Note 3. Insurance Reserves and Policyholder Funds

The following table presents the Company’s reserves for life, accident and health, and property and casualty losses, claims and loss adjustment expenses.

					Amount of Insurance In Force, Net
	2015		2014		2015		2014
Future policy benefits
Life insurance policies:
Ordinary	$	54,130	$	53,555	$	247,590	$	235,856
Mass market		2,205		2,475		2,758		3,148
Individual annuities		103		130		—		—
		56,438		56,160	$	250,348	$	239,004
Accident and health insurance policies		15,698		14,685
		72,136		70,845
Unearned premiums		25,348		24,544
Losses, claims and loss adjustment expenses		63,870		66,625
Other policy liabilities		1,991		2,080
Total insurance reserves and policyholder funds	$	163,345	$	164,094

Annualized premiums for accident and health insurance policies were $87,480 and $88,956 at December 31, 2015 and 2014, respectively.

Future Policy Benefits

Liabilities for life insurance future policy benefits are based upon assumed future investment yields, mortality rates, and withdrawal rates after giving effect to possible risks of unexpected claim experience. The assumed mortality and withdrawal rates are based upon the Company’s experience. The interest rates assumed for life, accident and health future policy benefits are generally: (i) 2.5% to 5.5% for issues prior to 1977, (ii) 7% graded to 5.5% for 1977 through 1979 issues, (iii) 9% for 1980 through 1987 issues, (iv) 5% to 7% for 1988 through 2009 issues, (v) 4% for 2010 through 2012 issues, and (vi) 3.5% for 2013 through 2015 issues.

Loss and Claim Reserves

Loss and claim reserves represent estimates of projected ultimate losses and are based upon: (a) management’s estimate of ultimate liability and claims adjusters’ evaluations for unpaid claims reported prior to the close of the accounting period, (b) estimates of incurred but not reported (“IBNR”) claims based on past experience, and (c) estimates of loss adjustment expenses. The estimated liability is periodically reviewed by management and updated, with changes to the estimated liability recorded in the statement of operations in the year in which such changes are known.

Activity in the liability for unpaid loss and claim reserves is summarized as follows:

	2015			2014
Balance at January 1	$	66,625		$	63,018
Less: Reinsurance receivable on unpaid losses		(14,302	)		(14,314	)
Net balance at January 1		52,323			48,704

Incurred related to:
Current year		99,447			104,225
Prior years		(701	)		(483	)
Total incurred		98,746			103,742

Paid related to:
Current year		68,159			72,443
Prior years		30,781			27,680
Total paid		98,940			100,123
Net balance at December 31		52,129			52,323
Plus: Reinsurance receivable on unpaid losses		11,741			14,302
Balance at December 31	$	63,870		$	66,625

Prior years’ development was primarily the result of better than expected development on prior years IBNR reserves for certain lines of business.

Following is a reconciliation of total incurred claims to total insurance benefits and losses incurred:

	2015		2014
Total incurred claims	$	98,746	$	103,742
Cash surrender value and matured endowments		1,390		1,574
Benefit reserve changes		1,228		879
Total insurance benefits and losses incurred	$	101,364	$	106,195