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Note 15 - Reserves for Losses and Loss Adjustment Expenses
 3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Insurance Disclosure [Text Block]

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 three months ended March 31, 2023 and 2022:  

 

  

2023

  

2022

 

Losses and LAE at January 1

 $1,690,579  $1,381,526 
         

Provision for losses and LAE claims arising in:

        

Current year

  576,510   201,795 

Prior year

  355,001   535,001 

Total incurred

  931,511   736,796 

Losses and LAE payments for claims arising in:

        

Current year

  27,496   33,550 

Prior years

  196,420   193,766 

Total payments

  223,916   227,316 
         

Less reinsurance recoverable

  415,000   315,000 
         

Losses and LAE at March 31,

 $1,983,174  $1,576,006 

 

For the three months ended March 31, 2023, $196,420 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $20,420 unfavorable prior year development during the three months ended  March 31, 2023. Reserves remaining as of  March 31, 2023 for prior years are $355,001 as a result of re-estimation of unpaid losses and loss adjustment expenses.

 

For the three months ended March 31, 2022, $193,766 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $24,526 unfavorable prior year development during the three months ended March 31, 2022. Reserves remaining as of March 31, 2022 for prior years were $535,001 as a result of re-estimation of unpaid losses and loss adjustment expenses.

 

In both periods, unfavorable prior year 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 recoverables were $415,000 and $315,000 at  March 31, 2023 and March 31, 2022, respectively.