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Deferred Policy Acquisition Costs
9 Months Ended
Sep. 30, 2012
Insurance [Abstract]  
Deferred Policy Acquisition Costs
Deferred Policy Acquisition Costs
Policy acquisition costs, most significantly commissions, premium taxes, and underwriting salaries, that are primarily and directly related to the successful production of new and renewal insurance contracts are capitalized as policy acquisition costs and amortized to expense as the related premium revenues are earned.
As discussed in Note 1, revised FASB guidance effective January 1, 2012 requires that policy acquisition costs related to unsuccessful contracts be expensed immediately. ProAssurance adopted the revised guidance on a prospective basis. Under prior guidance, policy acquisition costs capitalized during the three and nine months ended September 30, 2012 would have been $14.9 million and $45.2 million, respectively, as compared to $13.9 million and $42.0 million, respectively, capitalized under the current guidance.
Amortization of deferred policy acquisition costs was $14.0 million and $43.5 million for the three and nine months ended September 30, 2012, respectively, and $15.5 million and $44.5 million for the three and nine months ended September 30, 2011, respectively.