DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2013

Summary of carrying amount and estimated fair value of financial instruments

The carrying amount and the estimated fair value of the Company’s financial instruments is summarized below.



	Carrying amount		Estimated fair value
June 30, 2013
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,612,047	$	9,612,047
U.S. government-sponsored agencies	137,427,115		137,427,115
Obligations of states and political subdivisions	373,573,415		373,573,415
Commercial mortgage-backed	68,270,393		68,270,393
Residential mortgage-backed	88,006,679		88,006,679
Other asset-backed	10,379,266		10,379,266
Corporate	309,795,648		309,795,648
Total fixed maturity securities available-for-sale	997,064,563		997,064,563

Equity securities available-for-sale:
Common stocks:
Financial services	25,808,286		25,808,286
Information technology	16,119,834		16,119,834
Healthcare	21,458,416		21,458,416
Consumer staples	13,225,367		13,225,367
Consumer discretionary	20,762,526		20,762,526
Energy	21,560,010		21,560,010
Industrials	10,249,748		10,249,748
Other	19,693,809		19,693,809
Non-redeemable preferred stocks	8,699,220		8,699,220
Total equity securities available-for-sale	157,577,216		157,577,216

Short-term investments	33,921,749		33,921,749

Liabilities:
Surplus notes	25,000,000		10,222,310



	Carrying amount		Estimated fair value
December 31, 2012
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	4,984,902	$	4,984,902
U.S. government-sponsored agencies	162,442,630		162,442,630
Obligations of states and political subdivisions	370,962,114		370,962,114
Commercial mortgage-backed	80,349,182		80,349,182
Residential mortgage-backed	47,789,604		47,789,604
Other asset-backed	11,286,848		11,286,848
Corporate	321,979,577		321,979,577
Total fixed maturity securities available-for-sale	999,794,857		999,794,857

Equity securities available-for-sale:
Common stocks:
Financial services	18,093,388		18,093,388
Information technology	16,925,764		16,925,764
Healthcare	19,023,849		19,023,849
Consumer staples	13,609,527		13,609,527
Consumer discretionary	17,090,547		17,090,547
Energy	19,430,330		19,430,330
Industrials	8,574,816		8,574,816
Other	18,681,440		18,681,440
Non-redeemable preferred stocks	8,864,164		8,864,164
Total equity securities available-for-sale	140,293,825		140,293,825

Short-term investments	53,418,914		53,418,914

Liabilities:
Surplus notes	25,000,000		18,835,954

Summary of assets and liabilities measured on recurring and non-recurring basis

Presented in the table below are the estimated fair values of the Company’s financial instruments as of June 30, 2013 and December 31, 2012.



			Fair value measurements using
June 30, 2013	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial instruments reported at fair value on recurring basis:
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,612,047	$	—	$	9,612,047	$	—
U.S. government-sponsored agencies	137,427,115		—		137,427,115		—
Obligations of states and political subdivisions	373,573,415		—		373,573,415		—
Commercial mortgage-backed	68,270,393		—		68,270,393		—
Residential mortgage-backed	88,006,679		—		88,006,679		—
Other asset-backed	10,379,266		—		10,379,266		—
Corporate	309,795,648		—		308,847,358		948,290
Total fixed maturity securities available-for-sale	997,064,563		—		996,116,273		948,290

Equity securities available-for-sale:
Common stocks:
Financial services	25,808,286		25,805,679		—		2,607
Information technology	16,119,834		16,119,834		—		—
Healthcare	21,458,416		21,458,416		—		—
Consumer staples	13,225,367		13,225,367		—		—
Consumer discretionary	20,762,526		20,762,526		—		—
Energy	21,560,010		21,560,010		—		—
Industrials	10,249,748		10,249,748		—		—
Other	19,693,809		19,693,809		—		—
Non-redeemable preferred stocks	8,699,220		8,699,220		—		—
Total equity securities available-for-sale	157,577,216		157,574,609		—		2,607

Short-term investments	33,921,749		33,921,749		—		—

Financial instruments not reported at fair value:
Liabilities:
Surplus notes	10,222,310		—		—		10,222,310



			Fair value measurements using
December 31, 2012	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial instruments reported at fair value on recurring basis:
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	4,984,902	$	—	$	4,984,902	$	—
U.S. government-sponsored agencies	162,442,630		—		162,442,630		—
Obligations of states and political subdivisions	370,962,114		—		370,962,114		—
Commercial mortgage-backed	80,349,182		—		80,349,182		—
Residential mortgage-backed	47,789,604		—		47,789,604		—
Other asset-backed	11,286,848		—		11,286,848		—
Corporate	321,979,577		—		321,979,577		—
Total fixed maturity securities available-for-sale	999,794,857		—		999,794,857		—

Equity securities available-for-sale:
Common stocks:
Financial services	18,093,388		18,090,987		—		2,401
Information technology	16,925,764		16,925,764		—		—
Healthcare	19,023,849		19,023,849		—		—
Consumer staples	13,609,527		13,609,527		—		—
Consumer discretionary	17,090,547		17,090,547		—		—
Energy	19,430,330		19,430,330		—		—
Industrials	8,574,816		8,574,816		—		—
Other	18,681,440		18,681,440		—		—
Non-redeemable preferred stocks	8,864,164		8,864,164		—		—
Total equity securities available-for-sale	140,293,825		140,291,424		—		2,401

Short-term investments	53,418,914		42,062,664		11,356,250		—

Financial instruments not reported at fair value:
Liabilities:
Surplus notes	18,835,954		—		—		18,835,954

Reconciliation of assets measured at fair value on recurring basis using significant unobservable inputs

Presented in the table below is a reconciliation of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2013 and 2012. Any unrealized gains or losses on these securities are recognized in other comprehensive income. Any gains or losses from disposals or impairments of these securities are reported as realized investment gains or losses in net income.



	Fair value measurements using significant unobservable inputs (Level 3)
Three months ended June 30, 2013	Fixed maturity securities available-for-sale, corporate		Equity securities available-for-sale, financial services		Total
Beginning balance	$	—	$	2,401	$	2,401
Purchases	948,290		—		948,290
Unrealized gains included in other comprehensive income	—		206		206
Balance at June 30, 2013	$	948,290	$	2,607	$	950,897

Six months ended June 30, 2013
Beginning balance	$	—	$	2,401	$	2,401
Purchases	948,290		—		948,290
Unrealized gains included in other comprehensive income	—		206		206
Balance at June 30, 2013	$	948,290	$	2,607	$	950,897



	Fair value measurements using significant unobservable inputs (Level 3)
Three months ended June 30, 2012	Fixed maturity securities available-for-sale, corporate		Equity securities available-for-sale, financial services		Total
Beginning balance	$	—	$	2,250	$	2,250
Unrealized gains included in other comprehensive income	—		151		151
Balance at June 30, 2012	$	—	$	2,401	$	2,401

Six months ended June 30, 2012
Beginning balance	$	—	$	2,250	$	2,250
Unrealized gains included in other comprehensive income	—		151		151
Balance at June 30, 2012	$	—	$	2,401	$	2,401

- Definition

Tabular disclosure related to assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a recurring and/or nonrecurring basis in periods after initial recognition. Disclosures include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3) as well as transfers between levels 1 and 2.

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-Name Statement of Financial Accounting Standard (FAS)

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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-Name Statement of Financial Accounting Standard (FAS)

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