Statutory Accounting and Regulation (Tables)

9 Months Ended

Sep. 30, 2015

Our insurance affiliates must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. UPC is required to maintain capital and surplus equal to the greater of 10% of its total liabilities or $5,000,000. Our reinsurance affiliate is required to maintain a minimum surplus of $200,000. Family Security Insurance Company, Inc. is required to maintain capital and surplus of $3,250,000. The table below shows the amount of surplus as regards policyholders for our regulated entities at September 30, 2015 and December 31, 2014, respectively.



	September 30, 2015			December 31, 2014
UPC	$	126,594		$	126,249
UPC Re⁽²⁾	$	(1,445	)	$	19,048
FSIC	$	9,678		N/A⁽¹⁾

⁽¹⁾There is not a reportable value for FSIC at December 31, 2014 as we did not own the company

until February 2015.

⁽²⁾UPC Re is currently in a negative statutory position due to dividends being paid during Q3 2015.

This negative statutory position will be corrected prior to year end to meet the minimum surplus requirements.

Our insurance affiliates must file with the various insurance regulatory authorities an “Annual Statement” which reports, among other items, net income (loss) and surplus as regards policyholders, which is called stockholder’s equity under GAAP. For the three month and nine month periods ended September 30, 2015 and 2014, United Property & Casualty Insurance Company (UPC), Family Security Insurance Company, Inc. (FSIC) and UPC Re (our reinsurance affiliate) recorded statutory net income (loss).



	Three Months Ended				Nine Months Ended
	September 30, 2015		September 30, 2014		September 30, 2015			September 30, 2014
UPC	$	2,537	$	4,720	$	(174	)	$	15,981
UPC Re	$	169	$	1,605	$	249		$	2,225
FSIC	$	1,567	N/A⁽¹⁾		$	1,633		N/A⁽¹⁾

⁽¹⁾There is not a reportable value for FSIC as of September 30, 2014 as we did not own the company until February 2015.

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

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