10-Q/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1 

(Mark One)

[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 0-3978

UNICO AMERICAN CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

             Nevada                                                                     95-2583928

(State or Other Jurisdiction of                                            (I.R.S. Employee

Incorporation or Organization)                                               Identification No.)

26050 Mureau Road, Calabasas, California 91302

(Address of Principal Executive Offices) (Zip Code)

(818) 591-9800

(Registrant's Telephone Number, Including Area Code)

No Change

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No__ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer __ Accelerated filer __

Non-accelerated filer __ Smaller reporting company X

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at August 11, 2016
Common Stock, $0 par value per share	5,307,133

EXPLANATORY NOTE

This Amendment No.1 on Form 10-Q/A (this “Amendment”) amends the Quarterly Report on Form 10-Q of Unico American Corporation for the quarter ended June 30, 2016, originally filed with the Securities and Exchange Commission on August 11, 2016, (the “Original Filing”). We are filing this Amendment for the sole purpose of adding Interactive Data Files not included with the Original Filing as Exhibit 101. Interactive Data Files are filed with this Amendment as Exhibit 101.

Except as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred as a date subsequent to the filing of the Original FIning other than as indicated in this Amendment.

EXHIBIT INDEX

ITEM 6 – EXHIBITS

101 The following information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive (Loss) Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Condensed Notes to Unaudited Consolidated Financial Statements.*

*XBRL information is furnished and deemed not filed as part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNICO AMERICAN CORPORATION

Date: August 12, 2016      By:       /s/ CARY L. CHELDIN

Cary L. Cheldin

Chairman of the Board, President and Chief

Executive Officer, (Principal Executive Officer)

Date: August 12, 2016      By:       /s/ MICHAEL BUDNITSKY

Michael Budnitsky

Treasurer, Chief Financial Officer, (Principal

Accounting and Principal Financial Officer)

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 11, 2016
Document And Entity Information
Entity Registrant Name	Unico American Corporation
Entity Central Index Key	0000100716
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
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		5,307,133
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2016

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Consolidated Balance Sheets - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Available for sale:
Fixed maturities, at fair value (amortized cost: $86,359,294 at June 30, 2016, and $82,202,727 at December 31, 2015)	$ 86,421,658	$ 82,161,291
Short-term investments, at fair value	6,958,841	15,640,803
Total Investments	93,380,499	97,802,094
Cash	389,690	334,495
Accrued investment income	143,525	85,915
Receivables, net	6,273,342	5,505,361
Reinsurance Recoverable:
Paid losses and loss adjustment expenses	286,270	751,323
Unpaid losses and loss adjustment expenses	9,641,767	9,636,961
Deferred policy acquisition costs	4,495,106	4,233,396
Property and equipment (net of accumulated depreciation)	10,503,271	10,220,720
Deferred income taxes	1,288,816	1,334,087
Other assets	15,141,137	10,266,083
Total Assets	141,543,423	140,170,435
LIABILITIES
Unpaid losses and loss adjustment expenses	48,987,443	49,093,571
Unearned premiums	19,265,015	18,079,253
Advance premium and premium deposits	441,579	212,255
Income taxes payable	0	0
Accrued expenses and other liabilities	2,564,792	2,443,284
Total Liabilities	71,258,829	69,828,363
STOCKHOLDERS' EQUITY
Common stock, no par, authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at June 30, 2016, and 5,315,945 at December 31, 2015	3,749,768	3,742,547
Accumulated other comprehensive income	41,160	(27,348)
Retained earnings	66,493,666	66,626,873
Total Stockholders' Equity	70,284,594	70,342,072
Total Liabilities and Stockholders' Equity	$ 141,543,423	$ 140,170,435

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheets Parenthetical
Fixed Maturity Investments at Amortized Cost	$ 86,359,294	$ 82,202,727
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,307,133	5,315,945
Common stock, shares outstanding	5,307,133	5,315,945

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Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
REVENUES
Net premium earned	$ 7,717,951	$ 7,327,855	$ 15,290,366	$ 14,292,999
Investment income	212,344	97,853	424,344	185,176
Net realized investments losses	0	0	(1,278)	0
Other income	67,684	168,881	135,278	241,095
Total Insurance Company Revenues	7,997,979	7,594,589	15,848,710	14,719,270
Gross commissions and fees	708,939	701,995	1,366,184	1,393,214
Investment income	106	82	197	167
Finance fees earned	15,608	15,208	32,217	30,981
Other income	0	1,817	5,002	2,258
Total Revenues	8,722,632	8,313,691	17,252,310	16,145,890
EXPENSES
Losses and loss adjustment expenses	4,858,757	4,633,516	9,944,251	9,527,423
Policy acquisition costs	1,701,091	1,599,883	3,400,751	3,092,713
Salaries and employee benefits	1,279,849	1,166,206	2,661,433	2,414,113
Commissions to agents/brokers	40,636	44,756	81,055	89,344
Other operating expenses	633,705	686,657	1,226,252	1,430,661
Total Expenses	8,514,038	8,131,018	17,313,742	16,554,254
Income before income taxes	208,594	182,673	(61,432)	(408,364)
Income Tax Expense	57,564	70,292	(13,475)	(123,960)
Net Income	$ 151,030	$ 112,381	$ (47,957)	$ (284,404)
Basic
Earnings per share	$ .03	$ .02	$ (.01)	$ (.05)
Weighted average shares	5,307,133	5,339,392	5,308,255	5,340,270
Diluted
Earnings per share	$ .03	$ .02	$ (.01)	$ (.05)
Weighted average shares	5,308,501	5,342,944	5,308,255	5,340,270

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Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements Of Comprehensive Income Loss
Net Income	$ 151,030	$ 112,381	$ (47,957)	$ (284,404)
Other Changes in Comprehensive Income (Loss):
Unrealized gains (losses) on securities classified as available-for-sale arising during the period	10,963	(14,195)	103,800	69,837
Income tax benefit (expense) related to unrealized gains ( losses) on securities classified as available-for-sale arising during the period	(3,728)	4,826	(35,292)	(23,745)
Comprehensive Income (Loss)	$ 158,265	$ 103,012	$ 20,551	$ (238,312)

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Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash Flows from Operating Activities:
Net Income	$ (47,957)	$ (284,404)
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization	239,914	234,345
Bond amortization, net	(8,567)	(9,054)
Non-cash stock based compensation	11,552	11,552
Changes in assets and liabilities:
Net receivables and accrued investment income	(825,591)	(952,580)
Reinsurance recoverable	460,247	(462,692)
Deferred policy acquisition costs	(261,710)	(387,191)
Other assets	(4,847,221)	(111,974)
Unpaid losses and loss adjustment expenses	(106,128)	(164,846)
Unearned premium	1,185,762	1,716,663
Advance premium and premium deposits	229,324	133,077
Accrued expenses and other liabilities	121,508	(446,737)
Income taxes current/deferred	(17,853)	(128,377)
Net Cash Provided (Used) by Operating Activities	(3,866,720)	(852,218)
Cash Flows from Investing Activities:
Purchase of fixed maturity investments	(5,194,000)	(21,323,858)
Proceeds from maturity of fixed maturity investments	1,046,000	1,949,000
Net decrease in short-term investments	8,681,962	20,647,434
Additions to property and equipment	(522,465)	(339,919)
Net Cash Provided (Used) by Investing Activities	4,011,497	932,657
Cash Flows from Financing Activities:
Repurchase of common stock	(89,582)	(23,490)
Net Cash Provided (Used) by Financing Activities	(89,582)	(23,490)
Net increase (decrease) in cash	55,195	56,949
Cash at beginning of period	334,495	309,162
Cash at End of Period	389,690	366,111
Cash paid during the period for:
Interest	0	0
Income taxes	$ 8,774	$ 8,900

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Summary of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Unico American Corporation (the “Company” or “Unico”) is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. References to Unico or the Company include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Quarterly financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2015 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Certain reclassifications have been made to prior period amounts to conform to the current quarter’s presentation.

Use of Estimates in the Preparation of the Financial Statements

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ.

Fair Value of Financial Instruments

The Company employs a fair value hierarchy that prioritizes the inputs for valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques. (See Note 8.)

The Company has used the following methods and assumptions in estimating its fair value disclosures:

• Fixed maturities:

1. Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service.

2. Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values.

• Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments.

• Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments.

• Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments.

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Repurchase of Common Stock - Effects on Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Repurchase of Common Stock - Effects on Stockholders' Equity

NOTE 2 – REPURCHASE OF COMMON STOCK – EFFECTS ON STOCKHOLDERS’ EQUITY

On December 19, 2008, the Board of Directors authorized a stock repurchase program to acquire from time to time up to an aggregate of 500,000 shares of the Company’s common stock. This program has no expiration date and may be terminated by the Board of Directors at any time. As of June 30, 2016, and December 31, 2015, the Company had remaining authority under the 2008 program to repurchase up to an aggregate of 188,655 and 197,467 shares of its common stock, respectively. The 2008 program is the only program under which there is authority to repurchase shares of the Company’s common stock. The Company did not repurchase any stock during the three months ended June 30, 2016. The Company repurchased 8,812 shares of stock during the six months ended June 30, 2016, in unsolicited transactions at a cost of $89,582 of which $4,331 was allocated to capital and $85,251 was allocated to retained earnings. The Company repurchased 2,204 shares of stock during the three and six months ended June 30, 2015, in unsolicited transactions at a cost of $23,490 of which $1,083 was allocated to capital and $22,407 was allocated to retained earnings. The Company has or will retire all repurchased stock.

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Earnings Per Share

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share

NOTE 3 – EARNINGS (LOSS) PER SHARE

The following table represents the reconciliation of the Company's basic earnings (loss) per share and diluted earnings (loss) per share computations reported on the Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2016		2015		2016			2015
Basic Earnings (Loss) Per Share
Net income (loss)	$	151,030	$	112,381	$	(47,957	)	$	(284,404	)
Weighted average shares outstanding		5,307,133		5,339,392		5,308,255			5,340,270
Basic earnings (loss) per share	$	0.03	$	0.02	$	(0.01	)	$	(0.05	)
Diluted Earnings (Loss) Per Share
Net income (loss)	$	151,030	$	112,381	$	(47,957	)	$	(284,404	)
Weighted average shares outstanding		5,307,133		5,339,392		5,308,255			5,340,270
Effect of dilutive securities		1,368		3,552		—			—
Diluted shares outstanding		5,308,501		5,342,944		5,308,255			5,340,270
Diluted earnings (loss) per share	$	0.03	$	0.02	$	(0.01	)	$	(0.05	)

Basic earnings per share exclude the impact of common share equivalents and are based upon the weighted average common shares outstanding. Diluted earnings per share utilize the average market price per share when applying the treasury stock method in determining common share dilution. When outstanding stock options are dilutive, they are treated as common share equivalents for purposes of computing diluted earnings per share and represent the difference between basic and diluted weighted average shares outstanding. In loss periods, stock options are excluded from the calculation of diluted (loss) per share, as the inclusion of stock options would have an anti-dilutive effect. As of June 30, 2016 and 2015, the Company had 684 and 5,523 common share equivalents, respectively, that were excluded in the six months diluted (loss) per share calculation.

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Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

NOTE 4 – RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13 “Measurement of Credit Losses on Financial Instruments.”  ASU 2016-13 replaces the current incurred loss methodology for recognizing credit losses with a current expected credit loss model, which 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. ASU 2016-13 also requires enhanced disclosures for better understanding of significant estimates and judgments used in estimating credit losses. The Company is currently evaluating the effect ASU 2016-13 will have on the Company's consolidated financial statements, but expects the primary changes to be the use of the expected credit loss model for its premium receivables and reinsurance recoverables and the presentation of credit losses within the available-for-sale fixed maturities portfolio through an allowance method rather than as a direct write-down. ASU 2016-13 will become effective for fiscal years beginning after December 31, 2019.

In May 2015, FASB issued ASU 2015-09 “Disclosures About Short-Duration Contracts.” The objective of this ASU is to increase transparency about significant estimates in unpaid losses and loss adjustment expenses and provide additional information about amount, timing and uncertainty of cash flows related to unpaid losses and loss adjustment expenses. ASU 2015-09 is not expected to have any impact on the Company’s consolidated financial statements. The disclosure mandated by ASU 2015-09 will become effective for annual and quarterly reporting periods ended on and after December 31, 2016.

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Accounting For Income Taxes

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Accounting For Income Taxes

NOTE 5 – ACCOUNTING FOR INCOME TAXES

The Company and its wholly owned subsidiaries file consolidated federal and state income tax returns. Pursuant to the tax allocation agreement, Crusader Insurance Company (“Crusader”) and American Acceptance Corporation (“AAC”), wholly owned subsidiaries of the Company, are allocated taxes or tax credits, in the case of losses, at current corporate rates based on their own taxable income or loss. The Company files income tax returns under U.S. federal and various state jurisdictions. The Company is subject to examination by U.S. federal income tax authorities for tax returns filed starting at taxable year 2012 and California state income tax authorities for tax returns filed starting at taxable year 2011. There are no ongoing examinations of income tax returns by federal or state tax authorities.

As of June 30, 2016, and December 31, 2015, the Company had no unrecognized tax benefits or liabilities. In addition, the Company had not accrued interest and penalties related to unrecognized tax benefits or liabilities. However, if interest and penalties would need to be accrued related to unrecognized tax benefits or liabilities, such amounts would be recognized as a component of federal income tax expense.

As a California insurance company, Crusader is obligated to pay a premium tax on gross premiums written in all states in which Crusader is admitted. Premium taxes are deferred and amortized as the related premiums are earned. The premium tax is in lieu of state franchise taxes and is not included in the provision for state taxes.

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Property and Equipment (Net of Accumulated Depreciation)

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Property and Equipmentr (Net of Accumulated Depreciation)

NOTE 6 – PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

		June 30			December 31
		2016			2015
Building located in Calabasas, California	$	8,321,180		$	8,217,477
Furniture, fixtures and equipment		2,665,603			2,251,623
Accumulated depreciation and amortization		(2,443,941	)		(2,204,027	)
Land located in Calabasas, California		1,787,485			1,787,485
Computer software under development		172,944			168,162
Property and equipment, net	$	10,503,271		$	10,220,720

Depreciation on the Calabasas building, owned by Crusader, is computed using the straight line method over 39 years. Depreciation on furniture, fixtures and equipment in the Calabasas building is computed using the straight line method over 3 to 15 years. Amortization of leasehold improvements in the Calabasas building is being computed using the shorter of the useful life of the leasehold improvements or the remaining years of the lease.

Depreciation and amortization expense on all property and equipment for the three and six months ended June 30, 2016, was $124,631 and $239,914, respectively, and for the three and six months ended June 30, 2015, was $116,894 and $234,345, respectively.

The Calabasas building has generated rental revenue from non-affiliated tenants in the amount of $56,628 and $116,034 for the three and six months ended June 30, 2016, respectively, and $39,109 and $88,966 for the three and six months ended June 30, 2015, respectively. This rental revenue is included in “Other income” from insurance company operation in the Company’s Consolidated Statements of Operations.

The Calabasas building has incurred operating expenses (including depreciation) in the amount of $164,360 and $336,237 for the three and six months ended June 30, 2016, respectively, and $165,125 and $344,204 for the three and six months ended June 30, 2015, respectively. These operating expenses are included in “Other operating expenses” in the Company’s Consolidated Statements of Operations.

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Segment Reporting

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting

NOTE 7 – SEGMENT REPORTING

ASC Topic 280, “Segment Reporting,” establishes standards for the way information about operating segments is reported in financial statements. The Company has identified its insurance company operation as its primary reporting segment. Revenues from this segment comprised 92% of total revenues for the three and six months ended June 30, 2016, compared to 91% of total revenues for the three and six months ended June 30, 2015. The Company’s remaining operations constitute a variety of specialty insurance services, each with unique characteristics and individually insignificant to total revenues.

Revenues, income (loss) before income taxes, and assets by segment are as follows:

	Three Months Ended						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
Revenues
Insurance company operation	$	7,997,979		$	7,594,589		$	15,848,710		$	14,719,270
Other insurance operations		3,543,106			3,382,306			6,741,252			6,523,946
Intersegment eliminations (1)		(2,818,453	)		(2,663,204	)		(5,337,652	)		(5,097,326	)
Total other insurance operations		724,653			719,102			1,403,600			1,426,620
Total revenues	$	8,722,632		$	8,313,691		$	17,252,310		$	16,145,890
Income (Loss) Before Income Taxes
Insurance company operation	$	304,736		$	254,512		$	558,489		$	(2,068	)
Other insurance operations		(96,142	)		(71,839	)		(619,921	)		(406,296	)
Total income (loss) before income taxes	$	208,594		$	182,673		$	(61,432	)	$	(408,364	)

	June 30			December 31
	2016			2015
Assets
Insurance company operation	$	127,015,998		$	126,406,439
Intersegment eliminations (2)		(1,491,520	)		(1,409,797	)
Total insurance company operation		125,524,478			124,996,642
Other insurance operations		16,018,945			15,173,793
Total assets	$	141,543,423		$	140,170,435

(1) Intersegment revenue eliminations reflect rents paid by Unico to Crusader for space leased in the Calabasas building and commissions paid by Crusader to Unifax Insurance Systems, Inc. (“Unifax”), a wholly owned subsidiary of Unico.

(2) Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Fair Value of Financial Instruments

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

In determining the fair value of its financial instruments, the Company employs a fair value hierarchy that prioritizes the inputs for the valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques as follows:

Level 1 – Financial assets and financial liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities as of the reporting date.

Level 2 – Financial assets and financial liabilities whose values are based on quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in non-active markets; or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability as of the reporting date.

Level 3 – Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities as of the reporting date.

The hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the fair value hierarchy level within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) or unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis and are allocated among the three levels within the fair value hierarchy as of June 30, 2016, and December 31, 2015:

		Level 1		Level 2		Level 3		Total
June 30, 2016
Financial instruments:
Fixed maturity securities:
U.S. treasury securities	$	24,146,658	$	—	$	—	$	24,146,658
Certificates of deposit		—		62,275,000		—		62,275,000
Total fixed maturity securities		24,146,658		62,275,000		—		86,421,658
Cash and short-term investments		7,348,531		—		—		7,348,531
Total financial instruments at fair value	$	31,495,189	$	62,275,000	$	—	$	93,770,189
December 31, 2015
Financial instruments:
Fixed maturity securities:
U.S. treasury securities	$	24,034,291	$	—	$	—	$	24,034,291
Certificates of deposit		—		58,127,000		—		58,127,000
Total fixed maturity securities		24,034,291		58,127,000		—		82,161,291
Cash and short-term investments		15,975,298		—		—		15,975,298
Total financial instruments at fair value	$	40,009,589	$	58,127,000	$	—	$	98,136,589

Fair value measurements are not adjusted for transaction costs. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. The Company did not have any transfers between Levels 1, 2 and 3 of the fair value hierarchy during the three and six months ended June 30, 2016 and 2015.

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Investments

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Investments

NOTE 9 – INVESTMENTS

A summary of total investment income and net realized losses is as follows:

	Three Months Ended June 30				Six Months Ended June 30
	2016		2015		2016			2015
Fixed maturities	$	180,828	$	85,229	$	358,665		$	157,165
Short-term investments		31,622		12,706		65,876			28,178
Total investment income		212,450		97,935		424,541			185,343
Net realized losses		—		—		(1,278	)		—
Total investment income and net realized losses	$	212,450	$	97,935	$	423,263		$	185,343

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

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2016
Available for sale:
Fixed maturities
Certificates of deposit	$	62,275,000	$	—	$	—	$	62,275,000
U.S. treasury securities		24,084,294		62,364		—		24,146,658
Total fixed maturities	$	86,359,294	$	62,364	$	—	$	86,421,658

December 31, 2015
Available for sale:
Fixed maturities
Certificates of deposit	$	58,127,000	$	—	$	—		$	58,127,000
U.S. treasury securities		24,075,727		3,188		(44,624	)		24,034,291
Total fixed maturities	$	82,202,727	$	3,188	$	(44,624	)	$	82,161,291

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

	June 30			December 31
	2016			2015
Gross unrealized gains of fixed maturities	$	62,364		$	3,188
Gross unrealized (losses) of fixed maturities		—			(44,624	)
Net unrealized gains (losses) on investments		62,364			(41,436	)
Deferred federal tax (expense) benefit		(21,204	)		14,088
Net unrealized gains (losses), net of deferred income taxes	$	41,160		$	(27,348	)

At December 31, 2015, the Company had three fixed maturity investments with gross unrealized losses of $38,509 for a continuous period of less than 12 months and two fixed maturity investments with gross unrealized losses of $6,115 for a continuous period of more than 12 months.

The Company closely monitors its investments. 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 unrealized losses on the U.S. treasury securities as of December 31, 2015, were determined to be temporary.

Although the Company does not intend to sell its fixed maturity investments prior to maturity, the Company may sell investment securities from time to time in response to cash flow requirements, economic and/or market conditions. The Company sold three certificates of deposit during the six months ended June 30, 2016. These securities had an amortized cost of $746,000. The Company realized an investment loss of $1,278 on the sale. The Company did not sell any fixed maturity investments and there were no realized investment gains or losses during the three months ended June 30, 2016, nor during the three and six months ended June 30, 2015. The unrealized gains or losses from fixed maturities are reported as “Accumulated other comprehensive income,” which is a separate component of stockholders’ equity, net of any deferred tax effect.

The Company’s investment in certificates of deposit included $61,675,000 and $57,527,000 of brokered certificates of deposit as of June 30, 2016, and December 31, 2015, respectively. Brokered certificates of deposit provide the safety and security of a certificate of deposit combined with the convenience gained by one-stop shopping for rates at various institutions. This allows the Company to spread its investments across multiple institutions so that all of its certificates of deposit are insured by the Federal Deposit Insurance Corporation (“FDIC”). Brokered certificates of deposit are purchased through UnionBanc Investment Services, LLC, a registered broker-dealer, investment advisor, member of FINRA/SIPC, and a subsidiary of MUFG Union Bank, N.A. Brokered certificates of deposit are a direct obligation of the issuing depository institution, are bank products of the issuing depository institution, are held by UnionBank Global Custody Services for the benefit of the Company, and are FDIC insured within permissible limits. As of June 30, 2016, and December 31, 2015, the Company’s remaining certificates of deposit totaling $600,000 are from four different banks and represent statutory deposits that are assigned to and are held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for writing certain lines of business in California and for admission in the state of Nevada. All the Company’s brokered and non-brokered certificates of deposit are within the FDIC insured permissible limits.

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

		June 30		December 31
		2016		2015
U.S. treasury bills	$	—	$	9,987,804
U.S. treasury money market fund		5,063,582		3,357,841
Certificates of deposit		948,000		1,346,000
Bank money market accounts		945,496		947,395
Bank savings accounts		1,763		1,763
Total short-term investments	$	6,958,841	$	15,640,803

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Contingencies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Contingencies

NOTE 10 – CONTINGENCIES

The Company, by virtue of the nature of the business conducted by it, becomes involved in numerous legal proceedings as either plaintiff or defendant. From time to time, the Company is required to resort to legal proceedings against vendors providing services to the Company or against customers or their agents to enforce collection of premiums, commissions, or fees. These routine items of litigation do not materially affect the Company and are handled on a routine basis by the Company through its counsel.

The Company establishes reserves for lawsuits, regulatory actions, and other contingencies for which the Company is able to estimate its potential exposure and believes a loss is probable. For loss contingencies believed to be reasonably possible, the Company discloses the nature of the loss contingency, an estimate of the possible loss, a range of loss, or a statement that such an estimate cannot be made.

Likewise, the Company is sometimes named as a cross-defendant in litigation, which is principally directed against an insured who was issued a policy of insurance directly or indirectly through the Company. Incidental actions related to disputes concerning the issuance or non-issuance of individual policies are sometimes brought by customers or others. These items are also handled on a routine basis by counsel, and they do not generally affect the operations of the Company. Management is confident that the ultimate outcome of pending litigation should not have an adverse effect on the Company's consolidated results of operations or financial position. The Company vigorously defends itself unless a reasonable settlement appears appropriate.

In December 2015, a judgment was finalized on a Crusader policy liability claim. Crusader is appealing the judgment. As a part of the appeal, Crusader deposited $7,924,178 in cash in lieu of an appeal bond with the Los Angeles Superior Court on December 28, 2015. This cash deposit was required to appeal the judgment. In March 2016, an additional judgment for plaintiff’s attorney fees and costs on this Crusader policy liability claim was finalized. The Company is also appealing this additional judgment. That additional appeal required an additional cash deposit in lieu of an appeal bond of $5,449,615. The additional cash deposit was made on March 21, 2016. These cash deposits for the appeals represent 150% of the judgments. The cash deposits in lieu of an appeal bond of $13,373,793 and $7,924,178 were included in “Other assets” in the Consolidated Balance Sheets as of June 30, 2016, and December 31, 2015, respectively. Management believes the ultimate outcome of this litigation will be covered by Crusader’s reinsurance, subject to retention and participation. Since this litigation was related to a Crusader claim in its normal course of business, management’s best estimate for ultimate liability related to this litigation was included in Crusader’s IBNR as of June 30, 2016, and December 31, 2015.

One of the Company’s agents, which was appointed in 2008 to assist the Company in implementing its Trucking Program, failed to pay the net premium and policy fees due Unifax, the exclusive general agent for Crusader. The agent was initially late in paying its February 2009 production that was due to Unifax on April 15, 2009. In May 2009, as a result of the agent’s failure to timely pay its balance due to Unifax, the Company terminated its agency agreement and assumed ownership and control of that agent’s policy expirations written with the Company. The Company subsequently commenced legal proceedings against the agent corporation, its three principals (who personally guaranteed the agent’s obligations) and another individual for the recovery of the balance due and any related recovery costs incurred. All related recovery costs have been expensed as incurred. The agent corporation and two of its principals filed bankruptcy. The corporation was adjudicated bankrupt. The Company obtained judgments, non-dischargeable in bankruptcy, for the full amount due from the two principals who filed bankruptcy. The other principal stipulated to a judgment of $1,200,000. The other individual paid the Company to settle the claim against him. The Company collected $0 during the three and six months ended June 30, 2016 and 2015. As of June 30, 2016, and December 31, 2015, the agent’s balance due to Unifax was $1,181,272. As of June 30, 2016, and December 31, 2015, the Company’s bad debt reserve associated with this matter was $1,181,272, which represents 100% of the balance due to Unifax. Although the receivable is fully reserved for financial reporting purposes at June 30, 2016, the Company continues to pursue collection of the judgments from the three principals.

On October 9, 2015, the Company filed a lawsuit in the Superior Court for the State of California, County of Los Angeles, Central District against a software vendor, Insurance Systems, Inc. (“ISI”). The lawsuit sought an unspecified amount in monetary damages plus punitive damages against ISI. Causes of action stated in the lawsuit included fraudulent inducement and intentional misrepresentation, negligent misrepresentation, negligence, violation of business and professional code, breach of implied warranty of merchantability, breach of implied warranty of fitness, breach of contract and breach of implied covenant of good faith and fair dealings. Subsequently, the lawsuit was removed to the United States District Court for the Central District of California and all causes of action have been disallowed by the court except for breach of contract. On May 16, 2016, ISI filed a countersuit against the Company for $1,792,398 for unpaid invoices plus damages for alleged breach of the contract related to implementation of the ISI computer software by the Company. The Company is vigorously defending the countersuit and believes it to be without merit. The Company has asserted various affirmative defenses in opposition to the ISI countersuit including defenses of fraud in inducement, fraudulent concealment, and negligent misrepresentation.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Nature of Business

Nature of Business

Unico American Corporation (the “Company” or “Unico”) is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. References to Unico or the Company include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Quarterly financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2015 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Certain reclassifications have been made to prior period amounts to conform to the current quarter’s presentation.

Use of Estimates in the Preparation of the Financial Statements

Use of Estimates in the Preparation of the Financial Statements

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company employs a fair value hierarchy that prioritizes the inputs for valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques. (See Note 8.)

The Company has used the following methods and assumptions in estimating its fair value disclosures:

• Fixed maturities:

1. Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service.

2. Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values.

• Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments.

• Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments.

• Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share Tables

Basic and diluted earnings per share calculation data

The following table represents the reconciliation of the Company's basic earnings (loss) per share and diluted earnings (loss) per share computations reported on the Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2016		2015		2016			2015
Basic Earnings (Loss) Per Share
Net income (loss)	$	151,030	$	112,381	$	(47,957	)	$	(284,404	)
Weighted average shares outstanding		5,307,133		5,339,392		5,308,255			5,340,270
Basic earnings (loss) per share	$	0.03	$	0.02	$	(0.01	)	$	(0.05	)
Diluted Earnings (Loss) Per Share
Net income (loss)	$	151,030	$	112,381	$	(47,957	)	$	(284,404	)
Weighted average shares outstanding		5,307,133		5,339,392		5,308,255			5,340,270
Effect of dilutive securities		1,368		3,552		—			—
Diluted shares outstanding		5,308,501		5,342,944		5,308,255			5,340,270
Diluted earnings (loss) per share	$	0.03	$	0.02	$	(0.01	)	$	(0.05

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2016

Property And Equipment Tables

Property and Equipment

Property and equipment consist of the following:

		June 30			December 31
		2016			2015
Building located in Calabasas, California	$	8,321,180		$	8,217,477
Furniture, fixtures and equipment		2,665,603			2,251,623
Accumulated depreciation and amortization		(2,443,941	)		(2,204,027	)
Land located in Calabasas, California		1,787,485			1,787,485
Computer software under development		172,944			168,162
Property and equipment, net	$	10,503,271		$	10,220,720

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Revenues and income before income taxes by segment

Revenues, income (loss) before income taxes, and assets by segment are as follows:

	Three Months Ended						Six Months Ended
	June 30						June 30
	2016			2015			2016			2015
Revenues
Insurance company operation	$	7,997,979		$	7,594,589		$	15,848,710		$	14,719,270
Other insurance operations		3,543,106			3,382,306			6,741,252			6,523,946
Intersegment eliminations (1)		(2,818,453	)		(2,663,204	)		(5,337,652	)		(5,097,326	)
Total other insurance operations		724,653			719,102			1,403,600			1,426,620
Total revenues	$	8,722,632		$	8,313,691		$	17,252,310		$	16,145,890
Income (Loss) Before Income Taxes
Insurance company operation	$	304,736		$	254,512		$	558,489		$	(2,068	)
Other insurance operations		(96,142	)		(71,839	)		(619,921	)		(406,296	)
Total income (loss) before income taxes	$	208,594		$	182,673		$	(61,432	)	$	(408,364	)

Assets by segemnt

Assets by segment are as follows:

	June 30			December 31
	2016			2015
Assets
Insurance company operation	$	127,015,998		$	126,406,439
Intersegment eliminations (2)		(1,491,520	)		(1,409,797	)
Total insurance company operation		125,524,478			124,996,642
Other insurance operations		16,018,945			15,173,793
Total assets	$	141,543,423		$	140,170,435

(2) Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader.

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Fair Value Of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Of Financial Instruments Tables

Fair value of financial instruments

The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis and are allocated among the three levels within the fair value hierarchy as of June 30, 2016, and December 31, 2015:

		Level 1		Level 2		Level 3		Total
June 30, 2016
Financial instruments:
Fixed maturity securities:
U.S. treasury securities	$	24,146,658	$	—	$	—	$	24,146,658
Certificates of deposit		—		62,275,000		—		62,275,000
Total fixed maturity securities		24,146,658		62,275,000		—		86,421,658
Cash and short-term investments		7,348,531		—		—		7,348,531
Total financial instruments at fair value	$	31,495,189	$	62,275,000	$	—	$	93,770,189
December 31, 2015
Financial instruments:
Fixed maturity securities:
U.S. treasury securities	$	24,034,291	$	—	$	—	$	24,034,291
Certificates of deposit		—		58,127,000		—		58,127,000
Total fixed maturity securities		24,034,291		58,127,000		—		82,161,291
Cash and short-term investments		15,975,298		—		—		15,975,298
Total financial instruments at fair value	$	40,009,589	$	58,127,000	$	—	$	98,136,589

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Investments (Tables)

6 Months Ended

Jun. 30, 2016

Investments Tables

Investment income

A summary of total investment income and net realized losses is as follows:

	Three Months Ended June 30				Six Months Ended June 30
	2016		2015		2016			2015
Fixed maturities	$	180,828	$	85,229	$	358,665		$	157,165
Short-term investments		31,622		12,706		65,876			28,178
Total investment income		212,450		97,935		424,541			185,343
Net realized losses		—		—		(1,278	)		—
Total investment income and net realized losses	$	212,450	$	97,935	$	423,263		$	185,343

Available for sale investments

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

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2016
Available for sale:
Fixed maturities
Certificates of deposit	$	62,275,000	$	—	$	—	$	62,275,000
U.S. treasury securities		24,084,294		62,364		—		24,146,658
Total fixed maturities	$	86,359,294	$	62,364	$	—	$	86,421,658

December 31, 2015
Available for sale:
Fixed maturities
Certificates of deposit	$	58,127,000	$	—	$	—		$	58,127,000
U.S. treasury securities		24,075,727		3,188		(44,624	)		24,034,291
Total fixed maturities	$	82,202,727	$	3,188	$	(44,624	)	$	82,161,291

Unrealized gains (losses) on investments

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

	June 30			December 31
	2016			2015
Gross unrealized gains of fixed maturities	$	62,364		$	3,188
Gross unrealized (losses) of fixed maturities		—			(44,624	)
Net unrealized gains (losses) on investments		62,364			(41,436	)
Deferred federal tax (expense) benefit		(21,204	)		14,088
Net unrealized gains (losses), net of deferred income taxes	$	41,160		$	(27,348	)

Investment in short term assets

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

		June 30		December 31
		2016		2015
U.S. treasury bills	$	—	$	9,987,804
U.S. treasury money market fund		5,063,582		3,357,841
Certificates of deposit		948,000		1,346,000
Bank money market accounts		945,496		947,395
Bank savings accounts		1,763		1,763
Total short-term investments	$	6,958,841	$	15,640,803

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Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Notes to Financial Statements
Earnings per share - diluted	$ .03	$ .02	$ (.01)	$ (.05)
Earnings per share - basic	$ .03	$ .02	$ (.01)	$ (.05)
Net income	$ 151,030	$ 112,381	$ (47,957)	$ (284,404)
Effect of common share equivalents	1,368	3,552	0	0
Weighted average shares outstanding - diluted	5,308,501	5,342,944	5,308,255	5,340,270
Weighted average shares outstanding - basic	5,307,133	5,339,392	5,308,255	5,340,270

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Property and Equipment (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Property And Equipment Details
Office building and leasehold improvements	$ 8,321,180	$ 8,217,477
Furniture, fixtures, equipment and other leasehold improvements	2,665,603	2,251,623
Accumulated depreciation and amortization	(2,443,941)	(2,204,027)
Land located in Calabasas California	1,787,485	1,787,485
Computer software under development	172,944	168,162
Net property and equipment	$ 10,503,271	$ 10,220,720

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Segment Reporting - Revenues (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues
Insurance company operation	$ 7,997,979	$ 7,997,979	$ 7,594,589	$ 7,594,589	$ 15,848,710	$ 14,719,270
Revenues from other insurance operations		3,543,106		3,382,306	6,741,252	6,523,946
Intersegment revenue eliminations		(2,818,453)		(2,663,204)	(5,337,652)	(5,097,326)
Revenues from other insurance operations net of intersegment eliminations		724,653		719,102	1,403,600	1,426,620
Total revenues	8,722,632	8,722,632	8,313,691	8,313,691	17,252,310	16,145,890
Income Before Income Taxes
Income before taxes from insurance company operation		304,736		254,512	558,489	(2,068)
Income before taxes from other insurance operations		(96,142)		(71,839)	(619,921)	(406,296)
Income before income taxes	$ 208,594	$ 208,594	$ 182,673	$ 182,673	$ (61,432)	$ (408,364)

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Segment Reporting - Assets (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Assets
Insurance company operation	$ 127,015,998	$ 126,406,439
Intersegment asset eliminations	(1,491,520)	(1,409,797)
Total insurance company operation	125,524,478	124,996,642
Other insurance operations assets	16,018,945	15,173,793
Total assets	$ 141,543,423	$ 140,170,435

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Fair Value of Financial Instruments - Fair Value of Invested Assets (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Fixed maturity investments available for sale:
U.S. treasury securities	$ 24,146,658	$ 24,034,291
Certificates of deposit	62,275,000	58,127,000
Total fixed maturities	86,421,658	82,161,291
Cash and short term investments	7,348,531	15,975,298
Total financial instruments at fair value	93,770,189	98,136,589
Level 1
Fixed maturity investments available for sale:
U.S. treasury securities	24,146,658	24,034,291
Certificates of deposit	0	0
Total fixed maturities	24,146,658	24,034,291
Cash and short term investments	7,348,531	15,975,298
Total financial instruments at fair value	31,495,189	40,009,589
Level 2
Fixed maturity investments available for sale:
U.S. treasury securities	0	0
Certificates of deposit	62,275,000	58,127,000
Total fixed maturities	62,275,000	58,127,000
Cash and short term investments	0	0
Total financial instruments at fair value	62,275,000	58,127,000
Level 3
Fixed maturity investments available for sale:
U.S. treasury securities	0	0
Certificates of deposit	0	0
Total fixed maturities	0	0
Cash and short term investments	0	0
Total financial instruments at fair value	$ 0	$ 0

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Investments - Investment Income And Realized Losses (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Notes to Financial Statements
Investment income fixed maturities	$ 85,229	$ 180,828	$ 358,665	$ 157,165
Investment income short-term investments	12,706	31,622	65,876	28,178
Total investment income	97,935	212,450	424,541	185,343
[us-gaap:RealizedInvestmentGainsLosses]	0	0	(1,278)	0
Investment income and net realized losses	$ 97,935	$ 212,450	$ 423,263	$ 185,343

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Investments - Available for sale investments (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Certificates of deposit
Amortized cost of fixed maturity investments by asset type	$ 62,275,000	$ 58,127,000
Gross unrealized gains by asset type	0	0
Gross unrealized losses by asset type	0	0
Investments at fair value	62,275,000	58,127,000
U.S. treasury securities
Amortized cost of fixed maturity investments by asset type	24,084,294	24,075,727
Gross unrealized gains by asset type	62,364	3,188
Gross unrealized losses by asset type	0	(44,624)
Investments at fair value	24,146,658	24,034,291
Total fixed maturities
Amortized cost of fixed maturity investments by asset type	86,359,294	82,202,727
Gross unrealized gains by asset type	62,364	3,188
Gross unrealized losses by asset type	0	(44,624)
Investments at fair value	$ 86,421,658	$ 82,161,291

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Investments - Unrealized Gains (Losses) on Investments in Fixed Maturities (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Gross unrealized gains on fixed maturities	$ 62,364	$ 3,188
Gross unrealized losses on fixed maturities	0	(44,624)
Net unrealized gains (losses) on fixed maturities	62,364	(41,436)
Deferred federal tax (expense) benefit	(21,204)	14,088
Net unrealized gains (losses), net of deferred income taxes	$ 41,160	$ (27,348)

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Investments - Short term invesmtments (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Short-term U.S. treasury bills	$ 0	$ 9,987,804
U.S. treasury money market fund	5,063,582	3,357,841
Certificates of deposit	948,000	1,346,000
Bank money market accounts	945,496	947,395
Bank savings accounts	1,763	1,763
Total short-term investments	$ 6,958,841	$ 15,640,803

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Repurchase of Common Stock - Effects on Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Notes to Financial Statements
Cost of common stock repurchase	$ 0	$ 23,490	$ 89,582	$ 23,490
Share repurchase allocated to paid in capital	0	1,083	4,331	1,083
Share repurchase allocated to retained earnings	$ 0	$ 22,407	$ 85,251	$ 22,407
Stock repurchase authority remiaining			188,655		197,467
Shares repurchased and retired during period - shares	0	2,204	8,812	2,204
Repurchase of common stock previously authorized					500,000

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Earnings Per Share (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Notes to Financial Statements
Common share equivalens excluded in diluted (loss) per share calculation	5,523	684

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Property and Equipment (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)
Property And Equipment Details Narrative
Square footage of building	46,884		46,884
Building square footage leased to non-alliliates	10,292		10,292
Building square footage available for lease	4,189		4,189
Depreciation and amortization	$ 124,631	$ 116,894	$ 239,914	$ 234,345
Calabasas building operating expenses including depreciation	164,360	165,125	336,237	344,204
Office building revenue from leases from non-affiliates	$ 56,628	$ 39,109	$ 116,034	$ 88,966

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Segment Reporting (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Details Narrative
Percentage of consolidated revenues from insurance company operations segment	92.00%	91.00%	92.00%	91.00%

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Investments (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Notes to Financial Statements
Brokered certificates of deposit	$ 61,675,000		$ 61,675,000		$ 57,527,000
Statutory deposit of certificates of deposit	$ 600,000		$ 600,000		$ 600,000
Statutory deposits number of banks	4		4		4
Number of fixed maturity investments in an unrealized loss position for more than twelve months					2
Number of fixed maturity investments in an unrealized loss position for less than twelve months					3
Amortized cost of certificates of deposits sold	$ 0	$ 0	$ 746,000	$ 0
Realized loss on certificates of deposits sold	$ 0	$ 0	$ 1,278	$ 0
Fixed maturity investments in an unrealized loss position for less than twelve months					$ 38,509
Fixed maturity investments in an unrealized loss position for more than twelve months					$ 6,115

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Contingencies (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Agent balance receivable	$ 1,181,272	$ 1,181,272
Agent balance bad debt reserve	$ 1,181,272	$ 1,181,272
Agent balance bad debt reserve allowance percentage	100.00%	100.00%
Stipulated judgement from one principal	$ 1,200,000	$ 1,200,000
Judgements obtained from two principles	Full Amount Due
Cash deposit in lieu of appeal bond on judgements	$ 13,373,793	$ 7,924,178
Countersuit filed against the Company by ISI	$ 1,792,398