Allowance for Uncollectible Premiums Receivable (Notes)

3 Months Ended

Mar. 31, 2021

Allowance for Uncollectible Premiums Receivable Note [Text Block]

Premiums Receivable

The following table provides a roll forward of the allowance for credit losses on our premiums receivable balance for the periods indicated:


	Quarter ended March 31,
($ in thousands)	2021		2020
Balance at beginning of period	$	21,000	$	6,400
Cumulative effect adjustment1	—		1,058
Balance at beginning of period, as adjusted	$	21,000	$	7,458
Current period provision for expected credit losses	808		11,195

Write-offs charged against the allowance for credit losses	(874)		(653)
Recoveries	66		—
Allowance for credit losses, end of period	$	21,000	$	18,000

1Represents the impact of our adoption of ASU 2016-13, Financial Instruments - Credit Losses.

In First Quarter 2020, we recognized an additional allowance for credit losses of $10.5 million, net of write-offs and recoveries. We based this increase on an evaluation of the recoverability of our premiums receivable in light of (i) the billing accommodations we announced during the first quarter of 2020 and (ii) the impact of certain state regulations that provided for deferral of payments without cancellation for a period up to 90 days and increased earned but uncollected premiums. The billing accommodations included individualized payment flexibility and suspending the effect of policy cancellations, late payment notices, and late or reinstatement fees. The heightened credit risk experienced in 2020 that resulted in the allowance for credit losses being increased to $21.0 million in the second quarter of 2020 returned to pre-COVID-19 levels in 2021, and our allowance for credit losses has remained at $21.0 million, which is consistent with the reserve as of December 31, 2020. The existing allowance is expected to absorb anticipated write-offs that will occur over the corresponding collections cycle, which could last more than a year.