The Company cedes a portion of its homeowners’ insurance exposure to other entities under catastrophe excess of loss reinsurance contracts and one quota share reinsurance agreement. Ceded premiums under most catastrophe excess of loss reinsurance contracts are subject to revision resulting from subsequent adjustments in total insured value. Under the terms of the quota share reinsurance agreement, the Company is entitled to a 30% ceding commission on ceded premiums written. The reinsurance premiums under one flood catastrophe excess of loss reinsurance contract are generally determined on a quarterly basis based on the premiums associated with the applicable flood total insured value in force on the last day of the preceding quarter.

The Company remains liable for claims payments in the event that any reinsurer is unable to meet its obligations under the reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a number of reinsurers to secure its annual reinsurance coverage, which generally becomes effective June 1^st each year. The Company purchases reinsurance each year taking into consideration probable maximum losses and reinsurance market conditions.

The impact of the reinsurance contracts on premiums written and earned is as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Premiums Written:
Direct	$	116,464		$	97,331		$	364,942		$	298,384
Assumed		(13	)		—			(92	)		(2	)
Gross written		116,451			97,331			364,850			298,382
Ceded		(44,231	)		(31,568	)		(109,304	)		(94,298	)
Net premiums written	$	72,220		$	65,763		$	255,546		$	204,084
Premiums Earned:
Direct	$	106,337		$	86,002		$	303,956		$	251,916
Assumed		357			—			2,906			(2	)
Gross earned		106,694			86,002			306,862			251,914
Ceded		(44,231	)		(31,568	)		(109,304	)		(94,298	)
Net premiums earned	$	62,463		$	54,434		$	197,558		$	157,616

During the three and nine months ended September 30, 2020, the Company recognized ceded losses of $1,871 and $2,220, respectively, as a reduction in losses and loss adjustment expenses, and ceded losses of $113,888 were recognized in each of the three and nine months ended September 30, 2019. At September 30, 2020 and December 31, 2019, there were 38 and 31 reinsurers, respectively, participating in the Company’s reinsurance program. Total gross amounts recoverable and receivable from reinsurers at September 30, 2020 and December 31, 2019 were $95,274 and $132,678, respectively. Approximately 58.6% of the reinsurance recoverable balance at September 30, 2020 was receivable from three reinsurers, including the Florida Hurricane Catastrophe Fund, a state trust fund. Based on all available information considered in the rating-based method described in Note 2 – “Summary of Significant Accounting Policies,” the Company recognized a decrease in credit loss expense of $14 and $363 for the three and nine months ended September 30, 2020, respectively. Allowances for credit losses related to the reinsurance recoverable balance were $90 and $0 at September 30, 2020 and December 31, 2019, respectively.

One of the reinsurance contracts includes retrospective provisions that adjust premiums in the event losses are minimal or zero. For the three and nine months ended September 30, 2020, the Company recognized reductions in premiums ceded of $4,680 and $10,440, respectively, related to these adjustments in the consolidated statement of income. For the three and nine months ended September 30, 2019, the Company recognized net reductions in premiums ceded of $2,520 and $4,258, respectively, related to these adjustments.

Amounts receivable pursuant to retrospective provisions are reflected in other assets. At September 30, 2020 and December 31, 2019, other assets included $6,240 and $9,480 related to these adjustments, respectively. In June 2020, the Company received $13,680 of premium refund under the retrospective reinsurance contract that ended May 31, 2020. Management believes the credit risk associated with the collectability of these accrued benefits is minimal as the amount receivable is concentrated with one reinsurer and the Company monitors the creditworthiness of this reinsurer based on available information about the reinsurer’s financial condition.