v3.22.1

Reinsurance | 3 Months Ended
--- | ---
Mar. 31, 2022
Reinsurance Disclosures [Abstract] |
Reinsurance | Reinsurance The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Ceded reinsurance provides for the recovery of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of its reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for ceded reinsurance. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances. The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the three months ended March 31, 2022 and 2021 was as follows:
For the Three Months Ended March 31, |  | 2022 |  | 2021
Premiums written |  |  |  |
Direct |  | $ | 4,736 |  |  | $ | 5,003 |
Assumed |  | (14,906) |  |  | (7,393) |
Ceded |  | (153) |  |  | (306) |
Net |  | $ | (10,323) |  |  | $ | (2,696) |
Premiums earned |  |  |  |
Direct |  | $ | 4,751 |  |  | $ | 5,854 |
Assumed |  | (3,469) |  |  | 6,944 |
Ceded |  | (160) |  |  | (1,034) |
Net |  | $ | 1,122 |  |  | $ | 11,764 |
Loss and LAE |  |  |  |
Gross loss and LAE |  | $ | (2,196) |  |  | $ | 2,525 |
Loss and LAE ceded |  | (87) |  |  | (166) |
Net |  | $ | (2,283) |  |  | $ | 2,359 |
The Company's reinsurance recoverable on unpaid losses balance as at March 31, 2022 was $558,262 (December 31, 2021 - $562,845) presented in the Condensed Consolidated Balance Sheets. At March 31, 2022 and December 31, 2021, the Company had no valuation allowance against reinsurance recoverable on unpaid losses. On December 27, 2018, Cavello Bay Reinsurance Limited ("Cavello") and Maiden Reinsurance entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Reinsurance were 100.0% retroceded to Cavello in exchange for a ceding commission. The reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $67,633 at March 31, 2022 (December 31, 2021 - $69,006). On July 31, 2019, Maiden Reinsurance and Cavello entered into a Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $2,178,535 retention up to $600,000, in exchange for a retrocession premium of $445,000. The $2,178,535 retention is subject to adjustment for paid losses subsequent to December 31, 2018. The LPT/ADC Agreement provides Maiden Reinsurance with $155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018. The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $445,000 are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferral is recalculated each period based on loss payments and updated estimates. Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. As of March 31, 2022, the reinsurance recoverable on unpaid losses under the LPT/ADC Agreement was $489,860 while the deferred gain liability under the LPT/ADC Agreement was $44,860 (December 31, 2021 - $490,860 and $45,860, respectively). Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the LPT/ADC Agreement, which is estimated to be in 2024. Cavello provided collateral in the form of a letter of credit in the amount of $445,000 to AmTrust under the LPT/ADC Agreement. Cavello is subject to additional collateral funding requirements as explained in "Note 10. Related Party Transactions". As of March 31, 2022, the amount of collateral required was $405,029. Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $312,786. Cavello's parent company, Enstar, has credit ratings of BBB from both Standard & Poor's and Fitch Ratings at March 31, 2022.

X
- References No definition available. + Details
Name: | us-gaap_ReinsuranceDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI http://asc.fasb.org/topic&trid=2303980 + Details
Name: | us-gaap_ReinsuranceTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration