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Reinsurance (Tables) | 12 Months Ended
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Dec. 31, 2023
Reinsurance Disclosures [Abstract] |
Effect of Reinsurance Agreements on Premiums Earned and Losses Incurred | Table 9.1 below shows the effect of all reinsurance agreements on premiums earned and losses incurred as reflected in the consolidated statements of operations.
Reinsurance
Table | 9.1 |  |  |  |  |  |
|  | Years ended December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Premiums earned: |  |  |  |  |  |
Direct |  | $ | 1,142,412 |  |  | $ | 1,154,728 |  |  | $ | 1,167,592 |
Assumed |  | 12,960 |  |  | 8,778 |  |  | 9,858 |
Ceded - quota share reinsurance (1) |  | (123,955) |  |  | (86,435) |  |  | (118,537) |
Ceded - excess-of-loss reinsurance |  | (78,866) |  |  | (69,938) |  |  | (44,494) |
Total ceded |  | (202,821) |  |  | (156,373) |  |  | (163,031) |
Net premiums earned |  | $ | 952,551 |  |  | $ | 1,007,133 |  |  | $ | 1,014,419 |
Losses incurred: |  |  |  |  |  |
Direct |  | $ | (5,200) |  |  | $ | (274,072) |  |  | $ | 74,496 |
Assumed |  | (33) |  |  | (330) |  |  | (57) |
Ceded - quota share reinsurance |  | (15,623) |  |  | 19,837 |  |  | (9,862) |
Losses incurred, net |  | $ | (20,856) |  |  | $ | (254,565) |  |  | $ | 64,577 |
Other Reinsurance Impacts: |  |  |  |  |  |
Profit commission on quota share reinsurance (1) |  | $ | 133,145 |  |  | $ | 176,084 |  |  | $ | 153,759 |
Ceding commission on quota share reinsurance |  | 50,397 |  |  | 52,071 |  |  | 53,460 |
(1)Ceded premiums earned are shown net of profit commission.
Schedule of Quota Share Reinsurance Agreements | Table 9.2 below provides additional detail regarding our QSR transactions in effect during 2023.
Reinsurance
Table | 9.2 |  |  |  |  |  |  |
Quota Share Contract |  | Covered Policy Years | Quota Share % |  | Annual Loss Ratio to Exhaust Profit Commission (1) |  | Contractual Termination Date
2020 QSR |  | 2020 | 12.5 | % |  | 62.0 | % |  | (2)
2020 QSR and 2021 QSR |  | 2020 | 17.5 | % |  | 62.0 | % |  | (2)
2020 QSR and 2021 QSR |  | 2021 | 17.5 | % |  | 61.9 | % |  | December 31, 2032
2021 QSR and 2022 QSR |  | 2021 | 12.5 | % |  | 57.5 | % |  | December 31, 2032
2021 QSR and 2022 QSR |  | 2022 | 15.0 | % |  | 57.5 | % |  | December 31, 2033
2022 QSR and 2023 QSR |  | 2022 | 15.0 | % |  | 62.0 | % |  | December 31, 2033
2022 QSR and 2023 QSR |  | 2023 | 15.0 | % |  | 62.0 | % |  | December 31, 2034
2023 QSR |  | 2023 | 10.0 | % |  | 58.5 | % |  | December 31, 2034
Credit Union QSR |  | 2020-2025 | 65.0 | % |  | 50.0 | % |  | December 31, 2039
(1)We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio. (2)2020 QSR Transactions covering 2020 policy year were terminated effective December 31, 2023. Table 9.3 provides additional detail regarding optional termination dates and optional reductions to our quota share percentage which can, in each case be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 9.2 to the percentage showed in 9.3.
Reinsurance
Table 9.3 |  |  |  |  |  |
Quota Share Contract | Covered Policy Years | Optional Termination Date (1) | Optional Quota Share % Reduction Date (2) |  | Optional Reduced Quota Share %
2020 QSR and 2021 QSR | 2021 | June 30, 2024 | January 1, 2024 |  | 14.5% or 12%
2021 QSR and 2022 QSR | 2021 | June 30, 2024 | January 1, 2024 |  | 10.5% or 8%
2021 QSR and 2022 QSR | 2022 | December 31, 2024 | January 1, 2024 |  | 12.5% or 10%
2022 QSR and 2023 QSR | 2022 | December 31, 2024 | January 1, 2024 |  | 12.5% or 10%
2022 QSR and 2023 QSR | 2023 | December 31, 2025 | July 1, 2024 |  | 12.5% or 10%
2023 QSR | 2023 | December 31, 2025 | July 1, 2024 |  | 8% or 7%
(1) We can elect early termination of the QSR transaction beginning on this date, and bi-annually thereafter. (2) We can elect to reduce the quota share percentage beginning on this date, and bi-annually thereafter.
Reinsurance Retention Policy | Table 9.4a , 9.4b, and 9.4c provide a summary of our XOL Transactions as of December 31, 2023, December 31, 2022 and December 31, 2021.
Excess of Loss Reinsurance
9.4a |  |  |  |
($ in thousands) | Issue Date | Policy In force Dates | Optional Call/ Termination Date (1) | Legal Maturity
2023 Traditional XOL | April 1, 2023 | January 1, 2023 - December 29, 2023 | January 1, 2031 | 10 years
2022 Traditional XOL | April 1, 2022 | January 1, 2022 - December 30, 2022 | January 1, 2030 | 10 years
Home Re 2023-1, Ltd. | October 23, 2023 | June 1, 2022 - August 31, 2023 | October 25, 2028 | 10 years
Home Re 2022-1, Ltd. | April 26, 2022 | May 29, 2021 - December 31, 2021 | April 25, 2028 | 12.5 years
Home Re 2021-2, Ltd. | August 3, 2021 | January 1, 2021 - May 28, 2021 | July 25, 2028 | 12.5 years
Home Re 2021-1, Ltd. | February 2, 2021 | August 1, 2020 - December 31, 2020 | January 25, 2028 | 12.5 years
Home Re 2020-1, Ltd. | October 29, 2020 | January 1, 2020 - July 31, 2020 | October 25, 2027 | 10 years
Home Re 2019-1, Ltd. | May 25, 2019 | January 1, 2018 - March 31, 2019 | May 25, 2026 | 10 years
Home Re 2018-1, Ltd. | October 30, 2018 | July 1, 2016 - December 31, 2017 | October 25, 2025 | 10 years
(1)We have the right to terminate the Home Re Transactions under certain circumstances, including an optional call feature that provides us the right to terminate if the outstanding principal balance of the related insurance-linked notes falls below 10% of the initial principal balance of the related insurance-linked notes, and on any payment date on or after the respective Optional Call Date. We can elect early termination of the Traditional XOL Transactions beginning on this date, and quarterly thereafter.
Excess of Loss Reinsurance |  |
9.4b |  | Remaining First Layer Retention
($ in thousands) | Initial First Layer Retention | December 31, 2023 | December 31, 2022 | December 31, 2021
2023 Traditional XOL | $70,578 | $ | 70,578 |  | $ | $
2022 Traditional XOL | 82,523 | 82,346 |  | 82,517 |  |
Home Re 2023-1, Ltd. | 272,961 | 272,961 |  |  |
Home Re 2022-1, Ltd. | 325,589 | 325,001 |  | 325,576 |  |
Home Re 2021-2, Ltd. | 190,159 | 189,403 |  | 190,097 |  | 190,159 |
Home Re 2021-1, Ltd. | 211,159 | 210,831 |  | 211,102 |  | 211,142 |
Home Re 2020-1, Ltd. | 275,283 | 261,280 |  | 275,051 |  | 275,204 |
Home Re 2019-1, Ltd. | 185,730 | 182,722 |  | 183,540 |  | 183,917 |
Home Re 2018-1, Ltd. | 168,691 | 164,335 |  | 164,849 |  | 165,365 |
9.4c |  |  |  | Remaining Excess of Loss Reinsurance Coverage (1)
($ in thousands) | Initial Excess of Loss Reinsurance Coverage (1) | Initial Funding Percentage (2) | Funding Percentage at 12/31/2023 (2) | December 31, 2023 | December 31, 2022 | December 31, 2021
2023 Traditional XOL | $ | 96,942 |  | N/A | N/A | $ | 96,942 |  | $ | $
2022 Traditional XOL | 142,642 |  | N/A | N/A | 142,642 |  | 142,642 |  |
Home Re 2023-1, Ltd. | 330,277 |  | 97 | % | 97 | % | 330,277 |  |  |
Home Re 2022-1, Ltd. | 473,575 |  | 100 | % | 100 | % | 420,731 |  | 473,575 |  |
Home Re 2021-2, Ltd. (3) | 398,429 |  | 100 | % | 68 | % | 173,960 |  | 352,084 |  | 398,429 |
Home Re 2021-1, Ltd. (3) | 398,848 |  | 100 | % | 65 | % | 117,982 |  | 277,053 |  | 387,830 |
Home Re 2020-1, Ltd. | 412,917 |  | 100 | % | 100 | % | 41,846 |  | 113,247 |  | 234,312 |
Home Re 2019-1, Ltd. (3) | 315,739 |  | 100 | % | 10 | % | 21,039 |  | 208,146 |  | 208,146 |
Home Re 2018-1, Ltd. | 318,636 |  | 100 | % | 100 | % | 69,762 |  | 140,993 |  | 218,343 |
(1)The initial and remaining excess of loss reinsurance coverage is reduced by the applicable funding percentage. (2)The funding percentage represents the aggregate outstanding note balances divided by the aggregate ending coverage amounts. (3)The funding percentage on the 2021-1, 2021-2, and 2019-1 were reduced from 100% after the tender offers were conducted in the fourth quarter of 2023.
Schedule of Total Assets of Home Re Entities | Table 9.5 presents the total assets of the Home Re Entities as of December 31, 2023 , December 31, 2022 and December 31, 2021.
Home Re Entities total assets |  |
Table | 9.5 |  |  |  |
(In thousands) |  |  |  |
Home Re Entity |  | Total VIE Assets
|  | December 31, 2023 | December 31, 2022 | December 31, 2021
Home Re 2023-1 Ltd. |  | $ | 330,277 |  | $ | — |  | $ | — |
Home Re 2022-2 Ltd. |  | 427,279 |  | 473,575 |  | — |
Home Re 2021-2 Ltd. |  | 174,431 |  | 357,340 |  | 398,429 |
Home Re 2021-1 Ltd. |  | 118,043 |  | 285,039 |  | 398,848 |
Home Re 2020-1 Ltd. |  | 41,846 |  | 119,159 |  | 251,387 |
Home Re 2019-1 Ltd. |  | 21,039 |  | 208,146 |  | 208,146 |
Home Re 2018-1 Ltd. |  | 73,872 |  | 146,822 |  | 218,343 |

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