Estimated Title Losses

12 Months Ended

Dec. 31, 2011

Estimated Title Losses [Abstract]

Estimated title losses

NOTE 11

Estimated title losses.

	2011			2010			2009
	($000 omitted)
Balances at January 1		495,849			503,475			463,084
Provisions:
Current year		94,115			97,559			109,709
Previous policy years		47,986			50,879			73,072
Total provisions		142,101			148,438			182,781
Payments:
Current year		(22,404	)		(24,118	)		(21,801	)
Previous policy years		(111,915	)		(134,191	)		(127,530	)
Total payments		(134,319	)		(158,309	)		(149,331	)
Effects of changes in foreign currency exchange rates		(1,020	)		2,245			6,941
Balances at December 31		502,611			495,849			503,475

Provisions for title losses, as a percentage of title operating revenues, were 9.4%, 9.6% and 11.3% in 2011, 2010 and 2009, respectively. The total provisions included charges (above the annual provisioning rate) of $24.6 million, $13.3 million and $31.8 million for large title claims, including defalcations, in 2011, 2010 and 2009, respectively. The charges were reduced by insurance recoveries received of $2.4 million, $2.8 million and $11.9 million in 2011, 2010 and 2009, respectively.

The previous policy years’ title loss provision amounts in 2010 and 2009 included reserve strengthening adjustments of $4.8 million and $32.7 million, respectively, related to higher than expected loss payment experience for policy years 2005 through 2008. The years ended 2011, 2010 and 2009 included $19.2 million, $26.7 million and $26.0 million, respectively, related to maintaining a high provisioning rate for title losses due to continued elevated claims payment experience and $32.8 million, $19.2 million and $13.9 million, respectively, related to large title losses.

For the year ended December 31, 2010, the increase in payments relating to previous years was consistent with the rise in title claims resulting from the real estate market decline. Typically, the Company experiences a higher frequency of losses, including agency defalcations, which are reported sooner after policy issuance, in real estate markets where transaction volumes and prices are decreasing.