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Note 15 - Reserves for Losses and Loss Adjustment Expenses
 9 Months Ended
Sep. 30, 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 nine months ended September 30, 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

  1,281,128   943,706 

Prior year

  885,000   887,500 

Total incurred

  2,166,128   1,831,206 

Losses and LAE payments for claims arising in:

        

Current year

  974,960   100,277 

Prior years

  228,117   938,472 

Total payments

  1,203,077   1,038,749 
         

Less reinsurance recoverable

  455,000   365,000 
         

Losses and LAE at September 30,

 $2,198,630  $1,808,983 

 

For the nine months ended September 30, 2023, $228,117 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $1,117 unfavorable prior year development during the nine months ended  September 30, 2023. Reserves remaining as of  September 30, 2023 for prior years are $885,000 as a result of re-estimation of unpaid losses and loss adjustment expenses.

 

For the nine months ended September 30, 2022, $938,472 was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $528 favorable prior year development during the nine months ended September 30, 2022. Reserves remaining as of September 30, 2022 for prior years were $887,500 as a result of re-estimation of unpaid losses and loss adjustment expenses.

 

In both periods, unfavorable and favorable 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 $455,000 and $365,000 at  September 30, 2023 and September 30, 2022, respectively, and are included within Loss and Loss Adjustment Reserves.