Company: OXBRW
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000736
Chunk: 524

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1B
Chunk 524
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 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.

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 reinsurance contract meets the conditions for risk transfer requires judgment. The determination of risk transfer is critical
to reporting premiums written. If we determine that a reinsurance contract does not transfer sufficient risk, we must account for the
contract as a deposit liability.

Reserves
for Losses and Loss Adjustment Expenses. We determine our reserves for losses and loss adjustment expenses on the basis of the
claims reported by our ceding insurers and for losses IBNR, we use 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.

We
believe 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.

Under