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 2013, 2012 and 2011 was as follows:


	2013 Premiums				2012 Premiums				2011 Premiums
	Written		Earned		Written		Earned		Written		Earned
	(In thousands)
Gross	$	372,177	$	348,408	$	328,823	$	306,994	$	272,101	$	264,896
Ceded		(18,425)		(18,425)		(16,305)		(16,305)		(13,881)		(13,881)

Net premiums	$	353,752	$	329,983	$	312,518	$	290,689	$	258,220	$	251,015

The amounts recoverable from reinsurers consist of the following:


	December 31,
	2013		2012
	(In thousands)
Unpaid losses recoverable:
Case basis	$	31,850	$	31,105
Incurred but not reported		16,849		24,085
Paid losses recoverable		497		746
Experience-rated commissions recoverable		26,130		45,416

Total	$	75,326	$	101,352

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, 2013, 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.

In 2013, the Company returned previous recoveries of $2,316,000 due to a single closed claim. Excluding this impact, the Company received reinsurance recoveries of $2,078,000 in 2013, $5,344,000 in 2012 and $2,861,000 in 2011.

At December 31, 2013, 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+)	$	23,956
Odyssey America Reinsurance Corporation (A)		12,045
Minnesota Workers’ Compensation Reinsurance Association (NR)		6,784
Tokio Millenium Reinsurance Limited (A++)		6,246
Clearwater Insurance Company (bbb)		5,693
Other reinsurers		20,602

Total reinsurance recoverables		75,326
Letters of credit and funds held		(39,333)

Total unsecured reinsurance recoverables	$	35,993