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Reinsurance | 12 Months Ended
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Dec. 31, 2012
Reinsurance [Abstract] |
Reinsurance |
6. | Reinsurance
The Company cedes certain premiums and losses to various reinsurers under quota share and excess-of-loss treaties. These reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. Ceded reinsurance contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, 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 on a continual basis. The effect of reinsurance on premiums written and earned in 2012, 2011 and 2010 was as follows:
|  | 2012 Premiums |  |  | 2011 Premiums |  |  | 2010 Premiums |
|  | Written |  |  | Earned |  |  | Written |  |  | Earned |  |  | Written |  |  | Earned |
|  | (In thousands) |
Gross |  | $ | 328,823 |  |  | $ | 306,994 |  |  | $ | 272,101 |  |  | $ | 264,896 |  |  | $ | 228,424 |  |  | $ | 239,430 |
Ceded |  |  | (16,305 | ) |  |  | (16,305 | ) |  |  | (13,881 | ) |  |  | (13,881 | ) |  |  | (20,549 | ) |  |  | (20,549 | )
Net premiums |  | $ | 312,518 |  |  | $ | 290,689 |  |  | $ | 258,220 |  |  | $ | 251,015 |  |  | $ | 207,875 |  |  | $ | 218,881 |
The amounts recoverable from reinsurers consist of the following:
|  | December 31, |
|  | 2012 |  |  | 2011 |
|  | (In thousands) |
Unpaid losses recoverable: |  |  |  |  |  |  |  |
Case basis |  | $ | 31,105 |  |  | $ | 35,069 |
Incurred but not reported |  |  | 24,085 |  |  |  | 25,868 |
Paid losses recoverable |  |  | 746 |  |  |  | 764 |
Experience-rated commissions recoverable |  |  | 45,416 |  |  |  | 34,511 |
Total |  | $ | 101,352 |  |  | $ | 96,212 |
Amounts recoverable from reinsurers consists of ceded case reserves, ceded incurred but not reported (“IBNR”) reserves, paid losses recoverable and experience-rated commissions recoverable. Ceded case and ceded IBNR reserves represent the portion of gross loss and loss adjustment expense liabilities that are recoverable under reinsurance agreements, but are not yet due from reinsurers. Paid losses recoverable are receivables currently due from reinsurers for ceded paid losses. The Company considers paid losses recoverable outstanding for more than 90 days to be past due. At December 31, 2012, there were no paid losses recoverable past due. Experience-rated commissions recoverable represents earned commission from certain reinsurance companies based on the financial results of the applicable risks ceded to the reinsurers. The Company received reinsurance recoveries of $5,344,000 in 2012, $2,861,000 in 2011 and $3,667,000 in 2010. At December 31, 2012, unsecured reinsurance recoverables from reinsurers that exceeded 1.5% of statutory surplus of the Company’s insurance subsidiary are shown below (in thousands). The A.M. Best Company rating for the reinsurer is shown parenthetically.
Hannover Reinsurance (Ireland) Limited (A+) |  | $ | 31,904 |
Aspen Insurance (Bermuda) Limited (A) |  |  | 14,191 |
Odyssey America Reinsurance Corporation (A) |  |  | 12,426 |
Minnesota Workers’ Compensation Reinsurance Association (NR) |  |  | 8,641 |
Clearwater Insurance Company (B+) |  |  | 5,769 |
Finial Reinsurance Company (A-) |  |  | 4,975 |
SCOR Reinsurance Company (A) |  |  | 4,904 |
Other reinsurers |  |  | 18,542 |
Total reinsurance recoverables |  |  | 101,352 |
Letters of credit and funds held |  |  | (58,993 | )
Total unsecured reinsurance recoverables |  | $ | 42,359 |

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- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27374-158547 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 310 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6485557&loc=d3e21549-158491 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27261-158547 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27703-158548 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 6 -Article 7 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6811-158387 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27795-158548 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 113 -Paragraph 27 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03.6,13) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 113 -Paragraph 120 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 13 -Article 7 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6816-158387 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 92-5 -Paragraph 19 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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