Allowance for Expected Credit Losses

6 Months Ended

Jun. 30, 2021

Allowance for Expected Credit Losses

Premiums Receivable

The following table provides a roll forward of the allowance for expected credit losses of the Company’s premium receivables:



	Premium Receivables, Net of Allowance		Allowance for Expected Credit Losses
Three Months Ended June 30, 2021
Balance at beginning of period	$	2,618,175	$	36,111

Change for provision of expected credit losses (1)			(132)


Balance at end of period	$	2,866,578	$	35,979

Three Months Ended June 30, 2020
Balance at beginning of period	$	2,155,204	$	27,990

Change for provision of expected credit losses (1)			8,064
Balance at end of period	$	2,203,753	$	36,054

Six Months Ended June 30, 2021
Balance at beginning of period	$	2,064,586	$	37,781

Change for provision of expected credit losses (1)			(1,802)


Balance at end of period	$	2,866,578	$	35,979

Six Months Ended June 30, 2020
Balance at beginning of period	$	1,778,717	$	21,003
Cumulative effect of accounting change (2)			6,539
Change for provision of expected credit losses (1)			8,512


Balance at end of period	$	2,203,753	$	36,054

(1)Amounts deemed uncollectible are written-off in operating expenses. For the 2021 second quarter and 2020 second quarter, amounts written off were $1.1 million and $1.8 million, respectively. For the six months ended June 30, 2021 and 2020 period, amounts written off were were $1.2 million and $2.3 million, respectively.

(2)Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.

Reinsurance Recoverables

The following table provides a roll forward of the allowance for expected credit losses of the Company’s reinsurance recoverables:


	Reinsurance Recoverables, Net of Allowance		Allowance for Expected Credit Losses
Three Months Ended June 30, 2021
Balance at beginning of period	$	4,041,076	$	10,872

Change for provision of expected credit losses			157


Balance at end of period	$	4,314,515	$	11,029

Three Months Ended June 30, 2020
Balance at beginning of period	$	4,303,135	$	13,700

Change for provision of expected credit losses			(105)
Balance at end of period	$	4,363,507	$	13,595

Six Months Ended June 30, 2021
Balance at beginning of period	$	4,500,802	$	11,636

Change for provision of expected credit losses			(607)


Balance at end of period	$	4,314,515	$	11,029

Six Months Ended June 30, 2020
Balance at beginning of period	$	4,346,816	$	1,364
Cumulative effect of accounting change (1)			12,010
Change for provision of expected credit losses			221


Balance at end of period	$	4,363,507	$	13,595

(1) Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.

The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums):


	June 30,			December 31
	2021			2020
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	$	4,314,515		$	4,500,802
% due from carriers with A.M. Best rating of “A-” or better	66.0		%	63.9		%
% due from all other carriers with no A.M. Best rating (1)	34.0		%	36.1		%
Largest balance due from any one carrier as % of total shareholders’ equity	2.4		%	1.8		%

(1) At June 30, 2021 and December 31, 2020 over 91% and 94% of such amount were collateralized through reinsurance trusts, funds withheld arrangements, letters of credit or other, respectively.

Contractholder Receivables

The following table provides a roll forward of the allowance for expected credit losses of the Company’s contractholder receivables:



	Contract-holder Receivables, Net of Allowance		Allowance for Expected Credit Losses
Three Months Ended June 30, 2021
Balance at beginning of period	$	1,919,655	$	5,853

Change for provision of expected credit losses			(1,382)


Balance at end of period	$	1,882,948	$	4,471


Three Months Ended June 30, 2020
Balance at beginning of period	$	2,140,724	$	9,038

Change for provision of expected credit losses			(2,748)


Balance at end of period	2,179,124		$	6,290

Six Months Ended June 30, 2021
Balance at beginning of period	$	1,986,924	$	8,638

Change for provision of expected credit losses			(4,167)


Balance at end of period	$	1,882,948	$	4,471

Six Months Ended June 30, 2020
Balance at beginning of period	$	2,119,460	$	—
Cumulative effect of accounting change (1)			6,663
Change for provision of expected credit losses			(373)


Balance at end of period	$	2,179,124	$	6,290

(1) Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.