Reinsurance (Tables)

9 Months Ended

Sep. 30, 2014

Current Ratings from Rating Agencies and Unsecured Net Amounts Due from Reinsurers Whose Aggregate Balance Exceeded 3% of Stockholders' Equity

The following table presents ratings from rating agencies and the unsecured amounts due from the Company’s reinsurers whose aggregate balance exceeded 3% of the Company’s stockholders’ equity as of the dates presented (in thousands):

Ratings as of September 30, 2014

Due from as of

Standard

and Poor's

Moody's

AM Best

Rating

Investors

September 30,

December 31,

Reinsurer

Company

Services

Service, Inc.

2014

2013

Everest Reinsurance Company

A+

23,332

87,789

Florida Hurricane Catastrophe Fund

n/a

—

33,593

Odyssey Reinsurance Company

A-

151,762

142,190

Total (1)

175,094

263,572

(1)	Amounts represent prepaid reinsurance premiums, reinsurance receivables, and net recoverables for paid and unpaid losses, including incurred but not reported reserves, loss adjustment expenses, and offsetting reinsurance payables.

n/a	No rating available, because entity is not rated.

Summary of Effects of Reinsurance Arrangements

The Company’s reinsurance arrangements had the following effect on certain items in the Condensed Consolidated Statements of Income for the periods presented (in thousands):

	Three Months Ended September 30,
	2014									2013
							Loss and Loss									Loss and Loss
	Premiums			Premiums			Adjustment			Premiums			Premiums			Adjustment
	Written			Earned			Expenses			Written			Earned			Expenses
Direct	$	195,435		$	196,269		$	48,341		$	186,079		$	199,323		$	53,600
Ceded		(103,492	)		(101,981	)		(14,160	)		(124,961	)		(130,396	)		(25,265	)
Net	$	91,943		$	94,288		$	34,181		$	61,118		$	68,927		$	28,335

	Nine Months Ended September 30,
	2014									2013
							Loss and Loss									Loss and Loss
	Premiums			Premiums			Adjustment			Premiums			Premiums			Adjustment
	Written			Earned			Expenses			Written			Earned			Expenses
Direct	$	607,361		$	578,974		$	146,033		$	610,164		$	590,792		$	154,547
Ceded		(301,624	)		(347,517	)		(57,348	)		(400,175	)		(389,590	)		(74,529	)
Net	$	305,737		$	231,457		$	88,685		$	209,989		$	201,202		$	80,018

Prepaid Reinsurance Premiums and Reinsurance Recoverable and Receivable

The following prepaid reinsurance premiums and reinsurance recoverable and receivable are reflected in the Condensed Consolidated Balance Sheets as of the dates presented (in thousands):

	September 30,		December 31,
	2014		2013
Prepaid reinsurance premiums	$	195,322	$	241,214
Reinsurance recoverable on unpaid losses and LAE	$	49,339	$	68,584
Reinsurance recoverable on paid losses		6,902		39,263
Reinsurance receivable, net		12,535		203
Reinsurance recoverable and receivable	$	68,776	$	108,050