INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense include the following:

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	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Federal:
Current	$	(982)	$	5,162	$	2,431
Deferred	567		(751)		810
Federal income tax expense (benefit)	(415)		4,411		3,241
State:
Current	241		1,383		494
Deferred	(124)		(296)		(150)
State income tax expense (benefit)	117		1,087		344
Total income tax expense (benefit)	$	(298)	$	5,498	$	3,585

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense (benefit) in the consolidated statements of operations and statements of comprehensive income (loss). A reconciliation of these uncertain tax positions was as follows:


	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Balance at January 1	$	585	$	585	$	585
Increases/(decreases) for tax positions taken during the prior years	(203)		—		—
Balance at December 31	$	382	$	585	$	585

Schedule of Effective Income Tax Rate Reconciliation

The actual income tax expense differs from the “expected” income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense) as follows:

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	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Computed expected tax expense provision, at federal rate	$	150	$	4,244	$	3,124
State tax, net of federal tax benefit	(122)		761		187
Tax-exempt interest	(3)		(134)		(429)
Income subject to dividends-received deduction	(34)		(13)		(76)
Return to provision	(307)		158		329
Rate changes	—		—		297
Executive compensation	230		436		185
Meals and entertainment	43		28		76
Uncertain tax position	(203)		—		—
Other	(52)		18		(108)
Total income tax expense (benefit)	$	(298)	$	5,498	$	3,585

Significant Components of Net Deferred Tax Liability

Significant components of the Company’s net deferred income tax asset (liability) include the following:

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	As of December 31,
	2019		2018
	(In thousands)
Deferred income tax assets:
Unearned premiums	$	10,232	$	9,977
Unpaid losses and loss adjustment expenses	1,596		958
Accrued expenses	216		832
Net operating loss carryforwards	2,095		1,714
Deferred revenue	—		236
Share-based compensation	161		255
Unrealized losses on investment securities	—		1,254
Lease liability	1,655		—
Other	23		21
Total deferred income tax assets	15,978		15,247

Deferred income tax liabilities:
Deferred acquisition costs and other	(12,703)		(11,198)
Depreciation and amortization	(1,679)		(577)
Unrealized gains on investment securities	(3,270)		—
Lease asset	(1,655)		—
Other	(257)		(273)
Total deferred income tax liabilities	(19,564)		(12,048)

Deferred income tax asset (liability), net	$	(3,586)	$	3,199