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Note 15 - Reserves for Losses and Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2021

NOTE 15. RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses ("LAE") for the nine months ended September 30:

	*2021*		*2020*
Losses and LAE at January 1	$	2,492,334	$	1,203,493

Provision for losses and LAE claims arising in:
Current year		693,750		1,182,651
Prior year		578,302		1,054,890
Total incurred		1,272,052		2,237,541
Losses and LAE payments for claims arising in:
Current year		1,065,955		594,600
Prior years		691,410		431,821
Total payments		1,757,365		1,026,421

Losses and LAE at September 30	$	2,007,021	$	2,414,613

For the nine months ended September 30, 2021, $691,410 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $489,424 favorable prior year development during the nine months ended September 30, 2021. Reserves remaining as of September 30, 2021 for prior years are $578,302 as a result of re-estimation of unpaid losses and loss adjustment expenses. For the nine months ended September 30, 2020, $431,821 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $80,600 unfavorable prior year development during the nine months ended September 30, 2020.

Reserves remaining as of September 30, 2020 for prior years were $1,054,890 as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year losses and loss adjustment expense. Original estimates are increased or decreased as additional information becomes known regarding individual claims. At September 30, 2021, we did not have any reinsurance recoverables recorded. Reinsurance recoverables were $120,000 as of September 30, 2020.