Note 15 - Contingencies

12 Months Ended

Dec. 31, 2011

Contingencies Disclosure [Text Block]

15.  Contingencies

a. SBIC is subject to guaranty fund and other assessments by the states in which it writes business. Guaranty fund assessments are accrued at the time premiums are written. Other assessments are accrued either at the time of assessment or in the case of premium-based assessments, at the time the premiums are written, or in the case of loss-based assessments, at the time the losses are incurred. As of December 31, 2011 and 2010, SBIC had accrued liabilities for guaranty fund and other assessments of $6.5 million and $6.2 million, respectively, and had recorded  related assets for premium tax offset and policy surcharges of $5.1 million and $4.2 million as of those dates, respectively. These amounts represent management’s best estimate based on information received from the states in which it writes business and may change due to many factors including the Company’s share of the ultimate cost of current insolvencies. Most assessments are paid out in the year following the year in which the premium is written or the losses are paid. Guaranty fund receivables and other surcharge items are generally realized by a charge to new and renewing policyholders in the year following the year in which the related assessments were paid.

b. The Company is involved in various claims and lawsuits arising in the ordinary course of business. Management believes the outcome of these matters will not have a material adverse effect on the Company’s financial position or results of operations.