Investments (Tables)

9 Months Ended

Sep. 30, 2019

Investments Tables Abstract

Investment income

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

	Three Months Ended September 30						Nine Months Ended September 30
	2019			2018			2019			2018
Fixed maturities	$	532,307		$	498,656		$	1,626,843		$	1,430,323
Short-term investments and cash equivalents		16,811			14,284			53,278			33,872
Gross investment income		549,118			512,940			1,680,121			1,464,195
Less: investment expenses		(31,007	)		(25,381	)		(98,627	)		(79,231	)
Net investment income	$	518,111		$	487,559		$	1,581,494		$	1,384,964

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
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities	$	15,091,142	$	144,814	$	(5,979	)	$	15,229,977
Corporate securities		41,959,625		1,104,193		(2,388	)		43,061,430
Agency mortgage-backed securities		23,549,194		280,259		(3,056	)		23,826,397
Held-to-maturity fixed securities:
Certificates of deposits		2,292,000		—		—			2,292,000
Total fixed maturities	$	82,891,961	$	1,529,266	$	(11,423	)	$	84,409,804

	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 is shown below:

	September 30			December 31
	2019			2018
Gross unrealized gains on fixed maturities	$	1,529,266		$	74,248
Gross unrealized losses on fixed maturities		(11,423	)		(1,466,699	)
Net unrealized gains (losses) on fixed maturities		1,517,843			(1,392,451	)
Deferred federal tax benefit (expense)		(318,746	)		292,415
Net unrealized gains (losses), net of deferred income taxes	$	1,199,097		$	(1,100,036	)

Components of investments in unrealized loss position for continuous 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
September 30, 2019
U.S. treasury securities	$	1,093,984	$	(1,351	)		1	$	1,998,768	$	(4,628	)		2
Corporate securities		498,404		(1,596	)		1		1,698,824		(792	)		2
Agency mortgage-backed securities		3,085,390		(3,056	)		3		—		—			—
Total	$	4,677,778	$	(6,003	)		5	$	3,697,592	$	(5,420	)		4

	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.

	September 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:

	September 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