5. Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

5. Fair Value of Financial Instruments

The Company uses the following methods and assumptions in estimating its fair value disclosures for financial instruments:

Equity securities and fixed income securities available-for-sale:  Fair value disclosures for these investments are included in “Note 3 - Investments.”

Cash and cash equivalents: The carrying values of cash and cash equivalents approximate their fair values because of the short-term nature of these instruments.

Premiums receivable and reinsurance receivables:  The carrying values reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair values due to the short-term nature of the assets.

Real estate: The fair value of the land and building included in property and equipment, which is used in the Company’s operations, approximates the carrying value. The fair value was based on an appraisal dated September 8, 2015 prepared using the sales comparison approach and income approach, and accordingly the real estate is a Level 3 asset under the fair value hierarchy.

Reinsurance balances payable:  The carrying value reported in the condensed consolidated balance sheets for these financial instruments approximates fair value.

The estimated fair values of the Company's financial instruments as of March 31, 2016 and December 31, 2015 are as follows:

	March 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Fixed-maturity securities held-to-maturity	$	5,140,522	$	5,366,630	$	5,138,872	$	5,241,095
Cash and cash equivalents	$	5,579,224	$	5,579,224	$	13,551,372	$	13,551,372
Premiums receivable	$	10,522,191	$	10,522,191	$	10,621,655	$	10,621,655
Reinsurance receivables	$	35,830,346	$	35,830,346	$	31,270,235	$	31,270,235
Real estate, net of accumulated depreciation	$	1,698,035	$	1,925,000	$	1,710,897	$	1,925,000
Reinsurance balances payable	$	3,225,893	$	3,225,893	$	1,688,922	$	1,688,922