3. REVISIONS TO FINANCIAL STATEMENTS

In preparing its current period financial statements, the Company altered its processing of ceding certain commissions and deferred acquisition costs under an affiliated quota share agreement. In previous reporting periods, these expenses were ceded based upon a quarter lag. In the current period, the quarter lag was eliminated and these expenses are now recorded on a current quarter basis. Although management determined that the impact of the ceding lag was not material to prior period financial statements, the impact of eliminating the ceding lag would have significantly impacted results within the current period. As a result, prior period balances have been revised in the applicable financial statements and corresponding footnotes to eliminate the impact of the previous recording lag.

Management assessed the materiality of this change within prior period financial statements based upon SEC Staff Accounting Bulletin Number 99, Materiality, which is since codified in Accounting Standards Codification ("ASC") 250, Accounting Changes and Error Corrections. In accordance with ASC 250, the prior period comparative financial statements that are presented herein have been revised.

The following tables present line items for prior period financial statements that have been affected by the revision. For these line items, the tables detail the amounts as previously reported, the impact upon those line items due to the revision, and the amounts as currently revised within the financial statements.


CONSOLIDATED BALANCE SHEETS	March 31, 2017
	As Previously		Impact of
	Reported		Revisions			As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs	$	62,308	$	(4,994	)	$	57,314
TOTAL ASSETS	$	17,587,840	$	(4,994	)	$	17,582,846

LIABILITIES:
Other net payable to reinsurers	$	832,307	$	(41,746	)	$	790,561
Income taxes		223,629		5,625			229,254
Total liabilities		12,139,623		(36,121	)		12,103,502

STOCKHOLDERS EQUITY:
Retained earnings		5,085,352		31,127			5,116,479
Total stockholder's equity		5,448,217		31,127			5,479,344
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	17,587,840	$	(4,994	)	$	17,582,846


CONSOLIDATED BALANCE SHEETS	December 31, 2016							December 31, 2015
	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs	$	73,924	$	(5,303	)	$	68,621	$	92,651	$	(6,249	)	$	86,402
TOTAL ASSETS	$	17,088,739	$	(5,303	)	$	17,083,436	$	16,695,203	$	(6,249	)	$	16,688,954

LIABILITIES:
Other net payable to reinsurers	$	860,391	$	(45,093	)	$	815,298	$	1,225,260	$	(37,480	)	$	1,187,780
Income taxes		142,143		6,797			148,940		68,024		4,132			72,156
Total liabilities		11,823,179		(38,296	)		11,784,883		11,763,992		(33,348	)		11,730,644

STOCKHOLDERS EQUITY:
Retained earnings		4,914,308		32,993			4,947,301		4,618,558		27,099			4,645,657
Total stockholder's equity		5,265,560		32,993			5,298,553		4,931,211		27,099			4,958,310
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	17,088,739	$	(5,303	)	$	17,083,436	$	16,695,203	$	(6,249	)	$	16,688,954


CONSOLIDATED STATEMENTS OF OPERATIONS	Year Ended December 31, 2016							Year Ended December 31, 2015
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	289,982	$	(8,558	)	$	281,424	$	315,069	$	(2,744	)	$	312,325
Total claims and expenses		1,928,940		(8,558	)		1,920,382		1,892,062		(2,744	)		1,889,318

INCOME (LOSS) BEFORE TAXES		390,433		8,558			398,991		604,542		2,744			607,286
Income tax expense (benefit)		94,683		2,664			97,347		191,889		3,007			194,896

NET INCOME (LOSS)	$	295,750	$	5,894		$	301,644	$	412,653	$	(263	)	$	412,390

COMPREHENSIVE INCOME (LOSS)	$	321,571	$	5,894		$	327,465	$	345,998	$	(263	)	$	345,735


CONSOLIDATED STATEMENTS OF OPERATIONS	Year Ended December 31, 2014							Three Months Ended March 31, 2017
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	339,402	$	(427	)	$	338,975	$	49,470	$	3,037		$	52,507
Total claims and expenses		1,930,749		(427	)		1,930,322		411,543		3,037			414,580

INCOME (LOSS) BEFORE TAXES		657,688		427			658,115		247,984		(3,037	)		244,947
Income tax expense (benefit)		203,562		1,125			204,687		76,940		(1,171	)		75,769

NET INCOME (LOSS)	$	454,126	$	(698	)	$	453,428	$	171,044	$	(1,866	)	$	169,178

COMPREHENSIVE INCOME (LOSS)	$	370,997	$	(698	)	$	370,299	$	182,587	$	(1,866	)	$	180,721


CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended September 30, 2016							Nine Months Ended September 30, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	85,563	$	(2,785	)	$	82,778	$	226,511	$	(6,959	)	$	219,552
Total claims and expenses		462,009		(2,785	)		459,224		1,377,175		(6,959	)		1,370,216

INCOME (LOSS) BEFORE TAXES		95,943		2,785			98,728		249,064		6,959			256,023
Income tax expense (benefit)		21,145		1,280			22,425		66,990		2,368			69,358

NET INCOME (LOSS)	$	74,798	$	1,505		$	76,303	$	182,074	$	4,591		$	186,665

COMPREHENSIVE INCOME (LOSS)	$	74,465	$	1,505		$	75,970	$	299,559	$	4,591		$	304,150


CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended June 30, 2016							Six Months Ended June 30, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	72,126	$	(1,717	)	$	70,409	$	140,948	$	(4,174	)	$	136,774
Total claims and expenses		479,860		(1,717	)		478,143		915,166		(4,174	)		910,992

INCOME (LOSS) BEFORE TAXES		101,332		1,717			103,049		153,121		4,174			157,295
Income tax expense (benefit)		32,982		695			33,677		45,845		1,088			46,933

NET INCOME (LOSS)	$	68,350	$	1,022		$	69,372	$	107,276	$	3,086		$	110,362

COMPREHENSIVE INCOME (LOSS)	$	124,381	$	1,022		$	125,403	$	225,094	$	3,086		$	228,180


CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended March 31, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of
	Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	68,822	$	(2,457	)	$	66,365
Total claims and expenses		435,306		(2,457	)		432,849

INCOME (LOSS) BEFORE TAXES		51,789		2,457			54,246
Income tax expense (benefit)		12,863		393			13,256

NET INCOME (LOSS)	$	38,926	$	2,064		$	40,990

COMPREHENSIVE INCOME (LOSS)	$	100,713	$	2,064		$	102,777


CONSOLIDATED STATEMENTS OF	Year Ended December 31, 2016						Year Ended December 31, 2015
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of				As Previously		Impact of
	Reported		Revisions		As Revised		Reported		Revisions			As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	4,618,558	$	27,099	$	4,645,657	$	4,205,905	$	27,362		$	4,233,267
Net income (loss)		295,750		5,894		301,644		412,653		(263	)		412,390
Balance, end of period		4,914,308		32,993		4,947,301		4,618,558		27,099			4,645,657
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	5,265,560	$	32,993	$	5,298,553	$	4,931,211	$	27,099		$	4,958,310


CONSOLIDATED STATEMENTS OF	Year Ended December 31, 2014							Three Months Ended March 31, 2017
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	3,751,779	$	28,060		$	3,779,839	$	4,914,308	$	32,993		$	4,947,301
Net income (loss)		454,126		(698	)		453,428		171,044		(1,866	)		169,178
Balance, end of period		4,205,905		27,362			4,233,267		5,085,352		31,127			5,116,479
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	4,572,717	$	27,362		$	4,600,079	$	5,448,217	$	31,127		$	5,479,344


CONSOLIDATED STATEMENTS OF	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of				As Previously		Impact of
	Reported		Revisions		As Revised		Reported		Revisions		As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	4,725,834	$	30,185	$	4,756,019	$	4,618,558	$	27,099	$	4,645,657
Net income (loss)		74,798		1,505		76,303		182,074		4,591		186,665
Balance, end of period		4,800,632		31,690		4,832,322		4,800,632		31,690		4,832,322
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	5,240,955	$	31,690	$	5,272,645	$	5,240,955	$	31,690	$	5,272,645


CONSOLIDATED STATEMENTS OF	Three Months Ended June 30, 2016						Six Months Ended June 30, 2016
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of				As Previously		Impact of
	Reported		Revisions		As Revised		Reported		Revisions		As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	4,657,484	$	29,163	$	4,686,647	$	4,618,558	$	27,099	$	4,645,657
Net income (loss)		68,350		1,022		69,372		107,276		3,086		110,362
Balance, end of period		4,725,834		30,185		4,756,019		4,725,834		30,185		4,756,019
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	5,164,053	$	30,185	$	5,194,238	$	5,164,053	$	30,185	$	5,194,238


CONSOLIDATED STATEMENTS OF	Three Months Ended March 31, 2016
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of
	Reported		Revisions		As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	4,618,558	$	27,099	$	4,645,657
Net income (loss)		38,926		2,064		40,990
Balance, end of period		4,657,484		29,163		4,686,647
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	5,036,717	$	29,163	$	5,065,880


CONSOLIDATED STATEMENTS OF CASH FLOWS	Year Ended December 31, 2016									Year Ended December 31, 2015
	As Previously			Impact of						As Previously		Impact of
	Reported			Revisions			As Revised			Reported		Revisions			As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	295,750		$	5,894		$	301,644		$	412,653	$	(263	)	$	412,390
Decrease (increase) in income taxes		60,325			2,666			62,991			57,487		3,007			60,494
Increase (decrease) in other net payable to reinsurers		(364,242	)		(7,614	)		(371,856	)		204,526		(8,590	)		195,936
Change in other assets and liabilities, net		16,090			(946	)		15,144			7,499		5,846			13,345


CONSOLIDATED STATEMENTS OF CASH FLOWS	Year Ended December 31, 2014							Three Months Ended March 31, 2017
	As Previously		Impact of					As Previously			Impact of
	Reported		Revisions			As Revised		Reported			Revisions			As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	454,126	$	(698	)	$	453,428	$	171,044		$	(1,866	)	$	169,178
Decrease (increase) in income taxes		68,206		1,125			69,331		75,304			(1,172	)		74,132
Increase (decrease) in other net payable to reinsurers		5,130		(3,216	)		1,914		(30,525	)		3,347			(27,178	)
Change in other assets and liabilities, net		81,388		2,789			84,177		18,204			(309	)		17,895


CONSOLIDATED STATEMENTS OF CASH FLOWS	Nine Months Ended September 30, 2016									Six Months Ended June 30, 2016
	As Previously			Impact of						As Previously			Impact of
	Reported			Revisions			As Revised			Reported			Revisions			As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	182,074		$	4,591		$	186,665		$	107,276		$	3,086		$	110,362
Decrease (increase) in income taxes		33,279			2,368			35,647			8,190			1,089			9,279
Increase (decrease) in other net payable to reinsurers		(209,260	)		(6,764	)		(216,024	)		(370,242	)		(3,111	)		(373,353	)
Change in other assets and liabilities, net		(124,955	)		(195	)		(125,150	)		14,216			(1,064	)		13,152


CONSOLIDATED STATEMENTS OF CASH FLOWS	Three Months Ended March 31, 2016
	As Previously			Impact of
	Reported			Revisions			As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	38,926		$	2,064		$	40,990
Decrease (increase) in income taxes		6,546			393			6,939
Increase (decrease) in other net payable to reinsurers		(106,588	)		(1,122	)		(107,710	)
Change in other assets and liabilities, net		24,496			(1,335	)		23,161