Note 2 - Investments

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Investment Holdings [Text Block]

Note 2.  Investments

Fixed Maturity

The amortized cost and fair value of available for sale investments as of September 30, 2021 and December 31, 2020 is as follows:

	September 30, 2021
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	577,795	$	124,964	$	-		$	702,759
Corporate bonds		19,569,139		2,145,250		(194,441	)		21,519,948
Municipal bonds		6,311,889		669,965		(15,738	)		6,966,116
Redeemable preferred stock		3,071,658		54,358		(1,377	)		3,124,639
Mortgage backed and asset backed securities		5,576,509		37,054		(35,429	)		5,578,134
Total available for sale	$	35,106,990	$	3,031,591	$	(246,985	)	$	37,891,596

	December 31, 2020
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:
Fixed maturities:
US Treasury securities	$	574,935	$	127,981	$	-		$	702,916
Corporate bonds		20,126,836		2,821,508		(533	)		22,947,811
Municipal bonds		5,992,707		804,443		(496	)		6,796,654
Redeemable preferred stock		2,900,330		90,085		(200	)		2,990,215
Mortgage backed and asset backed securities		4,189,710		50,274		(2	)		4,239,982
Total available for sale	$	33,784,518	$	3,894,291	$	(1,231	)	$	37,677,578

The amortized cost and fair value of debt securities as of September 30, 2021 and December 31, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of September 30, 2021				As of December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
One year or less	$	274,728	$	275,215	$	373,590	$	379,823
After one year through five years		1,500,272		1,582,461		1,540,931		1,641,749
After five years through ten years		2,911,714		3,264,721		2,887,066		3,379,930
More than 10 years		21,772,109		24,066,426		21,892,891		25,045,879
Redeemable preferred stocks		3,071,658		3,124,639		2,900,330		2,990,215
Mortgage backed and asset backed securities		5,576,509		5,578,134		4,189,710		4,239,982
Total amortized cost and fair value	$	35,106,990	$	37,891,596	$	33,784,518	$	37,677,578

Proceeds from the sale of securities, maturities, and asset paydowns in the nine months ended September 30, 2021 and 2020 were $3,371,416 and $5,371,229, respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Nine Months Ended September 30,
	(unaudited)
	2021			2020
Gross gains	$	218,411		$	119,173
Gross losses		(398	)		(291,524	)
Net realized gains (losses)	$	218,013		$	(172,351	)

Proceeds from the sale of securities, maturities, and asset paydowns in the three months ended September 30, 2021 and 2020 were $460,583 and $766,220, respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Three Months Ended September 30,
	(unaudited)
	2021		2020
Gross gains	$	2,400	$	54,266
Gross losses		-		(1,739	)
Net realized gains (losses)	$	2,400	$	52,527

Gross unrealized losses by duration are summarized as follows:

	Less than 12 months					Greater than 12 months				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	Value		Loss			Value		Loss		Value		Loss
September 30, 2021
	(unaudited)
Available for sale:
Fixed maturities:
Corporate bonds	$	4,428,031	$	(194,441	)	$	-	$	-	$	4,428,031	$	(194,441	)
Municipal bonds		1,028,561		(15,738	)		-		-		1,028,561		(15,738	)
Redeemable preferred stock		540,975		(1,377	)		-		-		540,975		(1,377	)
Mortgage backed and asset backed securities		3,605,242		(35,429	)		-		-		3,605,242		(35,429	)
Total fixed maturities	$	9,602,808	$	(246,985	)	$	-	$	-	$	9,602,808	$	(246,985	)

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2020
Available for sale:
Fixed maturities:
Corporate bonds	$	210,625	$	(2	)	$	49,438	$	(531	)	$	260,063	$	(533	)
Municipal bonds		47,249		(496	)		-		-			47,249		(496	)
Redeemable preferred stock		77,918		(200	)		-		-			77,918		(200	)
Mortgage backed and asset backed securities		309,144		(2	)		-		-			309,144		(2	)
Total fixed maturities	$	644,936	$	(700	)	$	49,438	$	(531	)	$	694,374	$	(1,231	)

Unrealized losses occur from market price declines that may be due to a number of factors, including economic downturns, changes in interest rates, competitive forces within an industry, issuer specific events, operational difficulties, lawsuits, and market pricing anomalies caused by factors such as temporary lack of liquidity.

The total number of available for sale securities in the investment portfolio in an unrealized loss position as of September 30, 2021 was 62, which represented an unrealized loss of $246,985 of the aggregate carrying value of those securities. The 62 securities breakdown as follows: 29 bonds, 31 mortgage and asset backed securities, and 2 redeemable preferred stock. The Company determined that no securities were considered to be other-than-temporarily impaired as of September 30, 2021 and December 31, 2020.

Mortgage Loans on Real Estate

The Company has invested in various mortgage loans through participation agreements with the original issuing entity.  The Company’s mortgage loans by property type as of September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021		December 31, 2020
	(unaudited)
Commercial mortgage loans by property type
Student housing	$	-	$	781,512
Condominium		2,003,705		1,874,445
Multi-property		1,235,750		332,195
Multi-family		535,977		177,984
Total commercial mortgages	$	3,775,432	$	3,166,136

The Company utilizes loan-to-value of individual mortgage loans to evaluate the credit quality of its mortgage loan portfolio.  The loan-to-value measures the loan's carrying value to its appraised value.  The Company’s mortgage loans by loan-to-value ratio as of September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021		December 31, 2020
	(unaudited)
Loan to value ratio
Over 60 to 70%	$	2,003,705	$	1,874,445
Over 40 to 50%		340,667		-
Over 30 to 40%		195,310		177,984
Over 10 to 30%		1,235,750		1,113,707
Total	$	3,775,432	$	3,166,136

The Company’s mortgage loans by maturity date as of September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021		December 31, 2020
	(unaudited)
Maturity Date
One year or less	$	2,199,015	$	2,393,900
After one year through five years		1,576,417		772,236
Total	$	3,775,432	$	3,166,136

The Company had no mortgage loans that were on non-accrued status as of September 30, 2021 and December 31, 2020.  The were no mortgage loans delinquent on payments due the Company as of September 30, 2021 and December 31, 2020.  In addition, the Company did not establish a valuation allowance on any mortgage loans.

Investment Income, Net of Expenses

The components of net investment income for the nine months ended September 30, 2021 and 2020 are as follows:

	Nine Months Ended September 30,
	2021			2020
	(unaudited)
Fixed maturities	$	834,464		$	889,563
Mortgages		281,718			61,438
Equity securities		453,809			487,777
Funds withheld		2,675,956			962,023
Cash and cash equivalents		1,285			12,240
		4,247,232			2,413,041
Less investment expenses		(104,105	)		(90,872	)
	$	4,143,127		$	2,322,169

The components of net investment income for the three months ended September 30, 2021 and 2020 are as follows:

	Three Months Ended September 30,
	2021			2020
	(unaudited)
Fixed maturities	$	280,823		$	272,145
Mortgages		92,459			55,587
Equity securities		151,168			198,327
Funds withheld		1,026,680			597,990
Cash and cash equivalents		417			864
		1,551,547			1,124,913
Less investment expenses		(39,992	)		(58,755	)
	$	1,511,555		$	1,066,158

Net Investment Gains (Losses)

Accounting standards require that the unrealized gains and losses on equity securities be reported as income on the consolidated statements of comprehensive income (loss). For the nine months ended September 30, 2021, net investment losses is comprised of $63,119 of unrealized gains on our equity portfolio, net realized gains of $218,013, and a loss on the change in the fair value of our embedded derivative on funds withheld of $483,874. For the nine months ended September 30, 2020, net investment losses is comprised of $126,205 of unrealized losses on our equity portfolio, net realized losses of $172,351, and a loss on the change in the fair value of our embedded derivative on funds withheld of $138,529. For the three months ended September 30, 2021, net investment losses is comprised of $40,178 of unrealized losses on our equity portfolio, net realized gains of $2,400, and a loss on the change in the fair value of our embedded derivative on funds withheld of $238,754. For the three months ended September 30, 2020, net investment gains is comprised of $730,964 of unrealized gains on our equity portfolio, net realized gains of $52,527 and a gain on the change in the fair value of our embedded derivative on funds withheld of $138,529.