Our balance due from reinsurers, increased $23.7 million, or 43.7%, primarily due to an increase in ceded unearned premium reserve, which was due to the growth of our business, and an increase in ceded claims reserve, a result of increased claim activity.
Our loss and loss adjustment expense reserves increased $13.0 million, or 86.4%, primarily from increased claim activity due to an active springtime convectional thunderstorm season primarily during the second quarter of 2015 and the unusual occurrence of significant weather events during the fourth quarter of 2015.
Insurance companies' capital and surplus levels are regularly monitored by the insurance department of its state of domicile. The primary tool used to monitor an insurance company's capital adequacy is the National Association of Insurance Commissioner's Risk Based Capital Model or "RBC". Remedial action of varying severity begin once an insurance company's RBC falls below 200%. Our ratio at December 31, 2015 was 387% and 458% at the end of 2014. The industry guidelines for net premium writings to surplus is approximately 3:1. Our net writings to surplus was 0.51 for the year ended December 31, 2015 and 0.46 for the year ended December 31, 2014.
In regard to our investments and cash deposits as of December 31, 2015, we have limited our credit exposure to financial instruments by investing and holding our excess cash in bank demand and time deposits (i.e., CDs), money market accounts which are covered by FDIC insurance, and fixed-maturity securities, classified as available-for-sale. At times, our bank deposits may exceed the FDIC limit. To meet liquidity needs, time deposits mature in no more than eighteen months. We mitigate the credit risk for our fixed-maturity securities by investing in fixed-maturity securities that are generally investment grade and by diversifying our investment portfolio to avoid concentrations in any single issuer or business sector.
Deferred policy acquisitions costs ("DAC") consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair our ability to recover these costs.
The liability for losses and loss adjustment expenses ("LAE") are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management's estimate of an amount for losses incurred but not reported ("IBNR"), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings.
In August 2013, HAHC entered into an agreement or the "Advisory Agreement", with Inter-Atlantic Advisors III, Ltd., or "Inter-Atlantic", under which Inter-Atlantic agrees to perform certain management services for the Company. A number of our directors are among the beneficial owners of Inter-Atlantic. The Advisory Agreement has an initial term of six years, to be automatically renewed from year-to-year thereafter, unless terminated by either party upon 60 days' notice prior to the termination of the initial or any renewal term. For its services, the Company pays Inter-Atlantic an annual fee of $300,000, as well as, an annual grant of shares of our common stock with an aggregate fair market value of $150,000 at the time of grant, plus reimburses Inter-Atlantic's expenses incurred in connection with the performance of its service. As long as the Advisory Agreement is in effect and the fees and expense reimbursements are paid, the directors of the Company that are affiliated with Inter-Atlantic have agreed to waive any other compensation for their service as directors.
Property catastrophe treaties, which went into effect on the same day as the quota share program, develop over four layers with a gross loss of $175 million excess of $5 million per occurrence. The Company's net retention is $500,000 per loss occurrence. The Company entered into a mixture of 12 and 24 month treaty periods to take advantage of low catastrophe reinsurance pricing in the marketplace. The Company's higher limit catastrophe coverage is placed for 12 months, as the Company believes this level of coverage has less price volatility than lower limits and feels it can acquire this type of coverage at competitive prices going forward.