8. Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

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:

	March 31,			December 31,
	2016			2015
Deferred tax asset:
Net operating loss carryovers (1)	$	131,626		$	150,492
Claims reserve discount		459,217			405,709
Unearned premium		2,600,074			2,555,012
Deferred ceding commission revenue		2,181,511			2,187,923
Other		92,904			151,250
Total deferred tax assets		5,465,332			5,450,386
Deferred tax liability:
Investment in KICO (2)		1,169,000			1,169,000
Deferred acquisition costs		3,732,274			3,684,004
Intangibles		557,222			597,657
Depreciation and amortization		367,642			415,938
Net unrealized appreciation of securities - available for sale		745,504			255,977
Total deferred tax liabilities		6,571,642			6,122,576
Net deferred income tax liability	$	(1,106,310	)	$	(672,190	)

Losses subject to Annual Limitation

The deferred tax assets from net operating loss carryovers (“NOL”) are as follows:

	March 31,			December 31,
Type of NOL	2016			2015			Expiration
State only (A)	$	563,108		$	540,865			December 31, 2036
Valuation allowance		(441,682	)		(403,973	)
State only, net of valuation allowance		121,426			136,892
Amount subject to Annual Limitation, federal only (B)		10,200			13,600			December 31, 2019
Total deferred tax asset from net operating loss carryovers	$	131,626		$	150,492