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## PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES VALUATION ALLOWANCES AND QUALIFYING ACCOUNTS (in thousands) 

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(1) Effective January 1, 2020 the Company adopted the measurement of credit losses on financial instruments accounting standard that primarily affected its accounts receivable, reinsurance recoverable and commercial mortgage loans balances. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowance for credit losses at January 1, 2020 to conform to the new requirements. 

(2) In conjunction with the adoption of the credit losses accounting standard, the Company recorded an allowance for expected credit losses of $16,500 related to the PSG litigation matter. See Note T – Litigation, Commitments and Contingencies for further discussion. 

