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 2016, 2015 and 2014 was as follows:

	2016 Premiums						2015 Premiums						2014 Premiums
	Written			Earned			Written			Earned			Written			Earned
	(in thousands)
Gross	$	373,055		$	379,011		$	386,529		$	387,122		$	393,819		$	389,540
Ceded		(10,307	)		(10,307	)		(11,228	)		(11,228	)		(13,793	)		(13,793	)
Net premiums	$	362,748		$	368,704		$	375,301		$	375,894		$	380,026		$	375,747

The amounts recoverable from reinsurers consist of the following:

	December 31,
	2016		2015
	(in thousands)
Unpaid losses recoverable:
Case basis	$	49,361	$	37,207
Incurred but not reported		28,895		27,651
Paid losses recoverable		485		414
Experience-rated commissions recoverable		4,925		25,805
Total	$	83,666	$	91,077

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, 2016, 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, and these amounts declined during 2016 as a result of the December 2016 commutation of the 2011 through 2013 reinsurance agreements with Hannover and Tokio.

The Company received reinsurance recoveries of $0.5 million in 2016, $1.0 million in 2015 and $ 1.5 million in 2014.

The Company generally secures large reinsurance recoverable balances with various forms of collateral, including funds withheld accounts, irrevocable letters of credit and secured trusts. At December 31, 2016, reinsurance recoverables from reinsurers that exceeded 1.5% of statutory surplus of the Company’s insurance subsidiaries are shown below (in thousands). The A.M. Best Company rating for the reinsurer is shown parenthetically.

Hannover Reinsurance Limited (Ireland) (A+)	$	29,670
Odyssey America Reinsurance Corporation (A)		12,600
Minnesota Workers’ Compensation Reinsurance Association (NR)		9,623
Other reinsurers		31,773
Total amounts recoverable from reinsurers		83,666
Funds withheld and letters of credit related to the above recoverables		(38,453	)
Total unsecured amounts recoverable from reinsurers	$	45,213