add: claims expense accrual
Current period		35,743			32,729			69,013			71,221
Prior periods		(5,483	)		(1,373	)		(6,663	)		(2,186	)
		30,260			31,356			62,350			69,035
Less: claim payments related to
Current period		3,927			4,527			4,979			6,077
Prior periods ⁽¹⁾		73,240			135,853			99,005			165,530
		77,167			140,380			103,984			171,607

Change in claims incurred in excess of retention limits		(23	)		218			(379	)		90

Ending balance
Workers' compensation claims liabilities	$	315,733		$	336,504		$	315,733		$	336,504
Incurred but not reported (IBNR)	$	190,818		$	206,521		$	190,818		$	206,521

Ratio of IBNR to workers' compensation claims liabilities		60	%		61	%		60	%		61	%

(1) Claim payments related to prior periods includes an amount payable to a third-party insurance carrier of $47.4 million, which represents consideration for the loss portfolio transfer agreement entered into on June 30, 2021.

The Company provides workers’ compensation coverage for client employees primarily through arrangements with fully licensed, third-party insurers (the “insured program”). Under this program, carriers issue policies to the Company’s clients on behalf of the Company. Approximately 82% of the Company’s workers’ compensation exposure is covered through the insured program.

The Company entered into a new arrangement for its insured program effective July 1, 2021 whereby third-party insurers assume all risk of loss for claims incurred after June 30, 2021. The agreement continues to June 30, 2022 and includes a renewal commitment through June 30, 2023. The arrangement allows for premium adjustments depending on overall portfolio performance. If claims develop favorably, BBSI can participate in the savings up to $20.0 million for a twelve-month policy period. If claims develop adversely, additional premium may be charged up to $7.5 million for a twelve-month policy period.

For claims incurred under the insured program prior to July 1, 2021, the Company retains risk of loss up to the first $3.0 million per occurrence on policies issued after June 30, 2020 and $5.0 million per occurrence on policies issued before that date.

On June 29, 2020, the Company entered into a loss portfolio transfer agreement (“LPT 1”) to remove all outstanding workers’ compensation claims obligations for claims incurred under its insured program between February 1, 2014 and December 31, 2017. This transaction reduced the Company’s outstanding workers’ compensation liabilities and trust account balances by $115.7 million.

On June 30, 2021, the Company entered into a loss portfolio transfer agreement (“LPT 2”) to remove all remaining outstanding workers’ compensation claims obligations for client policies issued under its insured program up to June 30, 2018. This transaction reduced the Company’s outstanding workers’ compensation liabilities by $53.1 million. The payment terms of the LPT required $5.0 million to be paid prior to June 30, 2021, with the remaining amount due in July 2021. The balance payable is included in other accrued liabilities on the condensed consolidated balance sheets.

The following is a summary of the risk retained by the Company under its insured program after considering the effects of the loss portfolio transfers and current insurance arrangements:

(1) LPT 2 excluded approximately 10% of claims from 2018 and included an approximately offsetting amount of claims from 2019.

The Company is required to maintain minimum collateral levels for policies issued under the insured program, which is held in trust accounts (the “trust accounts”). The balance in the trust accounts was $376.6 million and $290.7 million at June 30, 2021 and December 31, 2020, respectively. The trust account balances are included as a component of the current and long-term restricted cash and investments in the Company’s condensed consolidated balance sheets.

The Company is a self-insured employer with respect to workers' compensation coverage for all employees, including client employees, working in Colorado, Maryland and Oregon. In the state of Washington, state law allows only the Company's staffing services and internal management employees to be covered under the Company's self-insured workers' compensation program. The Company also operates a wholly owned, fully licensed insurance company, Ecole, which provides workers’ compensation coverage to client employees working in Arizona and Utah. Approximately 18% of the Company’s workers’ compensation exposure is covered through self-insurance or Ecole (the “self-insured programs”).

For all claims incurred under the Company’s self-insured programs, the Company retains risk of loss up to the first $3.0 million per occurrence, except in Maryland and Colorado, where the Company’s retention per occurrence is $1.0 million and $2.0 million, respectively. For claims incurred under the Company’s self-insured programs prior to July 1, 2020, the Company retains risk of loss up to the first $5.0 million per occurrence, except in Maryland and Colorado, where the retention per occurrence is $1.0 million and $2.0 million, respectively.

The states of California, Maryland, Oregon, Washington, Colorado and Delaware required the Company to maintain collateral totaling $58.4 million and $60.1 million at June 30, 2021 and December 31, 2020, respectively, to cover potential workers’ compensation claims losses related to the Company’s current and former status as a self-insured employer. At June 30, 2021, the Company provided surety bonds and standby letters of credit totaling $58.4 million.

The Company provided a total of $315.7 million and $357.7 million at June 30, 2021 and December 31, 2020, respectively, as an estimated future liability for unsettled workers' compensation claims liabilities. Of this amount, $2.5 million and $2.9 million at June 30, 2021 and December 31, 2020, respectively, represent case reserves incurred in excess of the Company’s retention. The accrual for costs incurred in excess of retention limits is offset by a receivable from insurance carriers of $2.5 million and $2.9 million at June 30, 2021 and December 31, 2020, respectively, included in other assets in the condensed consolidated balance sheets.