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Reinsurance | 12 Months Ended
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Dec. 31, 2015
Insurance [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 2015, 2014 and 2013 was as follows:
|  | 2015 Premiums |  |  | 2014 Premiums |  |  | 2013 Premiums |
|  | Written |  |  | Earned |  |  | Written |  |  | Earned |  |  | Written |  |  | Earned |
|  | (in thousands) |
Gross |  | $ | 386,529 |  |  | $ | 387,122 |  |  | $ | 393,819 |  |  | $ | 389,540 |  |  | $ | 372,177 |  |  | $ | 348,408 |
Ceded |  |  | (11,228 | ) |  |  | (11,228 | ) |  |  | (13,793 | ) |  |  | (13,793 | ) |  |  | (18,425 | ) |  |  | (18,425 | )
Net premiums |  | $ | 375,301 |  |  | $ | 375,894 |  |  | $ | 380,026 |  |  | $ | 375,747 |  |  | $ | 353,752 |  |  | $ | 329,983 |
The amounts recoverable from reinsurers consist of the following:
|  | December 31, |
|  | 2015 |  |  | 2014 |
|  | (in thousands) |
Unpaid losses recoverable: |  |  |  |  |  |  |  |
Case basis |  | $ | 37,207 |  |  | $ | 34,196 |
Incurred but not reported |  |  | 27,651 |  |  |  | 25,138 |
Paid losses recoverable |  |  | 414 |  |  |  | 424 |
Experience-rated commissions recoverable |  |  | 25,805 |  |  |  | 26,130 |
Total |  | $ | 91,077 |  |  | $ | 85,888 |
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, 2015, 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. In 2013, the Company returned previous recoveries of $2.3 million due to a single closed claim. Excluding this impact, the Company received reinsurance recoveries of $1.0 million in 2015, $1.5 million in 2014 and $2.1 million in 2013. At December 31, 2015, 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+) |  | $ | 35,530 |
Odyssey America Reinsurance Corporation (A) |  |  | 12,127 |
Minnesota Workers’ Compensation Reinsurance Association (NR) |  |  | 9,034 |
Tokio Millenium Reinsurance Limited (A++) |  |  | 7,294 |
Clearwater Insurance Company (bbb) |  |  | 5,610 |
Other reinsurers |  |  | 21,482 |
Total reinsurance recoverables |  |  | 91,077 |
Letters of credit and funds held |  |  | (53,572 | )
Total unsecured reinsurance recoverables |  | $ | 37,505 |

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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 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6816-158387 Reference 2: 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 3: 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 4: 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 5: 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 6: 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=34714010&loc=d3e27795-158548 Reference 7: 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=34714010&loc=d3e27703-158548 Reference 8: 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 + Details
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