Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Deferred Policy Acquisition Costs

NOTE 9 – DEFERRED POLICY ACQUISITION COSTS

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

	Year ended December 31
	2017			2016
Deferred policy acquisition costs at beginning of year	$	4,432,299		$	4,233,396
Policy acquisition costs deferred during year		6,194,153			7,094,052
Policy acquisition costs amortized during year		(6,463,681	)		(6,895,149	)
Deferred policy acquisition costs at end of year	$	4,162,771		$	4,432,299

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 premium is 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. For the year ended December 31, 2017, the Company recognized $45,000 premium deficiency reserve; there was no such reserve for the year ended December 31, 2016.