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Reinsurance
 6 Months Ended
Jun. 30, 2022
Reinsurance Disclosures [Abstract]  
Reinsurance
8)    REINSURANCE

Our reinsurance program is designed, utilizing our risk management methodology, to address our exposure to catastrophes. Our program provides reinsurance protection for catastrophes, including hurricanes and tropical storms. These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our stockholders an acceptable return on the risks assumed in our property business, and to reduce variability of earnings, while providing protection to our 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 and quota share treaties. Our catastrophe reinsurance program, in effect from June 1, 2022 through May 31, 2023, provides coverage for catastrophe losses from named or numbered windstorms and earthquakes up to an exhaustion point of approximately $2,500,000,000. Under our core catastrophe excess of loss treaty, retention on a first and second event is $16,400,000 each. The exhaustion point of IIC's catastrophe reinsurance program is approximately $200,000,000, with a retention of $3,000,000 per occurrence, covering all perils.

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.
The table below outlines our quota share agreements in effect for the three and six months ended June 30, 2022 and 2021.

Reinsurer
Companies in Scope (1)
Effective DatesCession RateStates in Scope
External third-partyUPC, FSIC & ACIC06/01/2022 - 06/01/2023
10% (2)
Florida, Louisiana, Texas
TypTapUPC06/01/2022 - 06/01/2023
100% (3)
Georgia, North Carolina, South Carolina
External third-partyUPC, FSIC & ACIC12/31/2021 - 12/31/2022
8% (2)
Florida, Louisiana, Texas
HCPCIUPC12/31/2021 - 06/01/202285%Georgia, North Carolina, South Carolina
External third-partyUPC & FSIC12/31/2021 - 12/31/2022
25% (4)
Florida, Louisiana, Texas
HCPCI / TypTap (5)
UPC06/01/2021 - 06/01/2022
100% (3)
Connecticut, New Jersey, Massachusetts, Rhode Island
External third-party
UPC, FSIC & ACIC (6)
06/01/2021 - 06/01/2022
15% (2)
Florida, Georgia, Louisiana, North Carolina, South Carolina, Texas
IICUPC12/31/2020 - 12/31/2022100%New York
HCPCIUPC12/31/2020 - 06/01/202169.5%Connecticut, New Jersey, Massachusetts, Rhode Island
External third-partyUPC, FSIC & ACIC12/30/2020 - 12/31/2021
8% (2)
Connecticut, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas
External third-party
UPC, FSIC & ACIC (6)
06/01/2020 - 06/01/2021
15% (2)
Connecticut, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas
External third-partyUPC & FSIC06/01/2020 - 06/01/2021
7.5% (2)
Connecticut, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas
(1) Effective May 31, 2022, FSIC was merged into UPC, with UPC being the surviving entity.
(2) This treaty provides coverage for all catastrophe perils and attritional losses incurred. For all catastrophe perils, the quota share agreement provides ground- up protection effectively reducing our retention for catastrophe losses.
(3) This treaty provides coverage on our in-force, new and renewal policies until these states are transitioned to HCPCI or TypTap upon renewal.
(4) This treaty provides coverage on non-catastrophe losses on policies in-force on the effective date of the agreement.
(5) Cessions are split 50% to HCPCI and 50% to TypTap.
(6) This treaty was amended effective December 31, 2020 to include ACIC.

Reinsurance recoverable at the balance sheet dates consists of the following:
June 30,December 31,
20222021
Reinsurance recoverable on unpaid losses and loss adjustment expenses $561,591 $749,600 
Reinsurance recoverable on paid losses and loss adjustment expenses195,920 247,520 
Reinsurance recoverable (1)
$757,511 $997,120 
(1) Our reinsurance recoverable balance is net of our allowance for expected credit losses. More information related to this allowance can
be found in Note 12.

We write the majority of our flood insurance policies under an agreement with the National Flood Insurance Program (NFIP). 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 $407,000 and $608,000 for the three month periods ended June 30, 2022 and 2021, respectively and $617,000 and $890,000 for the six month periods ended
June 30, 2022 and 2021, respectively. On June 9, 2022, we entered into a renewal rights agreement with Wright National Flood Insurance Company to sell our entire NFIP Write Your Own flood insurance business.