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Note 16 - Reserves for Losses and Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 2023
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:

 

  

2023

  

2022

 

Gross reserve for unpaid losses and loss adjustment expenses, beginning of year

 $2,105,579  $1,721,526 

Less: reinsurance recoverable on unpaid losses

  415,000   340,000 

Net reserve for unpaid losses and loss adjustment expenses, beginning of year

  1,690,579   1,381,526 
         

Incurred losses and loss adjustment expenses:

        

Current year

  2,411,846   1,682,424 

Prior year

  (367,411)  (150,131)

Total net losses and loss adjustment expense incurred

  2,044,435   1,532,293 
         

Payments:

        

Current Year

  532,062   381,414 

Prior Year

  752,579   841,826 

Total Payments:

  1,284,641   1,223,240 
         

Net reserves for unpaid losses and loss adjustment expenses, end of year

  2,450,373   1,690,579 

Reinsurance recoverable on unpaid losses, net of allowance

  3,283,071   415,000 
         

Gross reserves for unpaid losses and loss adjustment expenses, end of year

 $5,733,444  $2,105,579 

 

During the years ended  December 31, 2023 and 2022, there was favorable prior year loss development of $367,411 and $150,131, respectively, which 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.