The Company entered into a reinsurance arrangement effective June 1, 2022 with its existing captive reinsurance arrangement which uses Isosceles Insurance Ltd., a Bermuda licensed insurance company, through the establishment of a Bermuda separate account named “Separate Account UVE-01”, which is a VIE in the normal course of business and consolidated as a VIE since the Company is the primary beneficiary. The VIE files a federal tax return however the VIE is domiciled in Bermuda and therefore is not subject to state income taxes. See “—Note 9 (Income Taxes).”

The reinsurance captive arrangement entered into in the prior year, which was effective June 1, 2021 through May 31, 2022, was terminated effective December 1, 2021, pursuant to the terms of the agreement. In connection with the termination of the agreement, the affiliates agreed to release funds held in trust due to one of the Insurance Entities (UPCIC) and the balance to the participant of the separate account (UVE) in December 2021.

On June 1, 2022, the VIE entered into a new reinsurance arrangement with UPCIC and on September 28, 2022 Hurricane Ian made landfall on the Gulf Coast of Florida triggering a full policy limit loss, totaling $66 million, issued by the VIE to UPCIC. Amounts due under this policy were fully paid in September 2022 to UPCIC.

The following table presents, on a consolidated basis, the balance sheet classification and exposure of restricted cash held in a reinsurance trust account, which can be used only to settle specific reinsurance obligations of the VIE as of the dates presented.