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Note 16 - Reserves for Losses and Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Insurance Disclosure [Text Block]

NOTE 16.

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 years ended December 31:

 

  

2022

  

2021

 

Losses and LAE at January 1

 $1,381,526  $2,492,334 
         

Provision for losses and LAE claims arising in:

        

Current year

  1,308,180   698,075 

Prior year

  414,999   664,229 

Total incurred

  1,723,179   1,362,304 

Losses and LAE payments for claims arising in:

        

Current year

  157,303   1,259,276 

Prior years

  841,824   873,836 

Total payments

  999,127   2,133,112 
         

Less reinsurance recoverable

  415,000   340,000 
         

Losses and LAE at December 31

 $1,690,578  $1,381,526 

 

For the year ended  December 31, 2022, $841,824 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $372,145 favorable prior year development during the year ended  December 31, 2022. Reserves remaining as of  December 31, 2022, for prior years are $414,999 as a result of re-estimation of unpaid losses and loss adjustment expenses. For the year ended  December 31, 2021, $873,836 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $1,170,001 favorable prior year development during the year ended  December 31, 2021.

 

Reserves remaining as of  December 31, 2021, for prior years were $664,229 as a result of re-estimation of unpaid losses and loss adjustment expenses. The favorable 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. Reinsurance recoverable of $415,000 and $340,000 are included within loss and loss adjustment reserves as of December 31, 2022, and 2021, respectively.