• Filing Date: 2012-03-30
  • Form Type: 10-K
  • Description: Annual report
12 Months Ended
Dec. 31, 2011
Reinsurance [Abstract]  

Note 7 -- Reinsurance

The Company cedes a portion of its homeowners insurance exposure to other entities under reinsurance agreements called catastrophe excess of loss reinsurance treaties. The Company remains liable with respect to claims payments in the event that any of the reinsurers are unable to meet their obligations under the reinsurance agreements. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a number of well-known and rated reinsurers to secure its annual reinsurance coverage, which becomes effective June 1st each year. We purchase reinsurance each year taking into consideration maximum projected losses and reinsurance market conditions.

The impact of the catastrophe excess of loss reinsurance treaties on premiums written and earned is as follows (in thousands):



Year Ended December 31,






Premiums Written



   $125,145        114,599   


            62,104            1,683   

Gross written

          187,249        116,282   


          (56,360     (57,322

Net premiums written

          130,889        58,960   

Premiums Earned



   $119,756        104,621   


            23,850          15,136   

Gross earned

          143,606        119,757   


          (56,360     (57,322

Net premiums earned

   $ 87,246        62,435   

During the years ended December 31, 2011 and 2010, there were no recoveries pertaining to reinsurance contracts that were deducted from losses incurred. At December 31, 2011 and 2010, prepaid reinsurance premiums related to 18 reinsurers and there were no amounts receivable with respect to reinsurers. Thus, there were no concentrations of credit risk associated with reinsurance receivables and prepaid reinsurance premiums as of December 31, 2011 and 2010.