Investments

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Investments

NOTE 3 – INVESTMENTS

A summary of net investment and related income is as follows:

	Year ended December 31
	2011	2010	2009
Fixed maturities	$2,890,473	$3,467,801	$4,264,304
Short-term investments	8,152	25,129	62,169
Total investment income	$2,898,625	$3,492,930	$4,326,473

The amortized cost and estimated fair value of fixed maturity investments at December 31, 2011, by contractual maturity are as follows. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Amortized	Estimated
	Cost	Fair Value
Due in one year or less	$58,117,126	$59,078,086
Due after one year through five years	31,785,551	32,278,538
Total fixed maturities	$89,902,677	$91,356,624

The amortized cost and estimated fair values of investments in fixed maturities by categories are as follows:

		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
December 31, 2011
Available for sale:
Fixed maturities
Certificates of deposit	$16,470,000	-	-	$16,470,000
U.S. treasury securities	73,432,677	$1,453,947	-	74,886,624
Total fixed maturities	$89,902,677	$1,453,947	-	$91,356,624
December 31, 2010
Available for sale:
Fixed maturities
Certificates of deposit	$27,464,998	-	-	$27,464,998
U.S. treasury securities	95,836,282	$3,410,702	-	99,246,984
Total fixed maturities	$123,301,280	$3,410,702	-	$126,711,982

A summary of the unrealized appreciation (depreciation) on investments carried at fair value and the applicable deferred federal income taxes are shown below:

	Year ended December 31
	2011	2010
Gross unrealized appreciation of fixed maturities	$1,453,947	$3,410,702
Gross unrealized (depreciation) of fixed maturities	-	-
Net unrealized appreciation on investments	1,453,947	3,410,702
Deferred federal tax (expense)	(494,343)	(1,159,639)
Net unrealized appreciation, net of deferred income taxes	$959,604	$2,251,063

At December 31, 2011 and 2010, the Company had no fixed maturity investments with a gross unrealized loss.

The Company monitors its investments closely. If an unrealized loss is determined to be other-than-temporary, it is written off as a realized loss through the Consolidated Statements of Operations. The Company’s methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity and the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. The Company does not have the intent to sell its fixed maturity investments and it is not likely that the Company would be required to sell any of its fixed maturity investments prior to recovery of its amortized costs. The Company did not sell any fixed maturity investments in the years ended December 31, 2011, 2010 or 2009.

Short-term investments have an initial maturity of one year or less and consist of the following:

	Year ended December 31
	2011	2010
U.S. treasury money market fund	$6,802,126	$121,751
Short-term U.S. treasury bills	30,288,668	4,398,003
Bank money market accounts	1,046,813	1,494,033
Certificates of deposit	-	450,000
Bank savings accounts	1,862	1,862
Total short-term investments	$38,139,469	$6,465,649