Company: OXBRW
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001493152-25-021063
Chunk: 9

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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etary, and provided by independent sources that are actively involved in the relevant markets.

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.

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.

Reserves
for losses and loss adjustment expenses: The Company determines its reserves for losses and loss adjustment expenses, if any,
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 operations in the period in which they are determined.

Loss
experience refund payable: Certain contracts may 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.

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OXBRIDGE