Investments (Tables)

6 Months Ended

Jun. 30, 2019

Investments Tables Abstract

Investment income

A summary of investment income, net of investment expenses, is as follows:

	Three Months Ended June 30						Six Months Ended June 30
	2019			2018			2019			2018
Fixed maturities	$	550,841		$	469,500		$	1,094,536		$	931,667
Short-term investments and cash equivalents		9,906			11,642			36,467			19,588
Gross investment income		560,747			481,142			1,131,003			951,255
Less: investment expenses		(30,000	)		(28,536	)		(67,619	)		(53,851	)
Net investment income	$	530,747		$	452,606		$	1,063,384		$	897,404

Fixed maturity 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, 2019
Available-for-sale fixed maturities:
U.S. treasury securities	$	15,076,613	$	132,352	$	(10,125	)	$	15,198,840
Corporate securities		41,465,815		817,350		(6,191	)		42,276,974
Agency mortgage-backed securities		23,665,009		184,821		(54,932	)		23,794,898
Held-to-maturity fixed securities:
Certificates of deposits		4,782,000		—		—			4,782,000
Total fixed maturities	$	84,989,437	$	1,134,523	$	(71,248	)	$	86,052,712

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities	$	16,746,832	$	16,069	$	(143,282	)	$	16,619,619
Corporate securities		40,804,425		50,422		(851,124	)		40,003,723
Agency mortgage-backed securities		20,751,331		7,757		(472,293	)		20,286,795
Held-to-maturity fixed securities:
Certificates of deposits		7,126,000		—		—			7,126,000
Total fixed maturities	$	85,428,588	$	74,248	$	(1,466,699	)	$	84,036,137

Unrealized gains (losses) on investments

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

	June 30			December 31
	2019			2018
Gross unrealized gains on fixed maturities	$	1,134,523		$	74,248
Gross unrealized losses on fixed maturities		(71,248	)		(1,466,699	)
Net unrealized gains (losses) on fixed maturities		1,063,275			(1,392,451	)
Deferred federal tax benefit (expense)		(223,288	)		292,415
Net unrealized gains (losses), net of deferred income taxes	$	839,987		$	(1,100,036	)

Components of investments in unrealized loss position for continiuos period of time

A summary of estimated fair value, gross unrealized losses, and number of securities in a gross unrealized loss position by the length of time in which the securities have continually been in that position is shown below:

	Less than 12 Months						12 Months or Longer
	Estimated Fair Value		Gross Unrealized Losses		Number of Securities		Estimated Fair Value		Gross Unrealized Losses			Number of Securities
June 30, 2019
U.S. treasury securities	$	—	$	—		—	$	3,486,173	$	(10,125	)		3
Corporate securities		—		—		—		3,513,044		(6,191	)		5
Agency mortgage-backed securities		—		—		—		13,031,946		(54,932	)		11
Total	$	—	$	—		—	$	20,031,163	$	(71,248	)		19

	Less than 12 Months							12 Months or Longer
	Estimated Fair Value		Gross Unrealized Losses			Number of Securities		Estimated Fair Value		Gross Unrealized Losses			Number of Securities
December 31, 2018
U.S. treasury securities	$	1,760,491	$	(20,181	)		2	$	8,496,069	$	(123,101	)		6
Corporate securities		10,878,381		(272,515	)		17		21,189,487		(578,609	)		27
Agency mortgage-backed securities		—		—			—		17,034,086		(472,293	)		15
Total	$	12,638,872	$	(292,696	)		19	$	46,719,642	$	(1,174,003	)		48

Summary of state held deposits

The following securities from three different banks represent statutory deposits that are assigned to and held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for writing certain lines of insurance in California and for admission to transact insurance business in the state of Nevada.

	June 30		December 31
	2019		2018
Certificates of deposit	$	200,000	$	200,000
Short-term investments		200,000		200,000
Total state held deposits	$	400,000	$	400,000

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
	2019		2018
U.S. treasury bills	$	—	$	4,490,954
Certificate of deposit		200,000		200,000
Total short-term investments	$	200,000	$	4,690,954