1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.	DESCRIPTION OF BUSINESS

ICC Holdings, Inc. is a Pennsylvania corporation that was organized in

2016.

As used in this Form

-Q, references to the “Company,” “we,” “us,” and “our” refer to the consolidated group. On a stand-alone basis ICC Holdings, Inc. is referred to as the “Parent Company.” The consolidated group consists of the holding company, ICC Holdings, Inc.; ICC Realty, LLC, a real estate services and holding company; Beverage Insurance Agency, Inc., a non-insurance subsidiary; Estrella Innovative Solutions, Inc., an outsourcing company; and Illinois Casualty Company (ICC), an operating insurance company that is the parent company of ICC Properties, LLC, a real estate series limited liability company. Both ICC and ICC Properties, LLC are Illinois domiciled companies.

We are a specialty insurance carrier primarily underwriting commercial multi-peril, liquor liability, workers' compensation, and umbrella liability coverages for the food and beverage industry through our subsidiary insurance company, ICC. ICC writes business in Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, Pennsylvania, and Wisconsin and markets through independent agents.

Approximately

22.7%

and

22.3%

of the premium is written in Illinois for the

three

months ended

September 30, 2020

and

2019

, respectively. For the

nine

months ended

September 30, 2020

and

2019

, approximately

25.0%

and

25.8%

of the premium is written in Illinois, respectively. The Company operates as a single segment.

B.	PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and with the instructions to Form

-Q. Accordingly, they do

not

include all the disclosures required by GAAP for complete financial statements. As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's Annual Report on Form

-K, for the year ended

December 31, 2019

(the

“2019

-K”). Management believes that the disclosures are adequate to make the information presented

not

misleading, and all normal and recurring adjustments necessary to present fairly the financial position at

September 30, 2020

, and the results of operations of the Company and its subsidiaries for all periods presented have been made. The results of operations for any interim period are

not

necessarily indicative of the operating results for a full year.

The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the period. These amounts are inherently subject to change and actual results could differ significantly from these estimates.

C.	SIGNIFICANT ACCOUNTING POLICIES

The Company reported its significant accounting policies in the

2019

-K.

D.	PROSPECTIVE ACCOUNTING STANDARDS

For information regarding accounting standards that the Company has

not

yet adopted, see the “Prospective Accounting Standards” in

Note

– Summary of Significant Accounting Policies

in the

2019

-K. The Company maintains its status as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of

2012

(the “JOBS Act”). We have taken advantage of the extended transition period provided by Section

107

of the JOBS Act. We decided to comply with the effective dates for financial accounting standards applicable to emerging growth companies later in compliance with the requirements in Sections

107

(b)(

) and (

) of the JOBS Act. Such decision is irrevocable.

E.	PROPERTY AND EQUIPMENT

Annually, the Company reviews the major asset classes of property and equipment held for impairment. For the periods ended

September 30, 2020

and

December 31, 2019

, the Company recognized

impairments. Property and equipment are summarized as follows:

	As of
	September 30,			December 31,
	2020			2019
Automobiles	$	530,722		$	505,788
Furniture and fixtures		474,401			457,218
Computer equipment and software		3,917,136			3,823,416
Home office		3,878,909			3,866,632
Total cost		8,801,168			8,653,054
Accumulated depreciation		(5,949,933	)		(5,619,706	)
Net property and equipment	$	2,851,235		$	3,033,348

F.	COMPREHENSIVE EARNINGS

Comprehensive earnings (loss) include net (loss) earnings plus unrealized (gains) losses on available-for-sale investment securities, net of tax. In reporting the components of comprehensive earnings on a net basis in the statement of earnings, the Company used a

21%

tax rate. Other comprehensive earnings, as shown in the consolidated statements of earnings and comprehensive earnings, is

net of tax expense

of $

343,316

and $

771,697

for the

nine

months ended

September 30, 2020

and

2019

, respectively.

The following table presents changes in accumulated other comprehensive earnings for unrealized gains and losses on available-for-sale securities:

	Nine-Month Periods Ended
	September 30,
	2020			2019
Beginning balance	$	2,953,936		$	(1,580,976	)
Cumulative effect of adoption of ASU 2016-01		-			1,366,297
Adjusted beginning balance		2,953,936			(214,679	)
Other comprehensive earnings before reclassification		2,579,925			3,611,573
Amount reclassified from accumulated other comprehensive earnings		(325,204	)		(188,340	)
Net current period other comprehensive earnings		2,254,721			3,423,233
Ending balance	$	5,208,657		$	3,208,554

The

following table

illustrates the components of other comprehensive earnings for each period presented in the condensed consolidated interim financial statements.

	Three-Month Periods Ended September 30,
	2020									2019
	Pre-tax			Tax			After-tax			Pre-tax			Tax			After-tax
Other comprehensive earnings, net of tax
Unrealized gains and losses on AFS investments:
Unrealized holding gains arising during the period	$	551,140		$	(57,292	)	$	493,848		$	890,152		$	(116,415	)	$	773,737
Reclassification adjustment for (gains) included in net earnings		(67,102	)		14,092			(53,010	)		(89,262	)		18,745			(70,517	)
Total other comprehensive earnings	$	484,038		$	(43,200	)	$	440,838		$	800,890		$	(97,670	)	$	703,220

	Nine-Month Periods Ended September 30,
	2020									2019
	Pre-tax			Tax			After-tax			Pre-tax			Tax			After-tax
Other comprehensive (loss) earnings, net of tax
Unrealized gains and losses on AFS investments:
Unrealized holding gains arising during the period	$	2,836,794		$	(256,869	)	$	2,579,925		$	4,333,205		$	(721,632	)	$	3,611,573
Reclassification adjustment for (gains) included in net earnings		(411,651	)		86,447			(325,204	)		(238,405	)		50,065			(188,340	)
Total other comprehensive earnings	$	2,425,143		$	(170,422	)	$	2,254,721		$	4,094,800		$	(671,567	)	$	3,423,233

The following table provides the reclassifications from accumulated other comprehensive earnings for the periods presented:

Amounts Reclassified from
Accumulated Other Comprehensive Earnings
	Three-Month Periods Ended						Nine-Month Periods Ended
Details about Accumulated Other	September 30,						September 30,						Affected Line Item in the Statement
Comprehensive Earnings Component	2020			2019			2020			2019			where Net Earnings is Presented
Unrealized (gains) losses on AFS investments:
	$	(67,102	)	$	(89,262	)	$	(411,651	)	$	(238,405	)	Net realized investment (gains) losses
		14,092			18,745			86,447			50,065		Income tax expense (benefit)
Total reclassification adjustment, net of tax	$	(53,010	)	$	(70,517	)	$	(325,204	)	$	(188,340	)

G.	RISKS AND UNCERTAINTIES

Certain risks and uncertainties are inherent to our day-to-day operations. Adverse changes in the economy could lower demand for our insurance products or negatively impact our investment results, both of which could have an adverse effect on the revenue and profitability of our operations. The COVID-

pandemic has resulted in, and is expected to continue to result in, significant disruptions in economic activity and financial markets. The cumulative effects of COVID-

on the Company, and the effect of any civil unrest or other public health outbreak, cannot be predicted at this time, but could reduce demand for our insurance policies, result in increased level of losses, settlement expenses or other operating costs, or reduce the market value of invested assets held by the Company.