Unico American (UNAM) 10-Q 9 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 09, 2016
Document And Entity Information
Entity Registrant Name	Unico American Corporation
Entity Central Index Key	100,716
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,307,133
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Available for sale:
Fixed maturities, at fair value (amortized cost: $82,607,624 at September 30, 2016, and $82,202,727 at December 31, 2015)	$ 82,648,802	$ 82,161,291
Short-term investments, at fair value	8,174,608	15,640,803
Total Investments	90,823,410	97,802,094
Cash	1,215,271	334,495
Accrued investment income	174,660	85,915
Receivables, net	6,142,607	5,505,361
Reinsurance Recoverable:
Paid losses and loss adjustment expenses	497,166	751,323
Unpaid losses and loss adjustment expenses	9,653,714	9,636,961
Deferred policy acquisition costs	4,546,827	4,233,396
Property and equipment (net of accumulated depreciation)	10,395,814	10,220,720
Deferred income taxes	1,296,451	1,334,087
Other assets	16,064,046	10,266,083
Total Assets	140,809,966	140,170,435
LIABILITIES
Unpaid losses and loss adjustment expenses	49,821,455	49,093,571
Unearned premiums	19,402,159	18,079,253
Advance premium and premium deposits	489,448	212,255
Income taxes payable	0	0
Accrued expenses and other liabilities	2,774,014	2,443,284
Total Liabilities	72,487,076	69,828,363
STOCKHOLDERS' EQUITY
Common stock, no par, authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at September 30, 2016, and 5,315,945 at December 31, 2015	3,755,544	3,742,547
Accumulated other comprehensive income (loss)	27,177	(27,348)
Retained earnings	64,540,169	66,626,873
Total Stockholders' Equity	68,322,890	70,342,072
Total Liabilities and Stockholders' Equity	$ 140,809,966	$ 140,170,435

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheets Parenthetical
Fixed Maturity Investments at Amortized Cost	$ 82,607,624	$ 82,202,727
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,307,133	5,315,945
Common stock, shares outstanding	5,307,133	5,315,945

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
REVENUES
Net premium earned	$ 7,980,930	$ 7,563,594	$ 23,271,296	$ 21,856,593
Investment income	234,495	128,742	658,839	313,918
Net realized investments losses	0	0	(1,278)	0
Other income	66,147	68,974	201,425	310,069
Total Insurance Company Revenues	8,281,572	7,761,310	24,130,282	22,480,580
Gross commissions and fees	697,245	672,368	2,063,429	2,065,582
Investment income	75	76	272	243
Finance fees earned	18,450	17,749	50,667	48,730
Other income	1,000	0	6,002	2,258
Total Revenues	8,998,342	8,451,503	26,250,652	24,597,393
EXPENSES
Losses and loss adjustment expenses	8,038,100	4,346,517	17,982,351	13,873,940
Policy acquisition costs	1,741,499	1,659,226	5,142,250	4,751,939
Salaries and employee benefits	1,318,622	1,254,967	3,980,055	3,669,080
Commissions to agents/brokers	40,324	37,601	121,379	126,945
Other operating expenses	826,519	2,120,832	2,052,771	3,551,493
Total Expenses	11,965,064	9,419,143	29,278,806	25,973,397
Loss before income taxes	(2,966,722)	(967,640)	(3,028,154)	(1,376,004)
Income tax benefit	(1,013,225)	(318,130)	(1,026,700)	(442,090)
Net Loss	$ (1,953,497)	$ (649,510)	$ (2,001,454)	$ (933,914)
Basic
Loss per share	$ (.37)	$ (.12)	$ (.38)	$ (.17)
Weighted average shares	5,307,133	5,335,319	5,307,881	5,338,619
Diluted
Loss per share	$ (.37)	$ (.12)	$ (.38)	$ (.17)
Weighted average shares	5,307,133	5,335,319	5,307,881	5,338,619

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Comprehensive Income Loss
Net Loss	$ (1,953,497)	$ (649,510)	$ (2,001,454)	$ (933,914)
Other Changes in Comprehensive Loss:
Net unrealized gains on securities classified as available-for-sale arising during the period	(21,186)	16,893	82,614	86,730
Income tax benefit (expense) related to unrealized gains on securities classified as available-for-sale arising during the period	7,203	(5,743)	(28,089)	(29,488)
Comprehensive Loss	$ (1,967,480)	$ (638,360)	$ (1,946,929)	$ (876,672)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities:
Net loss	$ (2,001,454)	$ (933,914)
Adjustments to reconcile net loss to net cash from operations
Depreciation and amortization	361,490	348,979
Bond amortization, net	(12,897)	(14,011)
Non-cash stock based compensation	17,328	17,328
Loss on asset impairment	0	1,287,460
Changes in assets and liabilities:
Net receivables and accrued investment income	(725,991)	(753,430)
Reinsurance recoverable	237,404	(1,479,971)
Deferred policy acquisition costs	(313,431)	(451,269)
Other assets	(4,750,878)	(371,366)
Unpaid losses and loss adjustment expenses	727,884	1,184,375
Unearned premium	1,322,906	1,906,565
Advance premium and premium deposits	277,193	164,220
Accrued expenses and other liabilities	330,730	(759,047)
Income taxes current/deferred	(1,037,537)	(453,102)
Net Cash Provided (Used) by Operating Activities	(5,567,253)	(307,183)
Cash Flows from Investing Activities:
Purchase of fixed maturity investments	(12,032,000)	(36,247,858)
Proceeds from maturity of fixed maturity investments	11,640,000	3,249,000
Net decrease in short-term investments	7,466,195	34,007,837
Additions to property and equipment	(536,584)	(490,196)
Net Cash Provided (Used) by Investing Activities	6,537,611	518,783
Cash Flows from Financing Activities:
Repurchase of common stock	(89,582)	(117,862)
Net Cash Provided (Used) by Financing Activities	(89,582)	(117,862)
Net increase (decrease) in cash	880,776	93,738
Cash at beginning of period	334,495	309,162
Cash at End of Period	1,215,271	402,900
Cash paid during the period for:
Interest	0	0
Income taxes	$ 8,774	$ 8,900

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Summary of Significant Accounting Policies	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Unico American Corporation (the “Company” or “Unico”) is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. References to Unico or the Company include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ. Fair Value of Financial Instruments The Company employs a fair value hierarchy that prioritizes the inputs for valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques. (See Note 8.) The Company has used the following methods and assumptions in estimating its fair value disclosures: Fixed maturities: 1. Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service. 2. Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments.

Repurchase of Common Stock - Ef

Repurchase of Common Stock - Effects on Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Repurchase of Common Stock - Effects on Stockholders' Equity	NOTE 2 – REPURCHASE OF COMMON STOCK – EFFECTS ON STOCKHOLDERS’ EQUITY On December 19, 2008, the Board of Directors authorized a stock repurchase program to acquire, from time to time, up to an aggregate of 500,000 shares of the Company’s common stock. This program has no expiration date and may be terminated by the Board of Directors at any time. As of September 30, 2016, and December 31, 2015, the Company had remaining authority under the 2008 program to repurchase up to an aggregate of 188,655 and 197,467 shares of its common stock, respectively. The 2008 program is the only program under which there is authority to repurchase shares of the Company’s common stock. The Company did not repurchase any stock during the three months ended September 30, 2016. The Company repurchased 8,812 shares of stock during the nine months ended September 30, 2016, in unsolicited transactions at a cost of $89,582 of which $4,331 was allocated to capital and $85,251 was allocated to retained earnings. The Company repurchased 9,630 shares of stock during the three months ended September 30, 2015, in unsolicited transactions at a cost of $94,372 of which $4,733 was allocated to capital and $89,639 was allocated to retained earnings. The Company repurchased 11,834 shares of stock during the nine months ended September 30, 2015, in unsolicited transactions at a cost of $117,862 of which $5,816 was allocated to capital and $112,046 was allocated to retained earnings. The Company has or will retire all repurchased stock.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Loss Per Share	NOTE 3 – LOSS PER SHARE The following table represents the reconciliation of the Company's basic loss per share and diluted loss per share computations reported on the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30 September 30 2016 2015 2016 2015 Basic Loss Per Share Net loss $ (1,953,497 ) $ (649,510 ) $ (2,001,454 ) $ (933,914 ) Weighted average shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Basic loss per share $ (0.37 ) $ (0.12 ) $ (0.38 ) $ (0.17 ) Diluted Loss Per Share Net loss $ (1,953,497 ) $ (649,510 ) $ (2,001,454 ) $ (933,914 ) Weighted average shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Effect of dilutive securities — — — — Diluted shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Diluted loss per share $ (0.37 ) $ (0.12 ) $ (0.38 ) $ (0.17 ) Basic earnings per share exclude the impact of common share equivalents and are based upon the weighted average common shares outstanding. Diluted earnings per share utilize the average market price per share when applying the treasury stock method in determining common share dilution. When outstanding stock options are dilutive, they are treated as common share equivalents for purposes of computing diluted earnings per share and represent the difference between basic and diluted weighted average shares outstanding. In loss periods, stock options are excluded from the calculation of diluted loss per share, as the inclusion of stock options would have an anti-dilutive effect. As of September 30, 2016 and 2015, the Company had 222 and 0 common share equivalents that were excluded in the three months diluted loss per share calculation, respectively, and 530 and 3,682 common share equivalents that were excluded in the nine months diluted loss per share calculation, respectively.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	9 Months Ended
	Sep. 30, 2016
Accounting Changes and Error Corrections [Abstract]
Recently Issued Accounting Standards	NOTE 4 – RECENTLY ISSUED ACCOUNTING STANDARDS In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13 “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 replaces the current incurred loss methodology for recognizing credit losses with a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures for better understanding of significant estimates and judgments used in estimating credit losses. The Company is currently evaluating the effect ASU 2016-13 will have on the Company's consolidated financial statements, but expects the primary changes to be (i) the use of the expected credit loss model for its premium receivables and reinsurance recoverables and (ii) the presentation of credit losses within the available-for-sale fixed maturities portfolio through an allowance method rather than as a direct write-down. ASU 2016-13 will become effective for fiscal years beginning after December 31, 2019, but provides for an early adoption for fiscal years beginning after December 31, 2018. The Company has not determined when it will adopt ASU 2016-13. In May 2015, FASB issued ASU 2015-09 “Disclosures About Short-Duration Contracts.” The objective of this ASU is to increase transparency about significant estimates in unpaid losses and loss adjustment expenses and provide additional information about amount, timing and uncertainty of cash flows related to unpaid losses and loss adjustment expenses. ASU 2015-09 is not expected to have any impact on the Company’s consolidated financial statements. The disclosure mandated by ASU 2015-09 will become effective for annual and quarterly reporting periods ended on and after December 31, 2016.

Accounting For Income Taxes

Accounting For Income Taxes	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Accounting For Income Taxes	NOTE 5 – ACCOUNTING FOR INCOME TAXES The Company and its wholly owned subsidiaries file consolidated federal and state income tax returns. Pursuant to the tax allocation agreement, Crusader Insurance Company (“Crusader”) and American Acceptance Corporation (“AAC”), wholly owned subsidiaries of the Company, are allocated taxes or tax credits, in the case of losses, at current corporate rates based on their own taxable income or loss. The Company files income tax returns under U.S. federal and various state jurisdictions. The Company is subject to examination by U.S. federal income tax authorities for tax returns filed starting at taxable year 2013 and California state income tax authorities for tax returns filed starting at taxable year 2012. There are no ongoing examinations of income tax returns by federal or state tax authorities. As of September 30, 2016, and December 31, 2015, the Company had no unrecognized tax benefits or liabilities. In addition, the Company had not accrued interest and penalties related to unrecognized tax benefits or liabilities. However, if interest and penalties would need to be accrued related to unrecognized tax benefits or liabilities, such amounts would be recognized as a component of federal income tax expense. As a California insurance company, Crusader is obligated to pay a premium tax on gross premiums written in all states in which Crusader is admitted. Premium taxes are deferred and amortized as the related premiums are earned. The premium tax is in lieu of state franchise taxes and is not included in the provision for state taxes.

Property and Equipment (Net of

Property and Equipment (Net of Accumulated Depreciation)	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Property and Equipmentr (Net of Accumulated Depreciation)	NOTE 6 – PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: September 30 December 31 2016 2015 Building located in Calabasas, California $ 8,331,182 $ 8,217,477 Furniture, fixtures and equipment 2,669,508 2,251,623 Accumulated depreciation and amortization (2,565,517 ) (2,204,027 ) Land located in Calabasas, California 1,787,485 1,787,485 Computer software under development 173,156 168,162 Property and equipment, net $ 10,395,814 $ 10,220,720 Depreciation on the Calabasas building, owned by Crusader, is computed using the straight line method over 39 years. Depreciation on computed using the straight line method over 3 to 15 years. Amortization of leasehold improvements in the Calabasas building is being computed using the shorter of the useful life of the leasehold improvements or the remaining years of the lease. Depreciation and amortization expense on all property and equipment for the three and nine months ended September 30, 2016, was $121,577 and $361,490, respectively, and for the three and nine months ended September 30, 2015, was $114,634 and $348,979, respectively. The Calabasas building has generated rental revenue from non-affiliated tenants in the amount of $55,099 and $171,133 for the three and nine months ended September 30, 2016, respectively, and $51,552 and $140,518 for the three and nine months ended September 30, 2015. This rental revenue is included in “Other income” from insurance company operation in the Company’s Consolidated Statements of Operations. The Calabasas building has incurred operating expenses (including depreciation) in the amount of $207,401 and $543,638 for the three and nine months ended September 30, 2016, respectively, and $180,146 and $524,351 for the three and nine months ended September 30, 2015, respectively. These operating expenses are included in “Other operating expenses” in the Company’s Consolidated Statements of Operations. The total square footage of the Calabasas building is 46,884, including common areas. As of September 30, 2016, 10,292 square feet of the Calabasas building was leased to non-affiliated entities and 4,189 square feet was vacant and available to be leased to non-affiliated entities. The Company capitalizes certain computer software costs purchased from outside vendors for internal use. These costs also include configuration and customization activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrade and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. The capitalized costs are not depreciated until the software is placed into production. On October 9, 2015, the Company concluded that a charge for impairment of the Company’s capitalized computer software costs, related to a contract entered into on November 1, 2012, was required under GAAP. The capitalized costs which were all incurred through the quarter ended June 30, 2015, included $1,287,460 of paid and $223,442 of accrued unpaid invoices from the software vendor, Insurance Systems, Inc. (“ISI”). The impact of this impairment to the Company’s consolidated statements of operations was a charge of $1,287,460 before income taxes in the quarter ended September 30, 2015. The Company did not intend to pay the accrued unpaid invoices which have been reversed from the accrued expenses and other liabilities and capitalized computer software costs as of September 30, 2015. In accordance with Accounting Standards Codification (“ ASC”) Topic 855, “Subsequent Events,” this impairment was reported as a subsequent event on the Company’s consolidated financial statements as of September 30, 2015. The decision to impair the asset was based on the Company’s beliefs that the ISI software had not achieved and would not be able to achieve the Company’s expected implementation targets and that the Company was unable to renegotiate the terms of its agreement with ISI. The fair value of the capitalized costs was deemed to be $0. The charge was included in other operating expenses in the consolidated statements of operations for the three and nine months ended September 30, 2015.

Segment Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Segment Reporting	NOTE 7 – SEGMENT REPORTING ASC Topic 280, “Segment Reporting,” establishes standards for the way information about operating segments is reported in financial statements. The Company has identified its insurance company operation as its primary reporting segment. Revenues from this segment comprised 92% of total revenues for the three and nine months ended September 30, 2016, compared to 92% and 91% of total revenues for the three and nine months ended September 30, 2015, respectively. The Company’s remaining operations constitute a variety of specialty insurance services, each with unique characteristics and individually insignificant to total revenues. Revenues, income (loss) before income taxes, and assets by segment are as follows: Three Months Ended Nine Months Ended September 30 September 30 2016 2015 2016 2015 Revenues Insurance company operation $ 8,281,572 $ 7,761,310 $ 24,130,282 $ 22,480,580 Other insurance operations 3,367,469 3,191,814 10,108,721 9,715,760 Intersegment eliminations (1) (2,650,699 ) (2,501,621 ) (7,988,351 ) (7,598,947 ) Total other insurance operations 716,770 690,193 2,120,370 2,116,813 Total revenues $ 8,998,342 $ 8,451,503 $ 26,250,652 $ 24,597,393 Income (Loss) Before Income Taxes Insurance company operation $ (2,414,571 ) $ 863,488 $ (1,856,083 ) $ 861,422 Other insurance operations (552,151 ) (1,831,128 ) (1,172,071 ) (2,237,426 ) Total loss before income taxes $ (2,966,722 ) $ (967,640 ) $ (3,028,154 ) $ (1,376,004 ) September 30 December 31 2016 2015 Assets Insurance company operation $ 126,009,223 $ 126,406,439 Intersegment eliminations (2) (1,907,685 ) (1,409,797 ) Total insurance company operation 124,101,538 124,996,642 Other insurance operations 16,708,428 15,173,793 Total assets $ 140,809,966 $ 140,170,435 (1) Intersegment revenue eliminations reflect rents paid by Unico to Crusader for space leased in the Calabasas building and commissions paid by Crusader to Unifax Insurance Systems, Inc. (“Unifax”), a wholly owned subsidiary of Unico. (2) Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Fair Value of Financial Instruments	NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS In determining the fair value of its financial instruments, the Company employs a fair value hierarchy that prioritizes the inputs for the valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques as follows: Level 1 – Financial assets and financial liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 – Financial assets and financial liabilities whose values are based on quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in non-active markets; or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability as of the reporting date. Level 3 – Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities as of the reporting date. The hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the fair value hierarchy level within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) or unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis, and are allocated among the three levels within the fair value hierarchy as of September 30, 2016, and December 31, 2015: Level 1 Level 2 Level 3 Total September 30, 2016 Financial instruments: Fixed maturity securities: U.S. treasury securities $ 19,129,802 $ — $ — $ 19,129,802 Certificates of deposit — 63,519,000 — 63,519,000 Total fixed maturity securities 19,129,802 63,519,000 — 82,648,802 Cash and short-term investments 9,389,879 — — 9,389,879 Total financial instruments at fair value $ 28,519,681 $ 63,519,000 $ — $ 92,038,681 December 31, 2015 Financial instruments: Fixed maturity securities: U.S. treasury securities $ 24,034,291 $ — $ — $ 24,034,291 Certificates of deposit — 58,127,000 — 58,127,000 Total fixed maturity securities 24,034,291 58,127,000 — 82,161,291 Cash and short-term investments 15,975,298 — — 15,975,298 Total financial instruments at fair value $ 40,009,589 $ 58,127,000 $ — $ 98,136,589 Fair value measurements are not adjusted for transaction costs. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. The Company did not have any transfers between Levels 1, 2 and 3 of the fair value hierarchy during the three and nine months ended September 30, 2016 and 2015.

Investments

Investments	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Investments	NOTE 9 – INVESTMENTS A summary of total investment income and net realized losses is as follows: Three Months Ended September 30 Nine Months Ended September 30 2016 2015 2016 2015 Fixed maturities $ 196,327 $ 117,904 $ 554,992 $ 275,069 Short-term investments 38,243 10,914 104,119 39,092 Total investment income 234,570 128,818 659,111 314,161 Net realized losses — — (1,278 ) — Total investment income and net realized losses $ 234,570 $ 128,818 $ 657,833 $ 314,161 The amortized cost and estimated fair values of investments in fixed maturities by category are as follows: Amortized Cost Gross Gross Estimated September 30, 2016 Available for sale: Fixed maturities: Certificates of deposit $ 63,519,000 $ — $ — $ 63,519,000 U.S. treasury securities 19,088,624 41,257 (79 ) 19,129,802 Total fixed maturities $ 82,607,624 $ 41,257 $ (79 ) $ 82,648,802 December 31, 2015 Available for sale: Fixed maturities: Certificates of deposit $ 58,127,000 $ — $ — $ 58,127,000 U.S. treasury securities 24,075,727 3,188 (44,624 ) 24,034,291 Total fixed maturities $ 82,202,727 $ 3,188 $ (44,624 ) $ 82,161,291 A summary of the unrealized gains (losses) on investments carried at fair value and the applicable deferred federal income taxes is shown below: September 30 December 31 2016 2015 Gross unrealized gains of fixed maturities $ 41,257 $ 3,188 Gross unrealized (losses) of fixed maturities (79 ) (44,624 ) Net unrealized gains (losses) on investments 41,178 (41,436 ) Deferred federal tax (expense) benefits (14,001 ) 14,088 Net unrealized gains (losses), net of deferred income taxes $ 27,177 $ (27,348 ) At September 30, 2016, the Company had one fixed maturity investment with gross unrealized losses of $79 for a continuous period of less than 12 months and no fixed maturity investments with gross unrealized losses for a continuous period of more than 12 months. At December 31, 2015, the Company had three fixed maturity investments with gross unrealized losses of $38,509 for a continuous period of less than 12 months and two fixed maturity investments with gross unrealized losses of $6,115 for a continuous period of more than 12 months. The Company closely monitors its investments. If an unrealized loss is determined to be other-than-temporary, it is written off as a realized loss through the Consolidated Statements of Operations. The Company’s methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity and the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. The unrealized losses on the U.S. treasury securities in unrealized loss positions as of September 30, 2016, and December 31, 2015, were determined to be temporary. Although the Company does not intend to sell its fixed maturity investments prior to maturity, the Company may sell investment securities from time to time in response to cash flow requirements, economic and/or market conditions. The Company sold three certificates of deposit prior to their maturity during the nine months ended September 30, 2016. These securities had an amortized cost of $746,000. The Company realized an investment loss of $1,278 on the sale. The Company did not sell any fixed maturity investments and there were no realized investment gains or losses during the three months ended September 30, 2016, nor during the three and nine months ended September 30, 2015. The unrealized gains or losses from fixed maturities are reported as “accumulated other comprehensive income (loss),” which is a separate component of stockholders’ equity, net of any deferred tax effect. The Company’s investment in certificates of deposit included $62,919,000 and $57,527,000 of brokered certificates of deposit as of September 30, 2016, and December 31, 2015, respectively. Brokered certificates of deposit provide the safety and security of a certificate of deposit combined with the convenience gained by one-stop shopping for rates at various institutions. This allows the Company to spread its investments across multiple institutions so that all of its certificates of deposit are insured by the Federal Deposit Insurance Corporation (“FDIC”). Brokered certificates of deposit are purchased through UnionBanc Investment Services, LLC, a registered broker-dealer, investment advisor, member of FINRA/SIPC, and a subsidiary of MUFG Union Bank, N.A. Brokered certificates of deposit are a direct obligation of the issuing depository institution, are bank products of the issuing depository institution, are held by Union Bank Global Custody Services for the benefit of the Company, and are FDIC insured within permissible limits. As of September 30, 2016, and December 31, 2015, the Company’s remaining certificates of deposit totaling $600,000 are from four different banks and represent statutory deposits that are assigned to and are held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for writing certain lines of business in California and for admission in the state of Nevada. All the Company’s brokered and non-brokered certificates of deposit are within the FDIC insured permissible limits. Short-term investments have an initial maturity of one year or less and consist of the following: September 30 2016 December 31 2015 U.S. treasury bills $ — $ 9,987,804 U.S. treasury money market fund 6,304,321 3,357,841 Certificates of deposit 1,098,000 1,346,000 Bank money market accounts 770,524 947,395 Bank savings accounts 1,763 1,763 Total short-term investments $ 8,174,608 $ 15,640,803

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Contingencies	NOTE 10 – CONTINGENCIES The Company, by virtue of the nature of the business conducted by it, becomes involved in numerous legal proceedings as either plaintiff or defendant. From time to time, the Company is required to resort to legal proceedings against vendors providing services to the Company or against customers or their agents to enforce collection of premiums, commissions, The Company establishes reserves for lawsuits, regulatory actions, and other contingencies for which the Company is able to estimate its potential exposure and believes a loss is probable. For loss contingencies believed to be reasonably possible, the Company discloses the nature of the loss contingency, an estimate of the possible loss, a range of loss, or a statement that such an estimate cannot be made. Likewise, the Company is sometimes named as a cross-defendant in litigation, which is principally directed against an insured who was issued a policy of insurance directly or indirectly through the Company. Incidental actions related to disputes concerning the issuance or non-issuance of individual policies are sometimes brought by customers or others. These items are also handled on a routine basis by counsel, and they do not generally affect the operations of the Company. Management is confident that the ultimate outcome of pending litigation should not have an adverse effect on the Company's consolidated results of operations or financial position. The Company vigorously defends itself unless a reasonable settlement appears appropriate. In December 2015, a judgment was finalized on a Crusader policy liability claim. Crusader is appealing the judgment. As a part of the appeal, Crusader deposited $7,924,178 in cash in lieu of an appeal bond with the Los Angeles Superior Court on December 28, 2015. This cash deposit was required to appeal the judgment. In March 2016, an additional judgment for plaintiff’s attorney fees and costs on this Crusader policy liability claim was finalized. The Company is also appealing this additional judgment. That additional appeal required an additional cash deposit in lieu of an appeal bond of $5,449,615. The additional cash deposit was made on March 21, 2016. These cash deposits for the appeals represent 150% of the judgments. The cash deposits in lieu of an appeal bond of $13,373,793 and $7,924,178 were included in “Other assets” on the Consolidated Balance Sheets as of September 30, 2016, and December 31, 2015, respectively. Management believes the ultimate outcome of this litigation will be covered by Crusader’s reinsurance, subject to retention and participation. Since this litigation was related to a Crusader claim in its normal course of business, management’s best estimate for ultimate liability related to this litigation was included in Crusader’s loss and loss adjustment expense reserves as of September 30, 2016, and December 31, 2015. One of the Company’s agents, which was appointed in 2008 to assist the Company in implementing its Trucking Program, failed to pay the net premium and policy fees due Unifax, the exclusive general agent for Crusader. The agent was initially late in paying its February 2009 production that was due to Unifax on April 15, 2009. In May 2009, as a result of the agent’s failure to timely pay its balance due to Unifax, the Company terminated its agency agreement and assumed ownership and control of that agent’s policy expirations written with the Company. The Company subsequently commenced legal proceedings against the agent corporation, its three principals (who personally guaranteed the agent’s obligations) and another individual for the recovery of the balance due and any related recovery costs incurred. All related recovery costs have been expensed as incurred. The agent corporation and two of its principals filed bankruptcy. The corporation was adjudicated bankrupt. The Company obtained judgments, non-dischargeable in bankruptcy, for the full amount due from the two principals who filed bankruptcy. The other principal stipulated to a judgment of $1,200,000. The other individual paid the Company to settle the claim against him. The Company collected $0 during the three and nine months ended September 30, 2016 and 2015. As of September 30, 2016, and December 31, 2015, the agent’s balance due to Unifax was $1,181,272. As of September 30, 2016, and December 31, 2015, the Company’s bad debt reserve associated with this matter was $1,181,272, which represents 100% of the balance due to Unifax. Although the receivable is fully reserved for financial reporting purposes at September 30, 2016, the Company continues to pursue collection of the judgments from the three principals. On October 9, 2015, the Company filed a lawsuit in the Superior Court for the State of California, County of Los Angeles, Central District against ISI. The lawsuit sought an unspecified amount in monetary damages plus punitive damages against ISI. Causes of action stated in the lawsuit included fraudulent inducement and intentional misrepresentation, negligent misrepresentation, negligence, violation of business and professional code, breach of implied warranty of merchantability, breach of implied warranty of fitness, breach of contract and breach of implied covenant of good faith and fair dealings. Subsequently, the lawsuit was removed to the United States District Court for the Central District of California and all causes of action have been disallowed by the court except for breach of contract. On May 16, 2016, ISI filed a countersuit against the Company for $1,792,398 for unpaid invoices plus damages for alleged breach of the contract related to implementation of the ISI computer software by the Company. The Company is vigorously defending the countersuit and believes it to be without merit. The Company has asserted various affirmative defenses in opposition to the ISI countersuit including defenses of fraud in inducement, fraudulent concealment, and negligent misrepresentation.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Nature of Business	Nature of Business Unico American Corporation (the “Company” or “Unico”) is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. References to Unico or the Company include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September
Use of Estimates in the Preparation of the Financial Statements	Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company employs a fair value hierarchy that prioritizes the inputs for valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs for the valuation techniques. (See Note 8.) The Company has used the following methods and assumptions in estimating its fair value disclosures: Fixed maturities: 1. Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service. 2. Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings Per Share Tables
Basic and diluted loss per share calculation data	The following table represents the reconciliation of the Company's basic loss per share and diluted loss per share computations reported on the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30 September 30 2016 2015 2016 2015 Basic Loss Per Share Net loss $ (1,953,497 ) $ (649,510 ) $ (2,001,454 ) $ (933,914 ) Weighted average shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Basic loss per share $ (0.37 ) $ (0.12 ) $ (0.38 ) $ (0.17 ) Diluted Loss Per Share Net loss $ (1,953,497 ) $ (649,510 ) $ (2,001,454 ) $ (933,914 ) Weighted average shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Effect of dilutive securities — — — — Diluted shares outstanding 5,307,133 5,335,319 5,307,881 5,338,619 Diluted loss per share $ (0.37 ) $ (0.12 ) $ (0.38 ) $ (0.17 )

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
Property And Equipment Tables
Property and Equipment	Property and equipment consist of the following: September 30 December 31 2016 2015 Building located in Calabasas, California $ 8,331,182 $ 8,217,477 Furniture, fixtures and equipment 2,669,508 2,251,623 Accumulated depreciation and amortization (2,565,517 ) (2,204,027 ) Land located in Calabasas, California 1,787,485 1,787,485 Computer software under development 173,156 168,162 Property and equipment, net $ 10,395,814 $ 10,220,720

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Revenues and income before income taxes by segment	Revenues and income (loss) before income taxes by segment are as follows: Three Months Ended Nine Months Ended September 30 September 30 2016 2015 2016 2015 Revenues Insurance company operation $ 8,281,572 $ 7,761,310 $ 24,130,282 $ 22,480,580 Other insurance operations 3,367,469 3,191,814 10,108,721 9,715,760 Intersegment eliminations (1) (2,650,699 ) (2,501,621 ) (7,988,351 ) (7,598,947 ) Total other insurance operations 716,770 690,193 2,120,370 2,116,813 Total revenues $ 8,998,342 $ 8,451,503 $ 26,250,652 $ 24,597,393 Income (Loss) Before Income Taxes Insurance company operation $ (2,414,571 ) $ 863,488 $ (1,856,083 ) $ 861,422 Other insurance operations (552,151 ) (1,831,128 ) (1,172,071 ) (2,237,426 ) Total loss before income taxes $ (2,966,722 ) $ (967,640 ) $ (3,028,154 ) $ (1,376,004 ) (1) Intersegment revenue eliminations reflect rents paid by Unico to Crusader for space leased in the Calabasas building and commissions paid by Crusader to Unifax Insurance Systems, Inc. (“Unifax”), a wholly owned subsidiary of Unico.
Assets by segemnt	Assets by segment are as follows: September 30 December 31 2016 2015 Assets Insurance company operation $ 126,009,223 $ 126,406,439 Intersegment eliminations (2) (1,907,685 ) (1,409,797 ) Total insurance company operation 124,101,538 124,996,642 Other insurance operations 16,708,428 15,173,793 Total assets $ 140,809,966 $ 140,170,435 (2) Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader.

Fair Value Of Financial Instr21

Fair Value Of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value Of Financial Instruments Tables
Fair value of financial instruments	The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis, and are allocated among the three levels within the fair value hierarchy as of September 30, 2016, and December 31, 2015: Level 1 Level 2 Level 3 Total September 30, 2016 Financial instruments: Fixed maturity securities: U.S. treasury securities $ 19,129,802 $ — $ — $ 19,129,802 Certificates of deposit — 63,519,000 — 63,519,000 Total fixed maturity securities 19,129,802 63,519,000 — 82,648,802 Cash and short-term investments 9,389,879 — — 9,389,879 Total financial instruments at fair value $ 28,519,681 $ 63,519,000 $ — $ 92,038,681 December 31, 2015 Financial instruments: Fixed maturity securities: U.S. treasury securities $ 24,034,291 $ — $ — $ 24,034,291 Certificates of deposit — 58,127,000 — 58,127,000 Total fixed maturity securities 24,034,291 58,127,000 — 82,161,291 Cash and short-term investments 15,975,298 — — 15,975,298 Total financial instruments at fair value $ 40,009,589 $ 58,127,000 $ — $ 98,136,589

Investments (Tables)

Investments (Tables)	9 Months Ended
	Sep. 30, 2016
Investments Tables
Investment income	A summary of total investment income and net realized losses is as follows: Three Months Ended September 30 Nine Months Ended September 30 2016 2015 2016 2015 Fixed maturities $ 196,327 $ 117,904 $ 554,992 $ 275,069 Short-term investments 38,243 10,914 104,119 39,092 Total investment income 234,570 128,818 659,111 314,161 Net realized losses — — (1,278 ) — Total investment income and net realized losses $ 234,570 $ 128,818 $ 657,833 $ 314,161
Available for sale investments	The amortized cost and estimated fair values of investments in fixed maturities by category are as follows: Amortized Cost Gross Gross Estimated September 30, 2016 Available for sale: Fixed maturities: Certificates of deposit $ 63,519,000 $ — $ — $ 63,519,000 U.S. treasury securities 19,088,624 41,257 (79 ) 19,129,802 Total fixed maturities $ 82,607,624 $ 41,257 $ (79 ) $ 82,648,802 December 31, 2015 Available for sale: Fixed maturities: Certificates of deposit $ 58,127,000 $ — $ — $ 58,127,000 U.S. treasury securities 24,075,727 3,188 (44,624 ) 24,034,291 Total fixed maturities $ 82,202,727 $ 3,188 $ (44,624 ) $ 82,161,291
Unrealized gains (losses) on investments	A summary of the unrealized gains (losses) on investments carried at fair value and the applicable deferred federal income taxes is shown below: September 30 December 31 2016 2015 Gross unrealized gains of fixed maturities $ 41,257 $ 3,188 Gross unrealized (losses) of fixed maturities (79 ) (44,624 ) Net unrealized gains (losses) on investments 41,178 (41,436 ) Deferred federal tax (expense) benefits (14,001 ) 14,088 Net unrealized gains (losses), net of deferred income taxes $ 27,177 $ (27,348 )
Investment in short term assets	Short-term investments have an initial maturity of one year or less and consist of the following: September 30 2016 December 31 2015 U.S. treasury bills $ — $ 9,987,804 U.S. treasury money market fund 6,304,321 3,357,841 Certificates of deposit 1,098,000 1,346,000 Bank money market accounts 770,524 947,395 Bank savings accounts 1,763 1,763 Total short-term investments $ 8,174,608 $ 15,640,803

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Notes to Financial Statements
Loss per share - diluted	$ (.37)	$ (.12)	$ (.38)	$ (.17)
Loss per share - basic	$ (.37)	$ (.12)	$ (.38)	$ (.17)
Net loss	$ (1,953,497)	$ (649,510)	$ (2,001,454)	$ (933,914)
Effect of common share equivalents	0	0	0	0
Weighted average shares outstanding - diluted	5,307,133	5,335,319	5,307,881	5,338,619
Weighted average shares outstanding - basic	5,307,133	5,335,319	5,307,881	5,338,619

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property And Equipment Details
Buidling located in Calabasas, CA	$ 8,331,182	$ 8,217,477
Furniture, fixtures and equipment	2,669,508	2,251,623
Accumulated depreciation and amortization	(2,565,517)	(2,204,027)
Land located in Calabasas California	1,787,485	1,787,485
Computer software under development	173,156	168,162
Net property and equipment	$ 10,395,814	$ 10,220,720

Segment Reporting - Revenues (D

Segment Reporting - Revenues (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Insurance company operation	$ 8,281,572	$ 7,761,310	$ 24,130,282	$ 22,480,580
Revenues from other insurance operations	3,367,469	3,191,814	10,108,721	9,715,760
Intersegment revenue eliminations	(2,650,699)	(2,501,621)	(7,988,351)	(7,598,947)
Revenues from other insurance operations net of intersegment eliminations	716,770	690,193	2,120,370	2,116,813
Total revenues	8,998,342	8,451,503	26,250,652	24,597,393
Income Before Income Taxes
Income before taxes from insurance company operation	(2,414,571)	863,488	(1,856,083)	861,422
Income before taxes from other insurance operations	(552,151)	(1,831,128)	(1,172,071)	(2,237,426)
Loss before income taxes	$ (2,966,722)	$ (967,640)	$ (3,028,154)	$ (1,376,004)

Segment Reporting - Assets (Det

Segment Reporting - Assets (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Assets
Insurance company operation	$ 126,009,223	$ 126,406,439
Intersegment asset eliminations	(1,907,685)	(1,409,797)
Total insurance company operation	124,101,538	124,996,642
Other insurance operations assets	16,708,428	15,173,793
Total assets	$ 140,809,966	$ 140,170,435

Fair Value of Financial Instr27

Fair Value of Financial Instruments - Fair Value of Invested Assets (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Fixed maturity investments available for sale:
U.S. treasury securities	$ 19,129,802	$ 24,034,291
Certificates of deposit	63,519,000	58,127,000
Total fixed maturities	82,648,802	82,161,291
Cash and short term investments	9,389,879	15,975,298
Total financial instruments at fair value	92,038,681	98,136,589
Level 1
Fixed maturity investments available for sale:
U.S. treasury securities	19,129,802	24,034,291
Certificates of deposit	0	0
Total fixed maturities	19,129,802	24,034,291
Cash and short term investments	9,389,879	15,975,298
Total financial instruments at fair value	28,519,681	40,009,589
Level 2
Fixed maturity investments available for sale:
U.S. treasury securities	0	0
Certificates of deposit	63,519,000	58,127,000
Total fixed maturities	63,519,000	58,127,000
Cash and short term investments	0	0
Total financial instruments at fair value	63,519,000	58,127,000
Level 3
Fixed maturity investments available for sale:
U.S. treasury securities	0	0
Certificates of deposit	0	0
Total fixed maturities	0	0
Cash and short term investments	0	0
Total financial instruments at fair value	$ 0	$ 0

Investments - Investment Income

Investments - Investment Income And Realized Losses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Notes to Financial Statements
Investment income fixed maturities	$ 196,327	$ 117,904	$ 554,992	$ 275,069
Investment income short-term investments	38,243	10,914	104,119	39,092
Total investment income	234,570	128,818	659,111	314,161
[us-gaap:RealizedInvestmentGainsLosses]	0	0	(1,278)	0
Investment income and net realized losses	$ 234,570	$ 128,818	$ 657,833	$ 314,161

Investments - Available for sal

Investments - Available for sale investments (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Certificates of deposit
Amortized cost of fixed maturity investments by asset type	$ 63,519,000	$ 58,127,000
Gross unrealized gains by asset type	0	0
Gross unrealized losses by asset type	0	0
Investments at fair value	63,519,000	58,127,000
U.S. treasury securities
Amortized cost of fixed maturity investments by asset type	19,088,624	24,075,727
Gross unrealized gains by asset type	41,257	3,188
Gross unrealized losses by asset type	(79)	(44,624)
Investments at fair value	19,129,802	24,034,291
Total fixed maturities
Amortized cost of fixed maturity investments by asset type	82,607,624	82,202,727
Gross unrealized gains by asset type	41,257	3,188
Gross unrealized losses by asset type	(79)	(44,624)
Investments at fair value	$ 82,648,802	$ 82,161,291

Investments - Unrealized Gains

Investments - Unrealized Gains (Losses) on Investments in Fixed Maturities (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Gross unrealized gains on fixed maturities	$ 41,257	$ 3,188
Gross unrealized losses on fixed maturities	(79)	(44,624)
Net unrealized gains (losses) on fixed maturities	41,178	(41,436)
Deferred federal tax (expense) benefit	(14,001)	14,088
Net unrealized gains (losses), net of deferred income taxes	$ 27,177	$ (27,348)

Investments - Short term invesm

Investments - Short term invesmtments (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Short-term U.S. treasury bills	$ 0	$ 9,987,804
U.S. treasury money market fund	6,304,321	3,357,841
Certificates of deposit	1,098,000	1,346,000
Bank money market accounts	770,524	947,395
Bank savings accounts	1,763	1,763
Total short-term investments	$ 8,174,608	$ 15,640,803

Repurchase of Common Stock - 32

Repurchase of Common Stock - Effects on Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Notes to Financial Statements
Cost of common stock repurchase	$ 0	$ 94,372	$ 89,582	$ 117,862
Share repurchase allocated to paid in capital	0	4,733	4,331	5,816
Share repurchase allocated to retained earnings	$ 0	$ 89,639	$ 85,251	$ 112,046
Stock repurchase authority remaining			188,655		197,467
Shares repurchased and retired during period - shares	0	9,630	8,812	11,834
Repurchase of common stock previously authorized					500,000

Earnings Per Share (Details Nar

Earnings Per Share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Notes to Financial Statements
Common share equivalens excluded in diluted (loss) per share calculation	222	0	530	3,682

Property and Equipment (Detai34

Property and Equipment (Details Narrative)	3 Months Ended			9 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)
Property And Equipment Details Narrative
Square footage of building	46,884			46,884
Building square footage leased to non-alliliates	10,292			10,292
Building square footage available for lease	4,189			4,189
Depreciation and amortization	$ 121,577	$ 114,634		$ 361,490	$ 348,979
Calabasas building operating expenses including depreciation	207,401	180,146		543,638	524,351
Office building revenue from leases from non-affiliates	$ 55,099	51,552		171,133	140,518
Loss on asset impairment				$ 0	1,287,460
Impaired capitalized software costs paid			$ 1,287,460		1,287,460
Impaired capitalized software costs unpaid			$ 223,442		223,442
Fair value of impaired captialized software costs		$ 0			$ 0

Segment Reporting (Details Narr

Segment Reporting (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Details Narrative
Percentage of consolidated revenues from insurance company operations segment	92.00%	92.00%	92.00%	91.00%

Investments (Details Narrative)

Investments (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Notes to Financial Statements
Brokered certificates of deposit	$ 62,919,000		$ 62,919,000		$ 57,527,000
Statutory deposit of certificates of deposit	$ 600,000		$ 600,000		$ 600,000
Statutory deposits number of banks	4		4		4
Number of fixed maturity investments in an unrealized loss position for more than twelve months	0		0		2
Number of fixed maturity investments in an unrealized loss position for less than twelve months	1		1		3
Amortized cost of certificates of deposit sold	$ 0	$ 0	$ 746,000	$ 0
Realized loss on certificates of deposit sold	0	$ 0	1,278	$ 0
Fixed maturity investments in an unrealized loss position for less than twelve months	79		79		$ 38,509
Fixed maturity investments in an unrealized loss position for more than twelve months	$ 0		$ 0		$ 6,115
Number of certificates of deposit sold	0	0	3	0

Contingencies (Details Narrativ

Contingencies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Notes to Financial Statements
Agent balance receivable	$ 1,181,272	$ 1,181,272
Agent balance bad debt reserve	$ 1,181,272	$ 1,181,272
Agent balance bad debt reserve allowance percentage	100.00%	100.00%
Stipulated judgement from one principal	$ 1,200,000	$ 1,200,000
Judgements obtained from two principles	Full Amount Due
Cash deposit in lieu of appeal bond on judgments	$ 13,373,793	$ 7,924,178
Additional cash deposit in lieu of appeal bond on judgment	$ 5,449,615
Cash deposit as percentage of judgment	150.00%	150.00%
Countersuit filed against the Company by ISI	$ 1,792,398