2018 Q4 Form 10-Q Financial Statement

#000106999618000028 Filed on November 07, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $498.0M $498.7M
YoY Change -6.06%
Cash & Equivalents $64.42M $69.46M $81.54M
Short-Term Investments $433.6M $429.2M
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $0.00 $4.120M
YoY Change -100.0%
Goodwill $0.00
YoY Change
Intangibles
YoY Change
Long-Term Investments $451.5M $448.9M $443.3M
YoY Change 1.69% 1.26% 4.04%
Other Assets
YoY Change
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $925.4M $890.6M $1.182B
YoY Change 2.27% -24.62% 57.64%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities
YoY Change
LONG-TERM LIABILITIES
Long-Term Debt $44.40M $44.40M $4.900M
YoY Change -9.94% 806.12% 0.0%
Other Long-Term Liabilities $23.90M $28.90M $38.80M
YoY Change -23.64% -25.52% 23.17%
Total Long-Term Liabilities $68.30M $73.30M $43.70M
YoY Change -15.26% 67.73% 20.05%
TOTAL LIABILITIES
Total Short-Term Liabilities
Total Long-Term Liabilities $68.30M $73.30M $43.70M
Total Liabilities $710.1M $667.7M $969.2M
YoY Change 4.83% -31.11% 92.0%
SHAREHOLDERS EQUITY
Retained Earnings $77.75M $88.10M
YoY Change 11.06%
Common Stock $128.0K $128.0K
YoY Change -1.54%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $215.3M $222.9M $212.3M
YoY Change
Total Liabilities & Shareholders Equity $925.4M $890.6M $1.182B
YoY Change 2.27% -24.62% 57.64%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3

Facts In Submission

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false
dei Document Period End Date
DocumentPeriodEndDate
2018-09-30
dei Document Type
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CY2017Q4 us-gaap Income Tax Receivable
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CY2018Q3 us-gaap Income Tax Receivable
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3006000 USD
us-gaap Income Taxes Paid Net
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us-gaap Income Taxes Paid Net
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us-gaap Increase Decrease In Deferred Policy Acquisition Costs
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2363000 USD
us-gaap Increase Decrease In Deferred Policy Acquisition Costs
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6502000 USD
us-gaap Increase Decrease In Deferred Revenue
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-73000 USD
us-gaap Increase Decrease In Deferred Revenue
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us-gaap Increase Decrease In Income Taxes Receivable
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5110000 USD
us-gaap Increase Decrease In Income Taxes Receivable
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303115000 USD
us-gaap Increase Decrease In Liability For Claims And Claims Adjustment Expense Reserve
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-9401000 USD
us-gaap Increase Decrease In Other Operating Capital Net
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-4517000 USD
us-gaap Increase Decrease In Other Operating Capital Net
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1038000 USD
us-gaap Increase Decrease In Premiums Receivable
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291000 USD
us-gaap Increase Decrease In Premiums Receivable
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-12107000 USD
us-gaap Increase Decrease In Prepaid Reinsurance Premiums
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33025000 USD
us-gaap Increase Decrease In Prepaid Reinsurance Premiums
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-1207000 USD
us-gaap Increase Decrease In Reinsurance Payables
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47325000 USD
us-gaap Increase Decrease In Reinsurance Payables
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5060000 USD
us-gaap Increase Decrease In Reinsurance Recoverable
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286630000 USD
us-gaap Increase Decrease In Reinsurance Recoverable
IncreaseDecreaseInReinsuranceRecoverable
10135000 USD
us-gaap Increase Decrease In Unearned Premiums
IncreaseDecreaseInUnearnedPremiums
18205000 USD
us-gaap Increase Decrease In Unearned Premiums
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1906000 USD
CY2017Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
0 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
91000 shares
CY2018Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
121000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
91000 shares
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81000 USD
us-gaap Interest Expense
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247000 USD
CY2018Q3 us-gaap Interest Expense
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1032000 USD
us-gaap Interest Expense
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3139000 USD
CY2017Q3 us-gaap Investment Income Dividend
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111000 USD
us-gaap Investment Income Dividend
InvestmentIncomeDividend
408000 USD
CY2018Q3 us-gaap Investment Income Dividend
InvestmentIncomeDividend
48000 USD
us-gaap Investment Income Dividend
InvestmentIncomeDividend
154000 USD
CY2017Q3 us-gaap Investment Income Interest
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2492000 USD
us-gaap Investment Income Interest
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7073000 USD
CY2018Q3 us-gaap Investment Income Interest
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3089000 USD
us-gaap Investment Income Interest
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8904000 USD
CY2017Q3 us-gaap Investment Income Interest And Dividend
InvestmentIncomeInterestAndDividend
2603000 USD
us-gaap Investment Income Interest And Dividend
InvestmentIncomeInterestAndDividend
7481000 USD
CY2018Q3 us-gaap Investment Income Interest And Dividend
InvestmentIncomeInterestAndDividend
3137000 USD
us-gaap Investment Income Interest And Dividend
InvestmentIncomeInterestAndDividend
9058000 USD
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677414000 USD
CY2018Q3 us-gaap Liabilities
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667675000 USD
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904873000 USD
CY2018Q3 us-gaap Liabilities And Stockholders Equity
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CY2017Q4 us-gaap Liability For Claims And Claims Adjustment Expense
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us-gaap Liability For Unpaid Claims And Claims Adjustment Expense Claims Paid Current Year1
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87960000 USD
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57322000 USD
us-gaap Liability For Unpaid Claims And Claims Adjustment Expense Claims Paid Prior Years1
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71266000 USD
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188683000 USD
us-gaap Liability For Unpaid Claims And Claims Adjustment Expense Incurred Claims1
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156098000 USD
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CY2017Q3 us-gaap Liability For Unpaid Claims And Claims Adjustment Expense Net
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132170000 USD
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Operating Activities
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42250000 USD
us-gaap Net Cash Provided By Used In Operating Activities
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us-gaap Net Income Loss
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1693000 USD
CY2018Q3 us-gaap Net Income Loss
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7950000 USD
us-gaap Net Income Loss
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us-gaap Net Income Loss Attributable To Noncontrolling Interest
NetIncomeLossAttributableToNoncontrollingInterest
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NetIncomeLossAttributableToNoncontrollingInterest
0 USD
us-gaap Net Income Loss Attributable To Noncontrolling Interest
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2603000 USD
us-gaap Net Investment Income
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us-gaap Net Investment Income
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514000 USD
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us-gaap Other Income
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us-gaap Other Income
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us-gaap Payments For Losses And Loss Adjustment Expense
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us-gaap Payments For Repurchase Of Common Stock
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3189000 USD
us-gaap Payments Of Dividends
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268999000 USD
us-gaap Payments To Acquire Available For Sale Securities Debt
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254110000 USD
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34339000 USD
us-gaap Payments To Acquire Available For Sale Securities Equity
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304000 USD
us-gaap Payments To Acquire Property Plant And Equipment
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1002000 USD
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us-gaap Policyholder Benefits And Claims Incurred Net
PolicyholderBenefitsAndClaimsIncurredNet
188683000 USD
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62457000 USD
us-gaap Policyholder Benefits And Claims Incurred Net
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156098000 USD
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us-gaap Premiums Earned Net Property And Casualty
PremiumsEarnedNetPropertyAndCasualty
245978000 USD
CY2018Q3 us-gaap Premiums Earned Net Property And Casualty
PremiumsEarnedNetPropertyAndCasualty
98493000 USD
us-gaap Premiums Earned Net Property And Casualty
PremiumsEarnedNetPropertyAndCasualty
264159000 USD
CY2017Q4 us-gaap Premiums Receivable Allowance For Doubtful Accounts
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CY2018Q3 us-gaap Premiums Receivable Allowance For Doubtful Accounts
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81000 USD
CY2017Q4 us-gaap Premiums Receivable At Carrying Value
PremiumsReceivableAtCarryingValue
46393000 USD
CY2018Q3 us-gaap Premiums Receivable At Carrying Value
PremiumsReceivableAtCarryingValue
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8260000 USD
us-gaap Premiums Written Net
PremiumsWrittenNet
220277000 USD
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us-gaap Premiums Written Net
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262547000 USD
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CY2018Q3 us-gaap Prepaid Reinsurance Premiums
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103000 USD
us-gaap Proceeds From Issuance Of Shares Under Incentive And Share Based Compensation Plans Including Stock Options
ProceedsFromIssuanceOfSharesUnderIncentiveAndShareBasedCompensationPlansIncludingStockOptions
39000 USD
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us-gaap Proceeds From Payments To Minority Shareholders
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252100000 USD
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us-gaap Profit Loss
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CY2018Q3 us-gaap Profit Loss
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us-gaap Realized Investment Gains Losses
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CY2018Q3 us-gaap Realized Investment Gains Losses
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1760000 USD
us-gaap Realized Investment Gains Losses
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CY2017Q3 us-gaap Reinsurance Recoverable For Unpaid Claims And Claims Adjustments
ReinsuranceRecoverableForUnpaidClaimsAndClaimsAdjustments
322520000 USD
CY2017Q4 us-gaap Reinsurance Recoverable For Unpaid Claims And Claims Adjustments
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CY2018Q3 us-gaap Reinsurance Recoverable For Unpaid Claims And Claims Adjustments
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92072000 USD
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124601000 USD
CY2018Q3 us-gaap Reinsurance Recoverables
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134736000 USD
CY2017Q4 us-gaap Reinsurance Recoverables On Paid Losses
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26256000 USD
CY2018Q3 us-gaap Reinsurance Recoverables On Paid Losses
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42664000 USD
us-gaap Repayments Of Debt
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us-gaap Repayments Of Debt
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5000000 USD
CY2017Q4 us-gaap Restricted Investments At Fair Value
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12900000 USD
CY2018Q3 us-gaap Restricted Investments At Fair Value
RestrictedInvestmentsAtFairValue
10200000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
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70009000 USD
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us-gaap Revenues
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289910000 USD
CY2018Q3 us-gaap Revenues
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us-gaap Revenues
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299651000 USD
us-gaap Share Based Compensation
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2279000 USD
us-gaap Share Based Compensation
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us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod
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us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod
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CY2017Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Total Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodTotalFairValue
686000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Total Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodTotalFairValue
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CY2018Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Total Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodTotalFairValue
622000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Total Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodTotalFairValue
2098000 USD
CY2017Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
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357000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
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364000 USD
CY2018Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
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151000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
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229000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures And Expirations In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriod
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CY2017Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
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CY2018Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
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3.72
CY2018Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted Average Exercise Price
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3.80
us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Exercises In Period Weighted Average Exercise Price
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us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Weighted Average Exercise Price
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us-gaap Stock Issued During Period Shares Stock Options Exercised
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CY2017Q3 us-gaap Stock Issued During Period Value Share Based Compensation Gross
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us-gaap Stock Issued During Period Value Share Based Compensation Gross
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CY2018Q3 us-gaap Stock Issued During Period Value Share Based Compensation Gross
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us-gaap Stock Issued During Period Value Share Based Compensation Gross
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CY2017Q3 us-gaap Stock Repurchase Program Authorized Amount1
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CY2018Q3 us-gaap Stock Repurchase Program Remaining Authorized Repurchase Amount1
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CY2017Q3 us-gaap Stock Repurchased During Period Value
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CY2018Q3 us-gaap Stock Repurchased During Period Value
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us-gaap Stock Repurchased During Period Value
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5061000 USD
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CY2018Q3 us-gaap Stockholders Equity
StockholdersEquity
222936000 USD
CY2016Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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234465000 USD
CY2017Q2 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
234773000 USD
CY2017Q3 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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224486000 USD
CY2017Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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227459000 USD
CY2018Q2 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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215028000 USD
CY2018Q3 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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222936000 USD
us-gaap Supplemental Information For Property Casualty Insurance Underwriters Current Year Claims And Claims Adjustment Expense
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191747000 USD
us-gaap Supplemental Information For Property Casualty Insurance Underwriters Current Year Claims And Claims Adjustment Expense
SupplementalInformationForPropertyCasualtyInsuranceUnderwritersCurrentYearClaimsAndClaimsAdjustmentExpense
159998000 USD
us-gaap Supplemental Information For Property Casualty Insurance Underwriters Prior Year Claims And Claims Adjustment Expense
SupplementalInformationForPropertyCasualtyInsuranceUnderwritersPriorYearClaimsAndClaimsAdjustmentExpense
-3064000 USD
us-gaap Supplemental Information For Property Casualty Insurance Underwriters Prior Year Claims And Claims Adjustment Expense
SupplementalInformationForPropertyCasualtyInsuranceUnderwritersPriorYearClaimsAndClaimsAdjustmentExpense
-3900000 USD
CY2017Q4 us-gaap Unearned Premiums
UnearnedPremiums
294423000 USD
CY2018Q3 us-gaap Unearned Premiums
UnearnedPremiums
296329000 USD
CY2018Q3 us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
1600000 USD
us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
2600000 USD
CY2017Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
600000 USD
CY2018Q3 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
600000 USD
us-gaap Unrecognized Tax Benefits Income Tax Penalties And Interest Expense
UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestExpense
100000 USD
us-gaap Unrecognized Tax Benefits Income Tax Penalties And Interest Expense
UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestExpense
100000 USD
CY2017Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
13135000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
13302000 shares
CY2018Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
12870000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
12866000 shares
CY2017Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
13135000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
13211000 shares
CY2018Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
12749000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
12775000 shares
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">1. ORGANIZATION, CONSOLIDATION AND BASIS OF PREPARATION</font><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;"> </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Organization</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">FedNat Holding Company (&#8220;FNHC,&#8221; the &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;us,&#8221; or "our") is an insurance holding company that controls substantially all aspects of the insurance underwriting, distribution and claims processes through our subsidiaries and contractual relationships with independent agents and general agents.&#160;&#160;The Company, through its wholly owned subsidiaries, is authorized to underwrite and/or place homeowners multi-peril ("homeowners"), federal flood and other lines of insurance in Florida and other states. The Company markets, distributes and services its own and third-party insurers&#8217; products and other services through a network of independent and general agents. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">FedNat Insurance Company (&#8220;FNIC&#8221;), our largest wholly owned insurance subsidiary, is licensed as an admitted carrier, to write specific lines of insurance by the state&#8217;s insurance departments, in Florida, Louisiana, Texas, Georgia, South Carolina and Alabama.&#160; Monarch National Insurance Company (&#8220;MNIC&#8221;), our other insurance subsidiary, is licensed as an admitted carrier in Florida. Admitted carriers are bound by rate and form regulations, and are strictly regulated to protect policyholders from a variety of illegal and unethical practices. Admitted carriers are also required to financially contribute to the state guarantee fund used to pay for losses if an insurance carrier becomes insolvent or unable to pay loss amounts due to their policyholders.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-style:italic;font-weight:bold;">Monarch National Insurance Company</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">We completed our acquisition of MNIC in February 2018 by acquiring the membership interests in MNIC&#8217;s indirect parent, Monarch Delaware Holdings LLC (&#8220;Monarch Delaware&#8221;), held by our joint venture partners.&#160; Our joint venture partners were Crosswinds Investor Monarch LP (&#8220;Crosswinds Investor&#8221;), a wholly owned subsidiary of Crosswinds Holdings Inc. (&#8220;Crosswinds Holdings&#8221;), a private equity firm and asset manager, and Transatlantic Reinsurance Company (&#8220;TransRe&#8221;), an international property and casualty reinsurance company. We purchased the </font><font style="font-family:Garamond,serif;font-size:10pt;">42.4%</font><font style="font-family:Garamond,serif;font-size:10pt;"> Class A membership interest in Monarch Delaware held by Crosswinds Investor for </font><font style="font-family:Garamond,serif;font-size:10pt;">$12.3 million</font><font style="font-family:Garamond,serif;font-size:10pt;"> and the </font><font style="font-family:Garamond,serif;font-size:10pt;">15.2%</font><font style="font-family:Garamond,serif;font-size:10pt;"> non-voting membership interest in Monarch Delaware held by TransRe for </font><font style="font-family:Garamond,serif;font-size:10pt;">$4.4 million</font><font style="font-family:Garamond,serif;font-size:10pt;">. We also repaid the outstanding principal balance and interest due on the </font><font style="font-family:Garamond,serif;font-size:10pt;">$5.0 million</font><font style="font-family:Garamond,serif;font-size:10pt;"> promissory note to TransRe. MNIC was organized in March 2015 and writes homeowners property and casualty insurance in Florida.&#160; </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Crosswinds AUM LLC, a subsidiary of Crosswinds Holdings, serves as an investment consultant to FNHC through December 31, 2018 for a quarterly fee of </font><font style="font-family:Garamond,serif;font-size:10pt;">$75,000</font><font style="font-family:Garamond,serif;font-size:10pt;">.&#160; In addition, subsidiaries of Crosswinds Holdings and TransRe each have a right of first refusal through December 31, 2018 to participate in our catastrophe excess of loss reinsurance program, at market rates and terms, up to a placement of </font><font style="font-family:Garamond,serif;font-size:10pt;">$10.0 million</font><font style="font-family:Garamond,serif;font-size:10pt;"> in reinsurance limit in the aggregate from Crosswinds Holdings and up to a placement of </font><font style="font-family:Garamond,serif;font-size:10pt;">$10.0 million</font><font style="font-family:Garamond,serif;font-size:10pt;"> in reinsurance limit in excess of its placement on our current catastrophe excess of loss reinsurance program from TransRe. TransRe does currently participate in the reinsurance program.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Please refer to Basis of Presentation and Principles of Consolidation and Note 12 below.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Material Distribution Relationships</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-style:italic;font-weight:bold;">Ivantage Select Agency, Inc.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">The Company is a party to an insurance agency master agreement with Ivantage Select Agency, Inc. (&#8220;ISA&#8221;), an affiliate of Allstate Insurance Company (&#8220;Allstate&#8221;), pursuant to which the Company has been authorized by ISA to appoint Allstate agents to offer the Company&#8217;s homeowners insurance products to consumers in Florida. As a percentage of the total homeowners premiums we underwrote,&#160;&#160;</font><font style="font-family:Garamond,serif;font-size:10pt;">24.5%</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">24.6%</font><font style="font-family:Garamond,serif;font-size:10pt;"> were from Allstate&#8217;s network of Florida agents, for the three months ended </font><font style="font-family:Garamond,serif;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">2017</font><font style="font-family:Garamond,serif;font-size:10pt;">, respectively. For the </font><font style="font-family:Garamond,serif;font-size:10pt;">nine months ended</font><font style="font-family:Garamond,serif;font-size:10pt;"> </font><font style="font-family:Garamond,serif;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">2017</font><font style="font-family:Garamond,serif;font-size:10pt;">, </font><font style="font-family:Garamond,serif;font-size:10pt;">23.9%</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">24.0%</font><font style="font-family:Garamond,serif;font-size:10pt;">, respectively, of the homeowners premiums we underwrote were from Allstate's network of Florida agents.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-style:italic;font-weight:bold;">SageSure Insurance Managers, LLC</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">The Company is a party to a managing general underwriting agreement with SageSure Insurance Managers, LLC (&#8220;SageSure&#8221;) to facilitate growth in our FNIC homeowners business outside of Florida.&#160; As a percentage of the total homeowners premiums, </font><font style="font-family:Garamond,serif;font-size:10pt;">16.2%</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">10.7%</font><font style="font-family:Garamond,serif;font-size:10pt;">, respectively, of the Company&#8217;s premiums were underwritten by SageSure, for the three months ended </font><font style="font-family:Garamond,serif;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">2017</font><font style="font-family:Garamond,serif;font-size:10pt;">, respectively. For the </font><font style="font-family:Garamond,serif;font-size:10pt;">nine months ended</font><font style="font-family:Garamond,serif;font-size:10pt;"> </font><font style="font-family:Garamond,serif;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">2017</font><font style="font-family:Garamond,serif;font-size:10pt;">, </font><font style="font-family:Garamond,serif;font-size:10pt;">14.2%</font><font style="font-family:Garamond,serif;font-size:10pt;"> and </font><font style="font-family:Garamond,serif;font-size:10pt;">9.7%</font><font style="font-family:Garamond,serif;font-size:10pt;">, respectively, of the Company's homeowners premiums were underwritten by SageSure.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Basis of Presentation and Principles of Consolidation</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (&#8220;GAAP&#8221;).&#160; The consolidated financial statements include the accounts of FNHC and its wholly-owned subsidiaries and all entities in which the Company has a controlling financial interest and any variable interest entity (&#8220;VIE&#8221;) of which the Company is the primary beneficiary. The Company&#8217;s management believes the consolidated financial statements reflect all material adjustments, including normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows of the Company for the periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">The Company identifies a VIE as an entity that does not have sufficient equity to finance its own activities without additional financial support or where the equity investors lack certain characteristics of a controlling financial interest.&#160; The Company assesses its contractual, ownership or other interests in a VIE to determine if the Company&#8217;s interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. &#160;The Company performs an ongoing qualitative assessment of its variable interests in a VIE to determine whether the Company has a controlling financial interest and would therefore be considered the primary beneficiary of the VIE.&#160; If the Company determines it is the primary beneficiary of a VIE, the Company consolidates the assets and liabilities of the VIE in its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">As of December 31, 2017, in connection with the investment in Monarch Delaware, the Company had determined that the Company possessed the power to direct the activities of the VIE that most significantly impact its economic performance and the Company was the primary beneficiary of the VIE.&#160; As such, the Company consolidated Monarch Delaware in its consolidated financial statements. Refer to </font><font style="font-family:Garamond,serif;font-size:10pt;font-style:italic;">Monarch National Insurance Company </font><font style="font-family:Garamond,serif;font-size:10pt;">above, related to our 100% ownership of Monarch Delaware that became effective on February 21, 2018. In accordance with the accounting standard on consolidation, a primary beneficiary that acquires additional ownership of the previously controlled and consolidated subsidiaries is accounted for as an equity transaction and re-measurement of assets and liabilities of previously controlled and consolidated subsidiaries is not permitted. As a result, we accounted for this transaction by eliminating the carrying value of the non-controlling interest to reflect our 100% ownership interest in MNIC as of February 21, 2018. The difference between the consideration paid and the amount by which the non-controlling interest was eliminated has been recognized in additional paid-in capital. Following the closing, Monarch Delaware and Monarch Holdings were merged into MNIC.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Revisions of Previously Issued Financial Statements</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Revisions to the three and nine months ended September 30, 2017, were described in Note 1 and Note 16 to our Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" included in our most recent Form 10-K for the year ended December 31, 2017 (the "2017 Form 10-K").</font></div></div>
us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Revisions of Previously Issued Financial Statements</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Revisions to the three and nine months ended September 30, 2017, were described in Note 1 and Note 16 to our Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" included in our most recent Form 10-K for the year ended December 31, 2017 (the "2017 Form 10-K").</font></div></div>
us-gaap Schedule Of Liability For Unpaid Claims And Claims Adjustment Expense
ScheduleOfLiabilityForUnpaidClaimsAndClaimsAdjustmentExpense
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Activity in the liability for loss and LAE reserves is summarized as follows:</font></div><div style="line-height:120%;text-align:justify;text-indent:96px;font-size:1pt;"><font style="font-family:Garamond,serif;font-size:1pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="9" rowspan="1"></td></tr><tr><td style="width:76%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:9%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:9%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="7" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:center;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;font-weight:bold;">Nine Months Ended</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="7" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:center;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;font-weight:bold;">September 30,</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;font-weight:bold;">2018</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:center;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;font-weight:bold;">2017</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="7" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:center;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(In thousands)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Gross reserves, beginning-of-period</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">230,515</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">$</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">158,110</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-indent:8px;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Less: reinsurance recoverable (1)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(98,345</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(40,412</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:28px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Net reserves, beginning-of-period</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">132,170</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">117,698</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Incurred loss, net of reinsurance, related to:</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Current year</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">159,998</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">191,747</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Prior year loss development (2)</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">330</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">8,309</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Ceded losses subject to offsetting experience account adjustments (3)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(4,230</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(11,373</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Prior years</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(3,900</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">(3,064</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-right:2px;padding-top:2px;padding-bottom:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">)</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:28px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Total incurred loss and LAE, net of reinsurance</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">156,098</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">188,683</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Paid loss, net of reinsurance, related to:</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td><td style="vertical-align:bottom;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Current year</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">87,960</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">109,988</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:12px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Prior years</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">71,266</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">57,322</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:middle;background-color:#cceeff;padding-left:28px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Total paid loss and LAE, net of reinsurance</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">159,226</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">167,310</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:36px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Net reserves, end-of-period</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">129,042</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">139,071</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Plus: reinsurance recoverable (1)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">92,072</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;" rowspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">322,520</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:52px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">Gross reserves, end-of-period</font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#cceeff;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">221,114</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#cceeff;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:right;font-size:9pt;"><font style="font-family:Garamond,serif;font-size:9pt;">461,591</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#cceeff;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></td></tr></table></div></div><div style="line-height:120%;padding-left:4px;text-align:left;padding-left:61px;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:61px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:37px;"><font style="font-family:Garamond,serif;font-size:10pt;">(1)</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Reinsurance recoverable in this table includes only ceded loss and LAE reserves.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:61px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:37px;"><font style="font-family:Garamond,serif;font-size:10pt;">(2)</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Reflects loss development from prior accident years impacting pre-tax net income. Excludes losses ceded under retrospective reinsurance treaties to the extent there is an offsetting experience account adjustment.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:61px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:37px;"><font style="font-family:Garamond,serif;font-size:10pt;">(3)</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Reflects losses ceded under retrospective reinsurance treaties to the extent there is an offsetting experience account adjustment, such that there is no impact on pre-tax net income.</font></div></td></tr></table></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;font-weight:bold;">Accounting Estimates and Assumptions</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">The Company prepares the accompanying consolidated financial statements in accordance with GAAP, which requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results may materially differ from those estimates.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Garamond,serif;font-size:10pt;">Similar to other property and casualty insurers, the Company&#8217;s liability for loss and loss adjustment expenses ("LAE") reserves, although supported by actuarial projections and other data, is ultimately based on management&#8217;s reasoned expectations of future events. Although considerable variability is inherent in these estimates, the Company believes that the liability and LAE reserve is adequate. The Company reviews and evaluates its estimates and assumptions regularly and makes adjustments, reflected in current operations, as necessary, on an ongoing basis.</font></div></div>

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