Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2017

Insurance [Abstract]

Deferred Policy Acquisition Costs

4. Deferred Policy Acquisition Costs

Deferred policy acquisition costs represent those costs that are incremental and directly related to the successful acquisition of new or the renewal of existing insurance contracts.  We defer incremental costs that result directly from, and are essential to, the acquisition or renewal of an insurance contract.

We also defer a portion of employee total compensation costs directly related to time spent performing specific acquisition or renewal activities.

These costs are deferred and expensed over the life of the related policies. Major categories of the Company’s deferred policy acquisition costs are summarized as follows:  

	December 31,
	2017		2016
	(in thousands)
Agents’ commissions	$	15,238	$	15,286
Premium taxes		3,395		2,578
Deferred underwriting expenses		1,618		1,436
Total deferred policy acquisition costs	$	20,251	$	19,300

The following summarizes the activity in the deferred policy acquisition costs:

	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Balance, beginning of year	$	19,300		$	20,412		$	19,649
Policy acquisition costs deferred		43,960			43,209			45,604
Amortization expense during the year		(43,009	)		(44,321	)		(44,841	)
Balance, end of year	$	20,251		$	19,300		$	20,412