Company: OXBRW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023960
Chunk: 106

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 106
---
 Loss Adjustment Expenses” below, under accounting principles generally accepted in
the United States of America (‘‘GAAP’’), we are not permitted to establish loss reserves with respect to losses
that may be incurred under reinsurance contracts until the occurrence of an event which may give rise to a claim. As a result, only loss
reserves applicable to losses incurred up to the reporting date may be established, with no provision for a contingency reserve to account
for expected future losses.

CRITICAL
ACCOUNTING POLICIES

We
are required to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements
and related footnotes. We evaluate these estimates and assumptions on an on-going basis based on historical developments, market conditions,
industry trends and other information that we believe to be reasonable under 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