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Statutory Information and Dividend Restrictions
12 Months Ended
Dec. 31, 2017
Statutory Information and Dividend Restrictions [Abstract]  
Statutory Information and Dividend Restrictions

10.     STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS



The statutory financial statements of ICC are presented on the basis of accounting practices prescribed or permitted by the Illinois Department of Insurance, which has adopted the National Association of Insurance Commissioners (NAIC) statutory accounting practices as the basis of its statutory accounting practices. ICC did not use any permitted statutory accounting practices that differ from NAIC prescribed statutory accounting practices. In converting from statutory to GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of statutory non-admitted assets and the inclusion of net unrealized holding gains or losses in equity relating to AFS investment securities, and the reclassification of surplus notes from equity to debt.



The NAIC has Risk-based capital (RBC) requirements that require insurance companies to calculate and report information under a risk-based formula, which measures statutory capital and surplus needs based upon a regulatory definition of risk relative to the company’s balance sheet and mix of products. As of December 31, 2017 and 2016,  ICC had RBC amounts in excess of the authorized control level RBC, as defined by the NAIC. ICC had an authorized control level RBC of $6,275,664 and $6,314,396 as of December 31, 2017 and 2016, respectively, compared to actual statutory capital and surplus of $50,772,460 and $29,957,250, respectively, for these same periods.



Year-end statutory surplus for 2017 and 2016 presented in the table below includes $0 and $51,207 of Estrella Innovative Solutions, LLC common stock (cost basis of  $270,078 and $270,078) held by ICC. This investment is eliminated in the GAAP consolidated financial statements.



The following table includes selected information for our insurance subsidiary: 







 

 

 

 

 

 



 

 

 

 

 

 



 

As of and periods ended December 31,



 

2017

 

2016

Net income, statutory basis

 

$

1,316,086 

 

$

3,445,706 

Consolidated surplus, statutory basis

 

$

50,772,460 

 

$

29,957,250 



No Illinois domiciled company may pay any extraordinary dividend or make any other extraordinary distribution to its security holders until: (a) 30 days after the Director has received notice of the declaration thereof and has not within such period disapproved the payment, or (b) the Director approves such payment within the 30-day period. For purposes of this subsection, an extraordinary dividend or distribution is any dividend or distribution of cash or other property whose fair market value, together with that of other dividends or distributions, made within the period of 12 consecutive months ending on the date on which the proposed dividend is scheduled for payment or distribution exceeds the greater of: (a) 10% of the company’s surplus as regards policyholders as of the 31st day of December next preceding, or (b) the net income of the company for the 12-month period ending the 31st day of December next preceding, but does not include pro rata distributions of any class of the company’s own securities.



The Company did not pay any dividends to security holders in 2017 or 2016. It did however, make cash dividend payments in the amount of $2,646 and $1,838 in 2017 and 2016, respectively, to Wisconsin policyholders in accordance with policy contractual obligations.