Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 13, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | FEDERATED NATIONAL HOLDING CO | ||
Entity Central Index Key | 1,069,996 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Amendment Flag | false | ||
Entity Public Float | $ 246,945,830 | ||
Entity Common Stock, Shares Outstanding | 13,853,574 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Debt securities, available-for-sale, at fair value (amortized cost of $376,644 and $338,021, respectively) | $ 374,756 | $ 339,178 |
Debt securities, held-to-maturity, at amortized cost | 5,551 | 6,619 |
Equity securities, available-for-sale, at fair value (cost of $24,163 and $33,581, respectively) | 29,375 | 38,534 |
Total investments (including $28,704 and $22,670 related to the VIE, respectively) | 409,682 | 384,331 |
Cash and cash equivalents (including $15,668 and $14,616 related to the VIE, respectively) | 74,593 | 53,038 |
Prepaid reinsurance premiums | 156,932 | 181,840 |
Premiums receivable, net of allowance of $55 and $302, respectively (including $1,584 and $355 related to the VIE, respectively) | 54,854 | 38,594 |
Reinsurance recoverable, net | 48,530 | 12,714 |
Deferred acquisition costs | 38,962 | 15,547 |
Income taxes receivable | 13,871 | 2,691 |
Property and equipment, net | 4,194 | 2,894 |
Other assets (including $1,910 and $1,037 related to the VIE, respectively) | 11,509 | 7,605 |
TOTAL ASSETS | 813,127 | 699,254 |
LIABILITIES: | ||
Loss and loss adjustment expense reserves | 158,110 | 97,340 |
Unearned premiums | 294,022 | 253,960 |
Reinsurance Payable | 79,154 | 61,069 |
Debt from consolidated variable interest entity | 4,909 | 4,887 |
Deferred income taxes, net | 1,433 | 5,627 |
Other liabilities | 37,643 | 25,612 |
Total liabilities | 575,271 | 448,495 |
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value: 1,000,000 shares authorized | ||
Common stock, $0.01 par value: 25,000,000 shares authorized; 13,473,120 and 13,798,773 shares issued and outstanding, respectively | 134 | 138 |
Additional paid-in capital | 136,779 | 131,998 |
Accumulated other comprehensive income | 1,941 | 3,985 |
Retained earnings | 80,275 | 96,461 |
Total shareholders’ equity attributable to Federated National Holding Company shareholders | 219,129 | 232,582 |
Noncontrolling interest | 18,727 | 18,177 |
Total shareholders' equity | 237,856 | 250,759 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 813,127 | $ 699,254 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Debt securities, available-for-sale, at amortized cost | $ 376,644 | $ 338,021 |
Equity securities, available-for-sale at cost | 24,163 | 33,581 |
Total investments | 409,682 | 384,331 |
Cash and cash equivalents | 74,593 | 53,038 |
Premiums receivable, net | 54,854 | 38,594 |
Premiums receivable, allowance for credit losses | 55 | 302 |
Other Assets | $ 11,509 | $ 7,605 |
SHAREHOLDERS' EQUITY: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 13,473,120 | 13,798,773 |
Common stock, shares outstanding (in shares) | 13,473,120 | 13,798,773 |
Monarch Delaware - Variable Interest Entity [Member] | ||
Investments: | ||
Debt securities, available-for-sale, at amortized cost | $ 27,100 | $ 21,312 |
Total investments | 28,704 | 22,670 |
Cash and cash equivalents | 15,668 | 14,616 |
Premiums receivable, net | 1,584 | 355 |
Other Assets | $ 1,910 | $ 1,037 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Net premiums earned | $ 259,872 | $ 210,020 | $ 170,905 |
Net investment income | 9,063 | 7,226 | 5,385 |
Net realized investment gains | 3,045 | 3,616 | 4,426 |
Direct written policy fees | 17,730 | 11,248 | 8,689 |
Other income | 26,674 | 17,783 | 11,287 |
Total revenue | 316,384 | 249,893 | 200,692 |
Costs and expenses: | |||
Losses and loss adjustment expenses | 187,341 | 104,353 | 81,036 |
Commissions and other underwriting expenses | 108,776 | 64,868 | 52,077 |
General and administrative expenses | 17,186 | 15,223 | 10,272 |
Interest expense | 348 | 256 | |
Total costs and expenses | 313,651 | 184,700 | 143,385 |
Income before income taxes | 2,733 | 65,193 | 57,307 |
Income taxes | 2,683 | 24,753 | 20,108 |
Net income | 50 | 40,440 | 37,199 |
Net income (loss) attributable to noncontrolling interest | 246 | (445) | |
Net (loss) income attributable to Federated National Holding Company shareholders | $ (196) | $ 40,885 | $ 37,199 |
Net (loss) income per share attributable to Federated National Holding Company shareholders: | |||
Basic (in dollars per share) | $ (0.01) | $ 2.98 | $ 3.08 |
Diluted (in dollars per share) | $ (0.01) | $ 2.92 | $ 2.99 |
Weighted average number of shares of common stock outstanding: | |||
Basic (in shares) | 13,758 | 13,729 | 12,082 |
Diluted (in shares) | 13,758 | 13,997 | 12,438 |
Dividends declared per share of common stock (in dollars per share) | $ 0.27 | $ 0.18 | $ 0.13 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | |||
Net income | $ 50 | $ 40,440 | $ 37,199 |
Change in net unrealized (losses) gains on investments, available-for-sale | (2,786) | (6,308) | 2,856 |
Comprehensive (loss) income before income taxes | (2,736) | 34,132 | 40,055 |
Income tax benefit (expense) related to items of other comprehensive income | 1,046 | 2,454 | (1,102) |
Comprehensive (loss) income | (1,690) | 36,586 | 38,953 |
Less: comprehensive income (loss) attributable to noncontrolling interest | 550 | (566) | |
Comprehensive (loss) income attributable to Federated National Holding Company shareholders | $ (2,240) | $ 37,152 | $ 38,953 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Total Shareholders' Equity Attributable to Federated National Holding Company Shareholders [Member] | Noncontrolling Interest [Member] | Total |
Balance, beginning of period at Dec. 31, 2013 | $ 109 | $ 80,525 | $ 5,964 | $ 21,896 | $ 108,494 | $ 108,494 | |
Balance (in shares) at Dec. 31, 2013 | 10,901,716 | ||||||
Net (loss) income | 37,199 | 37,199 | 37,199 | ||||
Other comprehensive (loss) income | 1,754 | 1,754 | 1,754 | ||||
Dividends | (1,672) | (1,672) | (1,672) | ||||
Stock issued in public offering | $ 23 | 43,086 | 43,109 | 43,109 | |||
Stock issued in public offering (in shares) | 2,358,975 | ||||||
Shares issued under share-based compensation plans | $ 4 | 1,551 | 1,555 | 1,555 | |||
Shares issued under share-based compensation plans (in shares) | 371,723 | ||||||
Tax benefits from share-based awards | 480 | 480 | 480 | ||||
Shares based compensation | 1,660 | 1,660 | 1,660 | ||||
Balance, end of period at Dec. 31, 2014 | $ 136 | 127,302 | 7,718 | 57,423 | 192,579 | 192,579 | |
Balance (in shares) at Dec. 31, 2014 | 13,632,414 | ||||||
Net (loss) income | 40,885 | 40,885 | $ (445) | 40,440 | |||
Other comprehensive (loss) income | (3,733) | (3,733) | (121) | (3,854) | |||
Noncontrolling interest capital contributions | 18,743 | 18,743 | |||||
Dividends | (1,847) | (1,847) | (1,847) | ||||
Shares issued under share-based compensation plans | $ 2 | 169 | 171 | 171 | |||
Shares issued under share-based compensation plans (in shares) | 166,359 | ||||||
Tax benefits from share-based awards | 1,564 | 1,564 | 1,564 | ||||
Shares based compensation | 2,963 | 2,963 | 2,963 | ||||
Balance, end of period at Dec. 31, 2015 | $ 138 | 131,998 | 3,985 | 96,461 | 232,582 | 18,177 | 250,759 |
Balance (in shares) at Dec. 31, 2015 | 13,798,773 | ||||||
Net (loss) income | (196) | (196) | 246 | 50 | |||
Other comprehensive (loss) income | (2,044) | (2,044) | 304 | (1,740) | |||
Dividends | (4,677) | (4,677) | (4,677) | ||||
Shares issued under share-based compensation plans | 361 | 361 | 361 | ||||
Shares issued under share-based compensation plans (in shares) | 299,165 | ||||||
Tax benefits from share-based awards | 590 | 590 | 590 | ||||
Repurchases of common stock | $ (4) | (11,313) | (11,317) | $ (11,317) | |||
Repurchases of common stock (in shares) | (624,818) | (624,818) | |||||
Shares based compensation | 3,831 | 3,831 | $ 3,831 | ||||
Balance, end of period at Dec. 31, 2016 | $ 134 | $ 136,779 | $ 1,941 | $ 80,275 | $ 219,129 | $ 18,727 | $ 237,856 |
Balance (in shares) at Dec. 31, 2016 | 13,473,120 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Cash flow from operating activities: | |||
Net income | $ 50 | $ 40,440 | $ 37,199 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Net realized investment gains | (3,045) | (3,616) | (4,426) |
Amortization of investment premium or discount, net | 5,346 | 5,645 | 4,165 |
Depreciation and amortization | 869 | 624 | 149 |
Share-based compensation | 4,420 | 4,527 | 2,140 |
Changes in operating assets and liabilities: | |||
Prepaid reinsurance premiums | 24,908 | (84,875) | (59,829) |
Premiums receivable, net | (16,260) | (11,319) | (4,860) |
Reinsurance recoverable, net | (35,816) | (180) | (9,793) |
Deferred acquisition costs | (23,415) | (1,937) | 3,098 |
Income taxes receivable, net | (11,769) | (2,445) | (4,189) |
Loss and loss adjustment expense reserves | 60,770 | 19,010 | 17,315 |
Unearned premiums | 40,062 | 61,535 | 64,081 |
Reinsurance payable | 18,085 | 18,606 | 12,918 |
Deferred income taxes, net of other comprehensive income | (2,575) | 6,741 | 765 |
Other, net | 8,120 | 135 | 4,411 |
Net cash provided by operating activities | 69,750 | 52,891 | 63,144 |
Cash flow from investing activities: | |||
Sales, maturities and redemptions of investment securities | 311,109 | 169,979 | 87,151 |
Purchases of investment securities | (342,113) | (231,884) | (194,087) |
Purchases of property and equipment | (2,147) | (1,736) | (969) |
Net cash used in investing activities | (33,151) | (63,641) | (107,905) |
Cash flow from financing activities: | |||
Noncontrolling interest equity investment | 18,743 | ||
Issuance of common stock in public offering | 43,109 | ||
Tax benefit related to share-based compensation | 589 | 1,564 | 480 |
Issuance of debt in consolidated variable interest entity | 5,000 | ||
Purchases of FNHC common stock | (11,317) | ||
Issuance of common stock for share-based awards | 361 | 171 | 1,555 |
Dividends paid | (4,677) | (1,847) | (1,672) |
Net cash (used in) provided by financing activities | (15,044) | 23,631 | 43,472 |
Net increase in cash and cash equivalents | 21,555 | 12,881 | (1,289) |
Cash and cash equivalents at beginning of period | 53,038 | 40,157 | 41,446 |
Cash and cash equivalents at end of period | 74,593 | 53,038 | 40,157 |
Cash paid during the period for: | |||
Income taxes | 14,360 | 15,662 | 19,185 |
Non-cash investing and finance activities: | |||
Accrued dividends payable | $ 1,115 | $ 712 | $ 564 |
ORGANIZATION, CONSOLIDATION AND
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION [Abstract] | |
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION | 1. ORGA NIZATION, CONSOLIDATION AND BASIS OF PRESENTATION  Organization  Federated National Holding Company, (“FNHC,” the “Company,” “we,” or “us”), is an insurance holding company that controls substantially all steps in the insurance underwriting, distribution and claims processes through our subsidiaries and our contractual relationships with our independent agents and general agents. We are authorized to underwrite, and/or place through our wholly owned subsidiaries, homeowners’ multi-peril (“homeowners’”), personal automobile, commercial general liability, federal flood, and other lines of insurance in Florida and other states. We market, distribute and service our own and third-party insurers’ products and our other services through a network of independent agents.  Our wholly owned insurance subsidiary is Federated National Insurance Company (“FNIC”), which is licensed as an admitted carrier in Florida, Texas, Georgia, Alabama, Louisiana and South Carolina. We also serve as managing general agent for Monarch National Insurance Company (“MNIC”), which was founded in 2015 through the joint venture, described below, and is licensed as an admitted carrier in Florida. An admitted carrier is an insurance company that has received a license from the state department of insurance giving the Company the authority to write specific lines of insurance in that state. These companies are also bound by rate and form regulations, and are strictly regulated to protect policyholders from a variety of illegal and unethical practices, including fraud. Admitted carriers are also required to financially contribute to the state guarantee fund, which is used to pay for losses if an insurance carrier becomes insolvent or unable to pay the losses due to their policyholders.  On March 19, 2015, the Company entered into a joint venture to organize MNIC, which received its certificate of authority to write homeowners’ property and casualty insurance in Florida from the Florida Office of Insurance Regulation (the “Florida OIR”). The Company’s joint venture partners are a majority-owned limited partnership of Crosswinds Holdings Inc., a publicly traded Canadian private equity firm and asset manager (“Crosswinds”); and Transatlantic Reinsurance Company (“TransRe”).  The Company and Crosswinds each invested $14.0 million in Monarch Delaware Holdings LLC (“Monarch Delaware”), the indirect parent company of MNIC, for a 42.4% interest in Monarch Delaware (each holding 50% of the voting interests in Monarch Delaware). TransRe invested $5.0 million for a 15.2% non-voting interest in Monarch Delaware and advanced an additional $5.0 million in debt evidenced by a six -year promissory note bearing 6% annual interest payable by Monarch National Holding Company (“MNHC”), a wholly owned subsidiary of Monarch Delaware and the direct parent company of MNIC.  Significant Customer  We entered into an Insurance Agency Master Agreement with Ivantage Select Agency, Inc., (“ISA”), an affiliate of Allstate Insurance Company (“Allstate”), pursuant to which we are authorized by ISA to appoint Allstate agents to offer our homeowners’ and commercial general liability insurance products to consumers in Florida. As a percentage of the total homeowners’ premiums we underwrote in the years ended December 31, 2016 , 2015, and 2014, 24.1% , 25.4% , and 20.5% , respectively, were from Allstate’s network of Florida agents.  Principles of Consolidation  The accompanying consolidated financial statements include the accounts of FNHC and all other entities in which we have a controlling financial interest and any variable interest entities (“VIE”) in which we are the primary beneficiary. All material inter-company accounts and transactions have been eliminated in consolidation. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements.  In connection with the investment in Monarch Delaware, we have determined that we are the primary beneficiary of this VIE, as we possess the power to direct the activities of the VIE that most significantly impact its economic performance. Accordingly, we consolidate the VIE in our consolidated financial statements. Refer to Note 14 for additional information on the VIE.  Basis of Presentation  The accompanying consolidated financial statements are prepared in accordance with United States of America Generally Accepted Accounting Principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below . |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 12 Months Ended |
Dec. 31, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 2. SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES  Accounting Estimates and Assumptions  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates.  Similar to other property and casualty insurers, our liability for losses and loss adjustment expense reserves, although supported by actuarial projections and other data, is ultimately based on management’s reasoned expectations of future events. Although considerable variability is inherent in these estimates, we believe that this liability is adequate. Estimates are reviewed regularly and adjusted as necessary. Such adjustments are reflected in current operations.  Fair Value  The fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. Alternative valuation techniques may be appropriate under the circumstances to determine the value that would be received to sell an asset or pay to transfer a liability in an orderly transaction. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Our nonperformance or credit risk is considered in determining the fair value of liabilities. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.  Refer to Note 3 for additional information regarding fair value.  Investments  Investments consist of debt and equity securities. Debt securities consist of securities with an initial fixed maturity, which include corporate bonds, municipal bonds and United States government bonds. Equity securities generally consist of securities that represent ownership interests in an enterprise. The Company determines the appropriate classification of investments in debt and equity securities at the acquisition date and re-evaluates the classification at each balance sheet date.  Held-to-maturity investments are recorded at the amortized cost, reflecting the ability and intent to hold the securities to maturity. All other securities were classified as available-for-sale and recorded at fair value. Unrealized gains and losses during the year, net of the related tax effect applicable to available-for-sale, are excluded from income and reflected in other comprehensive income, and the cumulative effect is reported as a separate component of shareholders’ equity until realized. If a decline in fair value is deemed to be other-than-temporary, the investment is written down to its fair value and the amount of the write-down is recorded as an other-than-temporary impairment (“O TTI”) loss on the statement of operations . In addition, any portion of such decline related to debt securities that is believed to arise from factors other than credit is recorded as a component of other comprehensive income rather than against income.  Net realized gains and losses on investments are determined in accordance with the specific identification method.  Net investment income consists primarily of interest income from debt securities, cash and cash equivalents, including any premium amortization or discount accretion and dividend income from equity securities; less expenses related to investments.  Refer to N ote 4 for additional information regarding investments.  Cash and Cash Equivalents  Cash and cash equivalents consist of all deposit balances with a bank that are available for immediate withdrawal and highly liquid investments. All investments with maturities of three months or less at the date of the purchase are considered cash equivalents.  Premiums and Unearned Premiums  Premiums are recognized as revenue on a pro-rata basis over the term of an insurance policy. Assumed reinsurance premiums written and earned are based on reports received from ceding companies for pro-rata treaty contracts and are generally recorded as written based on contract terms for excess-of-loss and quota share contracts. Premiums are earned ratably over the terms of the related coverage.  Unearned premiums and ceded unearned premiums represent the portion of gross premiums written and ceded premiums written, respectively, relating to the unexpired terms of such coverage.  Premium receivable balances are reported net of an allowance for estimated uncollectible premium amounts. Such allowance is based upon an ongoing review of amounts outstanding, length of collection periods, the creditworthiness of the insured and other relevant factors. Amounts deemed to be uncollectible are written off against the allowance.  Reinsurance  Reinsurance is used to mitigate the exposure to losses, manage capacity and protect capital resources. Reinsuring loss exposures does not relieve a ceding entity from its obligations to policyholders and cedants. Reinsurance recoverables (including amounts related to claims incurred but not reported) and ceded unearned premiums are reported as assets. To minimize exposure to losses from a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of the reinsurer, the collectability of the reinsurance recoverables is evaluated (and where appropriate, whether an allowance for estimated uncollectible reinsurance recoverables is to be established) based upon a number of other factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible are written off against the allowance for estimated uncollectible reinsurance recoverables. The Company currently has no allowances for uncollectible reinsurance recoverables.  Ceded premiums written are recorded in accordance with applicable terms of the various reinsurance contracts and ceded premiums earned are charged against revenue over the period of the various reinsurance contracts. This also generally applies to reinstatement premiums paid to a reinsurer, which arise when contractually-specified ceded loss triggers have been breached. Ceded commissions reduce commissions, brokerage and other underwriting expenses and ceded losses incurred reduce net loss and loss adjustment expense incurred over the applicable periods of the various reinsurance contracts with third party reinsurers. If premiums or commissions are subject to adjustment (for example, retrospectively-rated or experience-rated), the estimated ultimate premium or commission is recognized over the period of the contract.  Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business and consistent with the terms of the underlying reinsurance contract.  Direct Written Policy Fees  Policy fees represent a non-refundable application fee for insurance coverage, which are intended to reimburse us for the costs incurred to underwrite the policy. Policy fees are recognized on the effective date of the insurance policy.  Other Income  Other income represents primarily brokerage and commission related income from our personal automobile line of business and agency operations. The commission income from our personal automobile line of business is made up of ceded commission income and fee income for administration and claims handling services. The income associated with ceded commission and fee income is recognized over the respective terms of the contracts. The fees associated with the administrative services is recognized upfront upon policy inception. Commission income from our agency operations are recognized upfront upon policy inception.  Deferred Acquisition Costs  Deferred Acquisition Costs (“DAC”) represent those costs that are incremental and directly related to the successful acquisition of new or renewal of existing insurance contracts. The Company defers incremental costs that result directly from, and are essential to, the acquisition or renewal of an insurance contract. Such DAC generally include agent or broker commissions, referral fees, premium taxes, medical and inspection fees that would not have been incurred if the insurance contract had not been acquired or renewed. Each cost is analyzed to assess whether it is fully deferrable.  The Company also defers a portion of the employee total compensation and payroll-related fringe benefits directly related to time spent performing specific acquisition or renewal activities, including costs associated with the time spent on underwriting, policy issuance and processing, and sales force contract selling  The acquisition costs are deferred and amortized over the period in which the related premiums written are earned, generally 12 months. It is grouped consistent with the manner in which the insurance contracts are acquired, serviced and measured for 6 or profitability and is reviewed for recoverability based on the profitability of the underlying insurance contracts. Investment income is anticipated in assessing the recoverability of DAC. The Company assesses the recoverability of DAC on an annual basis or more frequently if circumstances indicate impairment may have occurred.  Property and Equipment  Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using a straight-line method over the estimated useful lives, ranging from 3 to 15 years. Repairs and maintenance are charged to expense as incurred.  The Company accounts for internal-use software development costs in accordance with accounting guidelines which state that software costs, including internal payroll costs, incurred in connection with the development or acquisition of software for internal use is charged to expense as incurred until the project enters the application development phase. Costs incurred in the application development phase are capitalized and are depreciated using the straight-line method over an estimated useful life of 5 years, beginning when the software is ready for use.  Losses and Loss Adjustment Expenses (“LAE”)  The reserves for loss and loss adjustment expense (“LAE”) represent management’s best estimate of the ultimate cost of all reported and unreported losses incurred through the balance sheet date. Such liabilities are determined based upon our assessment of claims pending and the development of prior years’ loss liability. These amounts include liabilities based upon individual case estimates for reported losses and LAE’s and estimates of such amounts that are incurred but not yet reported (“IBNR”). Changes in the estimated liability are charged or credited to operations as the losses and LAE’s are settled.  The estimates of the liability for loss and LAE reserves are subject to the effect of trends in claims severity and frequency and are continually reviewed. As part of this process, we review historical data and consider various factors, including known and anticipated legal developments, inflation and economic conditions. As experience develops and other data become available, these estimates are revised, as required, resulting in increases or decreases to the existing liability for loss and loss adjustment expense reserves. Adjustments are reflected in results of operations in the period in which they are made and the liabilities may deviate substantially from prior estimates.  Income Taxes  Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss, capital loss and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date.  Share-based Compensation  The Company accounts for share-based compensation based on the estimated grant date fair value. The Company grants awards with service only conditions and generally amortizes them on a straight-line over the requisite service period of the award, which is the vesting term. The fair value of the restricted stock grants is determined based on the closing market price on the date of grant. Non-employee directors are treated as employees for accounting purposes .  Basic and Diluted Net Income per Share  Basic net income per share is computed by dividing net (loss) income available to common shareholders by the weighted average number of common shares, while diluted net income per share is computed by dividing net income available to common shareholders by the weighted average number of such common shares and dilutive share equivalents result from the assumed exercise of employee stock options and vesting of restricted common stock and are calculated using the treasury stock method.  Reclassifications  Certain amounts in prior year’s consolidated financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on the reported results of operations, financial condition, and cash flows. In the current period, the Company concluded it was appropriate to present reinsurance assets and reinsurance payables separately on the consolidated balance sheets and statements of cash flows. The Company believes this reclassification provide greater clarity and insight into the consolidated financial statements for the periods presented. Adopted Accounting Pronouncements  In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 amended the consolidation guidance by modifying the evaluation criteria for whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminating the presumption that a general partner should consolidate a limited partnership, and affecting the consolidation analysis of reporting entities that are involved with variable interest entities. We adopted the provisions of ASU 2015-02 effective January 1, 2016 and re-evaluated all legal entity investments under the revised consolidation model. The adoption of ASU 2015-02 did not have any impact on our consolidated financial statements.  In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest . ASU 2015-03 reduces the complexity of disclosing debt issuance costs and debt discount and premium on the balance sheet by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The Company adopted this ASU retrospectively as of January 1, 2016. Other assets and debt from consolidated variable interest entity have been reclassified to be consistent with the adoption of this standard, which resulted in a reduction of $0.1 million each. There were no changes to shareholders’ equity as a result of this adoption. There were no other impacts on the Company’s consolidated financial statements.  In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosures about Short-Duration-Contracts . The amendments in this ASU apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Services—Insurance . The amendments require insurance entities to disclose for annual reporting periods information on the liability for unpaid claims and claim adjustment expenses. The amendments in this ASU are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. The disclosure requirements of this guidance were adopted; see Note 6 Loss and Loss Adjustment Expense Reserves for further details.  Recent Accounting Pronouncements  In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This authoritative guidance replaces all general and most industry specific revenue recognition guidance (excluding insurance) currently prescribed by U.S. GAAP. The core principle is that an entity recognizes revenue to reflect the transfer of a promised good or service to customers in an amount that reflects that consideration to which the entity expects to be entitled in exchange for that good or service. This guidance also provides clarification on when an entity is a principal or an agent in a transaction. The guidance may be applied using one of the two following methods: (1) retrospectively to each prior reporting periods presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. In addition, during 2016 the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12, all of which clarify certain implementation guidance within ASU 2014-09. We will adopt this accounting standard update effective January 1, 2018. While we are currently evaluating the method of adoption and the impact of the provisions of this accounting standard update, only a portion of our revenue s are impacted by this guidance because the guidance does not apply to revenue on contracts accounted for under the financial instruments or insurance contracts standards. Our evaluation process includes, but is not l imited to, identifying contracts within the scope of the guidance , reviewing and documenting our accounting for these contracts, and identifying and determining the accounting for any related contract costs.  In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, this new guidance requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. This new guidance is effective for annual reporting periods beginning after December 15, 2017. We are currently evaluating the impact the adoption of this standard would have on the Company’s consolidated financial statements.  In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Upon the effective date, ASU 2016-02 will supersede the current lease guidance in Topic 840, Leases . Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. This guidance will require us to add our operating leases to the balance sheet. We are currently evaluating other impacts this guidance will have on our consolidated financial statements .  In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The guidance will be adopted on a prospective basis as indicated by the guidance for each area of change and will not have a material impact on our consolidated financial statements.  In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which significantly changes the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as currently performed under the other-than-temporary impairment model. Additionally, the standard will require enhanced disclosures for financial assets measured at amortized cost and available-for-sale debt securities to help the financial statement users better understand significant judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effects the adoption of ASU 2016-13 will have on the Company’s consolidated financial statements.  In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 provides guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Current GAAP does not include specific guidance on these eight cash flow classification issues. The amendments of this ASU are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the effect that ASU 2015-16 will have on its consolidated financial statements and related disclosures. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE [Abstract] | |
FAIR VALUE | 3. FAIR VALUE  Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs are based on market data from independent sources, while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. All assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:  Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market is defined as a market where transactions for the financial statement occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  Level 2 — Quoted market prices for similar assets or liabilities and valuations, using models or other valuation techniques that use observable market data. All significant inputs are observable, or derived from observable information in the marketplace, or are supported by observable levels at which transactions are executed in the market place.  Level 3 — Instrumen ts that use non-binding broker quotes or model driven valuations that do not have observable market data or those that are estimated based on an ownership interest to which a proportionate share of net assets is attributed. Currently, the Company has no level 3 investments.  The Company’s financial instruments measured at fair value and the level of the fair value hierarchy of inputs used were as follows:      December 31, 2016  Level 1 Level 2 Level 3 Total  (in thousands)  Debt securities:  United States government obligations and authorities $ 36,560 $ 25,645 $ — $ 62,205  Obligations of states and political subdivisions — 151,183 — 151,183  Corporate — 149,505 — 149,505  International — 11,863 — 11,863  36,560 338,196 — 374,756   Equity securities 28,960 415 — 29,375   Total investments $ 65,520 $ 338,611 $ — $ 404,131      December 31, 2015  Level 1 Level 2 Level 3 Total  (in thousands)  Debt securities:  United States government obligations and authorities $ 34,733 $ 26,820 $ — $ 61,553  Obligations of states and political subdivisions — 110,702 — 110,702  Corporate — 154,620 — 154,620  International — 12,303 — 12,303  34,733 304,445 — 339,178   Equity securities 38,012 522 — 38,534   Total investments $ 72,745 $ 304,967 $ — $ 377,712  A third party nationally recognized pricing service provides the fair value of securities in Level 2. A summary of the significant valuation techniques and market inputs for each class of security is as follows:  U nited S tates government obligations and authorities : In determining the fair value for U.S. Government securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.  Obligations of s tate s and political subdivisions : In determining the fair value for state and municipal securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads, reference data and industry and economic events.  Corporate and International : In determining the fair value for corporate securities we use the market approach. The primary inputs to the valuation include reported trades, dealer quotes for identical or similar assets in markets that are not active, benchmark yields, credit spreads (for investment grade securities), observations of equity and credit default swap curves (for high-yield corporates), reference data and industry and economic events.  We review the third party pricing methodologies quarterly and test for significant differences between the market price used to value the security and recent sales activity. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENTS [Abstract] | |
INVESTMENTS | 4. INVESTMENTS  Unrealized Gains and Losses  The amortized cost and the fair value of debt and equity securities as of December 31, 2016 and 2015 are summarized as follows:      Amortized Gross Gross  Cost Unrealized Unrealized  or Cost Gains Losses Fair Value  (in thousands)  December 31, 2016  Debt securities - available-for-sale:  United States government obligations and authorities $ 62,881 $ 177 $ 853 $ 62,205  Obligations of states and political subdivisions 152,823 427 2,067 151,183  Corporate 149,053 1,347 895 149,505  International 11,887 95 119 11,863  376,644 2,046 3,934 374,756   Debt securities - held-to-maturity:  United States government obligations and authorities 4,163 22 118 4,067  Corporate 1,317 20 2 1,335  International 71 — — 71  5,551 42 120 5,473  Equity securities 24,163 5,500 288 29,375  Total investments $ 406,358 $ 7,588 $ 4,342 $ 409,604      Amortized Gross Gross  Cost Unrealized Unrealized  or Cost Gains Losses Fair Value  (in thousands)  December 31, 2015  Debt securities - available-for-sale:  United States government obligations and authorities $ 61,384 $ 489 $ 320 $ 61,553  Obligations of states and political subdivisions 109,152 1,590 40 110,702  Corporate 154,957 1,153 1,490 154,620  International 12,528 18 243 12,303  338,021 3,250 2,093 339,178   Debt securities - held-to-maturity:  United States government obligations and authorities 4,275 30 204 4,101  Corporate 2,253 14 20 2,247  International 91 — — 91  6,619 44 224 6,439  Equity securities 33,581 6,809 1,856 38,534  Total investments $ 378,221 $ 10,103 $ 4,173 $ 384,151  Net Realized Gains and Losses  The Company calculates the gain or loss realized on the sale of investments by comparing the sales price (fair value) to the cost or amortized cost of the security sold. Net realized gains and losses on investments are determined in accordance with the specific identification method. The following tables detail the Company’s net realized gains (losses) by major investment category for the years ended December 31, 2016, 2015 and 2014:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Gross realized gains:  Debt securities $ 3,208 $ 1,272 $ 725  Equity securities 4,264 4,959 4,489  Total gross realized gains 7,472 6,231 5,214   Gross realized losses:  Debt securities (1,614) (805) (147)  Equity securities (2,813) (1,810) (641)  Total gross realized losses (4,427) (2,615) (788)  Net realized gains on investments $ 3,045 $ 3,616 $ 4,426  During the years ended December 31, 2016 , 2015 and 2014 , the proceeds from sales of investment securities were $229.3 million, $157.2 million and $87.1 million, respectively.  Contractual Maturity  The amortized cost and estimated fair value of debt securities as of December 31, 2016 and 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.      December 31, 2016 December 31, 2015  Amortized Amortized  Cost Fair Value Cost Fair Value  Securities with maturity dates: (in thousands)  Debt securities, available-for-sale:  One year or less $ 46,189 $ 46,231 $ 24,470 $ 24,488  Over one through five years 177,982 177,899 170,797 171,113  Over five through ten years 150,557 148,783 142,728 143,545  Over ten years 1,916 1,843 26 32  376,644 374,756 338,021 339,178  Debt securities, held-to-maturity:  One year or less 170 170 486 487  Over one through five years 1,719 1,750 1,899 1,915  Over five through ten years 3,662 3,553 4,234 4,037  5,551 5,473 6,619 6,439  Total $ 382,195 $ 380,229 $ 344,640 $ 345,617  Net Investment Income  The following table summarizes the Company’s net investment income for years ended December 31, 2016, 2015 and 2014:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Interest income $ 7,920 $ 6,638 $ 4,832  Dividends income 1,143 588 553  Net investment income $ 9,063 $ 7,226 $ 5,385  Aging of Gross Unrealized Losses  As of December 31, 2016 and 2015 , gross unrealized losses and related fair values for debt and equity securities, grouped by duration of time in a continuous unrealized loss position, were as follows:      Less than 12 months 12 months or longer Total  Gross Gross Gross  Fair Unrealized Fair Unrealized Fair Unrealized  Value Losses Value Losses Value Losses  December 31, 2016 (in thousands)  Debt securities - available-for-sale:  United States government obligations  and authorities $ 45,255 $ 850 $ 111 $ 3 $ 45,366 $ 853  Obligations of states and political subdivisions 103,724 2,066 1,007 1 104,731 2,067  Corporate 59,970 864 2,427 31 62,397 895  International 5,925 119 5 - 5,930 119  214,874 3,899 3,550 35 218,424 3,934   Equity securities 4,701 253 434 35 5,135 288   Total investments $ 219,575 $ 4,152 $ 3,984 $ 70 $ 223,559 $ 4,222      Less than 12 months 12 months or longer Total  Gross Gross Gross  Fair Unrealized Fair Unrealized Fair Unrealized  Value Losses Value Losses Value Losses  December 31, 2015 (in thousands)  Debt securities - available-for-sale:  United States government obligations  and authorities $ 30,464 $ 303 $ 659 $ 17 $ 31,123 $ 320  Obligations of states and political subdivisions 16,652 40 — — 16,652 40  Corporate 87,176 1,420 3,590 70 90,766 1,490  International 8,660 191 281 52 8,941 243  142,952 1,954 4,530 139 147,482 2,093   Equity securities 11,790 1,850 84 6 11,874 1,856   Total investments $ 154,742 $ 3,804 $ 4,614 $ 145 $ 159,356 $ 3,949  As of December 31, 2016, the Company held a total of 1,132 debt and equity securities that were in an unrealized loss position, of which 36 securities were in an unrealized loss position continuously for 12 months or more. As of December 31, 2015, the Company held a total of 676 debt and equity securities that were in an unrealized loss position, of which 22 securities were in an unrealized loss position continuously for 12 months or more. The unrealized losses associated with these securities consisted primarily of losses related to corporate securities.  The Company holds its equity securities and some of its debt securities as available-for-sale and as such, these securities are recorded at fair value. The Company continually monitors the difference between cost and the estimated fair value of its investments, which involves uncertainty as to whether declines in value are temporary in nature. If the decline of a particular investment is deemed temporary, the Company records the decline as an unrealized loss in shareholders’ equity. If the decline is deemed to be other than temporary, the Company will write the security’s cost-basis or amortized cost-basis down to the fair value of the investment and recognizes an other than temporary impairment (“OTTI”) loss in our consolidated statement of operations. Additionally, any portion of such decline related to debt securities that is believed to arise from factors other than credit will be recorded as a component of other comprehensive income rather than charged against income.  The Company’s assessment of equity securities initially involves an evaluation of all securities that are in an unrealized loss position, regardless of the duration or severity of the loss, as of the applicable balance sheet date. Such initial review consists primarily of assessing whether: (i) there has been a negative credit or news event with respect to the issuer that could indicate the existence of an OTTI; and (ii) the Company has the ability and intent to hold an equity security for a period of time sufficient to allow for an anticipated recovery (generally considered to be one year from the balance sheet date). To the extent that an equity security in an unrealized loss position is not impaired based on the initial review described above, the Company then evaluates such equity security by considering qualitative and quantitative factors. These factors include but are not limited to facts and circumstances specific to individual securities, asset classes, the financial condition of the issuer, changes in dividend payment, the length of time fair value had been less than cost, the severity of the decline in fair value below cost, industry outlook and our ability and intent to hold each position until its forecasted recovery.  Debt securities classified as available-for-sale in a gross unrealized loss position for twelve months or longer are primarily comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is not more than likely than not that the Company will not be required to sell the security before recovery. The Company has analyzed these securities and has determined that they are not other than temporarily impaired.  During the years ended December 31, 2016, 2015 and 2014, OTTI losses were $0.3 million, $0.4 million and $0 , respectively. The determination that unrealized losses on such securities were other-than-temporary was primarily based on the duration of the decline in the fair value of such securities relative to their cost as of the balance sheet date.  Statutory Deposits  As of December 31, 2016 , investments with fair values of approximately $7.9 million , the majority of which were debt securities, were deposited with governmental authorities and into custodial bank accounts as required by law or contractual obligations. |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2016 | |
REINSURANCE [Abstract] | |
REINSURANCE | 5. REINSURANCE  Overview  Reinsurance is used to mitigate the exposure to losses, manage capacity and protect capital resources. The Company reinsures (cedes) a portion of written premiums on an excess of loss or a quota share basis in order to limit our loss exposure. To the extent that reinsuring companies are unable to meet their obligations assumed under these reinsurance agreements, we remain primarily liable to our policyholders.  We are selective in choosing reinsurers and consider numerous factors, the most important of which are the financial stability of the reinsurer or capital specifically pledged to uphold the contract, its history of responding to claims and its overall reputation. In an effort to minimize our exposure to the insolvency of a reinsurer, we evaluate the acceptability and review the financial condition of the reinsurer at least annually with the assistance of our reinsurance broker.  Significant Reinsurance Contracts  FNIC and MNIC operate primarily by underwriting and accepting risks for their direct account on a gross basis and reinsuring a portion of the exposure on either an individual risk or an aggregate basis to the extent those exceed the desired retention level. We continually evaluate the relative attractiveness of different forms of reinsurance contracts and different markets that may be used to achieve our risk and profitability objectives. All of our reinsurance contracts do not relieve FNIC or MNIC from their direct obligations to the insured.  FNIC’s 2015-2016 catastrophe reinsurance program, which ran either from June 1 to May 31 or from July 1 to June 30, consists of the Florida Hurricane Catastrophe Fund (“FHCF”), excess of loss treaties placed with the private market and a 40% property quota-share program. The property quota-share reinsurance is a form of proportional reinsurance that provides coverage for the homeowners’ property lines for wind related catastrophes in Florida. The FHCF treaty affords coverage for losses sustained in Florida and represents only a portion of the reinsurance coverage in Florida.  The excess of loss and FHCF treaties, which became effective on July 1, 2015 and June 1, 2015, respectively, insure for approximately $1.82 billion of aggregate catastrophic losses and loss adjustment expenses (“LAE”) with a maximum single event coverage totaling approximately $1.26 billion, with the Company retaining the first $12.9 million in Florida and $5.0 million in Louisiana, Alabama and South Carolina for losses and LAE from each event. Ceded premiums in connection with this program totaled approximately $149.7 million.  FNIC’s 2016-2017 reinsurance programs, costing approximately $179.5 million, include approximately $125.7 million for the private reinsurance for Federated National’s Florida exposure, including prepaid automatic premium reinstatement protection on all layers, along with approximately $53.8 million payable to the FHCF. The combination of private and FHCF reinsurance treaties will afford Federated National with approximately $2.22 billion of aggregate coverage with a maximum single event coverage totaling approximately $1.58 billion, exclusive of retentions. FNIC maintained its FHCF participation at 75% for the 2016 hurricane season. FNIC’s single event pre-tax retention for a catastrophic event in Florida is $18.45 million. In addition, FNIC purchases separate underlying reinsurance layers in Louisiana, Alabama, and South Carolina to cover losses and LAE outside of Florida for each catastrophic event from $8.0 million to $18.45 million. Depending on the characteristics of the catastrophic event, and the states involved, FNIC’s single event pre-tax retention could be as low as $8.0 million. The maximum pre-tax retention of $18.45 million for Florida represents 7.76% of the Company’s shareholders’ equity as of December 3 1 , 2016.  Additionally, the Company’s private market excess of loss treaties became effective July 1, 2016 and all private layers have prepaid automatic reinstatement protection, which affords us additional coverage against multiple catastrophic events in the same hurricane season. The Company obtained multiple year protection for a portion of its program; as a result, some of the coverage will expire on June 30, 2017, and a portion of the coverage will remain in-force one additional treaty year until June 30, 2018. These private market excess of loss treaties structure coverage into layers, with a cascading feature such that substantially all private layers attach after $18.45 million in losses for FNIC’s Florida exposure. If the aggregate limit of the preceding layer is exhausted, the next layer drops down (cascades) in its place. Additionally, any unused layer protection drops down for subsequent events until exhausted.  MNIC’s 2016-2017 catastrophe reinsurance program, which runs from either June 1 to May 31 or June 1 to June 30 ( 13 month period), consists of the FHCF and private market excess of loss treaties. All private layers have prepaid automatic reinstatement protection, which affords MNIC additional coverage, and have a cascading feature such that substantially all layers attach at $3.4 million for MNIC's Florida exposure.  The Company’s property quota share treaties, which are included in the reinsurance program, run for a two -year period from July 1 to July 1 of the following year. The property quota-share treaties consist of two different treaties, one for 30% which became effective July 1, 2014, and the other for 10% which became effective July 1, 2015. The combined treaties provided up to a 40% quota-share reinsurance on the first $100 million of covered losses for the homeowners’ property insurance program in Florida. The treaties are accounted for as retrospectively rated contracts whereby the estimated ultimate premium or commission is recognized over the period of the contracts.  On July 1, 2016, the 30% property quota-share treaty expired on a cut-off basis, which means as of that date the Company will retain 30% of its unearned premiums and losses. The reinsurers will remain liable for 30% of the paid losses occurring during the term of the treaty, until the treaty is commuted.  The Company’s private passenger automobile quota share treaties are typically one -year programs which become effective at different points in the year and cover auto policies across several states. These automobile quota share treaties cede 75% to 90% of all written premiums entered into by the Company.  Certain reinsurance agreements require FNIC to secure the credit, regulatory and business risk. Fully funded trust agreements securing these risks totaled $ 2.6 million as of December 31, 2016 and $3.5 million as of December 31, 2015.  Reinsurance Recoverables  Amounts recoverable from reinsurers are recognized in a manner consistent with the claims liabilities associated with the reinsurance placement and presented on the consolidated balance sheet as reinsurance recoverables. The following reinsurance recoverable is reflected in the consolidated balance sheets as of the dates presented as follows:      December 31,  2016 2015  (in thousands)  Reinsurance recoverable on paid losses $ 7,451 $ 5,218  Reinsurance recoverable on unpaid losses 41,079 7,496  Reinsurance recoverable, net $ 48,530 $ 12,714  Premiums Written and Earned  The following table presents premiums written and earned for the years ended December 31, 2016, 2015, and 2014:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Net premiums written:  Direct $ 605,485 $ 493,770 $ 377,156  Ceded (285,986) (268,516) (201,998)  $ 319,499 $ 225,254 $ 175,158  Net premiums earned:  Direct $ 565,423 $ 432,234 $ 313,075  Ceded (305,551) (222,214) (142,170)  $ 259,872 $ 210,020 $ 170,905  |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 12 Months Ended |
Dec. 31, 2016 | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES [Abstract] | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 6 . LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES  The liability for loss and LAE reserves is determined on an individual-case basis for all claims reported. The liability also includes amounts for unallocated expenses, anticipated future claim development and incurred but not yet reported (“IBNR”).  Activity in the liability for loss and LAE reserves is summarized as follows:       Year Ended December 31,  2016 2015 2014  (in thousands)  Gross reserves, beginning of period $ 97,340 $ 78,330 $ 61,016  Less: reinsurance recoverable (1) (7,496) (10,394) (2,313)  Net reserves, beginning of period 89,844 67,936 58,703   Incurred loss, net of reinsurance, related to:  Current year 174,795 113,819 79,932  Prior years 12,546 (9,466) 1,104  Total incurred loss and LAE, net of reinsurance 187,341 104,353 81,036   Paid loss, net of reinsurance, related to:  Current year 113,196 49,531 40,680  Prior years 56,958 32,914 31,123  Total paid loss and LAE, net of reinsurance 160,154 82,445 71,803   Net reserves, end of period 117,031 89,844 67,936  Plus: reinsurance recoverable (1) 41,079 7,496 10,394  Gross reserves, end of period $ 158,110 $ 97,340 $ 78,330  (1) Reinsurance recoverable in this table includes only ceded loss and LAE reserves.  The establishment of loss reserves is an inherently uncertain process and changes in loss reserve estimates are expected as such estimates are subject to the outcome of future events. The factors influencing changes in claim costs are often difficult to isolate or quantify and developments in paid and incurred losses from historical trends are frequently subject to multiple interpretations. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made.  During the year ended December 31, 2016, the Company experienced unfavorable loss and LAE reserve development on prior year accident years primarily in its all other peril homeowners’ coverage in Florida. The deficiency primarily relates to reserve development on prior year accident years and was related to the all other peril homeowners’ coverage in the state of Florida. The deficiency primarily relates to higher severity above the expected development factor anticipated at December 31, 2015 which was driven by the impact from assignment of benefits and other related adjusting expenses.  During the year ended December 31, 2015, the Company experienced a redundancy on prior year accident years primarily a result of continued favorable loss experience (mostly caused by decreased severity in reported claims) in the Company’s all other peril homeowners’ coverage caused in part by the absence of severe weather in Florida. Specifically, we have experienced better severity than expected on the 2014 and 2013 accident years.  The following tables provide incurred losses and allocated loss adjustment expenses (“ALAE”) as well as cumulative paid claims and ALAE, net of reinsurance, for the prior ten accident years for our largest lines of business, homeowners’’. In addition, as of the most recent reporting period, the total of IBNR reserves plus expected development on reported claims and the cumulative number of reported claims are presented (in thousands, except severity). The information about incurred and paid claims development for the years ended December 31, 2007 to December 31, 2015 is presented as supplementary information.       IBNR & expected Cumulative  Incurred losses and ALAE, net of reinsurance development on number of  For the years ended December 31, reported claims reported claims (1) Severity (2)  (unaudited)  Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2016 2016  2007 19,410 18,293 17,319 17,544 17,494 17,761 17,912 17,715 17,553 17,559 6 1,883 9,325  2008 18,305 15,784 15,811 15,977 15,659 16,021 15,661 15,604 15,609 4 1,705 9,155  2009 26,228 25,618 25,955 26,482 27,015 27,041 27,119 27,163 101 2,323 11,693  2010 24,825 25,056 26,151 27,895 28,968 29,407 29,945 34 2,348 12,753  2011 20,492 21,344 23,007 23,932 24,582 25,957 40 2,344 11,074  2012 23,032 23,301 24,186 24,468 25,889 326 2,579 10,038  2013 43,807 42,021 35,834 35,859 216 3,209 11,175  2014 64,312 63,300 61,770 2,222 5,679 10,877  2015 99,286 92,159 8,097 11,196 8,231  2016 168,875 48,663 20,923 8,071  Total $500,785      Cumulative paid losses and ALAE, net of reinsurance  For the years ended December 31,  (unaudited)  Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016  2007 11,358 15,352 16,160 16,783 17,027 17,291 17,429 17,443 17,509 17,519  2008 9,477 13,832 14,689 15,190 15,308 15,445 15,595 15,583 15,587  2009 15,047 23,095 24,657 26,007 26,462 26,831 26,927 26,982  2010 14,052 21,350 24,730 26,886 27,984 29,092 29,739  2011 11,119 19,250 21,323 22,723 24,047 25,580  2012 13,693 20,728 23,120 23,923 25,186  2013 19,986 31,606 33,867 35,123  2014 37,033 53,831 57,891  2015 52,190 76,169  2016 101,532  Total $414,308   All outstanding liabilities for unpaid claims and LAE prior to 2007, net of reinsurance 1,478  Total outstanding liabilities for unpaid claims and LAE, net of reinsurance $ 87,955  (1) The cumulative number of reported claims is measured by individual claimant at a coverage level. (2) Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars on reported claims. Note the older accident years are more developed than recent accident years.  The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in the consolidated balance sheets is as follows:       As of December 31, 2016  (in thousands)  Liabilities for unpaid losses and LAE:  Homeowners $ 87,955  Other lines 28,915  Total liabilities for unpaid losses and LAE, net of reinsurance 116,870   Reinsurance recoverables:  Homeowners 19,964  Other lines 21,115  Total reinsurance recoverables 41,079   Unallocated loss adjustment expenses 161  Gross liability for unpaid losses and LAE $ 158,110  Other lines include our CGL and personal automobile lines of business. Management performed a quantitative and qualitative assessment and determined that neither line of business met the guidelines for disaggregation, above.  Management establishes a liability on an aggregate basis to provide for the estimated IBNR. The estimates of the liability for loss and LAE reserves are subject to the effect of trends in claims severity and frequency and are continually reviewed. As part of this process, we review historical data and consider various factors, including known and anticipated legal developments , inflation and economic conditions. As experience develops and other data become available, these estimates are revised, as required, resulting in increases or decreases to the existing liability for loss and LAE reserves. Adjustments are reflected in results of operations in the period in which they are made and the liabilities may deviate substantially from prior estimates.  Various actuarial methods are utilized to determine the reserves that are booked to our financial statements. Weightings of tests and methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures and time elements. On an overall basis, changes to methods and/or assumptions underlying reserve estimations and selections as of December 31, 2016, were not considered material.  IBNR reserves are established for the quarter and year-end based on a quarterly reserve analysis by our actuarial staff. Various standard actuarial tests are applied to subsets of the business at a line of business and coverage basis. Included in the analyses are the following:  · Reported Loss Development Method : a reported loss development pattern is calculated based on historical loss development data, and this pattern is then used to project the latest evaluation of cumulative reported losses for each accident year or underwriting year, as appropriate, to ultimate levels;  · Paid Development Method : a paid loss development pattern is calculated based on historical paid loss development data, and this pattern is then used to project the latest evaluation of cumulative paid losses for each accident year or underwriting year, as appropriate, to ultimate levels;  · Expected Loss Ratio Method : expected loss ratios are applied to premiums earned, based on historical company experience, or historical insurance industry results when company experience is deemed not to be sufficient; and  · Bornhuetter-Ferguson Method : the results from the Expected Loss Ratio Method are essentially blended with either the Reported Loss Development Method or the Paid Development Method. Supplementary Information on Historical Loss and LAE Duration (Unaudited)  The following table provides supplementary information about the average annual percentage payout of incurred loss es and ALAE , net of reinsurance, as of December 31, 2016:      Average annual payout of losses and LAE, net of reinsurance  (unaudited)  Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10  Homeowners 53.4% 28.3% 7.4% 4.2% 2.2% 2.6% 1.0% 0.1% 0.4% 0.0% |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | 7 . LONG-TERM DEBT  On March 17, 2015, MNHC, our consolidated VIE, issued a promissory note with a principal amount of $5.0 million bearing 6% annual interest, due March 17, 2021 with interest payable on an annual basis due March 17 each year. The debt was issued to TransRe and is being carried at the unpaid principal balance; any accrued and unpaid interest is recognized in other liabilities in the consolidated statement of operations. In addition, the company recorded $0.1 million of debt issuance costs related to the 6% promissory note. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 8 . INCOME TAXES  The provision for income tax expense for the years ended December 31, 2016, 2015 and 2014 is as follows:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Federal:  Current $ 5,076 $ 15,523 $ 16,659  Deferred (2,771) 6,118 1,059  Federal income tax expense 2,305 21,641 17,718  State:  Current 674 2,489 2,204  Deferred (296) 623 186  State income tax expense 378 3,112 2,390  Total income tax expense $ 2,683 $ 24,753 $ 20,108  The actual income tax expense differs from the “expected” income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense) as follows:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Computed expected tax expense provision, at federal rate $ 957 $ 22,829 $ 19,887  State tax, net of federal tax benefit 85 2,291 1,696  Tax-exempt interest (571) (445) (312)  Income subject to dividends-received deduction (219) (109) (136)  Meals and entertainment 130 - -  Return to provision and rate changes 145 119 (1,027)  Prior year deferred tax true-up 2,163 - -  Other (7) 68 -  Total income tax expense $ 2,683 $ 24,753 $ 20,108  Income tax expense for the year ended December 31, 2016 was $2.7 million, which includes $2.2 million of additional tax expense related to a prior year adjustment impacting deferred taxes.  Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our net deferred tax liability are as follows:      Year Ended December 31,  2016 2015  (in thousands)  Deferred tax assets:  Unearned premiums $ 13,975 $ 9,375  Unpaid losses and loss adjustment expenses 1,612 1,175  Accrued expenses 692 694  Net operating loss carryforwards 7 140  Share-based compensation 582 606  Other 155 212  Total 17,023 12,202   Deferred tax liabilities:  Deferred acquisition costs (16,364) (11,906)  Unrealized gains on investment securities (1,277) (2,336)  Deferred revenue related to reinsurance - (3,395)  Depreciation and amortization (718) -  Other (97) (192)  Total (18,456) (17,829)   Net deferred tax liability $ (1,433) $ (5,627)  The Company files a federal income tax return and various state and local tax returns. The Company’s consolidated federal and state income tax returns for 2013 - 2015 are open for review by the Internal Revenue Service (“IRS”) and other state taxing authorities.  As of December 31, 2016 , 2015 , and 2014 , we have determined that there are no uncertain tax positions . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES  Legal Proceedings  In the ordinary course of conducting business, the Company is involved in various legal proceedings, specifically claims litigation. The company’s insurance subsidiaries participate in most of these proceedings by either defending third-party claims brought against insureds or litigating fir st-party coverage claims. The C ompany accounts for such activity through the establishment of loss and loss adjustment expense reserves. We believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, is immaterial to our consolidated financial statements. The Company is also occasionally involved in other legal and regulatory proceedings, some of which may assert claims for substantial amounts. These other legal proceedings may occasionally make us party to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such as claims alleging bad faith in the handling of insurance claims.  On a quarterly basis, the Company reviews these outstanding matters, if any. Consistent with GAAP, the Company establishes accruals when it is probable that a loss has been incurred and the Company can reasonably estimate its potential exposure. We record for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, the Company believes that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial statements.  On July 26, 2016, Mutual filed a demand for arbitration against the Company before the American Arbitration Association (“AAA”) alleging a breach of the Co-Existence Agreement. On November 29, 2016, the U.S. District Court for the Southern District of Florida granted Mutual’s motion to compel arbitration of the Company’s declaratory judgment action for non-infringement of a trademark. On February 3, 2017, the AAA granted the Company’s motion to terminate the arbitration for lack of jurisdiction based upon Mutual’s failure to comply with the Co-Existence Agreement’s regarding the selection of an arbitrator. The parties are currently in the process of conferring upon the selection of a mutually agreeable arbitrator. The Company nevertheless intends to vigorously defend against Mutual’s allegations, although there can be no assurances as to the outcome of this matter.  On March 2, 2017, the Company filed a complaint in Broward County, Florida court to enforce the terms of the restrictive covenants set forth in the Amended and Restated Non-Competition, Non-Disclosure and Non-Solicitation Agreement dated August 5, 2013, as amended, entered into between Peter J. Prygelski, III and the Company during Mr. Prygelski’s employment with the Company and set forth in the separation agreement he entered into in connection with his separation from the Company. The Company believes that he accepted employment with a competitor in contravention of these restrictive covenants and therefore the Company is seeking injunctive relief, declaratory relief and damages. The Company has not recognized a gain contingency in the financial statements as of December 31, 2016.  Assessment Related Activity  We operate in a regulatory environment where certain entities and organizations have the authority to require us to participate in assessments. Currently these entities and organizations include: Florida Insurance Guaranty Association (“FIGA”), Citizens Property Insurance Corporation (“Citizens”), FHCF, Florida Joint Underwriters Insurance Association (“JUA”), Georgia Insurers Insolvency Pool (“GIIP”), Special Insurance Fraud Fund (“SIIF”), Fair Access to Insurance Requirements Plan (“FAIRP”), Georgia Automobile Insurance Plan (“GAIP”), Property Insurance Association of Louisiana (“PIAL”), Louisiana Automobile Insurance Plan (“LAIP”), South Carolina Property & Casualty Insurance Guaranty Association (“SCPCIGA”), Texas Property and Casualty Insurance Guaranty Association (“TPCIGA”), Texas Windstorm Insurance Association (“TWIA”), Texas Automobile Insurance Plan Association (“TAIPA”), Alabama Insurance Guaranty Association (“AIGA”), and Alabama Insurance Un derwriters Association (“AIUA”) . As a direct premium writer in Florida, we are required to participate in certain insurer solvency associations under Florida law, administ ered by FIGA.  FNIC is also required to participate in an insurance apportionment plan under Florida law, which is referred to as a JUA Plan. The JUA Plan provides for the equitable apportionment of any profits realized, or losses and expenses incurred, among participating automobile insurers. In the event of an underwriting deficit incurred by the JUA Plan which is not recovered through the policyholders in the JUA Plan, such deficit shall be recovered from the companies participating in the JUA Plan in the proportion that the net direct written premiums of each such member during the preceding calendar year bear to the aggregate net direct premiums written in this state by all members of the JUA Plan. FNIC wa s not assessed by the JUA Plan.  Leases  The Company is committed under various operating lease agreements for office space. Rental expense for the years ended December 31, 2016 , 2015 and 2014 was $0.6 million, $0.7 million and $0.5 million, respectively. As of December 31, 2016 , the future minimum lease payments under these agreements are as follows:      Aggregate Minimum  Year Ended December 31, Lease Payments  (in thousands)  2017 $ 644  2018 662  2019 656  2020 678  2021 698  Thereafter 719  Total $ 4,057 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | 10. SHAREHOLDERS’ EQUITY  Common Stock Repurchases  In March 2016, our Board of Directors authorized a program to repurchase shares of common stock of FNHC, at such times and at prices as management determines advisable, up to an aggregate of $10.0 million through March 31, 2017. In November 2016, our Board of Directors authorized a program to repurchase shares of common stock of FNHC, at such times and at prices as management determines advisable, up to an aggregate of $10.0 million through March 1, 2017. Common stock repurchases are conducted in the open market or under Rule 10b5-1 trading plans from time to time in its discretion, based on ongoing assessments of the Company’s capital needs, the market price of its common stock and general market conditions . The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.  Pursuant to our Board of Directors’ authorizations, the Company repurchased 624,818 shares of its common stock at a total cost of $ 11.3 million, which is an average price per share of $19.23 , during the year ended December 31, 2016 .  Stock Compensation Plan  In April 2012, our Board of Directors adopted, and in September 2012 our shareholders approved, the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan permits the issuance of up to 1,000,000 shares of our common stock, subject to adjustment as provided for in the 2012 Plan, in connection with the grant of a variety of equity incentive awards, such as stock options and restricted stocks. Officers, directors, executive management and all other employees of the Company and its subsidiaries are eligible to participate in the 2012 Plan. Awards may be granted singly, in combination, or in tandem. The 2012 Plan will expire on April 5, 2022 .  Share-Based Compensation Expense  The following table provides certain information in connection with the Company’s share-based compensation arrangements as follows:      Year Ended  December 31,  2016 2015 2014  (in thousands)  Restricted stock $ 3,831 $ 2,930 $ 1,525  Stock options — 33 135  Total share-based compensation expense $ 3,831 $ 2,963 $ 1,660   Intrinsic value of options exercised $ 13,732 $ 1,124 $ 5,172  Fair value of restricted stock vested $ 41,495 $ 2,303 $ 549  The intrinsic value of options exercised represents the difference between the stock option exercise price and the weighted average closing stock price of FNHC common stock on the exercise dates, as reported on The NASDAQ Global Market.  The unamortized share-based compensation expense is $5.6 million for the year ended December 31, 2016 , which will be recognized over the remaining weighted average vesting period of approximately 1.76 years.   Stock Option Awards  A summary of the Company’s stock option activity for the period from January 1, 2014 to December 31, 2016 is as follows:      Number of Shares Weighted Average Option Exercise Price  Outstanding at January 1, 2014 526,521 $ 4.56  Granted — $ —  Exercised (302,735) $ 5.13  Cancelled (4,501) $ 3.49  Outstanding at December 31, 2014 219,285 $ 3.79  Granted — $ —  Exercised (44,652) $ 3.81  Cancelled — $ —  Outstanding at December 31, 2015 174,633 $ 3.79  Granted — $ —  Exercised (94,249) $ 3.85  Cancelled (900) $ 4.40  Outstanding at December 31, 2016 79,484 $ 3.70  A following table summarizes information about stock options outstanding and exercisable in a select price range as of December 31, 2016 :     Options Outstanding and Exercisable  Weighted Average  Remaining  Shares Outstanding Contractual Life Weighted Average Aggregate  Range of Exercise Price and Exercisable (years) Exercise Price Intrinsic Value  $2.45 - $4.40 79,484 4.87 3.70 1,191,218  Restricted Stock  During the years ended December 31, 2016 , 2015 and 2014 , the restricted stock awards issued have been granted to executives, directors and other key employees. The shares granted typically vest in equal portions over three or five years. A summary of the Company’s restricted stock activity for the period from January 1, 2014 to December 31, 2016 is as follows:      Number of Shares Weighted Average Grant Date Fair Value  Outstanding at January 1, 2014 249,500 $ 8.24  Granted 268,648 $ 22.50  Vested (68,988) $ 7.96  Cancelled (1,359) $ 8.29  Outstanding at December 31, 2014 447,801 $ 16.84  Granted 116,140 $ 27.53  Vested (145,134) $ 15.87  Cancelled — $ —  Outstanding at December 31, 2015 418,807 $ 20.14  Granted 128,472 $ 19.16  Vested (204,916) $ 20.25  Cancelled (5,160) $ 20.58  Outstanding at December 31, 2016 337,203 $ 19.69  The weighted average grant date fair value is measured at the closing price of FNHC common stock on the grant date, as repo rted on the NASDAQ Global Market.  Accumulated Other Comprehensive Income  The following table presents a reconciliation of the changes in accumulated other comprehensive income during the years ended December 31, 2016 and 2015 :      Year Ended December 31,  2016 2015  Before Tax Income Tax Net Before Tax Income Tax Net  (in thousands)  Accumulated other comprehensive income,  beginning of period $ 6,111 $ (2,247) $ 3,864 $ 12,419 $ (4,701) $ 7,718  Other comprehensive income before reclassifications 1,774 (470) 1,305 (324) 86 (238)  Reclassification adjustment for realized gains included  in net (loss) income (4,560) 1,515 (3,045) (5,984) 2,368 (3,616)  (2,786) 1,046 (1,740) (6,308) 2,454 (3,854)  Accumulated other comprehensive income, end of period $ 3,323 $ (1,199) $ 2,124 $ 6,111 $ (2,247) $ 3,864 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLAN [Abstract] | |
EMPLOYEE BENEFIT PLAN | 11. EMPLOYEE BENEFIT PLAN  The Company sponsors a profit sharing plan under Section 401(K) of the Internal Revenue Code, which is a defined contribution plan that allows employees to defer compensation through contributions to the 401(K) Plan. This plan covers substantially all employees who meet specified service requirements and includes a 100% match up to the first 6% of an employee’s salary, not to exceed statutory limits. Additionally, the Company may make additional prof it-sharing contributions. For the year ended December 31, 2016, there was no additional profit-sharing contribution. For the year ended December 31, 2015, the Company made an additional contribution of 1% of an employee’s salary.  The Company’s total contributions to the 401(K) Plan were $0.9 million, $0.6 million and $0.4 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS  The following is a summary of the related party transactions entered into by the Company for the years ended December 31, 2016 , 2015 and 2014 .  The Company entered into catastrophe excess of loss and quota share reinsurance agreements with TransRe. For the years ended December 31, 2016 , 2015 and 2014 , the Company ceded premiums related to these agreements totaling $5.0 million, $4.3 million and $1.2 million , respectively. In connection with Hurricane Matthew and the quota share agreements, we have ceded losses of $0.8 million and $0.1 million for the years ended December 31, 2016 and 2015 relating to these agreements. For the years ended December 31, 2014, there were no ceded losses relating to these agreements.  Bruce F. Simberg, the Company’s Chairman of the Board, is a partner of the Hollywood, Florida law firm of Conroy Simberg, which specializes in insurance defense and coverage matters. The Company paid legal fees to Conroy Simberg for services rendered in the amount of $72,198 , $26,286, and $6,538 for the years ended December 31, 2016 , 2015 , and 2014 , respectively. We believe that the fees charged for services provided by Conroy Simberg are on terms at least as favorable as those that we could secure from a non-affiliated law firm. The firm has handled only a limited number of matters for the Company. Mr. Simberg has not been personally involved in any of the legal matters handled by the firm for the Company and he received de minimis direct personal benefit from the fees paid to the firm by the Company. The matters handled by the firm for the Company as of December 31, 2016 have been completed or are in the process of being completed, and the Company does not at this time anticipate retaining the firm for future matters.  For the years ended December 31, 2016 and 2015 , the Company paid investment fees to Crosswinds AUM, LLC, a wholly owned subsidiary of Crosswinds, totaling $0.2 m illion and $0.2 million , respectively.  Refer to Note 7 for information relating to the debt owed to TransRe. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 13. EARNINGS PER SHARE  The following table illustrates our computations of basic and diluted net income per share.      Year Ended  December 31,  2016 2015 2014  (in thousands, except per share data)  Net (loss) income attributable to Federated National Holding  Company shareholders $ (196) $ 40,885 $ 37,199  Weighted average number of common shares outstanding -  basic 13,758 13,729 12,082  Net (loss) income per share - basic $ (0.01) $ 2.98 $ 3.08   Weighted average number of common shares outstanding -  basic 13,758 13,729 12,082  Dilutive effect of stock compensation plans - 268 356  Weighted average number of common shares outstanding -  diluted 13,758 13,997 12,438  Net (loss) income per share - diluted $ (0.01) $ 2.92 $ 2.99   Dividends per share $ 0.27 $ 0.18 $ 0.13 |
VARIABLE INTEREST ENTITY
VARIABLE INTEREST ENTITY | 12 Months Ended |
Dec. 31, 2016 | |
Variable Interest Entity [Abstract] | |
VARIABLE INTEREST ENTITY | 14. VARIABLE INTEREST ENTITY  The carrying amounts of Monarch Delaware, our consolidated VIE, assets, which can only be used to settle obligations of Monarch Delaware, and liabilities of Monarch Delaware for which creditors do not have recourse are as follows:       December 31,  2016 2015  ASSETS (in thousands)  Investments  Debt securities, available-for-sale, at amortized cost $ 27,100 $ 21,312  Equity securities, available-for-sale, at fair value 1,604 1,358  Total investments 28,704 22,670   Cash and cash equivalents 15,668 14,616  Prepaid reinsurance premiums 1,070 34  Premiums receivable, net 1,584 355  Other assets 1,910 1,037  Total assets $ 48,936 $ 38,712   LIABILITIES  Loss and loss adjustment expense reserves $ 1,659 $ 237  Unearned premiums 8,406 1,448  Reinsurance payable 864 —  Debt 4,909 4,887  Income taxes payable — 8  Other liabilities 1,026 374  Total liabilities $ 16,864 $ 6,954 |
STATUTORY ACCOUNTING AND DIVIDE
STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2016 | |
STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS [Abstract] | |
STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS | 15. STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS  The Company’s insurance companies are subject to regulations and standards of the Florida OIR. These standards require that insurance companies prepare statutory-basis financial statements in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual. The Company did not use any prescribed or permitted statutory accounting practices that differed from the National Association of Insurance Commissioners’ statutory accounting practices as of December 31, 2016 .  The Company’s insurance companies are required to report their risk-based capital (“RBC”) each December 31. Failure to maintain an adequate RBC could subject the Company to regulatory action and could restrict the payment of dividends. As of December 31, 2016 , the RBC levels of the Company’s insurance companies did not subject them to any regulatory action.  Additionally, Florida Statutes require the Company’s insurance companies to maintain specified levels of statutory capital and restrict the timing and amount of dividends and other distributions that may be paid to the parent company. These standards require dividends to be paid only from statutory unassigned surplus. The maximum dividend that may be paid by the Company’s insurance companies to their parent company, without prior regulatory approval is limited to the lesser of statutory net income from operations of the preceding calendar year, not including realized capital gains, plus a 2 -year carryforward or 10.0% of statutory unassigned surplus as of the preceding year end. A dividend may also be taken without prior regulatory approval if (a) the dividend is equal to or less than the greater of (i) Ten percent of the insurer’s surplus as to policyholders derived from realized net operating profits on its business and net realized capital gains; or (ii) the insurer’s entire net operating profits and realized net capital gains derived during the immediately preceding calendar year; (b) the insurer will have surplus as to policyholders equal to or exceeding 115 percent of the minimum required statutory surplus as to policyholders after the dividend or distribution is made; and (c) the insurer has filed notice with the office at least 10 business days prior to the dividend payment or distribution, or such shorter period of time as approved by the Florida OIR on a case-by-case basis. These dividends are referred to as “ordinary dividends.” However, if a dividend, together with other dividends paid within the preceding twelve months, exceeds this statutory limit or is paid from sources other than earned surplus, the entire dividend is generally considered an “extraordinary dividend” and must receive prior regulatory approval before such dividend can be paid.  As of December 31, 2016 and 2015 , on a consolidated statutory basis, the capital and surplus of the Company’s insurance companies was $172.1 million and $175.9 million, respectively. For the year ended December 31, 2016 consolidated statutory net loss of the Company’s insurance companies was $37.0 million. For the years ended December 31, 2015, and 2014, consolidated statutory net income of the Company’s insurance companies was $23.9 million and $29.3 million , respectively. Statutory capital and surplus significantly exceeds amounts necessary to satisfy regulatory requirements. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY RESULTS OF OPERATIONS [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS | 16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)  The following is a summary of unaudited quarterly results of operations:      First Second Third Fourth  Quarter Quarter Quarter Quarter  (in thousands, except per share data)  2016  Net premiums earned $ 54,997 $ 60,045 $ 69,405 $ 75,425  Total revenue $ 68,960 $ 75,064 $ 83,790 $ 88,570  Losses and loss adjustment expenses $ 29,545 $ 47,025 $ 43,613 $ 67,158  Total costs and expenses $ 53,562 $ 73,249 $ 82,250 $ 104,590  Net (loss) income attributable to Federated National Holding Company shareholders $ 9,535 $ 991 $ 1,394 $ (12,116)  Net (loss) income per share - basic $ 0.69 $ 0.07 $ 0.10 $ (0.89)   2015  Net premiums earned $ 44,786 $ 49,227 $ 62,286 $ 53,721  Total revenue $ 54,936 $ 58,790 $ 72,599 $ 63,568  Losses and loss adjustment expenses $ 23,949 $ 23,149 $ 28,412 $ 28,843  Total costs and expenses $ 40,452 $ 40,151 $ 54,974 $ 49,123  Net income attributable to Federated National Holding Company shareholders $ 9,284 $ 11,734 $ 10,593 $ 9,274  Net income per share - basic $ 0.68 $ 0.86 $ 0.77 $ 0.67 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS  On March 1, 2017, the Company entered into a Reimbursement Contract with the State Board of Administration of Florida (“SBA”) for the 2017 – 2018 hurricane season. The SBA is the agency that administers the FHCF. The Contracts will reimburse FNIC and MNIC for covered property losses under their respective homeowners’ insurance policies resulting from hurricanes that cause damage in the State of Florida, from June 1, 2017 through May 31, 2018.  On March 1, 2017, in connection with the Company’s review of its subsidiaries’ financial condition and capital resources as of the end of the 2016 fiscal year, the Company’s Board of Directors approved $25.0 million of capital to be transferred into FNIC from FNHC to support FNIC’s book of business and regulatory requirements.  On March 10, 2017, our Board of Directors authorized an additional $10 million share buyback program to repurchase shares of common stock through March 8, 2018. The Company may repurchase shares in open market transactions or under Rule 10b5-1 trading plans from time to time in its discretion, based on ongoing assessments of the Company’s capital needs, the market price of its common stock and general market conditions. The Company will fund the share repurchase program with cash from operations.  On March 13, 2017 , we announced that the Company’s Board of Directors approved a dividend of $0.08 per share, which will be paid on June 1, 2017 to shareholders on record as of May 1, 2017 . |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II - Condensed Financial Information of Registrant [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | Sche dule II – Condensed Financial Information of Registrant Condensed Balance Sheets FEDERATED NATIONAL HOLDING COMPANY (Parent Company Only) December 31, 201 6 and 201 5      December 31,  2016 2015  ASSETS (in thousands)  Investments in subsidiaries $ 283,669 $ 282,504  Investments securities, available-for-sale, at fair value 31,750 25,649  Cash and cash equivalents 7,786 2,397  Deferred income taxes, net — 485  Income taxes receivable 9,811 10,471  Other assets 2,030 1,506  Total assets $ 335,046 $ 323,012   LIABILITIES AND SHAREHOLDERS’ EQUITY  Due to subsidiaries $ 93,653 $ 70,079  Deferred income taxes, net 1,642 —  Other liabilities 1,895 2,174  Total liabilities 97,190 72,253   Preferred stock — —  Common stock 134 138  Additional paid-in capital 136,779 131,998  Accumulated other comprehensive income 1,941 3,985  Retained earnings 80,275 96,461  Total shareholders’ equity attributable Federated National Holding Company shareholders 219,129 232,582  Noncontrolling interest 18,727 18,177  Total shareholders’ equity 237,856 250,759  Total liabilities and shareholders’ equity $ 335,046 $ 323,012  See accompanying note to condensed financial statements. Schedule II – Condensed Financial Information of Registrant (continued) Condensed Statements of Earnings FEDERATED NATIONAL HOLDING COMPANY (Parent Company Only)     Year Ended December 31,  2016 2015 2014  (in thousands)  Revenue:  Management fees $ 2,492 $ 2,489 $ 2,387  Net investment income 623 609 417  Equity in income of consolidated subsidiaries 9,480 71,905 61,653  Total revenue 12,595 75,003 64,457   Costs and expenses:  General and administrative expenses 9,862 9,810 7,150  Total costs and expenses 9,862 9,810 7,150   Income before income taxes 2,733 65,193 57,307  Income taxes 2,683 24,753 20,108  Net income 50 40,440 37,199  Net income (loss) attributable to noncontrolling interest 246 (445) —   Net (loss) income attributable to Federated National Holding Company shareholders $ (196) $ 40,885 $ 37,199  See accompanying note to condensed financial statements.  Schedule II – Condensed Financial Information of Registrant (continued) Condensed Statements of Cash Flows FEDERATED NATIONAL HOLDING COMPANY (Parent Company Only)     Year Ended December 31,  2016 2015 2014  (in thousands)  Cash flow from operating activities:  Net income $ 50 $ 40,440 $ 37,199  Adjustments to reconcile net income to net cash provided by (used in) operating activities:  Equity in undistributed income of consolidated subsidiaries (9,480) (71,905) (61,653)  Depreciation and amortization 73 64 92  Share-based compensation 4,420 4,527 2,140  Changes in operating assets and liabilities:  Deferred income taxes, net of other comprehensive (loss) income 2,127 (153) 674  Income taxes receivable, net 2,978 24,352 16,521  Capital contribution payable — (18,501) 2,501  Due to subsidiaries 23,574 6,430 (2,069)  Other, net 3,786 2,057 4,460  Net cash provided by (used in) operating activities 27,528 (12,689) (135)   Cash flow from investing activities:  Capital contributions to consolidated subsidiaries, net — (32,743) (18,501)  Sales, maturities and redemptions of investments securities 76,928 38,612 22,414  Purchases of investment securities (83,724) (21,354) (36,949)  Purchases from property and equipment (299) (113) (391)  Net cash used in investing activities (7,095) (15,598) (33,427)  Cash flow from financing activities:  Noncontrolling interest equity investment — 18,743 —  Tax benefit related to share-based compensation 589 1,564 480  Issuance of common stock for share-based awards 361 171 1,555  Issuance of common stock in public offering — — 43,109  Purchases of FNHC common stock (11,317) — —  Dividends paid (4,677) (1,847) (1,672)  Net cash (used in) provided by financing activities (15,044) 18,631 43,472  Net (decrease) increase in cash and cash equivalents 5,389 (9,656) 9,910  Cash and cash equivalents at beginning of period 2,397 12,053 2,143  Cash and cash equivalents at end of period $ 7,786 $ 2,397 $ 12,053  See accompanying note to condensed financial statements. Schedule II – Condensed Financial Information of Registrant (continued) Note to Condensed Financial Statements FEDERATED NATIONAL HOLDING COMPANY (Parent Company Only)  (1) ORGANIZATION AND BASIS OF PRESENTATION  FNHC, the Parent Company, is an insurance holding company that controls substantially all steps in the insurance underwriting, distribution and claims processes through our subsidiaries and our contractual relationships with our independent agents and general agents.  The accompanying condensed financial statements include the activity of the Parent Company and, on an equity basis, its consolidated subsidiaries. Accordingly, these condensed financial statements have been presented for the parent company only. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of FNHC and subsidiaries set forth in Part II, Item 8 “Financial Statements and Supplemental Data” of this Form 10-K.  In applying the equity method to our consolidated subsidiaries, we record the investment at cost and subsequently adjust for additional capital contributions, distributions and proportionate share of earnings or losses.  Certain amounts in prior year’s condensed financial statements have been reclassified to conform to the 201 6 presentation. |
Schedule V - Valuation and Qual
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Schedule V - Valuation and Qualifying Accounts [Abstract] | |
Schedule V - Valuation and Qualifying Accounts | Sched ule V – Valuation and Qualifying Accounts FEDERATED NATIONAL HOLDING COMPANY AND SUBSIDIARIES     Charged to  Balance at Costs and Balance at  Year Description January 1, Expenses Deductions December 31,  (in thousands)  2016 Allowance for uncollectible reinsurance recoverable $ — $ — $ — $  Allowance for uncollectible premiums receivable $ 302 $ (219) $ (28) $ 55  2015 Allowance for uncollectible reinsurance recoverable $ — $ — $ — $ —  Allowance for uncollectible premiums receivable $ 148 $ 192 $ (38) $ 302  2014 Allowance for uncollectible reinsurance recoverable $ — $ — $ — $ —  Allowance for uncollectible premiums receivable $ 143 $ 45 $ (40) $ 148  |
Schedule VI - Supplemental Info
Schedule VI - Supplemental Information Concerning Insurance Operations | 12 Months Ended |
Dec. 31, 2016 | |
Schedule VI - Supplemental Information Concerning Insurance Operations [Abstract] | |
Schedule VI - Supplemental Information Concerning Insurance Operations | Sch edule VI – Supplemental Information Concerning Insurance Operations FEDERATED NATIONAL HOLDING COMPANY AND SUBSIDIARIES      At December 31, For the Year Ended December 31,   Loss and Claim and Claim  Loss Adjustment Expenses Amortization Paid Claims  Deferred Adjustment Net Incurred Related to of Deferred and Claim  Line of Acquisition Expense Unearned Earned Investment Current Prior Acquisition Adjustment Premiums  Year Business Costs Reserves Premiums Premiums Income Year Year Costs Expenses Written  (in thousands)  2016 Property and Casualty Insurance $ 38,962 $ 158,110 $ 294,022 $ 259,872 $ 9,063 $ 174,795 $ 12,546 $ 75,850 $ 160,154 $ 319,499  2015 Property and Casualty Insurance $ 15,547 $ 97,340 $ 253,960 $ 210,020 $ 7,226 $ 113,819 $ (9,466) $ 37,276 $ 82,445 $ 225,254  2014 Property and Casualty Insurance $ 13,610 $ 78,330 $ 192,424 $ 170,905 $ 5,385 $ 79,932 $ 1,104 $ 27,474 $ 71,803 $ 175,158  |
ORGANIZATION, CONSOLIDATION A28
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION [Abstract] | |
Significant Customer | Significant Customer  We entered into an Insurance Agency Master Agreement with Ivantage Select Agency, Inc., (“ISA”), an affiliate of Allstate Insurance Company (“Allstate”), pursuant to which we are authorized by ISA to appoint Allstate agents to offer our homeowners’ and commercial general liability insurance products to consumers in Florida. As a percentage of the total homeowners’ premiums we underwrote in the years ended December 31, 2016 , 2015, and 2014, 24.1% , 25.4% , and 20.5% , respectively, were from Allstate’s network of Florida agents. |
Principles of Consolidation | Principles of Consolidation  The accompanying consolidated financial statements include the accounts of FNHC and all other entities in which we have a controlling financial interest and any variable interest entities (“VIE”) in which we are the primary beneficiary. All material inter-company accounts and transactions have been eliminated in consolidation. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements.  In connection with the investment in Monarch Delaware, we have determined that we are the primary beneficiary of this VIE, as we possess the power to direct the activities of the VIE that most significantly impact its economic performance. Accordingly, we consolidate the VIE in our consolidated financial statements. Refer to Note 14 for additional information on the VIE. |
Basis of Presentation | Basis of Presentation  The accompanying consolidated financial statements are prepared in accordance with United States of America Generally Accepted Accounting Principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below . |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES [Abstract] | |
Accounting Estimates and Assumptions | Accounting Estimates and Assumptions  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates.  Similar to other property and casualty insurers, our liability for losses and loss adjustment expense reserves, although supported by actuarial projections and other data, is ultimately based on management’s reasoned expectations of future events. Although considerable variability is inherent in these estimates, we believe that this liability is adequate. Estimates are reviewed regularly and adjusted as necessary. Such adjustments are reflected in current operations.  |
Fair Value | Fair Value  The fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. Alternative valuation techniques may be appropriate under the circumstances to determine the value that would be received to sell an asset or pay to transfer a liability in an orderly transaction. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Our nonperformance or credit risk is considered in determining the fair value of liabilities. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.  Refer to Note 3 for additional information regarding fair value. |
Investment | Investments  Investments consist of debt and equity securities. Debt securities consist of securities with an initial fixed maturity, which include corporate bonds, municipal bonds and United States government bonds. Equity securities generally consist of securities that represent ownership interests in an enterprise. The Company determines the appropriate classification of investments in debt and equity securities at the acquisition date and re-evaluates the classification at each balance sheet date.  Held-to-maturity investments are recorded at the amortized cost, reflecting the ability and intent to hold the securities to maturity. All other securities were classified as available-for-sale and recorded at fair value. Unrealized gains and losses during the year, net of the related tax effect applicable to available-for-sale, are excluded from income and reflected in other comprehensive income, and the cumulative effect is reported as a separate component of shareholders’ equity until realized. If a decline in fair value is deemed to be other-than-temporary, the investment is written down to its fair value and the amount of the write-down is recorded as an other-than-temporary impairment (“O TTI”) loss on the statement of operations . In addition, any portion of such decline related to debt securities that is believed to arise from factors other than credit is recorded as a component of other comprehensive income rather than against income.  Net realized gains and losses on investments are determined in accordance with the specific identification method.  Net investment income consists primarily of interest income from debt securities, cash and cash equivalents, including any premium amortization or discount accretion and dividend income from equity securities; less expenses related to investments.  Refer to N ote 4 for additional information regarding investments. |
Cash and Cash Equivalents | Cash and Cash Equivalents  Cash and cash equivalents consist of all deposit balances with a bank that are available for immediate withdrawal and highly liquid investments. All investments with maturities of three months or less at the date of the purchase are considered cash equivalents. |
Premiums and Unearned Premiums |  Premiums and Unearned Premiums  Premiums are recognized as revenue on a pro-rata basis over the term of an insurance policy. Assumed reinsurance premiums written and earned are based on reports received from ceding companies for pro-rata treaty contracts and are generally recorded as written based on contract terms for excess-of-loss and quota share contracts. Premiums are earned ratably over the terms of the related coverage.  Unearned premiums and ceded unearned premiums represent the portion of gross premiums written and ceded premiums written, respectively, relating to the unexpired terms of such coverage.  Premium receivable balances are reported net of an allowance for estimated uncollectible premium amounts. Such allowance is based upon an ongoing review of amounts outstanding, length of collection periods, the creditworthiness of the insured and other relevant factors. Amounts deemed to be uncollectible are written off against the allowance. |
Reinsurance | Reinsurance  Reinsurance is used to mitigate the exposure to losses, manage capacity and protect capital resources. Reinsuring loss exposures does not relieve a ceding entity from its obligations to policyholders and cedants. Reinsurance recoverables (including amounts related to claims incurred but not reported) and ceded unearned premiums are reported as assets. To minimize exposure to losses from a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of the reinsurer, the collectability of the reinsurance recoverables is evaluated (and where appropriate, whether an allowance for estimated uncollectible reinsurance recoverables is to be established) based upon a number of other factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible are written off against the allowance for estimated uncollectible reinsurance recoverables. The Company currently has no allowances for uncollectible reinsurance recoverables.  Ceded premiums written are recorded in accordance with applicable terms of the various reinsurance contracts and ceded premiums earned are charged against revenue over the period of the various reinsurance contracts. This also generally applies to reinstatement premiums paid to a reinsurer, which arise when contractually-specified ceded loss triggers have been breached. Ceded commissions reduce commissions, brokerage and other underwriting expenses and ceded losses incurred reduce net loss and loss adjustment expense incurred over the applicable periods of the various reinsurance contracts with third party reinsurers. If premiums or commissions are subject to adjustment (for example, retrospectively-rated or experience-rated), the estimated ultimate premium or commission is recognized over the period of the contract.  Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured business and consistent with the terms of the underlying reinsurance contract.  |
Direct Written Policy Fees | Direct Written Policy Fees  Policy fees represent a non-refundable application fee for insurance coverage, which are intended to reimburse us for the costs incurred to underwrite the policy. Policy fees are recognized on the effective date of the insurance policy. |
Other Income |  Other Income  Other income represents primarily brokerage and commission related income from our personal automobile line of business and agency operations. The commission income from our personal automobile line of business is made up of ceded commission income and fee income for administration and claims handling services. The income associated with ceded commission and fee income is recognized over the respective terms of the contracts. The fees associated with the administrative services is recognized upfront upon policy inception. Commission income from our agency operations are recognized upfront upon policy inception. |
Deferred Acquisition Costs | Deferred Acquisition Costs  Deferred Acquisition Costs (“DAC”) represent those costs that are incremental and directly related to the successful acquisition of new or renewal of existing insurance contracts. The Company defers incremental costs that result directly from, and are essential to, the acquisition or renewal of an insurance contract. Such DAC generally include agent or broker commissions, referral fees, premium taxes, medical and inspection fees that would not have been incurred if the insurance contract had not been acquired or renewed. Each cost is analyzed to assess whether it is fully deferrable.  The Company also defers a portion of the employee total compensation and payroll-related fringe benefits directly related to time spent performing specific acquisition or renewal activities, including costs associated with the time spent on underwriting, policy issuance and processing, and sales force contract selling  The acquisition costs are deferred and amortized over the period in which the related premiums written are earned, generally 12 months. It is grouped consistent with the manner in which the insurance contracts are acquired, serviced and measured for 6 or profitability and is reviewed for recoverability based on the profitability of the underlying insurance contracts. Investment income is anticipated in assessing the recoverability of DAC. The Company assesses the recoverability of DAC on an annual basis or more frequently if circumstances indicate impairment may have occurred.  |
Property and Equipment | Property and Equipment  Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using a straight-line method over the estimated useful lives, ranging from 3 to 15 years. Repairs and maintenance are charged to expense as incurred.  The Company accounts for internal-use software development costs in accordance with accounting guidelines which state that software costs, including internal payroll costs, incurred in connection with the development or acquisition of software for internal use is charged to expense as incurred until the project enters the application development phase. Costs incurred in the application development phase are capitalized and are depreciated using the straight-line method over an estimated useful life of 5 years, beginning when the software is ready for use. |
Losses and Loss Adjustment Expenses | Losses and Loss Adjustment Expenses (“LAE”)  The reserves for loss and loss adjustment expense (“LAE”) represent management’s best estimate of the ultimate cost of all reported and unreported losses incurred through the balance sheet date. Such liabilities are determined based upon our assessment of claims pending and the development of prior years’ loss liability. These amounts include liabilities based upon individual case estimates for reported losses and LAE’s and estimates of such amounts that are incurred but not yet reported (“IBNR”). Changes in the estimated liability are charged or credited to operations as the losses and LAE’s are settled.  The estimates of the liability for loss and LAE reserves are subject to the effect of trends in claims severity and frequency and are continually reviewed. As part of this process, we review historical data and consider various factors, including known and anticipated legal developments, inflation and economic conditions. As experience develops and other data become available, these estimates are revised, as required, resulting in increases or decreases to the existing liability for loss and loss adjustment expense reserves. Adjustments are reflected in results of operations in the period in which they are made and the liabilities may deviate substantially from prior estimates. |
Income Taxes | Income Taxes  Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss, capital loss and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. |
Share-based Compensation | Share-based Compensation  The Company accounts for share-based compensation based on the estimated grant date fair value. The Company grants awards with service only conditions and generally amortizes them on a straight-line over the requisite service period of the award, which is the vesting term. The fair value of the restricted stock grants is determined based on the closing market price on the date of grant. Non-employee directors are treated as employees for accounting purposes . |
Basic and Diluted Net Income per Share |  Basic and Diluted Net Income per Share  Basic net income per share is computed by dividing net (loss) income available to common shareholders by the weighted average number of common shares, while diluted net income per share is computed by dividing net income available to common shareholders by the weighted average number of such common shares and dilutive share equivalents result from the assumed exercise of employee stock options and vesting of restricted common stock and are calculated using the treasury stock method. |
Reclassifications | Reclassifications  Certain amounts in prior year’s consolidated financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on the reported results of operations, financial condition, and cash flows. In the current period, the Company concluded it was appropriate to present reinsurance assets and reinsurance payables separately on the consolidated balance sheets and statements of cash flows. The Company believes this reclassification provide greater clarity and insight into the consolidated financial statements for the periods presented. |
Adopted and Recent Accounting Pronouncements | Adopted Accounting Pronouncements  In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 amended the consolidation guidance by modifying the evaluation criteria for whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminating the presumption that a general partner should consolidate a limited partnership, and affecting the consolidation analysis of reporting entities that are involved with variable interest entities. We adopted the provisions of ASU 2015-02 effective January 1, 2016 and re-evaluated all legal entity investments under the revised consolidation model. The adoption of ASU 2015-02 did not have any impact on our consolidated financial statements.  In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest . ASU 2015-03 reduces the complexity of disclosing debt issuance costs and debt discount and premium on the balance sheet by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The Company adopted this ASU retrospectively as of January 1, 2016. Other assets and debt from consolidated variable interest entity have been reclassified to be consistent with the adoption of this standard, which resulted in a reduction of $0.1 million each. There were no changes to shareholders’ equity as a result of this adoption. There were no other impacts on the Company’s consolidated financial statements.  In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosures about Short-Duration-Contracts . The amendments in this ASU apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Services—Insurance . The amendments require insurance entities to disclose for annual reporting periods information on the liability for unpaid claims and claim adjustment expenses. The amendments in this ASU are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. The disclosure requirements of this guidance were adopted; see Note 6 Loss and Loss Adjustment Expense Reserves for further details.  Recent Accounting Pronouncements  In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This authoritative guidance replaces all general and most industry specific revenue recognition guidance (excluding insurance) currently prescribed by U.S. GAAP. The core principle is that an entity recognizes revenue to reflect the transfer of a promised good or service to customers in an amount that reflects that consideration to which the entity expects to be entitled in exchange for that good or service. This guidance also provides clarification on when an entity is a principal or an agent in a transaction. The guidance may be applied using one of the two following methods: (1) retrospectively to each prior reporting periods presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. In addition, during 2016 the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12, all of which clarify certain implementation guidance within ASU 2014-09. We will adopt this accounting standard update effective January 1, 2018. While we are currently evaluating the method of adoption and the impact of the provisions of this accounting standard update, only a portion of our revenue s are impacted by this guidance because the guidance does not apply to revenue on contracts accounted for under the financial instruments or insurance contracts standards. Our evaluation process includes, but is not l imited to, identifying contracts within the scope of the guidance , reviewing and documenting our accounting for these contracts, and identifying and determining the accounting for any related contract costs.  In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, this new guidance requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. This new guidance is effective for annual reporting periods beginning after December 15, 2017. We are currently evaluating the impact the adoption of this standard would have on the Company’s consolidated financial statements.  In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Upon the effective date, ASU 2016-02 will supersede the current lease guidance in Topic 840, Leases . Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. This guidance will require us to add our operating leases to the balance sheet. We are currently evaluating other impacts this guidance will have on our consolidated financial statements .  In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The guidance will be adopted on a prospective basis as indicated by the guidance for each area of change and will not have a material impact on our consolidated financial statements.  In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which significantly changes the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as currently performed under the other-than-temporary impairment model. Additionally, the standard will require enhanced disclosures for financial assets measured at amortized cost and available-for-sale debt securities to help the financial statement users better understand significant judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effects the adoption of ASU 2016-13 will have on the Company’s consolidated financial statements.  In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 provides guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Current GAAP does not include specific guidance on these eight cash flow classification issues. The amendments of this ASU are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the effect that ASU 2015-16 will have on its consolidated financial statements and related disclosures. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE [Abstract] | |
Financial Instruments Measured at Fair Value |    December 31, 2016  Level 1 Level 2 Level 3 Total  (in thousands)  Debt securities:  United States government obligations and authorities $ 36,560 $ 25,645 $ — $ 62,205  Obligations of states and political subdivisions — 151,183 — 151,183  Corporate — 149,505 — 149,505  International — 11,863 — 11,863  36,560 338,196 — 374,756   Equity securities 28,960 415 — 29,375   Total investments $ 65,520 $ 338,611 $ — $ 404,131      December 31, 2015  Level 1 Level 2 Level 3 Total  (in thousands)  Debt securities:  United States government obligations and authorities $ 34,733 $ 26,820 $ — $ 61,553  Obligations of states and political subdivisions — 110,702 — 110,702  Corporate — 154,620 — 154,620  International — 12,303 — 12,303  34,733 304,445 — 339,178   Equity securities 38,012 522 — 38,534   Total investments $ 72,745 $ 304,967 $ — $ 377,712  |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENTS [Abstract] | |
Summary of Amortized Cost and Fair Value of Debt and Equity Securities |    Amortized Gross Gross  Cost Unrealized Unrealized  or Cost Gains Losses Fair Value  (in thousands)  December 31, 2016  Debt securities - available-for-sale:  United States government obligations and authorities $ 62,881 $ 177 $ 853 $ 62,205  Obligations of states and political subdivisions 152,823 427 2,067 151,183  Corporate 149,053 1,347 895 149,505  International 11,887 95 119 11,863  376,644 2,046 3,934 374,756   Debt securities - held-to-maturity:  United States government obligations and authorities 4,163 22 118 4,067  Corporate 1,317 20 2 1,335  International 71 — — 71  5,551 42 120 5,473  Equity securities 24,163 5,500 288 29,375  Total investments $ 406,358 $ 7,588 $ 4,342 $ 409,604      Amortized Gross Gross  Cost Unrealized Unrealized  or Cost Gains Losses Fair Value  (in thousands)  December 31, 2015  Debt securities - available-for-sale:  United States government obligations and authorities $ 61,384 $ 489 $ 320 $ 61,553  Obligations of states and political subdivisions 109,152 1,590 40 110,702  Corporate 154,957 1,153 1,490 154,620  International 12,528 18 243 12,303  338,021 3,250 2,093 339,178   Debt securities - held-to-maturity:  United States government obligations and authorities 4,275 30 204 4,101  Corporate 2,253 14 20 2,247  International 91 — — 91  6,619 44 224 6,439  Equity securities 33,581 6,809 1,856 38,534  Total investments $ 378,221 $ 10,103 $ 4,173 $ 384,151  |
Net Realized Gains (Losses) by Major Investment Category |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Gross realized gains:  Debt securities $ 3,208 $ 1,272 $ 725  Equity securities 4,264 4,959 4,489  Total gross realized gains 7,472 6,231 5,214   Gross realized losses:  Debt securities (1,614) (805) (147)  Equity securities (2,813) (1,810) (641)  Total gross realized losses (4,427) (2,615) (788)  Net realized gains on investments $ 3,045 $ 3,616 $ 4,426  |
Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity |    December 31, 2016 December 31, 2015  Amortized Amortized  Cost Fair Value Cost Fair Value  Securities with maturity dates: (in thousands)  Debt securities, available-for-sale:  One year or less $ 46,189 $ 46,231 $ 24,470 $ 24,488  Over one through five years 177,982 177,899 170,797 171,113  Over five through ten years 150,557 148,783 142,728 143,545  Over ten years 1,916 1,843 26 32  376,644 374,756 338,021 339,178  Debt securities, held-to-maturity:  One year or less 170 170 486 487  Over one through five years 1,719 1,750 1,899 1,915  Over five through ten years 3,662 3,553 4,234 4,037  5,551 5,473 6,619 6,439  Total $ 382,195 $ 380,229 $ 344,640 $ 345,617  |
Summary of Net Investment Income |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Interest income $ 7,920 $ 6,638 $ 4,832  Dividends income 1,143 588 553  Net investment income $ 9,063 $ 7,226 $ 5,385  |
Gross Unrealized Losses and Related Fair Values for Debt and Equity Securities, Grouped by Duration of Time in Continuous Unrealized Loss Position |    Less than 12 months 12 months or longer Total  Gross Gross Gross  Fair Unrealized Fair Unrealized Fair Unrealized  Value Losses Value Losses Value Losses  December 31, 2016 (in thousands)  Debt securities - available-for-sale:  United States government obligations  and authorities $ 45,255 $ 850 $ 111 $ 3 $ 45,366 $ 853  Obligations of states and political subdivisions 103,724 2,066 1,007 1 104,731 2,067  Corporate 59,970 864 2,427 31 62,397 895  International 5,925 119 5 - 5,930 119  214,874 3,899 3,550 35 218,424 3,934   Equity securities 4,701 253 434 35 5,135 288   Total investments $ 219,575 $ 4,152 $ 3,984 $ 70 $ 223,559 $ 4,222      Less than 12 months 12 months or longer Total  Gross Gross Gross  Fair Unrealized Fair Unrealized Fair Unrealized  Value Losses Value Losses Value Losses  December 31, 2015 (in thousands)  Debt securities - available-for-sale:  United States government obligations  and authorities $ 30,464 $ 303 $ 659 $ 17 $ 31,123 $ 320  Obligations of states and political subdivisions 16,652 40 — — 16,652 40  Corporate 87,176 1,420 3,590 70 90,766 1,490  International 8,660 191 281 52 8,941 243  142,952 1,954 4,530 139 147,482 2,093   Equity securities 11,790 1,850 84 6 11,874 1,856   Total investments $ 154,742 $ 3,804 $ 4,614 $ 145 $ 159,356 $ 3,949  |
REINSURANCE (Tables)
REINSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
REINSURANCE [Abstract] | |
Reinsurance Recoverables |    December 31,  2016 2015  (in thousands)  Reinsurance recoverable on paid losses $ 7,451 $ 5,218  Reinsurance recoverable on unpaid losses 41,079 7,496  Reinsurance recoverable, net $ 48,530 $ 12,714  |
Premiums Written and Earned |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Net premiums written:  Direct $ 605,485 $ 493,770 $ 377,156  Ceded (285,986) (268,516) (201,998)  $ 319,499 $ 225,254 $ 175,158  Net premiums earned:  Direct $ 565,423 $ 432,234 $ 313,075  Ceded (305,551) (222,214) (142,170)  $ 259,872 $ 210,020 $ 170,905  |
LOSS AND LOSS ADJUSTMENT EXPE33
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES [Abstract] | |
Activity in Liability for Loss and LAE Reserves |     Year Ended December 31,  2016 2015 2014  (in thousands)  Gross reserves, beginning of period $ 97,340 $ 78,330 $ 61,016  Less: reinsurance recoverable (1) (7,496) (10,394) (2,313)  Net reserves, beginning of period 89,844 67,936 58,703   Incurred loss, net of reinsurance, related to:  Current year 174,795 113,819 79,932  Prior years 12,546 (9,466) 1,104  Total incurred loss and LAE, net of reinsurance 187,341 104,353 81,036   Paid loss, net of reinsurance, related to:  Current year 113,196 49,531 40,680  Prior years 56,958 32,914 31,123  Total paid loss and LAE, net of reinsurance 160,154 82,445 71,803   Net reserves, end of period 117,031 89,844 67,936  Plus: reinsurance recoverable (1) 41,079 7,496 10,394  Gross reserves, end of period $ 158,110 $ 97,340 $ 78,330  (1) Reinsurance recoverable in this table includes only ceded loss and LAE reserves. |
Schedule of Incurred and Cumulative Paid Losses and Loss Adjustment Expenses, Net of Reinsurance |    IBNR & expected Cumulative  Incurred losses and ALAE, net of reinsurance development on number of  For the years ended December 31, reported claims reported claims (1) Severity (2)  (unaudited)  Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2016 2016  2007 19,410 18,293 17,319 17,544 17,494 17,761 17,912 17,715 17,553 17,559 6 1,883 9,325  2008 18,305 15,784 15,811 15,977 15,659 16,021 15,661 15,604 15,609 4 1,705 9,155  2009 26,228 25,618 25,955 26,482 27,015 27,041 27,119 27,163 101 2,323 11,693  2010 24,825 25,056 26,151 27,895 28,968 29,407 29,945 34 2,348 12,753  2011 20,492 21,344 23,007 23,932 24,582 25,957 40 2,344 11,074  2012 23,032 23,301 24,186 24,468 25,889 326 2,579 10,038  2013 43,807 42,021 35,834 35,859 216 3,209 11,175  2014 64,312 63,300 61,770 2,222 5,679 10,877  2015 99,286 92,159 8,097 11,196 8,231  2016 168,875 48,663 20,923 8,071  Total $500,785      Cumulative paid losses and ALAE, net of reinsurance  For the years ended December 31,  (unaudited)  Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016  2007 11,358 15,352 16,160 16,783 17,027 17,291 17,429 17,443 17,509 17,519  2008 9,477 13,832 14,689 15,190 15,308 15,445 15,595 15,583 15,587  2009 15,047 23,095 24,657 26,007 26,462 26,831 26,927 26,982  2010 14,052 21,350 24,730 26,886 27,984 29,092 29,739  2011 11,119 19,250 21,323 22,723 24,047 25,580  2012 13,693 20,728 23,120 23,923 25,186  2013 19,986 31,606 33,867 35,123  2014 37,033 53,831 57,891  2015 52,190 76,169  2016 101,532  Total $414,308   All outstanding liabilities for unpaid claims and LAE prior to 2007, net of reinsurance 1,478  Total outstanding liabilities for unpaid claims and LAE, net of reinsurance $ 87,955  (1) The cumulative number of reported claims is measured by individual claimant at a coverage level. (2) Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars on reported claims. Note the older accident years are more developed than recent accident years. |
Schedule of Reconciliation of Net Incurred and Paid Development |      As of December 31, 2016  (in thousands)  Liabilities for unpaid losses and LAE:  Homeowners $ 87,955  Other lines 28,915  Total liabilities for unpaid losses and LAE, net of reinsurance 116,870   Reinsurance recoverables:  Homeowners 19,964  Other lines 21,115  Total reinsurance recoverables 41,079   Unallocated loss adjustment expenses 161  Gross liability for unpaid losses and LAE $ 158,110  |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance |    Average annual payout of losses and LAE, net of reinsurance  (unaudited)  Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10  Homeowners 53.4% 28.3% 7.4% 4.2% 2.2% 2.6% 1.0% 0.1% 0.4% 0.0%  |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
Summary of Provision for Income Tax Expense |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Federal:  Current $ 5,076 $ 15,523 $ 16,659  Deferred (2,771) 6,118 1,059  Federal income tax expense 2,305 21,641 17,718  State:  Current 674 2,489 2,204  Deferred (296) 623 186  State income tax expense 378 3,112 2,390  Total income tax expense $ 2,683 $ 24,753 $ 20,108  |
Effective Federal and State Tax Rates to Income before Income Tax Expense |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Computed expected tax expense provision, at federal rate $ 957 $ 22,829 $ 19,887  State tax, net of federal tax benefit 85 2,291 1,696  Tax-exempt interest (571) (445) (312)  Income subject to dividends-received deduction (219) (109) (136)  Meals and entertainment 130 - -  Return to provision and rate changes 145 119 (1,027)  Prior year deferred tax true-up 2,163 - -  Other (7) 68 -  Total income tax expense $ 2,683 $ 24,753 $ 20,108  |
Significant Components of Net Deferred Tax Liability |    Year Ended December 31,  2016 2015  (in thousands)  Deferred tax assets:  Unearned premiums $ 13,975 $ 9,375  Unpaid losses and loss adjustment expenses 1,612 1,175  Accrued expenses 692 694  Net operating loss carryforwards 7 140  Share-based compensation 582 606  Other 155 212  Total 17,023 12,202   Deferred tax liabilities:  Deferred acquisition costs (16,364) (11,906)  Unrealized gains on investment securities (1,277) (2,336)  Deferred revenue related to reinsurance - (3,395)  Depreciation and amortization (718) -  Other (97) (192)  Total (18,456) (17,829)   Net deferred tax liability $ (1,433) $ (5,627)  |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Schedule of Future Minimum Lease Payments |    Aggregate Minimum  Year Ended December 31, Lease Payments  (in thousands)  2017 $ 644  2018 662  2019 656  2020 678  2021 698  Thereafter 719  Total $ 4,057  |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Schedule of Share-based Compensation Arrangements |    Year Ended  December 31,  2016 2015 2014  (in thousands)  Restricted stock $ 3,831 $ 2,930 $ 1,525  Stock options — 33 135  Total share-based compensation expense $ 3,831 $ 2,963 $ 1,660   Intrinsic value of options exercised $ 13,732 $ 1,124 $ 5,172  Fair value of restricted stock vested $ 41,495 $ 2,303 $ 549  |
Summary of Stock Option Activity |    Number of Shares Weighted Average Option Exercise Price  Outstanding at January 1, 2014 526,521 $ 4.56  Granted — $ —  Exercised (302,735) $ 5.13  Cancelled (4,501) $ 3.49  Outstanding at December 31, 2014 219,285 $ 3.79  Granted — $ —  Exercised (44,652) $ 3.81  Cancelled — $ —  Outstanding at December 31, 2015 174,633 $ 3.79  Granted — $ —  Exercised (94,249) $ 3.85  Cancelled (900) $ 4.40  Outstanding at December 31, 2016 79,484 $ 3.70  |
Summary Information about Stock Options Outstanding and Exercisable |   Options Outstanding and Exercisable  Weighted Average  Remaining  Shares Outstanding Contractual Life Weighted Average Aggregate  Range of Exercise Price and Exercisable (years) Exercise Price Intrinsic Value  $2.45 - $4.40 79,484 4.87 3.70 1,191,218  |
Summary of Restricted Stock Activity |    Number of Shares Weighted Average Grant Date Fair Value  Outstanding at January 1, 2014 249,500 $ 8.24  Granted 268,648 $ 22.50  Vested (68,988) $ 7.96  Cancelled (1,359) $ 8.29  Outstanding at December 31, 2014 447,801 $ 16.84  Granted 116,140 $ 27.53  Vested (145,134) $ 15.87  Cancelled — $ —  Outstanding at December 31, 2015 418,807 $ 20.14  Granted 128,472 $ 19.16  Vested (204,916) $ 20.25  Cancelled (5,160) $ 20.58  Outstanding at December 31, 2016 337,203 $ 19.69  |
Reconciliation of Changes in Accumulated Other Comprehensive Income |      Year Ended December 31,  2016 2015  Before Tax Income Tax Net Before Tax Income Tax Net  (in thousands)  Accumulated other comprehensive income,  beginning of period $ 6,111 $ (2,247) $ 3,864 $ 12,419 $ (4,701) $ 7,718  Other comprehensive income before reclassifications 1,774 (470) 1,305 (324) 86 (238)  Reclassification adjustment for realized gains included  in net (loss) income (4,560) 1,515 (3,045) (5,984) 2,368 (3,616)  (2,786) 1,046 (1,740) (6,308) 2,454 (3,854)  Accumulated other comprehensive income, end of period $ 3,323 $ (1,199) $ 2,124 $ 6,111 $ (2,247) $ 3,864  |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER SHARE [Abstract] | |
Schedule Of Calculation Of Basic And Diluted Net Income Per Common Share |    Year Ended  December 31,  2016 2015 2014  (in thousands, except per share data)  Net (loss) income attributable to Federated National Holding  Company shareholders $ (196) $ 40,885 $ 37,199  Weighted average number of common shares outstanding -  basic 13,758 13,729 12,082  Net (loss) income per share - basic $ (0.01) $ 2.98 $ 3.08   Weighted average number of common shares outstanding -  basic 13,758 13,729 12,082  Dilutive effect of stock compensation plans - 268 356  Weighted average number of common shares outstanding -  diluted 13,758 13,997 12,438  Net (loss) income per share - diluted $ (0.01) $ 2.92 $ 2.99   Dividends per share $ 0.27 $ 0.18 $ 0.13  |
VARIABLE INTEREST ENTITY (Table
VARIABLE INTEREST ENTITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Variable Interest Entity [Abstract] | |
Carrying Amount of VIE Consolidated Assets and Liabilities |    December 31,  2016 2015  ASSETS (in thousands)  Investments  Debt securities, available-for-sale, at amortized cost $ 27,100 $ 21,312  Equity securities, available-for-sale, at fair value 1,604 1,358  Total investments 28,704 22,670   Cash and cash equivalents 15,668 14,616  Prepaid reinsurance premiums 1,070 34  Premiums receivable, net 1,584 355  Other assets 1,910 1,037  Total assets $ 48,936 $ 38,712   LIABILITIES  Loss and loss adjustment expense reserves $ 1,659 $ 237  Unearned premiums 8,406 1,448  Reinsurance payable 864 —  Debt 4,909 4,887  Income taxes payable — 8  Other liabilities 1,026 374  Total liabilities $ 16,864 $ 6,954  |
QUARTERLY RESULTS OF OPERATIO39
QUARTERLY RESULTS OF OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY RESULTS OF OPERATIONS [Abstract] | |
Summary of Unaudited Quarterly Results of Operations |    First Second Third Fourth  Quarter Quarter Quarter Quarter  (in thousands, except per share data)  2016  Net premiums earned $ 54,997 $ 60,045 $ 69,405 $ 75,425  Total revenue $ 68,960 $ 75,064 $ 83,790 $ 88,570  Losses and loss adjustment expenses $ 29,545 $ 47,025 $ 43,613 $ 67,158  Total costs and expenses $ 53,562 $ 73,249 $ 82,250 $ 104,590  Net (loss) income attributable to Federated National Holding Company shareholders $ 9,535 $ 991 $ 1,394 $ (12,116)  Net (loss) income per share - basic $ 0.69 $ 0.07 $ 0.10 $ (0.89)   2015  Net premiums earned $ 44,786 $ 49,227 $ 62,286 $ 53,721  Total revenue $ 54,936 $ 58,790 $ 72,599 $ 63,568  Losses and loss adjustment expenses $ 23,949 $ 23,149 $ 28,412 $ 28,843  Total costs and expenses $ 40,452 $ 40,151 $ 54,974 $ 49,123  Net income attributable to Federated National Holding Company shareholders $ 9,284 $ 11,734 $ 10,593 $ 9,274  Net income per share - basic $ 0.68 $ 0.86 $ 0.77 $ 0.67  |
ORGANIZATION, CONSOLIDATION A40
ORGANIZATION, CONSOLIDATION AND BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Premiums Written, Net [Member] | Homeowners' Insurance Product Line [Member] | Customer Concentration Risk [Member] | ISA [Member] | |||
Concentration risk, percentage | 24.10% | 25.40% | 20.50% |
Monarch Delaware Holdings LLC [Member] | |||
Capital contribution for voting interests | $ 14 | ||
Percentage of ownership interest | 42.40% | ||
Percentage of voting interest held | 50.00% | ||
Transatlantic Reinsurance Company [Member] | Monarch Delaware Holdings LLC [Member] | |||
Percentage of ownership interest | 15.20% | ||
Capital contribution for non-voting interests | $ 5 | ||
Transatlantic Reinsurance Company [Member] | Monarch Delaware Holdings LLC [Member] | Senior Debt [Member] | |||
Long-term debt | $ 5 | ||
Maturity period of debt | 6 years | ||
Interest rate percentage | 6.00% |
SIGNIFICANT ACCOUNTING POLICI41
SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Adjustments for New Accounting Pronouncement [Member] | |
Significant Accounting Policies And Practices [Line Items] | |
Reduction in other assets amount | $ (0.1) |
Reduction in other debt amount | $ (0.1) |
Software and Software Development Costs [Member] | |
Significant Accounting Policies And Practices [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Minimum [Member] | |
Significant Accounting Policies And Practices [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Maximum [Member] | |
Significant Accounting Policies And Practices [Line Items] | |
Estimated useful life of property and equipment | 15 years |
FAIR VALUE (Financial Instrumen
FAIR VALUE (Financial Instruments Measured at Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | $ 374,756 | $ 339,178 |
Equity securities | 29,375 | 38,534 |
Total investments | 404,131 | 377,712 |
United States Government Obligations and Authorities [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 62,205 | 61,553 |
Total investments | 62,205 | 61,553 |
Obligations of States and Political Subdivisions [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 151,183 | 110,702 |
Total investments | 151,183 | 110,702 |
Corporate [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 149,505 | 154,620 |
Total investments | 149,505 | 154,620 |
International [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 11,863 | 12,303 |
Total investments | 11,863 | 12,303 |
Level 1 [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 36,560 | 34,733 |
Equity securities | 28,960 | 38,012 |
Total investments | 65,520 | 72,745 |
Level 1 [Member] | United States Government Obligations and Authorities [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 36,560 | 34,733 |
Level 2 [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 338,196 | 304,445 |
Equity securities | 415 | 522 |
Total investments | 338,611 | 304,967 |
Level 2 [Member] | United States Government Obligations and Authorities [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 25,645 | 26,820 |
Level 2 [Member] | Obligations of States and Political Subdivisions [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 151,183 | 110,702 |
Level 2 [Member] | Corporate [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | 149,505 | 154,620 |
Level 2 [Member] | International [Member] | ||
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities | $ 11,863 | $ 12,303 |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)security | Dec. 31, 2015USD ($)security | Dec. 31, 2014USD ($) | |
INVESTMENTS [Abstract] | |||
Proceeds from sales of available-for-sale investment securities | $ 229.3 | $ 157.2 | $ 87.1 |
Debt and equity securities held in an unrealized loss position | security | 1,132 | 676 | |
Debt securities and equity securities held in an unrealized loss position 12 months or more | security | 36 | 22 | |
OTTI losses | $ 0.3 | $ 0.4 | $ 0 |
Fair value of investments deposited with governmental authorities required by law | $ 7.9 |
INVESTMENTS (Summary of Amortiz
INVESTMENTS (Summary of Amortized Cost and Fair Value of Debt and Equity Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Fair Value | $ 404,131 | $ 377,712 |
Held-to-maturity securities, Amortized Cost or Cost | 5,551 | 6,619 |
Total investments, Amortized Cost or Cost | 406,358 | 378,221 |
Total investments, Gross Unrealized Gain | 7,588 | 10,103 |
Total investments, Gross Unrealized Loss | 4,342 | 4,173 |
Total investments, Fair Value | 409,604 | 384,151 |
Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 376,644 | 338,021 |
Available-for-sale securities, Gross Unrealized Gain | 2,046 | 3,250 |
Available-for-sale securities, Gross Unrealized Loss | 3,934 | 2,093 |
Available-for-sale securities, Fair Value | 374,756 | 339,178 |
Held-to-maturity securities, Amortized Cost or Cost | 5,551 | 6,619 |
Held-to-maturity securities, Gross Unrealized Gains | 42 | 44 |
Held-to-maturity securities, Gross Unrealized Losses | 120 | 224 |
Held-to-maturity securities, Fair Value | 5,473 | 6,439 |
United States Government Obligations and Authorities [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 62,881 | 61,384 |
Available-for-sale securities, Gross Unrealized Gain | 177 | 489 |
Available-for-sale securities, Gross Unrealized Loss | 853 | 320 |
Available-for-sale securities, Fair Value | 62,205 | 61,553 |
Held-to-maturity securities, Amortized Cost or Cost | 4,163 | 4,275 |
Held-to-maturity securities, Gross Unrealized Gains | 22 | 30 |
Held-to-maturity securities, Gross Unrealized Losses | 118 | 204 |
Held-to-maturity securities, Fair Value | 4,067 | 4,101 |
Obligations of States and Political Subdivisions [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 152,823 | 109,152 |
Available-for-sale securities, Gross Unrealized Gain | 427 | 1,590 |
Available-for-sale securities, Gross Unrealized Loss | 2,067 | 40 |
Available-for-sale securities, Fair Value | 151,183 | 110,702 |
Corporate [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 149,053 | 154,957 |
Available-for-sale securities, Gross Unrealized Gain | 1,347 | 1,153 |
Available-for-sale securities, Gross Unrealized Loss | 895 | 1,490 |
Available-for-sale securities, Fair Value | 149,505 | 154,620 |
Held-to-maturity securities, Amortized Cost or Cost | 1,317 | 2,253 |
Held-to-maturity securities, Gross Unrealized Gains | 20 | 14 |
Held-to-maturity securities, Gross Unrealized Losses | 2 | 20 |
Held-to-maturity securities, Fair Value | 1,335 | 2,247 |
International [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 11,887 | 12,528 |
Available-for-sale securities, Gross Unrealized Gain | 95 | 18 |
Available-for-sale securities, Gross Unrealized Loss | 119 | 243 |
Available-for-sale securities, Fair Value | 11,863 | 12,303 |
Held-to-maturity securities, Amortized Cost or Cost | 71 | 91 |
Held-to-maturity securities, Fair Value | 71 | 91 |
Equity Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Amortized Cost or Cost | 24,163 | 33,581 |
Available-for-sale securities, Gross Unrealized Gain | 5,500 | 6,809 |
Available-for-sale securities, Gross Unrealized Loss | 288 | 1,856 |
Available-for-sale securities, Fair Value | 29,375 | 38,534 |
Parent Company [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, Fair Value | $ 31,750 | $ 25,649 |
INVESTMENTS (Net Realized Gains
INVESTMENTS (Net Realized Gains (Losses) by Major Investment Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gross realized gains and losses [Abstract] | |||
Total gross realized gains | $ 7,472 | $ 6,231 | $ 5,214 |
Total gross realized losses | (4,427) | (2,615) | (788) |
Net realized gains on investments | 3,045 | 3,616 | 4,426 |
Debt Securities [Member] | |||
Gross realized gains and losses [Abstract] | |||
Total gross realized gains | 3,208 | 1,272 | 725 |
Total gross realized losses | (1,614) | (805) | (147) |
Equity Securities [Member] | |||
Gross realized gains and losses [Abstract] | |||
Total gross realized gains | 4,264 | 4,959 | 4,489 |
Total gross realized losses | $ (2,813) | $ (1,810) | $ (641) |
INVESTMENTS (Amortized Cost and
INVESTMENTS (Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale Securities, Debt maturities, Amortized cost: | ||
One year or less | $ 46,189 | $ 24,470 |
Over one through five years | 177,982 | 170,797 |
Over five through ten years | 150,557 | 142,728 |
Over ten years | 1,916 | 26 |
Amortized cost | 376,644 | 338,021 |
Available-for-sale Securities, Debt maturities, Fair value: | ||
One year or less | 46,231 | 24,488 |
Over one through five years | 177,899 | 171,113 |
Over five through ten years | 148,783 | 143,545 |
Over ten years | 1,843 | 32 |
Amortized cost | 374,756 | 339,178 |
Held-to-maturity Securities, Debt maturities, Amortized cost [Abstract] | ||
One year or less | 170 | 486 |
Over one through five years | 1,719 | 1,899 |
Over five through ten years | 3,662 | 4,234 |
Amortized cost | 5,551 | 6,619 |
Held-to-maturity Securities, Debt Maturities, Fair value: | ||
One year or less | 170 | 487 |
Over one through five years | 1,750 | 1,915 |
Over five through ten years | 3,553 | 4,037 |
Estimated fair value | 5,473 | 6,439 |
Total Investments [Abstract] | ||
Amortized cost | 382,195 | 344,640 |
Estimated fair value | $ 380,229 | $ 345,617 |
INVESTMENTS (Summary of Net Inv
INVESTMENTS (Summary of Net Investment Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net investment income [Abstract] | |||
Interest income | $ 7,920 | $ 6,638 | $ 4,832 |
Dividends income | 1,143 | 588 | 553 |
Net investment income | $ 9,063 | $ 7,226 | $ 5,385 |
INVESTMENTS (Gross Unrealized L
INVESTMENTS (Gross Unrealized Losses and Related Fair Values for Debt and Equity Securities, Grouped by Duration of Time in Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value [Abstract] | ||
Less than 12 months | $ 219,575 | $ 154,742 |
12 months or longer | 3,984 | 4,614 |
Total fair value | 223,559 | 159,356 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 4,152 | 3,804 |
12 months or longer | 70 | 145 |
Total gross unrealized losses | 4,222 | 3,949 |
Debt Securities [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 214,874 | 142,952 |
12 months or longer | 3,550 | 4,530 |
Total fair value | 218,424 | 147,482 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 3,899 | 1,954 |
12 months or longer | 35 | 139 |
Total gross unrealized losses | 3,934 | 2,093 |
United States Government Obligations and Authorities [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 45,255 | 30,464 |
12 months or longer | 111 | 659 |
Total fair value | 45,366 | 31,123 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 850 | 303 |
12 months or longer | 3 | 17 |
Total gross unrealized losses | 853 | 320 |
Obligations of States and Political Subdivisions [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 103,724 | 16,652 |
12 months or longer | 1,007 | |
Total fair value | 104,731 | 16,652 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 2,066 | 40 |
12 months or longer | 1 | |
Total gross unrealized losses | 2,067 | 40 |
Corporate [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 59,970 | 87,176 |
12 months or longer | 2,427 | 3,590 |
Total fair value | 62,397 | 90,766 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 864 | 1,420 |
12 months or longer | 31 | 70 |
Total gross unrealized losses | 895 | 1,490 |
International [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 5,925 | 8,660 |
12 months or longer | 5 | 281 |
Total fair value | 5,930 | 8,941 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 119 | 191 |
12 months or longer | 52 | |
Total gross unrealized losses | 119 | 243 |
Equity Securities [Member] | ||
Fair value [Abstract] | ||
Less than 12 months | 4,701 | 11,790 |
12 months or longer | 434 | 84 |
Total fair value | 5,135 | 11,874 |
Gross unrealized losses [Abstract] | ||
Less than 12 months | 253 | 1,850 |
12 months or longer | 35 | 6 |
Total gross unrealized losses | $ 288 | $ 1,856 |
REINSURANCE (Narrative) (Detail
REINSURANCE (Narrative) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)agreement | Jul. 01, 2016 | Dec. 31, 2015USD ($) | |
Liability for Catastrophe Claims [Line Items] | ||||
Amount payable under reinsurance program | $ 79,154 | $ 61,069 | ||
Trust agreement for loss exposure | 2,600 | $ 3,500 | ||
FNIC's 2016-2017 Reinsurance Programs [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Amount payable under reinsurance program | $ 179,500 | |||
Quota Share Treaties [Member] | Private Passenger Automobile Insurance Product Line [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Period of property quota share reinsurance treaty | 1 year | |||
Quota Share Treaties [Member] | Private Passenger Automobile Insurance Product Line [Member] | Minimum [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Percentage of property quota share reinsurance treaty | 75.00% | |||
Quota Share Treaties [Member] | Private Passenger Automobile Insurance Product Line [Member] | Maximum [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Percentage of property quota share reinsurance treaty | 90.00% | |||
Federated National's Florida [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Amount payable under reinsurance program | $ 125,700 | |||
FHCF [Member] | FNIC's 2015-2016 Catastrophe Reinsurance Program [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Aggregate catastrophic losses coverage amount | 1,820,000 | |||
Maximum single event coverage | 1,260,000 | |||
Ceded premiums in connection with catastrophe reinsurance program | $ 149,700 | |||
FHCF [Member] | FNIC's 2015-2016 Catastrophe Reinsurance Program [Member] | Property Insurance Product Line [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Percentage of property quota share program | 40.00% | |||
FHCF [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Amount payable under reinsurance program | $ 53,800 | |||
Percentage of property quota share reinsurance treaty | 75.00% | |||
Private and FHCF Reinsurance [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Aggregate catastrophic losses coverage amount | $ 2,220,000 | |||
Maximum single event coverage | 1,580,000 | |||
Florida [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Pre-tax retention amount for catastrophic event | $ 18,450 | |||
Maximum pre-tax retention amount representing percentage of shareholder’s equity | 7.76% | |||
Florida [Member] | Quota Share Treaties [Member] | Property Insurance Product Line [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Period of property quota share reinsurance treaty | 2 years | |||
Number of property quota share treaties | agreement | 2 | |||
Percentage of property quota share reinsurance treaty | 40.00% | |||
Covered losses for homeowners' insurance program | $ 100,000 | |||
Florida [Member] | Quota Share One [Member] | Property Insurance Product Line [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Percentage of property quota share reinsurance treaty | 30.00% | |||
Percentage of property quota share expired on cut off basis | 30.00% | |||
Percentage of unearned premiums and losses retained | 30.00% | |||
Florida [Member] | Quota Share Two [Member] | Property Insurance Product Line [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Percentage of property quota share reinsurance treaty | 10.00% | |||
Florida [Member] | FHCF [Member] | FNIC's 2015-2016 Catastrophe Reinsurance Program [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Amount retained per loss | $ 12,900 | |||
Florida [Member] | FHCF [Member] | MNIC’s 2016-2017 Catastrophe Reinsurance Program [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Private market term for loss treaties | 13 months | |||
Additional coverage amount | $ 3,400 | |||
Louisiana, Alabama and South Carolina [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | Minimum [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Pre-tax retention amount for catastrophic event | $ 8,000 | |||
Louisiana, Alabama and South Carolina [Member] | FNIC's 2016-2017 Reinsurance Programs [Member] | Maximum [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Pre-tax retention amount for catastrophic event | $ 18,450 | |||
Louisiana, Alabama and South Carolina [Member] | FHCF [Member] | FNIC's 2015-2016 Catastrophe Reinsurance Program [Member] | ||||
Liability for Catastrophe Claims [Line Items] | ||||
Amount retained per loss | $ 5,000 |
REINSURANCE (Reinsurance Recove
REINSURANCE (Reinsurance Recoverables) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
REINSURANCE [Abstract] | ||||
Reinsurance recoverable on paid losses | $ 7,451 | $ 5,218 | ||
Reinsurance recoverable on unpaid losses | 41,079 | 7,496 | $ 10,394 | $ 2,313 |
Reinsurance recoverable, net | $ 48,530 | $ 12,714 |
REINSURANCE (Premiums Written a
REINSURANCE (Premiums Written and Earned) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Premiums written [Abstract] | |||||||||||
Direct | $ 605,485 | $ 493,770 | $ 377,156 | ||||||||
Ceded | (285,986) | (268,516) | (201,998) | ||||||||
Net premiums written | 319,499 | 225,254 | 175,158 | ||||||||
Premiums earned [Abstract] | |||||||||||
Direct | 565,423 | 432,234 | 313,075 | ||||||||
Ceded | (305,551) | (222,214) | (142,170) | ||||||||
Net premiums earned | $ 75,425 | $ 69,405 | $ 60,045 | $ 54,997 | $ 53,721 | $ 62,286 | $ 49,227 | $ 44,786 | $ 259,872 | $ 210,020 | $ 170,905 |
LOSS AND LOSS ADJUSTMENT EXPE52
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Activity in Liability for Loss and LAE Reserves) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES [Abstract] | |||
Gross reserves, beginning of period | $ 97,340 | $ 78,330 | $ 61,016 |
Less: reinsurance recoverable | (7,496) | (10,394) | (2,313) |
Net reserves, beginning of period | 89,844 | 67,936 | 58,703 |
Incurred loss, net of reinsurance, related to: | |||
Current year | 174,795 | 113,819 | 79,932 |
Prior years | 12,546 | (9,466) | 1,104 |
Total incurred loss and LAE, net of reinsurance | 187,341 | 104,353 | 81,036 |
Paid loss, net of reinsurance, related to: | |||
Current year | 113,196 | 49,531 | 40,680 |
Prior years | 56,958 | 32,914 | 31,123 |
Total paid loss and LAE, net of reinsurance | 160,154 | 82,445 | 71,803 |
Net reserves, end of period | 117,031 | 89,844 | 67,936 |
Plus: reinsurance recoverable | 41,079 | 7,496 | 10,394 |
Gross reserves, end of period | $ 158,110 | $ 97,340 | $ 78,330 |
LOSS AND LOSS ADJUSTMENT EXPE53
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Schedule of Incurred Losses and ALAE, Net of Reinsurance) (Details) $ in Thousands | Dec. 31, 2016USD ($)claim$ / claim | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) |
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 500,785 | |||||||||
Accident Year 2007 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | 17,559 | $ 17,553 | $ 17,715 | $ 17,912 | $ 17,761 | $ 17,494 | $ 17,544 | $ 17,319 | $ 18,293 | $ 19,410 |
IBNR & development on reported claims | $ 6 | |||||||||
Cumulative number of reported claims | claim | 1,883 | |||||||||
Severity | $ / claim | 9,325 | |||||||||
Accident Year 2008 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 15,609 | 15,604 | 15,661 | 16,021 | 15,659 | 15,977 | 15,811 | 15,784 | $ 18,305 | |
IBNR & development on reported claims | $ 4 | |||||||||
Cumulative number of reported claims | claim | 1,705 | |||||||||
Severity | $ / claim | 9,155 | |||||||||
Accident Year 2009 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 27,163 | 27,119 | 27,041 | 27,015 | 26,482 | 25,955 | 25,618 | $ 26,228 | ||
IBNR & development on reported claims | $ 101 | |||||||||
Cumulative number of reported claims | claim | 2,323 | |||||||||
Severity | $ / claim | 11,693 | |||||||||
Accident Year 2010 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 29,945 | 29,407 | 28,968 | 27,895 | 26,151 | 25,056 | $ 24,825 | |||
IBNR & development on reported claims | $ 34 | |||||||||
Cumulative number of reported claims | claim | 2,348 | |||||||||
Severity | $ / claim | 12,753 | |||||||||
Accident Year 2011 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 25,957 | 24,582 | 23,932 | 23,007 | 21,344 | $ 20,492 | ||||
IBNR & development on reported claims | $ 40 | |||||||||
Cumulative number of reported claims | claim | 2,344 | |||||||||
Severity | $ / claim | 11,074 | |||||||||
Accident Year 2012 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 25,889 | 24,468 | 24,186 | 23,301 | $ 23,032 | |||||
IBNR & development on reported claims | $ 326 | |||||||||
Cumulative number of reported claims | claim | 2,579 | |||||||||
Severity | $ / claim | 10,038 | |||||||||
Accident Year 2013 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 35,859 | 35,834 | 42,021 | $ 43,807 | ||||||
IBNR & development on reported claims | $ 216 | |||||||||
Cumulative number of reported claims | claim | 3,209 | |||||||||
Severity | $ / claim | 11,175 | |||||||||
Accident Year 2014 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 61,770 | 63,300 | $ 64,312 | |||||||
IBNR & development on reported claims | $ 2,222 | |||||||||
Cumulative number of reported claims | claim | 5,679 | |||||||||
Severity | $ / claim | 10,877 | |||||||||
Accident Year 2015 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 92,159 | $ 99,286 | ||||||||
IBNR & development on reported claims | $ 8,097 | |||||||||
Cumulative number of reported claims | claim | 11,196 | |||||||||
Severity | $ / claim | 8,231 | |||||||||
Accident Year 2016 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred, claims and allocated claim adjustment expenses, net of reinsurance | $ 168,875 | |||||||||
IBNR & development on reported claims | $ 48,663 | |||||||||
Cumulative number of reported claims | claim | 20,923 | |||||||||
Severity | $ / claim | 8,071 |
LOSS AND LOSS ADJUSTMENT EXPE54
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Schedule of Cumulative Paid Losses and ALAE, Net of Reinsurance Recoverable) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2007 |
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | $ 414,308 | |||||||||
Liability for Claims and Claims Adjustment Expense | 158,110 | $ 97,340 | $ 78,330 | $ 61,016 | ||||||
Accident Year 2007 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 17,519 | 17,509 | 17,443 | 17,429 | $ 17,291 | $ 17,027 | $ 16,783 | $ 16,160 | $ 15,352 | $ 11,358 |
Accident Year 2008 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 15,587 | 15,583 | 15,595 | 15,445 | 15,308 | 15,190 | 14,689 | 13,832 | $ 9,477 | |
Accident Year 2009 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 26,982 | 26,927 | 26,831 | 26,462 | 26,007 | 24,657 | 23,095 | $ 15,047 | ||
Accident Year 2010 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 29,739 | 29,092 | 27,984 | 26,886 | 24,730 | 21,350 | $ 14,052 | |||
Accident Year 2011 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 25,580 | 24,047 | 22,723 | 21,323 | 19,250 | $ 11,119 | ||||
Accident Year 2012 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 25,186 | 23,923 | 23,120 | 20,728 | $ 13,693 | |||||
Accident Year 2013 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 35,123 | 33,867 | 31,606 | $ 19,986 | ||||||
Accident Year 2014 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 57,891 | 53,831 | $ 37,033 | |||||||
Accident Year 2015 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 76,169 | $ 52,190 | ||||||||
Accident Year 2016 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative paid, claims and allocated claim adjustment expenses, net of reinsurance | 101,532 | |||||||||
All Outstanding Liabilities for Unpaid Claims and LAE Prior to 2007 [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Liability for Claims and Claims Adjustment Expense | 1,478 | |||||||||
Homeowners [Member] | ||||||||||
Claims Development [Line Items] | ||||||||||
Liability for Claims and Claims Adjustment Expense | $ 87,955 |
LOSS AND LOSS ADJUSTMENT EXPE55
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Schedule of Reconciliation of Net Incurred and Paid Development) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Liability for Claims and Claims Adjustment Expense [Abstract] | ||||
Total liabilities for unpaid losses and LAE, net of reinsurance | $ 116,870 | |||
Reinsurance Recoverables on Unpaid Losses, Gross to Net [Abstract] | ||||
Total reinsurance recoverables | 41,079 | |||
Unallocated loss adjustment expenses | 161 | |||
Gross liability for unpaid losses and LAE | 158,110 | $ 97,340 | $ 78,330 | $ 61,016 |
Homeowners [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Abstract] | ||||
Total liabilities for unpaid losses and LAE, net of reinsurance | 87,955 | |||
Reinsurance Recoverables on Unpaid Losses, Gross to Net [Abstract] | ||||
Total reinsurance recoverables | 19,964 | |||
Gross liability for unpaid losses and LAE | 87,955 | |||
Other Lines [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Abstract] | ||||
Total liabilities for unpaid losses and LAE, net of reinsurance | 28,915 | |||
Reinsurance Recoverables on Unpaid Losses, Gross to Net [Abstract] | ||||
Total reinsurance recoverables | $ 21,115 |
LOSS AND LOSS ADJUSTMENT EXPE56
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance) (Details) - Homeowners [Member] | Dec. 31, 2016 |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 1 | 53.40% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 2 | 28.30% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 3 | 7.40% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 4 | 4.20% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 5 | 2.20% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 6 | 2.60% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 7 | 1.00% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 8 | 0.10% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 9 | 0.40% |
Average annual percentage payout of incurred claims by age, net of reinsurance, Year 10 | 0.00% |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) - Promissory Note [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Mar. 17, 2015 | |
Debt Instrument [Line Items] | ||
Debt issuance cost | $ 0.1 | |
Monarch Delaware Holdings LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 5 | |
Interest rate percentage | 6.00% | |
Maturity period of debt | Mar. 17, 2021 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income tax expense | $ 2,683 | $ 24,753 | $ 20,108 |
Net deferred tax liability | 1,433 | 5,627 | |
Income taxes receivable | 13,871 | 2,691 | |
Uncertain tax positions | $ 0 | 0 | 0 |
Minimum [Member] | |||
Income tax examination, year | 2,013 | ||
Maximum [Member] | |||
Income tax examination, year | 2,015 | ||
Restatement Adjustment [Member] | |||
Income tax expense | $ 2,200 | ||
Parent Company [Member] | |||
Income tax expense | 2,683 | 24,753 | $ 20,108 |
Net deferred tax liability | 1,642 | ||
Income taxes receivable | $ 9,811 | $ 10,471 |
INCOME TAXES (Summary of Provis
INCOME TAXES (Summary of Provision for Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Federal: | |||
Current | $ 5,076 | $ 15,523 | $ 16,659 |
Deferred | (2,771) | 6,118 | 1,059 |
Federal income tax expense | 2,305 | 21,641 | 17,718 |
State: | |||
Current | 674 | 2,489 | 2,204 |
Deferred | (296) | 623 | 186 |
State income tax expense | 378 | 3,112 | 2,390 |
Total income tax expense | 2,683 | 24,753 | 20,108 |
Parent Company [Member] | |||
State: | |||
Total income tax expense | $ 2,683 | $ 24,753 | $ 20,108 |
INCOME TAXES (Effective Federal
INCOME TAXES (Effective Federal and State Tax Rates to Income before Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Computed expected tax expense provision, at federal rate | $ 957 | $ 22,829 | $ 19,887 |
State tax, net of federal tax benefit | 85 | 2,291 | 1,696 |
Tax-exempt interest | (571) | (445) | (312) |
Income subject to dividends-received deduction | (219) | (109) | (136) |
Meals and entertainment | 130 | ||
Return to provision and rate changes | 145 | 119 | (1,027) |
Prior year deferred tax true-up | 2,163 | ||
Other | (7) | 68 | |
Total income tax expense | 2,683 | 24,753 | 20,108 |
Parent Company [Member] | |||
Total income tax expense | $ 2,683 | $ 24,753 | $ 20,108 |
INCOME TAXES (Significant Compo
INCOME TAXES (Significant Components of Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Unearned premiums | $ 13,975 | $ 9,375 |
Unpaid loss and loss adjustment expenses | 1,612 | 1,175 |
Accrued expenses | 692 | 694 |
Net operating loss carryforwards | 7 | 140 |
Share-based compensation | 582 | 606 |
Other | 155 | 212 |
Total | 17,023 | 12,202 |
Deferred tax liabilities: | ||
Deferred acquisition costs | (16,364) | (11,906) |
Unrealized gains on investment securities | (1,277) | (2,336) |
Deferred revenue related to reinsurance | (3,395) | |
Other | (97) | (192) |
Depreciation and amortization | (718) | |
Total | (18,456) | (17,829) |
Net deferred tax liability | (1,433) | $ (5,627) |
Parent Company [Member] | ||
Deferred tax liabilities: | ||
Net deferred tax liability | $ (1,642) |
COMMITMENTS AND CONTINGENCIES62
COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Lease Payments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
Rent expense | $ 600 | $ 700 | $ 500 |
Expected future lease payouts [Abstract] | |||
2,017 | 644 | ||
2,018 | 662 | ||
2,019 | 656 | ||
2,020 | 678 | ||
2,021 | 698 | ||
Thereafter | 719 | ||
Total | $ 4,057 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Nov. 30, 2016 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock repurchased during period (in shares) | 624,818 | ||
Common stock repurchased during period, total cost | $ 11,317 | ||
Common stock repurchased during period, average price (in dollars per share) | $ 19.23 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unamortized share-based compensation expense not yet recognized | $ 5,600 | ||
Unamortized share-based compensation remaining weighted average vesting period | 1 year 9 months 4 days | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock repurchases, authorized amount | $ 10,000 | $ 10,000 | |
2012 Stock Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment award, expiration date | Apr. 5, 2022 | ||
2012 Stock Incentive Plan [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 1,000,000 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Share-based Compensation Arrangements) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 3,831 | $ 2,963 | $ 1,660 |
Intrinsic value of options exercised | 13,732 | 1,124 | 5,172 |
Fair value of restricted stock vested | 41,495 | 2,303 | 549 |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 3,831 | 2,930 | 1,525 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 33 | $ 135 |
SHAREHOLDERS' EQUITY (Summary o
SHAREHOLDERS' EQUITY (Summary of Stock Option Activity) (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options, Number of Shares [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 174,633 | 219,285 | 526,521 |
Exercised (in shares) | (94,249) | (44,652) | (302,735) |
Cancelled (in shares) | (900) | (4,501) | |
Outstanding, end of period (in shares) | 79,484 | 174,633 | 219,285 |
Stock Options, Weighted Average Option Exercise Price [Roll Forward] | |||
Outstanding, beginning of period (in dollars per share) | $ 3.79 | $ 3.79 | $ 4.56 |
Exercised (in dollars per share) | 3.85 | 3.81 | 5.13 |
Cancelled (in dollars per share) | 4.40 | 3.49 | |
Outstanding, end of period (in dollars per share) | $ 3.70 | $ 3.79 | $ 3.79 |
SHAREHOLDERS' EQUITY (Summary I
SHAREHOLDERS' EQUITY (Summary Information about Stock Options Outstanding and Exercisable) (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
SHAREHOLDERS' EQUITY [Abstract] | |
Range of exercise price, lower range limit (in dollars per share) | $ 2.45 |
Range of exercise price, upper range limit (in dollars per share) | $ 4.40 |
Shares outstanding and exercisable (in shares) | shares | 79,484 |
Weighted average remaining contractual life | 4 years 10 months 13 days |
Weighted average exercise price (in dollars per share) | $ 3.70 |
Aggregate intrinsic value | $ | $ 1,191,218 |
SHAREHOLDERS' EQUITY (Summary67
SHAREHOLDERS' EQUITY (Summary of Restricted Stock Activity) (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted Shares, Number of Shares [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 418,807 | 447,801 | 249,500 |
Granted (in shares) | 128,472 | 116,140 | 268,648 |
Vested (in shares) | (204,916) | (145,134) | (68,988) |
Cancelled (in shares) | (5,160) | (1,359) | |
Outstanding, end of period (in shares) | 337,203 | 418,807 | 447,801 |
Restricted Shares, Weighted Average Option Exercise Price [Roll Forward] | |||
Outstanding, beginning of period (in dollars per share) | $ 20.14 | $ 16.84 | $ 8.24 |
Granted (in dollars per share) | 19.16 | 27.53 | 22.50 |
Vested (in dollars per share) | 20.25 | 15.87 | 7.96 |
Cancelled (in dollars per share) | 20.58 | 8.29 | |
Outstanding, end of period (in dollars per share) | $ 19.69 | $ 20.14 | $ 16.84 |
SHAREHOLDERS' EQUITY (Reconcili
SHAREHOLDERS' EQUITY (Reconciliation of Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Before Tax [Roll Forward] | |||
Comprehensive (loss) income before income taxes | $ (2,736) | $ 34,132 | $ 40,055 |
Income Tax [Roll Forward] | |||
Other comprehensive income after reclassifications | 1,046 | 2,454 | (1,102) |
Net [Roll Forward] | |||
Accumulated other comprehensive income, beginning of period | 3,985 | ||
Accumulated other comprehensive income, end of period | 1,941 | 3,985 | |
Accumulated Other Comprehensive Income [Member] | |||
Before Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning of period | 6,111 | 12,419 | |
Other comprehensive income before reclassifications | 1,774 | (324) | |
Reclassification adjustment for realized gains included in net (loss) income | (4,560) | (5,984) | |
Comprehensive (loss) income before income taxes | (2,786) | (6,308) | |
Accumulated other comprehensive income, end of period | 3,323 | 6,111 | 12,419 |
Income Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning of period | (2,247) | (4,701) | |
Other comprehensive income before reclassifications | (470) | 86 | |
Reclassification adjustment for realized gains included in net (loss) income | 1,515 | 2,368 | |
Other comprehensive income after reclassifications | 1,046 | 2,454 | |
Accumulated other comprehensive income, end of period | (1,199) | (2,247) | (4,701) |
Net [Roll Forward] | |||
Accumulated other comprehensive income, beginning of period | 3,864 | 7,718 | |
Other comprehensive income before reclassifications | 1,305 | (238) | |
Reclassification adjustment for realized gains included in net (loss) income | (3,045) | (3,616) | |
Other comprehensive income after reclassifications | (1,740) | (3,854) | |
Accumulated other comprehensive income, end of period | $ 2,124 | $ 3,864 | $ 7,718 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
EMPLOYEE BENEFIT PLAN [Abstract] | |||
Eligible employees to contribution, percentage | 100.00% | ||
Percentage of first elective contributions | 6.00% | ||
Percentage of additional contribution of employee salary | 0.00% | 1.00% | |
Entity's matching contribution | $ 0.9 | $ 0.6 | $ 0.4 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Ceded premiums related to loss and quota share reinsurance agreements | $ 285,986,000 | $ 268,516,000 | $ 201,998,000 |
Hurricane Matthew [Member] | |||
Related Party Transaction [Line Items] | |||
Ceded losses related to loss and quota share reinsurance agreements | 800,000 | 100,000 | 0 |
Transatlantic Reinsurance Company [Member] | |||
Related Party Transaction [Line Items] | |||
Ceded premiums related to loss and quota share reinsurance agreements | 5,000,000 | 4,300,000 | 1,200,000 |
Law Firm Associated with Chairman of the Board of Directors [Member] | |||
Related Party Transaction [Line Items] | |||
Fees paid to related party | 72,198 | 26,286 | $ 6,538 |
Crosswinds AUM, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Fees paid to related party | $ 200,000 | $ 200,000 |
EARNINGS PER SHARE (Schedule of
EARNINGS PER SHARE (Schedule of Calculation of Basic and Diluted Net Income Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income attributable to Federated National Holding Company shareholders | $ (12,116) | $ 1,394 | $ 991 | $ 9,535 | $ 9,274 | $ 10,593 | $ 11,734 | $ 9,284 | $ (196) | $ 40,885 | $ 37,199 |
Weighted average number of common shares outstanding - basic (in shares) | 13,758 | 13,729 | 12,082 | ||||||||
Net income per share - basic (in dollars per share) | $ (0.89) | $ 0.10 | $ 0.07 | $ 0.69 | $ 0.67 | $ 0.77 | $ 0.86 | $ 0.68 | $ (0.01) | $ 2.98 | $ 3.08 |
Dilutive effect of stock compensation plans (in shares) | 268 | 356 | |||||||||
Weighted average number of common shares outstanding - diluted (in shares) | 13,758 | 13,997 | 12,438 | ||||||||
Net income per share - diluted (in dollars per share) | $ (0.01) | $ 2.92 | $ 2.99 | ||||||||
Dividends per share | $ 0.27 | $ 0.18 | $ 0.13 | ||||||||
Parent Company [Member] | |||||||||||
Net income attributable to Federated National Holding Company shareholders | $ (196) | $ 40,885 | $ 37,199 |
VARIABLE INTEREST ENTITY (Carry
VARIABLE INTEREST ENTITY (Carrying Amount of VIE Consolidated Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Investments | ||||
Debt securities, available-for-sale, at amortized cost | $ 376,644 | $ 338,021 | ||
Equity securities, available-for-sale, at fair value | 29,375 | 38,534 | ||
Total investments | 409,682 | 384,331 | ||
Cash and cash equivalents | 74,593 | 53,038 | $ 40,157 | $ 41,446 |
Prepaid reinsurance premiums | 156,932 | 181,840 | ||
Premiums receivable, net | 54,854 | 38,594 | ||
Other asset | 11,509 | 7,605 | ||
TOTAL ASSETS | 813,127 | 699,254 | ||
LIABILITIES | ||||
Loss and loss adjustment expense reserves | 158,110 | 97,340 | $ 78,330 | $ 61,016 |
Unearned premiums | 294,022 | 253,960 | ||
Reinsurance Payable | 79,154 | 61,069 | ||
Debt | 4,909 | 4,887 | ||
Other liabilities | 37,643 | 25,612 | ||
Total liabilities | 575,271 | 448,495 | ||
Monarch Delaware - Variable Interest Entity [Member] | ||||
Investments | ||||
Debt securities, available-for-sale, at amortized cost | 27,100 | 21,312 | ||
Equity securities, available-for-sale, at fair value | 1,604 | 1,358 | ||
Total investments | 28,704 | 22,670 | ||
Cash and cash equivalents | 15,668 | 14,616 | ||
Prepaid reinsurance premiums | 1,070 | 34 | ||
Premiums receivable, net | 1,584 | 355 | ||
Other asset | 1,910 | 1,037 | ||
TOTAL ASSETS | 48,936 | 38,712 | ||
LIABILITIES | ||||
Loss and loss adjustment expense reserves | 1,659 | 237 | ||
Unearned premiums | 8,406 | 1,448 | ||
Reinsurance Payable | 864 | |||
Debt | 4,909 | 4,887 | ||
Income taxes payable | 8 | |||
Other liabilities | 1,026 | 374 | ||
Total liabilities | $ 16,864 | $ 6,954 |
STATUTORY ACCOUNTING AND DIVI73
STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STATUTORY ACCOUNTING AND DIVIDEND RESTRICTIONS [Abstract] | |||
Carryforward period for statutory unassigned surplus included in consideration of dividend to be paid | 2 years | ||
Percentage of statutory unassigned surplus as of preceding year included in consideration of dividend to be paid | 10.00% | ||
Percentage of insurers capital surplus considered for dividend distribution | 10.00% | ||
Percentage of minimum statutory capital surplus after the dividend or distribution | 115.00% | ||
Number of business days prior to dividend payment | 10 years | ||
Statutory capital and surplus | $ 172.1 | $ 175.9 | |
Statutory net income (loss) | $ (37) | $ 23.9 | $ 29.3 |
QUARTERLY RESULTS OF OPERATIO74
QUARTERLY RESULTS OF OPERATIONS (Summary of Unaudited Quarterly Results of Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unaudited Quarterly Results of Operations [Abstract] | |||||||||||
Net premiums earned | $ 75,425 | $ 69,405 | $ 60,045 | $ 54,997 | $ 53,721 | $ 62,286 | $ 49,227 | $ 44,786 | $ 259,872 | $ 210,020 | $ 170,905 |
Total Revenue | 88,570 | 83,790 | 75,064 | 68,960 | 63,568 | 72,599 | 58,790 | 54,936 | 316,384 | 249,893 | 200,692 |
Losses and loss adjustment expenses | 67,158 | 43,613 | 47,025 | 29,545 | 28,843 | 28,412 | 23,149 | 23,949 | 60,770 | 19,010 | 17,315 |
Total costs and expenses | 104,590 | 82,250 | 73,249 | 53,562 | 49,123 | 54,974 | 40,151 | 40,452 | 313,651 | 184,700 | 143,385 |
Net (loss) income attributable to Federated National Holding Company shareholders | $ (12,116) | $ 1,394 | $ 991 | $ 9,535 | $ 9,274 | $ 10,593 | $ 11,734 | $ 9,284 | $ (196) | $ 40,885 | $ 37,199 |
Net income per share - basic (in dollars per share) | $ (0.89) | $ 0.10 | $ 0.07 | $ 0.69 | $ 0.67 | $ 0.77 | $ 0.86 | $ 0.68 | $ (0.01) | $ 2.98 | $ 3.08 |
Parent Company [Member] | |||||||||||
Unaudited Quarterly Results of Operations [Abstract] | |||||||||||
Total Revenue | $ 12,595 | $ 75,003 | $ 64,457 | ||||||||
Total costs and expenses | 9,862 | 9,810 | 7,150 | ||||||||
Net (loss) income attributable to Federated National Holding Company shareholders | $ (196) | $ 40,885 | $ 37,199 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 07, 2017 | Mar. 01, 2017 | Dec. 31, 2016 | Mar. 10, 2017 |
Subsequent Events [Line Items] | ||||
Dividends declared date | Mar. 13, 2017 | |||
Subsequent Events [Member] | ||||
Subsequent Events [Line Items] | ||||
Amount authorized to repurchase common stock through March 8, 2018 | $ 10 | |||
Dividends payable, per share (in dollars per share) | $ 0.08 | |||
Dividends payable date | Jun. 1, 2017 | |||
Dividends record date | May 1, 2017 | |||
Subsequent Events [Member] | Support Book Of Business And Regulatory Requirement [Member] | ||||
Subsequent Events [Line Items] | ||||
Approved capital transfer amount into FNIC from FNHC | $ 25 |
Schedule II - Condensed Finan76
Schedule II - Condensed Financial Information of Registrant (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ||||
Investments securities, available-for-sale, at fair value | $ 404,131 | $ 377,712 | ||
Cash and cash equivalents | 74,593 | 53,038 | $ 40,157 | $ 41,446 |
Income taxes receivable | 13,871 | 2,691 | ||
Other asset | 11,509 | 7,605 | ||
TOTAL ASSETS | 813,127 | 699,254 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract] | ||||
Deferred Tax Liabilities, Net | 1,433 | 5,627 | ||
Other liabilities | 37,643 | 25,612 | ||
Total liabilities | 575,271 | 448,495 | ||
Preferred stock | ||||
Common stock | 134 | 138 | ||
Additional paid-in capital | 136,779 | 131,998 | ||
Accumulated other comprehensive income | 1,941 | 3,985 | ||
Retained earnings | 80,275 | 96,461 | ||
Total shareholders' equity attributable Federated National Holding Company shareholders | 219,129 | 232,582 | ||
Noncontrolling interest | 18,727 | 18,177 | ||
Total shareholders' equity | 237,856 | 250,759 | 192,579 | 108,494 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 813,127 | 699,254 | ||
Parent Company [Member] | ||||
Assets [Abstract] | ||||
Investments in subsidiaries | 283,669 | 282,504 | ||
Investments securities, available-for-sale, at fair value | 31,750 | 25,649 | ||
Cash and cash equivalents | 7,786 | 2,397 | $ 12,053 | $ 2,143 |
Deferred income taxes, net | 485 | |||
Income taxes receivable | 9,811 | 10,471 | ||
Other asset | 2,030 | 1,506 | ||
TOTAL ASSETS | 335,046 | 323,012 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract] | ||||
Due to subsidiaries | 93,653 | 70,079 | ||
Deferred Tax Liabilities, Net | 1,642 | |||
Other liabilities | 1,895 | 2,174 | ||
Total liabilities | 97,190 | 72,253 | ||
Common stock | 134 | 138 | ||
Additional paid-in capital | 136,779 | 131,998 | ||
Accumulated other comprehensive income | 1,941 | 3,985 | ||
Retained earnings | 80,275 | 96,461 | ||
Total shareholders' equity attributable Federated National Holding Company shareholders | 219,129 | 232,582 | ||
Noncontrolling interest | 18,727 | 18,177 | ||
Total shareholders' equity | 237,856 | 250,759 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 335,046 | $ 323,012 |
Schedule II - Condensed Finan77
Schedule II - Condensed Financial Information of Registrant, Condensed Statements of Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue [Abstract] | |||||||||||
Net investment income | $ 9,063 | $ 7,226 | $ 5,385 | ||||||||
Total revenue | $ 88,570 | $ 83,790 | $ 75,064 | $ 68,960 | $ 63,568 | $ 72,599 | $ 58,790 | $ 54,936 | 316,384 | 249,893 | 200,692 |
Costs and expenses [Abstract] | |||||||||||
General and administrative expenses | 17,186 | 15,223 | 10,272 | ||||||||
Total costs and expenses | 104,590 | 82,250 | 73,249 | 53,562 | 49,123 | 54,974 | 40,151 | 40,452 | 313,651 | 184,700 | 143,385 |
Income before income taxes | 2,733 | 65,193 | 57,307 | ||||||||
Income taxes | 2,683 | 24,753 | 20,108 | ||||||||
Net income | 50 | 40,440 | 37,199 | ||||||||
Net income (loss) attributable to noncontrolling interest | 246 | (445) | |||||||||
Net (loss) income attributable to Federated National Holding Company shareholders | $ (12,116) | $ 1,394 | $ 991 | $ 9,535 | $ 9,274 | $ 10,593 | $ 11,734 | $ 9,284 | (196) | 40,885 | 37,199 |
Parent Company [Member] | |||||||||||
Revenue [Abstract] | |||||||||||
Management fees | 2,492 | 2,489 | 2,387 | ||||||||
Net investment income | 623 | 609 | 417 | ||||||||
Equity in income of consolidated subsidiaries | 9,480 | 71,905 | 61,653 | ||||||||
Total revenue | 12,595 | 75,003 | 64,457 | ||||||||
Costs and expenses [Abstract] | |||||||||||
General and administrative expenses | 9,862 | 9,810 | 7,150 | ||||||||
Total costs and expenses | 9,862 | 9,810 | 7,150 | ||||||||
Income before income taxes | 2,733 | 65,193 | 57,307 | ||||||||
Income taxes | 2,683 | 24,753 | 20,108 | ||||||||
Net income | 50 | 40,440 | 37,199 | ||||||||
Net income (loss) attributable to noncontrolling interest | 246 | (445) | |||||||||
Net (loss) income attributable to Federated National Holding Company shareholders | $ (196) | $ 40,885 | $ 37,199 |
Schedule II - Condensed Finan78
Schedule II - Condensed Financial Information of Registrant, Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flow from operating activities [Abstract] | |||
Net income | $ 50 | $ 40,440 | $ 37,199 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 869 | 624 | 149 |
Share-based compensation | 4,420 | 4,527 | 2,140 |
Changes in operating assets and liabilities [Abstract] | |||
Deferred income taxes, net of other comprehensive income | (2,575) | 6,741 | 765 |
Income taxes receivable, net | (11,769) | (2,445) | (4,189) |
Other, net | 8,120 | 135 | 4,411 |
Net cash provided by operating activities | 69,750 | 52,891 | 63,144 |
Cash flow from investing activities [Abstract] | |||
Sales, maturities and redemptions of investments securities | 311,109 | 169,979 | 87,151 |
Purchases of property and equipment | (2,147) | (1,736) | (969) |
Net cash used in investing activities | (33,151) | (63,641) | (107,905) |
Net Cash Provided by (Used in) Financing Activities, Continuing Operations [Abstract] | |||
Noncontrolling interest equity investment | 18,743 | ||
Tax benefit related to share-based compensation | 589 | 1,564 | 480 |
Issuance of common stock for share-based awards | 361 | 171 | 1,555 |
Purchases of FNHC common stock | (11,317) | ||
Dividends paid | (4,677) | (1,847) | (1,672) |
Net cash (used in) provided by financing activities | (15,044) | 23,631 | 43,472 |
Net increase in cash and cash equivalents | 21,555 | 12,881 | (1,289) |
Cash and cash equivalents at beginning of period | 53,038 | 40,157 | 41,446 |
Cash and cash equivalents at end of period | 74,593 | 53,038 | 40,157 |
Parent Company [Member] | |||
Cash flow from operating activities [Abstract] | |||
Net income | 50 | 40,440 | 37,199 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Equity in undistributed income of consolidated subsidiaries | (9,480) | (71,905) | (61,653) |
Depreciation and amortization | 73 | 64 | 92 |
Share-based compensation | 4,420 | 4,527 | 2,140 |
Changes in operating assets and liabilities [Abstract] | |||
Deferred income taxes, net of other comprehensive income | 2,127 | (153) | 674 |
Income taxes receivable, net | 2,978 | 24,352 | 16,521 |
Capital contribution payable | (18,501) | 2,501 | |
Due to subsidiaries | 23,574 | 6,430 | (2,069) |
Other, net | 3,786 | 2,057 | 4,460 |
Net cash provided by operating activities | 27,528 | (12,689) | (135) |
Cash flow from investing activities [Abstract] | |||
Capital contributions to consolidated subsidiaries, net | (32,743) | (18,501) | |
Sales, maturities and redemptions of investments securities | 76,928 | 38,612 | 22,414 |
Purchases of investment securities | (83,724) | (21,354) | (36,949) |
Purchases of property and equipment | (299) | (113) | (391) |
Net cash used in investing activities | (7,095) | (15,598) | (33,427) |
Net Cash Provided by (Used in) Financing Activities, Continuing Operations [Abstract] | |||
Noncontrolling interest equity investment | 18,743 | ||
Tax benefit related to share-based compensation | 589 | 1,564 | 480 |
Issuance of common stock for share-based awards | 361 | 171 | 1,555 |
Issuance of common stock in public offering | 43,109 | ||
Purchases of FNHC common stock | (11,317) | ||
Dividends paid | (4,677) | (1,847) | (1,672) |
Net cash (used in) provided by financing activities | (15,044) | 18,631 | 43,472 |
Net increase in cash and cash equivalents | 5,389 | (9,656) | 9,910 |
Cash and cash equivalents at beginning of period | 2,397 | 12,053 | 2,143 |
Cash and cash equivalents at end of period | $ 7,786 | $ 2,397 | $ 12,053 |
Schedule V - Valuation and Qu79
Schedule V - Valuation and Qualifying Accounts (Details) - Allowance for Uncollectible Premiums Receivable [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | $ 302 | $ 148 | $ 143 |
Charged to costs and expenses | (219) | 192 | 45 |
Deductions | (28) | (38) | (40) |
Balance, end of period | $ 55 | $ 302 | $ 148 |
Schedule VI - Supplemental In80
Schedule VI - Supplemental Information Concerning Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Claim and claim adjustment expenses incurred related to current year | $ 174,795 | $ 113,819 | $ 79,932 |
Claim and claim adjustment expenses incurred related to prior year | 12,546 | (9,466) | 1,104 |
Property and Casualty Insurance [Member] | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||
Deferred acquisition costs | 38,962 | 15,547 | 13,610 |
Loss and loss adjustment expense reserves | 158,110 | 97,340 | 78,330 |
Unearned premiums | 294,022 | 253,960 | 192,424 |
Earned premiums | 259,872 | 210,020 | 170,905 |
Net investment income | 9,063 | 7,226 | 5,385 |
Claim and claim adjustment expenses incurred related to current year | 174,795 | 113,819 | 79,932 |
Claim and claim adjustment expenses incurred related to prior year | 12,546 | (9,466) | 1,104 |
Amortization of deferred acquisition costs | 75,850 | 37,276 | 27,474 |
Paid claims and claims adjustment expense | 160,154 | 82,445 | 71,803 |
Premiums written | $ 319,499 | $ 225,254 | $ 175,158 |