6.	Reinsurance

The Company cedes certain premiums and losses to various reinsurers under quota share and excess-of-loss treaties. These reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. Ceded reinsurance contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, 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 on a continual basis. The effect of reinsurance on premiums written and earned in 2011, 2010 and 2009 was as follows:


	2011 Premiums						2010 Premiums						2009 Premiums
	Written			Earned			Written			Earned			Written			Earned
	(In thousands)
Gross	$	272,101		$	264,896		$	228,424		$	239,430		$	256,454		$	271,054
Ceded		(13,881	)		(13,881	)		(20,549	)		(20,549	)		(20,158	)		(20,158	)

Net premiums	$	258,220		$	251,015		$	207,875		$	218,881		$	236,296		$	250,896

The amounts recoverable from reinsurers consist of the following:


	December 31,
	2011		2010
	(In thousands)
Unpaid losses recoverable:
Case basis	$	35,069	$	38,075
Incurred but not reported		25,868		27,461
Paid losses recoverable		764		795
Experience-rated commissions recoverable		34,511		28,802

Total	$	96,212	$	95,133

Amounts recoverable from reinsurers consists of ceded case reserves, ceded incurred but not reported ("IBNR") reserves, paid losses recoverable and experience-rated commissions recoverable. Ceded case and ceded IBNR reserves represent the portion of gross loss and loss adjustment expense liabilities that are recoverable under reinsurance agreements, but are not yet due from reinsurers. Paid losses recoverable are receivables currently due from reinsurers for ceded paid losses. The Company considers paid losses recoverable outstanding for more than 90 days to be past due. At December 31, 2011, there were no paid losses recoverable past due. Experience-rated commissions recoverable represents earned commission from certain reinsurance companies based on the financial results of the applicable risks ceded to the reinsurers.

The Company received reinsurance recoveries of $2,861,000 in 2011, $3,667,000 in 2010 and $6,376,000 in 2009.

At December 31, 2011, unsecured reinsurance recoverables from reinsurers that exceeded 1.5% of statutory surplus of the Company's insurance subsidiary are shown below (in thousands). The A.M. Best Company rating for the reinsurer is shown parenthetically.


Hannover Reinsurance (Ireland) Limited (A)	$	23,387
Aspen Insurance (Bermuda) Limited (A)		14,191
Odyssey America Reinsurance Corporation (A)		13,889
Minnesota Workers' Compensation Reinsurance Association (NR)		7,830
Clearwater Insurance Company (B++)		6,433
St. Paul Fire & Marine Insurance Company (A+)		6,147
Finial Reinsurance Company (A-)		5,606
SCOR Reinsurance Company (A)		5,137
Other reinsurers		13,592

Total reinsurance recoverables		96,212
Letters of credit and funds held		(47,307	)

Total unsecured reinsurance recoverables	$	48,905