policyholders. Although reinsurance agreements contractually obligate our reinsurers to reimburse us for the agreed-upon portion of our gross paid losses, they do not discharge our primary liability.

Our program includes excess of loss, aggregate excess of loss and quota share treaties. Our excess of loss treaty, in effect from June 1, 2021 through May 31, 2022, provides coverage for catastrophe losses from named or numbered windstorms and earthquakes up to an exhaustion point of approximately $2,900,000,000. Under our core catastrophe excess of loss treaty and excess of loss aggregate treaty, retention on a first and second event is $15,000,000 each and retention on subsequent events totals $1,000,000, resulting in a maximum retention of $31,000,000. Retentions for JIC are $4,000,000 for a first event and $1,000,000 for subsequent events, covering all perils. Retention for IIC is $3,000,000 per occurrence, covering all perils.

Effective December 31, 2021, we entered into a quota share reinsurance agreement with HCPCI and TypTap. Under the terms of this agreement, we will cede 85% of our in-force, new, and renewal policies in the states of Georgia, North Carolina and South Carolina. As a result, our 8% quota share agreement was modified to exclude these states, effective December 31, 2021.

Effective December 31, 2021, we entered into a structured quota share agreement. This structured quota share reinsurance agreement has a cession rate of 25% and covers UPC and FSIC’s non-catastrophe losses on policies in-force in Florida, Texas and Louisiana, on the effective date of the agreement.

Effective December 13, 2021, we renewed our all other perils catastrophe excess of loss agreement. The agreement provides protection from catastrophe loss events other than named windstorms and earthquakes up to $110,000,000. During the year ended December 31, 2021, we ceded $91,223,000 under the contract period effective January 1, 2021 through December 31, 2021. As a result of Winter Storm Uri, we incurred reinstatement premiums totaling $14,732,000 related to this agreement under the contract period effective January 1, 2021 through December 31, 2021.

The quota share agreements effective June 1, 2020 through May 31, 2021, provided coverage for all catastrophe perils and attritional losses incurred by two of our insurance subsidiaries, UPC and FSIC. Effective December 31, 2020, we extended these agreements that were set to expire on May 31, 2021. The cession rate of this extension is comprised of a quota share cession of 15% through May 31, 2022, which covers UPC, FSIC, and was amended to include ACIC, a quota share cession of 8% which was renewed effective December 31, 2021 through December 31, 2022, and the remaining 7.5% covering UPC and FSIC only, which was nonrenewed at June 1, 2021. For all catastrophe perils, the quota share agreement provides ground-up protection effectively reducing our retention for catastrophe losses.

Effective December 31, 2020, we entered into a quota share reinsurance agreement with HCPCI. Under the terms of this agreement, HCPCI provided 69.5% quota share reinsurance on in-force, new and renewal policies in Connecticut, Massachusetts, New Jersey, and Rhode Island effective December 31, 2020 through June 1, 2021. Effective June 1, 2021, we entered into a quota share reinsurance agreement with HCPCI and TypTap. Under the terms of this agreement, we will cede 100% of our in-force, new, and renewal policies in the states of Connecticut, New Jersey, Massachusetts, and Rhode Island. This agreement replaced the 69.5% quota share agreement. The cession of these policies is 50% to HCPCI and 50% to TypTap. As a result, our third-party quota share and excess of loss agreements were modified to exclude policies in these states effective June 1, 2021.

In addition, effective June 1, 2021 our quota share agreements were modified to exclude policies in New York. This modification was made as the result of our 100% internal quota share agreement, effective June 1, 2021, which cedes 100% of UPC's in-force, new, and renewal policies in the state of New York to our subsidiary IIC.


	December 31,
	2021		2020
Reinsurance recoverable on unpaid losses and LAE	$	749,600	$	674,746
Reinsurance recoverable on paid losses and LAE	247,520		146,410
Reinsurance recoverable	$	997,120	$	821,156

We write the majority of flood insurance under an agreement with the National Flood Insurance Program. We cede 100% of the premiums written and the related risk of loss to the federal government. We earn commissions for the issuance of flood

policies based upon a fixed percentage of net written premiums and the processing of flood claims based upon a fixed percentage of incurred losses, and we can earn additional commissions by meeting certain growth targets for the number of in-force policies. We recognized commission revenue from our flood program of $1,501,000, $1,467,000, and $1,506,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

The following table depicts written premiums, earned premiums and losses, showing the effects that our reinsurance transactions have on these components of our Consolidated Statements of Comprehensive Loss:


	Year ended December 31,
	2021		2020		2019
Premium written:
Direct	$	1,329,129	$	1,411,558	$	1,278,504
Assumed	316		45,305		101,764
Ceded	(864,725)		(755,871)		(633,275)
Net premium written	$	464,720	$	700,992	$	746,993
Change in unearned premiums:
Direct	$	59,547	$	(66,483)	$	(59,660)
Assumed	19,451		16,600		12,918
Ceded	46,043		114,554		52,149
Net decrease (increase)	$	125,041	$	64,671	$	5,407
Premiums earned:
Direct	$	1,388,676	$	1,345,075	$	1,218,844
Assumed	19,767		61,905		114,682
Ceded	(818,682)		(641,317)		(581,126)
Net premiums earned	$	589,761	$	765,663	$	752,400
Losses and LAE incurred:
Direct	$	1,319,606	$	1,186,401	$	1,003,767
Assumed	13,969		67,119		44,914
Ceded	(911,441)		(645,204)		(549,188)
Net losses and LAE incurred	$	422,134	$	608,316	$	499,493

Ceded losses incurred increased by $266,237,000 during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily as a result of the changes to our quota share reinsurance agreements at the end of 2020 and during 2021. In addition to these changes, we experienced an increase in ceded catastrophe losses to our Core CAT reinsurance program in 2021, driven by both our lower retention on our 2021 contracts as well as increased severity of catastrophe losses in 2021, driven by Hurricane Ida. We have billed and received reinsurance recoveries for losses that we incurred on this activity and expect to receive additional recoveries during 2022.

The following table highlights the effects that our reinsurance transactions have on unpaid losses and loss adjustment expenses and unearned premiums in our Consolidated Balance Sheets:


	December 31,
	2021		2020		2019
Unpaid losses and LAE:
Direct	$	1,062,567	$	1,042,994	$	716,559
Assumed	21,883		46,972		43,798
Gross unpaid losses and LAE	1,084,450		1,089,966		760,357
Ceded	(749,600)		(674,746)		(482,315)
Net unpaid losses and LAE	$	334,850	$	415,220	$	278,042
Unearned premiums:
Direct	$	644,065	$	703,612	$	637,128
Assumed	875		20,326		36,927
Gross unearned premiums	644,940		723,938		674,055
Ceded	(430,631)		(384,588)		(270,034)
Net unearned premiums	$	214,309	$	339,350	$	404,021