Note 2(A). American Independence Corp.	12 Months Ended
Dec. 31, 2012
Notes
Note 2(A). American Independence Corp.	Note 2. American Independence Corp. AMIC is an insurance holding company engaged in the insurance and reinsurance business. As of December 31, 2012, the Company owned 78.6% of AMIC’s outstanding common stock. In January 2013, as a result of share repurchases by AMIC, IHC’s ownership interest increased to 80.6%. (A) *Acquisitions of Noncontrolling Interests* i. In 2012, IHC acquired an aggregate 12,624 shares of AMIC common stock from noncontrolling interests for an aggregate of $58,000 cash consideration. As a result of these transactions, the Company: (i) recorded a $29,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 78.6%. ii. In 2011, IHC acquired shares of AMIC common stock from noncontrolling interests in the following transactions: · In the fourth quarter of 2011, AMIC purchased 251,370 shares of its own common stock and IHC purchased an additional 15,981 shares of AMIC common stock in the open market thereby increasing IHC’s ownership interest in AMIC to 78.4% as of December 31, 2011. · On July 15, 2011, IHC commenced an offer to exchange shares of its common stock for properly tendered and accepted shares of common stock of AMIC (the “Exchange Offer”). IHC filed a Registration Statement on Form S-4 in connection with the Exchange Offer that was declared effective by the Securities and Exchange Commission on July 15, 2011 and expired on Friday, August 12, 2011. Pursuant to the Exchange Offer, IHC acquired 1,109,225 shares of AMIC common stock in consideration of 762,551 newly issued shares of IHC common stock plus a de minimis amount of cash paid in-lieu of fractional shares. As a result of the exchange, the Company (i) recorded a $196,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 76.0%. · In January 2011, a subsidiary of IHC acquired 200,000 shares of AMIC common stock from a noncontrolling interest for $1,000,000 cash. In February and March 2011, IHC acquired an aggregate 900,325 shares of AMIC common stock from noncontrolling interests in exchange for the issuance of an aggregate 660,240 shares of IHC’s common stock in various private placements of unregistered securities under Section 4(2) of the Securities Act of 1933, as amended. Accordingly, the shares are "restricted securities", subject to a legend and will not be freely tradable in the United States until the shares are registered for resale under the Securities Act, or to the extent they are tradable under Rule 144 promulgated under the Securities Act or any other available exemption. As a result of these transactions, the Company: (i) recorded a $95,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 63.0%. iii. In 2011, AMIC acquired an additional ownership interest in its subsidiary, IPA Family, LLC (“IPA”) from noncontrolling interests for an aggregate cash consideration of $525,000, thereby increasing its ownership in IPA to 89.6%. As a result of this transaction, and giving effect to noncontrolling interests in AMIC, the Company (i) reduced noncontrolling interests by $1,568,000; and (ii) recorded a $1,043,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interests. iv. In 2010, subsequent the acquisition of AMIC, IHC purchased an additional 9,537 shares of AMIC common stock for a total consideration of $58,000 through December 31, 2010.

Note 2(A). American Independence Corp.

12 Months Ended

Dec. 31, 2012

Note 2. American Independence Corp.

AMIC is an insurance holding company engaged in the insurance and reinsurance business. As of December 31, 2012, the Company owned 78.6% of AMIC’s outstanding common stock. In January 2013, as a result of share repurchases by AMIC, IHC’s ownership interest increased to 80.6%.

(A) Acquisitions of Noncontrolling Interests

i. In 2012, IHC acquired an aggregate 12,624 shares of AMIC common stock from noncontrolling interests for an aggregate of $58,000 cash consideration. As a result of these transactions, the Company: (i) recorded a $29,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 78.6%.

ii. In 2011, IHC acquired shares of AMIC common stock from noncontrolling interests in the following transactions:

· In the fourth quarter of 2011, AMIC purchased 251,370 shares of its own common stock and IHC purchased an additional 15,981 shares of AMIC common stock in the open market thereby increasing IHC’s ownership interest in AMIC to 78.4% as of December 31, 2011.

· On July 15, 2011, IHC commenced an offer to exchange shares of its common stock for properly tendered and accepted shares of common stock of AMIC (the “Exchange Offer”). IHC filed a Registration Statement on Form S-4 in connection with the Exchange Offer that was declared effective by the Securities and Exchange Commission on July 15, 2011 and expired on Friday, August 12, 2011. Pursuant to the Exchange Offer, IHC acquired 1,109,225 shares of AMIC common stock in consideration of 762,551 newly issued shares of IHC common stock plus a de minimis amount of cash paid in-lieu of fractional shares. As a result of the exchange, the Company (i) recorded a $196,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 76.0%.

· In January 2011, a subsidiary of IHC acquired 200,000 shares of AMIC common stock from a noncontrolling interest for $1,000,000 cash. In February and March 2011, IHC acquired an aggregate 900,325 shares of AMIC common stock from noncontrolling interests in exchange for the issuance of an aggregate 660,240 shares of IHC’s common stock in various private placements of unregistered securities under Section 4(2) of the Securities Act of 1933, as amended. Accordingly, the shares are "restricted securities", subject to a legend and will not be freely tradable in the United States until the shares are registered for resale under the Securities Act, or to the extent they are tradable under Rule 144 promulgated under the Securities Act or any other available exemption. As a result of these transactions, the Company: (i) recorded a $95,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interest; and (ii) increased its ownership interest in AMIC to 63.0%.

iii. In 2011, AMIC acquired an additional ownership interest in its subsidiary, IPA Family, LLC (“IPA”) from noncontrolling interests for an aggregate cash consideration of $525,000, thereby increasing its ownership in IPA to 89.6%. As a result of this transaction, and giving effect to noncontrolling interests in AMIC, the Company (i) reduced noncontrolling interests by $1,568,000; and (ii) recorded a $1,043,000 credit to paid-in capital representing the difference between the fair value of the consideration paid and the carrying value of the noncontrolling interests.

iv. In 2010, subsequent the acquisition of AMIC, IHC purchased an additional 9,537 shares of AMIC common stock for a total consideration of $58,000 through December 31, 2010.

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

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