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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	May 11, 2017
Document And Entity Information
Entity Registrant Name	KINGSTONE COMPANIES, INC.
Entity Central Index Key	0000033992
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,623,593
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Assets
Fixed-maturity securities, held-to-maturity, at amortized cost (fair value of $5,159,351 at March 31, 2017 and $5,298,119 at December 31, 2016)	$ 4,895,443	$ 5,094,902
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $100,554,236 at March 31, 2017 and $80,596,628 at December 31, 2016)	100,687,355	80,428,828
Equity securities, available-for-sale, at fair value (cost of $9,545,785 at March 31, 2017 and $9,709,385 at December 31, 2016)	10,102,495	9,987,686
Total investments	115,685,293	95,511,416
Cash and cash equivalents	23,235,655	12,044,520
Premiums receivable, net	11,728,443	11,649,398
Reinsurance receivables, net	33,502,642	32,197,765
Deferred policy acquisition costs	12,467,976	12,239,781
Intangible assets, net	1,265,000	1,350,000
Property and equipment, net	3,375,436	3,011,373
Other assets	1,430,646	1,442,209
Total assets	202,691,091	169,446,462
Liabilities
Loss and loss adjustment expense reserves	44,611,586	41,736,719
Unearned premiums	55,322,298	54,994,375
Advance premiums	1,965,456	1,421,560
Reinsurance balances payable	2,108,447	2,146,017
Deferred ceding commission revenue	6,772,857	6,851,841
Accounts payable, accrued expenses and other liabilities	3,212,865	5,448,448
Income taxes payable	202,751	0
Deferred income taxes	396,425	166,949
Total liabilities	114,592,685	112,765,909
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $.01 par value; authorized 2,500,000 shares	0	0
Common stock, $.01 par value; authorized 20,000,000 shares; issued 11,596,947 shares at March 31, 2017 and 8,896,335 at December 31, 2016; outstanding 10,622,478 shares at March 31, 2017 and 7,921,866 shares at December 31, 2016	115,969	88,963
Capital in excess of par	68,152,149	37,950,401
Accumulated other comprehensive income	455,287	72,931
Retained earnings	21,370,463	20,563,720
Total	90,093,868	58,676,015
Treasury stock, at cost, 974,469 shares at March 31, 2017 and December 31, 2016	(1,995,462)	(1,995,462)
Total stockholders' equity	88,098,406	56,680,553
Total liabilities and stockholders' equity	$ 202,691,091	$ 169,446,462

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Condensed Consolidated Balance Sheets Parenthetical
Fixed-maturity securities, held-to-maturity, fair value	$ 5,159,351	$ 5,298,119
Fixed-maturity securities, available-for-sale, amortized cost	100,554,236	80,596,628
Equity securities, available-for-sale, cost	$ 9,545,785	$ 9,709,385
Stockholders' Equity
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	20,000,000	20,000,000
Common stock, issued shares	11,596,947	8,896,335
Common stock, outstanding shares	10,622,478	7,921,866
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized shares	2,500,000	2,500,000
Treasury stock, Shares	974,469	974,469

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Net premiums earned	$ 16,369,748	$ 14,531,675
Ceding commission revenue	3,184,452	2,770,337
Net investment income	857,800	813,057
Net realized (losses) gains on sales of investments	(54,506)	80,436
Other income	289,700	249,347
Total revenues	20,647,194	18,444,852
Expenses
Loss and loss adjustment expenses	8,292,996	9,483,855
Commission expense	4,888,978	4,270,066
Other underwriting expenses	4,212,417	3,346,441
Other operating expenses	755,804	329,239
Depreciation and amortization	318,698	283,828
Total expenses	18,468,893	17,713,429
Income from operations before taxes	2,178,301	731,423
Income tax expense	707,721	190,391
Net income	1,470,580	541,032
Other comprehensive income (loss), net of tax
Gross change in unrealized gains on available-for-sale-securities	524,822	1,484,064
Reclassification adjustment for losses (gains) included in net income	54,506	(80,436)
Net change in unrealized gains	579,328	1,403,628
Income tax expense related to items of other comprehensive income	(196,972)	(477,234)
Other comprehensive income, net of tax	382,356	926,394
Comprehensive income	$ 1,852,936	$ 1,467,426
Earnings per common share:
Basic	$ 0.15	$ 0.07
Diluted	$ 0.15	$ 0.07
Weighted average common shares outstanding
Basic	9,663,751	7,322,385
Diluted	9,848,494	7,360,564
Dividends declared and paid per common share	$ 0.0625	$ 0.0625

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($)	Preferred Stock	Common Stock	Capital in Excess of Par	Accumulated Other Comprehensive Income	Retained Earnings	Treasury Stock	Total
Beginning Balance, Shares at Dec. 31, 2016	0	8,896,335				974,469
Beginning Balance, Amount at Dec. 31, 2016	$ 0	$ 88,963	$ 37,950,401	$ 72,931	$ 20,563,720	$ (1,995,462)	$ 56,680,553
Proceeds from public offering, net of offering costs of $2,173,000, Shares		2,692,500
Proceeds from public offering, net of offering costs of $2,173,000, Amount		$ 26,925	30,109,774				30,136,699
Stock-based compensation			59,055				$ 59,055
Vesting of restricted stock awards, Shares		2,946					0
Vesting of restricted stock awards, Amount		$ 29	(29)
Exercise of stock options, Shares		5,166
Exercise of stock options, Amount		$ 52	32,948				$ 33,000
Dividends					(663,837)		(663,837)
Net income					1,470,580		1,470,580
Change in unrealized gains on available-for-sale securities, net of tax				382,356			382,356
Ending Balance, Shares at Mar. 31, 2017	0	11,596,947				974,469
Ending Balance, Amount at Mar. 31, 2017	$ 0	$ 115,969	$ 68,152,149	$ 455,287	$ 21,370,463	$ (1,995,462)	$ 88,098,406

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 1,470,580	$ 541,032
Adjustments to reconcile net income to net cash flows provided by operating activities:
Net realized losses (gains) on investments	54,506	(80,436)
Depreciation and amortization	318,698	283,828
Amortization of bond premium, net	124,054	92,646
Stock-based compensation	59,055	32,234
Deferred income tax benefit (expense)	32,504	(43,114)
(Increase) decrease in operating assets:
Premiums receivable, net	(79,045)	99,464
Reinsurance receivables, net	(1,304,877)	(4,560,111)
Deferred policy acquisition costs	(228,195)	(141,970)
Other assets	11,563	(666,404)
Increase (decrease) in operating liabilities:
Loss and loss adjustment expense reserves	2,874,867	6,154,265
Unearned premiums	327,923	122,858
Advance premiums	543,896	532,486
Reinsurance balances payable	(37,570)	1,536,971
Deferred ceding commission revenue	(78,984)	(18,859)
Accounts payable, accrued expenses and other liabilities	(2,032,832)	(1,212,176)
Net cash flows provided by operating activities	2,056,143	2,672,714
Cash flows from investing activities:
Purchase - fixed-maturity securities held-to-maturity	(22,811,402)	(15,890,742)
Purchase - equity securities available-for-sale	0	(1,831,513)
Redemption - fixed-maturity securities held-to-maturity	200,000	0
Sale or maturity - fixed-maturity securities available-for-sale	2,706,202	6,401,092
Sale - equity securities available-for-sale	132,091	1,161,501
Acquisition of fixed assets	(597,761)	(182,164)
Other investing activities	0	250,448
Net cash flows used in investing activities	(20,370,870)	(10,091,378)
Cash flows from financing activities:
Net proceeds from issuance of common stock	30,136,699	0
Proceeds from exercise of stock options	33,000	0
Purchase of treasury stock	0	(95,881)
Dividends paid	(663,837)	(457,603)
Net cash flows provided by (used in) financing activities	29,505,862	(553,484)
Increase (decrease) in cash and cash equivalents	11,191,135	(7,972,148)
Cash and cash equivalents, beginning of period	12,044,520	13,551,372
Cash and cash equivalents, end of period	23,235,655	5,579,224
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$ 0	$ 30,000

2. Accounting Policies

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

2. Accounting Policies

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.

Principles of Consolidation

The consolidated financial statements consist of Kingstone and its wholly owned subsidiaries; 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. All significant inter-company account balances and transactions have been eliminated in consolidation.

Accounting Changes

In May 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-09, Financial Services – Insurance (Topic 944): Disclosures About Short-Duration Contracts. The updated accounting guidance requires expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity’s ability to underwrite and anticipate costs associated with insurance claims. The disclosures include information about incurred and paid claims development by accident year, on a net basis after reinsurance, for the number of years claims incurred that typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting period is considered required supplementary information. The expanded disclosures also include information about significant changes in methodologies and assumptions, a reconciliation of incurred and paid claims development to the carrying amount of the liability for unpaid claims and claim adjustment expenses, the total amount of incurred but not reported liabilities plus expected development, claims frequency information including the methodology used to determine claim frequency and any changes to that methodology, and claim duration. The guidance became effective for annual periods beginning after December 15, 2015, and interim periods beginning after December 15, 2016, and has been applied retrospectively. The new guidance affected disclosures only and had no impact on the Company’s results of operations or financial position.

Effective January 1, 2017, the Company has adopted the provisions of ASU 2016-09 – Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires recognition of all income tax effects from share-based payments arising on or after January 1, 2017 (the Company’s adoption date) in income tax expense. As a result, the Company realized windfall tax benefits in the interim period of adoption of approximately $5,000, which was recognized as a discrete period income tax benefit as required by this ASU. This benefit resulted in lowering the Company’s effective tax rate for the interim period by 0.1%.

Accounting Pronouncements

In May 2014, FASB issued ASU 2014-09 – Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASU 2014-09, as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-20, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In January 2016, FASB issued ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The updated accounting guidance requires changes to the reporting model for financial instruments. The primary change for the Company is expected to be the requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements.

In February 2016, FASB issued ASU 2016-02 – Leases (Topic 842). Under this ASU, lessees will recognize a right-of-use-asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of fewer than 12 months. The liability is to be measured as the present value of the future minimum lease payments taking into account renewal options if applicable plus initial incremental direct costs such as commissions. The minimum payments are discounted using the rate implicit in the lease or, if not known, the lessee’s incremental borrowing rate. The lessee’s income statement treatment for leases will vary depending on the nature of what is being leased. A financing type lease is present when, among other matters, the asset is being leased for a substantial portion of its economic life or has an end-of-term title transfer or a bargain purchase option as in today’s practice. The payment of the liability set up for such leases will be apportioned between interest and principal; the right-of use asset will be generally amortized on a straight-line basis. If the lease does not qualify as a financing type lease, it will be accounted for on the income statement as rent on a straight-line basis. The guidance will be effective for the Company for interim and annual reporting periods beginning after December 15, 2018. The Company will apply the guidance using a modified retrospective approach. Early application is permitted. The Company is evaluating whether the adoption of ASU 2016-02 will have a significant impact on its consolidated results of operations, financial position or cash flows.

In June 2016, FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The revised accounting guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses of available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements.

In August 2016, FASB issued ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The revised ASU provides accounting guidance for eight specific cash flow issues. FASB issued the standard to clarify areas where GAAP has been either unclear or lacking in specific guidance. ASU 2016-15 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect the updated guidance will have on its consolidated statement of cash flows.

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

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

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 March 31, 2017 and December 31, 2016 are summarized as follows:

	March 31, 2017

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

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$ 7,582,088	$ 214,232	$ (18,806)	$ (18,710)	$ 7,758,804	$ 176,716

Corporate and other bonds
Industrial and miscellaneous	70,449,109	781,970	(556,753)	(7,370)	70,666,956	217,847

Residential mortgage and other asset backed securities	22,523,039	72,990	(308,073)	(26,361)	22,261,595	(261,444)
Total fixed-maturity securities	100,554,236	1,069,192	(883,632)	(52,441)	100,687,355	133,119

Equity Securities:
Preferred stocks	5,986,588	63,123	(120,639)	(75,322)	5,853,750	(132,838)
Common stocks	3,559,197	756,966	-	(67,418)	4,248,745	689,548
Total equity securities	9,545,785	820,089	(120,639)	(142,740)	10,102,495	556,710

Total	$ 110,100,021	$ 1,889,281	$ (1,004,271)	$ (195,181)	$ 110,789,850	$ 689,829

	December 31, 2016

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

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$ 8,053,449	$ 199,028	$ (46,589)	$ -	$ 8,205,888	$ 152,439

Corporate and other bonds
Industrial and miscellaneous	53,728,395	600,519	(638,113)	(5,612)	53,685,189	(43,206)

Residential mortgage and other asset backed securities	18,814,784	70,682	(309,273)	(38,442)	18,537,751	(277,033)
Total fixed-maturity securities	80,596,628	870,229	(993,975)	(44,054)	80,428,828	(167,800)

Equity Securities:
Preferred stocks	5,986,588	10,317	(241,333)	(70,571)	5,685,001	(301,587)
Common stocks	3,722,797	691,324	(13,968)	(97,468)	4,302,685	579,888
Total equity securities	9,709,385	701,641	(255,301)	(168,039)	9,987,686	278,301

Total	$ 90,306,013	$ 1,571,870	$ (1,249,276)	$ (212,093)	$ 90,416,514	$ 110,501

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 March 31, 2017 and December 31, 2016 is shown below:

	March 31, 2017		December 31, 2016
	Amortized		Amortized
Remaining Time to Maturity	Cost	Fair Value	Cost	Fair Value

Less than one year	$ 1,094,841	$ 1,106,433	$ 1,752,501	$ 1,765,795
One to five years	31,745,373	32,254,008	29,541,568	29,913,308
Five to ten years	42,572,660	42,468,839	30,487,775	30,211,974
More than 10 years	2,618,323	2,596,480	-	-
Residential mortgage and other asset backed securities	22,523,039	22,261,595	18,814,784	18,537,751
Total	$ 100,554,236	$ 100,687,355	$ 80,596,628	$ 80,428,828

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 March 31, 2017 and December 31, 2016 are summarized as follows:

	March 31, 2017

			Gross Unrealized Losses
	Cost or Amortized	Gross Unrealized	Less than 12	More than 12	Fair	Net Unrealized
Category	Cost	Gains	Months	Months	Value	Gains


U.S. Treasury securities	$ 606,436	$ 147,603	$ -	$ -	$ 754,039	$ 147,603

Political subdivisions of States,
Territories and Possessions	1,149,119	38,236	(1,868)	-	1,185,487	36,368

Corporate and other bonds
Industrial and miscellaneous	3,139,888	98,656	(7,065)	(11,654)	3,219,825	79,937

Total	$ 4,895,443	$ 284,495	$ (8,933)	$ (11,654)	$ 5,159,351	$ 263,908

	December 31, 2016

			Gross Unrealized Losses
	Cost or Amortized	Gross Unrealized	Less than 12	More than 12	Fair	Net Unrealized
Category	Cost	Gains	Months	Months	Value	Gains


U.S. Treasury securities	$ 606,427	$ 147,612	$ -	$ -	$ 754,039	$ 147,612

Political subdivisions of States,
Territories and Possessions	1,349,916	37,321	-	-	1,387,237	37,321

Corporate and other bonds
Industrial and miscellaneous	3,138,559	72,784	(7,619)	(46,881)	3,156,843	18,284

Total	$ 5,094,902	$ 257,717	$ (7,619)	$ (46,881)	$ 5,298,119	$ 203,217

Held-to-maturity U.S. Treasury 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 March 31, 2017 and December 31, 2016 is shown below:

	March 31, 2017		December 31, 2016
	Amortized		Amortized
Remaining Time to Maturity	Cost	Fair Value	Cost	Fair Value

Less than one year	$ -	$ -	$ -	$ -
One to five years	650,000	641,068	650,000	642,455
Five to ten years	3,639,007	3,764,244	3,838,475	3,901,625
More than 10 years	606,436	754,039	606,427	754,039
Total	$ 4,895,443	$ 5,159,351	$ 5,094,902	$ 5,298,119

Investment Income

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

	Three months ended
	March 31,
	2017	2016

Income:
Fixed-maturity securities	$ 745,453	$ 664,476
Equity securities	136,485	175,951
Cash and cash equivalents	6,169	6,446
Total	888,107	846,873
Expenses:
Investment expenses	30,307	33,816
Net investment income	$ 857,800	$ 813,057

Proceeds from the redemption of fixed-maturity securities held-to-maturity were $200,000 and $-0- for the three months ended March 31, 2017 and 2016, respectively.

Proceeds from the sale and maturity of fixed-maturity securities available-for-sale were $2,706,202 and $6,401,092 for the three months ended March 31, 2017 and 2016, respectively.

Proceeds from the sale of equity securities available-for-sale were $132,091 and $1,161,501 for the three months ended March 31, 2017 and 2016, respectively.

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

	Three months ended
	March 31,
	2017	2016

Fixed-maturity securities:
Gross realized gains	$ 13,123	$ 106,417
Gross realized losses (1)	(36,120)	(105,543)
	(22,997)	874

Equity securities:
Gross realized gains	-	82,688
Gross realized losses	(31,509)	(3,126)
	(31,509)	79,562

Net realized (losses) gains	$ (54,506)	$ 80,436

(1)

Gross realized losses for the three months ended March 31, 2017 include $747 of loss from the redemption of fixed-maturity securities held-to-maturity.

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, GAAP specifies (i) if the Company does not have the intent to sell a debt security prior to recovery and (ii) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When the Company does not intend to sell the security and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment (“OTTI”) of a debt security in earnings and the remaining portion in other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections. For held-to-maturity debt securities, the amount of OTTI recorded in other comprehensive income for the noncredit portion of a previous OTTI is amortized prospectively over the remaining life of the security on the basis of timing of future estimated cash flows of the security.

OTTI losses are recorded in the condensed 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 March 31, 2017 and December 31, 2016, there were 93 and 85 securities, respectively, that accounted for the gross unrealized loss. As of March 31, 2017, the Company’s held-to-maturity debt securities included an investment in one bond issued by the Commonwealth of Puerto Rico (“PR”). In July 2016, PR defaulted on its interest payment to bondholders. Due to the credit deterioration of PR, the Company recorded a credit loss component of OTTI on this investment as of June 30, 2016. As of December 31, 2016, the full amount of the write-down was recognized as a credit component of OTTI in the amount of $69,911. The Company determined that none of the other unrealized losses were deemed to be OTTI for its portfolio of fixed-maturity investments and equity securities for the three months ended March 31, 2017 and 2016. 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 March 31, 2017 and December 31, 2016 as follows:

	March 31, 2017
	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	$ 759,346	$ (18,806)	2	$ 313,326	$ (18,710)	1	$ 1,072,672	$ (37,516)

Corporate and other bonds industrial and miscellaneous	26,857,516	(556,753)	46	238,393	(7,370)	1	27,095,909	(564,123)

Residential mortgage and other asset backed securities	18,537,897	(308,073)	30	477,494	(26,361)	4	19,015,391	(334,434)

Total fixed-maturity securities	$ 46,154,759	$ (883,632)	78	$ 1,029,213	$ (52,441)	6	$ 47,183,972	$ (936,073)

Equity Securities:
Preferred stocks	$ 3,376,750	$ (120,639)	7	$ 656,000	$ (75,322)	1	$ 4,032,750	$ (195,961)
Common stocks	-	-	-	291,000	(67,418)	1	291,000	(67,418)

Total equity securities	$ 3,376,750	$ (120,639)	7	$ 947,000	$ (142,740)	2	$ 4,323,750	$ (263,379)

Total	$ 49,531,509	$ (1,004,271)	85	$ 1,976,213	$ (195,181)	8	$ 51,507,722	$ (1,199,452)

	December 31, 2016
	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	$ 1,067,574	$ (46,589)	3	$ -	$ -	-	$ 1,067,574	$ (46,589)

Corporate and other bonds industrial and miscellaneous	19,859,293	(638,113)	34	239,970	(5,612)	1	20,099,263	(643,725)

Residential mortgage and other asset backed securities	15,918,090	(309,273)	30	675,316	(38,442)	6	16,593,406	(347,715)

Total fixed-maturity securities	$ 36,844,957	$ (993,975)	67	$ 915,286	$ (44,054)	7	$ 37,760,243	$ (1,038,029)

Equity Securities:
Preferred stocks	$ 3,759,850	$ (241,333)	8	$ 660,750	$ (70,571)	1	$ 4,420,600	$ (311,904)
Common stocks	288,075	(13,968)	1	424,550	(97,468)	1	712,625	(111,436)

Total equity securities	$ 4,047,925	$ (255,301)	9	$ 1,085,300	$ (168,039)	2	$ 5,133,225	$ (423,340)

Total	$ 40,892,882	$ (1,249,276)	76	$ 2,000,586	$ (212,093)	9	$ 42,893,468	$ (1,461,369)

4. Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

4. Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation technique used by the Company to fair value its financial instruments is the market approach which uses prices and other relevant information generated by market transactions involving identical or comparable assets.

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, and residential mortgage-backed securities, 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 ability to observe 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 March 31, 2017 and December 31, 2016 as follows:

	March 31, 2017
	Level 1	Level 2	Level 3	Total

Fixed-maturity securities available-for-sale
Political subdivisions of
States, Territories and
Possessions	$ -	$ 7,758,804	$ -	$ 7,758,804

Corporate and other
bonds industrial and
miscellaneous	65,841,558	4,825,398	-	70,666,956

Residential mortgage and other asset backed securities	-	22,261,595	-	22,261,595
Total fixed maturities	65,841,558	34,845,797	-	100,687,355
Equity securities	10,102,495	-	-	10,102,495
Total investments	$ 75,944,053	$ 34,845,797	$ -	$ 110,789,850

	December 31, 2016
	Level 1	Level 2	Level 3	Total

Fixed-maturity securities available-for-sale
Political subdivisions of
States, Territories and
Possessions	$ -	$ 8,205,888	$ -	$ 8,205,888

Corporate and other
bonds industrial and
miscellaneous	48,356,317	5,328,872	-	53,685,189

Residential mortgage and other asset backed securities	-	18,537,751	-	18,537,751
Total fixed maturities	48,356,317	32,072,511	-	80,428,828
Equity securities	9,987,686	-	-	9,987,686
Total investments	$ 58,344,003	$ 32,072,511	$ -	$ 90,416,514

- Definition

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

6. Property and Casualty Insurance Activity

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

6. Property and Casualty Insurance Activity

Premiums Earned

Premiums written, ceded and earned are as follows:

	Direct	Assumed	Ceded	Net

Three months ended March 31, 2017
Premiums written	$ 26,125,467	$ 4,428	$ (9,395,590)	$ 16,734,305
Change in unearned premiums	(330,903)	2,981	(36,635)	(364,557)
Premiums earned	$ 25,794,564	$ 7,409	$ (9,432,225)	$ 16,369,748

Three months ended March 31, 2016
Premiums written	$ 23,043,325	$ 5,078	$ (8,386,528)	$ 14,661,875
Change in unearned premiums	(126,428)	3,571	(7,343)	(130,200)
Premiums earned	$ 22,916,897	$ 8,649	$ (8,393,871)	$ 14,531,675

Premium receipts in advance of the policy effective date are recorded as advance premiums. The balance of advance premiums as of March 31, 2017 and December 31, 2016 was approximately $1,965,000 and $1,422,000, respectively.

Loss and Loss Adjustment Expense Reserves

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

	Three months ended
	March 31,
	2017	2016

Balance at beginning of period	$ 41,736,719	$ 39,876,500
Less reinsurance recoverables	(15,776,880)	(16,706,364)
Net balance, beginning of period	25,959,839	23,170,136

Incurred related to:
Current year	8,297,582	9,903,094
Prior years	(4,586)	(419,239)
Total incurred	8,292,996	9,483,855

Paid related to:
Current year	2,269,894	3,006,210
Prior years	4,090,766	3,421,820
Total paid	6,360,660	6,428,030

Net balance at end of period	27,892,175	26,225,961
Add reinsurance recoverables	16,719,411	19,804,804
Balance at end of period	$ 44,611,586	$ 46,030,765

Incurred losses and LAE are net of reinsurance recoveries under reinsurance contracts of $4,233,804 and $4,313,667 for the three months ended March 31, 2017 and 2016, respectively.

Prior year incurred loss and LAE development is based upon estimates by line of business and accident year. Prior year loss and LAE development incurred during the three months ended March 31, 2017 and 2016 was $(4,586) favorable and $(419,239) favorable, respectively. The Company’s management continually monitors claims activity to assess the appropriateness of carried case and incurred but not reported (“IBNR”) reserves, giving consideration to Company and industry trends.

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 monthly 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 determine the required IBNR 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 affect 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 unreported claims (‘pure’ IBNR) for accident dates of March 31, 2014 and prior is limited although there remains the possibility of adverse development on reported claims (‘case development’ IBNR).

The following is information about incurred and paid claims development as of March 31, 2017, net of reinsurance, as well as the cumulative reported claims by accident year and total IBNR reserves as of March 31, 2017 included in the net incurred loss and allocated expense amounts. The historical information regarding incurred and paid claims development for the years ended December 31, 2008 to December 31, 2015 is presented as supplementary unaudited information.

Reported claim counts are measured on an occurrence or per event basis. A single claim occurrence could result in more than one loss type or claimant; however the Company counts claims at the occurrence level as a single claim regardless of the number of claimants or claim features involved.

All Lines of Business
(in thousands, except reported claims data)

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance										As of March 31, 2017
	For the Years Ended December 31,									Three Months Ended March 31,	IBNR	Cumulative Number of Reported Claims by Accident Year
Accident Year	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	IBNR	Cumulative Number of Reported Claims by Accident Year
	(Unaudited 2008 - 2015)									(Unaudited)

2008	$4,505	$4,329	$4,223	$4,189	$4,068	$4,055	$4,056	$4,040	$4,038	$ 4,036	$ 2	1,133
2009		4,403	4,254	4,287	4,384	4,511	4,609	4,616	4,667	4,669	8	1,136
2010			5,598	5,707	6,429	6,623	6,912	6,853	6,838	6,833	14	1,616
2011				7,603	7,678	8,618	9,440	9,198	9,066	9,127	59	1,913
2012					9,539	9,344	10,278	10,382	10,582	10,653	113	4,701	(1)
2013						10,728	9,745	9,424	9,621	9,513	348	1,554
2014							14,193	14,260	14,218	14,359	838	2,120
2015								22,340	21,994	21,675	2,048	2,514
2016									26,062	26,153	4,813	2,784
2017										7,718	3,174	657
									Total	$ 114,736
(1) Reported claims for accident year 2012 includes 3,406 claims from Superstorm Sandy.

All Lines of Business
(in thousands)
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,									Three Months Ended March 31,
Accident Year	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017
	(Unaudited 2008 - 2015)									(Unaudited)

2008	$2,406	$3,346	$3,730	$3,969	$4,003	$4,029	$4,028	$4,031	$4,031	$ 4,031
2009		2,298	3,068	3,607	3,920	4,134	4,362	4,424	4,468	4,470
2010			2,566	3,947	4,972	5,602	6,323	6,576	6,720	6,742
2011				3,740	5,117	6,228	7,170	8,139	8,540	8,554
2012					3,950	5,770	7,127	8,196	9,187	9,477
2013						3,405	5,303	6,633	7,591	7,743
2014							5,710	9,429	10,738	10,905
2015								12,295	16,181	16,809
2016									15,364	17,814
2017										2,114
									Total	$ 88,658

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented										$ 26,079
All outstanding liabilities before 2008, net of reinsurance										634
Liabilities for claims and allocated claim adjustment expenses, net of reinsurance										$ 26,713

The reconciliation of the net incurred and paid claims development tables to the loss and LAE reserves in the consolidated balance sheet is as follows:

	As of
(in thousands)	March 31, 2017
Liabilities for claims and claim adjustment expenses, net of reinsurance	$ 26,713
Total reinsurance recoverable on unpaid claims	16,719
Unallocated claims adjustment expenses	1,180
Total gross liability for loss and LAE reserves	$ 44,612

Commercial Auto Line of Business

Effective October 1, 2014 the Company decided that it would no longer accept applications for new commercial auto policies. The action was taken following a series of underwriting and pricing measures which were intended to improve the profitability of this line of business. The actions taken did not yield the hoped for results. In February 2015, the Company made the decision that it would no longer offer renewals on its existing commercial auto policies beginning with those that expired on or after May 1, 2015. The Company had -0- and 34 commercial auto policies in force as of March 31, 2017 and 2016, respectively.

Reinsurance

The Company’s quota share reinsurance treaties are on a July 1 through June 30 fiscal year basis; therefore, for year to date fiscal periods after June 30, two separate treaties will be included in such periods.

The Company’s quota share reinsurance treaties in effect for the three months ended March 31, 2017 for its personal lines business, which primarily consists of homeowners’ policies, were covered under the July 1, 2016/June 30, 2017 treaty year (“2016/2017 Treaty”). The Company’s quota share reinsurance treaties in effect for the three months ended March 31, 2016 were covered under the July 1, 2015/June 30, 2016 treaty year (“2015/2016 Treaty”).

The Company’s 2015/2016 Treaty and 2016/2017 Treaty provide for the following material terms:

	Treaty Year
	July 1, 2016	July 1, 2015
	to	to
Line of Busines	June 30, 2017	June 30, 2016

Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded	40%	40%
Risk retained	$ 500,000	$ 450,000
Losses per occurrence subject to quota share reinsurance coverage	$ 833,333	$ 750,000
Excess of loss coverage above quota share coverage	$ 3,666,667	$ 3,750,000
	in excess of	in excess of
	$ 833,333	$ 750,000
Total reinsurance coverage per occurrence	$ 4,000,000	$ 4,050,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	$ 4,500,000
Expiration date	June 30, 2017	June 30, 2016

Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90%	90%
Percent ceded - excess of $1,000,000 of coverage	100%	100%
Risk retained	$ 100,000	$ 100,000
Total reinsurance coverage per occurrence	$ 4,900,000	$ 2,900,000
Losses per occurrence subject to quota share reinsurance coverage	$ 5,000,000	$ 3,000,000
Expiration date	June 30, 2017	June 30, 2016

Commercial Lines:
General liability commercial policies, except for commercial auto
Quota share treaty:
Percent ceded (terminated effective July 1, 2014)	None	None
Risk retained	$ 500,000	$ 425,000
Losses per occurrence subject to quota share reinsurance coverage	None	None
Excess of loss coverage above quota share coverage	$ 4,000,000	$ 4,075,000
	in excess of	in excess of
	$ 500,000	$ 425,000
Total reinsurance coverage per occurrence	$ 4,000,000	$ 4,075,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	$ 4,500,000

Commercial Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90%
Percent ceded - excess of $1,000,000 of coverage	100%
Risk retained	$ 100,000
Total reinsurance coverage per occurrence	$ 4,900,000
Losses per occurrence subject to quota share reinsurance coverage	$ 5,000,000
Expiration date	June 30, 2017

Commercial Auto:
Risk retained		$ 300,000
Excess of loss coverage in excess of risk retained		$ 1,700,000
		in excess of
		$ 300,000
Catastrophe Reinsurance:
Initial loss subject to personal lines quota share treaty	$ 5,000,000	$ 4,000,000
Risk retained per catastrophe occurrence (1)	$ 3,000,000	$ 2,400,000
Catastrophe loss coverage in excess of quota share coverage (2) (3)	$ 247,000,000	$ 176,000,000
Severe winter weather aggregate (3)	No	Yes
Reinstatement premium protection (4)	Yes	Yes

(1)

Plus losses in excess of catastrophe coverage.

(2)

Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts. Effective July 1, 2016, the duration of a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone was extended to 168 consecutive hours from 120 consecutive hours.

(3)

From July 1, 2015 through June 30, 2016, catastrophe treaty also covered losses caused by severe winter weather during any consecutive 28 day period.

(4)

Effective July 1, 2015, reinstatement premium protection for $16,000,000 of catastrophe coverage in excess of $4,000,000. Effective July 1, 2016, reinstatement premium protection for $20,000,000 of catastrophe coverage in excess of $5,000,000.

The single maximum risks per occurrence to which the Company is subject under the new treaties effective July 1, 2016 and under the treaties that expired on June 30, 2016 are as follows:

	July 1, 2016 - June 30, 2017		July 1, 2015 - June 30, 2016
Treaty	Extent of Loss	Risk Retained	Extent of Loss	Risk Retained
Personal Lines	Initial $833,333	$500,000	Initial $750,000	$450,000
	$833,333 - $4,500,000	None(1)	$750,000 - $4,500,000	None(1)
	Over $4,500,000	100%	Over $4,500,000	100%

Personal Umbrella	Initial $1,000,000	$100,000	Initial $1,000,000	$100,000
	$1,000,000 - $5,000,000	None(1)	$1,000,000 - $3,000,000	None(1)
	Over $5,000,000	100%	Over $3,000,000	100%

Commercial Lines	Initial $500,000	$500,000	Initial $425,000	$425,000
	$500,000 - $4,500,000	None(1)	$425,000 - $4,500,000	None(1)
	Over $4,500,000	100%	Over $4,500,000	100%

Commercial Umbrella	Initial $1,000,000	$100,000
	$1,000,000 - $5,000,000	None(1)
	Over $5,000,000	100%

Catastrophe (2)	Initial $5,000,000	$3,000,000	Initial $4,000,000	$2,400,000
	$5,000,000 - $252,000,000	None	$4,000,000 - $180,000,000	None
	Over $252,000,000	100%	Over $180,000,000	100%

________________

(1)

Covered by excess of loss treaties.

(2)

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

In March 2017, the Company bound its personal lines quota share reinsurance treaty effective July 1, 2017. The treaty provides for a reduction in the quota share ceding rate to 20%, from the current 40% in the expiring treaty, and the provisional ceding commission rate increases to 52.5%, from the current 52.0% in the expiring treaty. The new treaty covers a two year period from July 1, 2017 through June 30, 2019 (“2017/2019 Treaty”). The Company shall have the option under broad circumstances to reduce the quota share ceding rate or terminate the 2017/2019 Treaty effective July 1, 2018 by giving advance notice to the two reinsurers who participate in the quota share reinsurance treaty. The two reinsurers who participate in the quota share reinsurance treaty shall have the option under limited circumstances to reduce the quota share ceding rate or terminate the 2017/2019 Treaty effective July 1, 2018 by giving advance notice to the Company.

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 of its obligations to policyholders.

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.

The Company’s estimated ultimate treaty year loss ratios (“Loss Ratio(s)”) for treaties in effect for the three months ended March 31, 2017 are attributable to contracts for the 2016/2017 Treaty. The Company’s Loss Ratios for treaties in effect for the three months ended March 31, 2016 are attributable to contracts for the 2015/2016 Treaty.

Treaties in effect for the three months ended March 31, 2017

Under the 2016/2017 Treaty, the Company is receiving a higher upfront fixed provisional rate in exchange for a less favorable sliding scale contingent rate. Under this arrangement, the Company earns more provisional ceding commissions, while contingent ceding commissions are reduced due to the less favorable sliding scale rate. The Company’s Loss Ratios for the period July 1, 2016 through March 31, 2017 (attributable to the 2016/2017 Treaty) were consistent with the contractual Loss Ratio at which the provisional ceding commissions are earned and therefore no contingent commission was recorded.

Treaties in effect for the three months ended March 31, 2016

Under the 2015/2016 Treaty, the Company is receiving a higher upfront fixed provisional rate in exchange for a less favorable sliding scale contingent rate. Under this arrangement, the Company earns more provisional ceding commissions, while contingent ceding commissions are reduced due to the less favorable sliding scale rate. The Company’s Loss Ratio for the period July 1, 2015 through March 31, 2016, which is attributable to the 2015/2016 Treaty, was higher than the contractual Loss Ratio at which provisional ceding commissions are earned. Accordingly, for the three month period ended March 31, 2016, the Company’s contingent ceding commission earned was reduced as a result of the estimated Loss Ratio for the 2015/2016 Treaty.

In addition to the treaties that were in effect for the three months ended March 31, 2017 and 2016, the 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 commission revenue consists of the following:

	Three months ended
	March 31,
	2017	2016

Provisional ceding commissions earned	$ 3,343,769	$ 3,099,614
Contingent ceding commissions earned	(159,317)	(329,277)
	$ 3,184,452	$ 2,770,337

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, the Loss Ratios from prior years’ treaties are subject to change as incurred losses from those periods develop, resulting in an increase or decrease in the commission rate and contingent ceding commissions earned. As of March 31, 2017 and December 31, 2016, net contingent ceding commissions payable to reinsurers under all treaties was approximately $1,051,000 and $773,000, respectively.

7. Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

7. Stockholders' Equity

Public Offering of Common Stock

On January 31, 2017, the Company closed on an underwritten public offering of 2,500,000 shares of its Common Stock. On February 14, 2017, the Company closed on the underwriters’ purchase option for an additional 192,500 shares of its Common Stock. The public offering price for the 2,692,500 shares sold was $12.00 per share. The aggregate net proceeds to the Company was approximately $30,137,000, after deducting underwriting discounts and commissions and other offering expenses in the aggregate amount of $2,173,000.

On March 1, 2017, the Company used $23,000,000 of the net proceeds of the offering to contribute capital to its insurance subsidiary, KICO, to support its ratings upgrade plan and additional growth. The remainder of the net proceeds will be used for general corporate purposes. A shelf registration statement relating to the shares sold in the offering was filed with the SEC and became effective on January 19, 2017.

Dividends Declared

Dividends declared and paid on Common Stock were $663,837 and $457,603 for the three months ended March 31, 2017 and 2016, respectively. The Company’s Board of Directors approved a quarterly dividend on May 10, 2017 of $.08 per share payable in cash on June 15, 2017 to stockholders of record as of May 31, 2017 (see Note 11).

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 700,000 shares of the Company’s Common Stock are permitted to be issued pursuant to options granted and restricted stock issued. Pursuant to the Company’s 2014 Equity Participation Plan (the “2014 Plan”), a maximum of 700,000 shares of Common Stock of the Company are authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses. Incentive stock options granted under the 2014 Plan and 2005 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). The Board of Directors or the Compensation Committee of the Board determines the expiration date with respect to non-statutory stock options and the vesting provisions for restricted stock granted under the 2014 Plan and 2005 Plan.

The results of operations for the three months ended March 31, 2017 and 2016 include stock-based stock option compensation expense totaling approximately $16,000 and $32,000 respectively. Stock-based compensation expense related to stock options is net of estimated forfeitures of 17% for each of the three months ended March 31, 2017 and 2016. Such amounts have been included in the condensed consolidated statements of income and comprehensive income within other operating expenses.

Stock-based compensation expense for the three months ended March 31, 2017 and 2016 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. The Company uses the “simplified” method to estimate the expected term of the options because the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. No options were granted during the three months ended March 31, 2017. The weighted average estimated fair value of stock options granted during the three months ended March 31, 2016 was $1.97 per share. The fair value of stock options at the grant date was estimated using the Black-Scholes option-pricing model. The following weighted average assumptions were used for grants during the following periods:

	Three months ended
	March 31,
	2017	2016

Dividend Yield	n/a	3.18%
Volatility	n/a	31.61%
Risk-Free Interest Rate	n/a	1.11%
Expected Life	n/a	3.25 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 stock option activity under the Company’s 2014 Plan and 2005 Plan for the three months ended March 31, 2017 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, 2017	362,750	$ 6.62	2.61	$ 2,586,748

Granted	-	$ -		$ -
Exercised	(5,250)	$ 6.53		$ 37,863
Forfeited	-	$ -		$ -

Outstanding at March 31, 2017	357,500	$ 6.62	2.37	$ 3,335,360

Vested and Exercisable at March 31, 2017	271,250	$ 6.43	2.23	$ 2,581,023

The aggregate intrinsic value of options outstanding and options exercisable at March 31, 2017 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 $15.95 closing price of the Company’s Common Stock on March 31, 2017.

Participants in the 2005 and 2014 Plans 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 $33,000 from the exercise of options for the purchase of 5,000 shares of Common Stock during the three months ended March 31, 2017. The remaining 250 options exercised during the three months ended March 31, 2017 were Net Exercises, resulting in the issuance of 166 shares of Common Stock. No options were exercised during the three months ended March 31, 2016.

As of March 31, 2017, the fair value of unamortized compensation cost related to unvested stock option awards was approximately $28,000. Unamortized compensation cost as of March 31, 2017 is expected to be recognized over a remaining weighted-average vesting period of 0.70 years.

As of March 31, 2017, there were 578,500 shares reserved for grants under the 2014 Plan.

Other Equity Compensation

In January 2017, the Company granted a total of 8,000 shares of restricted Common Stock under the 2014 Plan to its four non-employee directors. In January 2016, the Company granted a total of 6,000 shares of restricted Common Stock under the 2014 Plan to its three then non-employee directors. In March 2016, the Company granted 1,500 shares of restricted Common Stock under the 2014 Plan to a newly elected non-employee director. One-third of the shares granted will vest on each of the three annual anniversaries following the grant date.

In February 2017, the Company granted a total of 16,000 shares of restricted Common Stock under the 2014 Plan to two executive officers. The shares granted will vest on a monthly basis over the three year period following the grant date.

The fair value of the shares will be determined on each of the vesting dates. For the three months ended March 31, 2017, stock-based compensation of approximately $43,000 for these grants is included in the condensed consolidated statements of income and comprehensive income.

- Definition

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.

+ References

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-Section S99
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-Publisher FASB
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+ Details

8. Income Taxes

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

8. 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 return 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 condensed consolidated financial statements taken as a whole for the respective periods.

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 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:

	March 31,	December 31,
	2017	2016

Deferred tax asset:
Net operating loss carryovers (1)	$ 112,760	$ 131,626
Claims reserve discount	448,437	417,349
Unearned premium	2,902,155	2,877,365
Deferred ceding commission revenue	2,302,771	2,329,626
Other	166,025	188,675
Total deferred tax assets	5,932,148	5,944,641

Deferred tax liability:
Investment in KICO (2)	1,169,000	1,169,000
Deferred acquisition costs	4,239,112	4,161,526
Intangibles	430,100	459,000
Depreciation and amortization	250,206	265,671
Net unrealized appreciation of securities - available for sale	240,155	56,393
Total deferred tax liabilities	6,328,573	6,111,590

Net deferred income tax liability	$ (396,425)	$ (166,949)

____________________________

(1)

The deferred tax assets from net operating loss carryovers (“NOL”) are as follows:


	March 31,	December 31,
Type of NOL	2017	2016	Expiration
State only (A)	$ 698,350	$ 655,719	December 31, 2037
Valuation allowance	(592,390)	(534,293)
State only, net of valuation allowance	105,960	121,426
Amount subject to Annual Limitation, federal only (B)	6,800	10,200	December 31, 2019
Total deferred tax asset from net operating loss carryovers	$ 112,760	$ 131,626

(A) Kingstone generates operating losses for state purposes and has prior year NOLs available. The state NOL as of March 31, 2017 and December 31, 2016 was approximately $10,744,000 and $10,088,000, 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 condensed 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 NOLs over their remaining lives, which expire between 2027 and 2037.

(B) The Company has an NOL of $20,000 that is subject to Internal Revenue Code Section 382, which places a limitation on the utilization of the federal NOL 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.

(1)

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. 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.

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 three months ended March 31, 2017 and 2016. If any had been recognized these would have been reported in income tax expense.

Generally, taxing authorities may examine the Company’s tax returns for the three years from the date of filing. The Company’s tax returns for the years ended December 31 2013 through December 31, 2016 remain subject to examination.

2. Accounting Policies (Policies)	3 Months Ended
2. Accounting Policies (Policies)	Mar. 31, 2017
Notes to Financial Statements
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.
Principles of Consolidation	The consolidated financial statements consist of Kingstone and its wholly owned subsidiaries; 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. All significant inter-company account balances and transactions have been eliminated in consolidation.
Accounting Changes	In May 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-09, Financial Services – Insurance (Topic 944): Disclosures About Short-Duration Contracts. The updated accounting guidance requires expanded disclosures for insurance entities that issue short-duration contracts. The expanded disclosures are designed to provide additional insight into an insurance entity’s ability to underwrite and anticipate costs associated with insurance claims. The disclosures include information about incurred and paid claims development by accident year, on a net basis after reinsurance, for the number of years claims incurred that typically remain outstanding, not to exceed ten years. Each period presented in the disclosure about claims development that precedes the current reporting period is considered required supplementary information. The expanded disclosures also include information about significant changes in methodologies and assumptions, a reconciliation of incurred and paid claims development to the carrying amount of the liability for unpaid claims and claim adjustment expenses, the total amount of incurred but not reported liabilities plus expected development, claims frequency information including the methodology used to determine claim frequency and any changes to that methodology, and claim duration. The guidance became effective for annual periods beginning after December 15, 2015, and interim periods beginning after December 15, 2016, and has been applied retrospectively. The new guidance affected disclosures only and had no impact on the Company’s results of operations or financial position. Effective January 1, 2017, the Company has adopted the provisions of ASU 2016-09 – Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires recognition of all income tax effects from share-based payments arising on or after January 1, 2017 (the Company’s adoption date) in income tax expense. As a result, the Company realized windfall tax benefits in the interim period of adoption of approximately $5,000, which was recognized as a discrete period income tax benefit as required by this ASU. This benefit resulted in lowering the Company’s effective tax rate for the interim period by 0.1%.
Accounting Pronouncements	In May 2014, FASB issued ASU 2014-09 – Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASU 2014-09, as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-20, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its consolidated financial statements. In January 2016, FASB issued ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The updated accounting guidance requires changes to the reporting model for financial instruments. The primary change for the Company is expected to be the requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements. In February 2016, FASB issued ASU 2016-02 – Leases (Topic 842). Under this ASU, lessees will recognize a right-of-use-asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of fewer than 12 months. The liability is to be measured as the present value of the future minimum lease payments taking into account renewal options if applicable plus initial incremental direct costs such as commissions. The minimum payments are discounted using the rate implicit in the lease or, if not known, the lessee’s incremental borrowing rate. The lessee’s income statement treatment for leases will vary depending on the nature of what is being leased. A financing type lease is present when, among other matters, the asset is being leased for a substantial portion of its economic life or has an end-of-term title transfer or a bargain purchase option as in today’s practice. The payment of the liability set up for such leases will be apportioned between interest and principal; the right-of use asset will be generally amortized on a straight-line basis. If the lease does not qualify as a financing type lease, it will be accounted for on the income statement as rent on a straight-line basis. The guidance will be effective for the Company for interim and annual reporting periods beginning after December 15, 2018. The Company will apply the guidance using a modified retrospective approach. Early application is permitted. The Company is evaluating whether the adoption of ASU 2016-02 will have a significant impact on its consolidated results of operations, financial position or cash flows. In June 2016, FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The revised accounting guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses of available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements. In August 2016, FASB issued ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The revised ASU provides accounting guidance for eight specific cash flow issues. FASB issued the standard to clarify areas where GAAP has been either unclear or lacking in specific guidance. ASU 2016-15 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect the updated guidance will have on its consolidated statement of cash flows. 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 (Tables)

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Schedule of Availalbe for Sale Securities

	March 31, 2017

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

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$ 7,582,088	$ 214,232	$ (18,806)	$ (18,710)	$ 7,758,804	$ 176,716

Corporate and other bonds
Industrial and miscellaneous	70,449,109	781,970	(556,753)	(7,370)	70,666,956	217,847

Residential mortgage and other asset backed securities	22,523,039	72,990	(308,073)	(26,361)	22,261,595	(261,444)
Total fixed-maturity securities	100,554,236	1,069,192	(883,632)	(52,441)	100,687,355	133,119

Equity Securities:
Preferred stocks	5,986,588	63,123	(120,639)	(75,322)	5,853,750	(132,838)
Common stocks	3,559,197	756,966	-	(67,418)	4,248,745	689,548
Total equity securities	9,545,785	820,089	(120,639)	(142,740)	10,102,495	556,710

Total	$ 110,100,021	$ 1,889,281	$ (1,004,271)	$ (195,181)	$ 110,789,850	$ 689,829

	December 31, 2016

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

Fixed-Maturity Securities:
Political subdivisions of States,
Territories and Possessions	$ 8,053,449	$ 199,028	$ (46,589)	$ -	$ 8,205,888	$ 152,439

Corporate and other bonds
Industrial and miscellaneous	53,728,395	600,519	(638,113)	(5,612)	53,685,189	(43,206)

Residential mortgage and other asset backed securities	18,814,784	70,682	(309,273)	(38,442)	18,537,751	(277,033)
Total fixed-maturity securities	80,596,628	870,229	(993,975)	(44,054)	80,428,828	(167,800)

Equity Securities:
Preferred stocks	5,986,588	10,317	(241,333)	(70,571)	5,685,001	(301,587)
Common stocks	3,722,797	691,324	(13,968)	(97,468)	4,302,685	579,888
Total equity securities	9,709,385	701,641	(255,301)	(168,039)	9,987,686	278,301

Total	$ 90,306,013	$ 1,571,870	$ (1,249,276)	$ (212,093)	$ 90,416,514	$ 110,501

Schedule of Availalbe for Sale Securities by contractual maturity

	March 31, 2017		December 31, 2016
	Amortized		Amortized
Remaining Time to Maturity	Cost	Fair Value	Cost	Fair Value

Less than one year	$ 1,094,841	$ 1,106,433	$ 1,752,501	$ 1,765,795
One to five years	31,745,373	32,254,008	29,541,568	29,913,308
Five to ten years	42,572,660	42,468,839	30,487,775	30,211,974
More than 10 years	2,618,323	2,596,480	-	-
Residential mortgage and other asset backed securities	22,523,039	22,261,595	18,814,784	18,537,751
Total	$ 100,554,236	$ 100,687,355	$ 80,596,628	$ 80,428,828

Schedule of Held to Maturity Securities

	March 31, 2017

			Gross Unrealized Losses
	Cost or Amortized	Gross Unrealized	Less than 12	More than 12	Fair	Net Unrealized
Category	Cost	Gains	Months	Months	Value	Gains


U.S. Treasury securities	$ 606,436	$ 147,603	$ -	$ -	$ 754,039	$ 147,603

Political subdivisions of States,
Territories and Possessions	1,149,119	38,236	(1,868)	-	1,185,487	36,368

Corporate and other bonds
Industrial and miscellaneous	3,139,888	98,656	(7,065)	(11,654)	3,219,825	79,937

Total	$ 4,895,443	$ 284,495	$ (8,933)	$ (11,654)	$ 5,159,351	$ 263,908

	December 31, 2016

			Gross Unrealized Losses
	Cost or Amortized	Gross Unrealized	Less than 12	More than 12	Fair	Net Unrealized
Category	Cost	Gains	Months	Months	Value	Gains


U.S. Treasury securities	$ 606,427	$ 147,612	$ -	$ -	$ 754,039	$ 147,612

Political subdivisions of States,
Territories and Possessions	1,349,916	37,321	-	-	1,387,237	37,321

Corporate and other bonds
Industrial and miscellaneous	3,138,559	72,784	(7,619)	(46,881)	3,156,843	18,284

Total	$ 5,094,902	$ 257,717	$ (7,619)	$ (46,881)	$ 5,298,119	$ 203,217

Schedule of Held to Maturity Securities by contractual maturity

	March 31, 2017		December 31, 2016
	Amortized		Amortized
Remaining Time to Maturity	Cost	Fair Value	Cost	Fair Value

Less than one year	$ -	$ -	$ -	$ -
One to five years	650,000	641,068	650,000	642,455
Five to ten years	3,639,007	3,764,244	3,838,475	3,901,625
More than 10 years	606,436	754,039	606,427	754,039
Total	$ 4,895,443	$ 5,159,351	$ 5,094,902	$ 5,298,119

Schedule of Investment Income

	Three months ended
	March 31,
	2017	2016

Income:
Fixed-maturity securities	$ 745,453	$ 664,476
Equity securities	136,485	175,951
Cash and cash equivalents	6,169	6,446
Total	888,107	846,873
Expenses:
Investment expenses	30,307	33,816
Net investment income	$ 857,800	$ 813,057

Schedule of Securities with realized gains and losses on investments

	Three months ended
	March 31,
	2017	2016

Fixed-maturity securities:
Gross realized gains	$ 13,123	$ 106,417
Gross realized losses (1)	(36,120)	(105,543)
	(22,997)	874

Equity securities:
Gross realized gains	-	82,688
Gross realized losses	(31,509)	(3,126)
	(31,509)	79,562

Net realized (losses) gains	$ (54,506)	$ 80,436

Schedule of Securities with Unrealized Losses

	March 31, 2017
	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	$ 759,346	$ (18,806)	2	$ 313,326	$ (18,710)	1	$ 1,072,672	$ (37,516)

Corporate and other bonds industrial and miscellaneous	26,857,516	(556,753)	46	238,393	(7,370)	1	27,095,909	(564,123)

Residential mortgage and other asset backed securities	18,537,897	(308,073)	30	477,494	(26,361)	4	19,015,391	(334,434)

Total fixed-maturity securities	$ 46,154,759	$ (883,632)	78	$ 1,029,213	$ (52,441)	6	$ 47,183,972	$ (936,073)

Equity Securities:
Preferred stocks	$ 3,376,750	$ (120,639)	7	$ 656,000	$ (75,322)	1	$ 4,032,750	$ (195,961)
Common stocks	-	-	-	291,000	(67,418)	1	291,000	(67,418)

Total equity securities	$ 3,376,750	$ (120,639)	7	$ 947,000	$ (142,740)	2	$ 4,323,750	$ (263,379)

Total	$ 49,531,509	$ (1,004,271)	85	$ 1,976,213	$ (195,181)	8	$ 51,507,722	$ (1,199,452)

	December 31, 2016
	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	$ 1,067,574	$ (46,589)	3	$ -	$ -	-	$ 1,067,574	$ (46,589)

Corporate and other bonds industrial and miscellaneous	19,859,293	(638,113)	34	239,970	(5,612)	1	20,099,263	(643,725)

Residential mortgage and other asset backed securities	15,918,090	(309,273)	30	675,316	(38,442)	6	16,593,406	(347,715)

Total fixed-maturity securities	$ 36,844,957	$ (993,975)	67	$ 915,286	$ (44,054)	7	$ 37,760,243	$ (1,038,029)

Equity Securities:
Preferred stocks	$ 3,759,850	$ (241,333)	8	$ 660,750	$ (70,571)	1	$ 4,420,600	$ (311,904)
Common stocks	288,075	(13,968)	1	424,550	(97,468)	1	712,625	(111,436)

Total equity securities	$ 4,047,925	$ (255,301)	9	$ 1,085,300	$ (168,039)	2	$ 5,133,225	$ (423,340)

Total	$ 40,892,882	$ (1,249,276)	76	$ 2,000,586	$ (212,093)	9	$ 42,893,468	$ (1,461,369)

6. Property and Casualty Insurance Activity (Tables)

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Schedule of Earned Premiums

	Direct	Assumed	Ceded	Net

Three months ended March 31, 2017
Premiums written	$ 26,125,467	$ 4,428	$ (9,395,590)	$ 16,734,305
Change in unearned premiums	(330,903)	2,981	(36,635)	(364,557)
Premiums earned	$ 25,794,564	$ 7,409	$ (9,432,225)	$ 16,369,748

Three months ended March 31, 2016
Premiums written	$ 23,043,325	$ 5,078	$ (8,386,528)	$ 14,661,875
Change in unearned premiums	(126,428)	3,571	(7,343)	(130,200)
Premiums earned	$ 22,916,897	$ 8,649	$ (8,393,871)	$ 14,531,675

Schedule of Loss and Loss Adjustment Expenses

	Three months ended
	March 31,
	2017	2016

Balance at beginning of period	$ 41,736,719	$ 39,876,500
Less reinsurance recoverables	(15,776,880)	(16,706,364)
Net balance, beginning of period	25,959,839	23,170,136
Incurred related to:
Current year	8,297,582	9,903,094
Prior years	(4,586)	(419,239)
Total incurred	8,292,996	9,483,855
Paid related to:
Current year	2,269,894	3,006,210
Prior years	4,090,766	3,421,820
Total paid	6,360,660	6,428,030
Net balance at end of period	27,892,175	26,225,961
Add reinsurance recoverables	16,719,411	19,804,804
Balance at end of period	$ 44,611,586	$ 46,030,765

Allocated Claim Adjustment Expenses

All Lines of Business
(in thousands, except reported claims data)

	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance										As of March 31, 2017
	For the Years Ended December 31,									Three Months Ended March 31,	IBNR	Cumulative Number of Reported Claims by Accident Year
Accident Year	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	IBNR	Cumulative Number of Reported Claims by Accident Year
	(Unaudited 2008 - 2015)									(Unaudited)

2008	$4,505	$4,329	$4,223	$4,189	$4,068	$4,055	$4,056	$4,040	$4,038	$ 4,036	$ 2	1,133
2009		4,403	4,254	4,287	4,384	4,511	4,609	4,616	4,667	4,669	8	1,136
2010			5,598	5,707	6,429	6,623	6,912	6,853	6,838	6,833	14	1,616
2011				7,603	7,678	8,618	9,440	9,198	9,066	9,127	59	1,913
2012					9,539	9,344	10,278	10,382	10,582	10,653	113	4,701	(1)
2013						10,728	9,745	9,424	9,621	9,513	348	1,554
2014							14,193	14,260	14,218	14,359	838	2,120
2015								22,340	21,994	21,675	2,048	2,514
2016									26,062	26,153	4,813	2,784
2017										7,718	3,174	657
									Total	$ 114,736
(1) Reported claims for accident year 2012 includes 3,406 claims from Superstorm Sandy.

All Lines of Business
(in thousands)
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,									Three Months Ended March 31,
Accident Year	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017
	(Unaudited 2008 - 2015)									(Unaudited)

2008	$2,406	$3,346	$3,730	$3,969	$4,003	$4,029	$4,028	$4,031	$4,031	$ 4,031
2009		2,298	3,068	3,607	3,920	4,134	4,362	4,424	4,468	4,470
2010			2,566	3,947	4,972	5,602	6,323	6,576	6,720	6,742
2011				3,740	5,117	6,228	7,170	8,139	8,540	8,554
2012					3,950	5,770	7,127	8,196	9,187	9,477
2013						3,405	5,303	6,633	7,591	7,743
2014							5,710	9,429	10,738	10,905
2015								12,295	16,181	16,809
2016									15,364	17,814
2017										2,114
									Total	$ 88,658

Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented										$ 26,079
All outstanding liabilities before 2008, net of reinsurance										634
Liabilities for claims and allocated claim adjustment expenses, net of reinsurance										$ 26,713

Reconciliation of the net incurred and paid claims

	As of
(in thousands)	March 31, 2017
Liabilities for claims and claim adjustment expenses, net of reinsurance	$ 26,713
Total reinsurance recoverable on unpaid claims	16,719
Unallocated claims adjustment expenses	1,180
Total gross liability for loss and LAE reserves	$ 44,612

Schedule of line of business

	Treaty Year
	July 1, 2016	July 1, 2015
	to	to
Line of Busines	June 30, 2017	June 30, 2016

Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded	40%	40%
Risk retained	$ 500,000	$ 450,000
Losses per occurrence subject to quota share reinsurance coverage	$ 833,333	$ 750,000
Excess of loss coverage above quota share coverage	$ 3,666,667	$ 3,750,000
	in excess of	in excess of
	$ 833,333	$ 750,000
Total reinsurance coverage per occurrence	$ 4,000,000	$ 4,050,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	$ 4,500,000
Expiration date	June 30, 2017	June 30, 2016

Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90%	90%
Percent ceded - excess of $1,000,000 of coverage	100%	100%
Risk retained	$ 100,000	$ 100,000
Total reinsurance coverage per occurrence	$ 4,900,000	$ 2,900,000
Losses per occurrence subject to quota share reinsurance coverage	$ 5,000,000	$ 3,000,000
Expiration date	June 30, 2017	June 30, 2016

Commercial Lines:
General liability commercial policies, except for commercial auto
Quota share treaty:
Percent ceded (terminated effective July 1, 2014)	None	None
Risk retained	$ 500,000	$ 425,000
Losses per occurrence subject to quota share reinsurance coverage	None	None
Excess of loss coverage above quota share coverage	$ 4,000,000	$ 4,075,000
	in excess of	in excess of
	$ 500,000	$ 425,000
Total reinsurance coverage per occurrence	$ 4,000,000	$ 4,075,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	$ 4,500,000

Commercial Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90%
Percent ceded - excess of $1,000,000 of coverage	100%
Risk retained	$ 100,000
Total reinsurance coverage per occurrence	$ 4,900,000
Losses per occurrence subject to quota share reinsurance coverage	$ 5,000,000
Expiration date	June 30, 2017

Commercial Auto:
Risk retained		$ 300,000
Excess of loss coverage in excess of risk retained		$ 1,700,000
		in excess of
		$ 300,000
Catastrophe Reinsurance:
Initial loss subject to personal lines quota share treaty	$ 5,000,000	$ 4,000,000
Risk retained per catastrophe occurrence (1)	$ 3,000,000	$ 2,400,000
Catastrophe loss coverage in excess of quota share coverage (2) (3)	$ 247,000,000	$ 176,000,000
Severe winter weather aggregate (3)	No	Yes
Reinstatement premium protection (4)	Yes	Yes

Schedule of Single maximum risks under treaties

	July 1, 2016 - June 30, 2017		July 1, 2015 - June 30, 2016
Treaty	Extent of Loss	Risk Retained	Extent of Loss	Risk Retained
Personal Lines	Initial $833,333	$500,000	Initial $750,000	$450,000
	$833,333 - $4,500,000	None(1)	$750,000 - $4,500,000	None(1)
	Over $4,500,000	100%	Over $4,500,000	100%

Personal Umbrella	Initial $1,000,000	$100,000	Initial $1,000,000	$100,000
	$1,000,000 - $5,000,000	None(1)	$1,000,000 - $3,000,000	None(1)
	Over $5,000,000	100%	Over $3,000,000	100%

Commercial Lines	Initial $500,000	$500,000	Initial $425,000	$425,000
	$500,000 - $4,500,000	None(1)	$425,000 - $4,500,000	None(1)
	Over $4,500,000	100%	Over $4,500,000	100%

Commercial Umbrella	Initial $1,000,000	$100,000
	$1,000,000 - $5,000,000	None(1)
	Over $5,000,000	100%

Catastrophe (2)	Initial $5,000,000	$3,000,000	Initial $4,000,000	$2,400,000
	$5,000,000 - $252,000,000	None	$4,000,000 - $180,000,000	None
	Over $252,000,000	100%	Over $180,000,000	100%

Schedule of Ceding Commission Revenue

	Three months ended
	March 31,
	2017	2016

Provisional ceding commissions earned	$ 3,343,769	$ 3,099,614
Contingent ceding commissions earned	(159,317)	(329,277)
	$ 3,184,452	$ 2,770,337

3. Investments (Details) - USD ($)	3 Months Ended	12 Months Ended
3. Investments (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Cost or Amortized Cost	$ 110,100,021	$ 90,306,013
Gross Unrealized Gains	1,889,281	1,571,870
Gross Unrealized Losses-Less than 12 Months	(1,004,271)	(1,249,276)
Gross Unrealized Loss-More than 12 Months	(195,181)	(212,093)
Fair Value	110,789,850	90,416,514
Net Unrealized Gains/(Losses)	689,829	110,501
Fixed Maturity Securities Political Subdivisions Of States Territories And Possessions [Member]
Cost or Amortized Cost	7,582,088	8,053,449
Gross Unrealized Gains	214,232	199,028
Gross Unrealized Losses-Less than 12 Months	(18,806)	(46,589)
Gross Unrealized Loss-More than 12 Months	(18,710)	0
Fair Value	7,758,804	8,205,888
Net Unrealized Gains/(Losses)	176,716	152,439
Fixed Maturity Securities Corporate And Other Bonds Industrial And Miscellaneous [Member]
Cost or Amortized Cost	70,449,109	53,728,395
Gross Unrealized Gains	781,970	600,519
Gross Unrealized Losses-Less than 12 Months	(556,753)	(638,113)
Gross Unrealized Loss-More than 12 Months	(7,370)	(5,612)
Fair Value	70,666,956	53,685,189
Net Unrealized Gains/(Losses)	217,847	(43,206)
Fixed Maturity Securities Residential Mortgage and other asset backed securities [Member]
Cost or Amortized Cost	22,523,039	18,814,784
Gross Unrealized Gains	72,990	70,682
Gross Unrealized Losses-Less than 12 Months	(308,073)	(309,273)
Gross Unrealized Loss-More than 12 Months	(26,361)	(38,442)
Fair Value	22,261,595	18,537,751
Net Unrealized Gains/(Losses)	(261,444)	(277,033)
Fixed Maturity Securities Total Fixed Maturity Securities [Member]
Cost or Amortized Cost	100,554,236	80,596,628
Gross Unrealized Gains	1,069,192	870,229
Gross Unrealized Losses-Less than 12 Months	(883,632)	(993,975)
Gross Unrealized Loss-More than 12 Months	(52,441)	(44,054)
Fair Value	100,687,355	80,428,828
Net Unrealized Gains/(Losses)	133,119	(167,800)
Equity Securities Preferred Stocks [Member]
Cost or Amortized Cost	5,986,588	5,986,588
Gross Unrealized Gains	63,123	10,317
Gross Unrealized Losses-Less than 12 Months	(120,639)	(241,333)
Gross Unrealized Loss-More than 12 Months	(75,322)	(70,571)
Fair Value	5,853,750	5,685,001
Net Unrealized Gains/(Losses)	(132,838)	(301,587)
Equity Securities Common Stocks [Member]
Cost or Amortized Cost	3,559,197	3,722,797
Gross Unrealized Gains	756,966	691,324
Gross Unrealized Losses-Less than 12 Months	0	(13,968)
Gross Unrealized Loss-More than 12 Months	(67,418)	(97,468)
Fair Value	4,248,745	4,302,685
Net Unrealized Gains/(Losses)	689,548	579,888
Equity Securities Total Equity Securities [Member]
Cost or Amortized Cost	9,545,785	9,709,385
Gross Unrealized Gains	820,089	701,641
Gross Unrealized Losses-Less than 12 Months	(120,639)	(255,301)
Gross Unrealized Loss-More than 12 Months	(142,740)	(168,039)
Fair Value	10,102,495	9,987,686
Net Unrealized Gains/(Losses)	$ 556,710	$ 278,301

3. Investments (Details 6) - USD ($)	3 Months Ended	12 Months Ended
3. Investments (Details 6) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Fair Value-Less than 12 months	$ 49,531,509	$ 40,892,882
Unrealized Losses-Less than 12 Months	(1,004,271)	(1,249,276)
No. of Positions Held-Less than 12 Months	85	76
Fair Value-12 months or more	1,976,213	2,000,586
Unrealized Losses-12 months or more	(195,181)	(212,093)
No. of Positions Held-12 months or more	8	9
Aggregate Fair Value-Total	51,507,722	42,893,468
Unrealized Losses-Total	(1,199,452)	(1,461,369)
Fixed Maturity Securities Political Subdivisions Of States Territories And Possessions [Member]
Fair Value-Less than 12 months	759,346	1,067,574
Unrealized Losses-Less than 12 Months	(18,806)	(46,589)
No. of Positions Held-Less than 12 Months	2	3
Fair Value-12 months or more	313,326	0
Unrealized Losses-12 months or more	(18,710)	0
No. of Positions Held-12 months or more	1	0
Aggregate Fair Value-Total	1,072,672	1,067,574
Unrealized Losses-Total	(37,516)	(46,589)
Fixed Maturity Securities Corporate And Other Bonds Industrial And Miscellaneous [Member]
Fair Value-Less than 12 months	26,857,516	19,859,293
Unrealized Losses-Less than 12 Months	(556,753)	(638,113)
No. of Positions Held-Less than 12 Months	46	34
Fair Value-12 months or more	238,393	239,970
Unrealized Losses-12 months or more	(7,370)	(5,612)
No. of Positions Held-12 months or more	1	1
Aggregate Fair Value-Total	27,095,909	20,099,263
Unrealized Losses-Total	(564,123)	(643,725)
Fixed Maturity Securities Residential Mortgage and other asset backed securities [Member]
Fair Value-Less than 12 months	18,537,897	15,918,090
Unrealized Losses-Less than 12 Months	(308,073)	(309,273)
No. of Positions Held-Less than 12 Months	30	30
Fair Value-12 months or more	477,494	675,316
Unrealized Losses-12 months or more	(26,361)	(38,442)
No. of Positions Held-12 months or more	4	6
Aggregate Fair Value-Total	19,015,391	16,593,406
Unrealized Losses-Total	(334,434)	(347,715)
Fixed Maturity Securities Total Fixed Maturity Securities [Member]
Fair Value-Less than 12 months	46,154,759	36,844,957
Unrealized Losses-Less than 12 Months	(883,632)	(993,975)
No. of Positions Held-Less than 12 Months	78	67
Fair Value-12 months or more	1,029,213	915,286
Unrealized Losses-12 months or more	(52,441)	(44,054)
No. of Positions Held-12 months or more	6	7
Aggregate Fair Value-Total	47,183,972	37,760,243
Unrealized Losses-Total	(936,073)	(1,038,029)
Equity Securities Preferred Stocks [Member]
Fair Value-Less than 12 months	3,376,750	3,759,850
Unrealized Losses-Less than 12 Months	(120,639)	(241,333)
No. of Positions Held-Less than 12 Months	7	8
Fair Value-12 months or more	656,000	660,750
Unrealized Losses-12 months or more	(75,322)	(70,571)
No. of Positions Held-12 months or more	1	1
Aggregate Fair Value-Total	4,032,750	4,420,600
Unrealized Losses-Total	(195,961)	(311,904)
Equity Securities Common Stocks [Member]
Fair Value-Less than 12 months	0	288,075
Unrealized Losses-Less than 12 Months	0	(13,968)
No. of Positions Held-Less than 12 Months	0	1
Fair Value-12 months or more	291,000	424,550
Unrealized Losses-12 months or more	(67,418)	(97,468)
No. of Positions Held-12 months or more	1	1
Aggregate Fair Value-Total	291,000	712,625
Unrealized Losses-Total	(67,418)	(111,436)
Equity Securities Total Equity Securities [Member]
Fair Value-Less than 12 months	3,376,750	4,047,925
Unrealized Losses-Less than 12 Months	(120,639)	(255,301)
No. of Positions Held-Less than 12 Months	7	9
Fair Value-12 months or more	947,000	1,085,300
Unrealized Losses-12 months or more	(142,740)	(168,039)
No. of Positions Held-12 months or more	2	2
Aggregate Fair Value-Total	4,323,750	5,133,225
Unrealized Losses-Total	$ (263,379)	$ (423,340)

6. Property and Casualty Insurance Activity (Details 2) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Personal Lines [Member]
Percent ceded	40.00%	40.00%
Risk retained	$ 500,000	$ 450,000
Losses per occurrence subject to quota share reinsurance coverage	833,333	750,000
Excess of loss coverage above quota share coverage	3,666,667	3,750,000
In excess of	833,333	750,000
Total reinsurance coverage per occurrence	4,000,000	4,050,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	$ 4,500,000
Expiration date	Jun. 30, 2017	Jun. 30, 2016
Personal Umbrella [Member]
Percent ceded - first million dollars of coverage	90.00%	90.00%
Percent ceded - excess of one million dollars of coverage	100.00%	100.00%
Risk retained	$ 100,000	$ 100,000
Total reinsurance coverage per occurrence	4,900,000	2,900,000
Losses per occurrence subject to reinsurance coverage	$ 5,000,000	$ 3,000,000
Expiration date	Jun. 30, 2017	Jun. 30, 2016
Commercial Lines [Member]
Percent ceded (terminated effective July 1, 2014)	0.00%	0.00%
Risk retained	$ 500,000	$ 425,000
Losses per occurrence subject to quota share reinsurance coverage	0	0
Excess of loss coverage above quota share coverage	4,000,000	4,075,000
In excess of	500,000	425,000
Total reinsurance coverage per occurrence	4,000,000	4,075,000
Losses per occurrence subject to reinsurance coverage	$ 4,500,000	4,500,000
Commercial Umbrella [Member]
Percent ceded - first million dollars of coverage	90.00%
Percent ceded - excess of one million dollars of coverage	100.00%
Risk retained	$ 100,000
Total reinsurance coverage per occurrence	4,900,000
Losses per occurrence subject to reinsurance coverage	$ 5,000,000
Expiration date	Jun. 30, 2017
Commercial Auto [Member]
Risk retained		300,000
Excess of loss coverage above quota share coverage		1,700,000
In excess of		300,000
Catastrophe [Member]
Initial loss subject to personal lines quota share treaty	$ 5,000,000	4,000,000
Risk retained per catastrophe occurrence (1)	3,000,000	2,400,000
Catastrophe loss coverage in excess of quota share coverage (2) (3)	$ 247,000,000	$ 176,000,000
Severe winter weather aggregate	No	Yes
Reinstatement premium protection	Yes	Yes

6. Property and Casualty Insurance Activity (Details 4)	Mar. 31, 2017 USD ($)
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented	$ 26,079
All outstanding liabilities before 2007, net of reinsurance	634
Liabilities for claims and claim adjustment expenses, net of reinsurance	26,713
2008
2008	2,406
2009
2008	3,346
2009	2,298
2010
2008	3,730
2009	3,068
2010	2,566
2011
2008	3,969
2009	3,607
2010	3,947
2011	3,740
2012
2008	4,003
2009	3,920
2010	4,972
2011	5,117
2012	3,950
2013
2008	4,029
2009	4,134
2010	5,602
2011	6,228
2012	5,770
2013	3,405
2014
2008	4,028
2009	4,362
2010	6,323
2011	7,170
2012	7,127
2013	5,303
2014	5,710
2015
2008	4,031
2009	4,424
2010	6,576
2011	8,139
2012	8,196
2013	6,633
2014	9,429
2015	12,295
2016
2008	4,031
2009	4,468
2010	6,720
2011	8,540
2012	9,187
2013	7,591
2014	10,738
2015	16,181
2016	15,364
2017
2008	4,031
2009	4,470
2010	6,742
2011	8,554
2012	9,477
2013	7,743
2014	10,905
2015	16,809
2016	17,814
2017	2,114
Total	$ 88,658

7. Stockholders' Equity (Details 1)	3 Months Ended
7. Stockholders' Equity (Details 1)	Mar. 31, 2017 USD ($) $ / shares shares
Stockholders Equity Details 1
Number of Options Outstanding, Beginning \| shares	362,750
Number of Options Granted \| shares	0
Number of Options Exercised \| shares	(5,250)
Number of Options Forfeited \| shares	0
Number of Options Outstanding, Ending \| shares	57,500
Number of Options Vested and Exercisable \| shares	271,250
Weighted Average Exercise Price Outstanding, Beginning	$ 6.62
Weighted Average Exercise Price Granted	0.00
Weighted Average Exercise Price Exercised	6.53
Weighted Average Exercise Price Forfeited	0.00
Weighted Average Exercise Price Outstanding, Ending	6.62
Weighted Average Exercise Price Vested and Exercisable	$ 6.43
Weighted Average Remaining Contractual Life (in years) Outstanding Beginning	2 years 7 months 10 days
Weighted Average Remaining Contractual Life (in years) Outstanding Ending	2 years 4 months 13 days
Weighted Average Remaining Contractual Life (in years) Vested and Exercisable	2 years 2 months 23 days
Aggregate Intrinsic Value Outstanding, Beginning \| $	$ 2,586,748
Aggregate Intrinsic Value Granted	$ 0
Aggregate Intrinsic Value Exercised \| $	$ 37,863
Aggregate Intrinsic Value Forfeited/canceled	$ 0
Aggregate Intrinsic Value Outstanding, Ending \| $	$ 3,335,360
Aggregate Intrinsic Value Vested and Exercisable \| $	$ 2,581,023

8. Income Taxes (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Deferred tax asset:
Net operating loss carryovers (1)	$ 112,760	$ 131,626
Claims reserve discount	448,437	417,349
Unearned premium	2,902,155	2,877,365
Deferred ceding commission revenue	2,302,771	2,329,626
Other	166,025	188,675
Total deferred tax assets	5,932,148	5,944,641
Deferred tax liability:
Investment in KICO (2)	1,169,000	1,169,000
Deferred acquisition costs	4,239,112	4,161,526
Intangibles	430,100	459,000
Depreciation and amortization	250,206	265,671
Net unrealized appreciation of securities - available for sale	240,155	56,393
Total deferred tax liabilities	6,328,573	6,111,590
Net deferred income tax liability	$ (396,425)	$ (166,949)

10. Commitments and Contingencies (Details)	Mar. 31, 2017 USD ($)
Notes to Financial Statements
2017 (nine months)	$ 119,939
2018	164,117
2019	169,861
2020	175,806
2021	181,959
Thereafter	432,392
Total	$ 1,244,074

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical)	3 Months Ended
	Mar. 31, 2017 USD ($)
Statement of Stockholders' Equity [Abstract]
Offering Costs	$ 2,173,000

3. Investments (Details Narrative) - USD ($)	3 Months Ended
3. Investments (Details Narrative) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Investments Details Narrative
Proceeds from the sale and maturity of fixed-maturity securities	$ 2,706,202	$ 6,401,092
Proceeds from the sale of equity securities	$ 132,091	$ 1,161,501

6. Property and Casualty Insurance Activity (Details Narrative)	3 Months Ended
	Mar. 31, 2017 USD ($) Number	Mar. 31, 2016 USD ($) Number
Property And Casualty Insurance Activity Details Narrative
Advance premiums	$ 1,965,000	$ 1,422,000
Incurred Losses and Loss Adjustment Expenses are net of reinsurance recoveries under reinsurance contracts	4,233,804	4,313,667
Prior year loss development	$ (4,586)	$ (419,239)
Commercial auto policies in force \| Number	0	34

7. Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended
7. Stockholders' Equity (Details Narrative) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Dividends Declared	$ 663,837	$ 457,603
Compensation Expense	$ 16,000	$ 32,000
Stock-based compensation expense related to stock options is net of estimated forfeitures	17.00%	17.00%
Closing price of common stock	$ 15.95
Unamortized compensation cost related to unvested stock option awards	$ 28,000
Unamortized compensation cost vesting period	8 months 12 days
2014 Plan [Member]
Shares reserved	578,500

8. Income Taxes (Details Narrative) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Income Taxes Details Narrative
Net operating loss carryover	$ 10,744,000	$ 10,088,000

3. Investments (Details 1) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Amortized Cost	$ 100,554,236	$ 80,596,628
Fair Value	100,687,355	80,428,828
Less Than One Year [Member]
Amortized Cost	1,094,841	1,752,501
Fair Value	1,106,433	1,765,795
One To Five Years [Member]
Amortized Cost	31,745,373	29,541,568
Fair Value	32,254,008	29,913,308
Five To Ten Years [Member]
Amortized Cost	42,572,660	30,487,775
Fair Value	42,468,839	30,211,974
More Than 10 Years [Member]
Amortized Cost	2,618,323	0
Fair Value	2,596,480	0
Residential mortgage-backed securities [Member]
Amortized Cost	22,523,039	18,814,784
Fair Value	$ 22,261,595	$ 18,537,751

3. Investments (Details 4) - USD ($)	3 Months Ended
3. Investments (Details 4) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Income:
Fixed-maturity securities	$ 745,453	$ 664,476
Equity securities	136,485	175,951
Cash and cash equivalents	6,169	6,446
Total	888,107	846,873
Expenses:
Investment expenses	30,307	33,816
Net investment income	$ 857,800	$ 813,057

3. Investments (Details 5) - USD ($)	3 Months Ended
3. Investments (Details 5) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Fixed-maturity securities:
Gross realized gains	$ 13,123	$ 106,417
Gross realized losses	(36,120)	(105,543)
Total fixed-maturity securities	(22,997)	874
Equity securities:
Gross realized gains	0	82,688
Gross realized losses	(31,509)	(3,126)
Total equity securities	(31,509)	79,562
Other-than-temporary impairment losses:
Net realized (losses) gains	$ (54,506)	$ 80,436

5. Fair Value of Financial Instruments (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Reinsurance balances payable	$ 2,108,447	$ 2,146,017
Carrying Value [Member]
Fixed-maturity securities held-to-maturity	4,895,443	5,094,902
Cash and cash equivalents	23,235,655	12,044,520
Premiums receivable	11,728,443	11,649,398
Reinsurance receivables	33,502,642	32,197,765
Real estate, net of accumulated depreciation	1,715,486	1,659,405
Reinsurance balances payable	2,108,447	2,146,017
Fair Value [Member]
Fixed-maturity securities held-to-maturity	5,159,351	5,298,119
Cash and cash equivalents	23,235,655	12,044,520
Premiums receivable	11,728,443	11,649,398
Reinsurance receivables	33,502,642	32,197,765
Real estate, net of accumulated depreciation	1,925,000	1,925,000
Reinsurance balances payable	$ 2,108,447	$ 2,146,017

6. Property and Casualty Insurance Activity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Premiums Written [Member]
Direct	$ 26,125,467	$ 23,043,325
Assumed	4,428	5,078
Ceded	(9,395,590)	(8,386,528)
Net	16,734,305	14,661,875
Changes In Unearned Premiums [Member]
Direct	(330,903)	(126,428)
Assumed	2,981	3,571
Ceded	(36,635)	(7,343)
Net	(364,557)	(130,200)
Premiums Earned [Member]
Direct	25,794,564	22,916,897
Assumed	7,409	8,649
Ceded	(9,432,225)	(8,393,871)
Net	$ 16,369,748	$ 14,531,675

7. Stockholders' Equity (Details)	3 Months Ended
7. Stockholders' Equity (Details)	Mar. 31, 2017	Mar. 31, 2016
Dividend Yield	0.00%	3.18%
Volatility	0.00%	31.61%
Risk-Free Interest Rate	0.00%	1.11%
Expected Life		3 years 3 months

8. Income Taxes (Details 1) - USD ($)	3 Months Ended
8. Income Taxes (Details 1) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Income Taxes Details 1
State only (A)	$ 698,350	$ 655,719
Valuation allowance	592,390	534,293
State only, net of valuation allowance	105,960	121,426
Amount subject to Annual Limitation, Federal only (B)	6,800	10,200
Total deferred tax asset from net operating loss carryovers	$ 112,760	$ 131,626
State only (A) expiration date	December 31, 2037
Amount subject to Annual Limitation, Federal only (B) expiration date	December 31, 2019

9. Earnings Per Common Share (Details) - USD ($)	3 Months Ended
9. Earnings Per Common Share (Details) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Common Share Details
Weighted average number of shares outstanding	9,663,751	7,322,385
Effect of dilutive securities, common share equivalents	$ 184,743	$ 38,179
Weighted average number of shares outstanding, used for computing diluted earnings per share	9,848,494	7,360,564

9. Earnings Per Common Share (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Common Share Details Narrative
Options computation of diluted earnings per share	0	54,327