9. Income Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

Schedule of Deferrred Tax Assets and Liabilities

Company’s deferred tax assets and liabilities are as follows:

	September 30,			December 31,
	2013			2012
	(unaudited)
Deferred tax asset:
Net operating loss carryovers (1)	$	260,121		$	264,648
Claims reserve discount		370,539			313,544
Unearned premium		1,024,271			811,413
Deferred ceding commission revenue		2,237,332			1,658,190
Other		8,344			10,921
Total deferred tax assets		3,900,607			3,058,716
Deferred tax liability:
Investment in KICO (2)		1,169,000			1,169,000
Deferred acquisition costs		2,249,496			1,893,759
Intangibles		961,578			1,082,886
Depreciation and amortization		171,648			152,576
Reinsurance recoverable		-			20,400
Net unrealized appreciation of securities - available for sale		208,246			527,376
Total deferred tax liabilities		4,759,968			4,845,997
Net deferred income tax liability	$	(859,361	)	$	(1,787,281	)

Losses subject to Annual Limitation

	September 30,			December 31,
Type of NOL	2013			2012			Expiration
State only (A)	$	433,645		$	380,810		December 31, 2033
Valuation allowance		(200,724	)		(146,762	)
State only, net of valuation allowance		232,921			234,048
Amount subject to Annual Limitation, federal only (B)		27,200			30,600		December 31, 2019
Total deferred tax asset from net operating loss carryovers	$	260,121		$	264,648