Reinsurance

12 Months Ended

Dec. 31, 2012

Reinsurance

Reinsurance [Text Block]

9.     Reinsurance

The Company cedes insurance to CAR and to other reinsurers. The Company has a property catastrophe excess of loss agreement and a casualty excess of loss agreement that qualify as reinsurance treaties and are designed to protect against large or unusualloss and LAE activity. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies.

The Company is subject to concentration of credit risk with respect to reinsurance ceded to CAR. At December 31, 2012 and 2011, respectively, reinsurance receivables on paid and unpaid loss and LAE with a carrying value of $41,755 and $37,671 and ceded unearned premiums of $13,876 and $11,951 were associated with CAR. The Company assumes a proportionate share of the obligations from CAR. The Company makes an estimate of its share of assumed activity from the most recent quarter reported by CAR and records adjustments to the reported activity to reflect its anticipated final assumed obligations. The Company's participation in CAR resulted in assumed net loss of $424 for the year ended December 31, 2012 and assumed net income of $697and $4,241for the years ended 2012, 2011, and 2010.

CAR has been, with few exceptions, required by law to issue a policy to any applicant who seeks it. As a servicing carrier of CAR, this requirement has applied to the Company.

The effect of assumed and ceded premiums on net written and earned premiums and losses and LAE is as follows.

		Years Ended December 31,
		2012		2011		2010
Written Premiums
	Direct	$	696,220	$	649,262	$	604,957
	Assumed		17,943		16,521		13,738
	Ceded		(50,221)		(45,467)		(41,888)
Net written premiums		$	663,942	$	620,316	$	576,807
Earned Premiums
	Direct	$	673,596	$	626,483	$	580,942
	Assumed		16,910		15,790		14,134
	Ceded		(48,037)		(43,905)		(43,126)
Net earned premiums		$	642,469	$	598,368	$	551,950
Loss and LAE
	Direct	$	431,526	$	473,970	$	368,542
	Assumed		13,102		10,497		4,712
	Ceded		(22,411)		(17,827)		(12,406)
Net loss and LAE		$	422,217	$	466,640	$	360,848