Reinsurance

12 Months Ended

Dec. 31, 2012

Reinsurance [Abstract]

Reinsurance

4. Reinsurance

Total premiums written and earned are summarized as follows (in thousands).

	Year Ended December 31,						Six Months Ended December 31,						Year Ended June 30,
	2012						2011						2011						2010
	Written			Earned			Written			Earned			Written			Earned			Written		Earned
Direct	$	168,990		$	164,715		$	71,325		$	71,503		$	152,356		$	153,368		$	162,150	$	167,744
Assumed		21,517			21,121			9,245			9,222			19,435			19,844			19,858		19,302
Ceded		(192	)		(192	)		(88	)		(88	)		(171	)		(171	)		—		—
Total	$	190,315		$	185,644		$	80,482		$	80,637		$	171,620		$	173,041		$	182,008	$	187,046

Assumed business represents private-passenger non-standard automobile insurance premiums in Texas written through a program with a county mutual insurance company and assumed by the Company through 100% quota-share reinsurance. The percentages of premiums assumed to net premiums written for the year ended December 31, 2012, the six months ended December 31, 2011 and the years ended June 30, 2011 and 2010 were 11%, 12%, 11% and 11%, respectively.

Effective August 1, 2010, the Insurance Companies began utilizing excess-of-loss reinsurance with an unaffiliated reinsurer to limit their exposure to losses under liability coverages for policies issued with limits greater than the minimum statutory requirements. Although the reinsurance agreements contractually obligate the reinsurer to reimburse the Company for their share of losses, they do not discharge the primary liability of the Company, which remains contingently liable in the event the reinsurer is unable to meet their contractual obligations.

At December 31, 2012, the Insurance Companies had unsecured aggregate reinsurance receivables of $0.3 million. During the year ended December 31, 2012, ceded premiums earned and reinsurance recovered on losses and loss adjustment expenses (“LAE”) were both $0.2 million, respectively.