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Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2012

NOTE 8 – DEFERRED POLICY ACQUISITION COSTS

The following table provides an analysis of the roll forward of Crusader’s deferred policy acquisition costs:

	Year ended December 31
	2012			2011			2010

Deferred policy acquisition costs at beginning of year	$	4,158,522		$	4,300,927		$	4,955,636
Policy acquisition costs deferred during year		6,371,345			6,938,363			6,627,837
Policy acquisition costs amortized during year		(6,744,273	)		(7,080,768	)		(7,282,546	)
Deferred policy acquisition costs at end of year	$	3,785,594		$	4,158,522		$	4,300,927

Deferred policy acquisition costs consist of commissions (net of ceding commission), premium taxes, inspection fees, and certain other underwriting costs, which are related to and vary with the production of Crusader policies. Policy acquisition costs are deferred and amortized as the related premiums are earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income on insurance policies generated from these costs, including investment income.

- Definition

Disclosure of accounting policy for capitalizing costs incurred to write or acquire insurance contracts, the basis for and methodology for capitalizing such costs, the accounting for such deferred acquisition costs (DAC) when modifications or internal replacements of related insurance contracts occur and the effect on results of operations, and the methodology and amount of amortization. This disclosure addresses the nature, type, and amount of capitalized costs incurred to write or acquire insurance contracts.

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