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2. Accounting Policies and Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

The consolidated financial statements consist of Kingstone and its wholly-owned subsidiaries. Subsidiaries include: (1) KICO and its wholly-owned subsidiaries, CMIC Properties, Inc. (“Properties”) and 15 Joys Lane, LLC (“15 Joys Lane”), which together own the land and building from which KICO operates, and (2) Payments, Inc. All significant inter-company transactions have been eliminated in consolidation.

Revenue Recognition

Net Premiums Earned

Insurance policies issued by the Company are short-duration contracts. Accordingly, premium revenue, net of premiums ceded to reinsurers, is recognized as earned in proportion to the amount of insurance protection provided, on a pro-rata basis over the terms of the underlying policies. Unearned premiums represent premium applicable to the unexpired portions of in-force insurance contracts at the end of each year.

Ceding Commission Revenue

Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs of the reinsurance, generally on a pro-rata basis over the terms of the policies reinsured. Unearned amounts are recorded as deferred ceding commission revenue. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience under the agreements. The Company records ceding commission revenue based on its current estimate of subject losses. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined.

Premium Finance Placement Fees

Premium finance placement fees are earned in the period when contracts are placed with a third party premium finance company. Premium finance placement fees are included in “Other income” in the accompanying consolidated statements of income and comprehensive income.

Liability for Loss and Loss Adjustment Expenses (“LAE”)

The liability for loss and LAE represents management’s best estimate of the ultimate cost of all reported and unreported losses that are unpaid as of the balance sheet date. The liability for loss and LAE is estimated on an undiscounted basis, using individual case-basis valuations, statistical analyses and various actuarial procedures. The projection of future claim payment and reporting is based on an analysis of the Company’s historical experience, supplemented by analyses of industry loss data. Management believes that the reserves for loss and LAE are adequate to cover the ultimate cost of losses and claims to date; however, because of the uncertainty from various sources, including changes in reporting patterns, claims settlement patterns, judicial decisions, legislation, and economic conditions, actual loss experience may not conform to the assumptions used in determining the estimated amounts for such liability at the balance sheet date. As adjustments to these estimates become necessary, such adjustments are reflected in expense for the period in which the estimates are changed. Because of the nature of the business historically written, the Company’s management believes that the Company has limited exposure to environmental claim liabilities. The Company recognizes recoveries from salvage and subrogation when received.

Reinsurance

In the normal course of business, the Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers.

Reinsurance receivables represents management’s best estimate of paid and unpaid loss and LAE recoverable from reinsurers, and ceded losses receivable and unearned ceded premiums under reinsurance agreements. Ceded losses receivable are estimated using techniques and assumptions consistent with those used in estimating the liability for loss and LAE. Management believes that reinsurance receivables as recorded represent its best estimate of such amounts; however, as changes in the estimated ultimate liability for loss and LAE are determined, the estimated ultimate amount receivable from the reinsurers will also change. Accordingly, the ultimate receivable could be significantly in excess of or less than the amount indicated in the consolidated financial statements. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. Loss and LAE incurred as presented in the consolidated statement of income and comprehensive income are net of reinsurance recoveries.

The Company accounts for reinsurance in accordance with GAAP guidance for accounting and reporting for reinsurance of short-duration contracts. Management has evaluated its reinsurance arrangements and determined that significant insurance risk is transferred to the reinsurers. Reinsurance agreements have been determined to be short-duration prospective contracts and, accordingly, the costs of the reinsurance are recognized over the life of the contract in a manner consistent with the earning of premiums on the underlying policies subject to the reinsurance contract.

In preparing financial statements, management estimates uncollectible amounts receivable from reinsurers based on an assessment of factors including the creditworthiness of the reinsurers and the adequacy of collateral obtained, where applicable. There was no allowance for uncollectible reinsurance as of December 31, 2013 and 2012. The Company did not expense any uncollectible reinsurance for the years ended December 31, 2013 and 2012. Significant uncertainties are inherent in the assessment of the creditworthiness of reinsurers and estimates of any uncollectible amounts due from reinsurers. Any change in the ability of the Company’s reinsurers to meet their contractual obligations could have a detrimental impact on the consolidated financial statements and KICO’s ability to meet their regulatory capital and surplus requirements.

Cash and Cash Equivalents

Cash and cash equivalents are presented at cost, which approximates fair value. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash balances at several financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) secures accounts up to $250,000 at these institutions.

Investments

The Company accounts for its investments in accordance with GAAP guidance for investments in debt and equity securities, which requires that fixed-maturity and equity securities that have readily determined fair values be segregated into categories based upon the Company’s intention for those securities.

In accordance with this guidance, the Company has classified its fixed-maturity securities as either held to maturity or available-for-sale and its equity securities as available-for-sale. The Company may sell its available-for-sale securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Fixed maturity securities that the Company has the specific intent and ability to hold until maturity are classified as such and carried at amortized cost.

Available-for-sale securities are reported at their estimated fair values based on quoted market prices from a recognized pricing service, with unrealized gains and losses, net of tax effects, reported as a separate component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses are determined on the specific identification method and recognized in the statement of income and comprehensive income.

Investment income is accrued to the date of the financial statements and includes amortization of premium and accretion of discount on fixed maturities. Interest is recognized when earned, while dividends are recognized when declared. As of December 31, 2013 and 2012, due and accrued investment income was $414,210 and $343,521, respectively.

Impairment of investment securities results in a charge to operations when a market decline below cost is deemed to be other-than-temporary. The Company regularly reviews its fixed-maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. In evaluating potential impairment, management considers, among other criteria, the following: the current fair value compared to amortized cost or cost, as appropriate; the length of time the security’s fair value has been below amortized cost or cost; management’s intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value to cost or amortized cost; specific credit issues related to the issuer; and current economic conditions. Other-than-temporary impairment (“OTTI”) losses result in a permanent reduction of the cost basis of the underlying investment. As of December 31, 2013 and 2012, none of the Company’s investments were deemed to be OTTI.

Fair Value

The fair value hierarchy in GAAP prioritizes fair value measurements into three levels based on the nature of the inputs. Quoted prices in active markets for identical assets or liabilities have the highest priority (“Level 1”), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (“Level 2”) and unobservable inputs, including the reporting entity’s estimates of the assumptions that market participants would use, having the lowest priority (“Level 3”).

For investments in active markets, the Company uses quoted market prices to determine fair value. In circumstances where quoted market prices are unavailable, the Company utilizes fair value estimates based upon other observable inputs including matrix pricing, benchmark interest rates, market comparables and other relevant inputs. The Company’s process to validate the market prices obtained from the outside pricing sources include, but are not limited to, periodic evaluation of model pricing methodologies and analytical reviews of certain prices.

Premiums Receivable

Premiums receivable are presented net of an allowance for doubtful accounts of approximately $145,000 and $85,000 as of December 31, 2013 and 2012, respectively. The allowance for uncollectible amounts is based on an analysis of amounts receivable giving consideration to historical loss experience and current economic conditions and reflects an amount that, in management’s judgment, is adequate. Uncollectible premiums receivable balances of approximately $88,000 and $54,000 were written off for the years ended December 31, 2013 and 2012, respectively.

Deferred Policy Acquisition Costs

Deferred policy acquisition costs represent the costs of writing business that vary with, and are primarily related to, the successful production of insurance business (principally commissions, premium taxes and certain underwriting salaries). Policy acquisition costs are deferred and recognized as expense as related premiums are earned.

Intangible Assets

The Company has recorded acquired identifiable intangible assets. In accounting for such assets, the Company follows GAAP guidance for intangible assets. The cost of a group of assets acquired in a transaction is allocated to the individual assets including identifiable intangible assets based on their relative fair values. Identifiable intangible assets with a finite useful life are amortized over the period that the asset is expected to contribute directly or indirectly to the future cash flows of the Company. Intangible assets with an indefinite life are not amortized, but are subject to annual impairment testing. All identifiable intangible assets are tested for recoverability whenever events or changes in circumstances indicate that a carrying amount may not be recoverable. Based on the results of our annual impairment testing, no impairment losses from intangible assets were recognized for the years ended December 31, 2013 and 2012.

Property and Equipment

Building and building improvements, furniture, leasehold improvements, computer equipment, and software are reported at cost less accumulated depreciation and amortization. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the assets. The Company estimates the useful life for computer equipment, computer software, automobile, furniture and other equipment is three years, and building and building improvements is 39 years.

The Company reviews its real estate assets used as its headquarters to evaluate the necessity of recording impairment losses for market changes due to declines in the fair value of the property. In evaluating potential impairment, management considers the current estimated fair value compared to the carrying value of the asset. The fair value of the real estate assets is estimated to be in excess of the carrying value.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company files a consolidated tax return with its subsidiaries. The Company follows the relevant provisions of GAAP concerning uncertainties in income taxes and through December 31, 2013, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

Assessments

Insurance related assessments are accrued in the period in which they have been incurred. A typical obligating event would be the issuance of an insurance policy or the occurrence of a claim. The Company is subject to a variety of assessments.

Concentration and Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and accounts receivable. Investments are diversified through many industries and geographic regions based upon KICO’s Investment Committee’s guidelines, which employs different investment strategies. The Company believes that no significant concentration of credit risk exists with respect to investments. As of December 31, 2013 and 2012, the Company had cash deposits in excess of the FDIC secured limit of $250,000 per account at financial institutions of approximately $3,046,000 and $4,162,000, respectively. Cash equivalents are not insured by the FDIC.

As of December 31, 2013 and 2012, the Company had deposits of cash equivalents as follows:

	December 31,		December 31,
	2013		2012

Collateralized bank repurchase agreement (1)	$	17,280,027	$	-
Money market fund		953,504		1,184,109
Total	$	18,233,531	$	1,184,109

(1) The Company has a security interest in certain of the bank's holdings of direct obligations of the United States or one or more agencies thereof. The collateral is held in a hold-in-custody arrangement with a third party who maintains physical possession of the collateral on behalf of the bank.

At December 31, 2013, the outstanding premiums receivable balance is generally diversified due to the number of insured comprising the Company’s customer base, which is largely concentrated in the area of New York City and adjacent Long Island. The Company also has receivables from its reinsurers. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Management’s policy is to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for doubtful accounts, if deemed necessary.

Direct premiums earned from lines of business that subject the Company to concentration risk for the years ended December 31, 2013 and 2012 are as follows:

	Years ended December 31,
	2013			2012
Personal Lines		70.0	%		68.4	%
Commercial Lines		16.0	%		16.2	%
Commercial Automobile		n/a			11.6	%
Total premiums earned subject to concentration		86.0	%		96.2	%
Premiums earned not subject to concentration		14.0	%		3.8	%
Total premiums earned		100.0	%		100.0	%

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions, which include the reserves for losses and loss adjustment expenses, are subject to considerable estimation error due to the inherent uncertainty in projecting ultimate claim amounts that will be reported and settled over a period of several years. In addition, estimates and assumptions associated with receivables under reinsurance contracts related to contingent ceding commission revenue require considerable judgment by management. On an on-going basis, management reevaluates its assumptions and the methods of calculating its estimates. Actual results may differ significantly from the estimates and assumptions used in preparing the consolidated financial statements.

Earnings per share

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The computation of diluted earnings per share excludes those with an exercise price in excess of the average market price of the Company’s common shares during the periods presented.

Advertising Costs

Advertising costs are charged to operations when the advertising first takes place. Included in other underwriting expenses in the accompanying consolidated statements of income and comprehensive income are advertising costs approximating $55,000 and $35,000 for the years ended December 31, 2013 and 2012, respectively.

Stock-based Compensation

The Company records compensation expense associated with stock options and other equity-based compensation in accordance with guidance established by GAAP. Stock-based compensation expense in 2013 and 2012 is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award less an estimate for anticipated forfeitures.

Comprehensive Income

Comprehensive income refers to revenue, expenses, gains and losses that under GAAP are included in comprehensive income but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders' equity, primarily from changes in unrealized gains/losses on available-for-sale securities.

Recent Accounting Pronouncements

Accounting guidance adopted in 2013

In February 2013, Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income ("ASU 2013-02"). ASU 2013-02 supersedes and replaces the presentation requirements for the reclassifications out of accumulated other comprehensive income. None of the other requirements of previously issued ASUs related to comprehensive income are affected by ASU 2013-02. The Company adopted ASU 2013-02 on January 1, 2013 and the implementation of the standard did not have a material impact on the Company's results of operations, financial position or liquidity.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350) Testing Indefinite Lived Intangible Assets for Impairment (“ASU 2012-02”). ASU 2012-02 updated guidance regarding the impairment test applicable to indefinite-lived intangible assets that is similar to the impairment guidance applicable to goodwill. Under the updated guidance, an entity may assess qualitative factors (such as changes in management, strategy, technology or customers) that may impact the fair value of the indefinite-lived intangible asset and lead to the determination that it is more likely than not that the fair value of the asset is less than its carrying value. If an entity determines that it is more likely than not that the fair value of the intangible asset is less than its carrying value, an impairment test must be performed. The impairment test requires an entity to calculate the estimated fair value of the indefinite-lived intangible asset. If the carrying value of the indefinite-lived intangible asset exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess. The Company adopted this guidance on January 1, 2013 and it did not have any effect on the Company's results of operations, financial position or liquidity.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on its consolidated financial position, results of operations and cash flows, or do not apply to its operations.

3. Investments

12 Months Ended

Dec. 31, 2013

3. Investments

Available-for-Sale Securities

The amortized cost and fair value of investments in available-for-sale fixed-maturity securities and equity securities as of December 31, 2013 and December 31, 2012 are summarized as follows:

	December 31, 2013
													Net
	Cost or		Gross		Gross Unrealized Losses								Unrealized
	Amortized		Unrealized		Less than 12			More than 12			Fair		Gains/
Category	Cost		Gains		Months			Months			Value		(Losses)

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$	7,000,222	$	162,616	$	(49,491	)	$	(45,140	)	$	7,068,207	$	67,985

Corporate and other bonds
Industrial and miscellaneous		21,079,680		569,139		(179,810	)		(101,194	)		21,367,815		288,135
Total fixed-maturity securities		28,079,902		731,755		(229,301	)		(146,334	)		28,436,022		356,120

Equity Securities:
Preferred stocks		2,899,301		2,503		(251,525	)		(62,551	)		2,587,728		(311,573	)
Common stocks		3,791,037		470,606		(38,785	)		(13,913	)		4,208,945		417,908
Total equity securities		6,690,338		473,109		(290,310	)		(76,464	)		6,796,673		106,335

Total	$	34,770,240	$	1,204,864	$	(519,611	)	$	(222,798	)	$	35,232,695	$	462,455

	December 31, 2012
													Net
	Cost or		Gross		Gross Unrealized Losses								Unrealized
	Amortized		Unrealized		Less than 12			More than 12			Fair		Gains/
Category	Cost		Gains		Months			Months			Value		(Losses)

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$	5,219,092	$	257,298	$	(1,574	)	$	-		$	5,474,816	$	255,724

Corporate and other bonds
Industrial and miscellaneous		19,628,005		1,123,392		(43,553	)		(722	)		20,707,122		1,079,117
Total fixed-maturity securities		24,847,097		1,380,690		(45,127	)		(722	)		26,181,938		1,334,841

Equity Securities:
Preferred stocks		1,475,965		19,512		(11,130	)		-			1,484,347		8,382
Common stocks		3,598,012		353,782		(145,899	)		-			3,805,895		207,883
Total equity securities		5,073,977		373,294		(157,029	)		-			5,290,242		216,265
Total	$	29,921,074	$	1,753,984	$	(202,156	)	$	(722	)	$	31,472,180	$	1,551,106

A summary of the amortized cost and fair value of the Company’s investments in available-for-sale fixed-maturity securities by contractual maturity as of December 31, 2013 and 2012 is shown below:

	December 31, 2013				December 31, 2012
	Amortized				Amortized
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	758,281	$	768,954	$	546,952	$	560,162
One to five years		9,025,386		9,466,973		9,031,248		9,569,943
Five to ten years		14,070,003		14,114,271		12,605,798		13,306,033
More than 10 years		4,226,232		4,085,824		2,663,099		2,745,800
Total	$	28,079,902	$	28,436,022	$	24,847,097	$	26,181,938

The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

Held-to-Maturity Securities

The amortized cost and fair value of investments in held to maturity fixed-maturity securities as of December 31, 2013 and 2012 are summarized as follows:

	December 31, 2013
												Net
	Cost or		Gross		Gross Unrealized Losses							Unrealized
	Amortized		Unrealized		Less than 12			More than 12		Fair		Gains/
Category	Cost		Gains		Months			Months		Value		(Losses)


U.S. Treasury securities	$	606,138	$	46,915	$	-		$	-	$	653,053	$	46,915

Political subdivisions of States,
Territories and Possessions		208,697		-		(25,359	)		-		183,338		(25,359	)

Corporate and other bonds
Industrial and miscellaneous		1,584,647		4,223		-			-		1,588,870		4,223

Total	$	2,399,482	$	51,138	$	(25,359	)	$	-	$	2,425,261	$	25,779

December 31, 2012

Net

Cost or

Gross

Gross Unrealized Losses

Unrealized

Amortized

Unrealized

Less than 12

More than 12

Fair

Gains/

Category

Cost

Gains

Months

Value

(Losses)

U.S. Treasury securities

606,281

172,745

779,026

172,745

U.S. Treasury securities included in held-to-maturity securities are held in trust pursuant to the New York State Department of Financial Services’ minimum funds requirement.

A summary of the amortized cost and fair value of the Company’s investments in held-to-maturity securities by contractual maturity as of December 31, 2013 and 2012 is shown below:

	December 31, 2013				December 31, 2012
	Amortized				Amortized
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	-	$	-	$	-	$	-
One to five years		-		-		-		-
Five to ten years		1,793,344		1,772,208		-		-
More than 10 years		606,138		653,053		606,281		779,026
Total	$	2,399,482	$	2,425,261	$	606,281	$	779,026

Investment Income

Major categories of the Company’s net investment income are summarized as follows:

	Years ended
	December 31,
	2013		2012
Income:
Fixed-maturity securities	$	1,018,857	$	951,895
Equity securities		390,818		268,034
Cash and cash equivalents		41		134
Other		16,507		23,857
Total		1,426,223		1,243,920
Expenses:
Investment expenses		256,172		228,764
Net investment income	$	1,170,051	$	1,015,156

Proceeds from the sale and maturity of fixed-maturity securities were $5,850,770 and $4,322,120 for the years ended December 31, 2013 and 2012, respectively.

Proceeds from the sale of equity securities were $4,868,193 and $1,726,345 for the years ended December 31, 2013 and 2012, respectively.

The Company’s net realized gains and losses on investments are summarized as follows:

	Year ended
	December 31,
	2013			2012

Fixed-maturity securities
Gross realized gains	$	237,886		$	233,299
Gross realized losses		(73,910	)		(52,933	)
		163,976			180,366

Equity securities
Gross realized gains		551,912			137,271
Gross realized losses		(140,096	)		(29,569	)
		411,816			107,702

Net realized gains	$	575,792		$	288,068

Impairment Review

Impairment of investment securities results in a charge to operations when a market decline below cost is deemed to be other-than-temporary. The Company regularly reviews its fixed-maturity securities and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. In evaluating potential impairment, management considers, among other criteria: (i) the current fair value compared to amortized cost or cost, as appropriate; (ii) the length of time the security’s fair value has been below amortized cost or cost; (iii) specific credit issues related to the issuer such as changes in credit rating, reduction or elimination of dividends or non-payment of scheduled interest payments; (iv) management’s intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in value to cost; and (v) current economic conditions. OTTI losses result in a permanent reduction of the cost basis of the underlying investment.

OTTI losses are recorded in the consolidated statements of income and comprehensive income as net realized losses on investments and result in a permanent reduction of the cost basis of the underlying investment. The determination of OTTI is a subjective process and different judgments and assumptions could affect the timing of loss realization. At December 31, 2013, there were 52 securities that account for the gross unrealized loss. The Company determined that none of the unrealized losses were deemed to be OTTI for its portfolio of fixed maturity investments and equity securities for the years ended December 31, 2013 and 2012. Significant factors influencing the Company’s determination that unrealized losses were temporary included the magnitude of the unrealized losses in relation to each security’s cost, the nature of the investment and management’s intent and ability to retain the investment for a period of time sufficient to allow for an anticipated recovery of fair value to the Company’s cost basis.

The Company held securities with unrealized losses representing declines that were considered temporary at December 31, 2013 and 2012 as follows:

	December 31, 2013
	Less than 12 months							12 months or more							Total
						No. of							No. of		Aggregate
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies	$	-	$	-			-	$	-	$	-			-	$	-	$	-

Political subdivisions of
States, Territories and
Possessions		2,015,437		(49,491	)		6		415,866		(45,140	)		2		2,431,303		(94,631	)

Corporate and other
bonds industrial and
miscellaneous		6,447,605		(179,810	)		24		1,430,377		(101,194	)		5		7,877,982		(281,004	)

Total fixed-maturity
securities	$	8,463,042	$	(229,301	)		30	$	1,846,243	$	(146,334	)		7	$	10,309,285	$	(375,635	)

Equity Securities:
Preferred stocks	$	1,835,958	$	(251,525	)		8	$	444,100	$	(62,551	)		2	$	2,280,058	$	(314,076	)
Common stocks		879,525		(38,785	)		4		145,625		(13,913	)		1		1,025,150		(52,698	)

Total equity securities	$	2,715,483	$	(290,310	)		12	$	589,725	$	(76,464	)		3	$	3,305,208	$	(366,774	)
Total	$	11,178,525	$	(519,611	)		42	$	2,435,968	$	(222,798	)		10	$	13,614,493	$	(742,409	)

	December 31, 2012
	Less than 12 months							12 months or more							Total
						No. of							No. of		Aggregate
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
Political subdivisions of
States, Territories and
Possessions	$	202,798	$	(1,574	)		1	$	-	$	-			-	$	202,798	$	(1,574	)

Corporate and other
bonds industrial and
miscellaneous		4,025,551		(43,553	)		19		128,125		(722	)		1		4,153,676		(44,275	)

Total fixed-maturity
securities	$	4,228,349	$	(45,127	)		20	$	128,125	$	(722	)		1	$	4,356,474	$	(45,849	)

Equity Securities:
Preferred stocks	$	387,925	$	(11,130	)		3	$	-	$	-			-	$	387,925	$	(11,130	)
Common stocks		1,536,860		(145,899	)		9		-		-			-		1,536,860		(145,899	)

Total equity securities	$	1,924,785	$	(157,029	)		12	$	-	$	-			-	$	1,924,785	$	(157,029	)
Total	$	6,153,134	$	(202,156	)		32	$	128,125	$	(722	)		1	$	6,281,259	$	(202,878	)

4. Fair Value Measurements

12 Months Ended

Dec. 31, 2013

4. Fair Value Measurements

The Company follows GAAP guidance regarding fair value measurements. The valuation technique used to fair value the financial instruments is the market approach which uses prices and other relevant information generated by market transactions involving identical or comparable assets.

This guidance establishes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded, including during period of market disruption, and the reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The levels of the hierarchy and those investments included in each are as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets. Included are those investments traded on an active exchange, such as the NASDAQ Global Select Market, U.S. Treasury securities and obligations of U.S. government agencies, together with corporate debt securities that are generally investment grade.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Municipal and corporate bonds that are traded in less active markets are classified as Level 2. These securities are valued using market price quotations for recently executed transactions.

Level 3—Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement. Material assumptions and factors considered in pricing investment securities and other assets may include appraisals, projected cash flows, market clearing activity or liquidity circumstances in the security or similar securities that may have occurred since the prior pricing period.

The availability of observable inputs varies and is affected by a wide variety of factors. When the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. The degree of judgment exercised by management in determining fair value is greatest for investments categorized as Level 3. For investments in this category, the Company considers prices and inputs that are current as of the measurement date. In periods of market dislocation, as characterized by current market conditions, the observability of prices and inputs may be reduced for many instruments. This condition could cause a security to be reclassified between levels.

The Company’s investments are allocated among pricing input levels at December 31, 2013 and 2012 as follows:

	December 31, 2013
($ in thousands)	Level 1		Level 2		Level 3		Total

Fixed-maturity investments available for sale
Political subdivisions of
States, Territories and
Possessions	$	-	$	7,068	$	-	$	7,068

Corporate and other
bonds industrial and
miscellaneous		20,731		637		-		21,368
Total fixed maturities		20,731		7,705		-		28,436
Equity investments		6,797		-		-		6,797
Total investments	$	27,528	$	7,705	$	-	$	35,233

	December 31, 2012
($ in thousands)	Level 1		Level 2		Level 3		Total

Fixed-maturity investments available for sale
Political subdivisions of
States, Territories and
Possessions	$	-	$	5,475	$	-	$	5,475

Corporate and other
bonds industrial and
miscellaneous		11,600		9,107		-		20,707
Total fixed maturities		11,600		14,582		-		26,182
Equity investments		5,290		-		-		5,290
Total investments	$	16,890	$	14,582	$	-	$	31,472

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

5. Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2013

5. Fair Value of Financial Instruments

GAAP requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value. The Company uses the following methods and assumptions in estimating its fair value disclosures for financial instruments:

Equity securities and fixed income securities available-for-sale: Fair value disclosures for these investments are included in “Note 3 - Investments.”

Cash and cash equivalents: The carrying values of cash and cash equivalents approximate their fair values because of the short-term nature of these instruments.

Premiums receivable, reinsurance receivables: The carrying values reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values due to the short term nature of the assets.

Real Estate: The fair value of the land and building included in property and equipment, which is used in the Company’s operations, approximates the carrying value. The fair value was based on an appraisal prepared using the sales comparison approach, and accordingly the real estate is a Level 3 asset under the fair value hierarchy.

Reinsurance balances payable: The carrying value reported in the consolidated balance sheets for these financial instruments approximates fair value.

Notes payable (including related parties): The Company estimates that the carrying amount of notes payable at December 31, 2012 approximates fair value because of the negotiated interest rates, which are based on the terms of the loans, risk and guaranty.

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value

Fixed-maturity investments held to maturity	$	2,399,482	$	2,425,261	$	606,281	$	779,026
Cash and cash equivalents		19,922,506		19,922,506		2,240,012		2,240,012
Premiums receivable		7,590,074		7,590,074		7,766,825		7,766,825
Receivables- reinsurance contracts		974,989		974,989		-		-
Reinsurance receivables		38,535,814		38,535,814		38,902,782		38,902,782
Real estate, net of accumulated depreciation		1,777,942		1,816,122		1,696,924		1,720,000
Reinsurance balances payable		2,566,729		2,566,729		1,820,527		1,820,527
Advance payments from catastrophe reinsurers		-		-		7,358,391		7,358,391
Notes payable (including related parties)		-		-		1,197,000		1,197,000

6. Intangibles

12 Months Ended

Dec. 31, 2013

6. Intangibles

Intangible assets consist of finite and indefinite life assets. Finite life intangible assets include customer and producer relationships and assembled workforce. Insurance company license is considered indefinite life intangible assets subject to annual impairment testing. The weighted average amortization period of identified intangible assets of finite useful life is approximately 5.0 years as of December 31, 2013.

The components of intangible assets and their useful lives, accumulated amortization, and net carrying value as of December 31, 2013 and 2012 are summarized as follows:

			December 31, 2013						December 31, 2012
	Useful		Gross				Net		Gross				Net
	Life		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(in yrs)		Value		Amortization		Amount		Value		Amortization		Amount
Insurance license		-	$	500,000	$	-	$	500,000	$	500,000	$	-	$	500,000
Customer relationships		10		3,400,000		1,530,000		1,870,000		3,400,000		1,190,000		2,210,000
Assembled workforce		7		950,000		610,756		339,244		950,000		475,042		474,958
Total			$	4,850,000	$	2,140,756	$	2,709,244	$	4,850,000	$	1,665,042	$	3,184,958

Intangible asset impairment testing and amortization

The Company performs an analysis annually as of December 31 to identify potential impairment of intangible assets with both definite and indefinite lives and measures the amount of any impairment loss that may need to be recognized. Intangible asset impairment testing requires an evaluation of the estimated fair value of each identified intangible asset to its carrying value. An impairment charge would be recorded if the estimated fair value is less than the carrying amount of the intangible asset. No impairments have been identified in the years ended December 31, 2013 and 2012.

The Company recorded amortization expense related to intangibles of $475,714 for each of the years ended December 31, 2013 and 2012. The estimated aggregate amortization expense for the remaining life of finite life intangibles is as follows:

2014	$	475,714
2015		475,714
2016		407,816
2017		340,000
2018		340,000
Thereafter		170,000
	$	2,209,244

7. Reinsurance

12 Months Ended

Dec. 31, 2013

7. Reinsurance

The Company’s reinsurance treaties for both its Personal Lines business, which primarily consists of homeowners’ policies, and Commercial Lines business expired on June 30, 2013. Effective July 1, 2013, the Company entered into new treaties with different terms. The treaties are annual, except for personal lines described below, and provide for the following material terms as of July 1, 2013:

Personal Lines

The personal lines treaty was renewed with a two year term expiring on June 30, 2015. Personal lines business, which includes homeowners, dwelling fire and canine legal liability insurance, is reinsured under a 75% quota share treaty, which provides coverage with respect to losses of up to $1,200,000 per occurrence. An excess of loss contract provides 100% of coverage for the next $1,700,000 of losses for a total reinsurance coverage of $2,600,000 with respect to losses of up to $2,900,000 per occurrence. Effective as of July 1, 2014, the Company has the option to increase the quota share percentage to a maximum of 85% or decrease the quota share percentage to a minimum of 55% by giving no less than 30 days advance notice. See “Catastrophe Reinsurance” below for a discussion of the Company’s reinsurance coverage with respect to its Personal Lines business in the event of a catastrophe.

Personal umbrella policies are reinsured under a 90% quota share treaty limiting the Company to a maximum of $100,000 per occurrence for the first $1,000,000 of coverage. The second $1,000,000 of coverage is 100% reinsured.

Commercial Lines

General liability commercial policies written by the Company, except for commercial auto policies, are reinsured under a 25% quota share treaty, which provides coverage with respect to losses of up to $400,000 per occurrence. Excess of loss contracts provide 100% of coverage for the next $2,500,000 of losses for a total reinsurance coverage of $2,600,000 with respect to losses of up to $2,900,000 per occurrence.

Commercial Auto

Commercial auto policies are covered by an excess of loss reinsurance contract, which provides $1,700,000 of coverage in excess of $300,000.

Catastrophe Reinsurance

The Company has catastrophe reinsurance coverage with regard to losses of up to $90,000,000. The initial $4,000,000 of losses in a catastrophe are subject to a 75% quota share treaty, such that the Company retains $1,000,000 per catastrophe occurrence With respect to any additional catastrophe losses of up to $86,000,000 per catastrophe, the Company is 100% reinsured under its catastrophe reinsurance program. Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.

The single maximum risks to which the Company is subject under these treaties per occurrence are as follows:

Treaty	Extent of Loss	Risk Retained
Personal Lines	Initial $1,200,000	$300,000
	$1,200,000 - $2,900,000	None(1)
	Over $2,900,000	100%

Personal Umbrella	Initial $1,000,000	$100,000
	$1,000,000 - $2,000,000	None(1)
	Over $2,000,000	100%

Commercial Lines	Initial $400,000	$300,000
	$400,000 - $2,900,000	None(1)
	Over $2,900,000	100%

Commercial Auto	Initial $300,000	$300,000
	$300,000 - $2,000,000	None(1)
	Over $2,000,000	100%

Catastrophe (2)	Initial $4,000,000	$1,000,000
	$4,000,000 - $90,000,000	None
	Over $90,000,000	100%

(1)

Covered by excess of loss treaties.

(2)

Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.

The reinsurance treaties, which expired on June 30, 2013, provided for the following material terms:

Personal Lines

Personal Lines business, which includes homeowners, dwelling fire and canine legal liability insurance, was reinsured under a 75% quota share treaty which provided coverage with respect to losses of up to $1,000,000 per occurrence. An excess of loss contract provided 100% of coverage for the next $1,900,000 of losses for a total reinsurance coverage of $2,650,000 with respect to losses of up to $2,900,000 per occurrence. See “Catastrophe Reinsurance” below for a discussion of the Company’s reinsurance coverage with respect to its Personal Lines business in the event of a catastrophe.

Personal umbrella policies were reinsured under a 90% quota share treaty limiting the Company to a maximum of $100,000 per occurrence for the first $1,000,000 of coverage. The second $1,000,000 of coverage was 100% reinsured.

Commercial Lines

General liability commercial policies written by the Company, except for commercial auto policies, were reinsured under a 40% quota share treaty, which provided coverage with respect to losses of up to $500,000 per occurrence. Excess of loss contracts provided 100% of coverage for the next $2,400,000 of losses for a total reinsurance coverage of $2,600,000 with respect to losses of up to $2,900,000 per occurrence.

Commercial Auto

Commercial auto policies were covered by an excess of loss reinsurance contract, which provided $1,750,000 of coverage in excess of $250,000.

Catastrophe Reinsurance

The Company had catastrophe reinsurance coverage with regard to losses of up to $73,000,000. The initial $3,000,000 of losses in a catastrophe were subject to a 75% quota share treaty, such that the Company retained $750,000 per catastrophe occurrence With respect to any additional catastrophe losses of up to $70,000,000, the Company was 100% reinsured under its catastrophe reinsurance program.

The Company’s reinsurance program is structured to enable the Company to significantly grow its premium volume while maintaining regulatory capital and other financial ratios generally within or below the expected ranges used for regulatory oversight purposes. The reinsurance program also provides income as a result of ceding commissions earned pursuant to the quota share reinsurance contracts. The Company’s participation in reinsurance arrangements does not relieve the Company from its obligations to policyholders.

The Company’s new reinsurance programs on July 1, 2013 and 2012 resulted in adjustments to ceded written premiums, net written premiums and provisional ceding commissions earned. These adjustments were the result of the annual treaty changes and are not recurring on a quarterly basis:

Personal Lines Quota Share

On July 1, 2013, the Company’s provisional ceding commissions rate increased from 35% to 40%, and, as a result, the reinsurers were obligated to pay to the Company 5% of the ceded unearned premiums as of June 30, 2013. The additional provisional ceding commissions received will increase provisional ceding commission revenue as they are earned.

Commercial Lines Quota Share

On July 1, 2013, the change from a 40% quota share to a 25% quota share resulted in a decrease to ceded written premiums, as the quota share carriers were obligated to return to the Company 37.50% of the previously ceded unearned premiums. On July 1, 2012, the change from a 60% quota share to a 40% quota share resulted in a decrease to ceded written premiums, as the quota share carriers were obligated to return to the Company 33.33% of the previously ceded unearned premiums. The returned unearned premiums are then earned over the remaining life of the policies to which they relate. On July 1, 2013 and 2012, along with the increase to net written premiums and net earned premiums, the Company was obligated to return to the reinsurers 37.50% and 33.33%, respectively, of the unearned provisional ceding commission previously received, which will reduce future ceding commission revenues as they are earned.

The Company received advance payments from catastrophe reinsurers related to Superstorm Sandy. As of December 31, 2013 and 2012, the balance of advance payments from catastrophe reinsurers which were applied against unpaid losses when paid was $-0- and $7,358,391, respectively, and are included in “Advance payments from catastrophe reinsurers” in the consolidated balance sheets.

Approximate reinsurance recoverables on unpaid and paid losses by reinsurer are as follows:

	Unpaid		Paid
($ in thousands)	Losses		Losses		Total		Security
December 31, 2013
Maiden Reinsurace Company	$	6,929	$	732	$	7,661	$	13,868	(1	)
SCOR Reinsurance Company		3,318		294		3,612		-
Swiss Reinsuarnace America Corporation		2,523		454		2,977		-
Motors Insurance Corporation		1,536		48		1,584		792	(1	)
Sirius American Insurance Company		1,410		44		1,454		-
Allied World Assurance Company		665		39		704		-
Others		983		246		1,229		135	(2	)
Total	$	17,364	$	1,857	$	19,221	$	14,795

December 31, 2012
Maiden Reinsurace Company	$	8,173	$	2,989	$	11,162	$	6,503	(1	)
SCOR Reinsurance Company		4,437		1,495		5,932		-
Motors Insurance Corporation		1,550		49		1,599		1,214	(1	)
Sirius American Insurance Company		1,406		18		1,424		-
Swiss Reinsurance America Corporation		1,705		756		2,461		-
Allied World Assurance Company		808		372		1,180		-
Others		341		113		454		91	(2	)
Total	$	18,420	$	5,792	$	24,212	$	7,808

(1) Secured pursuant to collateralized trust agreements.
(2) Guaranteed by an irrevocable letter of credit.

Assets held in the two trusts referred to in footnote (1) above are not included in the Company’s invested assets and investment income earned on these assets is credited to the two reinsurers respectively. In addition to reinsurance recoverables on unpaid and paid losses, reinsurance receivables as of December 31, 2013 and 2012 include unearned ceded premiums of $18,400,338 and $14,690,683, respectively.

Ceding Commission Revenue

The Company earns ceding commission revenue under its quota share reinsurance agreements based on: (i) a fixed provisional commission rate at which provisional ceding commissions are earned, and (ii) a sliding scale of commission rates and ultimate treaty year loss ratios on the policies reinsured under each of these agreements based upon which contingent ceding commissions are earned. The sliding scale includes minimum and maximum commission rates in relation to specified ultimate loss ratios. The commission rate and contingent ceding commissions earned increases when the estimated ultimate loss ratio decreases and, conversely, the commission rate and contingent ceding commissions earned decreases when the estimated ultimate loss ratio increases.

As of December 31, 2013, the Company’s estimated ultimate loss ratios are attributable to contracts for the July 1, 2012/June 30, 2013 treaty year (“2012/2013 Treaties”) and the July 1, 2013/June 30, 2014 treaty year (“2013/2014 Treaties”). As of December 31, 2012, the Company’s estimated ultimate loss ratios are attributable to contracts for the July 1, 2011/June 30, 2012 treaty year (“2011/2012 Treaties”) and the 2012/2013 Treaties.

Treaties in effect as of December 31, 2013

The Company’s estimated ultimate loss ratios attributable to the 2012/2013 Treaties are greater than the contractual ultimate loss ratios at which the provisional ceding commissions are earned. Accordingly, for the year ended December 31, 2013, the Company has recorded negative contingent ceding commissions earned with respect to the 2012/2013 Treaties.

The Company’s estimated ultimate loss ratios attributable to contracts for the 2013/2014 Treaties are lower than the contractual ultimate loss ratios at which the provisional ceding commissions are earned. Accordingly, for the year ended December 31, 2013, the Company has recorded contingent ceding commissions earned with respect to the 2013/2014 Treaties.

Treaties in effect as of December 31, 2012

The Company’s estimated ultimate loss ratios attributable to contracts for the 2011/2012 Treaties are lower than the contractual ultimate loss ratios at which the provisional ceding commissions are earned. Accordingly, for the year ended December 31, 2012, the Company has recorded contingent ceding commissions earned with respect to the 2011/2012 Treaties.

The Company’s estimated ultimate loss ratios attributable to the 2012/2013 Treaties are greater than the contractual ultimate loss ratios at which the provisional ceding commissions are earned. Accordingly, for the year ended December 31, 2012, the Company has recorded negative contingent ceding commissions earned with respect to the 2012/2013 Treaties.

In addition to the treaties that were in effect as of December 31, 2013 and 2012, the estimated ultimate loss ratios from prior years’ treaties are subject to change as loss reserves from those periods increase or decrease, resulting in an increase or decrease in the commission rate and contingent ceding commissions earned.

Ceding commissions earned consists of the following:

	Years ended
	December 31,
	2013		2012

Provisional ceding commissions earned	$	11,007,342	$	8,516,240
Contingent ceding commissions earned		665,761		1,173,915
	$	11,673,103	$	9,690,155

Provisional ceding commissions are settled monthly. Balances due from reinsurers for contingent ceding commissions on quota share treaties are settled annually based on the loss ratio of each treaty year that ends on June 30. As discussed above, for the years ended December 31, 2013 and 2012, respectively, the Company has recorded negative contingent ceding commissions earned with respect to the 2012/2013 Treaties, which results in ceding commissions payable to reinsurers. Net contingent ceding commissions payable to reinsurers as of December 31, 2013 and 2012 was $-0- and $807,415, respectively, and is included in “Reinsurance balances payable” in the consolidated balance sheets.

The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6816-158387

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 605
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27374-158547

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03.6,13)
-URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6811-158387

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 605
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27261-158547

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 605
-Section 55
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27795-158548

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 605
-Section 55
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27703-158548

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6485557&loc=d3e21549-158491

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 6
-Article 7

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 13
-Article 7

8. Deferred Acquisition Costs and Deferred Ceding Commission Revenue

12 Months Ended

Dec. 31, 2013

8. Deferred Acquisition Costs and Deferred Ceding Commission Revenue

Policy acquisition costs incurred and policy-related ceding commission revenue are deferred, and amortized to income on property and casualty insurance business as follows:

	Year ended
	December 31,
	2013			2012

Net deferred policy acquisition costs net of ceding
commission revenue, beginning of year	$	692,848		$	553,374

Cost incurred and deferred:
Commissions and brokerage		10,500,068			8,087,355
Other underwriting and policy acquisition costs		3,193,910			3,012,611
Ceding commission revenue		(13,114,478	)		(9,410,871	)
Net deferred policy acquisition costs		579,500			1,689,095
Amortization		(1,396,251	)		(1,549,621	)
		(816,751	)		139,474

Net deferred policy acquisition costs net of ceding
commission revenue, end of year	$	(123,902	)	$	692,848

Ending balances for deferred policy acquisition costs and deferred ceding commission revenue as of December 31, 2013 and 2012 follows:

	December 31,
	2013			2012

Deferred policy acquisition costs	$	6,860,263		$	5,569,878
Deferred ceding commission revenue		(6,984,166	)		(4,877,030	)
Balance at end of period	$	(123,903	)	$	692,848

9. Property and Equipment

12 Months Ended

Dec. 31, 2013

9. Property and Equipment

The components of property and equipment are summarized as follows:

			Accumulated
	Cost		Depreciation			Net

December 31, 2013
Building	$	1,760,435	$	(195,363	)	$	1,565,072
Land		153,097		-			153,097
Furniture		170,505		(79,885	)		90,620
Computer equipment and software		533,966		(307,382	)		226,584
Automobile		81,394		(78,012	)		3,382
Total	$	2,699,397	$	(660,642	)	$	2,038,755

December 31, 2012
Building	$	1,648,838	$	(152,976	)	$	1,495,862
Land		153,097		-			153,097
Furniture		138,115		(66,570	)		71,545
Computer equipment and software		336,851		(219,447	)		117,404
Automobile		81,394		(50,880	)		30,514
Total	$	2,358,295	$	(489,873	)	$	1,868,422

Depreciation expense for the years ended December 31, 2013 and 2012 was $170,769 and $120,633, respectively.

10. Property and Casualty Insurance Activity

12 Months Ended

Dec. 31, 2013

10. Property and Casualty Insurance Activity

Premiums written, ceded and earned are as follows:

	Direct			Assumed			Ceded			Net

Year ended December 31, 2013
Premiums written	$	60,449,077		$	45,746		$	(35,656,060	)	$	24,838,763
Change in unearned premiums		(6,341,750	)		18,499			3,709,655			(2,613,596	)
Premiums earned	$	54,107,327		$	64,245		$	(31,946,405	)	$	22,225,167

Year ended December 31, 2012
Premiums written	$	49,251,630		$	23,967		$	(29,715,971	)	$	19,559,626
Change in unearned premiums		(4,724,193	)		(5,010	)		2,386,188			(2,343,015	)
Premiums earned	$	44,527,437		$	18,957		$	(27,329,783	)	$	17,216,611

Premium receipts in advance of the policy effective date are recorded as advance premiums. The balance of advance premiums as of December 31, 2013 and 2012 was approximately $776,000 and $611,000, respectively.

The components of the liability for loss and LAE expenses and related reinsurance receivables as of December 31, 2013 and 2012 are as follows:

	Gross		Reinsurance
	Liability		Receivables
December 31, 2013
Case-basis reserves	$	22,489,240	$	12,078,399
Loss adjustment expenses		4,200,675		1,226,763
IBNR reserves		7,813,314		4,058,813
Recoverable on unpaid losses				17,363,975
Recoverable on paid losses		-		1,796,512
Total loss and loss adjustment expenses	$	34,503,229		19,160,487
Unearned premiums				18,400,338
Total reinsurance receivables			$	37,560,825

December 31, 2012
Case-basis reserves	$	21,190,141	$	13,284,613
Loss adjustment expenses		2,502,169		1,064,420
IBNR reserves		6,793,222		4,070,661
Recoverable on unpaid losses				18,419,694
Recoverable on paid losses		-		5,792,405
Total loss and loss adjustment expenses	$	30,485,532		24,212,099
Unearned premiums				14,690,683
Total reinsurance receivables			$	38,902,782

The following table provides a reconciliation of the beginning and ending balances for unpaid losses and loss adjustment expenses (“LAE”):

	Years ended
	December 31,
	2013			2012

Balance at beginning of period	$	30,485,532		$	18,480,717
Less reinsurance recoverables		(18,419,694	)		(9,960,334	)
Net balance, beginning of period		12,065,838			8,520,383

Incurred related to:
Current year		11,765,420			10,460,000
Prior years		1,821,113			774,713
Total incurred		13,586,533			11,234,713

Paid related to:
Current year		3,709,495			4,419,000
Prior years		4,803,622			3,270,258
Total paid		8,513,117			7,689,258

Net balance at end of period		17,139,254			12,065,838
Add reinsurance recoverables		17,363,975			18,419,694
Balance at end of period	$	34,503,229		$	30,485,532

Incurred losses and LAE are net of reinsurance recoveries under reinsurance contracts of $17,167,407 and $21,396,768 for the years ended December 31, 2013 and 2012, respectively.

Prior year incurred loss and LAE development is based upon numerous estimates by line of business and accident year. The Company’s management continually monitors claims activity to assess the appropriateness of carried case and IBNR reserves, giving consideration to Company and industry trends.

Loss and loss adjustment expense reserves

The reserving process for loss adjustment expense reserves provides for the Company’s best estimate at a particular point in time of the ultimate unpaid cost of all losses and loss adjustment expenses incurred, including settlement and administration of losses, and is based on facts and circumstances then known and including losses that have been incurred but not yet been reported. The process includes using actuarial methodologies to assist in establishing these estimates, judgments relative to estimates of future claims severity and frequency, the length of time before losses will develop to their ultimate level and the possible changes in the law and other external factors that are often beyond the Company’s control. Several actuarial reserving methodologies are used to estimate required loss reserves. The process produces carried reserves set by management based upon the actuaries’ best estimate and is the result of numerous best estimates made by line of business, accident year, and loss and loss adjustment expense. The amount of loss and loss adjustment expense reserves for reported claims (“case reserve”) is based primarily upon a case-by-case evaluation of coverage, liability, injury severity, and any other information considered pertinent to estimating the exposure presented by the claim. The amounts of loss and loss adjustment expense reserves for unreported claims and development on known claims (incurred but not reported reserves) are determined using historical information by line of insurance as adjusted to current conditions. Since this process produces loss reserves set by management based upon the actuaries’ best estimate, there is no explicit or implicit provision for uncertainty in the carried loss reserves.

Due to the inherent uncertainty associated with the reserving process, the ultimate liability may differ, perhaps substantially, from the original estimate. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year’s results. Reserves are closely monitored and are recomputed periodically using the most recent information on reported claims and a variety of statistical techniques. On at least a quarterly basis, the Company reviews by line of business existing reserves, new claims, changes to existing case reserves and paid losses with respect to the current and prior years. Several methods are used, varying by product line and accident year, in order to select the estimated year-end loss reserves. These methods include the following:

Paid Loss Development – historical patterns of paid loss development are used to project future paid loss emergence in order to estimate required reserves.

Incurred Loss Development – historical patterns of incurred loss development, reflecting both paid losses and changes in case reserves, are used to project future incurred loss emergence in order to estimate required reserves.

Paid Bornhuetter-Ferguson (“BF”) – an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been paid, based on historical paid loss development patterns. The estimate of required reserves assumes that the remaining unpaid portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of paid losses exists at the early stages of the claims development process.

Incurred Bornhuetter-Ferguson (“BF”) - an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been reported, based on historical incurred loss development patterns. The estimate of required reserves assumes that the remaining unreported portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of reported losses exists at the early stages of the claims development process.

Management’s best estimate of required reserves is generally based on an average of the methods above, with appropriate weighting of the various methods based on the line of business and accident year being projected. In some cases, additional methods or historical data from industry sources are employed to supplement the projections derived from the methods listed above.

Two key assumptions that materially impact the estimate of loss reserves are the loss ratio estimate for the current accident year used in the BF methods described above, and the loss development factor selections used in the loss development methods described above. The loss ratio estimates used in the BF methods are selected after reviewing historical accident year loss ratios adjusted for rate changes, trend, and mix of business.

The Company is not aware of any claims trends that have emerged or that would cause future adverse development that have not already been considered in existing case reserves and in its current loss development factors.

In New York State, lawsuits for negligence are subject to certain limitations and must be commenced within three years from the date of the accident or are otherwise barred. Accordingly, the Company’s exposure to ‘pure’ IBNR for accident years 2010 and prior is limited although there remains the possibility of adverse development on reported claims (‘case development’ IBNR).

The Company was previously a one-third participant in a pool arrangement. Effective November 1, 1997, the Company withdrew from its participation in the pool arrangement. Accordingly, the Company will only be participating in losses and allocated loss adjustment expenses that occurred prior to that date.

11. Long-Term Debt

12 Months Ended

Dec. 31, 2013

11. Long-Term Debt

Long-term debt and capital lease obligations consist of:

	December 31, 2013						December 31, 2012
			Less						Less
	Total		Current		Long-Term		Total		Current		Long-Term
	Debt		Maturities		Debt		Debt		Maturities		Debt
Notes payable	$	-	$	-	$	-	$	747,000	$	-	$	747,000
Bank line of credit		-		-		-		450,000		450,000		-
	$	-	$	-	$	-	$	1,197,000	$	450,000	$	747,000

Notes Payable

From June 2009 through March 2010, the Company borrowed $1,450,000 (including $785,000 from related parties as disclosed below) and issued promissory notes in such aggregate principal amount (the “2009/2010 Notes”). The 2009/2010 Notes provided for interest at the rate of 12.625% per annum through the maturity date of July 10, 2011. During the quarter the ended June 30, 2011, the Company prepaid $703,000 (including $407,000 to related parties) of the principal amount of the 2009/2010 Notes. In June 2011, the remaining note holders agreed to extend the maturity date for a period of three years from July 10, 2011 to July 10, 2014, and effective July 11, 2011, reduce the interest rate from 12.625% to 9.5% per annum. The reduction in the interest rate and the extension of the maturity date did not significantly change the fair value of the 2009/2010 Notes. The remaining 2009/2010 Notes, as extended, were prepaid on December 13, 2013 without premium or penalty. Interest expense on the 2009/2010 Notes for years ended December 31 2013 and 2012 was approximately $69,000 and $71,000, respectively.

Related party balances as of December 31, 2013 and 2012, and principal prepayments as described above for the year ended December 31, 2013 under the 2009/2010 Notes are as follows:

			Less
			Principal
	Balance		Prepayments		Balance
	December 31,		Year Ended		December 31,
	2012		December 31, 2013		2013

Barry Goldstein IRA (Mr. Goldstein is Chairman of the Board, President
and Chief Executive Officer, and principal stockholder of the Company)	$	90,000	$	90,000	$	—
Jay Haft, a director of the Company		30,000		30,000		—
A member of the family of Michael Feinsod, a director of the Company		60,000		60,000		—
Mr. Yedid and members of his family		156,000		156,000		—
A member of the family of Floyd Tupper, a director of KICO		42,000		42,000		—
Total related party transactions	$	378,000	$	378,000	$	—

Interest expense on related party borrowings for the years ended December 31, 2013 and 2012 was approximately $35,000 and $36,000, respectively.

Bank Line of Credit

On December 27, 2011, Kingstone executed a Promissory Note pursuant to a line of credit (together, the “Trustco Agreement”) with Trustco Bank (“Lender”). Under the Trustco Agreement, Kingstone may receive advances from Lender not to exceed an unpaid principal balance of $500,000 (the “Credit Limit”). On January 25, 2013, the Credit Limit was increased to $600,000. Advances extended under the Trustco Agreement will bear interest at a floating rate based on the Lender’s prime rate, which was 3.75% at December 31, 2013.

Interest only payments are due monthly. The principal balance is payable on demand, and must be reduced to zero for a minimum of thirty consecutive days during each year of the term of the Trustco Agreement. The line of credit is subject to annual renewal at the discretion of the Lender. Lender may set off any depository accounts maintained by Kingstone that are held by Lender. Payment of amounts due pursuant to the Trustco Agreement is secured by all of Kingstone’s cash and deposit accounts, receivables, inventory and fixed assets, and is guaranteed by Kingstone’s subsidiary, Payments, Inc.

The line of credit is being used for general corporate purposes.

The weighted average interest rate on the amount outstanding during the years ended December 31, 2013 and 2012 was 3.75%. There are no other fees in connection with this credit line. Interest expense on the line of credit for years ended December 31 2013 and 2012 was approximately $7,000 and $10,000, respectively.

12. Stockholders' Equity

12 Months Ended

Dec. 31, 2013

12. Stockholders' Equity

Dividend Declared

Dividends declared and paid on Common Stock were $612,401 and $533,763 for the years ended December 31, 2013 and 2012, respectively. The Company’s Board of Directors approved a quarterly dividend on February 20, 2014 of $.04 per share payable in cash on March 14, 2014 to stockholders of record as of March 6, 2014 (See note 19).

Preferred Stock

On August 13, 2013, the Company’s stockholders approved an amendment to the Certificate of Incorporation of the Company to increase the number of authorized shares of Preferred Stock from 1,000,000 to 2,500,000. The Board of Directors has the authority to issue shares of Preferred Stock from time to time in a series and to fix, before the issuance of each series, the number of shares in each series and the designation, liquidation preferences, conversion privileges, rights and limitations of each series. There was no preferred stock issued as of December 31, 2013 and 2012.

Common Stock

On August 13, 2013, the Company’s stockholders approved an amendment to the Certificate of Incorporation of the Company to increase the number of authorized shares of Common Stock from 10,000,000 to 20,000,000.

On December 13, 2013, the Company closed on an underwritten public offering of 3,450,000 shares of its Common Stock, including 450,000 shares issued pursuant to the underwriter’s 30-day over-allotment option, at a public offering price of $5.95 per share. The aggregate net proceeds to the Company was approximately $18,804,000, after deducting underwriting discounts and commissions and other offering expenses of $1,723,000.

The Company used the net proceeds of the offering to contribute capital to its insurance subsidiary, KICO, to support growth, including possible product expansion, and to repay indebtedness. A registration statement relating to these securities was filed with the SEC and became effective on December 9, 2013.

Other Equity Compensation

For the years ended December 31, 2013 and 2012, there was no other equity compensation.

Stock Options

Pursuant to the Company’s 2005 Equity Participation Plan (the “2005 Plan”), which provides for the issuance of incentive stock options, non-statutory stock options and restricted stock, a maximum of 550,000 shares of Common Stock were permitted to be issued pursuant to options granted and restricted stock issued. On August 13, 2013, the Company’s stockholders approved an increase in the number of shares authorized to be issued pursuant to the 2005 Plan from 550,000 to 700,000. Incentive stock options granted under the 2005 Plan expire no later than ten years from date of grant (except no later than five years for a grant to a 10% stockholder). The Board of Directors or the Stock Option Committee determines the expiration date with respect to non-statutory options, and the vesting provisions for restricted stock, granted under the 2005 Plan.

The results of operations for the years ended December 31, 2013 and 2012 include stock-based stock option compensation expense totaling approximately $60,000 and $48,000, respectively. Stock-based compensation expense related to stock options is net of estimated forfeitures of 21% for the years ended December 31, 2013 and 2012. Such amounts have been included in the consolidated statements of income and comprehensive income within other operating expenses.

Stock-based compensation expense in 2013 and 2012 is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award. The weighted average estimated fair value of stock options granted during the years ended December 31, 2013 and 2012 were $1.43 and $2.47 per share respectively. The fair value of options at the grant date was estimated using the Black-Scholes option-pricing method. The following weighted average assumptions were used for grants during the years ended December 31, 2013 and 2012:

	Years ended
	December 31,
	2013			2012
Dividend Yield		2.42% - 3.14	%		0.00	%
Volatility		45.73% - 46.71	%		50.89% - 89.27	%
Risk-Free Interest Rate		0.61% - 0.79	%		0.61	%
Expected Life	3.25 years			5 years

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because our stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our stock options.

A summary of option activity under the Company’s 2005 Plan for the year ended December 31, 2013 is as follows:

Stock Options	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

Outstanding at January 1, 2013		235,115		$	2.58		2.24	$	539,485

Granted		92,500		$	5.27		-	$	184,900
Exercised		(6,250	)	$	2.35		-	$	18,175
Forfeited		-		$	-		-	$	-

Outstanding at December 31, 2013		321,365		$	3.36		2.26	$	1,257,936

Vested and Exercisable at December 31, 2013		244,490		$	2.77		1.49	$	1,100,811

The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2013 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $7.27 closing price of the Company’s Common Stock on December 31, 2013. The total intrinsic value of options exercised in year ended December 31, 2013 was $18,175, determined as of the date of exercise.

Participants in the 2005 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised (“Net Exercise”). The Company received cash proceeds of $11,750 from the exercise of options for the purchase of 5,000 shares of Common Stock in the year ended December 31, 2013. The remaining 1,250 options exercised in 2013 were Net Exercises. The Company received cash proceeds of $47,075 from the exercise of options for the purchase of 22,500 shares of Common Stock in the year ended December 31, 2012. The remaining 146,250 options exercised in 2012 were Net Exercises.

As of December 31, 2013 and 2012, the fair value of unamortized compensation cost related to unvested stock option awards was approximately $71,000 and $26,000, respectively. Unamortized compensation cost as of December 31, 2013 is expected to be recognized over a remaining weighted-average vesting period of 1.47 years.

As of December 31, 2013, there were 201,135 shares reserved under the 2005 Plan.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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13. Statutory Financial Information and Accounting Policies

12 Months Ended

Dec. 31, 2013

13. Statutory Financial Information and Accounting Policies

For regulatory purposes, the Company’s Insurance Subsidiaries prepare their statutory basis financial statements in accordance with practices prescribed or permitted by the state in which they are domiciled (“statutory basis” or “SAP”). The more significant SAP variances from GAAP are as follows:


•	Policy acquisition costs are charged to operations in the year such costs are incurred, rather than being deferred and amortized as premiums are earned over the terms of the policies.

•	Ceding commission revenues are earned when ceded premiums are written except for ceding commission revenues in excess of anticipated acquisition costs, which are deferred and amortized as ceded premiums are earned. GAAP requires that all ceding commission revenues be earned as the underlying ceded premiums are earned over the term of the reinsurance agreements.

•	Certain assets including certain receivables, a portion of the net deferred tax asset, prepaid expenses and furniture and equipment are not admitted.

•	Investments in fixed-maturity securities are valued at National Association of Insurance Commissioners (“NAIC”) value for statutory financial purposes, which is primarily amortized cost. GAAP requires certain investments in fixed-maturity securities classified as available for sale, to be reported at fair value.

•	Certain amounts related to ceded reinsurance are reported on a net basis within the statutory basis financial statements. GAAP requires these amounts to be shown gross.
•	For SAP purposes, changes in deferred income taxes relating to temporary differences between net income for financial reporting purposes and taxable income are recognized as a separate component of gains and losses in surplus rather than included in income tax expense or benefit as required under GAAP.

State insurance laws restrict the ability of KICO to declare dividends. These restrictions are related to surplus and net investment income. Dividends are restricted to the lesser of 10% of surplus or 100% of investment income (on a statutory accounting basis) for the trailing four quarters. State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. Generally, dividends may only be paid out of unassigned surplus, and the amount of an insurer’s unassigned surplus following payment of any dividends must be reasonable in relation to the insurer’s outstanding liabilities and adequate to meet its financial needs. KICO paid dividends of $700,000 for each of the years ended December 31, 2013 and 2012. On February 27, 2014, KICO’s board of directors approved a cash dividend of $375,000 to Kingstone, which was paid on February 28, 2014. For the years ended December 31, 2013 and 2012, KICO had statutory basis net income of $3,057,740 and $1,142,493, respectively. At December 31, 2013 and 2012, KICO had reported statutory basis surplus as regards policyholders of $31,829,876 and $14,345,729, respectively, as filed with the Department.

14. Risk Based Capital

12 Months Ended

Dec. 31, 2013

14. Risk Based Capital

State insurance departments impose risk-based capital (“RBC”) requirements on insurance enterprises. The RBC Model serves as a benchmark for the regulation of insurance companies by state insurance regulators. RBC provides for targeted surplus levels based on formulas, which specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk, and are set forth in the RBC requirements. Such formulas focus on four general types of risk: (a) the risk with respect to the company’s assets (asset or default risk); (b) the risk of default on amounts due from reinsurers, policyholders, or other creditors (credit risk); (c) the risk of underestimating liabilities from business already written or inadequately pricing business to be written in the coming year (underwriting risk); and, (d) the risk associated with items such as excessive premium growth, contingent liabilities, and other items not reflected on the balance sheet (off-balance sheet risk). The amount determined under such formulas is called the authorized control level RBC (“ACLC”).

The RBC guidelines define specific capital levels based on a company’s ACLC that are determined by the ratio of the company’s total adjusted capital (“TAC”) to its ACLC. TAC is equal to statutory capital, plus or minus certain other specified adjustments. The Company is in compliance with RBC requirements as of December 31, 2013 and 2012.

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=7881181&loc=SL5958569-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=7881181&loc=SL5958570-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=7881181&loc=SL5958575-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7881181&loc=SL5958568-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=7881181&loc=SL5958573-112826

15. Income Taxes

12 Months Ended

Dec. 31, 2013

15. Income Taxes

The Company files a consolidated U.S. federal income tax return that includes all wholly-owned subsidiaries. State tax returns are filed on a consolidated or separate basis depending on applicable laws. The Company records adjustments related to prior years’ taxes during the period when they are identified, generally when the tax returns are filed. The effect of these adjustments on the current and prior periods (during which the differences originated) is evaluated based upon quantitative and qualitative factors and are considered in relation to the financial statements taken as a whole for the respective periods. The Company has evaluated this year’s amounts in relation to the current and prior reporting periods and determined that a restatement of those prior reporting periods is not appropriate.

The provision for income taxes is comprised of the following:

Years ended December 31,	2013			2012

Current federal income tax expense	$	1,473,370		$	641,857
Current state income tax expense		14,952			(225	)
Deferred federal and state income tax expense		(724,053	)		(338,723	)
Provision for income taxes	$	764,269		$	302,909

A reconciliation of the federal statutory rate to our effective tax rate is as follows:

Years ended December 31,	2013					2012
Computed expected tax expense	$	944,040		34.0	%	$	363,669		34.0
State taxes, net of Federal benefit		(48,411	)	(1.8	)		(44,687	)	(4.2	)
State valuation allowance		85,821		3.1			104,325		9.8
Permanent differences
Dividends received deduction		(91,163	)	(3.3	)		(64,274	)	(6.0	)
Non-taxable investment income		(43,905	)	(1.5	)		(68,667	)	(6.4	)
Stock-based compensation expense		-		-			16,414		1.5
Other permanent differences		25,709		0.9			25,956		2.4
Prior year tax matters		(52,145	)	(1.9	)		(46,906	)	(4.4	)
Other		(55,677	)	(2.0	)		17,079		1.6
Total tax	$	764,269		27.5	%	$	302,909		28.3

Deferred tax assets and liabilities are determined using the enacted tax rates applicable to the period the temporary differences are expected to be recovered. Accordingly, the current period income tax provision can be affected by the enactment of new tax rates. The net deferred income taxes on the balance sheet reflect temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and income tax purposes, tax effected at a various rates depending on whether the temporary differences are subject to federal taxes, state taxes, or both. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,			December 31,
	2013			2012

Deferred tax asset:
Net operating loss carryovers (1)	$	246,476		$	264,648
Claims reserve discount		445,384			313,544
Unearned premium		1,000,372			811,413
Deferred ceding commission revenue		2,374,616			1,658,190
Other		17,087			10,921
Total deferred tax assets		4,083,935			3,058,716

Deferred tax liability:
Investment in KICO (2)		1,169,000			1,169,000
Deferred acquisition costs		2,332,489			1,893,759
Intangibles		921,143			1,082,886
Depreciation and amortization		197,223			152,576
Reinsurance recoverable		-			20,400
Net unrealized appreciation of securities - available for sale		157,167			527,376
Investment income		-			-
Total deferred tax liabilities		4,777,022			4,845,997

Net deferred income tax liability	$	(693,087	)	$	(1,787,281	)

(1)

The deferred tax assets from net operating loss carryovers are as follows:

	December 31,			December 31,
Type of NOL	2013			2012			Expiration
State only (A)	$	459,989		$	380,810		December 31, 2032
Valuation allowance		(240,713	)		(146,762	)
State only, net of valuation allowance		219,276			234,048
Amount subject to Annual Limitation, federal only (B)		27,200			30,600		December 31, 2019
Total deferred tax asset from net operating loss carryovers	$	246,476		$	264,648

(A) Kingstone generates operating losses for state purposes and has prior year net operating loss carryovers available. The state net operating loss carryover as of December 31, 2013 and December 31, 2012 was approximately $5,482,000 and $4,588,000, respectively. KICO, the Company’s insurance underwriting subsidiary, is not subject to state income taxes. KICO’s state tax obligations are paid through a gross premiums tax, which is included in the consolidated statements of income and comprehensive income within other underwriting expenses. A valuation allowance has been recorded due to the uncertainty of generating enough state taxable income to utilize 100% of the available state net operating loss carryovers over their remaining lives, which expire between 2027 and 2033.

(B) The Company has an NOL of $60,000 that is subject to Internal Revenue Code Section 382, which places a limitation on the utilization of the federal net operating loss to approximately $10,000 per year (“Annual Limitation”) as a result of a greater than 50% ownership change of the Company in 1999. The losses subject to the Annual Limitation will be available for future years, expiring through December 31, 2019.

(2)

Deferred tax liability - investment in KICO

On July 1, 2009, the Company completed the acquisition of 100% of the issued and outstanding common stock of KICO (formerly known as Commercial Mutual Insurance Company (“CMIC”)) pursuant to the conversion of CMIC from an advance premium cooperative to a stock property and casualty insurance company. Pursuant to the plan of conversion, the Company acquired a 100% equity interest in KICO, in consideration for the exchange of $3,750,000 principal amount of surplus notes of CMIC. In addition, the Company forgave all accrued and unpaid interest on the surplus notes as of the date of conversion. As of the date of acquisition, unpaid accrued interest on the surplus notes along with the accretion of the discount on the original purchase of the surplus notes totaled $2,921,319 (together “Untaxed Interest”). As of the date of acquisition, the deferred tax liability on the Untaxed Interest was $1,169,000. Under GAAP guidance for business combinations, a temporary difference with an indefinite life exists when the parent has a lower carrying value of its subsidiary for income tax purposes. The Company is required to maintain its deferred tax liability of $1,169,000 related to this temporary difference until the stock of KICO is sold, or the assets of KICO are sold or KICO and the parent are merged.

The table below reconciles the changes in net deferred income tax liability to the deferred income tax provision for the year ended December 31, 2013:

Change in net deferred income tax liabilities	$	(1,094,194	)
Deferred tax expense allocated to other comprehensive income		(370,141	)
Deferred income tax provision	$	(724,053	)

In assessing the valuation of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. No valuation allowance against deferred tax assets has been established, except for NOL limitations, as the Company believes it is more likely than not the deferred tax assets will be realized based on the historical taxable income of KICO, or by offset to deferred tax liabilities.

The Company had no material unrecognized tax benefit and no adjustments to liabilities or operations were required. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2013 and 2012. If any had been recognized these would be reported in income tax expense.

IRS Tax Audit

The Company’s federal income tax return for the year ended December 31, 2009 was examined by the Internal Revenue Service and was accepted as filed. The tax returns for years ended December 31, 2010 through 2012 are subject to examination, generally for three years after filing.

In March 2014, the Company received a notice that its Federal income tax return for the years ended December 31, 2011 and 2012 has been selected for examination by the Internal Revenue Service. The audit has not yet commenced. The final results of this audit are unknown, although management believes the outcome of this examination will not have a material effect on these financial statements though the actual outcome may differ from this belief.

16. Employee Benefit Plans	12 Months Ended
16. Employee Benefit Plans	Dec. 31, 2013
Notes to Financial Statements
16. Employee Benefit Plans	The Company’s insurance subsidiary, KICO, maintains a salary reduction plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”) for its qualified employees. KICO matches 100% of each participant’s contribution up to 4% of the participant’s eligible contribution. The Company, at its discretion, may allocate an amount for additional contributions (“Additional Contributions”) to the 401(k) Plan. The Company incurred approximately $270,000 and $139,000 of expense for the years ended December 31, 2013 and 2012, respectively, related to the 401(k) Plan. For the years ended December 31, 2013 and 2012, Additional Contributions consisted of approximately $156,000 and $31,000, respectively.

17. Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

17. Commitments and Contingencies

Litigation

From time to time, the Company is involved in various legal proceedings in the ordinary course of business. For example, to the extent a claim asserted by a third party in a law suit against one of the Company’s insureds covered by a particular policy, the Company may have a duty to defend the insured party against the claim. These claims may relate to bodily injury, property damage or other compensable injuries as set forth in the policy. Such proceedings are considered in estimating the liability for loss and LAE expenses. The Company is not subject to any other pending legal proceedings that management believes are likely to have a material adverse effect on the financial statements.

State Insurance Regulation

In the aftermath of Superstorm Sandy, the New York State Department of Financial Services (“DFS”) has adopted various regulations that affect insurance companies that operate in the state of New York. Included among the regulations are accelerated claims investigation and settlement requirements and mandatory participation in non-binding mediation proceedings funded by the insurer. Further, in February 2013, the state of New York announced that the DFS commenced an investigation into the claims practices of three insurance companies, including KICO, in connection with Superstorm Sandy claims. The DFS stated that the three insurers had a much larger than average consumer complaint rate with regard to Superstorm Sandy claims and indicated that the three insurers were being investigated for (i) failure to send adjusters in a timely manner; (ii) failure to process claims in a timely manner; and (iii) inability of homeowners to contact insurance company representatives. KICO received a letter from the DFS seeking information and data with regard to the foregoing. KICO has supplied information and data, and is cooperating with the DFS in connection with its investigation. KICO has not received a response from the DFS and believes that such matter will not have any effect on the Company’s financial position or results of operations.

Employment Agreements

Chief Executive Officer (Kingstone)

The Company’s President, Chairman of the Board and Chief Executive Officer, Barry B. Goldstein, is employed pursuant to an employment agreement, dated October 16, 2007, as amended (the “Goldstein Employment Agreement”), that expires on December 31, 2014. Pursuant to the Goldstein Employment Agreement, effective January 1, 2010, Mr. Goldstein was entitled to receive an annual base salary of $375,000 (“Base Salary”) and annual bonuses based on the Company’s net income (which bonus, commencing for 2010, may not be less than $10,000 per annum). Effective January 1, 2012, Mr. Goldstein assumed the positions of President and Chief Executive Officer of KICO. Effective April 16, 2012, the Company entered into an amendment to its employment agreement with Mr. Goldstein, pursuant to which, effective January 1, 2012 and continuing through the term of the agreement, Mr. Goldstein’s annual base salary was increased to $450,000 from $375,000 in consideration for his additional responsibilities to KICO. On August 25, 2008, the Company and Mr. Goldstein entered into an amendment (the “2008 Amendment”) to the Goldstein Employment Agreement. The 2008 Amendment entitles Mr. Goldstein to devote certain time to KICO to fulfill his duties and responsibilities as Chairman of the Board, Chief Investment Officer, and effective January 1, 2012, President and Chief Executive Officer of KICO. Such permitted activity is subject to a reduction in Base Salary under the Goldstein Employment Agreement on a dollar-for-dollar basis to the extent of the salary payable by KICO to Mr. Goldstein pursuant to his KICO employment contract, which, effective July 1, 2013 and 2012, is $385,875 and $367,500 per year, respectively. Pursuant to the Goldstein Employment Agreement, the Company also agreed that, under certain circumstances following a change of control of Kingstone Companies, Inc. and the termination of his employment, Mr. Goldstein would be entitled to a payout equal to one and one-half times his then annual salary and all of Mr. Goldstein’s outstanding options would become exercisable. In the event of termination of Mr. Goldstein’s employment by the Company without cause or he resigns with good reason (as each term is defined in the Goldstein Employment Agreement) Mr. Goldstein would be entitled to receive his base salary and bonuses from the Company for the remainder of the term, and his outstanding options would become exercisable and would remain exercisable until the first anniversary of the termination date. In addition, in the event Mr. Goldstein’s employment with KICO is terminated by KICO with or without cause, he would be entitled to receive a lump sum payment from KICO equal to six months base salary.

Executive Vice President (KICO)

John D. Reiersen, KICO’s Executive Vice President, is employed pursuant to an employment agreement effective as of November 13, 2006 and amended as of January 25, 2008, February 28, 2011 and October 14, 2013 (together, the “Reiersen Agreement”). The Reiersen Agreement expires on December 31, 2016 and may be terminated by KICO at any time with or without cause upon written notice. In the event of termination by KICO, Mr. Reiersen will be entitled to receive severance in an amount equal to the lesser of $50,000 or the remaining salary payable to him through the term of his agreement. Pursuant to the Reiersen Agreement, Mr. Reiersen’s minimum annual salary effective from January 1, 2012 through December 31, 2014 is $100,000. His minimum annual salary effective January 1, 2015 will be $105,000. His minimum salary in both periods is subject to increase based upon the provision of more than 500 hours of service per year on behalf of KICO. Mr. Reiersen also receives additional customary benefits and a $2,000 annual fee for his position as a director of KICO.

Approval Required for Transactions with Subsidiary

On July 1, 2009, Kingstone completed the acquisition of 100% of the issued and outstanding common stock of KICO (formerly known as Commercial Mutual Insurance Company (“CMIC”)) pursuant to the conversion of CMIC from an advance premium cooperative to a stock property and casualty insurance company. Pursuant to the plan of conversion, Kingstone acquired a 100% equity interest in KICO. In connection with the plan of conversion of CMIC, the Company has agreed with the Department of Financial Services that any intercompany transaction between itself and KICO must be filed with the Department 30 days prior to implementation.

18. Net Income Per Common Share

12 Months Ended

Dec. 31, 2013

18. Net Income Per Common Share

Basic net earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The computation of diluted earnings per share excludes those options with an exercise price in excess of the average market price of the Company’s common shares during the periods presented.

The computation of diluted earnings per share excludes outstanding options in periods where the exercise of such options would be anti-dilutive. For the years ended December 31, 2013 and 2012, the inclusion of 27,094 and 10,000 options in the computation of diluted earnings per share would have been anti-dilutive for the periods and, as a result, the weighted average number of common shares used in the calculation of diluted earnings per common has not been adjusted for the effect of such options.

The reconciliation of the weighted average number of shares of Common Stock used in the calculation of basic and diluted earnings per common share for the years ended December 31, 2013 and 2012 follows:

	Year ended
	December 31,
	2013		2012

Weighted average number of shares outstanding		3,975,115		3,806,697
Effect of dilutive securities, common share equivalents		84,609		65,063

Weighted average number of shares outstanding,
used for computing diluted earnings per share		4,059,724		3,871,760

19. Subsequent Event

12 Months Ended

Dec. 31, 2013

Accounting Policies And Basis Of Presentation Policies

19. Subsequent Event

The Company has evaluated events that occurred subsequent to December 31, 2013 through the date these financial statements were issued for matters that required disclosure or adjustment in these financial statements.

Dividends Declared and Paid

On February 20, 2014, the Company’s board of directors approved a dividend of $.04 per share, $290,664, payable in cash on March 14, 2014 to stockholders of record as of March 6, 2014.

2. Accounting Policies and Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2013

Principles of Consolidation

Revenue Recognition

Net Premiums Earned

Ceding Commission Revenue

Premium Finance Placement Fees

Liability for Loss and Loss Adjustment Expenses ("LAE")

Reinsurance

Cash and Cash Equivalents

Investments

Fair Value

Premiums Receivable

Deferred Policy Acquisition Costs

Intangible Assets

Property and Equipment

Income Taxes

Assessments

Concentration and Credit Risk

As of December 31, 2013 and 2012, the Company had deposits of cash equivalents as follows:

	December 31,		December 31,
	2013		2012

Collateralized bank repurchase agreement (1)	$	17,280,027	$	-
Money market fund		953,504		1,184,109
Total	$	18,233,531	$	1,184,109

Direct premiums earned from lines of business that subject the Company to concentration risk for the years ended December 31, 2013 and 2012 are as follows:

	Years ended December 31,
	2013			2012
Personal Lines		70.0	%		68.4	%
Commercial Lines		16.0	%		16.2	%
Commercial Automobile		n/a			11.6	%
Total premiums earned subject to concentration		86.0	%		96.2	%
Premiums earned not subject to concentration		14.0	%		3.8	%
Total premiums earned		100.0	%		100.0	%

Use of Estimates

Earnings per share

Advertising Costs

Stock-based Compensation

Comprehensive Income

Recent Accounting Pronouncements

Accounting guidance adopted in 2013

2. Accounting Policies and Basis of Presentation (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies And Basis Of Presentation Tables

Summary of deposits of cash equivalents

As of December 31, 2013 and 2012, the Company had deposits of cash equivalents as follows:

	December 31,		December 31,
	2013		2012

Collateralized bank repurchase agreement (1)	$	17,280,027	$	-
Money market fund		953,504		1,184,109
Total	$	18,233,531	$	1,184,109

Schedule of Concentration Risk

Direct premiums earned from lines of business that subject the Company to concentration risk for the years ended December 31, 2013 and 2012 are as follows:

	Years ended December 31,
	2013			2012
Personal Lines		70.0	%		68.4	%
Commercial Lines		16.0	%		16.2	%
Commercial Automobile		n/a			11.6	%
Total premiums earned subject to concentration		86.0	%		96.2	%
Premiums earned not subject to concentration		14.0	%		3.8	%
Total premiums earned		100.0	%		100.0	%

3. Investments (Tables)

12 Months Ended

Dec. 31, 2013

Investments Tables

Schedule of Availalbe for Sale Securities

The amortized cost and fair value of investments in available-for-sale fixed-maturity securities and equity securities as of December 31, 2013 and December 31, 2012 are summarized as follows:

	December 31, 2013
													Net
	Cost or		Gross		Gross Unrealized Losses								Unrealized
	Amortized		Unrealized		Less than 12			More than 12			Fair		Gains/
Category	Cost		Gains		Months			Months			Value		(Losses)

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$	7,000,222	$	162,616	$	(49,491	)	$	(45,140	)	$	7,068,207	$	67,985

Corporate and other bonds
Industrial and miscellaneous		21,079,680		569,139		(179,810	)		(101,194	)		21,367,815		288,135
Total fixed-maturity securities		28,079,902		731,755		(229,301	)		(146,334	)		28,436,022		356,120

Equity Securities:
Preferred stocks		2,899,301		2,503		(251,525	)		(62,551	)		2,587,728		(311,573	)
Common stocks		3,791,037		470,606		(38,785	)		(13,913	)		4,208,945		417,908
Total equity securities		6,690,338		473,109		(290,310	)		(76,464	)		6,796,673		106,335
Total	$	34,770,240	$	1,204,864	$	(519,611	)	$	(222,798	)	$	35,232,695	$	462,455

	December 31, 2012
													Net
	Cost or		Gross		Gross Unrealized Losses								Unrealized
	Amortized		Unrealized		Less than 12			More than 12			Fair		Gains/
Category	Cost		Gains		Months			Months			Value		(Losses)

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$	5,219,092	$	257,298	$	(1,574	)	$	-		$	5,474,816	$	255,724

Corporate and other bonds
Industrial and miscellaneous		19,628,005		1,123,392		(43,553	)		(722	)		20,707,122		1,079,117
Total fixed-maturity securities		24,847,097		1,380,690		(45,127	)		(722	)		26,181,938		1,334,841

Equity Securities:
Preferred stocks		1,475,965		19,512		(11,130	)		-			1,484,347		8,382
Common stocks		3,598,012		353,782		(145,899	)		-			3,805,895		207,883
Total equity securities		5,073,977		373,294		(157,029	)		-			5,290,242		216,265
Total	$	29,921,074	$	1,753,984	$	(202,156	)	$	(722	)	$	31,472,180	$	1,551,106

Schedule of Availalbe for Sale Securities by contractual maturity

A summary of the amortized cost and fair value of the Company’s investments in available-for-sale fixed-maturity securities by contractual maturity as of December 31, 2013 and 2012 is shown below:

	December 31, 2013				December 31, 2012
	Amortized				Amortized
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	758,281	$	768,954	$	546,952	$	560,162
One to five years		9,025,386		9,466,973		9,031,248		9,569,943
Five to ten years		14,070,003		14,114,271		12,605,798		13,306,033
More than 10 years		4,226,232		4,085,824		2,663,099		2,745,800
Total	$	28,079,902	$	28,436,022	$	24,847,097	$	26,181,938

Schedule of Held to Maturity Securities

The amortized cost and fair value of investments in held to maturity fixed-maturity securities as of December 31, 2013 and 2012 are summarized as follows:

	December 31, 2013
												Net
	Cost or		Gross		Gross Unrealized Losses							Unrealized
	Amortized		Unrealized		Less than 12			More than 12		Fair		Gains/
Category	Cost		Gains		Months			Months		Value		(Losses)


U.S. Treasury securities	$	606,138	$	46,915	$	-		$	-	$	653,053	$	46,915

Political subdivisions of States,
Territories and Possessions		208,697		-		(25,359	)		-		183,338		(25,359	)

Corporate and other bonds
Industrial and miscellaneous		1,584,647		4,223		-			-		1,588,870		4,223

Total	$	2,399,482	$	51,138	$	(25,359	)	$	-	$	2,425,261	$	25,779

December 31, 2012

Net

Cost or

Gross

Gross Unrealized Losses

Unrealized

Amortized

Unrealized

Less than 12

More than 12

Fair

Gains/

Category

Cost

Gains

Months

Value

(Losses)

U.S. Treasury securities

606,281

172,745

779,026

172,745

U.S. Treasury securities included in held-to-maturity securities are held in trust pursuant to the New York State Department of Financial Services’ minimum funds requirement.

A summary of the amortized cost and fair value of the Company’s investments in held-to-maturity securities by contractual maturity as of December 31, 2013 and 2012 is shown below:

	December 31, 2013				December 31, 2012
	Amortized				Amortized
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	-	$	-	$	-	$	-
One to five years		-		-		-		-
Five to ten years		1,793,344		1,772,208		-		-
More than 10 years		606,138		653,053		606,281		779,026
Total	$	2,399,482	$	2,425,261	$	606,281	$	779,026

Schedule of Investment Income

Major categories of the Company’s net investment income are summarized as follows:

	Years ended
	December 31,
	2013		2012
Income:
Fixed-maturity securities	$	1,018,857	$	951,895
Equity securities		390,818		268,034
Cash and cash equivalents		41		134
Other		16,507		23,857
Total		1,426,223		1,243,920
Expenses:
Investment expenses		256,172		228,764
Net investment income	$	1,170,051	$	1,015,156

Schedule of net realized gains and losses on investments

The Company’s net realized gains and losses on investments are summarized as follows:

	Year ended
	December 31,
	2013			2012

Fixed-maturity securities
Gross realized gains	$	237,886		$	233,299
Gross realized losses		(73,910	)		(52,933	)
		163,976			180,366

Equity securities
Gross realized gains		551,912			137,271
Gross realized losses		(140,096	)		(29,569	)
		411,816			107,702

Net realized gains	$	575,792		$	288,068

Schedule of Securities with Unrealized Losses

The Company held securities with unrealized losses representing declines that were considered temporary at December 31, 2013 and 2012 as follows:

	December 31, 2013
	Less than 12 months							12 months or more							Total
						No. of							No. of		Aggregate
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies	$	-	$	-			-	$	-	$	-			-	$	-	$	-

Political subdivisions of
States, Territories and
Possessions		2,015,437		(49,491	)		6		415,866		(45,140	)		2		2,431,303		(94,631	)

Corporate and other
bonds industrial and
miscellaneous		6,447,605		(179,810	)		24		1,430,377		(101,194	)		5		7,877,982		(281,004	)

Total fixed-maturity
securities	$	8,463,042	$	(229,301	)		30	$	1,846,243	$	(146,334	)		7	$	10,309,285	$	(375,635	)

Equity Securities:
Preferred stocks	$	1,835,958	$	(251,525	)		8	$	444,100	$	(62,551	)		2	$	2,280,058	$	(314,076	)
Common stocks		879,525		(38,785	)		4		145,625		(13,913	)		1		1,025,150		(52,698	)

Total equity securities	$	2,715,483	$	(290,310	)		12	$	589,725	$	(76,464	)		3	$	3,305,208	$	(366,774	)

Total	$	11,178,525	$	(519,611	)		42	$	2,435,968	$	(222,798	)		10	$	13,614,493	$	(742,409	)

	December 31, 2012
	Less than 12 months							12 months or more							Total
						No. of							No. of		Aggregate
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
Political subdivisions of
States, Territories and
Possessions	$	202,798	$	(1,574	)		1	$	-	$	-			-	$	202,798	$	(1,574	)

Corporate and other
bonds industrial and
miscellaneous		4,025,551		(43,553	)		19		128,125		(722	)		1		4,153,676		(44,275	)

Total fixed-maturity
securities	$	4,228,349	$	(45,127	)		20	$	128,125	$	(722	)		1	$	4,356,474	$	(45,849	)

Equity Securities:
Preferred stocks	$	387,925	$	(11,130	)		3	$	-	$	-			-	$	387,925	$	(11,130	)
Common stocks		1,536,860		(145,899	)		9		-		-			-		1,536,860		(145,899	)

Total equity securities	$	1,924,785	$	(157,029	)		12	$	-	$	-			-	$	1,924,785	$	(157,029	)

Total	$	6,153,134	$	(202,156	)		32	$	128,125	$	(722	)		1	$	6,281,259	$	(202,878	)

4. Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Measurements Tables

Schedule of Fair Value Measurements

The Company’s investments are allocated among pricing input levels at December 31, 2013 and 2012 as follows:

	December 31, 2013
($ in thousands)	Level 1		Level 2		Level 3		Total

Fixed-maturity investments available for sale
Political subdivisions of
States, Territories and
Possessions	$	-	$	7,068	$	-	$	7,068

Corporate and other
bonds industrial and
miscellaneous		20,731		637		-		21,368
Total fixed maturities		20,731		7,705		-		28,436
Equity investments		6,797		-		-		6,797
Total investments	$	27,528	$	7,705	$	-	$	35,233

	December 31, 2012
($ in thousands)	Level 1		Level 2		Level 3		Total

Fixed-maturity investments available for sale
Political subdivisions of
States, Territories and
Possessions	$	-	$	5,475	$	-	$	5,475

Corporate and other
bonds industrial and
miscellaneous		11,600		9,107		-		20,707
Total fixed maturities		11,600		14,582		-		26,182
Equity investments		5,290		-		-		5,290
Total investments	$	16,890	$	14,582	$	-	$	31,472

5. Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Of Financial Instruments Tables

Schedule of Fair Value of Financial Instruments

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value

Fixed-maturity investments held to maturity	$	2,399,482	$	2,425,261	$	606,281	$	779,026
Cash and cash equivalents		19,922,506		19,922,506		2,240,012		2,240,012
Premiums receivable		7,590,074		7,590,074		7,766,825		7,766,825
Receivables- reinsurance contracts		974,989		974,989		-		-
Reinsurance receivables		38,535,814		38,535,814		38,902,782		38,902,782
Real estate, net of accumulated depreciation		1,777,942		1,816,122		1,696,924		1,720,000
Reinsurance balances payable		2,566,729		2,566,729		1,820,527		1,820,527
Advance payments from catastrophe reinsurers		-		-		7,358,391		7,358,391
Notes payable (including related parties)		-		-		1,197,000		1,197,000

6. Intangibles (Tables)

12 Months Ended

Dec. 31, 2013

Intangibles Tables

Schedule of components of intangible assets and their useful lives, accumulated amortization, and net carrying value

The components of intangible assets and their useful lives, accumulated amortization, and net carrying value as of December 31, 2013 and 2012 are summarized as follows:

			December 31, 2013						December 31, 2012
	Useful		Gross				Net		Gross				Net
	Life		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(in yrs)		Value		Amortization		Amount		Value		Amortization		Amount
Insurance license		-	$	500,000	$	-	$	500,000	$	500,000	$	-	$	500,000
Customer relationships		10		3,400,000		1,530,000		1,870,000		3,400,000		1,190,000		2,210,000
Assembled workforce		7		950,000		610,756		339,244		950,000		475,042		474,958
Total			$	4,850,000	$	2,140,756	$	2,709,244	$	4,850,000	$	1,665,042	$	3,184,958

Schedule of estimated aggregate amortization expense

The estimated aggregate amortization expense for the remaining life of finite life intangibles is as follows:

2014	$	475,714
2015		475,714
2016		407,816
2017		340,000
2018		340,000
Thereafter		170,000
	$	2,209,244

7. Reinsurance (Tables)

12 Months Ended

Dec. 31, 2013

Reinsurance Tables

Single maximum risks under treaties per occurrence

The single maximum risks to which the Company is subject under these treaties per occurrence are as follows:

Treaty	Extent of Loss	Risk Retained
Personal Lines	Initial $1,200,000	$300,000
	$1,200,000 - $2,900,000	None(1)
	Over $2,900,000	100%

Personal Umbrella	Initial $1,000,000	$100,000
	$1,000,000 - $2,000,000	None(1)
	Over $2,000,000	100%

Commercial Lines	Initial $400,000	$300,000
	$400,000 - $2,900,000	None(1)
	Over $2,900,000	100%

Commercial Auto	Initial $300,000	$300,000
	$300,000 - $2,000,000	None(1)
	Over $2,000,000	100%

Catastrophe (2)	Initial $4,000,000	$1,000,000
	$4,000,000 - $90,000,000	None
	Over $90,000,000	100%

(1)

Covered by excess of loss treaties.

(2)

Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.

Schedule of approximate reinsurance recoverables

Approximate reinsurance recoverables on unpaid and paid losses by reinsurer are as follows:

	Unpaid		Paid
($ in thousands)	Losses		Losses		Total		Security
December 31, 2013
Maiden Reinsurace Company	$	6,929	$	732	$	7,661	$	13,868	(1	)
SCOR Reinsurance Company		3,318		294		3,612		-
Swiss Reinsuarnace America Corporation		2,523		454		2,977		-
Motors Insurance Corporation		1,536		48		1,584		792	(1	)
Sirius American Insurance Company		1,410		44		1,454		-
Allied World Assurance Company		665		39		704		-
Others		983		246		1,229		135	(2	)
Total	$	17,364	$	1,857	$	19,221	$	14,795

December 31, 2012
Maiden Reinsurace Company	$	8,173	$	2,989	$	11,162	$	6,503	(1	)
SCOR Reinsurance Company		4,437		1,495		5,932		-
Motors Insurance Corporation		1,550		49		1,599		1,214	(1	)
Sirius American Insurance Company		1,406		18		1,424		-
Swiss Reinsurance America Corporation		1,705		756		2,461		-
Allied World Assurance Company		808		372		1,180		-
Others		341		113		454		91	(2	)
Total	$	18,420	$	5,792	$	24,212	$	7,808

(1) Secured pursuant to collateralized trust agreements.
(2) Guaranteed by an irrevocable letter of credit.

Schedule of Ceding commissions earned

Ceding commissions earned consists of the following:

	Years ended
	December 31,
	2013		2012

Provisional ceding commissions earned	$	11,007,342	$	8,516,240
Contingent ceding commissions earned		665,761		1,173,915
	$	11,673,103	$	9,690,155

8. Deferred Acquisition Costs and Deferred Ceding Commission Revenue (Tables)

12 Months Ended

Dec. 31, 2013

Deferred Acquisition Costs And Deferred Ceding Commission Revenue Tables

Schedule of acquisition costs incurred

Policy acquisition costs incurred and policy-related ceding commission revenue are deferred, and amortized to income on property and casualty insurance business as follows:

	Year ended
	December 31,
	2013			2012

Net deferred policyacquisition costs net of ceding
commission revenue, beginning of year	$	692,848		$	553,374

Cost incurred and deferred:
Commissions and brokerage		10,500,068			8,087,355
Other underwriting and policy acquisition costs		3,193,910			3,012,611
Ceding commission revenue		(13,114,478	)		(9,410,871	)
Net deferred policy acquisition costs		579,500			1,689,095
Amortization		(1,396,251	)		(1,549,621	)
		(816,751	)		139,474

Net deferred policy acquisition costs net of ceding
commission revenue, end of year	$	(123,902	)	$	692,848

Schedule of Ending balances for deferred acquisition costs and deferred ceding commission revenue

Ending balances for deferred acquisition costs and deferred ceding commission revenue as of December 31, 2013 and 2012 follows:

	December 31,
	2013			2012

Deferred policy acquisition costs	$	6,860,263		$	5,569,878
Deferred ceding commission revenue		(6,984,166	)		(4,877,030	)
Balance at end of period	$	(123,903	)	$	692,848

9. Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property And Equipment Tables

Schedule of components of property and equipment

The components of property and equipment are summarized as follows:

			Accumulated
	Cost		Depreciation			Net

December 31, 2013
Building	$	1,760,435	$	(195,363	)	$	1,565,072
Land		153,097		-			153,097
Furniture		170,505		(79,885	)		90,620
Computer equipment and software		533,966		(307,382	)		226,584
Automobile		81,394		(78,012	)		3,382
Total	$	2,699,397	$	(660,642	)	$	2,038,755

December 31, 2012
Building	$	1,648,838	$	(152,976	)	$	1,495,862
Land		153,097		-			153,097
Furniture		138,115		(66,570	)		71,545
Computer equipment and software		336,851		(219,447	)		117,404
Automobile		81,394		(50,880	)		30,514
Total	$	2,358,295	$	(489,873	)	$	1,868,422

10. Property and Casualty Insurance Activity (Tables)

12 Months Ended

Dec. 31, 2013

Property And Casualty Insurance Activity Tables

Schedule of Earned Premiums

Premiums written, ceded and earned are as follows:

	Direct			Assumed			Ceded			Net

Year ended December 31, 2013
Premiums written	$	60,449,077		$	45,746		$	(35,656,060	)	$	24,838,763
Change in unearned premiums		(6,341,750	)		18,499			3,709,655			(2,613,596	)
Premiums earned	$	54,107,327		$	64,245		$	(31,946,405	)	$	22,225,167

Year ended December 31, 2012
Premiums written	$	49,251,630		$	23,967		$	(29,715,971	)	$	19,559,626
Change in unearned premiums		(4,724,193	)		(5,010	)		2,386,188			(2,343,015	)
Premiums earned	$	44,527,437		$	18,957		$	(27,329,783	)	$	17,216,611

Schedule of Loss and Loss Adjustment Expenses

The components of the liability for loss and LAE expenses and related reinsurance receivables as of December 31, 2013 and 2012 are as follows:

	Gross		Reinsurance
	Liability		Receivables
December 31, 2013
Case-basis reserves	$	22,489,240	$	12,078,399
Loss adjustment expenses		4,200,675		1,226,763
IBNR reserves		7,813,314		4,058,813
Recoverable on unpaid losses				17,363,975
Recoverable on paid losses		-		1,796,512
Total loss and loss adjustment expenses	$	34,503,229		19,160,487
Unearned premiums				18,400,338
Total reinsurance receivables			$	37,560,825

December 31, 2012
Case-basis reserves	$	21,190,141	$	13,284,613
Loss adjustment expenses		2,502,169		1,064,420
IBNR reserves		6,793,222		4,070,661
Recoverable on unpaid losses				18,419,694
Recoverable on paid losses		-		5,792,405
Total loss and loss adjustment expenses	$	30,485,532		24,212,099
Unearned premiums				14,690,683
Total reinsurance receivables			$	38,902,782

Schedule of Ceding Commission Revenue

The following table provides a reconciliation of the beginning and ending balances for unpaid losses and loss adjustment expenses (“LAE”):

	Years ended
	December 31,
	2013			2012

Balance at beginning of period	$	30,485,532		$	18,480,717
Less reinsurance recoverables		(18,419,694	)		(9,960,334	)
Net balance, beginning of period		12,065,838			8,520,383

Incurred related to:
Current year		11,765,420			10,460,000
Prior years		1,821,113			774,713
Total incurred		13,586,533			11,234,713

Paid related to:
Current year		3,709,495			4,419,000
Prior years		4,803,622			3,270,258
Total paid		8,513,117			7,689,258

Net balance at end of period		17,139,254			12,065,838
Add reinsurance recoverables		17,363,975			18,419,694
Balance at end of period	$	34,503,229		$	30,485,532

11. Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2013

Long-Term Debt Tables

Schedule of Long-Term Debt

Long-term debt and capital lease obligations consist of:

	December 31, 2013						December 31, 2012
			Less						Less
	Total		Current		Long-Term		Total		Current		Long-Term
	Debt		Maturities		Debt		Debt		Maturities		Debt
Notes payable	$	-	$	-	$	-	$	747,000	$	-	$	747,000
Bank line of credit		-		-		-		450,000		450,000		-
	$	-	$	-	$	-	$	1,197,000	$	450,000	$	747,000

Schedule of Related Party Balances

Related party balances as of December 31, 2013 and 2012, and principal prepayments as described above for the year ended December 31, 2013 under the 2009/2010 Notes are as follows:

			Less
			Principal
	Balance		Prepayments		Balance
	December 31,		Year Ended		December 31,
	2012		December 31, 2013		2013

Barry Goldstein IRA (Mr. Goldstein is Chairman of the Board, President
and Chief Executive Officer, and principal stockholder of the Company)	$	90,000	$	90,000	$	—
Jay Haft, a director of the Company		30,000		30,000		—
A member of the family of Michael Feinsod, a director of the Company		60,000		60,000		—
Mr. Yedid and members of his family		156,000		156,000		—
A member of the family of Floyd Tupper, a director of KICO		42,000		42,000		—
Total related party transactions	$	378,000	$	378,000	$	—

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6584090&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5

Weighted average assumptions

12. Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2013

Stockholders Equity Tables

The following weighted average assumptions were used for grants during the years ended December 31, 2013 and 2012:

	Years ended
	December 31,
	2013			2012
Dividend Yield		2.42% - 3.14	%		0.00	%
Volatility		45.73% - 46.71	%		50.89% - 89.27	%
Risk-Free Interest Rate		0.61% - 0.79	%		0.61	%
Expected Life	3.25 years			5 years

Schedule of Stock Options Activity

A summary of option activity under the Company’s 2005 Plan for the year ended December 31, 2013 is as follows:

Stock Options	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

Outstanding at January 1, 2013		235,115		$	2.58		2.24	$	539,485

Granted		92,500		$	5.27		-	$	184,900
Exercised		(6,250	)	$	2.35		-	$	18,175
Forfeited		-		$	-		-	$	-

Outstanding at December 31, 2013		321,365		$	3.36		2.26	$	1,257,936

Vested and Exercisable at December 31, 2013		244,490		$	2.77		1.49	$	1,100,811

15. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes Tables

Schedule of provision for income taxes from continuing operations

The provision for income taxes is comprised of the following:

Years ended December 31,	2013			2012

Current federal income tax expense	$	1,473,370		$	641,857
Current state income tax expense		14,952			(225	)
Deferred federal and state income tax expense		(724,053	)		(338,723	)
Provision for income taxes	$	764,269		$	302,909

Schedule of a reconciliation of the federal statutory rate

A reconciliation of the federal statutory rate to our effective tax rate is as follows:

Years ended December 31,	2013					2012
Computed expected tax expense	$	944,040		34.0	%	$	363,669		34.0
State taxes, net of Federal benefit		(48,411	)	(1.8	)		(44,687	)	(4.2	)
State valuation allowance		85,821		3.1			104,325		9.8
Permanent differences
Dividends received deduction		(91,163	)	(3.3	)		(64,274	)	(6.0	)
Non-taxable investment income		(43,905	)	(1.5	)		(68,667	)	(6.4	)
Stock-based compensation expense		-		-			16,414		1.5
Other permanent differences		25,709		0.9			25,956		2.4
Prior year tax matters		(52,145	)	(1.9	)		(46,906	)	(4.4	)
Other		(55,677	)	(2.0	)		17,079		1.6
Total tax	$	764,269		27.5	%	$	302,909		28.3

Schedule of Deferrred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,			December 31,
	2013			2012

Deferred tax asset:
Net operating loss carryovers (1)	$	246,476		$	264,648
Claims reserve discount		445,384			313,544
Unearned premium		1,000,372			811,413
Deferred ceding commission revenue		2,374,616			1,658,190
Other		17,087			10,921
Total deferred tax assets		4,083,935			3,058,716

Deferred tax liability:
Investment in KICO (2)		1,169,000			1,169,000
Deferred acquisition costs		2,332,489			1,893,759
Intangibles		921,143			1,082,886
Depreciation and amortization		197,223			152,576
Reinsurance recoverable		-			20,400
Net unrealized appreciation of securities - available for sale		157,167			527,376
Investment income		-			-
Total deferred tax liabilities		4,777,022			4,845,997

Net deferred income tax liability	$	(693,087	)	$	(1,787,281	)

Schedule of net operating loss carryovers

	December 31,			December 31,
Type of NOL	2013			2012			Expiration
State only (A)	$	459,989		$	380,810		December 31, 2032
Valuation allowance		(240,713	)		(146,762	)
State only, net of valuation allowance		219,276			234,048
Amount subject to Annual Limitation, federal only (B)		27,200			30,600		December 31, 2019
Total deferred tax asset from net operating loss carryovers	$	246,476		$	264,648

Schedule of changes in net deferred income tax liability to the deferred income tax provision

The table below reconciles the changes in net deferred income tax liability to the deferred income tax provision for the year ended December 31, 2013:

Change in net deferred income tax liabilities	$	(1,094,194	)
Deferred tax expense allocated to other comprehensive income		(370,141	)
Deferred income tax provision	$	(724,053	)

18. Net Income Per Common Share (Tables)

12 Months Ended

Dec. 31, 2013

Earnings per common share:

Reconciliation of the weighted average number of shares of Common Stock used in the calculation of basic and diluted earnings per common share

	Year ended
	December 31,
	2013		2012

Weighted average number of shares outstanding		3,975,115		3,806,697
Effect of dilutive securities, common share equivalents		84,609		65,063

Weighted average number of shares outstanding,
used for computing diluted earnings per share		4,059,724		3,871,760

2. Accounting Policies and Basis of Presentation (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies And Basis Of Presentation Details
Collateralized bank repurchase agreement (1)	$ 17,280,027
Money market fund	953,504	1,184,109
Total	$ 18,233,531	$ 1,184,109

2. Accounting Policies and Basis of Presentation (Details 1)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Total premiums earned subject to concentration	0.860	0.962
Premiums earned not subject to concentration	0.140	0.038
Total premiums earned	1.000	1.000
Personal Lines [Member]
Total premiums earned subject to concentration	0.700	0.684
Commercial Lines [Member]
Total premiums earned subject to concentration	0.160	0.162
Commercial Automobile [Member]
Total premiums earned subject to concentration		0.116

2. Accounting Policies and Basis of Presentation (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies And Basis Of Presentation Details Narrative
Due and accrued investment income	$ 414,210	$ 343,521
Allowance for doubtful accounts	145,000	85,000
Uncollectible premiums receivable balances written off	88,000	54,000
Cash deposits in excess of the FDIC secured limit	3,046,000	4,162,000
Advertising costs	$ 55,000	$ 35,000

3. Investments (Details) - USD ($)	12 Months Ended
3. Investments (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Cost or Amortized Cost	$ 34,770,240	$ 29,921,074
Gross Unrealized Gains	1,204,864	1,753,984
Gross Unrealized Losses-Less than 12 Months	(519,611)	(202,156)
Gross Unrealized Loss-More than 12 Months	(222,798)	(722)
Fair Value	35,232,695	31,472,180
Net Unrealized Gains/(Losses)	462,455	1,551,106
Fixed Maturity Securities Political Subdivisions Of States Territories And Possessions
Cost or Amortized Cost	7,000,222	5,219,092
Gross Unrealized Gains	162,616	257,298
Gross Unrealized Losses-Less than 12 Months	(49,491)	(1,574)
Gross Unrealized Loss-More than 12 Months	(45,140)
Fair Value	7,068,207	5,474,816
Net Unrealized Gains/(Losses)	67,985	255,724
Fixed Maturity Securities Corporate And Other Bonds Industrial And Miscellaneous
Cost or Amortized Cost	21,079,680	19,628,005
Gross Unrealized Gains	569,139	1,123,392
Gross Unrealized Losses-Less than 12 Months	(179,810)	(43,553)
Gross Unrealized Loss-More than 12 Months	(101,194)	(722)
Fair Value	21,367,815	20,707,122
Net Unrealized Gains/(Losses)	288,135	1,079,117
Fixed Maturity Securities Total Fixed Maturity Securities
Cost or Amortized Cost	28,079,902	24,847,097
Gross Unrealized Gains	731,755	1,380,690
Gross Unrealized Losses-Less than 12 Months	(229,301)	(45,127)
Gross Unrealized Loss-More than 12 Months	(146,334)	(722)
Fair Value	28,436,022	26,181,938
Net Unrealized Gains/(Losses)	356,120	1,334,841
Equity Securities Preferred Stocks
Cost or Amortized Cost	2,899,301	1,475,965
Gross Unrealized Gains	2,503	19,512
Gross Unrealized Losses-Less than 12 Months	(251,525)	(11,130)
Gross Unrealized Loss-More than 12 Months	(62,551)
Fair Value	2,587,728	1,484,347
Net Unrealized Gains/(Losses)	(311,573)	8,382
Equity Securities Common Stocks
Cost or Amortized Cost	3,791,037	3,598,012
Gross Unrealized Gains	470,606	353,782
Gross Unrealized Losses-Less than 12 Months	(38,785)	(145,899)
Gross Unrealized Loss-More than 12 Months	(13,913)
Fair Value	4,208,945	3,805,895
Net Unrealized Gains/(Losses)	417,908	207,883
Equity Securities Total Equity Securities
Cost or Amortized Cost	6,690,338	5,073,977
Gross Unrealized Gains	473,109	373,294
Gross Unrealized Losses-Less than 12 Months	(290,310)	(157,029)
Gross Unrealized Loss-More than 12 Months	(76,464)
Fair Value	6,796,673	5,290,242
Net Unrealized Gains/(Losses)	$ 106,335	$ 216,265

3. Investments (Details 1) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Amortized Cost	$ 28,079,902	$ 24,847,097
Fair Value	28,436,022	26,181,938
Less Than One Year
Amortized Cost	758,281	546,952
Fair Value	768,954	560,162
One To Five Years
Amortized Cost	9,025,386	9,031,248
Fair Value	9,466,973	9,569,943
Five To Ten Years
Amortized Cost	14,070,003	12,605,798
Fair Value	14,114,271	13,306,033
More Than 10 Years
Amortized Cost	4,226,232	2,663,099
Fair Value	$ 4,085,824	$ 2,745,800

3. Investments (Details 2) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Cost or Amortized Cost	$ 2,399,482	$ 606,281
Gross Unrealized Gains	51,138	172,745
Gross Unrealized Losses-Less than 12 Months	(25,359)
Gross Unrealized Loss-More than 12 Months
Fair Value	2,425,261	779,026
Net Unrealized Gains/(Losses)	25,779	172,745
US Treasury Securities
Cost or Amortized Cost	606,138	606,281
Gross Unrealized Gains	46,915	172,745
Gross Unrealized Losses-Less than 12 Months
Gross Unrealized Loss-More than 12 Months
Fair Value	653,053	779,026
Net Unrealized Gains/(Losses)	46,915	$ 172,745
Fixed Maturity Securities Political Subdivisions Of States Territories And Possessions
Cost or Amortized Cost	208,697
Gross Unrealized Gains
Gross Unrealized Losses-Less than 12 Months	(25,359)
Gross Unrealized Loss-More than 12 Months
Fair Value	183,338
Net Unrealized Gains/(Losses)	(25,359)
Fixed Maturity Securities Corporate And Other Bonds Industrial And Miscellaneous
Cost or Amortized Cost	1,584,647
Gross Unrealized Gains	4,223
Gross Unrealized Losses-Less than 12 Months
Gross Unrealized Loss-More than 12 Months
Fair Value	1,588,870
Net Unrealized Gains/(Losses)	$ 4,223

3. Investments (Details 3) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Amortized Cost	$ 2,399,482	$ 606,281
Fair Value	2,425,261	779,026
Less Than One Year
Amortized Cost
Fair Value
One To Five Years
Amortized Cost
Fair Value
Five To Ten Years
Amortized Cost	1,793,344
Fair Value	1,772,208
More Than 10 Years
Amortized Cost	606,138	606,281
Fair Value	$ 653,053	$ 779,026

3. Investments (Details 4) - USD ($)	12 Months Ended
3. Investments (Details 4) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Income:
Fixed-maturity securities	$ 1,018,857	$ 951,895
Equity securities	390,818	268,034
Cash and cash equivalents	41	134
Other	16,507	23,857
Total	1,426,223	1,243,920
Expenses:
Investment expenses	256,172	228,764
Net investment income	$ 1,170,051	$ 1,015,156

3. Investments (Details 5) - USD ($)	12 Months Ended
3. Investments (Details 5) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Fixed-maturity securities:
Gross realized gains	$ 237,886	$ 233,299
Gross realized losses	(73,910)	(52,933)
Total	163,976	180,366
Equity securities:
Gross realized gains	551,912	137,271
Gross realized losses	(140,096)	(29,569)
Total equity securities	411,816	107,702
Net realized gains	$ 575,792	$ 288,068

3. Investments (Details 6)	12 Months Ended
3. Investments (Details 6)	Dec. 31, 2013 USD ($) Security	Dec. 31, 2012 USD ($) Security
Fair Value-Less than 12 months	$ 11,178,525	$ 6,153,134
Unrealized Losses-Less than 12 Months	$ (519,611)	$ (202,156)
No. of Positions Held-Less than 12 Months \| Security	42	32
Fair Value-12 months or more	$ 2,435,968	$ 128,125
Unrealized Losses-12 months or more	$ (222,798)	$ (722)
No. of Positions Held-12 months or more \| Security	10	1
Aggregate Fair Value-Total	$ 13,614,493	$ 6,281,259
Unrealized Losses-Total	(742,409)	(202,878)
Fixed Maturity Securities Political Subdivisions Of States Territories And Possessions
Fair Value-Less than 12 months	2,015,437	202,798
Unrealized Losses-Less than 12 Months	$ (49,491)	$ (1,574)
No. of Positions Held-Less than 12 Months \| Security	6	1
Fair Value-12 months or more	$ 415,866
Unrealized Losses-12 months or more	$ (45,140)
No. of Positions Held-12 months or more \| Security	2
Aggregate Fair Value-Total	$ 2,431,303	$ 202,798
Unrealized Losses-Total	(94,631)	(1,574)
Fixed Maturity Securities Corporate And Other Bonds Industrial And Miscellaneous
Fair Value-Less than 12 months	6,447,605	4,025,551
Unrealized Losses-Less than 12 Months	$ (179,810)	$ (43,553)
No. of Positions Held-Less than 12 Months \| Security	24	19
Fair Value-12 months or more	$ 1,430,377	$ 128,125
Unrealized Losses-12 months or more	$ (101,194)	$ (722)
No. of Positions Held-12 months or more \| Security	5	1
Aggregate Fair Value-Total	$ 7,877,982	$ 4,153,676
Unrealized Losses-Total	(281,004)	(44,275)
Fixed Maturity Securities Total Fixed Maturity Securities
Fair Value-Less than 12 months	8,463,042	4,228,349
Unrealized Losses-Less than 12 Months	$ (229,301)	$ (45,127)
No. of Positions Held-Less than 12 Months \| Security	30	20
Fair Value-12 months or more	$ 1,846,243	$ 128,125
Unrealized Losses-12 months or more	$ (146,334)	$ (722)
No. of Positions Held-12 months or more \| Security	7	1
Aggregate Fair Value-Total	$ 10,309,285	$ 4,356,474
Unrealized Losses-Total	(375,635)	(45,849)
Equity Securities Preferred Stocks
Fair Value-Less than 12 months	1,835,958	387,925
Unrealized Losses-Less than 12 Months	$ (251,525)	$ (11,130)
No. of Positions Held-Less than 12 Months \| Security	8	3
Fair Value-12 months or more	$ 444,100
Unrealized Losses-12 months or more	$ (62,551)
No. of Positions Held-12 months or more \| Security	2
Aggregate Fair Value-Total	$ 2,280,058	$ 387,925
Unrealized Losses-Total	(314,076)	(11,130)
Equity Securities Common Stocks
Fair Value-Less than 12 months	879,525	1,536,860
Unrealized Losses-Less than 12 Months	$ (38,785)	$ (145,899)
No. of Positions Held-Less than 12 Months \| Security	4	9
Fair Value-12 months or more	$ 145,625
Unrealized Losses-12 months or more	$ (13,913)
No. of Positions Held-12 months or more \| Security	1
Aggregate Fair Value-Total	$ 1,025,150	$ 1,536,860
Unrealized Losses-Total	(52,698)	(145,899)
Equity Securities Total Equity Securities
Fair Value-Less than 12 months	2,715,483	1,924,785
Unrealized Losses-Less than 12 Months	$ (290,310)	$ (157,029)
No. of Positions Held-Less than 12 Months \| Security	12	12
Fair Value-12 months or more	$ 589,725
Unrealized Losses-12 months or more	$ (76,464)
No. of Positions Held-12 months or more \| Security	3
Aggregate Fair Value-Total	$ 3,305,208	$ 1,924,785
Unrealized Losses-Total	(366,774)	$ (157,029)
US Treasury Securities
Fair Value-Less than 12 months
Fair Value-12 months or more
Aggregate Fair Value-Total

3. Investments (Details Narrative)	12 Months Ended
3. Investments (Details Narrative)	Dec. 31, 2013 USD ($) Security	Dec. 31, 2012 USD ($)
Investments Details Narrative
Proceeds from the sale and maturity of fixed-maturity securities	$ 5,850,770	$ 4,322,120
Proceeds from the sale of equity securities	$ 4,868,193	$ 1,726,345
Securities that account for the gross unrealized loss \| Security	52

4. Fair Value Measurements (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Political subdivisions of States, Territories and Possessions	$ 7,068,000	$ 5,475,000
Corporate and other bonds industrial and miscellaneous	21,368,000	20,707,000
Total fixed maturities	28,436,000	26,182,000
Equity investments	6,797,000	5,290,000
Total investments	35,233,000	31,472,000
Level 1
Political subdivisions of States, Territories and Possessions	0
Corporate and other bonds industrial and miscellaneous	20,731,000	11,600,000
Total fixed maturities	20,731,000	11,600,000
Equity investments	6,797,000	5,290,000
Total investments	27,528,000	16,890,000
Level 2
Political subdivisions of States, Territories and Possessions	7,068,000	5,475,000
Corporate and other bonds industrial and miscellaneous	637,000	9,107,000
Total fixed maturities	7,705,000	14,582,000
Equity investments	0
Total investments	7,705,000	14,582,000
Level 3
Political subdivisions of States, Territories and Possessions	0
Corporate and other bonds industrial and miscellaneous	0
Total fixed maturities	0
Equity investments	0
Total investments	$ 0

5. Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Reinsurance receivables	$ 37,560,825	$ 38,902,782
Reinsurance balances payable	2,566,729	1,820,527
Carrying Value
Fixed-maturity investments held to maturity	2,399,482	606,281
Cash and cash equivalents	19,922,506	2,240,012
Premiums receivable	7,590,074	7,766,825
Receivables- reinsurance contracts	974,989
Reinsurance receivables	37,560,825	38,902,782
Real estate net of accumulated depreciation	1,777,942	1,696,924
Reinsurance balances payable	2,566,729	1,820,527
Advance payments from catastrophe reinsurers		7,358,391
Notes payable (including related parties)		1,197,000
Fair Value
Fixed-maturity investments held to maturity	2,425,261	779,026
Cash and cash equivalents	19,922,506	2,240,012
Premiums receivable	7,590,074	7,766,825
Receivables- reinsurance contracts	974,989
Reinsurance receivables	37,560,825	38,902,782
Real estate net of accumulated depreciation	1,816,122	1,720,000
Reinsurance balances payable	2,566,729	1,820,527
Advance payments from catastrophe reinsurers		7,358,391
Notes payable (including related parties)		$ 1,197,000

6. Intangibles (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Gross Carrying Value	$ 4,850,000	$ 4,850,000
Accumulated Amortization	2,140,756	1,665,042
Net Carrying Amount	2,709,244	3,184,958
Insurance license [Member]
Gross Carrying Value	500,000	500,000
Net Carrying Amount	500,000	500,000
Customer relationships [Member]
Gross Carrying Value	3,400,000	3,400,000
Accumulated Amortization	1,530,000	1,190,000
Net Carrying Amount	$ 1,870,000	$ 2,210,000
Useful Life (in yrs)	10 years	10 years
Assembled workforce [Member]
Gross Carrying Value	$ 950,000	$ 950,000
Accumulated Amortization	610,756	475,042
Net Carrying Amount	$ 339,224	$ 474,958
Useful Life (in yrs)	7 years	7 years

6. Intangibles (Details 1)	Dec. 31, 2013 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2014	$ 475,714
2015	475,714
2016	407,816
2017	340,000
2018	340,000
Thereafter	170,000
Total	$ 2,209,244

6. Intangibles (Details Narrative) - USD ($)	12 Months Ended
6. Intangibles (Details Narrative) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Intangibles Details Narrative
Weighted average amortization period of identified intangible assets of finite useful life	5 years
Amortization expense, related to intangibles	$ 475,714	$ 475,714

7. Reinsurance (Details)	12 Months Ended
7. Reinsurance (Details)	Dec. 31, 2013
Personal Lines [Member] \| Initial $1,200,000 [Member]
Risk Retained	$300,000
Personal Lines [Member] \| $1,200,000 - $2,900,000 [Member]
Risk Retained	None
Personal Lines [Member] \| Over $2,900,000 [Member]
Risk Retained (Percentage)	100.00%
Personal Umbrella [Member] \| Initial $1,000,000 [Member]
Risk Retained	$100,000
Personal Umbrella [Member] \| $1,000,000 - $2,000,000 [Member]
Risk Retained	None
Personal Umbrella [Member] \| Over $2,000,000 [Member]
Risk Retained (Percentage)	100.00%
Commercial Lines [Member] \| Initial $400,000 [Member]
Risk Retained	$300,000
Commercial Lines [Member] \| $400,000 - $2,900,000 [Member]
Risk Retained	None
Commercial Lines [Member] \| Over $2,900,000 [Member]
Risk Retained (Percentage)	100.00%
Commercial Automobile [Member] \| Initial $300,000 [Member]
Risk Retained	$300,000
Commercial Automobile [Member] \| $300,000 - $2,000,000 [Member]
Risk Retained	None
Commercial Automobile [Member] \| Over $2,000,000 [Member]
Risk Retained (Percentage)	100.00%
Catastrophe [Member] \| Initial $4,000,000 [Member]
Risk Retained	$1,000,000
Catastrophe [Member] \| $4,000,000 - $90,000,000 [Member]
Risk Retained	None
Catastrophe [Member] \| Over $90,000,000 [Member]
Risk Retained (Percentage)	100.00%

7. Reinsurance (Details 1) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Unpaid Losses	$ 17,364,000	$ 18,420,000
Paid Losses	1,796,000	5,792
Total	19,160,000	24,212,000
Security	14,795,000	7,808,000
Maiden Reinsurace Company [Member]
Unpaid Losses	6,929,000	8,173,000
Paid Losses	732,000	2,989,000
Total	7,661,000	11,162,000
Security	13,868,000	6,503,000
SCOR Reinsurance Company [Member]
Unpaid Losses	3,318,000	4,437,000
Paid Losses	294,000	1,495,000
Total	3,612,000	5,932,000
Security
Motors Insurance Corporation [Member]
Unpaid Losses	1,536,000	1,550,000
Paid Losses	48,000	49,000
Total	1,584,000	1,599,000
Security	792,000	1,214,000
Sirius American Insurance Company [Member]
Unpaid Losses	1,410,000	1,406,000
Paid Losses	44,000	18,000
Total	1,454,000	1,424,000
Security
Swiss Reinsurance America Corporation [Member]
Unpaid Losses	2,523,000	1,705,000
Paid Losses	454,000	756,000
Total	2,977,000	2,461,000
Allied World Assurance Company [Member]
Unpaid Losses	665,000	808,000
Paid Losses	39,000	372,000
Total	704,000	1,180,000
Security
Others [Member]
Unpaid Losses	983,000	341,000
Paid Losses	185,000	113,000
Total	1,168,000	454,000
Security	$ 135,000	$ 91,000

7. Reinsurance (Details 2) - USD ($)	12 Months Ended
7. Reinsurance (Details 2) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Reinsurance Details 2
Provisional ceding commissions earned	$ 11,007,342	$ 8,516,240
Contingent ceding commissions earned	665,761	1,173,915
Ceding commission revenue	$ 11,673,103	$ 9,690,155

7. Reinsurance (Details Narrative) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Reinsurance Details Narrative
Reinsurance receivables	$ 18,400,338	$ 14,690,683
Unpaid losses	0	7,358,391
Reinsurance balances payable	$ 0	$ 807,415

8. Deferred Acquisition Costs and Deferred Ceding Commission Revenue (Details) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Deferred Acquisition Costs And Deferred Ceding Commission Revenue Details
Net deferred policy acquisition costs net of ceding commission revenue, beginning of year	$ 692,848	$ 553,374
Cost incurred and deferred:
Commissions and brokerage	10,500,068	8,087,355
Other underwriting and policy acquisition costs	3,193,910	3,012,611
Ceding commission revenue	(13,114,478)	(9,410,871)
Net deferred policy acquisition costs	579,500	1,689,095
Amortization	(1,396,251)	(1,549,621)
Deferred acquisition costs	(816,751)	139,474
Net deferred policy acquisition costs net of ceding commission revenue, end of year	$ (123,903)	$ 692,848

8. Deferred Acquisition Costs and Deferred Ceding Commission Revenue (Details 1) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Deferred Acquisition Costs And Deferred Ceding Commission Revenue Details 1
Deferred policy acquisition costs	$ 6,860,263	$ 5,569,878
Deferred ceding commission revenue	(6,984,166)	(4,877,030)
Balance at end of period	$ (123,903)	$ 692,848

9. Property and Equipment (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Cost	$ 2,699,397	$ 2,358,295
Accumulated Depreciation	(660,642)	(489,873)
Net	2,038,755	1,868,422
Building
Cost	1,760,435	1,648,838
Accumulated Depreciation	(195,363)	(152,976)
Net	1,565,072	1,495,862
Land
Cost	153,097	153,097
Net	153,097	153,097
Furniture
Cost	170,505	138,115
Accumulated Depreciation	(79,885)	(66,570)
Net	90,620	71,545
Computer equipment and software
Cost	533,966	336,851
Accumulated Depreciation	(307,382)	(219,447)
Net	226,584	117,404
Automobile
Cost	81,394	81,394
Accumulated Depreciation	(78,012)	(50,880)
Net	$ 3,382	$ 30,514

9. Property and Equipment (Details Textual) - USD ($)	12 Months Ended
9. Property and Equipment (Details Textual) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Property And Equipment Details Textual
Depreciation expense	$ 170,769	$ 120,633

10. Property and Casulty Insurance Activity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Premiums Written
Direct	$ 60,449,077	$ 49,251,630
Assumed	45,746	23,967
Ceded	(35,656,060)	(29,715,971)
Net	24,838,763	19,559,626
Changes In Unearned Premiums
Direct	(6,341,750)	(4,724,193)
Assumed	18,499	(5,010)
Ceded	3,709,655	2,386,188
Net	(2,613,596)	(2,343,015)
Premiums Earned
Direct	54,107,327	44,527,437
Assumed	64,245	18,957
Ceded	(31,946,405)	(27,329,783)
Net	$ 22,225,167	$ 17,216,611

10. Property and Casulty Insurance Activity (Details 1) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Unearned premiums	$ 32,335,614	$ 26,012,363
Total reinsurance receivables	37,560,825	38,902,782
Reinsurance Receivables
Case-basis reserves	12,078,399	13,284,613
Loss adjustment expenses	1,226,763	1,064,420
IBNR reserves	4,058,813	4,070,661
Recoverable on unpaid losses	17,363,975	18,419,694
Recoverable on paid losses	1,796,512	5,792,405
Total loss and loss adjustment expenses	19,160,487	24,212,099
Unearned premiums	18,400,338	14,690,683
Total reinsurance receivables	37,560,825	38,902,782
Gross Liability
Case-basis reserves	22,489,240	21,190,141
Loss adjustment expenses	4,200,675	2,502,169
IBNR reserves	7,813,314	6,793,222
Recoverable on paid losses
Total loss and loss adjustment expenses	$ 34,503,229	$ 30,485,532

10. Property and Casulty Insurance Activity (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property And Casulty Insurance Activity Details 2
Balance at beginning of period	$ 30,485,532	$ 18,480,717
Less reinsurance recoverables	(18,419,694)	(9,960,334)
Net balance, beginning of period	12,065,838	8,520,383
Incurred related to:
Current year	11,765,420	10,460,000
Prior years	1,821,113	774,713
Total incurred	13,586,533	11,234,713
Paid related to:
Current year	3,709,495	4,419,000
Prior years	4,803,622	3,270,258
Total paid	8,513,117	7,689,258
Net balance at end of period	17,139,254	12,065,838
Add reinsurance recoverables	17,363,975	18,419,694
Balance at end of period	$ 34,503,229	$ 30,485,532

10. Property and Casulty Insurance Activity (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property And Casulty Insurance Activity Details Narrative
Advance premiums	$ 776,000	$ 611,000
Incurred Losses and Loss Adjustment Expenses are net of reinsurance recoveries under reinsurance contracts	$ 17,167,407	$ 21,396,768

11. Long-Term Debt (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Notes Payable		$ 1,197,000
Total Debt
Notes Payable		747,000
Bank Line of Credit		450,000
Long-Term Debt-Total		1,197,000
Less Current Maturities
Notes Payable
Bank Line of Credit		450,000
Long-Term Debt-Total		450,000
LongTermDebt
Notes Payable		747,000
Bank Line of Credit
Long-Term Debt-Total		$ 747,000