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.

●

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

: Fair values of available for sale fixed maturity securities are provided by a

third

party pricing service. The pricing service uses a variety of sources to determine fair value of securities. The Company’s fixed maturity securities are highly liquid, which allows for a high percentage of the portfolio to be priced through pricing sources. Fair values for equity securities are also provided by a

third

party pricing service and are derived from active trading on national market exchanges.

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

March 31, 2019

and

December 31, 2018:

	March 31, 2019
	Total		Level 1		Level 2		Level 3
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	589,784	$	589,784	$	-	$	-
Corporate bonds		17,383,167		-		17,187,167		196,000
Municipal bonds		6,800,040		-		6,800,040		-
Redeemable preferred stock		99,200		-		99,200		-
Mortgage backed and asset backed securities		3,799,557		-		3,799,557		-
Total fixed maturities		28,671,748		589,784		27,885,964		196,000
Equities:
Equities		11,895,466		11,895,466		-		-
Total	$	40,567,214	$	12,485,250	$	27,885,964	$	196,000

	December 31, 2018
	Total		Level 1		Level 2		Level 3
Available for sale:
Fixed maturities:
US Treasury securities	$	569,940	$	569,940	$	-	$	-
Corporate bonds		15,842,361		-		15,642,361		200,000
Municipal bonds		6,598,113		-		6,598,113		-
Redeemable preferred stock		90,840		-		90,840		-
Mortgage backed and asset backed securities		3,780,985		-		3,780,985		-
Total fixed maturities		26,882,239		569,940		26,112,299		200,000
Equities:
Equities		10,987,539		10,987,539		-		-
Total	$	37,869,778	$	11,557,479	$	26,112,299	$	200,000

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

: The carrying amounts approximate fair value because of the short maturity of these instruments.

Investment income due and accrued:

The carrying amounts approximate fair value because of the short maturity of these instruments.

Policy loans

Policy loans are stated at unpaid principal balances. As these loans are fully collateralized by the cash surrender value of the underlying insurance policies, the carrying value of the policy loans approximates their fair value.

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 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

March 31, 2019

and

December 31, 2018

are as follows:

	March 31, 2019				December 31, 2018
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	2,485,374	$	2,485,374	$	2,077,646	$	2,077,646
Investment income due and accrued		311,398		311,398		286,890		286,890
Investments, at fair value		40,624,649		40,624,649		37,926,317		37,926,317
Total Financial Assets	$	43,421,421	$	43,421,421	$	40,290,853	$	40,290,853

Financial Liabilities:
Policyholder deposits in deposit-type contracts	$	17,280,482	$	16,197,221	$	16,626,218	$	15,361,164
Total Financial Liabilities	$	17,280,482	$	16,197,221	$	16,626,218	$	15,361,164