XML 30 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

Insurance Operations | 9 Months Ended
--- | ---
Sep. 30, 2021
Insurance [Abstract] |
Insurance Operations | Insurance Operations Deferred Policy Acquisition Costs The Company defers certain costs in connection with written premium, called Deferred Policy Acquisition Costs (“DPAC”). DPAC is amortized over the effective period of the related insurance policies. The following table presents the beginning and ending balances and the changes in DPAC for the periods presented (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
DPAC, beginning of period | $ | 115,971 |  |  | $ | 103,527 |  |  | $ | 110,614 |  |  | $ | 91,882 |
Capitalized Costs | 55,054 |  |  | 58,727 |  |  | 170,996 |  |  | 164,700 |
Amortization of DPAC | (57,046) |  |  | (50,959) |  |  | (167,631) |  |  | (145,287) |
DPAC, end of period | $ | 113,979 |  |  | $ | 111,295 |  |  | $ | 113,979 |  |  | $ | 111,295 |
Regulatory Requirements and Restrictions The Insurance Entities are subject to regulations and standards of the Florida Office of Insurance Regulation (“FLOIR”). The Insurance Entities are also subject to regulations and standards of regulatory authorities in other states where they are licensed, although as Florida-domiciled insurers, their principal regulatory authority is the FLOIR. These standards and regulations require the Insurance Entities to maintain specified levels of statutory capital and restrict the timing and amount of dividends and other distributions that may be paid by the Insurance Entities to the parent company. Except in the case of extraordinary dividends, these standards generally permit dividends to be paid from statutory unassigned funds of the regulated subsidiary and are limited based on the regulated subsidiary’s level of statutory net income and statutory capital and surplus. The maximum dividend that may be paid by the Insurance Entities to their immediate parent company, Protection Solutions, Inc. (“PSI”, formerly known as Universal Insurance Holding Company of Florida), without prior regulatory approval is limited by the provisions of the Florida Insurance Code. These dividends are referred to as “ordinary dividends.” However, if the dividend, together with other dividends paid within the preceding twelve months, exceeds this statutory limit or is paid from sources other than earned surplus, the entire dividend is generally considered an “extraordinary dividend” and must receive prior regulatory approval. In accordance with Florida Insurance Code, and based on the calculations performed by the Company as of September 30, 2021, UPCIC and APPCIC currently are not able to pay any ordinary dividends. For the three and nine months ended September 30, 2021 and 2020, no dividends were paid from the Insurance Entities to PSI. Effective July 1, 2021, the Florida Insurance Code requires a residential property insurance company to maintain statutory surplus as to policyholders of at least $15.0 million or ten percent of the insurer’s total liabilities, whichever is greater. As of December 31, 2020, this minimum requirement was the greater of $10.0 million or ten percent of the insurer’s total liabilities. The following table presents the amount of capital and surplus calculated in accordance with statutory accounting principles, which differ from U.S. GAAP, and an amount representing ten percent of total liabilities for each of the Insurance Entities as of the dates presented (in thousands):
| September 30, 2021 |  | December 31, 2020
Statutory capital and surplus |  |  |
UPCIC (1) (2) | $ | 363,465 |  |  | $ | 360,707 |
APPCIC | $ | 16,417 |  |  | $ | 12,918 |
Ten percent of total liabilities |  |  |
UPCIC | $ | 129,593 |  |  | $ | 98,682 |
APPCIC | $ | 7,365 |  |  | $ | 1,793 |
(1) | As of the dates in the table above, statutory capital and surplus for UPCIC includes a $77 million capital contribution funded in February 2021 by UIH through PSI, the Insurance Entities’ parent company, which the FLOIR permitted to be included in the statutory capital and surplus at December 31, 2020 under statutory accounting principles. This contribution was not recognized on a U.S. GAAP basis at December 31, 2020.
(2) | As of the dates in the table above, statutory capital and surplus for UPCIC includes a $20 million Subordinated Surplus Debenture funded in October 2021 by UIH through PSI, the Insurance Entities’ parent company, which the FLOIR permitted to be included in UPCIC’s statutory capital and surplus at September 30, 2021 under statutory accounting principles. This contribution was not recognized on a U.S. GAAP basis at September 30, 2021.
As of the dates in the table above, the Insurance Entities each exceeded the minimum statutory capitalization requirement. The Insurance Entities also met the capitalization requirements of the other states in which they were licensed as of September 30, 2021. The Insurance Entities are also required to adhere to prescribed premium-to-capital surplus ratios and each met those requirements at such dates. Through PSI, UIH recorded contributions for the periods presented (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
Capital contributions - UPCIC |  | $ | 15,000 |  |  | $ | 44,000 |  |  | $ | 92,000 |  |  | $ | 74,000 |
The following table summarizes combined net income (loss) for the Insurance Entities determined in accordance with statutory accounting practices for the periods presented (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Combined net income (loss) | $ | (22,903) |  |  | $ | (41,436) |  |  | $ | (21,723) |  |  | $ | (37,034) |
The Insurance Entities are required by various state laws and regulations to maintain certain assets in depository accounts. The following table represents assets held by insurance regulators as of the dates presented (in thousands):
| September 30, 2021 |  | December 31, 2020
Restricted cash and cash equivalents | $ | 2,635 |  |  | $ | 2,635 |
Investments | $ | 3,484 |  |  | $ | 3,550 |

X
- References No definition available. + Details
Name: | us-gaap_InsuranceAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the types of coverages and products sold, and the assets, obligations, recorded liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI http://asc.fasb.org/topic&trid=2303980 + Details
Name: | us-gaap_InsuranceDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration