Blueprint
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark
One)
☒
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended June 30, 2017
☐
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from __________ to __________
Commission
File Number: 1-36346
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OXBRIDGE
RE HOLDINGS LIMITED
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(Exact name of
registrant as specified in its charter)
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Cayman
Islands
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98-1150254
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(State or other
jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification
No.)
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Strathvale House,
2nd
Floor90 North Church Street, Georgetown P.O. Box 469
Grand Cayman,
Cayman Islands
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KY1-9006
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(Address of
principal executive offices)
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(Zip
Code)
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Registrant’s telephone number, including area code: (345)
749-7570
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company”, and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
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Large
accelerated
filer
☐
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Accelerated
filer
☐
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Non-accelerated
filer
☐
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Smaller
reporting
company
☒
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Emerging growth
company
☒
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|
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ______
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Indicate
the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable
date.
As of
August 8, 2017; 5,786,562 ordinary shares, par value $0.001 per
share, were outstanding.
OXBRIDGE RE HOLDINGS LIMITED
INDEX
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PART I – FINANCIAL INFORMATION
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Page
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Item
1.
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Financial
Statements
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Consolidated
Balance Sheets June 30, 2017
(unaudited) and December 31, 2016
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3
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Consolidated
Statements of Income Three and Six
Months Ended June 30, 2017 and 2016 (unaudited)
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4
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Consolidated
Statements of Comprehensive Income Three and Six
Months Ended June 30, 2017 and 2016 (unaudited)
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5
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Consolidated
Statements of Cash Flows Six Months Ended
June 30, 2017 and 2016 (unaudited)
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6
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Consolidated
Statements of Changes in Shareholders’ Equity
Six
Months Ended June 30, 2017 and 2016 (unaudited)
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8
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Notes
to Consolidated Financial Statements (unaudited)
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9
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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33
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Item
3.
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Quantitative and
Qualitative Disclosures About Market Risk
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44
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Item
4.
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Controls and
Procedures
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44
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PART II – OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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44
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Item
1A.
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Risk
Factors
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44
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Item
2.
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Unregistered Sales
of Equity Securities and Use of Proceeds
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44
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Item
3.
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Defaults Upon
Senior Securities
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46
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Item
4.
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Mine
Safety Disclosures
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46
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Item
5.
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Other
Information
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46
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Item
6.
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Exhibits
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46
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Signatures
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47
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Balance Sheets
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
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Assets
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Investments:
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Fixed-maturity
securities, available for sale, at fair value (amortized cost:
$10,006 and $6,060, respectively)
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$10,007
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6,051
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Equity
securities, available for sale, at fair value (cost: $5,719 and
$5,343, respectively)
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5,399
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4,941
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Total
investments
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15,406
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10,992
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Cash
and cash equivalents
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5,758
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12,242
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Restricted
cash and cash equivalents
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26,496
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23,440
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Accrued
interest and dividend receivable
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56
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48
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Premiums
receivable
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12,112
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4,038
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Deferred
policy acquisition costs
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537
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88
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Unearned
premiums ceded
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733
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-
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Prepayment
and other receivables
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151
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98
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Property
and equipment, net
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49
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54
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Total
assets
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$61,298
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51,000
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Liabilities and Shareholders’ Equity
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Liabilities:
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Reserve
for losses and loss adjustment expenses
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$3,043
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8,702
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Loss
experience refund payable
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2,730
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1,470
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Losses
payable
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1,467
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-
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Unearned
premiums reserve
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16,276
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3,461
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Accounts
payable and other liabilities
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152
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204
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Total
liabilities
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23,668
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13,837
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Shareholders’
equity:
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Ordinary
share capital, (par value $0.001, 50,000,000 shares authorized;
5,806,334 and 5,916,149 shares issued and outstanding)
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6
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6
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Additional
paid-in capital
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32,426
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33,034
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Retained
earnings
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5,517
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4,534
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Accumulated
other comprehensive loss
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(319)
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(411)
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Total
shareholders’ equity
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37,630
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37,163
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Total
liabilities and shareholders’ equity
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$61,298
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51,000
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The
accompanying Notes to Consolidated Financial Statements are an
integral
part of
the Consolidated Financial Statements.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
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Revenue
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Assumed
premiums $
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$17,376
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14,562
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$18,256
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15,065
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Premiums
ceded
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(147)
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-
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(147)
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-
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Change
in loss experience refund payable
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(512)
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(289)
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(1,260)
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(2,377)
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Change
in unearned premiums reserve
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(14,231)
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(10,927)
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(12,815)
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(7,961)
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Net
premiums earned
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2,486
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3,346
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4,034
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4,727
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Net
realized investment gains
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46
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77
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48
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133
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Net
investment income
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127
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109
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213
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203
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Total
revenue
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2,659
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3,532
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4,295
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5,063
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Expenses
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Losses
and loss adjustment expenses
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1,059
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2,215
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1,027
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2,278
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Policy
acquisition costs and underwriting expenses
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94
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68
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158
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129
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General
and administrative expenses
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390
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377
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724
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741
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Total
expenses
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1,543
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2,660
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1,909
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3,148
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Net
income
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$1,116
|
872
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$2,386
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1,915
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Earnings per share
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Basic
and Diluted
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$0.19
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0.14
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$0.41
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0.32
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Dividends paid per share
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$0.12
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0.12
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$0.24
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0.24
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The
accompanying Notes to Consolidated Financial Statements are an
integral
part of
the Consolidated Financial Statements.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Comprehensive Income
(Unaudited)
(expressed in thousands of U.S. Dollars)
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Net
income
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$1,116
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872
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$2,386
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1,915
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Other
comprehensive income:
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Change
in unrealized loss on investments:
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Unrealized
gain arising during the period
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181
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632
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140
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976
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Reclassification
adjustment for net realized gains included in net
income
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(46)
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(77)
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(48)
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(133)
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Net
change in unrealized loss
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135
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555
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92
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843
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Total
other comprehensive income
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135
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555
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92
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843
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Comprehensive
income
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$1,251
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1,427
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$2,478
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2,758
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The
accompanying Notes to Consolidated Financial Statements are an
integral
part of
the Consolidated Financial Statements.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(expressed in thousands of U.S. Dollars)
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Operating activities
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Net
income
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$2,386
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1,915
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Adjustments
to reconcile net income to net cash provided by operating
activities:
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Stock-based
compensation
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63
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60
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Net
amortization of premiums on investments in fixed-maturity
securities
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42
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-
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Depreciation
and amortization
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11
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10
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Net
realized investment gains
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(48)
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(133)
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Change
in operating assets and liabilities:
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Accrued
interest and dividend receivable
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(8)
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(31)
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Premiums
receivable
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(8,074)
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(5,489)
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Deferred
policy acquisition costs
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(449)
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(155)
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Unearned
premiums ceded
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(733)
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-
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Prepayment
and other receivables
|
(53)
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(39)
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Reserve
for losses and loss adjustment expenses
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(5,659)
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2,250
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Loss
experience refund payable
|
1,260
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(5,184)
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Losses
payable
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1,467
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-
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Unearned
premiums reserve
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12,815
|
7,962
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Accounts
payable and other liabilities
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(52)
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17
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Net
cash provided by operating activities
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$2,968
|
1,183
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Investing activities
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Change
in restricted cash and cash equivalents
|
(3,056)
|
(194)
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Purchase
of fixed-maturity securities
|
(3,987)
|
(3,111)
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Purchase
of equity securities
|
(10,007)
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(5,525)
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Proceeds
from sale of fixed-maturity and equity securities
|
9,678
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5,237
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Purchase
of property and equipment
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(6)
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(1)
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Net
cash used in investing activities
|
$(7,378)
|
(3,594)
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Financing activities
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Repurchases
of common stock under share repurchase plan
|
(671)
|
(60)
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Dividends
paid
|
(1,403)
|
(1,455)
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|
|
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Net
cash used in financing activities
|
$(2,074)
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(1,515)
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(continued)
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Cash Flows, continued
(Unaudited)
(expressed in thousands of U.S. Dollars)
|
|
|
|
|
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|
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|
|
|
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Net
change in cash and cash equivalents
|
(6,484)
|
(3,926)
|
|
Cash
and cash equivalents at beginning of period
|
12,242
|
8,584
|
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Cash
and cash equivalents at end of period
|
$5,758
|
4,658
|
|
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|
|
Supplemental disclosure of cash flow information
|
|
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|
Interest
paid
|
-
|
-
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|
Income
taxes paid
|
-
|
-
|
|
|
|
|
|
Non-cash investing activities
|
|
|
|
Net
change in unrealized loss on securities available for
sale
|
|
843
|
|
|
|
|
The
accompanying Notes to Consolidated Financial Statements are an
integral
part of
the Consolidated Financial Statements.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Changes in Shareholders’ Equity
(unaudited)
Six
Months Ended June 30, 2017 and 2016
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
|
|
|
|
|
|
Accumulated Other Comprehensive
|
|
|
|
|
|
|
|
|
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|
Balance
at December 31, 2015
|
6,060,000
|
6
|
33,657
|
4,838
|
(1,474)
|
37,027
|
|
Cash
dividends paid
|
-
|
-
|
-
|
(1,455)
|
-
|
(1,455)
|
|
Repurchase
and retirement of common stock under share repurchase
plan
|
(11,530)
|
-
|
(60)
|
-
|
-
|
(60)
|
|
Net
income for the period
|
-
|
-
|
-
|
1,915
|
-
|
1,915
|
|
Stock-based
compensation
|
-
|
-
|
60
|
-
|
-
|
60
|
|
Total
other comprehensive income
|
-
|
-
|
-
|
-
|
843
|
843
|
|
Balance
at June 30, 2016
|
6,048,470
|
6
|
33,657
|
5,298
|
(631)
|
38,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2016
|
5,916,149
|
6
|
33,034
|
4,534
|
(411)
|
37,163
|
|
Cash
dividends paid
|
-
|
-
|
-
|
(1,403)
|
-
|
(1,403)
|
|
Repurchase
and retirement of common stock under share repurchase
plan
|
(109,815)
|
-
|
(671)
|
-
|
-
|
(671)
|
|
Net
income for the period
|
-
|
-
|
-
|
2,386
|
-
|
2,386
|
|
Stock-based
compensation
|
-
|
-
|
63
|
-
|
-
|
63
|
|
Total
other comprehensive income
|
-
|
-
|
-
|
-
|
92
|
92
|
|
Balance
at June 30, 2017
|
5,806,344
|
6
|
32,426
|
5,517
|
(319)
|
37,630
|
The
accompanying Notes to Consolidated Financial Statements are an
integral
part of
the Consolidated Financial Statements.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
1.
ORGANIZATION
AND BASIS OF PRESENTATION
Oxbridge Re
Holdings Limited was incorporated as an exempted company on April
4, 2013 under the laws of the Cayman Islands. Oxbridge Re Holdings
Limited owns 100% of the equity interest in Oxbridge Reinsurance
Limited (the “Subsidiary”), an entity incorporated on
April 23, 2013 under the laws of the Cayman Islands and for which a
Class “C” Insurer’s license was granted on April
29, 2013 under the provisions of the Cayman Islands Insurance Law.
Oxbridge Re Holdings Limited and the Subsidiary (collectively, the
“Company”) have their registered offices at P.O. Box
309, Ugland House, Grand Cayman, Cayman Islands.
The
Company’s ordinary shares and warrants are listed on The
NASDAQ Capital Market under the symbols “OXBR” and
“OXBRW,” respectively.
The
Company operates as a single business segment through the
Subsidiary, which provides collateralized reinsurance to cover
excess of loss catastrophe risks of various affiliated and
non-affiliated ceding insurers, including Claddaugh Casualty
Insurance Company, Ltd. (“Claddaugh”) and Homeowners
Choice Property & Casualty Insurance Company
(“HCPCI”), which are related-party entities domiciled
in Bermuda and Florida, respectively.
(b)
Basis
of Presentation
The
accompanying unaudited, consolidated financial statements of the
Company have been prepared in accordance with accounting principles
generally accepted in the United States of America
(“GAAP”) for interim financial information, and the
Securities and Exchange Commission (“SEC”) rules for
interim financial reporting. Certain information and
footnote disclosures normally included in the consolidated
financial statements prepared in accordance with GAAP have been
omitted pursuant to such rules and regulations. However, in
the opinion of management, the accompanying interim consolidated
financial statements reflect all normal recurring adjustments
necessary to present fairly the Company’s consolidated
financial position as of June 30, 2017 and the consolidated results
of operations and cash flows for the periods presented. The
consolidated results of operations for interim periods are not
necessarily indicative of the results of operations to be expected
for any
subsequent interim period or for the fiscal year ended
December 31, 2017. The accompanying unaudited consolidated
financial statements and notes thereto should be read
in conjunction with the audited consolidated financial statements
for the year ended December 31, 2016 included in the
Company’s Form 10-K, which was filed with the SEC on March
13, 2017.
In
preparing the interim unaudited consolidated financial statements,
management was required to make certain estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues,
expenses and related disclosures at the financial reporting date
and throughout the periods being reported upon. Certain of the
estimates result from judgments that can be subjective and complex
and consequently actual results may differ from these estimates,
which would be reflected in future periods.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Material estimates
that are particularly susceptible to significant change in the
near-term relate to the determination of the reserve for losses and loss adjustment
expenses, which include amounts
estimated for claims incurred but not yet reported. The Company
uses various assumptions and actuarial data it believes to be
reasonable under the circumstances to make these estimates. In
addition, accounting policies specific to valuation of investments, assessment of
other-than-temporary impairment (“OTTI”) and loss
experience refund payable involve significant
judgments and estimates material to the Company’s
consolidated financial statements. Although considerable
variability is likely to be inherent in these estimates, management
believes that the amounts provided are reasonable. These estimates
are continually reviewed and adjusted if necessary. Such
adjustments are reflected in current operations.
All
significant intercompany balances and transactions have been
eliminated.
2.
SIGNIFICANT
ACCOUNTING POLICIES
Cash and cash
equivalents: Cash and cash equivalents are comprised of cash
and short term investments with original maturities of three months
or less.
Restricted
cash and cash equivalents: Restricted cash and cash equivalents represent
funds held in accordance with the Company’s trust agreements
with ceding insurers and trustees, which requires the Company to
maintain collateral with a market value greater than or equal to
the limit of liability, less unpaid premium.
Investments:
The Company’s investments consist of fixed-maturity
securities and equity securities, and are classified as
available-for-sale. The Company’s investments are carried at
fair value with changes in fair value included as a separate
component of accumulated other comprehensive loss in
shareholders’ equity.
Unrealized gains or
losses are determined by comparing the fair market value of the
securities with their cost or amortized cost. Realized gains and
losses on investments are recorded on the trade date and are
included in the consolidated statements of income. The cost of
securities sold is based on the specified identification method.
Investment income is recognized as earned and discounts or premiums
arising from the purchase of debt securities are recognized in
investment income using the interest method over the remaining term
of the security.
The
Company reviews all securities for other-than-temporary impairment
("OTTI") on a quarterly basis and more frequently when economic or
market conditions warrant such review. When the fair value of any
investment is lower than its cost, an assessment is made to see
whether the decline is temporary of other-than-temporary. If the
decline is determined to be other-than-temporary the investment is
written down to fair value and an impairment charge is recognized
in income in the period in which the Company makes such
determination. For a debt security that the Company does not intend
to sell nor is it more likely than not that the Company will be
required to sell before recovery of its amortized cost, only the
credit loss component is recognized in income, while impairment
related to all other factors is recognized in other comprehensive
income. The Company considers various factors in determining
whether an individual security is other-than-temporarily impaired
(see Note 4).
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Fair value
measurement: GAAP establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets (Level 1
measurements) and the lowest priority to unobservable inputs (Level
3 measurements). The three levels of the fair value hierarchy under
GAAP are as follows:
|
Level
1
|
Inputs
that reflect unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to
access at the measurement date;
|
|
|
|
|
Level
2
|
Inputs
other than quoted prices that are observable for the asset or
liability either directly or indirectly, including inputs in
markets that are not considered to be active; and
|
|
|
|
|
Level
3
|
Inputs
that are unobservable.
|
Inputs
are used in applying the various valuation techniques and broadly
refer to the assumptions that market participants use to make
valuation decisions, including assumptions about risk. For debt
securities, inputs may include price information, volatility
statistics, specific and broad credit data, liquidity statistics,
broker quotes for similar securities and other factors. The fair
value of investments in common stocks and exchange-traded funds is
based on the last traded price. A financial instrument’s
level within the fair value hierarchy is based on the lowest level
of any input that is significant to the fair value measurement.
However, the determination of what constitutes
“observable” requires significant judgment by the
Company’s investment custodians. The investment custodians
consider observable data to be market data which is readily
available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources
that are actively involved in the relevant markets. The
categorization of a financial instrument within the hierarchy is
based upon the pricing transparency of the instrument.
Deferred policy
acquisition costs (“DAC”): Policy acquisition
costs consist of brokerage fees, federal excise taxes and other
costs related directly to the successful acquisition of new or
renewal insurance contracts, and are deferred and amortized over
the terms of the reinsurance agreements to which they relate. The
Company evaluates the recoverability of DAC by determining if the
sum of future earned premiums and anticipated investment income is
greater than the expected future claims and expenses. If a loss is
probable on the unexpired portion of policies in force, a premium
deficiency loss is recognized. At June 30, 2017, the DAC was
considered fully recoverable and no premium deficiency loss was
recorded.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Property and
equipment:
Property and equipment are recorded at cost when acquired. Property
and equipment are comprised of motor vehicles, furniture and
fixtures, computer equipment and leasehold improvements and are
depreciated, using the straight-line method, over their estimated
useful lives, which are five years for furniture and fixtures and
computer equipment and four years for motor vehicles. Leasehold
improvements are amortized over the lesser of the estimated useful
lives of the assets or remaining lease term. The Company
periodically reviews property and equipment that have finite lives,
and that are not held for sale, for impairment by comparing the
carrying value of the assets to their estimated future undiscounted
cash flows. For the three and six-month periods ended June 30,
2017, there were no impairments in property and
equipment.
Allowance for
uncollectible receivables: Management evaluates credit
quality by evaluating the exposure to individual counterparties;
where warranted management also considers the credit rating or
financial position, operating results and/or payment history of the
counterparty. Management establishes an allowance for amounts for
which collection is considered doubtful. Adjustments to previous
assessments are recognized as income in the year in which they are
determined. At June 30, 2017, no receivables were determined to be
overdue or impaired and, accordingly, no allowance for
uncollectible receivables has been established.
Reserves for
losses and loss adjustment
expenses: The Company determines its reserves for losses and
loss adjustment expenses on the basis of the claims reported by the
Company’s ceding insurers and for losses incurred but not
reported (“IBNR”), management uses the assistance of an
independent actuary. The reserves for losses and loss adjustment
expenses represent management’s best estimate of the ultimate
settlement costs of all losses and loss adjustment expenses.
Management believes that the amounts are adequate; however, the
inherent impossibility of predicting future events with precision,
results in uncertainty as to the amount which will ultimately be
required for the settlement of losses and loss expenses, and the
differences could be material. Adjustments are reflected in
the consolidated
statements of income in the period in which they are
determined.
Loss experience
refund payable: Certain contracts include retrospective
provisions that adjust premiums or result in profit commissions in
the event losses are minimal or zero. In accordance with GAAP, the
Company will recognize a liability in the period in which the
absence of loss experience obligates the Company to pay cash or
other consideration under the contracts. On the contrary, the
Company will derecognize such liability in the period in which a
loss experience arises. Such adjustments to the liability, which
accrue throughout the contract terms, will reduce the liability
should a catastrophic loss event covered by the Company
occur.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Premiums
assumed: The Company records premiums assumed, net of loss
experience refunds, as earned pro-rata over the terms of the
reinsurance agreements and the unearned portion at the consolidated
balance sheet date is recorded as unearned premiums reserve. A
reserve is made for estimated premium deficiencies to the extent
that estimated losses and loss adjustment expenses exceed related
unearned premiums. Investment income is not considered in
determining whether or not a deficiency exists.
Subsequent adjustments of premiums assumed, based
on reports of actual premium by the ceding companies, or revisions
in estimates of ultimate premium, are recorded in the period in
which they are determined. Such adjustments are generally
determined after the associated risk periods have expired, in which
case the premium adjustments are fully earned when
assumed.
Certain
contracts allow for reinstatement premiums in the event of a full
limit loss prior to the expiration of the contract. A reinstatement
premium is not due until there is a full limit loss event and
therefore, in accordance with GAAP, the Company records a
reinstatement premium as written only in the event that the
reinsured incurs a full limit loss on the contract and the contract
allows for a reinstatement of coverage upon payment of an
additional premium. For catastrophe contracts which contractually
require the payment of a reinstatement premium equal to or greater
than the original premium upon the occurrence of a full limit loss,
the reinstatement premiums are earned over the original contract
period. Reinstatement premiums that are contractually calculated on
a pro-rata basis of the original premiums are earned over the
remaining coverage period.
Unearned Premiums
Ceded: The
Company reduces the risk of future losses on business assumed by
reinsuring certain risks and exposures with other reinsurers
(retrocessionaires). The Company remains liable to the extent that
any retrocessionaire fails to meet its obligations and to the
extent that the Company does not hold sufficient security for their
unpaid obligations.
Ceded
premiums are written and are expensed pro-rata over the contract
period in proportion to the period of protection. Unearned premiums
ceded consist of the unexpired portion of the reinsurance
obtained.
Uncertain income
tax positions: The authoritative GAAP guidance on
accounting for, and disclosure of, uncertainty in income tax
positions requires the Company to determine whether an income tax
position of the Company is more likely than not to be sustained
upon examination by the relevant tax authority, including
resolution of any related appeals or litigation processes, based on
the technical merits of the position. For income tax positions
meeting the more likely than not threshold, the tax amount
recognized in the financial statements, if any, is reduced by the
largest benefit that has a greater than fifty percent likelihood of
being realized upon ultimate settlement with the relevant taxing
authority. The application of this authoritative guidance has had
no effect on the Company’s consolidated financial statements
because the Company had no uncertain tax positions at June 30,
2017.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Earnings per
share: Basic
earnings per share has been computed on the basis of the
weighted-average number of ordinary shares outstanding during the
periods presented. Diluted earnings per share is computed based on
the weighted-average number of ordinary shares outstanding and
reflects the assumed exercise or conversion of diluted securities,
such as stock options and warrants, computed using the treasury
stock method.
Stock-Based Compensation:
The Company
accounts for stock-based compensation under the fair value
recognition provisions of GAAP which requires the measurement and
recognition of compensation for all stock-based awards made to
employees and directors, including stock options and restricted
stock issuances based on estimated fair values. The Company measures compensation for restricted
stock based on the price of the Company’s ordinary shares at
the grant date. Determining the fair value of share purchase
options at the grant date requires significant estimation and
judgment. The Company uses an option-pricing model (Black-Scholes
option pricing model) to assist in the calculation of fair value
for share purchase options. The Company's shares have not been
publicly traded for a sufficient length of time to solely use the
Company's performance to reasonably estimate the expected
volatility. Therefore, when estimating the expected volatility, the
Company takes into consideration the historical volatility of
similar entities. The Company considers factors such as an entity's
industry, stage of life cycle, size and financial leverage when
selecting similar entities. The Company uses a sample peer group of
companies in the reinsurance industry as well as the
Company’s own historical volatility in determining the
expected volatility. Additionally, the Company uses the full life
of the options, ten years, as the estimated term of the options,
and has assumed no forfeitures during the life of the
options.
The
Company uses the straight-line attribution method for all grants
that include only a service condition. Compensation expense related
to all awards is included in general and administrative
expenses.
Recent accounting
pronouncements:
Accounting Standards Update No. 2016-18. In November 2016, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Updated
("ASU") 2016-18, “Statements of Cash Flows - Restricted Cash
(Topic 230)” (“ASU 2016-18”). ASU 2016-18
requires restricted cash and cash equivalents to be included with
cash and cash equivalents in the consolidated statement of cash
flows and disclose the nature of the restrictions on cash and cash
equivalents. ASU 2016-18 is effective for annual periods beginning
after December 15, 2017, and interim periods within those fiscal
years. Early adoption is permitted. The Company currently
separately discloses the restrictions on cash and cash equivalents
in Note 3 of the consolidated financial statements
and expects to continue these disclosures since ASU 2016-18 does
not change the requirement in Regulation S-X (Rule 5-02) to
separately disclose cash and cash equivalents that have
restrictions on withdrawal or use. The Company currently presents
changes in restricted cash and cash equivalents under investing
activities in the consolidated statements of cash flows. Upon
adoption of ASU 2016-18, the Company will amend the presentation in
the consolidated statements of cash flows to include the restricted
cash and cash equivalents with cash and cash equivalents in
the consolidated statements of cash flows and will
retrospectively reclassify all periods presented.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Accounting
Standards Update No. 2016-13. In June 2016, the FASB
issued ASU 2016-13, “Financial Instruments - Credit
Losses (Topic 326): Measurements of Credit Losses on Financial
Instruments” (“ASU 2016-13”). ASU 2016-13 amends the guidance
on reporting credits losses and affects loans, debt securities,
trade receivables, reinsurance recoverables and other financial
assets that have the contractual right to receive cash. The
amendments are effective for annual periods beginning after
December 15, 2019, and interim periods within those annual periods.
Early adoption is permitted for any organization for annual periods
beginning after December 15, 2018 and interim periods within those
annual periods. The Company is in the process of evaluating the
impact of the requirements of ASU 2016-13 on the Company’s
consolidated financial statements and anticipates implementing ASU
2016-13 during the first quarter of fiscal year 2020.
Accounting
Standards Update No. 2016-09. In March 2016, the FASB issued ASU
No. 2016-09, "Compensation-Stock Compensation (Topic 718),"
which affects all entities that issue share-based awards to their
employees. Among the amendments affecting share-based payment
transactions are their income tax consequences, classification of
awards as either equity or liabilities, and classification on the
statement of cash flows. ASU 2016-09 is effective for all public
entities for reporting periods beginning after December 15,
2016 and interim periods within those fiscal years. Early adoption
is permitted for all entities. The Company does not expect a
material impact of this guidance on the Company’s
consolidated financial statements.
Accounting
Standards Update No. 2016-02. In February 2016, the FASB issued
ASU 2016-02, "Leases (Topic 842)," which supersedes Topic 840
and creates the new lease accounting standards for lessees and
lessors, primarily related to the recognition of lease assets and
liabilities by lessees for leases classified as operating leases.
ASU 2016-02 is effective for all public entities for reporting
periods beginning after December 15, 2018 and interim periods
within those fiscal years. Early adoption is permitted for all
entities. The Company is currently evaluating the impact of this
guidance on the Company’s consolidated financial
statements.
Accounting
Standards Update No. 2016-01. In January 2016, the FASB issued
ASU 2016-01, "Financial Instruments (Subtopic 825-10)," which
addresses certain aspects of recognition, measurement,
presentation, and disclosure of financial instruments. One of the
changes is to require certain equity investments to be measured at
fair value with changes in fair value recognized in net income. ASU
2016-01 is effective for all public entities for reporting periods
beginning after December 15, 2017 and interim periods within
those fiscal years. Early adoption is permitted for financial
statements that have not been previously issued. The Company is
currently evaluating the impact of this guidance on the
Company’s consolidated financial statements.
Accounting
Standards Update No. 2017-08. In March 2017, the FASB
issued ASU No. 2017-08, "Premium Amortization on Purchased Callable
Debt Securities," to amend the amortization period for certain
purchased callable debt securities held at a
premium. Under current GAAP, entities generally amortize
the premium as an adjustment of yield over the contractual life of
the instrument. The amendments in this update require
the premium to be amortized to the earliest call
date. No accounting change is required for securities
held at a discount. For public business entities, the
amendments in this update become effective for annual periods, and
interim periods within those annual periods, beginning after
December 15, 2018. Early adoption is permitted, including
adoption in an interim period. If an entity early adopts the
amendments in an interim period, any adjustments should be
reflected as of the beginning of the fiscal year that includes that
interim period. An entity should apply the amendments in this
update on a modified retrospective basis through a
cumulative-effect adjustment directly to retained earnings as of
the beginning of the period of adoption. The Company is currently
evaluating the impact of adopting the new guidance on the
consolidated financial statements, but it is not expected to have a
material impact.
Accounting Standards Update
No. 2017-09. In May 2017, the FASB issued ASU 2017-09,
"Scope of Modification Accounting," to provide clarity and reduce
both (1) diversity in practice and (2) cost and complexity when
applying the guidance in Topic 718, Compensation—Stock
Compensation, to a change to the terms or conditions of a
share-based payment award. The amendments in this update
provide guidance about which changes to the terms or conditions of
a share-based payment award require an entity to apply modification
accounting in Topic 718. An entity should account for the effects
of a modification unless all the following are met: (1) the fair
value (or calculated value or intrinsic value, if such an
alternative measurement method is used) of the modified award is
the same as the fair value (or calculated value or intrinsic value,
if such an alternative measurement method is used) of the original
award immediately before the original award is modified. If the
modification does not affect any of the inputs to the valuation
technique that the entity uses to value the award, the entity is
not required to estimate the value immediately before and after the
modification; (2) the vesting conditions of the modified award are
the same as the vesting conditions of the original award
immediately before the original award is modified; (3)
the classification of the modified award as an equity
instrument or a liability instrument is the same as the
classification of the original award immediately before the
original award is modified. The current disclosure requirements in
Topic 718 apply regardless of whether an entity is required to
apply modification accounting under the amendments in this
update. For public business entities, the amendments in
this update become effective for annual periods, and interim
periods within those annual periods, beginning after
December 15, 2017. Early adoption is permitted, including
adoption in an interim period. An entity should apply the
amendments in this update prospectively to an award modified on or
after the adoption date. The Company is currently evaluating the
impact of adopting the new guidance on the consolidated financial
statements, but it is not expected to have a material
impact.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
Segment
Information: Under
GAAP, operating segments are based on the internal information that
management uses for allocating resources and assessing performance
as the source of the Company’s reportable segments. The
Company manages its business on the basis of one operating segment,
Property and Casualty Reinsurance, in accordance with the
qualitative and quantitative criteria established under
GAAP.
Reclassifications: Certain reclassifications of prior
period amounts have been made to conform to the current period
presentation.
3. CASH
AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH
EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
on deposit
|
$398
|
$6,868
|
|
Cash
held with custodians
|
5,360
|
5,374
|
|
Restricted
cash held in trust
|
26,496
|
23,440
|
|
|
|
|
|
Total
|
32,254
|
35,682
|
Cash
and cash equivalents are held by large and reputable counterparties
in the United States of America and in the Cayman Islands.
Restricted cash held in trust is custodied with Bank of New York
Mellon and Wells Fargo Bank and is held in accordance with the
Company’s trust agreements with the ceding insurers and
trustees, which require that the Company provide collateral having
a market value greater than or equal to the limit of liability,
less unpaid premium.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
4. INVESTMENTS
The
Company holds investments in fixed-maturity securities and equity
securities that are classified as available-for-sale. At June 30,
2017 and December 31, 2016, the cost or amortized cost, gross
unrealized gains and losses, and estimated fair value of the
Company’s available-for-sale securities by security type were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017
|
|
|
|
|
|
Fixed-maturity securities
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
$10,006
|
$28
|
$(27)
|
$10,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
10,006
|
28
|
(27)
|
10,007
|
|
|
|
|
|
|
|
Mutual
funds
|
602
|
9
|
(3)
|
608
|
|
Preferred
stocks
|
895
|
27
|
(3)
|
919
|
|
Common
stocks
|
4,222
|
16
|
(366)
|
3,872
|
|
|
|
|
|
|
|
Total
equity securities
|
5,719
|
52
|
(372)
|
5,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities
|
$15,725
|
$80
|
$(399)
|
$15,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
|
|
Fixed-maturity securities
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
$6,060
|
$28
|
$(37)
|
$6,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
6,060
|
28
|
(37)
|
6,051
|
|
|
|
|
|
|
|
Mutual
funds
|
400
|
2
|
(6)
|
396
|
|
Preferred
stocks
|
687
|
8
|
(4)
|
691
|
|
Common
stocks
|
4,256
|
126
|
(528)
|
3,854
|
|
|
|
|
|
|
|
Total
equity securities
|
5,343
|
136
|
(538)
|
4,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities
|
$11,403
|
$164
|
$(575)
|
$10,992
|
At June
30, 2017 and December 31, 2016, available-for-sale securities with
fair value of $7,451,000 and $3,502,000, respectively, are held in
trust accounts as collateral under reinsurance contacts with the
Company’s ceding insurers.
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
4.
INVESTMENTS
(continued)
Expected maturities will differ from contractual maturities as
borrowers may have the right to call or prepay obligations with or
without penalties. The scheduled contractual maturities of
fixed-maturity securities at June 30, 2017 and December 31, 2016
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017
|
|
|
|
Available for sale
|
|
|
|
Due
within one year
|
$6,019
|
6,023
|
|
Due
after one year through five years
|
3,987
|
3,984
|
|
|
|
|
|
|
$10,006
|
$10,007
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
Available for sale
|
|
|
|
Due
within one year
|
$2,970
|
$2,998
|
|
Due
after one year through five years
|
3,090
|
3,053
|
|
|
|
|
|
|
$6,060
|
$6,051
|
Proceeds received, and the gross realized gains and losses from
sales of available-for-sale securities, for the three and six
months ended June 30, 2017 and 2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
Fixed-maturity
securities
|
$-
|
$-
|
$-
|
|
|
|
|
|
|
Equity
securities
|
$6,101
|
$540
|
$(494)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017
|
|
|
|
|
Fixed-maturity
securities
|
$-
|
$-
|
$-
|
|
|
|
|
|
|
Equity
securities
|
$9,678
|
$732
|
$(684)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2016
|
|
|
|
|
Fixed-maturity
securities
|
$119
|
$8
|
$-
|
|
|
|
|
|
|
Equity
securities
|
$3,670
|
$310
|
$(241)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2016
|
|
|
|
|
Fixed-maturity
securities
|
$119
|
$8
|
$-
|
|
|
|
|
|
|
Equity
securities
|
$5,118
|
$498
|
$(373)
|
OXBRIDGE
RE HOLDINGS LIMITED AND SUBSIDIARY
Notes
to Consolidated Financial Statements (unaudited)
June
30, 2017
4.
INVESTMENTS
(continued)
The
Company regularly reviews its individual investment securities for
OTTI. The Company considers various factors in determining whether
each individual security is other-than-temporarily impaired,
including:
●
the
financial condition and near-term prospects of the issuer,
including any specific events that may affect its operations or
income;
●
the
length of time and the extent to which the market value of the
security has been below its cost or amortized cost;
●
general market
conditions and industry or sector specific factors;
●
nonpayment by the
issuer of its contractually obligated interest and principal
payments; and
●
the
Company’s intent and ability to hold the investment for a
period of time sufficient to allow for the recovery of
costs.
Securities with gross unrealized loss positions at June 30, 2017
and December 31, 2016, aggregated by investment category and length
of time the individual securities have been in a continuous loss
position, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturity securities
|
|
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
3
|
3,984
|
24
|
3,025
|
27
|
7,009
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
3
|
3,984
|
24
|
3,025
|
27
|
7,009
|
|
|
|
|
|
|
|
|
|
Equity securities
|
|
|
|
|
|
|
|
Mutual
funds
|
3
|
199
|
-
|
-
|
3
|
199
|
|
Preferred
stocks
|
3
|
398
|
-
|
-
|
3
|
398
|
|
All
other common stocks
|
141
|
1,651
|
225
|
1,298
|
366
|
2,949
|
|
|
|
|
|
|
|
|
|
Total
equity securities
|
147
|
2,248
|
225
|
1,298
|
372
|
3,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities
|
$150
|
$6,232
|
$249
|
$4,323
|
$399
|
$10,555
|
At June 30, 2017, there were 21 securities in an unrealized loss
position of which 5 of these positions had been in an unrealized
loss position for 12 months or greater.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
June
30, 2017
4.
INVESTMENTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturity securities
|
|
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
37
|
3,053
|
-
|
-
|
37
|
3,053
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
37
|
3,053
|
-
|
-
|
37
|
3,053
|
|
|
|
|
|
|
|
|
|
Equity securities
|
|
|
|
|
|
|
|
Mutual
funds
|
6
|
193
|
-
|
-
|
6
|
193
|
|
Preferred
stocks
|
4
|
396
|
-
|
-
|
4
|
396
|
|
All
other common stocks
|
84
|
1,142
|
444
|
1,088
|
528
|
2,230
|
|
|
|
|
|
|
|
|
|
Total
equity securities
|
94
|
1,731
|
444
|
1,088
|
538
|
2,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
available for sale securities
|
$131
|
$4,784
|
$444
|
$1,088
|
$575
|
$5,872
|
At December 31, 2016, there were 17 securities in an unrealized
loss position of which 5 of these positions had been in an
unrealized loss position for 12 months or greater.
The Company believes
there were no fundamental issues such as credit losses or other
factors with respect to its fixed-maturity securities. It is
expected that the securities would not be settled at a price less
than the par value of the investments and because the Company has the ability and intent
to hold these securities and it is probable that the Company will
not be required to sell these securities until a market price
recovery or maturity, the Company does not consider any of its
fixed-maturity securities to be other-than-temporarily impaired at
June 30, 2017 and December 31, 2016.
In determining whether equity securities are other
than temporarily impaired, the Company considers its intent and
ability to hold a security for a period of time sufficient to allow
for the recovery of cost, along with factors including the length
of time each security had been in an unrealized loss position, the
extent of the decline and the near-term prospect for recovery.
Based on management’s evaluation, the Company does not
consider any of its equity securities to be other-than-temporarily
impaired at June 30, 2017 and December 31, 2016.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
June
30, 2017
4.
INVESTMENTS
(continued)
Assets Measured at Estimated Fair Value on a Recurring
Basis
The following table presents information about the Company’s
financial assets measured at estimated fair value on a recurring
basis that is reflected in the consolidated balance sheets at
carrying value. The table indicates the fair value hierarchy of the
valuation techniques utilized by the Company to determine such fair
value as of June 30, 2017 and December 31, 2016:
|
|
Fair Value Measurements Using
|
|
|
|
|
|
|
|
|
As of June 30, 2017
|
|
|
Financial
Assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$5,758
|
$-
|
$-
|
$5,758
|
|
|
|
|
|
|
|
Restricted cash and cash equivalents
|
$26,496
|
$-
|
$-
|
$26,496
|
|
|
|
|
|
|
|
Fixed-maturity securities:
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
10,007
|
-
|
-
|
10,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
10,007
|
-
|
-
|
10,007
|
|
|
|
|
|
|
|
Mutual
funds
|
608
|
-
|
-
|
608
|
|
Preferred
stocks
|
919
|
-
|
-
|
919
|
|
All
other common stocks
|
3,872
|
-
|
-
|
3,872
|
|
|
|
|
|
|
|
Total
equity securities
|
5,399
|
-
|
-
|
5,399
|
|
|
|
|
|
|
|
Total
available for sale securities
|
15,406
|
-
|
-
|
15,406
|
|
|
|
|
|
|
|
Total
|
$47,660
|
$-
|
$-
|
$47,660
|
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
June
30, 2017
4.
INVESTMENTS
(continued)
|
|
Fair Value Measurements Using
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|
|
Financial
Assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$12,242
|
$-
|
$-
|
$12,242
|
|
|
|
|
|
|
|
Restricted cash and cash equivalents
|
$23,440
|
$-
|
$-
|
$23,440
|
|
|
|
|
|
|
|
Fixed-maturity securities:
|
|
|
|
|
|
U.S.
Treasury and agency securities
|
6,051
|
-
|
-
|
6,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
fixed-maturity securities
|
6,051
|
-
|
-
|
6,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual
funds
|
396
|
-
|
-
|
396
|
|
Preferred
stocks
|
691
|
-
|
-
|
691
|
|
All
other common stocks
|
3,854
|
-
|
-
|
3,854
|
|
|
|
|
|
|
|
Total
equity securities
|
4,941
|
-
|
-
|
4,941
|
|
|
|
|
|
|
|
Total
available for sale securities
|
10,992
|
-
|
-
|
10,992
|
|
|
|
|
|
|
|
Total
|
$46,674
|
$-
|
$-
|
$46,674
|
5.
TAXATION
Under
current Cayman Islands law, no corporate entity, including the
Company and the Subsidiary, is obligated to pay taxes in the Cayman
Islands on either income or capital gains. The Company and the
Subsidiary have an undertaking from the Governor-in-Cabinet of the
Cayman Islands, pursuant to the provisions of the Tax Concessions
Law, as amended, that, in the event that the Cayman Islands enacts
any legislation that imposes tax on profits, income, gains or
appreciations, or any tax in the nature of estate duty or
inheritance tax, such tax will not be applicable to the Company and
the Subsidiary or their operations, or to the ordinary shares or
related obligations, until April 23, 2033 and May 17, 2033,
respectively.
The
Company and its subsidiary intend to conduct substantially all of
their operations in the Cayman Islands in a manner such that they
will not be engaged in a trade or business in the U.S. However,
because there is no definitive authority regarding activities that
constitute being engaged in a trade or business in the U.S. for
federal income tax purposes, the Company cannot assure that the
U.S. Internal Revenue Service will not contend, perhaps
successfully, that the Company or its subsidiary is engaged in a
trade or business in the U.S. A foreign corporation deemed to be so
engaged would be subject to U.S. federal income tax, as well as
branch profits tax, on its income that is treated as effectively
connected with the conduct of that trade or business unless the
corporation is entitled to relief under an applicable tax
treaty.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
June
30, 2017
6.
LOSSES AND LOSS ADJUSTMENT EXPENSES
The
following table summarizes the Company’s loss and loss
adjustment expenses (“LAE”) and the reserve for loss
and LAE reserve movements for the three and six-month periods
ending June 30, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
beginning of period
|
$5,684
|
63
|
$8,702
|
-
|
|
Incurred
related to:
|
|
|
|
|
|
Current
period
|
-
|
2,215
|
-
|
2,278
|
|
Prior
period
|
1,059
|
-
|
1,027
|
-
|
|
Total
incurred
|
1,059
|
2,215
|
1,027
|
2,278
|
|
|