Dividend Payment Restrictions [Text Block]

12 Months Ended

Dec. 31, 2017

Notes

Dividend Payment Restrictions

Note 17.Dividend Payment Restrictions and Statutory Information 

Our insurance subsidiaries are restricted by state laws and regulations as to the amount of dividends they may pay to their parent without regulatory approval in any year. Any dividends in excess of limits are deemed “extraordinary” and require approval. Based on statutory results as of December 31, 2017, in accordance with applicable dividend restrictions, our insurance subsidiaries could pay dividends of approximately $23,606,000 in 2018 without obtaining regulatory approval. There are no regulatory restrictions on the ability of our holding company, IHC, to pay dividends. Under Delaware law, IHC is permitted to pay dividends from surplus or net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Dividends to shareholders are paid from funds available at the corporate holding company level.

Non-“extraordinary” dividend payments were as follows:  (i) Madison National Life declared and paid cash dividends of $11,000,000, $5,290,000 and $4,600,000 to its parent in 2017, 2016 and 2015, respectively; (ii) Standard Security Life declared and paid dividends of $7,000,000, $12,500,000 and $6,000,000 to its parent in 2017, 2016 and 2015, respectively; and (iii) Independence American declared and paid $0 dividends to its parent in 2017, 2016 or 2015. IHC declared cash dividends of $2,392,000 in 2017, $1,800,000 in 2016 and $1,562,000 in 2015.

In December 2016, regulatory approvals were received for the following “extraordinary” dividend payments: (i) Madison National Life declared and paid an “extraordinary” dividend in the amount of $10,546,000 to its parent; and (ii) Standard Security Life declared and paid an “extraordinary” dividend in the amount of $60,000,000 to its parent.

The Company’s insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of their state of domicile. Statutory accounting practices differ from U.S. GAAP in several respects causing differences in reported net income and stockholder’s equity. The Company’s insurance subsidiaries have no permitted accounting practices, which encompass all accounting practices not so prescribed that have been specifically allowed by the state insurance authorities.

The statutory net income and statutory capital and surplus for each of the Company’s insurance subsidiaries are as follows for the periods indicated (in thousands):

		Years Ended December 31,
		2017		2016		2015
Statutory net income:
Madison National Life	$	12,794	$	(1,615)	$	20,326
Standard Security Life		3,555		(10,480)		13,198
Independence American		8,728		4,048		2,960

		December 31,
		2017		2016
Statutory capital and surplus:
Madison National Life	$	179,648	$	178,978
Standard Security Life		65,600		70,620
Independence American		72,083		66,812

The insurance subsidiaries are also required to maintain certain minimum amounts of statutory surplus to satisfy their various state insurance departments of domicile. Risk-based capital (“RBC”) requirements are designed to assess capital adequacy and to raise the level of protection that statutory surplus provides for policyholders. At December 31, 2017 and 2016, the statutory capital of our insurance subsidiaries is significantly in excess of their regulatory RBC requirements.