Note

Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

●

Level

inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement rate.

●

Level

inputs are inputs other than quoted prices included within Level

that are observable for the asset or liability, either directly or indirectly.

The Company’s Level

assets and liabilities include fixed maturity securities with quoted prices that are traded less frequently than exchange-traded instruments or assets and liabilities whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes U.S. Government and agency mortgage-backed debt securities and corporate debt securities.

●

Level

inputs are unobservable for the asset or liability and reflect an entity

’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Investments, available for sale

: Investments in securities that are classified as available for sale are recorded at fair value utilizing Level

and Level

measurements.

The

following table presents the amounts of assets measured at fair value on a recurring basis as of

September 30, 2017

and

December 31, 2016:

	September 30, 2017
	Total		Level 1		Level 2		Level 3
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	240,475	$	240,475	$	-	$	-
Government agency bonds		299,303		-		299,303		-
Corporate bonds		6,234,413		-		6,234,413		-
Municipal bonds		5,702,588		-		5,702,588		-
Redeemable preferred stock		100,040		-		100,040		-
Mortgage backed and asset backed securities		2,577,005		-		2,577,005		-
Total fixed maturities		15,153,824		240,475		14,913,349		-
Equities:
Equities		7,665,497		7,665,497		-		-
Total	$	22,819,321	$	7,905,972	$	14,913,349	$	-

	December 31, 2016
	Total		Level 1		Level 2		Level 3
Available for sale:
Fixed maturities:
US Treasury securities	$	299,162	$	299,162	$	-	$	-
Corporate bonds		3,845,896		-		3,845,896		-
Municipal bonds		2,849,829		-		2,849,829		-
Mortgage backed and asset backed securities		3,325,187		-		3,325,187		-
Total fixed maturities		10,320,074		299,162		10,020,912		-
Equities:
Equities		4,942,248		4,942,248		-		-
Other equity investments		201,256		201,256		-		-
Total equities		5,143,504		5,143,504		-		-
Total	$	15,463,578	$	5,442,666	$	10,020,912	$	-

The Company discloses the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are

not

measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for accrued interest. The methodologies for other financial assets and financial liabilities are discussed below:

Cash and cash equivalents

, investment income due and accrued, and policy loans

: The carrying value of these financial instruments approximates their fair values. Cash and cash equivalents are included in Level

of the fair value hierarchy due to their highly liquid nature.

Policyholder deposits in deposit-type contracts

: The fair value for policyholder deposits in deposit-type insurance contracts (accumulation annuities) is calculated using a discounted cash flow approach. Cash flows are projected using actuarial assumptions and discounted to the valuation date using the risk-free rates adjusted for credit risk

and the nonperformance risk of the liabilities.

The estimated fair values of the Company

’s financial assets and liabilities at

September 30, 2017

and

December 31, 2016

are as follows:

	September 30, 2017				December 31, 2016

	Carrying Value		Fair Value		Carrying Value		Fair Value
	(unaudited)
Financial Assets:
Cash and cash equivalents	$	11,015,077	$	11,015,077	$	3,145,745	$	3,145,745
Investment income due and accrued		124,745		124,745		100,713		100,713
Policy loans		33,376		33,376		-		-
Investments, at fair value		22,819,321		22,819,321		15,463,578		15,463,578
Total Financial Assets	$	33,992,519	$	33,992,519	$	18,710,036	$	18,710,036

Financial Liabilities:
Policyholder deposits in deposit-type contracts	$	12,749,556	$	11,950,167	$	3,398,170	$	3,260,086
Total Financial Liabilities	$	12,749,556	$	11,950,167	$	3,398,170	$	3,260,086