XML 22 R9.htm IDEA: XBRL DOCUMENT
v3.23.2

Discontinued Operations and Disposal Groups | 3 Months Ended
--- | ---
Mar. 31, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Income Statement Disclosure | ) DISCONTINUED OPERATIONS On August 25, 2022, we announced that our former subsidiary UPC had filed plans for withdrawal in the states of Florida, Louisiana, and Texas and intended to file a plan for withdrawal in the state of New York. All filed plans entailed non-renewing personal lines policies in these states. Additionally, we announced that Demotech, an insurance rating agency, notified UPC of its intent to withdraw UPC's Financial Stability Rating. On December 5, 2022, the FLOIR issued Consent Order No. 303643-22- CO that provided for the administrative supervision and approval of the plan of run-off for UPC (the "Consent Order"). The Consent Order provided formal approval of UPC's Plan of Run-Off (the "Plan") to facilitate a solvent wind down of its affairs in an orderly fashion. On February 10, 2023, we announced that a solvent run-off of UPC was unlikely, driven by Hurricane Ian losses which exhausted UPC's reinsurance coverage. On February 27, 2023, UPC was placed into receivership with the DFS which divested our ownership of UPC. In the first quarter of 2023, the assets and liabilities of UPC were divested. In addition, activities provided by our entities, SCS, SLS and UIM, related directly to supporting the business conducted by UPC have been included. The assets and liabilities for the balance sheet as of December 31, 2022 are reclassified as held for disposal retrospectively, and the results of UPC and activities related directly to supporting the business conducted by UPC are presented as discontinued operations for all periods presented. The results from discontinued operations for the three months ended March 31, 2023 and 2022 are presented below.
Results From Discontinued Operations |  |  |  |
|  | Three Months Ended March 31,
|  | 2023 |  | 2022
REVENUE: |  |  |  |
Gross premiums written |  | $ | (120,608) |  |  | $ | 146,828 |
Change in gross unearned premiums |  | 198,154 |  |  | 59,726 |
Gross premiums earned |  | 77,546 |  |  | 206,554 |
Ceded premiums earned |  | (48,203) |  |  | (163,443) |
Net premiums earned |  | 29,343 |  |  | 43,111 |
Net investment income |  | 2,182 |  |  | 1,075 |
Net realized investment gains (losses) |  | 1,343 |  |  | (1,806) |
Net unrealized gains (losses) on equity securities |  | 2,080 |  |  | (1,498) |
Other revenue |  | 2,717 |  |  | 3,063 |
Total revenue |  | 37,665 |  |  | 43,945 |
EXPENSES: |  |  |  |
Losses and loss adjustment expenses |  | 35,226 |  |  | 65,064 |
Policy acquisition costs |  | (1,352) |  |  | 5,708 |
Operating expenses |  | 3,996 |  |  | 8,541 |
General and administrative expenses |  | 1,284 |  |  | 7,941 |
Interest expense |  | 22 |  |  | 20 |
Total expenses |  | 39,176 |  |  | 87,274 |
Loss before other income |  | (1,511) |  |  | (43,329) |
Other income (loss) |  | — |  |  | 9 |
Loss before income taxes |  | (1,511) |  |  | (43,320) |
Provision (benefit) for income taxes |  | 16 |  |  | (10,336) |
Income (loss) from discontinued operations, net of tax |  | $ | (1,527) |  |  | $ | (32,984) |
As of February 28, 2023, the Company completed the disposal of its former subsidiary, UPC. This divestiture resulted in a gain of $238,440,000 for the period. This gain was driven by the negative equity position of UPC. The major classes of assets and liabilities transferred as a result of the transaction as of the date of transfer and December 31, 2022 are presented below.
Major Classes of Assets and Liabilities Disposed |  |  |  |
|  | Closing (1) |  | December 31, 2022
ASSETS |  |  |  |
Fixed maturities, available-for-sale |  | 1,380 |  |  | 171,781 |
Equity securities |  | 272 |  |  | 23,363 |
Other investments |  | 12,882 |  |  | 12,952 |
Cash and cash equivalents |  | 224,824 |  |  | 158,990 |
Restricted cash |  | 7,758 |  |  | 7,730 |
Accrued investment income |  | 875 |  |  | 1,457 |
Premiums receivable, net |  | 22,733 |  |  | 46,736 |
Reinsurance recoverable on paid and unpaid losses, net |  | 548,929 |  |  | 834,863 |
Ceded unearned premiums |  | 75,262 |  |  | 122,533 |
Deferred policy acquisition costs, net |  | (89) |  |  | (2,046) |
Other assets |  | 51,625 |  |  | 33,548 |
Total assets |  | $ | 946,451 |  |  | $ | 1,411,907 |
LIABILITIES |  |  |  |
Unpaid losses and loss adjustment expenses |  | 920,431 |  |  | 1,103,980 |
Unearned premiums |  | 98,655 |  |  | 286,842 |
Reinsurance payable on premiums |  | 12,612 |  |  | 29,394 |
Payments outstanding |  | 144,238 |  |  | 213,058 |
Accounts payable and accrued expenses |  | 1,361 |  |  | (872) |
Other liabilities |  | 3,476 |  |  | 14,658 |
Notes payable, net |  | 4,118 |  |  | 4,118 |
Total Liabilities |  | $ | 1,184,891 |  |  | $ | 1,651,178 |
(1) The Company divested its ownership on February 27, 2023, the date the DFS was appointed as receiver of the entity. In addition, the major classes of assets and liabilities remaining related to activities directly supporting the business conducted by UPC are outlined in the table below as of March 31, 2023 and December 31, 2022.
Major Classes of Assets and Liabilities Held for Disposal |  |  |  |
|  | March 31, 2023 |  | December 31, 2022
ASSETS |  |  |  |
Property and equipment, net |  | 13,395 |  |  | 14,299 |
Deferred policy acquisition costs |  | — |  |  | 8,609 |
Total assets |  | $ | 13,395 |  |  | $ | 22,908 |
LIABILITIES |  |  |  |
Commissions Payable |  | 1,817 |  |  | 987 |
Unearned Policy Fees |  | — |  |  | 2,652 |
Total Liabilities |  | $ | 1,817 |  |  | $ | 3,639 |
The discontinued operations of the Company incurred $252,000 and $438,000 of amortization expense during the three months ended March 31, 2023 and 2022, respectively. There were no other noncash transactions for either period.

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

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration