| Discontinued Operations | Note 3. Discontinued Operations As of February 13, 2020, as a result of the approval of the Order of Liquidation, the control and net assets of Maidstone vested with the NYS Liquidation Bureau. The Company determined that the disposal of Maidstone and its Insurance segment operations represented a strategic shift that had a major effect on the Company’s results of operations and, as a result, reported the disposal as discontinued operations. As such, amounts related to the Insurance Segment presented on the consolidated balance sheets as of December 31, 2019 and 2018 and consolidated statements of (loss) income for the year ended December 31, 2019 and the period from January 2, 2018 to December 31, 2018 have been reclassified as discontinued operations. During the year ended December 31, 2019, the Company recorded impairment charges of $0.8 million and $2.0 million related to the full impairment of the goodwill and intangible asset balances, respectively, in its Insurance segment, which have The related assets and liabilities of the Insurance Segment are presented as assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2019 and 2018. The following table provides details of the carrying amounts of major classes of assets and liabilities related to discontinued operations as of December 31, 2019 and 2018: (In thousands) December 31, 2019 December 31, 2018 ASSETS OF DISCONTINUED OPERATIONS Cash and cash equivalents $ 6,626 $ 5,590 Fixed maturities available for sale, at fair value; amortized cost 21,680 32,132 Equity securities, at fair value 1,075 693 Premiums receivable 2,440 5,858 Property, plant and equipment, net 208 302 Right-of-use assets 13 - Intangible assets, net - 2,075 Deferred policy acquisition costs 993 2,279 Goodwill - 757 Other assets 913 2,483 Total assets $ 33,948 $ 52,169 LIABILITIES OF DISCONTINUED OPERATIONS Reserves for losses and loss adjustment expenses $ 25,393 $ 27,330 Unearned premiums 5,818 12,707 Advance premium collected 318 500 Accrued expenses 891 - Accrued liabilities - 1,785 Current portion of operating lease liabilities 34 - Deferred tax liabilities - 420 Other long-term liabilities 847 716 Total liabilities $ 33,301 $ 43,458 The following table provides details of the amounts reflected in loss from discontinued operations, net of tax in the consolidated statements of (loss) income for the year ended December 31, 2019 and the period from January 2, 2018 to December 31, 2018: Year Ended December 31 (In thousands) 2019 2018 Revenues: Insurance premiums earned $ 25,072 $ 28,648 Net investment income 935 851 Other income 964 1,158 Total revenues of discontinued operations 26,971 30,657 Operating costs and expenses: Incurred losses and loss adjustment expenses 24,350 25,221 Impairment loss on goodwill and other intangibles 2,826 - Other operating expenses 8,527 8,631 Total operating costs and expenses 35,703 33,852 Operating loss of discontinued operations (8,732 ) (3,195 ) Loss before income taxes (8,732 ) (3,195 ) Income tax benefit 420 - Net loss of discontinued operations, net of tax $ (8,312 ) $ (3,195 ) The components of cash flow provided by or used in operating, investing and financing activities resulting from discontinued operations are presented as separate line items on the accompanying consolidated statements of cash flows for the year ended December 31, 2019 and the period from January 2, 2018 to December 31, 2018. Acquisition of Maidstone On January 2, 2018, the Company acquired all the outstanding capital stock of Interboro for cash consideration of $2.5 million. Under the name Maidstone Insurance Company, Maidstone offered personal automobile insurance, primarily in the state of New York. The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired, and liabilities assumed were recorded at fair value as of the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition: (In thousands) At January 2, 2018 as reported (final) Fixed maturities available for sale $ 25,386 Cash and cash equivalents 12,795 Investment income due and accrued 203 Premiums receivable 7,158 Property, plant and equipment 408 Intangible assets 2,100 Other assets 615 Reserves for losses and loss adjustment expenses (30,672 ) Unearned premiums (12,784 ) Advance premium collected (651 ) Deferred tax liability (420 ) Other liabilities (2,395 ) Total net assets acquired 1,743 Consideration exchanged 2,500 Goodwill $ 757 Accounting Policies of Discontinued Operations Revenue recognition Maidstone recognized revenue from insurance contracts, including premiums and fees, under the guidance in ASC 944, Financial Services-Insurance Premiums Fixed Maturity Securities Investments in fixed maturity securities including bonds, loan-backed and structured securities were classified as available-for-sale and reported at fair value. Significant changes in prevailing interest rates and other economic conditions may adversely affect the timing and amount of cash flows on fixed income investments, as well as their related fair values. Fixed maturities are recorded on a trade date basis. Amortization of bond premium and accretion of bond discount are calculated using the scientific method. Changes in fair values of these securities, after deferred income tax effects, are reflected as unrealized gains or losses in accumulated other comprehensive (loss) income. Realized gains and losses from the sale of investments are calculated as of the trade date in the consolidated statements of (loss) income and comprehensive (loss) income and are based upon the specific identification of securities sold. Investment income consists of interest and is reported net of investment expenses. Prepayment assumptions are considered when determining the amortization of discount or premium for loan-backed and structured securities. An investment is considered impaired when the fair value of the investment is less than its cost or amortized cost. When an investment is impaired, the Company must decide as to whether the impairment is other than temporary (“OTTI”). With respect to an investment in an impaired fixed maturity security, OTTI occurs if the Company (a) intends to sell the fixed maturity security, (b) more likely than not will be required to sell the fixed maturity security before its anticipated recovery, or (c) it is probable that the Company will be unable to collect all amounts due to the recovery of the entire cost basis of the security. The Company conducts a periodic review to identify and evaluate securities having OTTI, which include the above factors as well as the following: (1) the likelihood of the recoverability of principal and interest for fixed maturity securities (i.e., whether there is a credit loss); (2) the length of time and extent to which the fair value has been less than amortized cost for fixed maturity securities; and (3) the financial condition, near term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. If the Company intends to sell the fixed maturity security, or will more likely than not be required to sell the fixed maturity security before the anticipated recovery, a loss in the entire amount of the impairment is reflected in net investment gains (losses) in net income (loss). If the Company determines that it is probable it will be unable to collect all amounts and the Company has no intent to sell the fixed maturity security, a credit loss is recognized in net investment gains (losses) in net income (loss) to the extent that the present value of expected cash flows is less than the amortized cost basis; any difference between fair value and the new amortized cost basis (net of the credit loss) is reflected in other comprehensive (loss) income, net of applicable income taxes. Upon recognizing an OTTI, the new cost basis of the security is the previous amortized cost basis less the OTTI recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair value; however, for fixed maturity securities, the difference between the new cost basis and expected cash flows is accreted to net investment gains (losses) over the remaining expected life of the investment. Equity Securities The Company’s equity investments were carried at fair value with changes in fair value recognized in income. Unrealized gains and losses on equity securities are recorded in the consolidated statements of (loss) income. The Company had net unrealized gains on equity securities of $0.1 million, which were included in net investment income in the table above for the year ended December 31, 2019. For the year ended December 31, 2018, the Company had net unrealized holding losses on equity securities of $0.1 million, which were included in net investment income in the table above. Deferred Policy Acquisition Costs Policy acquisition costs, which vary with and were directly related to the production of successful new business, are deferred. The costs deferred consist principally of commissions and policy issuance costs and are amortized into expense as the related premiums are earned. The activity of the deferred policy acquisition costs (“DAC”) accounts was as follows: (In thousands) For the year ended December 31, 2019 For the period ended December 31, 2018 DAC asset at beginning of period $ 2,279 $ - Deferred expenses 3,068 5,097 Amortized expenses (4,354 ) (2,818 ) DAC asset at end of period $ 993 $ 2,279 The Company, utilizing assumptions for future expected claims, premium rate increases and interest rates, reviews the recoverability of its DAC on a periodic basis. If the Company determines that the future gross profits of its in-force policies are not sufficient to recover its DAC, the Company recognizes a premium deficiency by charging any unamortized acquisition costs to expense to the extent required in order to eliminate the deficiency. If the premium deficiency exceeds the unamortized acquisition costs, then a liability is accrued for the excess deficiency. The Company anticipates investment income as a factor in its premium deficiency reserve calculation. Premiums Receivable Premiums and agents’ balances in the course of collection are reported at the amount management expects to collect from outstanding balances. Past due amounts are determined based on contractual terms. Maidstone provided an allowance for doubtful accounts based upon review of outstanding receivables and historical collection information Maidstone recorded an allowance for doubtful accounts of less than $30,000 as of December 31, 2019 and 2018. Investment Income Due and Accrued Investment income consisted of interest, which is recognized on an accrual basis. Due and accrued income is not recorded on fixed maturity securities in default and on delinquent fixed maturities where collection of interest is improbable. As of December 31, 2019, no investment income amounts were excluded from the Company balances. Incurred Losses and Loss Adjustment Expenses Incurred losses and loss adjustment expenses (“LAE”) were charged to operations as incurred. The liability for losses and LAE was based upon individual case estimates for reported claims and a factor for incurred but not reported (“IBNR”) claims. Losses, LAE and related liabilities are reported net of estimated salvage and subrogation. Inherent in the estimate of ultimate losses and LAE are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled; however, management believes that its aggregate provision for losses and LAE at December 31, 2019 is reasonable and adequate to meet the ultimate net cost of covered losses, but such provision is necessarily based on estimates and the ultimate net cost may vary significantly from such estimates. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. Insurance Company Assessments Assessments from various state insurance departments are incurred by the insurance company in the normal course of business. Assessments based upon premium volumes are accrued during the year while non-premium assessments are expensed in the period they are reported to the insurance company. During the year ended December 31, 2019, the Company recorded $0.3 million in premium based assessments from New York State, which were recorded in other operating expenses in the table above. There were no significant assessments incurred during the year ended December 31, 2018. Reinsurance The Company accounts for reinsurance in accordance with the accounting guidance concerning the accounting and reporting for reinsurance of short-duration contracts. Management believes the Company’s reinsurance arrangements qualify for reinsurance accounting. Reinsurance premiums, losses, LAE and commissions were accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. The Company relies on ceded reinsurance to limit its insurance risk. Reinstatement premiums for the Company’s insurance operations were recognized at the time a loss event occurs, where coverage limits for the remaining life of the contract are reinstated under pre-defined contract terms. The accrual of reinstatement premiums was based on an estimate of losses and LAE, which reflects management’s judgment. Amounts recoverable from reinsurers are estimated and recognized in a manner consistent with the claims liabilities arising from reinsured policies and incurred but not reported losses. In entering into reinsurance agreements, management considers a variety of factors including the creditworthiness of reinsurers. In preparing consolidated financial statements, management makes estimates of amounts recoverable from reinsurers, which include consideration of amounts, if any, estimated to be uncollectible. As of December 31, 2019, no amounts were deemed to be uncollectible from reinsurers. As changes in the estimated ultimate liability for loss and LAE are determined, ceded reinsurance premiums may also change based on the terms of the reinsurance agreements. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. Income tax policy The Company’s insurance subsidiary was taxed at the Federal corporate level applying special rules applicable to property and casualty insurance companies. The insurance company was generally exempt from corporate income tax under state tax law. In lieu of corporate income tax, the insurance company paid a premium tax based on a percentage of direct annual premiums written in each state. The insurance subsidiary will be included in SDI’s consolidated tax return. Deferred income taxes are recorded for temporary differences in reporting certain transactions for financial statement and income tax purposes, principally deferred policy acquisition costs, loss and LAE reserves and net operating losses. Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities result from temporary differences between the amounts recorded in the financial statements and the tax basis of the Company’s assets and liabilities. As a part of the Company’s impairment of other indefinite lived intangible assets the Company reversed its deferred tax liability recorded as a part of the purchase of Maidstone during the year ended December 31, 2019. The reversal decreased deferred income taxes by $0.4 million and provided an income tax benefit of $0.4 million included in net loss from discontinued operations on the consolidated statements of (loss) income for the year ended December 31, 2019. Investments Reclassified to Discontinued Operations Debt Securities The Company classified all of its investments in fixed maturity debt securities held by Maidstone as available-for-sale and, accordingly, they were carried at estimated fair value. The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2019 U.S. Treasury and U.S. Government $ 11,253 $ 30 $ - $ 11,283 U.S. Tax-exempt municipal 2,508 76 - 2,584 Corporate 3,907 82 - 3,989 Mortgage and asset-backed securities 3,760 64 - 3,824 Total Fixed Maturity Securities $ 21,428 $ 252 $ - $ 21,680 December 31, 2018 U.S. Treasury and U.S. Government $ 4,338 $ - $ (34 ) $ 4,304 U.S. Tax-exempt municipal 4,645 4 (25 ) 4,624 Corporate 14,858 16 (193 ) 14,681 Mortgage and asset-backed securities 8,633 10 (120 ) 8,523 Total Fixed Maturity Securities $ 32,474 $ 30 $ (372 ) $ 32,132 Amortized cost and fair value of fixed maturity securities at December 31, 2019 and 2018 by contractual maturity are shown below. The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. December 31, 2019 December 31, 2018 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 3,695 $ 3,698 $ 748 $ 745 Due after one year through five years 12,600 12,720 13,719 13,600 Due after five years through ten years 1,488 1,553 9,027 8,917 Due after ten years - - 347 347 Mortgage and asset-backed securities 3,645 3,709 8,633 8,523 Total $ 21,428 $ 21,680 $ 32,474 $ 32,132 The Company used the services of its investment manager, which uses a proprietary model for loss assumptions and widely accepted models for prepayment assumptions in valuing mortgage-backed and asset-backed securities with inputs from major third-party data providers. The models combine the effects of interest rates, volatility, and prepayment speeds based on various scenarios (Monte Carlo simulations) with resulting effective analytics (spreads, duration, convexity) and cash flows on a monthly basis. Credit sensitive cash flows are calculated using proprietary models, which estimate future loan defaults in terms of timing and severity. Model assumptions are specific to asset class and collateral types and are regularly evaluated and adjusted where appropriate. Fixed maturity securities that were in an unrealized loss position and the length of time that such securities have been in an unrealized loss position, as measured by their prior 12-month fair values, are as follows as of: Less Than 12 Months 12 Months or More Total (In thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses December 31, 2019 Bonds: U.S. Treasury and U.S. Government $ 3,698 $ (386 ) $ - $ - $ 3,698 $ (386 ) Mortgage and asset-backed securities - - 59 (32 ) 59 (32 ) Total fixed maturities available for sale $ 3,698 $ (386 ) $ 59 $ (32 ) $ 3,757 $ (418 ) December 31, 2018 Bonds: U.S. Treasury and U.S. Government $ 4,304 $ (34 ) $ - $ - $ 4,304 $ (34 ) U.S. Tax-exempt municipal 4,285 (25 ) - - 4,285 (25 ) Corporate bonds 10,306 (193 ) - - 10,306 (193 ) Mortgage and asset-backed securities 6,717 (120 ) - - 6,717 (120 ) Total fixed maturities available for sale $ 25,612 $ (372 ) $ - $ - $ 25,612 $ (372 ) The Company has evaluated the unrealized losses on the fixed maturity securities and determined that they are not attributable to credit risk factors. For fixed maturity securities, losses in fair value are viewed as temporary if the fixed maturity security can be held to maturity and it is reasonable to assume that the issuer will be able to service the debt, both as to principal and interest. The Company did not recognize OTTI losses during the year ended December 31, 2019 or for the period ended December 31, 2018. Equity Securities The Company’s equity investments are carried at fair value with changes in fair value recognized in income. Net investment income The components of net investment income for the year ended December 31, 2019 and for the period ended December 31, 2018 are as follows: (In thousands) For the Year Ended December 31, 2019 For the period from January 2, 2018 to December 31, 2018 Investment income: Bonds $ 777 $ 699 Common stocks 51 16 Preferred stocks 45 18 Cash and cash equivalents 100 138 Other asset investments 27 72 Total investment income 1,000 943 Less: Investment expenses (65 ) (92 ) Net investment income $ 935 $ 851 For the year ended December 31, 2019, Maidstone realized $0.4 million of capital gains and less than $20,000 of capital losses. For the period from January 2, 2018 to December 31, 2018, Maidstone realized less than $10,000 in capital gains and capital losses. Fair value disclosures The following tables show how Maidstone’s investments are categorized in the fair value hierarchy as of: (In thousands) Level 1 Level 2 Level 3 Total Fair Value December 31, 2019 Common stock $ 255 $ - $ - $ 255 Preferred stocks - 820 - 820 Total equities: $ 255 $ 820 $ - $ 1,075 Fixed maturities: U.S. treasury and U.S. government $ 11,283 $ - $ - $ 11,283 U.S. tax-exempt municipal - 2,584 - 2,584 Corporate - 3,989 - 3,989 Mortgage and asset-backed securities - 3,824 - 3,824 Total fixed maturities $ 11,283 $ 10,397 $ - $ 21,680 December 31, 2018 Common stock $ 227 $ - $ - $ 227 Preferred stocks - 466 - 466 Total equities: $ 227 $ 466 $ - $ 693 Fixed maturities: U.S. treasury and U.S. government $ 4,304 $ - $ - $ 4,304 U.S. tax-exempt municipal - 4,624 - 4,624 Corporate - 14,681 - 14,681 Mortgage and asset-backed securities - 8,523 - 8,523 Total fixed maturities $ 4,304 $ 27,828 $ - $ 32,132 There were no transfers between levels during the year ended December 31, 2019 or for the period ended December 31, 2018. Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis Level 1 inputs- Level 2 inputs- Restricted Assets The Company was required to maintain assets on deposit, which primarily consisted of cash or fixed maturities, with various regulatory authorities to support its insurance operations. The Company’s insurance subsidiaries maintained assets in trust accounts as collateral for or guarantees for letters of credit to third parties. As of December 31, 2019 and 2018, the carrying value of deposits the Company had on deposit with U.S. regulatory authorities was $2.8 million. Liability for Losses and Loss Adjustment Expenses Reclassified to Discontinued Operations Maidstone estimated reserves for both reported and unreported unpaid losses that have occurred on or before the balance sheet date that will need to be paid in the future. Reserves for unpaid losses fall into two categories: case reserves and reserves for claims incurred but not reported, or “IBNR”. Case reserves were established within the claims department on an individual-case basis for all accidents reported. When a claim was reported, an automatic minimum case reserve was established for that claim type that represents our initial estimate of the losses that will ultimately be paid on the reported claim. The initial estimate for each claim is based upon averages of loss payments for prior closed claims made for that claim type. Claims personnel perform an evaluation of the type of claim involved, the circumstances surrounding each claim and the policy provisions relating to the loss and consequentially adjust the reserves as necessary. As claims mature, management increases or decreases the case reserve estimates as deemed necessary by the claims department based upon additional information received regarding the loss and any other information gathered while reviewing claims. IBNR was applied as a bulk reserve, which cannot be allocated to particular claims, but are necessary to estimate ultimate losses on reported and unreported claims. Management estimates IBNR reserves by projecting ultimate losses using industry accepted actuarial methods, mentioned below, and then deducting actual loss payments and case reserves from the projected ultimate losses. Management calculates estimates of ultimate losses by using the following actuarial methods. Management separately calculates the methods using paid loss data and incurred loss data. In the versions of these methods based on incurred loss data, the incurred losses are defined as paid losses plus case reserves. Management also evaluates ultimate losses based on claim type. In the auto industry, claim type is based on coverage; i.e. bodily injury, uninsured motorist, property damage, personal injury protection and physical damage. • Incurred Development Method - The incurred development method is based upon the assumption that the relative change in a given year’s incurred loss estimates from one evaluation point to the next is similar to the relative change in prior years’ reported loss estimates at similar evaluation points. • Paid Development Method - The paid development method is similar to the incurred development method, simply using paid triangles to calculate development factors. • Incurred Bornhuetter-Ferguson (“BF”) Method - The Incurred BF Method uses an estimated loss ratio for a particular year, and is weighted against the portion of the year’s claims that have been reported, based on historical incurred loss development patterns. The estimate of required reserves assumes that the remaining unreported portion of a particular year will pay out at a rate consistent with the estimated loss ratio for that year. • Paid Bornhuetter-Ferguson (“BF”) Method - The Paid BF Method uses an estimated loss ratio for a particular year, and is weighted against the portion of the year’s claims that have been paid, based on historical paid loss development patterns. The estimate of required reserves assumes that the remaining unpaid portion of a particular year will pay out at a rate consistent with the estimated loss ratio for that year. Maidstone’s best estimate of required reserves was generally based on an average of the methods above, with appropriate weighting of the various methods based on claim type and year. Maidstone engages an independent external actuarial specialist (the “Actuary”) to calculate its recorded reserves on a quarterly basis since the second quarter 2019. The Actuary estimates a range of ultimate losses, along with a range and recommended central estimate of IBNR reserve amounts. Maidstone’s carried IBNR reserves were based on an internal actuarial analysis and reflect management’s best estimate of unpaid loss and LAE liabilities. The following tables are loss reserve development tables that illustrate the change over time of reserves established for claim and allocated claim adjustment expenses arising from short-duration insurance contracts. Insurance contracts are considered to be short-duration contracts when the contracts are not expected to remain in force for an extended period of time. The Incurred Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative net incurred claim and allocated claim adjustment expenses relating to each accident year at the end of the stated calendar year. Changes in the cumulative amount across time are the result of Maidstone’s expanded awareness of additional facts and circumstances that pertain to the unsettled claims. The Cumulative Paid Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative amount paid for claims in each accident year as of the end of the stated calendar year. Auto Insurance Tables in thousands (except number of reported claims) Auto: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the years ended December 31, As of December 31, 2019 Unaudited Audited Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net IBNR Reserve Reported Claims 2010 $ 54,887 $ 57,194 $ 56,990 $ 57,281 $ 57,105 $ 56,872 $ 56,254 $ 56,084 $ 56,030 $ 56,035 $ 53 12,355 2011 47,570 44,500 44,184 43,752 43,548 42,908 42,817 42,830 42,934 62 9,351 2012 26,106 25,378 25,572 25,308 25,066 24,743 24,718 24,784 60 5,252 2013 15,997 15,605 15,951 15,830 15,727 15,681 15,734 36 3,455 2014 12,270 12,282 11,973 11,931 11,929 12,123 45 3,409 2015 15,840 15,562 15,421 15,149 15,405 159 4,758 2016 30,996 32,128 32,469 34,060 448 8,311 2017 23,331 25,096 26,697 1,402 7,030 2018 16,956 20,744 3,409 5,625 2019 16,714 4,847 3,881 Total $ 240,858 $ 265,230 $ 10,521 Auto: Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the years ended December 31, Unaudited Audited Accident Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 25,764 $ 45,769 $ 51,501 $ 53,932 $ 54,938 $ 55,481 $ 55,328 $ 55,619 $ 55,683 $ 55,717 2011 20,259 34,495 39,391 41,338 42,166 42,116 42,443 42,545 42,772 2012 12,411 19,975 22,590 23,821 23,784 24,100 24,431 24,510 2013 7,685 12,103 13,985 14,674 15,223 15,417 15,556 2014 5,971 9,101 9,870 10,576 11,371 11,807 2015 8,002 8,917 10,862 13,283 14,391 2016 15,980 23,545 27,582 31,034 2017 14,477 18,922 22,733 2018 11,237 15,146 2019 9,085 Total $ 220,473 $ 242,751 Auto: Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses as of: December 31, 2019 2018 Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance, for years presented $ 22,266 $ 24,248 Unpaid Loss and Loss Adjustment Expense, Net of Reinsurance, for years prior to 2010 393 97 Unpaid Unallocated Loss Adjustment Expense 2,734 2,955 Unpaid Losses and Loss Adjustment Expenses $ 25,393 $ 27,300 The following is supplementary information about average historical claims duration: Auto: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance as of December 31, 2019 (Unaudited) Years 1 2 3 4 5 6 7 8 9 10 49.6 % 22.6 % 11.5 % 8.7 % 3.3 % 1.0 % 0.4 % 0.3 % 0.3 % 0.1 % Homeowners’ Insurance Tables in thousands (except number of reported claims) Homeowners’: Incurred claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the years ended December 31, Unaudited Audited As of December 31, 2019 Accident Year 2014 2015 2016 2017 2018 2019 Net IBNR Reserves Reported Claims 2014 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ - 3 2015 597 580 580 580 580 - 41 2016 524 523 524 524 - 27 2017 - - - - - 2018 42 45 3 7 2019 286 32 15 Total $ 1,148 $ 1,437 $ 35 Homeowners’: Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Unaudited Audited Accident Year 2014 2015 2016 2017 2018 2019 2014 $ - $ 1 $ 2 $ 2 $ 2 $ 2 2015 304 580 580 580 580 2016 524 524 524 524 2017 - - - 2018 11 42 2019 185 Total $ 1,117 $ 1,333 Homeowners’: Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Adjustment Expenses as of: December 31, 2019 2018 Unpaid Loss and Allocated Loss Adjustment Expense, Net of Reinsurance, for years presented $ 104 $ 30 Unpaid Loss and Loss Adjustment Expense, Net of Reinsurance, for years prior to 2010 - - Unpaid Unallocated Loss Adjustment Expense - - Unpaid Losses and Loss Adjustment Expenses $ 104 $ 30 The following is supplementary information about average historical claims duration: Homeowners’ Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance as of December 31, 2019 (Unaudited) Years 1 2 3 4 5 6 7 8 9 10 48.9 % 34.0 % 0.8 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % The following table summarizes the net outstanding liabilities based on the tables above as of: December 31, (In thousands) 2019 2018 Net Outstanding Liabilities: Auto $ 22,555 $ 24,345 Homeowners’ 104 30 Liability for unpaid claims and claims adjustment expenses, net of reinsurance 22,659 24,375 Reinsurance recoverable on unpaid claims: Auto - - Homeowners’ - - Total reinsurance recoverable on unpaid claims - - Unallocated claims adjustment expenses 2,734 2,955 Total gross liability for unpaid claims and claims adjustment expenses $ 25,393 $ 27,330 Activity in the liability for losses and LAE is summarized as follows: (In thousands) For the Year Ended December 31, 2019 For the Period from January 2, 2018 to December 31, 2018 Reserve for losses and LAE at beginning of period $ 27,330 $ 30,672 Provision for claims, net of insurance: Incurred related to: Prior year 3,918 - Current year 13,187 25,223 Total incurred 17,105 25,223 Deduct payment of claims, net of reinsurance: Paid related to: Prior year 14,603 14,176 Current year 4,439 14,389 Total paid 19,042 28,565 Reserve for lo |
