16. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Schedule of provision for income taxes from continuing operations

The provision for income taxes is comprised of the following:

Years ended December 31,	2012			2011
Current federal income tax expense	$	641,857		$	1,394,090
Current state income tax expense		(225	)		19,529
Deferred federal and state income tax expense		(338,723	)		(325,106	)
Provision for income taxes	$	302,909		$	1,088,513

Schedule of a reconciliation of the federal statutory rate

Years ended December 31,	2012					2011
Computed expected tax expense	$	363,669		34.0	%	$	1,221,156		34.0	%
State taxes, net of Federal benefit		(44,687	)	(4.2	)		1,270		-
State valuation allowance		104,325		9.8			-		-
Permanent differences
Dividends received deduction		(64,274	)	(6.0	)		(39,613	)	(1.1	)
Non-taxable investment income		(68,667	)	(6.4	)		(84,930	)	(2.4	)
Stock-based compensation expense		16,414		1.5			35,999		1.0
Other permanent differences		25,956		2.4			(21,548	)	2.4
Prior year tax matters		(46,906	)	(4.4	)		(50,886	)	(1.4	)
Other		17,079		1.6			27,065		(2.2	)
Total tax	$	302,909		28.3	%	$	1,088,513		30.3	%

Schedule of Deferrred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,			December 31,
	2012			2011
Deferred tax asset:
Net operating loss carryovers (1)	$	264,648		$	276,312
Claims reserve discount		313,544			220,354
Unearned premium		811,413			647,596
Deferred ceding commission revenue		1,658,190			1,354,016
Other		10,921			4,583
Total deferred tax assets		3,058,716			2,502,861
Deferred tax liability:
Investment in KICO (2)		1,169,000			1,169,000
Deferred acquisition costs		1,893,759			1,542,163
Intangibles		1,082,886			1,244,628
Depreciation and amortization		152,576			133,411
Reinsurance recoverable		20,400			20,400
Net unrealized appreciation of securities - available for sale		527,376			172,155
Investment income		-			10,543
Total deferred tax liabilities		4,845,997			4,292,300
Net deferred income tax liability	$	(1,787,281	)	$	(1,789,439	)

Schedule of net operating loss carryovers

	December 31,			December 31,
Type of NOL	2012			2011			Expiration
State only (A)	$	380,810		$	284,749		December 31, 2032
Valuation allowance		(146,762	)		(42,437	)
State only, net of valuation allowance		234,048			242,312
Amount subject to Annual Limitation, federal only (B)		30,600			34,000		December 31, 2019
Total deferred tax asset from net operating loss carryovers	$	264,648		$	276,312

Schedule of changes in net deferred income tax liability to the deferred income tax provision

The table below reconciles the changes in net deferred income tax liability to the deferred income tax provision for the year ended December 31, 2012:

Change in net deferred income tax liabilities	$	(2,158	)
Deferred tax expense allocated to other comprehensive income		336,565
Deferred income tax provision	$	(338,723	)