LPT Agreement |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
LPT Agreement [Abstract] | |
LPT Agreement | LPT Agreement The Company is party to the LPT Agreement under which $1.5 billion in liabilities for losses and LAE related to claims incurred by the Fund prior to July 1, 1995 were reinsured for consideration of $775.0 million. The LPT Agreement provides coverage up to $2.0 billion. The Company records its estimate of contingent profit commission in the accompanying Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded in the accompanying Consolidated Balance Sheets in Deferred reinsurance gain–LPT Agreement. The Deferred Gain is being amortized using the recovery method. Amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the LPT Agreement, except for the contingent profit commission, which is amortized through June 30, 2024, the date through which the Company is entitled to receive a contingent profit commission under the LPT Agreement. The amortization is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustments to the Deferred Gain are recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. The Company amortized $2.5 million and $3.0 million of the Deferred Gain for the three months ended September 30, 2017 and 2016, respectively, and $8.5 million and $8.7 million for the nine months ended September 30, 2017 and 2016, respectively. Additionally, the Deferred Gain was reduced by a further $3.1 million and $1.8 million for the nine months ended September 30, 2016, due to a favorable LPT Reserve Adjustment and a favorable LPT Contingent Commission Adjustment, respectively. The remaining Deferred Gain was $166.4 million and $174.9 million as of September 30, 2017 and December 31, 2016, respectively. The estimated remaining liabilities subject to the LPT Agreement were $445.4 million and $465.5 million as of September 30, 2017 and December 31, 2016, respectively. Losses and LAE paid with respect to the LPT Agreement totaled $742.7 million and $722.7 million from inception through September 30, 2017 and December 31, 2016, respectively. |