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REINSURANCE
 3 Months Ended
Mar. 31, 2013
REINSURANCE [Abstract]  
REINSURANCE
3.       REINSURANCE

The effect of reinsurance on premiums written and earned, and losses and settlement expenses incurred, for the three months ended March 31, 2013 and 2012 is presented below.  The classification of the assumed and ceded reinsurance amounts between affiliates and nonaffiliates is based on the participants in the underlying reinsurance agreements, and is intended to provide an understanding of the actual source of the reinsurance activities.  This presentation differs from the classifications used in the consolidated financial statements, where all amounts resulting from transactions associated with the pooling, quota share and excess of loss agreements with Employers Mutual are reported as "affiliated" balances.
 
 
Three months ended March 31, 2013
 
 
Property and
 
 
 
 
 
 
 
 
casualty
 
 
 
 
 
 
 
 
insurance
 
 
Reinsurance
 
 
Total
 
Premiums written
 
 
 
 
 
 
 
 
 
    Direct
 
$
88,887,763
 
 
$
-
 
 
$
88,887,763
 
    Assumed from non affiliates
 
 
613,344
 
 
 
34,712,747
 
 
 
35,326,091
 
    Assumed from affiliates
 
 
99,401,066
 
 
 
-
 
 
 
99,401,066
 
    Ceded to non affiliates
 
 
(5,233,223
)
 
 
(4,658,725
)
 
 
(9,891,948
)
    Ceded to affiliates
 
 
(88,887,763
)
 
 
(2,704,862
)
 
 
(91,592,625
)
        Net premiums written
 
$
94,781,187
 
 
$
27,349,160
 
 
$
122,130,347
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums earned
 
 
 
 
 
 
 
 
 
 
 
 
    Direct
 
$
85,142,430
 
 
$
-
 
 
$
85,142,430
 
    Assumed from non affiliates
 
 
661,328
 
 
 
33,235,745
 
 
 
33,897,073
 
    Assumed from affiliates
 
 
97,595,787
 
 
 
-
 
 
 
97,595,787
 
    Ceded to non affiliates
 
 
(5,552,097
)
 
 
(2,738,649
)
 
 
(8,290,746
)
    Ceded to affiliates
 
 
(85,142,430
)
 
 
(2,704,862
)
 
 
(87,847,292
)
        Net premiums earned
 
$
92,705,018
 
 
$
27,792,234
 
 
$
120,497,252
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and settlement expenses incurred
 
 
 
 
 
 
 
 
 
 
 
 
    Direct
 
$
49,603,589
 
 
$
-
 
 
$
49,603,589
 
    Assumed from non affiliates
 
 
392,621
 
 
 
19,007,220
 
 
 
19,399,841
 
    Assumed from affiliates
 
 
56,585,394
 
 
 
224,095
 
 
 
56,809,489
 
    Ceded to non affiliates
 
 
(1,010,641
)
 
 
(1,447,937
)
 
 
(2,458,578
)
    Ceded to affiliates
 
 
(49,603,589
)
 
 
(1,177,094
)
 
 
(50,780,683
)
        Net losses and settlement expenses incurred
 
$
55,967,374
 
 
$
16,606,284
 
 
$
72,573,658
 
 
 
Three months ended March 31, 2012
 
 
Property and
 
 
 
 
 
 
 
 
casualty
 
 
 
 
 
 
 
 
insurance
 
 
Reinsurance
 
 
Total
 
Premiums written
 
 
 
 
 
 
 
 
 
    Direct
 
$
79,768,592
 
 
$
-
 
 
$
79,768,592
 
    Assumed from non affiliates
 
 
358,626
 
 
 
25,314,687
 
 
 
25,673,313
 
    Assumed from affiliates
 
 
90,544,743
 
 
 
-
 
 
 
90,544,743
 
    Ceded to non affiliates
 
 
(5,008,273
)
 
 
(785,061
)
 
 
(5,793,334
)
    Ceded to affiliates
 
 
(79,768,592
)
 
 
(2,452,963
)
 
 
(82,221,555
)
        Net premiums written
 
$
85,895,096
 
 
$
22,076,663
 
 
$
107,971,759
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums earned
 
 
 
 
 
 
 
 
 
 
 
 
    Direct
 
$
77,527,691
 
 
$
-
 
 
$
77,527,691
 
    Assumed from non affiliates
 
 
392,796
 
 
 
29,398,070
 
 
 
29,790,866
 
    Assumed from affiliates
 
 
90,461,807
 
 
 
-
 
 
 
90,461,807
 
    Ceded to non affiliates
 
 
(5,823,213
)
 
 
(2,216,741
)
 
 
(8,039,954
)
    Ceded to affiliates
 
 
(77,527,691
)
 
 
(2,452,963
)
 
 
(79,980,654
)
        Net premiums earned
 
$
85,031,390
 
 
$
24,728,366
 
 
$
109,759,756
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and settlement expenses incurred
 
 
 
 
 
 
 
 
 
 
 
 
    Direct
 
$
41,022,963
 
 
$
-
 
 
$
41,022,963
 
    Assumed from non affiliates
 
 
284,059
 
 
 
15,066,192
 
 
 
15,350,251
 
    Assumed from affiliates
 
 
53,343,497
 
 
 
173,604
 
 
 
53,517,101
 
    Ceded to non affiliates
 
 
(1,609,303
)
 
 
(1,953,619
)
 
 
(3,562,922
)
    Ceded to affiliates
 
 
(41,022,963
)
 
 
(64,141
)
 
 
(41,087,104
)
        Net losses and settlement expenses incurred
 
$
52,018,253
 
 
$
13,222,036
 
 
$
65,240,289
 
 
Individual lines in the above tables are defined as follows:
·
"Direct" represents business produced by the property and casualty insurance subsidiaries.
·
"Assumed from nonaffiliates" for the property and casualty insurance subsidiaries represents their aggregate 30 percent pool participation percentage of involuntary business assumed by the pool participants pursuant to state law.  For the reinsurance subsidiary, this line represents the reinsurance business assumed through the quota share agreement (including "fronting" activities initiated by Employers Mutual) and the business assumed outside the quota share agreement.
·
"Assumed from affiliates" for the property and casualty insurance subsidiaries represents their aggregate 30 percent pool participation percentage of all the pool members' direct business.  "Losses and settlement expenses incurred" also includes claim-related services provided by Employers Mutual that are allocated to the property and casualty insurance subsidiaries and the reinsurance subsidiary.
·
"Ceded to nonaffiliates" for the property and casualty insurance subsidiaries represents their aggregate 30 percent pool participation percentage of the amounts ceded to nonaffiliated reinsurance companies in accordance with the terms of the reinsurance agreements providing protection to the pool and each of its participants.  For the reinsurance subsidiary, this line includes reinsurance business that is ceded to other insurance companies in connection with "fronting" activities initiated by Employers Mutual.
·
"Ceded to affiliates" for the property and casualty insurance subsidiaries represents the cession of their direct business to Employers Mutual under the terms of the pooling agreement.  For the reinsurance subsidiary this line represents amounts ceded to Employers Mutual under the terms of the excess of loss reinsurance agreement.