Company: OXBRW
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009673
Chunk: 15

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 15
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 the circumstances. These accounting policies pertain to fair value measurements,
particular with respect to our beneficial interest in Jet.AI., premium revenues and risk transfer, reserve for loss and loss adjustment
expenses, and deferred acquisition costs.

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 fixed maturity 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 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
and management. The investment custodians and management 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.

33

Premium Revenue and Risk
Transfer. We record premiums revenue as earned pro-rata over the terms of the reinsurance agreements and the unearned portion
at the 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.

We account for reinsurance contracts
in accordance with ASC 944, ‘‘Financial Services – Insurance.” Assessing whether or not a re