9. Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Schedule of Deferrred Tax Assets and Liabilities

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

	September 30,	December 31,
	2015	2014
Deferred tax asset:
Net operating loss carryovers (1)	$            187,613	$           211,550
Claims reserve discount	396,089	562,941
Unearned premium	2,524,398	1,741,360
Deferred ceding commission revenue	2,063,768	2,025,224
Other	110,286	88,148
Total deferred tax assets	5,282,154	4,629,223
Deferred tax liability:
Investment in KICO (2)	1,169,000	1,169,000
Deferred acquisition costs	3,555,280	3,055,234
Intangibles	638,093	759,400
Depreciation and amortization	286,684	291,689
Net unrealized appreciation of securities - available for sale	288,558	491,080
Total deferred tax liabilities	5,937,615	5,766,403
Net deferred income tax liability	$           (655,461)	$      (1,137,180)

Losses subject to Annual Limitation

	September 30,	December 31,
Type of NOL	2015	2014	Expiration
State only (A)	$               518,426	$               567,188	December 31, 2035
Valuation allowance	(344,413)	(372,638)
State only, net of valuation allowance	174,013	194,550
Amount subject to Annual Limitation, federal only (B)	13,600	17,000	December 31, 2019
Total deferred tax asset from net operating loss carryovers	$               187,613	$               211,550