9. Income Taxes (Tables)

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Schedule of Deferrred Tax Assets and Liabilities

	September 30,	December 31,
	2014	2013
Deferred tax asset:
Net operating loss carryovers (1)	$            238,862	$           246,476
Claims reserve discount	505,447	445,384
Unearned premium	1,747,757	1,000,372
Deferred ceding commission revenue	1,934,251	2,374,616
Other	-	17,087
Total deferred tax assets	4,426,317	4,083,935
Deferred tax liability:
Investment in KICO (2)	1,169,000	1,169,000
Deferred acquisition costs	2,938,996	2,332,489
Intangibles	799,836	921,143
Depreciation and amortization	156,493	197,223
Net unrealized appreciation of securities - available for sale	460,175	157,167
Other	5,309	-
Total deferred tax liabilities	5,529,809	4,777,022
Net deferred income tax liability	$        (1,103,492)	$         (693,087)

Losses subject to Annual Limitation

	September 30,	December 31,
Type of NOL	2014	2013	Expiration
State only (A)	$               537,300	$               459,989	December 31, 2034
Valuation allowance	(315,438)	(240,713)
State only, net of valuation allowance	221,862	219,276
Amount subject to Annual Limitation, federal only (B)	17,000	27,200	December 31, 2019
Total deferred tax asset from net operating loss carryovers	$               238,862	$               246,476