Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2020

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
	2020			2019
Deferred policy acquisition costs at beginning of year	$	3,619,594		$	3,489,728
Policy acquisition costs deferred during year		4,782,461			5,090,712
Policy acquisition costs amortized during year		(4,898,807	)		(4,960,846	)
Deferred policy acquisition costs at end of year	$	3,503,248		$	3,619,594

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. The Company recognized a premium deficiency of $150,000 as of December 31, 2020. The Company did not carry a premium deficiency reserve as of December 31, 2019.