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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Obligations under Multi-Year Reinsurance Contracts The Company purchases reinsurance coverage to protect its capital and to limit its losses when certain major events occur. The Company’s reinsurance commitments generally run from June 1 st of the current year to May 31 st of the following year. Certain of the Company’s reinsurance agreements are for periods longer than one year. Amounts payable for coverage during the current June 1 st to May 31 st contract period are recorded as “Reinsurance Payable, net” in the Condensed Consolidated Balance Sheet. Multi-year contract commitments for future years will be recorded at the commencement of the coverage period. Amounts payable for future reinsurance contract years that the Company is obligated to pay are: (1) $72.7 million in 2024 and (2) $52.6 million in 2025. Lawsuits and Legal Proceedings From time to time, lawsuits are filed against the Company or the Company may become involved in other legal proceedings. Many of these lawsuits or legal proceedings involve claims under policies that the Company underwrites and for which it reserves. The Company is also involved in various other legal proceedings and litigation unrelated to claims under the Company’s policies that arise in the ordinary course of business operations. The Company contests liability and/or the amount of damages as it considers appropriate according to the facts and circumstances of each matter. The Insurance Entities are obligated by regulation and by contract to commute their losses under reimbursement agreements with the FHCF. The commutation process results in a final estimate of, and payment to the insurer for, remaining reimbursable losses attributable to a reimbursement contract year in exchange for a release of future FHCF obligations for that contract year. On June 1, 2023, the Insurance Entities began their respective commutation processes for the 2017-18 reimbursement contract year. In the third quarter, each of the Insurance Entities successfully reached an agreement with the FHCF on the amount of the FHCF’s final payment in commutation without the need for dispute resolution. In accordance with applicable accounting guidance, the Company establishes reserves intended to encompass claims-related lawsuits or legal proceedings and establishes an accrued liability for other legal matters when those matters present loss contingencies that are both probable and estimable. Lawsuits and legal proceedings are subject to many uncertain factors that generally cannot be predicted with certainty, and the Company may be exposed to losses in excess of any amounts accrued. The Company currently estimates that the reasonably possible losses for legal matters in excess of a related accrued liability, including reserves, or where there is no accrued liability, and for which the Company is able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. These estimates of possible loss do not represent our maximum loss exposure, and actual results may vary significantly from current estimates.

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