Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 28, 2014 | Jun. 30, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 16,119,602 | ' |
Entity Registrant Name | 'Homeowners of America Holding Corp | ' | ' |
Entity Central Index Key | '0001346922 | ' | ' |
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 | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets: | ' | ' |
Cash and cash equivalents | $8,104,310 | $10,194,375 |
Short-term investments | 4,151,011 | 3,853,353 |
Restricted cash and investments | 1,000,000 | 1,000,000 |
Long-term investments | 1,960,000 | 2,155,695 |
Accrued investment income | 8,853 | 8,435 |
Due and deferred premiums | 4,169,824 | 3,643,136 |
Balance due from reinsurers | 46,281,756 | 36,080,628 |
Property, equipment and software, net | 244,516 | 234,156 |
Deferred policy acquisition costs | 6,214,334 | 5,274,515 |
Deferred ceding commissions | 0 | 683,914 |
TWIA assessments, net of ceded amounts | 0 | 80,040 |
Prepaid expenses and other | 128,195 | 130,296 |
Deferred tax assets, net | 933,221 | 816,811 |
Total assets | 73,196,020 | 64,155,354 |
Liabilities | ' | ' |
Loss and loss adjustment expenses | 15,884,062 | 11,641,296 |
Advance premiums | 90,854 | 36,499 |
Ceded reinsurance premiums payable | 3,271,858 | 2,782,190 |
Unearned premiums | 31,297,118 | 26,578,928 |
Ceded deferred premiums | 0 | 2,381,906 |
Unearned ceding commissions | 8,067,162 | 6,826,778 |
Commissions payable, reinsurers and agents | 3,716,423 | 6,117,170 |
General and other accrued expenses payable | 1,906,265 | 729,441 |
Income tax payable | 211,198 | 349,785 |
Taxes, licenses and other fees payable | 474,503 | 431,382 |
Funds held under reinsurance treaty | 0 | 36,573 |
Convertible promissory note | 0 | 1,000,000 |
Total liabilities | 64,919,443 | 58,911,948 |
Stockholders' equity: | ' | ' |
Preferred stock | 0 | 0 |
Common Stock | 1,583 | 90 |
Treasury stock, $0.0001 par value per share; 1,350,000 common shares as of December 31, 2013 | -135 | 0 |
Additional paid-in-capital | 5,969,550 | 4,906,000 |
Retained earnings | 2,305,579 | 336,816 |
Total stockholders' equity | 8,276,577 | 5,243,406 |
Total liabilities and stockholders' equity | 73,196,020 | 64,155,354 |
Series A Preferred Stock [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock | 0 | 450 |
Series B Preferred Stock [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock | $0 | $50 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred Stock Convertible Cumulative Percentage | 12.50% | 12.50% |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 20,500,000 | ' |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 40,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 17,181,140 | 900,000 |
Common Stock, Shares, Outstanding | 15,831,140 | 900,000 |
Treasury Stock Par Or Stated Value Per Share | $0.00 | $0.00 |
Treasury Stock, Shares | 1,350,000 | ' |
Series A Preferred Stock [Member] | ' | ' |
Preferred Stock, Shares Authorized | ' | 4,500,000 |
Preferred Stock, Shares Issued | ' | 4,500,000 |
Preferred Stock, Shares Outstanding | ' | 4,500,000 |
Series B Preferred Stock [Member] | ' | ' |
Preferred Stock, Shares Authorized | ' | 1,000,000 |
Preferred Stock, Shares Issued | ' | 500,000 |
Preferred Stock, Shares Outstanding | ' | 500,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues: | ' | ' |
Premiums earned | $53,238,811 | $47,185,700 |
Ceded premiums | -48,422,943 | -42,207,361 |
Net premiums | 4,815,868 | 4,978,339 |
Policy fees | 4,655,315 | 4,442,069 |
Ceding commissions | 10,493,183 | 9,601,837 |
Gross investment income | 41,649 | 17,980 |
Reinsurance profit sharing, installment fees and other income | 2,544,751 | 1,392,732 |
Total Revenue | 22,550,766 | 20,432,957 |
Expenses: | ' | ' |
Losses and loss adjustment expenses | 2,259,107 | 4,064,797 |
Policy acquisition expenses | 11,606,188 | 10,178,892 |
Underwriting and other operating expenses | 5,677,484 | 5,325,414 |
Total Expenses | 19,542,779 | 19,569,103 |
Income before income taxes | 3,007,987 | 863,854 |
Provision (benefit) for income taxes: | ' | ' |
Current | 1,155,634 | 376,688 |
Deferred | -116,410 | -615,830 |
Total income taxes | 1,039,224 | -239,142 |
Net income | 1,968,763 | 1,102,996 |
Cumulative preferred stock dividends | -974,179 | -1,288,750 |
Net income (loss) available to common stockholders | $994,584 | ($185,754) |
Basic income (loss) per common share | $0.15 | ($0.08) |
Weighted average number of common shares outstanding - basic | 6,777,047 | 2,250,000 |
Diluted income (loss) per common share | $0.11 | ($0.08) |
Weighted average number of common shares outstanding - diluted | 17,633,640 | 2,250,000 |
Cash dividend declared per common share | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Treasury Stock [Member] |
Balance at Dec. 31, 2011 | $4,140,410 | $90 | $4,906,000 | ($766,180) | $450 | $50 | ' |
Balance, shares at Dec. 31, 2011 | ' | 900,000 | ' | ' | 4,500,000 | 500,000 | ' |
Net Income | 1,102,996 | 0 | 0 | 1,102,996 | 0 | 0 | ' |
Balance at Dec. 31, 2012 | 5,243,406 | 90 | 4,906,000 | 336,816 | 450 | 50 | 0 |
Balance, shares at Dec. 31, 2012 | ' | 900,000 | ' | ' | 4,500,000 | 500,000 | 0 |
Net Income | 1,968,763 | 0 | 0 | 1,968,763 | 0 | 0 | 0 |
Conversion of Series A Preferred Stock | 675 | 1,125 | 0 | 0 | -450 | 0 | 0 |
Conversion of Series A Preferred Stock (in shares) | ' | 11,250,000 | ' | ' | -4,500,000 | 0 | 0 |
Conversion of Series B Preferred Stock | 75 | 125 | 0 | 0 | 0 | -50 | 0 |
Conversion Of Series B Preferred Stock (in shares) | ' | 1,250,000 | ' | ' | 0 | -500,000 | 0 |
Conversion of Convertible Note Payable | 1,000,000 | 227 | 999,773 | 0 | 0 | 0 | 0 |
Conversion of Convertible Note Payable (in shares) | ' | 2,272,500 | ' | ' | 0 | 0 | 0 |
Conversion of Interest on Convertible Note Payable (in shares) | ' | 158,640 | ' | ' | 0 | 0 | 0 |
Conversion of Interest on Convertible Note Payable | 69,808 | 16 | 69,792 | 0 | 0 | 0 | 0 |
Repurchase of Common Stock | -5,400 | 0 | -5,265 | 0 | 0 | 0 | -135 |
Repurchase of Common Stock (in shares) | ' | 0 | ' | ' | 0 | 0 | 1,350,000 |
Adjustment of Par Value to reflect Forward Stock Split | -750 | 0 | -750 | 0 | 0 | 0 | 0 |
Balance at Dec. 31, 2013 | $8,276,577 | $1,583 | $5,969,550 | $2,305,579 | $0 | $0 | ($135) |
Balance, shares at Dec. 31, 2013 | ' | 15,831,140 | ' | ' | 0 | 0 | 1,350,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $1,968,763 | $1,102,996 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation & amortization | 88,770 | 72,704 |
Deferred tax assets | -116,410 | -615,830 |
(Increase) decrease in: | ' | ' |
Accrued investment income | -418 | 621 |
Due and deferred premiums | -526,688 | -89,507 |
Balance due from reinsurers | -10,201,128 | -2,470,169 |
Deferred policy acquisition costs | -939,819 | -844,771 |
Deferred ceding commissions | 683,914 | 755,673 |
TWIA assessments | 80,040 | 80,040 |
Prepaid and other | 2,101 | -20,946 |
Increase (decrease) in: | ' | ' |
Losses and loss adjustment expenses | 4,242,766 | 2,332,322 |
Advance premiums | 54,355 | -31,093 |
Ceded reinsurance premiums payable | 489,668 | -1,873,909 |
Unearned premiums | 4,718,190 | 4,112,674 |
Ceded deferred premiums | -2,381,906 | -370,275 |
Unearned ceding commissions | 1,240,384 | 1,057,503 |
Commissions payable, reinsurance & agents | -2,400,747 | 1,870,654 |
General and other accrued expenses | 1,246,632 | 328,248 |
Funds held under reinsurance treaty | -36,573 | 36,573 |
Income tax payable | -138,587 | 309,258 |
Taxes, licenses and other fees payable | 43,121 | 292,017 |
Net cash provided by (used in) operating activities | -1,883,572 | 6,034,783 |
Cash flows from investing activities: | ' | ' |
Purchases of long-term certificate of deposit | -1,960,000 | -2,032,000 |
Maturities of long-term certificate of deposit | 2,155,695 | 0 |
Maturities of short-term investments | 1,455,000 | 0 |
Purchases of short-term investments | -1,752,658 | -1,814,142 |
Additions to furniture, equipment and software | -99,130 | -187,668 |
Net cash used in investing activities | -201,093 | -4,033,810 |
Cash flows from financing activities: | ' | ' |
Repurchase of common stock | -5,400 | 0 |
Proceeds from convertible notes payable | 0 | 1,000,000 |
Net cash provided by (used in) financing activities | -5,400 | 1,000,000 |
Net increase (decrease) in cash and cash equivalents | -2,090,065 | 3,000,973 |
Cash and cash equivalents, beginning of period | 10,194,375 | 7,193,402 |
Cash and cash equivalents, end of the period | 8,104,310 | 10,194,375 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid during the year for income tax | 1,260,724 | 70,000 |
Cash paid during the year for interest expense | 0 | 0 |
Non cash investing from financing activities | ' | ' |
Repayment of debt on convertible note and conversion to common stock | 1,000,000 | 0 |
Conversion of interest on convertible note | $69,808 | $0 |
ORGANIZATION_AND_SUMMARY_OF_SI
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | |
1 | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Homeowners of America Holding Corporation (“HAHC”) is an insurance holding company established to hold insurance entities for the purpose of marketing homeowners insurance products on a national basis. HAHC owns 100% of Homeowners of America Insurance Company (“HAIC”). HAIC is domiciled in Texas, licensed in multiple states and is authorized to write various forms of homeowners and auto insurance. All coverage is concentrated in Texas. HAHC also owns 100% of Homeowners of America MGA, Inc. (“MGA”), a Texas Corporation, formed as a captive managing general agency to produce business for HAIC. HAHC, along with its subsidiaries HAIC and MGA, are collectively referred to as “the Company”. | ||
Principles of Consolidation | ||
The accompanying consolidated financial statements include the accounts of Homeowners of America Holding Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||
Basis of Presentation | ||
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents include cash and highly liquid short-term investments, with original maturities of three months or less. The amount is carried at cost, which approximates fair value. At December 31, 2013 and 2012, cash and cash equivalents consist of cash on deposit with financial institutions, as well as money market mutual funds. | ||
General and other accrued expenses payable as of December 31, 2013 include $1.2 million of checks issued in excess of cash book balances, not yet presented for payment. | ||
Investments | ||
The Company’s investments are comprised of short-term, restricted, and long-term investments. Restricted investments and long-term investments are described below. Short-term investments include certificates of deposit with original maturities greater than three months and maturities of one year or less. Due to the short-term nature of these investments, significant changes in prevailing interest rates and economic conditions should not adversely affect the timing and amount of cash flows on such investments or their related values. Accordingly, certificates of deposit are carried at cost, which approximates fair value. | ||
The Company has pledged to the Texas Department of Insurance $1 million for the purpose of meeting state regulatory requirements. Restricted assets are shown separately in the accompanying consolidated balance sheets as “Restricted cash and investments”. Although the Company, with the approval of the Texas Department of Insurance, may exchange the investments with other funds or investments, management intends to hold the portion of these restricted investments in certificates of deposit to their maturity. As such, these restricted certificates of deposit are carried at cost which approximates fair value. Interest earned on these investments inures to the benefit of the Company. | ||
The Company’s investments also include certificates of deposit that mature more than one year after the balance sheet date and are reflected on the consolidated balance sheets as Long-term investments. Based on management’s intent to hold to maturity, this investment is carried at cost. Cost approximates fair value based on the rates currently offered for deposits of similar remaining maturities. | ||
The Company’s investments in certificates of deposits and money market accounts do not qualify as securities as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320, Investment – Debt and Equity Securities. Accordingly, the fair value disclosures required by FASB ASC 820, Fair Value Measurements and Disclosures are not provided. Where applicable, the Company assesses investments of an issuer currently carrying a net unrealized loss. If in management’s judgment, the decline in value is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in determining whether impairment exists include financial condition, business prospects and creditworthiness of the issuer, the length of time and magnitude that the asset value has been less than cost, and the ability and intent to hold such investments until the fair value recovers. | ||
Comprehensive Income | ||
FASB ASC 220 - Comprehensive Income, requires that recognized revenues, expenses, gains and losses be included in net income (loss). Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, these items, along with net income (loss), are components of comprehensive income. The Company characterizes their fixed income portfolio as available-for-sale securities, with appropriate adjustments to other comprehensive income. There were no qualifying items reported in comprehensive income for the years ended December 31, 2013 or 2012. | ||
Recognition of Premium Revenues | ||
Premiums are recognized as revenue on a daily pro rata basis over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the measurement period and to be earned over the remaining term of those polices, is deferred and reported as unearned premiums. | ||
Ceding Commission | ||
Ceding commissions represent acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the associated policy. | ||
Policy Fees | ||
Policy fee income includes application fees which are intended to reimburse the Company for a portion of the costs incurred in establishing the insurance. Policy fees on policies where premium is traditionally paid in full upon inception of the policy are recognized when written, while fees charged on policies where premiums are paid in installments, are recognized when collected. | ||
Reinsurance Profit Sharing, Installment Fees and Other Income | ||
Reinsurance profit share income is recognized when earned. Installment and other fees associated with the collection of installment premium payments are recognized as income when collected. Reinsurance profit share income for the year ended December 31, 2013 was 5.82% of total revenue within this classification on the consolidated statement of operations. There was no amount over 5% of total revenue within this classification on the consolidated statement of operations for the year ended December 31, 2012. | ||
Property, Equipment and Software | ||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which range from three to five years. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations. Maintenance and repairs are expensed as incurred. | ||
Software installation and development is stated at cost, net of accumulated amortization. Amortization is calculated on a straight-line basis method over three years. | ||
Impairment of Long-Lived Assets | ||
Long-lived assets, such as property, equipment and software, are reviewed for impairment whenever business events or circumstances could lead to or indicate that the value of the asset may not be recoverable. The assessment of possible impairment is based on whether the carrying amount of the assets exceeds its fair value. The Company uses estimates of undiscounted future cash flows in determining the recoverability of long-lived assets. As of December 31, 2013 and 2012, no impairment has been recorded. | ||
Deferred Policy and Acquisition Costs/Deferred Ceding Commissions | ||
Deferred policy acquisitions costs (“DAC”) as of December 31, 2013 and 2012, consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if estimates of future premium income from their related lines of insurance are revised. | ||
Deferred ceding commission as of December 31, 2012 consists of the expense allowance afforded by reinsurers on premium subject to quota share reinsurance treaties, which remain uncollected as of the balance sheet date. Due to a change in the terms of the Company’s property reinsurance treaty effective April 1, 2013, where ceded premium is remitted on a written basis rather than on a collected basis, the balance of uncollected ceding commission for property quota share reinsurance is zero at December 31, 2013. | ||
Reserve for Losses and Loss Adjustment Expenses | ||
The liability for losses and loss adjustment expenses (“LAE”) are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management’s estimate of an amount for losses incurred but not reported (“IBNR”), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings. | ||
Due and Deferred Premiums | ||
Due and deferred premiums consist of uncollateralized premiums and agents’ balances in the course of collection as well as premiums booked but not yet due. | ||
Reinsurance | ||
In the normal course of business, the Company seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses only quality, financially rated reinsurers and continually monitors the financial ratings of these companies through its brokers. The amount and type of reinsurance purchased each year is based on management’s estimate of its probable maximum loss and the conditions within the reinsurance market. The Company continually monitors its risk exposure through the use of the AIR modeling system and other modeling tools provided by its reinsurance brokers. Reinsurance premiums, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums paid for reinsurance are reported as reductions of earned premium income. | ||
Income Taxes | ||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss carryforwards, and liabilities are measured using enacted tax rates expected to be recovered or settled. | ||
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. | ||
Uncertain Tax Positions | ||
The Company recognizes uncertain tax positions in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns, and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. At December 31, 2013, the Company’s tax years from 2010 through 2013 remain subject to examination. | ||
Estimates | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s primary areas of estimate are for liabilities for unpaid losses and loss adjustment expenses, deferred policy acquisition costs, deferred tax asset valuation, and reinsurance. Actual results could differ significantly from those estimates. | ||
Fair Value of Financial Instruments | ||
The carrying value for the Company’s cash and cash equivalents, short-term investments, and convertible notes payable approximate fair values as of December 31, 2013 and 2012 due to their short-term nature. Fair value for securities is based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures. | ||
Convertible Notes Payable | ||
The Company accounts for convertible notes payable under FASB ASC Topic 470-20 – Debt with Conversion and Other Options, which requires issuers to assess whether or not an embedded conversion feature is required to be separately accounted for as a derivative liability for liability and equity components and if the conversion feature is beneficial to the holder. See Note 10 on Convertible Notes Payable for additional disclosure. | ||
Stock Based Compensation | ||
The Company accounts for stock-based compensation under the fair value recognition provisions of FASB ASC Topic 718 – Compensation – Stock Compensation, which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with FASB ASC Topic 718, the Company recognizes stock-based compensation, if any, in the consolidated statements of operations on a straight line basis over the vesting period of the stock award. | ||
Earnings (Loss) Per Share | ||
Basic earnings (loss) per share of common stock is computed by dividing net income or loss, less cumulative preferred stock dividends for the period whether or not earned or paid, by the weighted-average number of common shares during the period. | ||
For the year ended December 31, 2013, the net income attributable to common stockholders was decreased for cumulative dividends on preferred stock during the period of $974,179. | ||
For the year ended December 31, 2012, the net income attributable to common stockholders was decreased for cumulative dividends on preferred stock during the period of $1,288,750. | ||
Diluted earnings (loss) per share of common stock is computed by dividing net income or loss attributable to common stockholders, adjusted for the effect of potentially dilutive securities, by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include convertible notes payable, outstanding convertible preferred stock and stock options. | ||
For the year ended December 31, 2013, all of the Company’s dilutive securities were included in the computation of diluted earnings per share as dilutive. The total number of dilutive shares of common stock that were included totaled 10,856,593. | ||
For the year ended December 31, 2012, all of the Company’s potentially dilutive securities were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive shares of common stock that were excluded totaled 13,118,125. | ||
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended | ||
Dec. 31, 2013 | |||
New Accounting Pronouncements and Changes In Accounting Principles [Abstract] | ' | ||
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | ' | ||
2 | RECENT ACCOUNTING PRONOUNCEMENTS | ||
Accounting Standards Update No. 2013-02. In February 2013, the FASB issued Accounting Standards Update No. 2013-02 (“ASU 2013-02”), Comprehensive Income (Topic 220), Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for public entities for reporting periods beginning after December 15, 2012. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. | |||
Accounting Standards Update No. 2013-01. In January 2013, the FASB issued Accounting Standards Update No. 2013-01 (“ASU 2013-01”), Balance Sheet (Topic 210), Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. ASU 2013-01 clarifies that the scope of Update 2011-11 applies to derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the required disclosures retrospectively for all comparative periods presented. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. | |||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | ||
Dec. 31, 2013 | |||
Related Party Transactions [Abstract] | ' | ||
Related Party Transactions Disclosure [Text Block] | ' | ||
3 | RELATED PARTY TRANSACTIONS | ||
MGA commenced operations September 1, 2010. As a captive insurance agency formed to service HAIC, MGA has the authority to receive and accept proposals for insurance, charge and collect premiums, maintain underwriting guidelines, prepare rate filings, appoint agents and create marketing materials and advertising. As compensation for these services, MGA retains the policy fees charged on each policy ranging from $50 to $75, as well as installment and delinquent collection fees. The policy fees and other miscellaneous charges were previously a component of HAIC operations. | |||
In conjunction with the retention of certain policy fees at MGA, HAIC allocates a significant portion of its general expense base to MGA. HAIC allocated $5,370,955 and $4,862,218 of general expenses and taxes, licenses and fees to MGA during the years ended December 31, 2013 and 2012, respectively. The expense allocation agreement has been approved by the Texas Department of Insurance. On a consolidated company basis these transactions are eliminated. | |||
During the years ended December 31, 2013 and 2012, MGA collected policy fees in the amount of $4,655,315 and $4,442,069, respectively. | |||
In December 2012, HAHC entered into a Convertible Promissory Note with Inter-Atlantic and Phoenix Associates, Inc., (a company controlled by a shareholder and former director). See Note 10 Convertible Notes Payable for additional disclosure. | |||
INVESTMENTS
INVESTMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Investments Schedule [Abstract] | ' | |||||||||||||
Investment [Text Block] | ' | |||||||||||||
4 | INVESTMENTS | |||||||||||||
Gross investment income from investments totaled $41,649 and $17,980 for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||
There were no realized or unrealized gains or losses recognized for the periods due to the short term nature of the investments held. The intent is to hold to maturity certificates of deposit carried at amortized cost. | ||||||||||||||
The following table provides the Company’s investment holdings by type of financial instruments that were used to estimate the fair value disclosures for financial instruments: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Book Value | Fair Value / | Book Value | Fair Value / | |||||||||||
Carrying | Carrying | |||||||||||||
Value | Value | |||||||||||||
Financial Assets: | ||||||||||||||
Restricted certificates of deposit | $ | 785,000 | $ | 785,000 | $ | 1,000,000 | $ | 1,000,000 | ||||||
Restricted cash | 215,000 | 215,000 | - | - | ||||||||||
Long term investments | 1,960,000 | 1,960,000 | 2,155,695 | 2,155,695 | ||||||||||
Short-term investments | 4,151,011 | 4,151,011 | 3,853,353 | 3,853,353 | ||||||||||
$ | 7,111,011 | $ | 7,111,011 | $ | 7,009,048 | $ | 7,009,048 | |||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Range of Maturities | Interest Rates | Range of Maturities | Interest Rates | |||||||||||
Restricted certificates of deposit | Less than 1 year | 0.10% - 0.25 | % | Less than 1 year | 0.25% - 0.35 | % | ||||||||
Restricted cash | Less than 1 year | - | - | - | ||||||||||
Long-term investments | More than 1 year | 0.30% - 0.70 | % | More than 1 year | 0.35% - 1.24 | % | ||||||||
Short-term investments | Less than 1 year | 0.20% - 1.242 | % | Less than 1 year | 0.25% - 0.85 | % | ||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | ' | |||||||||||||
Financial Instruments Disclosure [Text Block] | ' | |||||||||||||
5 | FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
The Company’s financial assets carried at fair value have been classified, for disclosure purposes, based on the hierarchy established within FASB ASC 820-10 – Fair Value Measurements and Disclosures. When market prices are not available, fair value is generally estimated utilizing valuation techniques that vary by asset class and incorporate available trade, bid and other market information, when available. The acceptable valuation techniques include (a) market approach, which uses prices or relevant information derived from market transactions for identical or comparable assets or liabilities, (b) the Income Approach, which converts future amounts such as cash flows or earnings to a single present value amount based on current market expectations about those future amounts, and (c) the Cost Approach, which is based on the amount that currently would be required to replace the service capacity of an asset. In certain circumstances, these valuation techniques may involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk premium inherent in a particular methodology, model or input used. | ||||||||||||||
The fair value hierarchy is used to prioritize valuation inputs into three levels: | ||||||||||||||
⋅ | Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities. These inputs are considered to be the most reliable evidence of fair value. | |||||||||||||
⋅ | Level 2 – quoted prices for similar assets in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the investment. Such inputs include market interest rates and volatilities, spreads and yield curves. | |||||||||||||
⋅ | Level 3 – termed unobservable inputs which are utilized in situations where there is little or no market activity for the asset or liability at the measurement date. The approach typically involves a significant subjective management judgment toward the pricing of the security. | |||||||||||||
The Company’s short-term investments comprised of certificates of deposit held at financial institutions which are not measured at fair value on a recurring basis. A portion of the Company’s cash and cash equivalents include money market mutual fund accounts held at financial institutions which are measured at fair value on a recurring basis. The following tables provide information as of December 31, 2013 and 2012, about the Company’s financial assets measured at fair value on a recurring basis: | ||||||||||||||
Fair Value Measurements Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
As of December 31, 2013 | ||||||||||||||
Money market mutual funds | $ | 5,903,478 | $ | - | $ | - | $ | 5,903,478 | ||||||
Total | $ | 5,903,478 | $ | - | $ | - | $ | 5,903,478 | ||||||
Fair Value Measurements Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
As of December 31, 2012 | ||||||||||||||
Money market mutual funds | $ | 60,855 | $ | - | $ | - | $ | 60,855 | ||||||
Total | $ | 60,855 | $ | - | $ | - | $ | 60,855 | ||||||
The following methods and assumptions were used to estimate the fair value disclosures for financial instruments: | ||||||||||||||
Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included as a Level 1 measurement in the table above. | ||||||||||||||
PROPERTY_EQUIPMENT_AND_SOFTWAR
PROPERTY, EQUIPMENT, AND SOFTWARE NET | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||||
6 | PROPERTY, EQUIPMENT, AND SOFTWARE NET | |||||||||
Property, equipment, and software net consist of the following as of December 31, 2013 and 2012, respectively: | ||||||||||
December 31, | December 31, | |||||||||
2013 | 2012 | Useful Life | ||||||||
Computer equipment | $ | 222,225 | $ | 200,786 | 3 years | |||||
Office equipment | 13,999 | 13,999 | 5 years | |||||||
Furniture and fixtures | 106,524 | 95,022 | 5 years | |||||||
Software installation and development | 750,200 | 684,011 | 3 years | |||||||
Total, at cost | 1,092,948 | 993,818 | ||||||||
Less accumulated depreciation and amortization | -848,432 | -759,662 | ||||||||
Property and equipment, net | $ | 244,516 | $ | 234,156 | ||||||
Depreciation and amortization expense for property, equipment and software totaled $88,770 and $72,704 for the years ended December 31, 2013 and 2012, respectively. | ||||||||||
DEFERRED_POLICY_ACQUISION_COST
DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred Policy Acquisition Costs Disclosures [Abstract] | ' | |||||||
Deferred Policy Acquisition Costs [Text Block] | ' | |||||||
7 | DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS | |||||||
Total capitalized deferred policy acquisition costs as of December 31, 2013 and December 31, 2012, comprised of commissions, premium taxes and costs associated with underwriting and issuing policies were $6,214,334 and $5,274,515, respectively. | ||||||||
Changes in deferred policy acquisition costs for the years ended December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
Deferred policy acquisition charges, beginning of the period | $ | 5,274,515 | $ | 4,429,744 | ||||
Capitalized costs | 11,451,353 | 9,680,833 | ||||||
Amortized costs | -10,511,534 | -8,836,062 | ||||||
Deferred policy acquisition charges, end of the period | $ | 6,214,334 | $ | 5,274,515 | ||||
Deferred ceding commissions, which represent acquisition costs associated with insurance risk ceded to other reinsurance partners, as of December 31, 2013 and 2012 were $0 and $683,914, respectively. The decrease of $683,914 is primarily due to a change in settlement procedures affecting the property quota share reinsurance program. | ||||||||
Changes in deferred ceding commissions for the years ended December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
Deferred ceding commission, beginning of the period | $ | 683,914 | $ | 1,439,587 | ||||
Capitalized commissions | 14,982,210 | 12,971,433 | ||||||
Amortized commissions | -15,666,124 | -13,727,106 | ||||||
Deferred ceding commission, end of the period | $ | - | $ | 683,914 | ||||
TWIA_ASSESSMENTS
TWIA ASSESSMENTS | 12 Months Ended | ||
Dec. 31, 2013 | |||
Twia Assessments [Abstract] | ' | ||
Twia Assessments [Text Block] | ' | ||
8 | TWIA ASSESSMENTS | ||
On September 17, 2008, an assessment was levied against HAIC by the Texas Windstorm Insurance Association (“TWIA”) in the aftermath of Hurricane Ike. HAIC’s portion of the overall statutory assessment was $748,200. HAIC received an immediate premium tax credit of $400,200 for a portion of the assessment paid and established an asset for future credits against premium tax. The portion of the assessment applied against premium tax payments was amortized over a five year period during 2008 through 2012. No further TWIA assessments have been levied against HAIC since 2008. | |||
UNPAID_LOSSES_AND_LOSS_ADJUSTM
UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Supplementary Insurance Information [Abstract] | ' | |||||||
Supplementary Insurance Information, for Insurance Companies Disclosure [Text Block] | ' | |||||||
9 | UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES | |||||||
Losses and loss adjustment expenses (LAE), less related reinsurance and deductibles, are charged to operations as incurred. Unpaid losses and LAE are based on claims adjusters’ estimates of the cost of settlement plus an estimate for losses IBNR based upon historical experience, industry loss experience, and management’s estimates. Loss reserves reflect Company management’s best estimate of the total cost of (i) claims that have been incurred but not yet paid, and (ii) claims that have been incurred, but not yet reported (IBNR). Loss reserves that are established by Company management are not an exact calculation of our liability, but rather loss reserves represent management’s best estimate for our Company’s liability based on the application of actuarial techniques and other projection methodology, taking into consideration other facts and circumstances known as of the balance sheet date. The process of setting reserves is complex and necessarily imprecise. The impact of both internal and external variables on ultimate loss and LAE costs is difficult to estimate. To arrive at its best estimate for losses, the Company uses damage estimating software developed and owned by acknowledged industry leader, Insurance Service Office. Reserve factors for IBNR are reviewed quarterly by an independent actuarial consultant. In addition, our appointed independent actuary attests to the adequacy of our unpaid claim reserve, including IBNR at calendar year end. | ||||||||
Losses and Loss Adjustment Expenses | ||||||||
The following table provides the reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2013 and 2012: | ||||||||
2013 | 2012 | |||||||
Reserve for losses and LAE, beginning of year | $ | 11,641,296 | $ | 9,308,974 | ||||
Reinsurance recoverables on losses and LAE | -10,618,032 | -8,469,000 | ||||||
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year | 1,023,264 | 839,974 | ||||||
Add provision for claims and LAE occurring in: | ||||||||
Current year | 2,015,107 | 3,904,000 | ||||||
Prior years | 244,000 | 160,000 | ||||||
Net incurred losses and LAE during the current year | 2,259,107 | 4,064,000 | ||||||
Deduct payments for claims and LAE occurring in: | ||||||||
Current year | 1,927,482 | 3,057,000 | ||||||
Prior years | 561,002 | 823,710 | ||||||
Net claim and LAE payments during the current year | 2,488,484 | 3,880,710 | ||||||
Reserve for losses and LAE, net of reinsurance recoverables, at end of year | 793,887 | 1,023,264 | ||||||
Reinsurance recoverables on losses and LAE | 15,090,175 | 10,618,032 | ||||||
Losses and loss adjustment expenses at December 31 | $ | 15,884,062 | $ | 11,641,296 | ||||
As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of claims and claim adjustment expenses were made resulting in an increase of $244,000 and $160,000 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Debt Disclosure [Abstract] | ' | ||||||
Debt Disclosure [Text Block] | ' | ||||||
10 | CONVERTIBLE NOTES PAYABLE | ||||||
On December 26, 2012, the Company entered into Convertible Promissory Note agreements with Inter-Atlantic Fund, L.P. and Phoenix Associates, Inc. (a company controlled by a shareholder and former director) in the amounts of $950,000 and $50,000, respectively, with an interest rate equal to 10% per annum (accelerating to 12.5% per annum in the event of default) which are due and payable on December 26, 2013. At any date, the holders of the majority interest of these notes has the right to convert all or a portion of the notes, plus accrued interest, into that number of shares of the Company’s Series A convertible preferred stock, identical in all respects to the existing Series A preferred stock issued in November 2005, equal to a ratio of 1 share per $1.10 of the note’s principal plus accrued interest plus, the amount of cumulative unpaid Series A preferred stock dividends the note holders would have received had the notes been outstanding since 2005. | |||||||
To the extent the existing Series A convertible preferred stock is no longer outstanding at the time of conversion, the notes shall be convertible, using the above ratio, into stock or other consideration received for the existing Series A convertible preferred stock. | |||||||
During the year ended December 31, 2013, and 2012 interest expense on these notes totaled $68,164, and $1,644, respectively. | |||||||
On August 31, 2013, Inter-Atlantic Fund, L.P. elected to convert all of its $950,000 Convertible Promissory Note and accrued interest in accordance with the terms of the Convertible Promissory Note into 922,461 shares of Series A preferred stock. | |||||||
Amount | Conversion ratio | ||||||
to Series A | |||||||
Preferred Stock | |||||||
0.9090 (shares) | |||||||
Convertible Promissory Note on 12/26/12 | $ | 950,000 | 863,550 | ||||
Interest on Convertible Promissory Note at 8/31/2013 | 64,808 | 58,911 | |||||
Total Amount Converted | $ | 1,014,808 | 922,461 | ||||
As more fully described below in Note 11, these shares were part of the 2.5:1 forward stock split which took place on August 31, 2013. As a result of the forward stock split, the 922,461 shares of Series A preferred stock noted above were converted into 2,306,152 common shares. | |||||||
On December 26, 2013, Phoenix Associates, Inc. elected to convert all of its $50,000 Convertible Promissory Note and accrued interest in accordance with the terms of the Convertible Promissory Note into 49,995 shares of Series A preferred stock. | |||||||
Amount | Conversion ratio | ||||||
to Series A | |||||||
Preferred Stock | |||||||
0.9090 (shares) | |||||||
Convertible Promissory Note on 12/26/12 | $ | 50,000 | 45,450 | ||||
Interest on Convertible Promissory Note at 12/26/2013 | 5,000 | 4,545 | |||||
Total Amount Converted | $ | 55,000 | 49,995 | ||||
As more fully described in Note 11, these shares are subject to the 2.5:1 forward stock split, which took place on August 31, 2013. As a result of the forward stock split, the 49,995 shares of Series A preferred stock noted above were converted into 124,988 common shares. | |||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||
11 | STOCKHOLDERS’ EQUITY | ||||||||||
Preferred Stock | |||||||||||
On July 24, 2013, the Delaware Secretary of State approved an amendment to the Amended and Restated Certificate of Incorporation increasing the authorized preferred stock to 20,500,000 shares. | |||||||||||
On August 31, 2013, in accordance with Article Fourth, Section C, Subsection 4 of the Company’s Amended and Restated Certificate of Incorporation, the Series A and Series B preferred stockholders elected to convert 100% of their shares into common stock on a 1:1 basis. | |||||||||||
Preferred Shares | Conversion Ratio | Common Stock | |||||||||
Series A Preferred Stock | 4,500,000 | 1:01 | 4,500,000 | ||||||||
Series B Preferred Stock | 500,000 | 1:01 | 500,000 | ||||||||
Convertible Promissory Note | 922,461 | 1:01 | 922,461 | ||||||||
Common Stock | 900,000 | n/a | 900,000 | ||||||||
Total Converted Preferred Shares | 6,822,461 | 6,822,461 | |||||||||
On December 26, 2013, there were no Series A convertible preferred stock outstanding, therefore the convertible promissory note was converted into common stock on a 1:1 basis. | |||||||||||
Preferred Shares | Conversion Ratio | Common Stock | |||||||||
Convertible Promissory Note | 49,995 | 1:01 | 49,995 | ||||||||
Total Converted Preferred Shares 12/26/2013 | 49,995 | 49,995 | |||||||||
As of December 31, 2013 there were no shares of Series A or Series B preferred stock outstanding. | |||||||||||
As of December 31, 2012, the Series A and Series B preferred stockholders had not elected to convert or redeem their preferred stock. | |||||||||||
Common Stock | |||||||||||
There were no common stock warrants issued during the years ended December 31, 2013 and 2012. | |||||||||||
As of December 31, 2012, the Company had 10,000,000 shares authorized and 900,000 shares issued and outstanding of $0.0001 par value common stock. Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders. | |||||||||||
On July 24, 2013 the Delaware Secretary of State approved an amendment to the Amended and Restated Certificate of Incorporation increasing the authorized common stock to 40,000,000 shares. | |||||||||||
Buyback of Shares | |||||||||||
On August 31, 2013, the Company entered into a Stock Purchase Agreement with Mr. Spencer Tucker (director of the Company and president and chief operating officer of HAIC) and Mr. Richard Backus (former secretary of HAIC) pursuant to which the Company purchased 480,000 and 60,000 shares of the Company’s common stock from Mr. Tucker and Mr. Backus respectively, for an aggregate consideration of $5,400. | |||||||||||
As discussed in the Preferred Stock section of this footnote above, on August 31, 2013, in accordance with Article Fourth, Section C, Subsection 4 of the Company’s Amended and Restated Certificate of Incorporation the Series A and Series B preferred stockholders elected to convert 100% of their shares into common stock on a 1:1 basis; therefore as of September 30, 2013 there were no shares of Series A or Series B preferred stock outstanding. Further, in accordance with the Company’s Amended and Restated Certificate of Incorporation Article Fourth, Section C, Subsection 4(c) (iii) & (iv), all shares which shall have been surrendered for conversion shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, and to receive payment of any dividends occurred or declared but unpaid cease and terminate at the time of conversion, except only the right of the holders thereof to receive common stock in exchange therefor. Upon such conversion, no adjustment to the applicable conversion price shall be made for any accrued or declared but unpaid dividends on the series of preferred stock surrendered for conversion or the common stock delivered upon conversion. | |||||||||||
As of December 31, 2013, the Company has 40,000,000 shares authorized and 17,181,140 shares issued and 15,831,140 shares outstanding of $0.0001 par value common stock (giving effect to the forward stock split discussed below). Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders. | |||||||||||
Forward Stock Split | |||||||||||
On August 31, 2013, the Board of Directors of the Company unanimously approved and recommended for approval by the stockholders of the Company, and the holders of voting shares representing 99.15% of the voting rights of our common stock approved, an amendment to the Company’s Amended and Restated Certificate of Incorporation. The Certificate of Amendment was filed with the Delaware Secretary of State and is effective. The Certificate of Amendment provides for a 2.5 for 1 forward stock split of the Company’s common stock. All holders of the Company’s Series A and Series B preferred shares converted their preferred shares to common stock prior to the effectiveness of the stock split. | |||||||||||
Common Stock | Forward Stock | Common Stock | Par Value at $.0001 | ||||||||
Split on 8/31/2013 | |||||||||||
Series A Preferred Stock | 4,500,000 | 2.5:1 | 11,250,000 | 1,125 | |||||||
Series B Preferred Stock | 500,000 | 2.5:1 | 1,250,000 | 125 | |||||||
Convertible Promissory Note | 922,461 | 2.5:1 | 2,306,152 | 231 | |||||||
Common Stock, including Treasury Stock | 900,000 | 2.5:1 | 2,250,000 | 225 | |||||||
Total Common Stock | 6,822,461 | 17,056,152 | 1,706 | ||||||||
The above shares have been adjusted to reflect the conversion of Series A & B preferred stock into common stock and the forward stock split of common stock on August 31, 2013. | |||||||||||
In accordance with the terms of the Convertible Promissory Note dated, December 26, 2012, to the extent the existing Series A convertible preferred stock is no longer outstanding at the time of conversion, the notes shall be convertible into stock or other consideration received for the existing Series A convertible preferred stock. Therefore, the Convertible Promissory Note converted on December 26, 2013 to Series A preferred shares are converted to common shares which then are adjusted for the forward stock split. | |||||||||||
Common Stock | Forward Stock | Common Stock | Par Value at $.0001 | ||||||||
Split on 8/31/2013 | |||||||||||
Convertible Promissory Note 12/26/2013 | 49,995 | 2.5:1 | 124,988 | 12 | |||||||
Total Common Stock | 49,995 | 124,988 | 12 | ||||||||
The above shares have been adjusted to reflect the conversion of Series A preferred stock into common stock and the forward stock split of common stock. | |||||||||||
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | |||||||||||
12 | STOCK BASED COMPENSATION | |||||||||||
The Company accounts for stock-based compensation under the fair value recognition provision of FASB ASC Topic 718 – Compensation – Stock Compensation. | ||||||||||||
Incentive Plans | ||||||||||||
The Company’s 2005 Management Incentive Plan (the “2005 Plan”) provides for granting of stock options to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2005 Plan, options may be granted to purchase a total not to exceed 789,475 shares in the aggregate (as adjusted for the 2.5:1 forward split), made up of original issue shares, treasury share or a combination of the two. Options have a life of 10 years and vest at a rate of 25% per year, beginning 12 months from their date of issue. At December 31, 2012, options to purchase 783,750 shares have been granted under the 2005 Plan. | ||||||||||||
On October 24, 2013, the Board of Directors (“the Board) of the Company unanimously approved and adopted the 2013 Equity Compensation Plan (the “2013 Plan”) which became effective October 24, 2013. The 2013 Plan provides granting of stock options, incentive stock options, stock awards, and restricted stock units to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2013 Plan, options may be granted to purchase a total not to exceed 2,925,000 shares, made up of original issue shares, treasury shares or a combination of the two. The 2013 Plan will terminate on October 23, 2023. At December 31, 2013, options to purchase 1,925,000 shares had been granted under the 2013 Plan. | ||||||||||||
At December 31, 2013, options to purchase under the 2005 Plan was 783,750 shares and under the 2013 Plan was 1,925,000 shares for a total of 2,708,750 shares. | ||||||||||||
A summary of the activity of the Company’s stock option plan (as adjusted for the 2.5:1 forward split) for the years ended December 31, 2013 and 2012 is as follows: | ||||||||||||
Number of | Weighted | Weighted Avg. | Aggregate | |||||||||
Options | Avg. Exercise | Remaining | Intrinsic Value | |||||||||
Price | Cont. Term | (in thousands) | ||||||||||
Outstanding at December 31, 2011 | 783,750 | $ | 0.78 | 6.91 | $ | |||||||
Granted | - | |||||||||||
Outstanding at December 31, 2012 | 783,750 | $ | 0.78 | 5.91 | $ | |||||||
Granted | 1,925,000 | $ | 0.5 | |||||||||
Outstanding at December 31, 2013 | 2,708,750 | $ | 0.58 | 8.41 | $ | 4 | ||||||
Exercisable at December 31, 2013 | 902,500 | $ | 0.7 | 5.8 | $ | 4 | ||||||
The fair value of options granted is estimated using a market value approach and the Black-Scholes option pricing model using the following assumptions for the year ended December 31, 2013: | ||||||||||||
Year Ending | ||||||||||||
December 31, | ||||||||||||
2013 | ||||||||||||
Dividend Yield | 0 | % | ||||||||||
Expected Volatility | 25 | % | ||||||||||
Risk-free interest rate | 1.75 | % | ||||||||||
Expected life (in years) | 5.21 | |||||||||||
As of December 31, 2013, there was approximately $190,000 of total unrecognized compensation cost related to non-vested stock options, of which approximately $38,000 is expected to be recognized each year in 2014 through 2018. | ||||||||||||
No compensation expense was recognized for the years ended December 31, 2013 and 2012 as the amounts were deemed not to be material. | ||||||||||||
Stock options granted in 2013 had a weighted average grant date fair value of $0.10. There were no stock options granted in 2012. Stock options granted prior to 2012 had a weighted average grant date fair value $0.00. | ||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Tax Disclosure [Text Block] | ' | |||||||
13 | INCOME TAXES | |||||||
The Company files a consolidated federal income tax return. Allocation of tax expense or refunds among the consolidated group is based on separate return calculations. | ||||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: | ||||||||
2013 | 2012 | |||||||
Gross Deferred Tax Assets: | ||||||||
Loss reserve discount | $ | 12,713 | $ | 19,159 | ||||
Unearned premium reserve discount | 235,548 | 205,368 | ||||||
Organization costs (net of amortization) | 62,239 | 66,969 | ||||||
Unearned ceding commissions | 2,742,835 | 2,321,104 | ||||||
Total Deferred Tax Assets | 3,053,335 | 2,612,600 | ||||||
Valuation allowance | - | - | ||||||
Total Adjusted Deferred Tax Assets | $ | 3,053,335 | $ | 2,612,600 | ||||
Deferred Tax Liabilities | ||||||||
Deferred policy acquisition costs | $ | 2,112,873 | $ | 1,793,335 | ||||
Property, equipment and software | 7,241 | 2,454 | ||||||
Total deferred tax liabilities | 2,120,114 | 1,795,789 | ||||||
Net Deferred Tax Assets | $ | 933,221 | $ | 816,811 | ||||
As of December 31, 2013 and 2012, it was determined that no valuation allowance against deferred tax assets was considered necessary. | ||||||||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management considers the reversal of deferred tax liabilities and projected future taxable income in making this assessment. The results of operations during the years ended December 31, 2013 and 2012, continued growth in the Company’s insurance policy and premium base with a wider demographic and geographic spread, as well as changes in the Company’s reinsurance and catastrophe coverage were also considered important factors in assessing the realizability of deferred tax assets. | ||||||||
The total income tax provision (benefit) incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference for 2013 and 2012 are as follows: | ||||||||
2013 | Tax Effect | Tax Rate | ||||||
Income before taxes at statutory rate | $ | 1,022,716 | 34 | % | ||||
Meals and entertainment | 9,800 | 0.33 | % | |||||
Other | 6,708 | 0.22 | % | |||||
Total | $ | 1,039,224 | 34.55 | % | ||||
2012 | Tax Effect | Tax Rate | ||||||
Income before taxes at statutory rate | $ | 293,710 | 34 | % | ||||
Meals and entertainment | 5,747 | 0.67 | % | |||||
Valuation allowance adjustment | -477,765 | -55.31 | % | |||||
Other | -60,834 | -7.04 | % | |||||
Total | $ | -239,142 | -27.68 | % | ||||
REINSURANCE
REINSURANCE | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Insurance [Abstract] | ' | |||||||||||||||||||
Reinsurance [Text Block] | ' | |||||||||||||||||||
14 | REINSURANCE | |||||||||||||||||||
Certain premiums and benefits are ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide HAIC with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. Ceded reinsurance contracts do not relieve HAIC from its obligations to policyholders. HAIC remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, HAIC evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers. | ||||||||||||||||||||
For the 12 month period commencing April 1, 2013 and ending March 31, 2014, the Company reinsured with various third party reinsurers under residential quota share reinsurance treaties, 90% of its risk. The reinsurers’ liability under the quota share arrangement beginning in respect to any one loss occurrence shall not exceed $80,000,000. Property catastrophe treaties, which went into effect on the same day and have the same term as the quota share treaties, develop over four layers and cover a gross loss of $76,000,000 excess of $4,000,000 per occurrence. The Company’s net retention is $400,000 per occurrence. | ||||||||||||||||||||
From April 1, 2012 through March 31, 2013, the Company reinsured with various reinsurers under homeowners quotashare reinsurance treaties ceding 90% of its risk to reinsurers. The reinsurers’ liability under the quota share arrangement beginning April 1, 2012, in respect to any one loss occurrence shall not exceed $60,000,000. Property catastrophe treaties in effect at the end of 2012 develop over four layers and cover a gross loss of $62,000,000 excess of $3,000,000 per occurrence. The Company’s net retention is $300,000 per occurrence. | ||||||||||||||||||||
The Company also purchases reinsurance covering non-weather losses (two occurrences) in excess of a gross loss of $500,000 per occurrence for all coverage lines (a net loss of $50,000). This coverage which was enforced during 2013 and 2012 has been obtained principally to protect the Company in the event of a large fire loss. | ||||||||||||||||||||
Effective June 1, 2011 through May 31, 2012, the Company’s private passenger auto reinsurance program reinsures 50% of physical damage and liability losses emanating from private passenger automobile policies written by the Company. This coverage was extended through July 31, 2012 in respect to policies written during the term of the contract. With effect from August 1, 2012, the Company stopped writing new policies. Per the terms of the reinsurance contract the reinsurance coverage remains in force on policies the Company is required to issue, renew or keep in force by any state regulator until the first time the Company can lawfully cancel or non-renew such policies. The maximum coverage period for subject policies is deemed to be 12 months, plus odd time, not to exceed 18 months. The Company also purchases excess of loss insurance on its private passenger automobile program, covering 50% of losses from physical damage and liability claim in excess of $40,000. This coverage reinsurance program has the same run-off provisions. | ||||||||||||||||||||
The effects of reinsurance on premiums written and earned were as follows, for the years ended December 31, 2013 and December 31, 2012: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Written | Earned | Written | Earned | |||||||||||||||||
Direct premiums | $ | 57,957,011 | $ | 53,238,811 | $ | 51,298,374 | $ | 47,185,700 | ||||||||||||
Ceded premiums | -51,683,634 | -48,422,943 | -45,040,512 | -42,207,361 | ||||||||||||||||
Net Premiums | $ | 6,273,377 | $ | 4,815,868 | $ | 6,257,862 | $ | 4,978,339 | ||||||||||||
Following is a summary of HAIC’s reinsurance balances under the above described reinsurance treaties as of December 31, 2013 and December 31, 2012: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Ceded premiums payable | $ | 3,271,858 | $ | 2,782,190 | ||||||||||||||||
Ceded loss adjustment expenses | 4,424,649 | 3,944,270 | ||||||||||||||||||
Ceded loss and loss adjustment expense reserve | 15,090,175 | 10,618,032 | ||||||||||||||||||
Ceded unearned premium reserve | 27,924,037 | 23,595,317 | ||||||||||||||||||
Ceded earned premiums | 48,422,943 | 42,207,361 | ||||||||||||||||||
The following is a summary of the names of each of HAIC’s significant reinsurer and the amount due from each for paid losses, LAE and unearned premium. | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Paid Losses & LAE | Unearned Premium | Total Receivable | Paid Losses & LAE | Unearned Premium | Total Receivable | |||||||||||||||
Maiden Reinsurance Company | $ | 84,395 | $ | - | $ | 84,395 | $ | 130,739 | $ | - | $ | 130,739 | ||||||||
NGM Insurance Company | 11,630 | - | 11,630 | 139,541 | 150,990 | 290,531 | ||||||||||||||
Arch Reinsurance Company | 460,006 | 7,511,308 | 7,971,314 | 483,262 | 9,299,583 | 9,782,845 | ||||||||||||||
Endurance Reinsurance Corp. of America | 178,974 | 3,129,712 | 3,308,686 | 156,687 | 2,657,023 | 2,813,710 | ||||||||||||||
Catlin RE | - | - | - | -1,059 | - | -1,059 | ||||||||||||||
Montpelier Insurance Company | - | - | - | -314 | - | -314 | ||||||||||||||
RLI Insurance Company | 123,916 | - | 123,916 | 225,091 | 3,985,536 | 4,210,627 | ||||||||||||||
SCOR Reinsurance Company | 213,273 | 3,129,712 | 3,342,985 | 225,125 | 3,985,536 | 4,210,661 | ||||||||||||||
Endurance Specialty | 92 | - | 92 | -123 | - | -123 | ||||||||||||||
Houston Casualty | 27 | - | 27 | -9 | - | -9 | ||||||||||||||
R+V Versicherung AG | 308,614 | 3,825,256 | 4,133,870 | 279,534 | 3,516,649 | 3,796,183 | ||||||||||||||
Everest Re | 177,864 | 6,259,424 | 6,437,288 | - | - | - | ||||||||||||||
Taiping | 26,680 | 938,914 | 965,593 | - | - | - | ||||||||||||||
SCOR Switzerland | 44 | - | 44 | 2,553 | - | 2,553 | ||||||||||||||
Paladin CAT Management | 49 | - | 49 | -416 | - | -416 | ||||||||||||||
Odyssey RE | 88,981 | 3,129,712 | 3,218,693 | 2,823 | - | 2,823 | ||||||||||||||
SCOR Global | 328 | - | 328 | -114 | - | -114 | ||||||||||||||
Lloyds Syndicates | 603 | - | 603 | 4,607 | - | 4,607 | ||||||||||||||
Partner RE Europe LTD (France) | 104 | - | 104 | 6,023 | - | 6,023 | ||||||||||||||
Total | $ | 1,675,579 | $ | 27,924,037 | $ | 29,599,617 | $ | 1,653,950 | $ | 23,595,317 | $ | 25,249,267 | ||||||||
CONCENTRATION_OF_CREDIT_RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended | ||
Dec. 31, 2013 | |||
Risks and Uncertainties [Abstract] | ' | ||
Concentration Risk Disclosure [Text Block] | ' | ||
15 | CONCENTRATION OF CREDIT RISK | ||
The Company has exposure and remains liable in the event of an insolvency of one of its primary reinsurers. Management and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer base companies. | |||
Financial instruments which potentially subject the Company to credit risk consist principally of cash and money market accounts on deposit with financial institutions, money market funds, certificates of deposit and premium balance in the course of collection. With respect to cash and money market accounts. Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act provides temporary (to December 31, 2012) Federal Deposit Insurance Corporation (“FDIC”) insurance coverage on all balances held in non-interest bearing accounts. Subsequent to December 31, 2012, insurance coverage on interest and non-interest bearing accounts continues at $250,000 per bank. At times, the Company’s bank deposits may exceed the FDIC limit. | |||
The concentration of credit risk with respect to premium balances in the course of collection is limited, due to the large number of insureds comprising the Company’s customer base. However, substantially all of the Company’s revenues are derived from customers in Texas, which could be adversely affected by economic conditions, an increase in competition, or other environmental changes. | |||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
16 | COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases | |||||
The Company leases its corporate office space and certain office equipment under non-cancelable operating leases which expire at various dates through 2017. Future minimum lease payments required under the non-cancelable operating leases are as follows for the years ending December 31: | |||||
2014 | $ | 144,858 | |||
2015 | 140,919 | ||||
2016 | 147,025 | ||||
2017 | 63,600 | ||||
$ | 496,402 | ||||
Rent expense under such leases in the year ended December 31, 2013 and December 31, 2012 was $123,187 and $101,746, respectively. | |||||
Litigation | |||||
The Company is the defendant in routine litigation involving matters that are incidental to the claims aspect of the Company’s business for which estimated losses are included in unpaid loss and loss adjustment expense reserves in the Company’s consolidated financial statements. It is management’s opinion that these lawsuits are not material individually or in the aggregate to the Company’s financial position, results of operations, or cash flow. | |||||
REGULATORY_REQUIREMENTS_AND_RE
REGULATORY REQUIREMENTS AND RESTRICTIONS | 12 Months Ended | |
Dec. 31, 2013 | ||
Banking and Thrift [Abstract] | ' | |
Regulatory Capital Requirements under Banking Regulations [Text Block] | ' | |
17 | REGULATORY REQUIREMENTS AND RESTRICTIONS | |
HAIC is subject to the laws and regulations of the State of Texas and the regulations of any other states in which HAIC conducts business. State regulations cover all aspects of HAIC’s business and are generally designed to protect the interests of insurance policyholders, as opposed to the interests of stockholders. The Texas Insurance Code requires all property and casualty insurers to have a minimum of $2.5 million in capital stock and $2.5 million in surplus. Companies already authorized to do business in Texas as of September 1, 2009, which includes HAIC, are able to increase their capital and surplus to these levels incrementally, with compliance with the new requirements by December 31, 2019. | ||
As of December 31, 2012, HAIC’s total statutory surplus was $6,716,222 (capital stock of $1,500,000 and surplus of $5,216,222). | ||
As of December 31, 2013, HAIC’s total statutory surplus was $8,963,573 (capital stock of $2,500,000 and surplus of $6,463,573). | ||
As of December 31, 2013 and 2012, HAIC had restricted cash and investments totaling $1 million which have been pledged to the Texas Department of Insurance for the benefit of the State of Texas. States routinely require deposits of assets for the protection of policyholders. | ||
The Texas Insurance Code limits dividends from insurance companies to their stockholders to net income accumulated in the Company’s surplus account, or “earned surplus”. | ||
The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year or the statutory net income of the preceding calendar year. No dividends were paid by HAIC in 2013 or 2012. | ||
HAIC prepares its statutory-based financial statements in conformity with accounting practices prescribed or permitted by the Texas Department of Insurance. Prescribed statutory accounting practices primarily include those published as statements of SAP by the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practice not so prescribed. As of December 31, 2013 and 2012, there were no material permitted statutory accounting practice utilized by HAIC. | ||
RESTATEMENT_OF_UNAUDITED_CONSO
RESTATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Text Block] | ' | ||||||||||||||||||||||||||||
18 | RESTATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||||||||||||||
On March 28, 2014, we concluded that the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the year to date period ended March 31, 2013, including comparatively presented periods, that we previously included in our Form S-1/A filed on August 9, 2013 and for the year to date period ended June 30, 2013 and September 30, 2013, including comparatively presented periods, that we previously included in our quarterly reports on Forms 10-Q filed in 2013 should be restated. These restatements resulted in money market mutual fund accounts held at financial institutions which were previously classified as short-term investments to be now classified as cash and cash equivalents. In addition, checks issued in excess of cash book balances, not yet presented for payment, which were previously classified as cash and cash equivalents are now classified as general and other accrued expenses payable. | |||||||||||||||||||||||||||||
These restatements resulted in certain adjustments to our Consolidated Balance Sheets and Consolidated Statements of Cash Flows which are illustrated below. | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
March 31, 2013 | June 30, 2013 | September 30, 2013 | |||||||||||||||||||||||||||
As | As | As | |||||||||||||||||||||||||||
Previously | As | Previously | As | Previously | As | ||||||||||||||||||||||||
Reported | Adjustment | Restated | Reported | Adjustment | Restated | Reported | Adjustment | Restated | |||||||||||||||||||||
Consolidated Balance Sheet: | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,430,735 | $ | 9,044,030 | $ | 10,474,765 | $ | 1,353,322 | $ | 6,684,436 | $ | 8,037,758 | $ | 2,002,812 | $ | 6,278,589 | $ | 8,281,401 | |||||||||||
Short-term investments | 10,994,564 | -6,990,240 | 4,004,324 | 8,563,817 | -3,930,755 | 4,633,062 | 7,923,223 | -4,491,856 | 3,431,367 | ||||||||||||||||||||
Total assets | $ | 67,344,137 | $ | 2,053,790 | $ | 69,397,927 | $ | 69,247,707 | $ | 2,753,681 | $ | 72,001,388 | $ | 72,303,083 | $ | 1,786,733 | $ | 74,089,816 | |||||||||||
Liabilities: | |||||||||||||||||||||||||||||
General and other accrued expenses payable | $ | 722,885 | $ | 2,053,790 | $ | 2,776,675 | $ | 727,443 | $ | 2,753,681 | $ | 3,481,124 | $ | 785,380 | $ | 1,786,733 | $ | 2,572,113 | |||||||||||
Total liabilities | 61,835,034 | 2,053,790 | 63,888,824 | 63,481,129 | 2,753,681 | 66,234,810 | 64,866,178 | 1,786,733 | 66,652,911 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 67,344,137 | $ | 2,053,790 | $ | 69,397,927 | $ | 69,247,707 | $ | 2,753,681 | $ | 72,001,388 | $ | 72,303,083 | $ | 1,786,733 | $ | 74,089,816 | |||||||||||
Consolidated Statements of Cash Flows: | |||||||||||||||||||||||||||||
Cash flows from operating activities | |||||||||||||||||||||||||||||
General and accrued expenses | $ | -6,556 | $ | 2,053,790 | $ | 2,047,234 | $ | -1,998 | $ | 2,753,681 | $ | 2,751,683 | $ | 52,117 | $ | 1,786,733 | $ | 1,838,850 | |||||||||||
Net cash used in operating activities | 116,478 | 2,053,790 | 2,170,268 | -3,838,764 | 2,753,681 | -1,085,083 | -2,813,808 | 1,786,733 | -1,027,075 | ||||||||||||||||||||
Cash flows from investing activities | |||||||||||||||||||||||||||||
Purchases of short term investments | -7,264,906 | 6,990,240 | -274,666 | -5,929,423 | 3,930,755 | -1,998,668 | -5,932,051 | 4,491,856 | -1,440,195 | ||||||||||||||||||||
Net cash used in investing activities | -8,880,117 | 6,990,240 | -1,889,877 | -5,002,289 | 3,930,755 | -1,071,534 | -5,372,355 | 4,491,856 | -880,499 | ||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | -8,763,640 | 9,044,030 | 280,390 | -8,841,053 | 6,684,436 | -2,156,617 | -8,191,563 | 6,278,589 | -1,912,974 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period | 10,194,375 | - | 10,194,375 | 10,194,375 | - | 10,194,375 | 10,194,375 | - | 10,194,375 | ||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 1,430,735 | $ | 9,044,030 | $ | 10,474,765 | $ | 1,353,322 | $ | 6,684,436 | $ | 8,037,758 | $ | 2,002,812 | $ | 6,278,589 | $ | 8,281,401 | |||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Dec. 31, 2013 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events [Text Block] | ' | |
19 | SUBSEQUENT EVENTS | |
On January 24, 2014, the Company completed placement of its 2014-2015 quota share reinsurance program with third party reinsurers, effective April 1, 2014. The quota share ratio remains the same (90%) as the current program. Certain participants on the program will change from the 2013 program. | ||
On January 31, 2014, the Company executed a new lease agreement to expand its corporate office approximately 2,802 feet, effective April 1, 2014 and to extend the expiration date to May 31, 2017. Base rent will increase April 1, 2014 to $11,597 per month through May 31, 2016 and will increase to $12,720 per month through May 31, 2017. | ||
On February 1, 2014, the Company issued 288,462 shares of common stock at $0.52 a share, as determined by an independent valuation expert who valued the Company as of December 31, 2013, to Inter-Atlantic Management, Inc., a beneficial owner of more than 5% of the outstanding shares of common stock. Per the terms of the Advisory Agreement dated August 1, 2013, Inter-Atlantic Management, Inc. will be issued annually on February 1st , a grant of the Company’s common stock which in aggregate will have a fair market value of $150,000 at the time of grant. | ||
On March 3, 2014, Inter-Atlantic Fund, L.P., a beneficial owner of more than 5% of the outstanding shares of common stock, distributed 11,512,301 shares, $.0001 par value per share, to the limited partners of Inter-Atlantic Fund, L.P. in accordance with Inter-Atlantic Fund, L.P.’s partnership agreement. | ||
On March 14, 2014, the Company completed placement of its 2014-2015 catastrophe reinsurance program with third party reinsurers, effective April 1, 2014. Coverage was extended to $110 million in excess of $4 million in the new treaty year. | ||
ORGANIZATION_AND_SUMMARY_OF_SI1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of Homeowners of America Holding Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation | |
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). | |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash and highly liquid short-term investments, with original maturities of three months or less. The amount is carried at cost, which approximates fair value. At December 31, 2013 and 2012, cash and cash equivalents consist of cash on deposit with financial institutions, as well as money market mutual funds. | |
General and other accrued expenses payable as of December 31, 2013 include $1.2 million of checks issued in excess of cash book balances, not yet presented for payment. | |
Investment, Policy [Policy Text Block] | ' |
Investments | |
The Company’s investments are comprised of short-term, restricted, and long-term investments. Restricted investments and long-term investments are described below. Short-term investments include certificates of deposit with original maturities greater than three months and maturities of one year or less. Due to the short-term nature of these investments, significant changes in prevailing interest rates and economic conditions should not adversely affect the timing and amount of cash flows on such investments or their related values. Accordingly, certificates of deposit are carried at cost, which approximates fair value. | |
The Company has pledged to the Texas Department of Insurance $1 million for the purpose of meeting state regulatory requirements. Restricted assets are shown separately in the accompanying consolidated balance sheets as “Restricted cash and investments”. Although the Company, with the approval of the Texas Department of Insurance, may exchange the investments with other funds or investments, management intends to hold the portion of these restricted investments in certificates of deposit to their maturity. As such, these restricted certificates of deposit are carried at cost which approximates fair value. Interest earned on these investments inures to the benefit of the Company. | |
The Company’s investments also include certificates of deposit that mature more than one year after the balance sheet date and are reflected on the consolidated balance sheets as Long-term investments. Based on management’s intent to hold to maturity, this investment is carried at cost. Cost approximates fair value based on the rates currently offered for deposits of similar remaining maturities. | |
The Company’s investments in certificates of deposits and money market accounts do not qualify as securities as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320, Investment – Debt and Equity Securities. Accordingly, the fair value disclosures required by FASB ASC 820, Fair Value Measurements and Disclosures are not provided. Where applicable, the Company assesses investments of an issuer currently carrying a net unrealized loss. If in management’s judgment, the decline in value is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in determining whether impairment exists include financial condition, business prospects and creditworthiness of the issuer, the length of time and magnitude that the asset value has been less than cost, and the ability and intent to hold such investments until the fair value recovers. | |
Comprehensive Income, Policy [Policy Text Block] | ' |
Comprehensive Income | |
FASB ASC 220 - Comprehensive Income, requires that recognized revenues, expenses, gains and losses be included in net income (loss). Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, these items, along with net income (loss), are components of comprehensive income. The Company characterizes their fixed income portfolio as available-for-sale securities, with appropriate adjustments to other comprehensive income. There were no qualifying items reported in comprehensive income for the years ended December 31, 2013 or 2012. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Recognition of Premium Revenues | |
Premiums are recognized as revenue on a daily pro rata basis over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the measurement period and to be earned over the remaining term of those polices, is deferred and reported as unearned premiums. | |
Ceding Commission [Policy Text Block] | ' |
Ceding Commission | |
Ceding commissions represent acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the associated policy. | |
Policy Fees [Policy Text Block] | ' |
Policy Fees | |
Policy fee income includes application fees which are intended to reimburse the Company for a portion of the costs incurred in establishing the insurance. Policy fees on policies where premium is traditionally paid in full upon inception of the policy are recognized when written, while fees charged on policies where premiums are paid in installments, are recognized when collected. | |
Reinsurance Profit Sharing Installments and Other Income [Policy Text Block] | ' |
Reinsurance Profit Sharing, Installment Fees and Other Income | |
Reinsurance profit share income is recognized when earned. Installment and other fees associated with the collection of installment premium payments are recognized as income when collected. Reinsurance profit share income for the year ended December 31, 2013 was 5.82% of total revenue within this classification on the consolidated statement of operations. There was no amount over 5% of total revenue within this classification on the consolidated statement of operations for the year ended December 31, 2012. | |
Property, Plant and Equipment, Policy [Policy Text Block] | ' |
Property, Equipment and Software | |
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which range from three to five years. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations. Maintenance and repairs are expensed as incurred. | |
Software installation and development is stated at cost, net of accumulated amortization. Amortization is calculated on a straight-line basis method over three years. | |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' |
Impairment of Long-Lived Assets | |
Long-lived assets, such as property, equipment and software, are reviewed for impairment whenever business events or circumstances could lead to or indicate that the value of the asset may not be recoverable. The assessment of possible impairment is based on whether the carrying amount of the assets exceeds its fair value. The Company uses estimates of undiscounted future cash flows in determining the recoverability of long-lived assets. As of December 31, 2013 and 2012, no impairment has been recorded. | |
Commissions, Policy [Policy Text Block] | ' |
Deferred Policy and Acquisition Costs/Deferred Ceding Commissions | |
Deferred policy acquisitions costs (“DAC”) as of December 31, 2013 and 2012, consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if estimates of future premium income from their related lines of insurance are revised. | |
Deferred ceding commission as of December 31, 2012 consists of the expense allowance afforded by reinsurers on premium subject to quota share reinsurance treaties, which remain uncollected as of the balance sheet date. Due to a change in the terms of the Company’s property reinsurance treaty effective April 1, 2013, where ceded premium is remitted on a written basis rather than on a collected basis, the balance of uncollected ceding commission for property quota share reinsurance is zero at December 31, 2013. | |
Reserve For Losses and Loss Adjustment Expenses [Policy Text Block] | ' |
Reserve for Losses and Loss Adjustment Expenses | |
The liability for losses and loss adjustment expenses (“LAE”) are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management’s estimate of an amount for losses incurred but not reported (“IBNR”), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings. | |
Due and Deferred Premiums [Policy Text Block] | ' |
Due and Deferred Premiums | |
Due and deferred premiums consist of uncollateralized premiums and agents’ balances in the course of collection as well as premiums booked but not yet due. | |
Reinsurance Accounting Policy [Policy Text Block] | ' |
Reinsurance | |
In the normal course of business, the Company seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses only quality, financially rated reinsurers and continually monitors the financial ratings of these companies through its brokers. The amount and type of reinsurance purchased each year is based on management’s estimate of its probable maximum loss and the conditions within the reinsurance market. The Company continually monitors its risk exposure through the use of the AIR modeling system and other modeling tools provided by its reinsurance brokers. Reinsurance premiums, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums paid for reinsurance are reported as reductions of earned premium income. | |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes | |
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss carryforwards, and liabilities are measured using enacted tax rates expected to be recovered or settled. | |
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. | |
Income Tax Uncertainties, Policy [Policy Text Block] | ' |
Uncertain Tax Positions | |
The Company recognizes uncertain tax positions in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns, and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. At December 31, 2013, the Company’s tax years from 2010 through 2013 remain subject to examination. | |
Use of Estimates, Policy [Policy Text Block] | ' |
Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s primary areas of estimate are for liabilities for unpaid losses and loss adjustment expenses, deferred policy acquisition costs, deferred tax asset valuation, and reinsurance. Actual results could differ significantly from those estimates. | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' |
Fair Value of Financial Instruments | |
The carrying value for the Company’s cash and cash equivalents, short-term investments, and convertible notes payable approximate fair values as of December 31, 2013 and 2012 due to their short-term nature. Fair value for securities is based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures. | |
Convertible Notes Payable [Policy Text Block] | ' |
Convertible Notes Payable | |
The Company accounts for convertible notes payable under FASB ASC Topic 470-20 – Debt with Conversion and Other Options, which requires issuers to assess whether or not an embedded conversion feature is required to be separately accounted for as a derivative liability for liability and equity components and if the conversion feature is beneficial to the holder. See Note 10 on Convertible Notes Payable for additional disclosure. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Stock Based Compensation | |
The Company accounts for stock-based compensation under the fair value recognition provisions of FASB ASC Topic 718 – Compensation – Stock Compensation, which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with FASB ASC Topic 718, the Company recognizes stock-based compensation, if any, in the consolidated statements of operations on a straight line basis over the vesting period of the stock award. | |
Earnings Per Share, Policy [Policy Text Block] | ' |
Earnings (Loss) Per Share | |
Basic earnings (loss) per share of common stock is computed by dividing net income or loss, less cumulative preferred stock dividends for the period whether or not earned or paid, by the weighted-average number of common shares during the period. | |
For the year ended December 31, 2013, the net income attributable to common stockholders was decreased for cumulative dividends on preferred stock during the period of $974,179. | |
For the year ended December 31, 2012, the net income attributable to common stockholders was decreased for cumulative dividends on preferred stock during the period of $1,288,750. | |
Diluted earnings (loss) per share of common stock is computed by dividing net income or loss attributable to common stockholders, adjusted for the effect of potentially dilutive securities, by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include convertible notes payable, outstanding convertible preferred stock and stock options. | |
For the year ended December 31, 2013, all of the Company’s dilutive securities were included in the computation of diluted earnings per share as dilutive. The total number of dilutive shares of common stock that were included totaled 10,856,593. | |
For the year ended December 31, 2012, all of the Company’s potentially dilutive securities were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive shares of common stock that were excluded totaled 13,118,125. | |
INVESTMENTS_Tables
INVESTMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Investments Schedule [Abstract] | ' | |||||||||||||
Investment Holdings, Schedule of Investments [Table Text Block] | ' | |||||||||||||
The following table provides the Company’s investment holdings by type of financial instruments that were used to estimate the fair value disclosures for financial instruments: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Book Value | Fair Value / | Book Value | Fair Value / | |||||||||||
Carrying | Carrying | |||||||||||||
Value | Value | |||||||||||||
Financial Assets: | ||||||||||||||
Restricted certificates of deposit | $ | 785,000 | $ | 785,000 | $ | 1,000,000 | $ | 1,000,000 | ||||||
Restricted cash | 215,000 | 215,000 | - | - | ||||||||||
Long term investments | 1,960,000 | 1,960,000 | 2,155,695 | 2,155,695 | ||||||||||
Short-term investments | 4,151,011 | 4,151,011 | 3,853,353 | 3,853,353 | ||||||||||
$ | 7,111,011 | $ | 7,111,011 | $ | 7,009,048 | $ | 7,009,048 | |||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Range of Maturities | Interest Rates | Range of Maturities | Interest Rates | |||||||||||
Restricted certificates of deposit | Less than 1 year | 0.10% - 0.25 | % | Less than 1 year | 0.25% - 0.35 | % | ||||||||
Restricted cash | Less than 1 year | - | - | - | ||||||||||
Long-term investments | More than 1 year | 0.30% - 0.70 | % | More than 1 year | 0.35% - 1.24 | % | ||||||||
Short-term investments | Less than 1 year | 0.20% - 1.242 | % | Less than 1 year | 0.25% - 0.85 | % | ||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | ' | |||||||||||||
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | ' | |||||||||||||
The following tables provide information as of December 31, 2013 and 2012, about the Company’s financial assets measured at fair value on a recurring basis: | ||||||||||||||
Fair Value Measurements Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
As of December 31, 2013 | ||||||||||||||
Money market mutual funds | $ | 5,903,478 | $ | - | $ | - | $ | 5,903,478 | ||||||
Total | $ | 5,903,478 | $ | - | $ | - | $ | 5,903,478 | ||||||
Fair Value Measurements Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
As of December 31, 2012 | ||||||||||||||
Money market mutual funds | $ | 60,855 | $ | - | $ | - | $ | 60,855 | ||||||
Total | $ | 60,855 | $ | - | $ | - | $ | 60,855 | ||||||
PROPERTY_EQUIPMENT_AND_SOFTWAR1
PROPERTY, EQUIPMENT, AND SOFTWARE NET (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||||
Property, equipment, and software net consist of the following as of December 31, 2013 and 2012, respectively: | ||||||||||
December 31, | December 31, | |||||||||
2013 | 2012 | Useful Life | ||||||||
Computer equipment | $ | 222,225 | $ | 200,786 | 3 years | |||||
Office equipment | 13,999 | 13,999 | 5 years | |||||||
Furniture and fixtures | 106,524 | 95,022 | 5 years | |||||||
Software installation and development | 750,200 | 684,011 | 3 years | |||||||
Total, at cost | 1,092,948 | 993,818 | ||||||||
Less accumulated depreciation and amortization | -848,432 | -759,662 | ||||||||
Property and equipment, net | $ | 244,516 | $ | 234,156 | ||||||
DEFERRED_POLICY_ACQUISION_COST1
DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred Policy Acquisition Costs Disclosures [Abstract] | ' | |||||||
Deferred Policy Acquisition Costs and Ceding Commissions [Table Text Block] | ' | |||||||
Changes in deferred policy acquisition costs for the years ended December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
Deferred policy acquisition charges, beginning of the period | $ | 5,274,515 | $ | 4,429,744 | ||||
Capitalized costs | 11,451,353 | 9,680,833 | ||||||
Amortized costs | -10,511,534 | -8,836,062 | ||||||
Deferred policy acquisition charges, end of the period | $ | 6,214,334 | $ | 5,274,515 | ||||
Schedule Of Changes In Deferred Ceding Commissions [Table Text Block] | ' | |||||||
Changes in deferred ceding commissions for the years ended December 31, 2013 and 2012 are as follows: | ||||||||
2013 | 2012 | |||||||
Deferred ceding commission, beginning of the period | $ | 683,914 | $ | 1,439,587 | ||||
Capitalized commissions | 14,982,210 | 12,971,433 | ||||||
Amortized commissions | -15,666,124 | -13,727,106 | ||||||
Deferred ceding commission, end of the period | $ | - | $ | 683,914 | ||||
UNPAID_LOSSES_AND_LOSS_ADJUSTM1
UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Supplementary Insurance Information [Abstract] | ' | |||||||
Liability for Unpaid Claims Adjustment Expense by Expense Type [Table Text Block] | ' | |||||||
The following table provides the reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2013 and 2012: | ||||||||
2013 | 2012 | |||||||
Reserve for losses and LAE, beginning of year | $ | 11,641,296 | $ | 9,308,974 | ||||
Reinsurance recoverables on losses and LAE | -10,618,032 | -8,469,000 | ||||||
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year | 1,023,264 | 839,974 | ||||||
Add provision for claims and LAE occurring in: | ||||||||
Current year | 2,015,107 | 3,904,000 | ||||||
Prior years | 244,000 | 160,000 | ||||||
Net incurred losses and LAE during the current year | 2,259,107 | 4,064,000 | ||||||
Deduct payments for claims and LAE occurring in: | ||||||||
Current year | 1,927,482 | 3,057,000 | ||||||
Prior years | 561,002 | 823,710 | ||||||
Net claim and LAE payments during the current year | 2,488,484 | 3,880,710 | ||||||
Reserve for losses and LAE, net of reinsurance recoverables, at end of year | 793,887 | 1,023,264 | ||||||
Reinsurance recoverables on losses and LAE | 15,090,175 | 10,618,032 | ||||||
Losses and loss adjustment expenses at December 31 | $ | 15,884,062 | $ | 11,641,296 | ||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Inter-Atlantic Fund, L.P [Member] | ' | ||||||
Short-term Debt [Line Items] | ' | ||||||
Schedule of Debt Conversions [Table Text Block] | ' | ||||||
On August 31, 2013, Inter-Atlantic Fund, L.P. elected to convert all of its $950,000 Convertible Promissory Note and accrued interest in accordance with the terms of the Convertible Promissory Note into 922,461 shares of Series A preferred stock. | |||||||
Amount | Conversion ratio | ||||||
to Series A | |||||||
Preferred Stock | |||||||
0.9090 (shares) | |||||||
Convertible Promissory Note on 12/26/12 | $ | 950,000 | 863,550 | ||||
Interest on Convertible Promissory Note at 8/31/2013 | 64,808 | 58,911 | |||||
Total Amount Converted | $ | 1,014,808 | 922,461 | ||||
Phoenix Associates, Inc [Member] | ' | ||||||
Short-term Debt [Line Items] | ' | ||||||
Schedule of Debt Conversions [Table Text Block] | ' | ||||||
On December 26, 2013, Phoenix Associates, Inc. elected to convert all of its $50,000 Convertible Promissory Note and accrued interest in accordance with the terms of the Convertible Promissory Note into 49,995 shares of Series A preferred stock. | |||||||
Amount | Conversion ratio | ||||||
to Series A | |||||||
Preferred Stock | |||||||
0.9090 (shares) | |||||||
Convertible Promissory Note on 12/26/12 | $ | 50,000 | 45,450 | ||||
Interest on Convertible Promissory Note at 12/26/2013 | 5,000 | 4,545 | |||||
Total Amount Converted | $ | 55,000 | 49,995 | ||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Schedule of Conversion Of Preferred Stock and Common Stock Debt [Table Text Block] | ' | ||||||||||
On August 31, 2013, in accordance with Article Fourth, Section C, Subsection 4 of the Company’s Amended and Restated Certificate of Incorporation, the Series A and Series B preferred stockholders elected to convert 100% of their shares into common stock on a 1:1 basis. | |||||||||||
Preferred Shares | Conversion Ratio | Common Stock | |||||||||
Series A Preferred Stock | 4,500,000 | 1:01 | 4,500,000 | ||||||||
Series B Preferred Stock | 500,000 | 1:01 | 500,000 | ||||||||
Convertible Promissory Note | 922,461 | 1:01 | 922,461 | ||||||||
Common Stock | 900,000 | n/a | 900,000 | ||||||||
Total Converted Preferred Shares | 6,822,461 | 6,822,461 | |||||||||
Converted Preferred Shares [Table Text Block] | ' | ||||||||||
On December 26, 2013, there were no Series A convertible preferred stock outstanding, therefore the convertible promissory note was converted into common stock on a 1:1 basis. | |||||||||||
Preferred Shares | Conversion Ratio | Common Stock | |||||||||
Convertible Promissory Note | 49,995 | 1:01 | 49,995 | ||||||||
Total Converted Preferred Shares 12/26/2013 | 49,995 | 49,995 | |||||||||
Schedule Of Conversion Of Preferred Stock And Stock Split On Common Stock [Table Text Block] | ' | ||||||||||
All holders of the Company’s Series A and Series B preferred shares converted their preferred shares to common stock prior to the effectiveness of the stock split. | |||||||||||
Common Stock | Forward Stock | Common Stock | Par Value at $.0001 | ||||||||
Split on 8/31/2013 | |||||||||||
Series A Preferred Stock | 4,500,000 | 2.5:1 | 11,250,000 | 1,125 | |||||||
Series B Preferred Stock | 500,000 | 2.5:1 | 1,250,000 | 125 | |||||||
Convertible Promissory Note | 922,461 | 2.5:1 | 2,306,152 | 231 | |||||||
Common Stock, including Treasury Stock | 900,000 | 2.5:1 | 2,250,000 | 225 | |||||||
Total Common Stock | 6,822,461 | 17,056,152 | 1,706 | ||||||||
Converted Common Shares [Table Text Block] | ' | ||||||||||
Therefore, the Convertible Promissory Note converted on December 26, 2013 to Series A preferred shares are converted to common shares which then are adjusted for the forward stock split. | |||||||||||
Common Stock | Forward Stock | Common Stock | Par Value at $.0001 | ||||||||
Split on 8/31/2013 | |||||||||||
Convertible Promissory Note 12/26/2013 | 49,995 | 2.5:1 | 124,988 | 12 | |||||||
Total Common Stock | 49,995 | 124,988 | 12 | ||||||||
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | |||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||
A summary of the activity of the Company’s stock option plan (as adjusted for the 2.5:1 forward split) for the years ended December 31, 2013 and 2012 is as follows: | ||||||||||||
Number of | Weighted | Weighted Avg. | Aggregate | |||||||||
Options | Avg. Exercise | Remaining | Intrinsic Value | |||||||||
Price | Cont. Term | (in thousands) | ||||||||||
Outstanding at December 31, 2011 | 783,750 | $ | 0.78 | 6.91 | $ | |||||||
Granted | - | |||||||||||
Outstanding at December 31, 2012 | 783,750 | $ | 0.78 | 5.91 | $ | |||||||
Granted | 1,925,000 | $ | 0.5 | |||||||||
Outstanding at December 31, 2013 | 2,708,750 | $ | 0.58 | 8.41 | $ | 4 | ||||||
Exercisable at December 31, 2013 | 902,500 | $ | 0.7 | 5.8 | $ | 4 | ||||||
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | ' | |||||||||||
The fair value of options granted is estimated using a market value approach and the Black-Scholes option pricing model using the following assumptions for the year ended December 31, 2013: | ||||||||||||
Year Ending | ||||||||||||
December 31, | ||||||||||||
2013 | ||||||||||||
Dividend Yield | 0 | % | ||||||||||
Expected Volatility | 25 | % | ||||||||||
Risk-free interest rate | 1.75 | % | ||||||||||
Expected life (in years) | 5.21 | |||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | |||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: | ||||||||
2013 | 2012 | |||||||
Gross Deferred Tax Assets: | ||||||||
Loss reserve discount | $ | 12,713 | $ | 19,159 | ||||
Unearned premium reserve discount | 235,548 | 205,368 | ||||||
Organization costs (net of amortization) | 62,239 | 66,969 | ||||||
Unearned ceding commissions | 2,742,835 | 2,321,104 | ||||||
Total Deferred Tax Assets | 3,053,335 | 2,612,600 | ||||||
Valuation allowance | - | - | ||||||
Total Adjusted Deferred Tax Assets | $ | 3,053,335 | $ | 2,612,600 | ||||
Deferred Tax Liabilities | ||||||||
Deferred policy acquisition costs | $ | 2,112,873 | $ | 1,793,335 | ||||
Property, equipment and software | 7,241 | 2,454 | ||||||
Total deferred tax liabilities | 2,120,114 | 1,795,789 | ||||||
Net Deferred Tax Assets | $ | 933,221 | $ | 816,811 | ||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | |||||||
The total income tax provision (benefit) incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference for 2013 and 2012 are as follows: | ||||||||
2013 | Tax Effect | Tax Rate | ||||||
Income before taxes at statutory rate | $ | 1,022,716 | 34 | % | ||||
Meals and entertainment | 9,800 | 0.33 | % | |||||
Other | 6,708 | 0.22 | % | |||||
Total | $ | 1,039,224 | 34.55 | % | ||||
2012 | Tax Effect | Tax Rate | ||||||
Income before taxes at statutory rate | $ | 293,710 | 34 | % | ||||
Meals and entertainment | 5,747 | 0.67 | % | |||||
Valuation allowance adjustment | -477,765 | -55.31 | % | |||||
Other | -60,834 | -7.04 | % | |||||
Total | $ | -239,142 | -27.68 | % | ||||
REINSURANCE_Tables
REINSURANCE (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Insurance [Abstract] | ' | |||||||||||||||||||
Schedule Of Effects Of Reinsurance On Premiums Written and Earned [Table Text Block] | ' | |||||||||||||||||||
The effects of reinsurance on premiums written and earned were as follows, for the years ended December 31, 2013 and December 31, 2012: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Written | Earned | Written | Earned | |||||||||||||||||
Direct premiums | $ | 57,957,011 | $ | 53,238,811 | $ | 51,298,374 | $ | 47,185,700 | ||||||||||||
Ceded premiums | -51,683,634 | -48,422,943 | -45,040,512 | -42,207,361 | ||||||||||||||||
Net Premiums | $ | 6,273,377 | $ | 4,815,868 | $ | 6,257,862 | $ | 4,978,339 | ||||||||||||
Summary Of Reinsurance Balance [Table Text Block] | ' | |||||||||||||||||||
Following is a summary of HAIC’s reinsurance balances under the above described reinsurance treaties as of December 31, 2013 and December 31, 2012: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Ceded premiums payable | $ | 3,271,858 | $ | 2,782,190 | ||||||||||||||||
Ceded loss adjustment expenses | 4,424,649 | 3,944,270 | ||||||||||||||||||
Ceded loss and loss adjustment expense reserve | 15,090,175 | 10,618,032 | ||||||||||||||||||
Ceded unearned premium reserve | 27,924,037 | 23,595,317 | ||||||||||||||||||
Ceded earned premiums | 48,422,943 | 42,207,361 | ||||||||||||||||||
Effects of Reinsurance [Table Text Block] | ' | |||||||||||||||||||
The following is a summary of the names of each of HAIC’s significant reinsurer and the amount due from each for paid losses, LAE and unearned premium. | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Paid Losses & LAE | Unearned Premium | Total Receivable | Paid Losses & LAE | Unearned Premium | Total Receivable | |||||||||||||||
Maiden Reinsurance Company | $ | 84,395 | $ | - | $ | 84,395 | $ | 130,739 | $ | - | $ | 130,739 | ||||||||
NGM Insurance Company | 11,630 | - | 11,630 | 139,541 | 150,990 | 290,531 | ||||||||||||||
Arch Reinsurance Company | 460,006 | 7,511,308 | 7,971,314 | 483,262 | 9,299,583 | 9,782,845 | ||||||||||||||
Endurance Reinsurance Corp. of America | 178,974 | 3,129,712 | 3,308,686 | 156,687 | 2,657,023 | 2,813,710 | ||||||||||||||
Catlin RE | - | - | - | -1,059 | - | -1,059 | ||||||||||||||
Montpelier Insurance Company | - | - | - | -314 | - | -314 | ||||||||||||||
RLI Insurance Company | 123,916 | - | 123,916 | 225,091 | 3,985,536 | 4,210,627 | ||||||||||||||
SCOR Reinsurance Company | 213,273 | 3,129,712 | 3,342,985 | 225,125 | 3,985,536 | 4,210,661 | ||||||||||||||
Endurance Specialty | 92 | - | 92 | -123 | - | -123 | ||||||||||||||
Houston Casualty | 27 | - | 27 | -9 | - | -9 | ||||||||||||||
R+V Versicherung AG | 308,614 | 3,825,256 | 4,133,870 | 279,534 | 3,516,649 | 3,796,183 | ||||||||||||||
Everest Re | 177,864 | 6,259,424 | 6,437,288 | - | - | - | ||||||||||||||
Taiping | 26,680 | 938,914 | 965,593 | - | - | - | ||||||||||||||
SCOR Switzerland | 44 | - | 44 | 2,553 | - | 2,553 | ||||||||||||||
Paladin CAT Management | 49 | - | 49 | -416 | - | -416 | ||||||||||||||
Odyssey RE | 88,981 | 3,129,712 | 3,218,693 | 2,823 | - | 2,823 | ||||||||||||||
SCOR Global | 328 | - | 328 | -114 | - | -114 | ||||||||||||||
Lloyds Syndicates | 603 | - | 603 | 4,607 | - | 4,607 | ||||||||||||||
Partner RE Europe LTD (France) | 104 | - | 104 | 6,023 | - | 6,023 | ||||||||||||||
Total | $ | 1,675,579 | $ | 27,924,037 | $ | 29,599,617 | $ | 1,653,950 | $ | 23,595,317 | $ | 25,249,267 | ||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
Future minimum lease payments required under the non-cancelable operating leases are as follows for the years ending December 31: | |||||
2014 | $ | 144,858 | |||
2015 | 140,919 | ||||
2016 | 147,025 | ||||
2017 | 63,600 | ||||
$ | 496,402 | ||||
RESTATEMENT_OF_UNAUDITED_CONSO1
RESTATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | ' | ||||||||||||||||||||||||||||
These restatements resulted in certain adjustments to our Consolidated Balance Sheets and Consolidated Statements of Cash Flows which are illustrated below. | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
March 31, 2013 | June 30, 2013 | September 30, 2013 | |||||||||||||||||||||||||||
As | As | As | |||||||||||||||||||||||||||
Previously | As | Previously | As | Previously | As | ||||||||||||||||||||||||
Reported | Adjustment | Restated | Reported | Adjustment | Restated | Reported | Adjustment | Restated | |||||||||||||||||||||
Consolidated Balance Sheet: | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,430,735 | $ | 9,044,030 | $ | 10,474,765 | $ | 1,353,322 | $ | 6,684,436 | $ | 8,037,758 | $ | 2,002,812 | $ | 6,278,589 | $ | 8,281,401 | |||||||||||
Short-term investments | 10,994,564 | -6,990,240 | 4,004,324 | 8,563,817 | -3,930,755 | 4,633,062 | 7,923,223 | -4,491,856 | 3,431,367 | ||||||||||||||||||||
Total assets | $ | 67,344,137 | $ | 2,053,790 | $ | 69,397,927 | $ | 69,247,707 | $ | 2,753,681 | $ | 72,001,388 | $ | 72,303,083 | $ | 1,786,733 | $ | 74,089,816 | |||||||||||
Liabilities: | |||||||||||||||||||||||||||||
General and other accrued expenses payable | $ | 722,885 | $ | 2,053,790 | $ | 2,776,675 | $ | 727,443 | $ | 2,753,681 | $ | 3,481,124 | $ | 785,380 | $ | 1,786,733 | $ | 2,572,113 | |||||||||||
Total liabilities | 61,835,034 | 2,053,790 | 63,888,824 | 63,481,129 | 2,753,681 | 66,234,810 | 64,866,178 | 1,786,733 | 66,652,911 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 67,344,137 | $ | 2,053,790 | $ | 69,397,927 | $ | 69,247,707 | $ | 2,753,681 | $ | 72,001,388 | $ | 72,303,083 | $ | 1,786,733 | $ | 74,089,816 | |||||||||||
Consolidated Statements of Cash Flows: | |||||||||||||||||||||||||||||
Cash flows from operating activities | |||||||||||||||||||||||||||||
General and accrued expenses | $ | -6,556 | $ | 2,053,790 | $ | 2,047,234 | $ | -1,998 | $ | 2,753,681 | $ | 2,751,683 | $ | 52,117 | $ | 1,786,733 | $ | 1,838,850 | |||||||||||
Net cash used in operating activities | 116,478 | 2,053,790 | 2,170,268 | -3,838,764 | 2,753,681 | -1,085,083 | -2,813,808 | 1,786,733 | -1,027,075 | ||||||||||||||||||||
Cash flows from investing activities | |||||||||||||||||||||||||||||
Purchases of short term investments | -7,264,906 | 6,990,240 | -274,666 | -5,929,423 | 3,930,755 | -1,998,668 | -5,932,051 | 4,491,856 | -1,440,195 | ||||||||||||||||||||
Net cash used in investing activities | -8,880,117 | 6,990,240 | -1,889,877 | -5,002,289 | 3,930,755 | -1,071,534 | -5,372,355 | 4,491,856 | -880,499 | ||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | -8,763,640 | 9,044,030 | 280,390 | -8,841,053 | 6,684,436 | -2,156,617 | -8,191,563 | 6,278,589 | -1,912,974 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period | 10,194,375 | - | 10,194,375 | 10,194,375 | - | 10,194,375 | 10,194,375 | - | 10,194,375 | ||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 1,430,735 | $ | 9,044,030 | $ | 10,474,765 | $ | 1,353,322 | $ | 6,684,436 | $ | 8,037,758 | $ | 2,002,812 | $ | 6,278,589 | $ | 8,281,401 | |||||||||||
ORGANIZATION_AND_SUMMARY_OF_SI2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Certificates of Deposit, at Carrying Value | $1,000,000 | ' |
Percentage Of Settlement With Tax Authority | 50.00% | ' |
Reinsurance Profit Sharing Instalments And Other Income Percentage | 5.82% | 5.00% |
Cumulative preferred stock dividends | 974,179 | 1,288,750 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 10,856,593 | 13,118,125 |
Checks issued in excess of cash book balances not yet presented for payment | $1,200,000 | ' |
Homeowners Of America Insurance Company [Member] | ' | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ' |
Homeowners Of America Mga Inc [Member] | ' | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Policy fees | $4,655,315 | $4,442,069 |
General Insurance Expense | 5,370,955 | 4,862,218 |
Maximum [Member] | ' | ' |
Policy fees | 75 | ' |
Minimum [Member] | ' | ' |
Policy fees | $50 | ' |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Financial Assets Book Value | $7,111,011 | $7,009,048 |
Financial Assets Fair Value / Carrying Value | 7,111,011 | 7,009,048 |
Restricted Certificates Of Deposit [Member] | ' | ' |
Financial Assets Book Value | 785,000 | 1,000,000 |
Financial Assets Fair Value / Carrying Value | 785,000 | 1,000,000 |
Range of Maturities | 'Less than 1 year | 'Less than 1 year |
Restricted Certificates Of Deposit [Member] | Maximum [Member] | ' | ' |
Interest Rates | 0.25% | 0.35% |
Restricted Certificates Of Deposit [Member] | Minimum [Member] | ' | ' |
Interest Rates | 0.10% | 0.25% |
Restricted cash [Member] | ' | ' |
Financial Assets Book Value | 215,000 | 0 |
Financial Assets Fair Value / Carrying Value | 215,000 | 0 |
Range of Maturities | 'Less than 1 year | '- |
Long-term investments [Member] | ' | ' |
Financial Assets Book Value | 1,960,000 | 2,155,695 |
Financial Assets Fair Value / Carrying Value | 1,960,000 | 2,155,695 |
Range of Maturities | 'More than 1 year | 'More than 1 year |
Long-term investments [Member] | Maximum [Member] | ' | ' |
Interest Rates | 0.70% | 1.24% |
Long-term investments [Member] | Minimum [Member] | ' | ' |
Interest Rates | 0.30% | 0.35% |
Short-term investments [Member] | ' | ' |
Financial Assets Book Value | 4,151,011 | 3,853,353 |
Financial Assets Fair Value / Carrying Value | $4,151,011 | $3,853,353 |
Range of Maturities | 'Less than 1 year | 'Less than 1 year |
Short-term investments [Member] | Maximum [Member] | ' | ' |
Interest Rates | 1.24% | 0.85% |
Short-term investments [Member] | Minimum [Member] | ' | ' |
Interest Rates | 0.20% | 0.25% |
INVESTMENTS_Details_Textual
INVESTMENTS (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Investment Income, Net | $41,649 | $17,980 |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Money market mutual funds, Total | $5,903,478 | $60,855 |
Money market mutual funds [Member] | ' | ' |
Money market mutual funds, Total | 5,903,478 | 60,855 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Money market mutual funds, Total | 5,903,478 | 60,855 |
Fair Value, Inputs, Level 1 [Member] | Money market mutual funds [Member] | ' | ' |
Money market mutual funds, Total | 5,903,478 | 60,855 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Money market mutual funds, Total | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Money market mutual funds [Member] | ' | ' |
Money market mutual funds, Total | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Money market mutual funds, Total | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Money market mutual funds [Member] | ' | ' |
Money market mutual funds, Total | $0 | $0 |
PROPERTY_EQUIPMENT_AND_SOFTWAR2
PROPERTY, EQUIPMENT, AND SOFTWARE NET (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Total, at cost | $1,092,948 | $993,818 |
Less accumulated depreciation and amortization | -848,432 | -759,662 |
Property and equipment, net | 244,516 | 234,156 |
Computer equipment [Member] | ' | ' |
Total, at cost | 222,225 | 200,786 |
Property, Plant and Equipment, Useful Life | '3 years | '3 years |
Office equipment [Member] | ' | ' |
Total, at cost | 13,999 | 13,999 |
Property, Plant and Equipment, Useful Life | '5 years | '5 years |
Furniture and fixtures [Member] | ' | ' |
Total, at cost | 106,524 | 95,022 |
Property, Plant and Equipment, Useful Life | '5 years | '5 years |
Software installation and development [Member] | ' | ' |
Total, at cost | $750,200 | $684,011 |
Property, Plant and Equipment, Useful Life | '3 years | '3 years |
PROPERTY_EQUIPMENT_AND_SOFTWAR3
PROPERTY, EQUIPMENT, AND SOFTWARE NET (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Depreciation, Amortization and Accretion, Net | $88,770 | $72,704 |
DEFERRED_POLICY_ACQUISION_COST2
DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred policy acquisition charges, end of the period | $6,214,334 | $5,274,515 |
Deferred Policy Acquisition Costs [Member] | ' | ' |
Deferred policy acquisition charges, beginning of the period | 5,274,515 | 4,429,744 |
Capitalized costs | 11,451,353 | 9,680,833 |
Amortized costs | -10,511,534 | -8,836,062 |
Deferred policy acquisition charges, end of the period | $6,214,334 | $5,274,515 |
DEFERRED_POLICY_ACQUISION_COST3
DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred ceding commission, end of the period | $0 | $683,914 |
Deferred Ceding Commissions [Member] | ' | ' |
Deferred ceding commission, beginning of the period | 683,914 | 1,439,587 |
Capitalized commissions | 14,982,210 | 12,971,433 |
Amortized commissions | -15,666,124 | -13,727,106 |
Deferred ceding commission, end of the period | $0 | $683,914 |
DEFERRED_POLICY_ACQUISION_COST4
DEFERRED POLICY ACQUISION COSTS AND CEDING COMMISSIONS (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred Policy Acquisition Costs, Net | $6,214,334 | $5,274,515 |
Deferred Ceding Commissions Net | 0 | 683,914 |
Deferred Policy Acquisition Costs, Period Increase (Decrease) | $683,914 | ' |
TWIA_ASSESSMENTS_Details_Textu
TWIA ASSESSMENTS (Details Textual) (USD $) | 1 Months Ended |
Sep. 17, 2008 | |
Statutory Accounting Practices, Statutory Net Income Amount | $748,200 |
Premium Tax Credit | $400,200 |
UNPAID_LOSSES_AND_LOSS_ADJUSTM2
UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Reserve for losses and LAE, beginning of year | $11,641,296 | $9,308,974 |
Reinsurance recoverables on losses and LAE | -10,618,032 | -8,469,000 |
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year | 1,023,264 | 839,974 |
Add provision for claims and LAE occurring in: | ' | ' |
Current year | 2,015,107 | 3,904,000 |
Prior years | 244,000 | 160,000 |
Net Incurred losses and LAE during the current period | 2,259,107 | 4,064,000 |
Deduct payments for claims and LAE occuring in: | ' | ' |
Current year | 1,927,482 | 3,057,000 |
Prior years | 561,002 | 823,710 |
Net claim and LAE payments during the current year | 2,488,484 | 3,880,710 |
Reserve for losses and LAE, net of reinsurance recoverables, at end of period | 793,887 | 1,023,264 |
Reinsurance recoverables on losses and LAE | 15,090,175 | -10,618,032 |
Losses and LAE reserves at end of period | $15,884,062 | $11,641,296 |
UNPAID_LOSSES_AND_LOSS_ADJUSTM3
UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | $244,000 | $160,000 |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (Conversion ratio to Series A Preferred Stock 0.9090, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Inter-Atlantic Fund, L.P [Member] | ' |
Debt Conversion [Line Items] | ' |
Convertible Promissory Note | $950,000 |
Interest on Convertible Promissory Note | 64,808 |
Total | 1,014,808 |
Convertible Promissory Note (in shares) | 863,550 |
Interest on Convertible Promissory Note (in shares) | 58,911 |
Total (in shares) | 922,461 |
Phoenix Associates, Inc [Member] | ' |
Debt Conversion [Line Items] | ' |
Convertible Promissory Note | 50,000 |
Interest on Convertible Promissory Note | 5,000 |
Total | $55,000 |
Convertible Promissory Note (in shares) | 45,450 |
Interest on Convertible Promissory Note (in shares) | 4,545 |
Total (in shares) | 49,995 |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 26, 2013 | Aug. 31, 2013 | Dec. 26, 2012 | Aug. 31, 2013 | Dec. 26, 2012 | Dec. 26, 2013 | Dec. 26, 2012 | Dec. 26, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | |
Inter-Atlantic Fund, L.P [Member] | Inter-Atlantic Fund, L.P [Member] | Phoenix Associates, Inc [Member] | Phoenix Associates, Inc [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||
Phoenix Associates, Inc [Member] | ||||||||||||
Convertible Notes Payable, Total | $0 | $1,000,000 | ' | ' | ' | $950,000 | $950,000 | $50,000 | $50,000 | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Interest Rate On Default | ' | ' | ' | ' | 12.50% | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | 'At any date, the holders of the majority interest of these notes has the right to convert all or a portion of the notes, plus accrued interest, into that number of shares of the Companys Series A convertible preferred stock, identical in all respects to the existing Series A preferred stock issued in November 2005, equal to a ratio of 1 share per $1.10 of the notes principal plus accrued interest plus, the amount of cumulative unpaid Series A preferred stock dividends the note holders would have received had the notes been outstanding since 2005. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt, Total | $68,164 | $1,644 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,995 | 922,461 | ' |
Convertible preferred stock, shares issued upon conversion | ' | ' | 49,995 | 6,822,461 | ' | ' | ' | ' | ' | ' | 2,306,152 | 124,988 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) | Dec. 31, 2013 | Dec. 26, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Convertible Debt [Member] | Convertible Common Stock [Member] | Convertible Preferred Stock [Member] | ||||
Preferred Stock, Shares Outstanding | 0 | 49,995 | 0 | 4,500,000 | 500,000 | 922,461 | 900,000 | 6,822,461 |
Common Stock, Shares, Outstanding | 15,831,140 | ' | 900,000 | 4,500,000 | 500,000 | 922,461 | 900,000 | 6,822,461 |
Convertible Preferred Stock, Conversion Ratio | ' | ' | ' | '1:1 | '1:1 | '1:1 | 'n/a | ' |
STOCKHOLDERS_EQUITY_Details_1
STOCKHOLDERS' EQUITY (Details 1) | Dec. 31, 2013 | Dec. 26, 2013 | Aug. 31, 2013 | Dec. 31, 2012 | Dec. 26, 2013 |
Convertible Debt [Member] | |||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' |
Preferred Shares | 0 | 49,995 | ' | 0 | 49,995 |
Conversion Ratio | ' | ' | ' | ' | '1:1 |
Convertible preferred stock, shares issued upon conversion | ' | 49,995 | 6,822,461 | ' | 49,995 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | 1 Months Ended | |
Dec. 26, 2013 | Aug. 31, 2013 | |
CommonStock | 49,995 | 6,822,461 |
CommonStock | 124,988 | 17,056,152 |
Par Valueat 0.0001 | $12 | $1,706 |
Series A Preferred Stock [Member] | ' | ' |
CommonStock | ' | 4,500,000 |
CommonStock | ' | 11,250,000 |
Par Valueat 0.0001 | ' | $1,125 |
Series A Preferred Stock [Member] | Maximum [Member] | ' | ' |
Forward Stock Split on 8/31/2013 | ' | '2.5:1 |
Series B Preferred Stock [Member] | ' | ' |
CommonStock | ' | 500,000 |
CommonStock | ' | 1,250,000 |
Par Valueat 0.0001 | ' | $125 |
Series B Preferred Stock [Member] | Maximum [Member] | ' | ' |
Forward Stock Split on 8/31/2013 | ' | '2.5:1 |
Convertible Common Stock [Member] | ' | ' |
CommonStock | 49,995 | 922,461 |
CommonStock | 124,988 | 2,306,152 |
Par Valueat 0.0001 | $12 | $231 |
Convertible Common Stock [Member] | Maximum [Member] | ' | ' |
Forward Stock Split on 8/31/2013 | ' | '2.5:1 |
Common Stock [Member] | ' | ' |
CommonStock | ' | 900,000 |
CommonStock | ' | 2,250,000 |
Par Valueat 0.0001 | ' | $225 |
Common Stock [Member] | Maximum [Member] | ' | ' |
Forward Stock Split on 8/31/2013 | ' | '2.5:1 |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 1 Months Ended | |
Dec. 26, 2013 | Aug. 31, 2013 | |
Class of Stock [Line Items] | ' | ' |
Convertible Preferred Stock, Shares Issued upon Conversion | 49,995 | 6,822,461 |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 124,988 | 17,056,152 |
Shares Issued, Price Per Share | $12 | $1,706 |
Convertible Common Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Convertible Preferred Stock, Shares Issued upon Conversion | 49,995 | 922,461 |
Stockholders Equity Note, Stock Split | '2.5:1 | ' |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 124,988 | 2,306,152 |
Shares Issued, Price Per Share | $12 | $231 |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 24, 2013 | |
Common Stock, Shares Authorized | ' | 40,000,000 | 10,000,000 | 40,000,000 |
Common Stock, Shares, Issued | ' | 17,181,140 | 900,000 | ' |
Common Stock, Shares, Outstanding | ' | 15,831,140 | 900,000 | ' |
Common Stock, Par or Stated Value Per Share | ' | $0.00 | $0.00 | ' |
Common Stock, Voting Rights | ' | 'one (1) vote for each share of common stock held | 'one (1) vote for each share of common stock held | ' |
Preferred Stock, Shares Authorized | ' | 20,500,000 | ' | 20,500,000 |
Payment for Buy Back of Shares | $5,400 | ' | ' | ' |
Equity Method Investment, Ownership Percentage | 99.15% | ' | ' | ' |
Mr. Tucker [Member] | ' | ' | ' | ' |
Buy Back Of Shares | 480,000 | ' | ' | ' |
Mr. Backus [Member] | ' | ' | ' | ' |
Buy Back Of Shares | 60,000 | ' | ' | ' |
Series A and B Preferred Stock [Member] | ' | ' | ' | ' |
Percentage Of Conversion Of Preferred Stock Into Securities | 100.00% | ' | ' | ' |
STOCK_BASED_COMPENSATION_Detai
STOCK BASED COMPENSATION (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Number Of Options, Outstanding (in shares) | 783,750 | 783,750 | ' |
Granted | 1,925,000 | 0 | ' |
Numberof Options, Outstanding (in shares) | 2,708,750 | 783,750 | 783,750 |
Number of Options, Exercisable (in shares) | 902,500 | ' | ' |
Weighted Average Exercise Price, Outstanding (in dollars per shares) | $0.78 | $0.78 | ' |
Granted | $0.50 | ' | ' |
Weighted Average Exercise Price, Outstanding (in dollars per shares) | $0.58 | $0.78 | $0.78 |
Weighted Average Exercise Price, Exercisable | $0.70 | ' | ' |
Weighted Average Remaining Contractual Term, Outstanding | '8 years 4 months 28 days | '5 years 10 months 28 days | '6 years 10 months 28 days |
Weighted Average Remaining Contractual Term, Exercisable | '5 years 9 months 18 days | ' | ' |
Aggregate Intrinsic Value, Outstanding (in dollars) | $4 | ' | ' |
Aggregate Intrinsic Value, Outstanding Exercisable | $4 | ' | ' |
STOCK_BASED_COMPENSATION_Detai1
STOCK BASED COMPENSATION (Details 1) | 12 Months Ended |
Dec. 31, 2013 | |
Dividend Yield | 0.00% |
Expected Volatility | 25.00% |
Risk-free interest rate | 1.75% |
Expected life (in years) | '5 years 2 months 16 days |
STOCK_BASED_COMPENSATION_Detai2
STOCK BASED COMPENSATION (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 24, 2013 | Dec. 31, 2013 | |
Stock Compensation Plan [Member] | 2005 Management Incentive Plan [Member] | 2005 Management Incentive Plan [Member] | 2013 Equity Compensation Plan [Member] | 2013 Equity Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | ' | ' | ' | ' | 789,475 | 783,750 | 2,925,000 | 1,925,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,708,750 | 783,750 | 783,750 | 2,708,750 | 783,750 | ' | ' | 1,925,000 |
Share-based Compensation, Total | $0 | $0 | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | ' | '10 years | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | ' | ' | ' | ' | 25.00% | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 190,000 | ' | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $38,000 | ' | ' | ' | ' | ' | ' | ' |
Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Expected To Be Recognized Period | '2014 through 2018 | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $0.10 | ' | $0 | ' | ' | ' | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Gross Deferred Tax Assets: | ' | ' |
Loss reserve discount | $12,713 | $19,159 |
Unearned premium reserve discount | 235,548 | 205,368 |
Organization costs (net of amortization) | 62,239 | 66,969 |
Unearned ceding commissions | 2,742,835 | 2,321,104 |
Total Deferred Tax Assets | 3,053,335 | 2,612,600 |
Valuation allowance | 0 | 0 |
Total Adjusted Deferred Tax Assets | 3,053,335 | 2,612,600 |
Deferred Tax Liabilities | ' | ' |
Deferred policy acquisition costs | 2,112,873 | 1,793,335 |
Property, equipment and software | 7,241 | 2,454 |
Total deferred tax liabilities | 2,120,114 | 1,795,789 |
Net Deferred Tax Assets | $933,221 | $816,811 |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income before taxes at statutory rate | $1,022,716 | $293,710 |
Meals and entertainment | 9,800 | 5,747 |
Valuation allowance adjustment | ' | -477,765 |
Other | 6,708 | -60,834 |
Total income taxes | $1,039,224 | ($239,142) |
Income before taxes at statutory rate | 34.00% | 34.00% |
Meals and entertainment | 0.33% | 0.67% |
Valuation allowance adjustment | ' | -55.31% |
Other | 0.22% | -7.04% |
Total | 34.55% | -27.68% |
REINSURANCE_Details
REINSURANCE (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Direct premiums, Written | $57,957,011 | $51,298,374 |
Ceded premiums, Written | -51,683,634 | -45,040,512 |
Net Premiums, Written | 6,273,377 | 6,257,862 |
Direct premiums, Earned | 53,238,811 | 47,185,700 |
Ceded premiums, Earned | -48,422,943 | -42,207,361 |
Net premiums | $4,815,868 | $4,978,339 |
REINSURANCE_Details_1
REINSURANCE (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Ceded premiums payable | $3,271,858 | $2,782,190 |
Ceded loss adjustment expenses | 4,424,649 | 3,944,270 |
Ceded loss and loss adjustment expense reserve | 15,090,175 | 10,618,032 |
Ceded unearned premium reserve | 27,924,037 | 23,595,317 |
Ceded earned premiums | $48,422,943 | $42,207,361 |
REINSURANCE_Details_2
REINSURANCE (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | $1,675,579 | $1,653,950 |
Unearned Premium | 27,924,037 | 23,595,317 |
Total Receivable | 29,599,617 | 25,249,267 |
Maiden Reinsurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 84,395 | 130,739 |
Unearned Premium | 0 | 0 |
Total Receivable | 84,395 | 130,739 |
NGM Insurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 11,630 | 139,541 |
Unearned Premium | 0 | 150,990 |
Total Receivable | 11,630 | 290,531 |
Arch Reinsurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 460,006 | 483,262 |
Unearned Premium | 7,511,308 | 9,299,583 |
Total Receivable | 7,971,314 | 9,782,845 |
Endurance Reinsurance Corp. of America | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 178,974 | 156,687 |
Unearned Premium | 3,129,712 | 2,657,023 |
Total Receivable | 3,308,686 | 2,813,710 |
Catlin RE | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 0 | -1,059 |
Unearned Premium | 0 | 0 |
Total Receivable | 0 | -1,059 |
Montpelier Insurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 0 | -314 |
Unearned Premium | 0 | 0 |
Total Receivable | 0 | -314 |
RLI Insurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 123,916 | 225,091 |
Unearned Premium | 0 | 3,985,536 |
Total Receivable | 123,916 | 4,210,627 |
SCOR Reinsurance Company | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 213,273 | 225,125 |
Unearned Premium | 3,129,712 | 3,985,536 |
Total Receivable | 3,342,985 | 4,210,661 |
Endurance Specialty | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 92 | -123 |
Unearned Premium | 0 | 0 |
Total Receivable | 92 | -123 |
Houston Casualty | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 27 | -9 |
Unearned Premium | 0 | 0 |
Total Receivable | 27 | -9 |
R+V Versicherung AG | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 308,614 | 279,534 |
Unearned Premium | 3,825,256 | 3,516,649 |
Total Receivable | 4,133,870 | 3,796,183 |
Everest Re | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 177,864 | 0 |
Unearned Premium | 6,259,424 | 0 |
Total Receivable | 6,437,288 | 0 |
Taiping | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 26,680 | 0 |
Unearned Premium | 938,914 | 0 |
Total Receivable | 965,593 | 0 |
SCOR Switzerland | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 44 | 2,553 |
Unearned Premium | 0 | 0 |
Total Receivable | 44 | 2,553 |
Paladin CAT Management | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 49 | -416 |
Unearned Premium | 0 | 0 |
Total Receivable | 49 | -416 |
Odyssey RE | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 88,981 | 2,823 |
Unearned Premium | 3,129,712 | 0 |
Total Receivable | 3,218,693 | 2,823 |
SCOR Global | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 328 | -114 |
Unearned Premium | 0 | 0 |
Total Receivable | 328 | -114 |
Lloyds Syndicates | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 603 | 4,607 |
Unearned Premium | 0 | 0 |
Total Receivable | 603 | 4,607 |
Partner RE Europe LTD (France) | ' | ' |
Reinsurance Retention Policy [Line Items] | ' | ' |
Paid Losses & LAE | 104 | 6,023 |
Unearned Premium | 0 | 0 |
Total Receivable | $104 | $6,023 |
REINSURANCE_Details_Textual
REINSURANCE (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | 31-May-12 | Dec. 31, 2013 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | |
Non-Weather Losse [Member] | Private Passenger Automobile Policies [Member] | Property Catastrophe Treaties [Member] | Property Catastrophe Treaties [Member] | Excess Of Loss Reinsurance [Member] | Maximum [Member] | Minimum [Member] | |||||
Private Passenger Automobile Policies [Member] | |||||||||||
Contracts in Force Subject to Participation Through Reinsurance, Percentage | 90.00% | 90.00% | ' | ' | ' | 50.00% | ' | ' | 50.00% | ' | ' |
Reinsurance recoverables on losses and LAE | $46,281,756 | ' | $36,080,628 | ' | ' | ' | ' | ' | ' | $80,000,000 | $60,000,000 |
Liability for Claims and Claims Adjustment Expense, Property Casualty Liability | ' | ' | ' | ' | 500,000 | ' | 76,000,000 | 62,000,000 | 40,000 | ' | ' |
Net Retention Amount Under Reinsurance Liability | 4,000,000 | ' | 3,000,000 | ' | 50,000 | ' | ' | ' | ' | ' | ' |
Retention Payable, Total | $400,000 | ' | ' | $300,000 | ' | ' | ' | ' | ' | ' | ' |
CONCENTRATION_OF_CREDIT_RISK_D
CONCENTRATION OF CREDIT RISK (Details Textual) (USD $) | Dec. 31, 2012 |
Cash, FDIC Insured Amount | $250,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2013 |
2014 | $144,858 |
2015 | 140,919 |
2016 | 147,025 |
2017 | 63,600 |
Operating Leases, Future Minimum Payments Due | $496,402 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Leases, Rent Expense | $123,187 | $101,746 |
REGULATORY_REQUIREMENTS_AND_RE1
REGULATORY REQUIREMENTS AND RESTRICTIONS (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Description of Regulatory Capital Requirements under Insurance Regulations | 'minimum of $2.5 million in capital stock and $2.5 million in surplus | ' |
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | $8,963,573 | $6,716,222 |
Statutory Accounting Practices Statutory Capital Balance | 2,500,000 | 1,500,000 |
Statutory Accounting Practices Statutory Surplus Balance | 6,463,573 | 5,216,222 |
Statutory Accounting Practices, Future Dividend Payments Restrictions | 'The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year | ' |
Certificates Of Deposit [Member] | ' | ' |
Assets Held by Insurance Regulators | $1,000,000 | $1,000,000 |
RESTATEMENT_OF_UNAUDITED_CONSO2
RESTATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | $10,474,765 | $8,037,758 | $8,281,401 | $8,104,310 | $10,194,375 |
Short-term investments | 4,004,324 | 4,633,062 | 3,431,367 | 4,151,011 | 3,853,353 |
Total assets | 69,397,927 | 72,001,388 | 74,089,816 | 73,196,020 | 64,155,354 |
Liabilities: | ' | ' | ' | ' | ' |
General and other accrued expenses payable | 2,776,675 | 3,481,124 | 2,572,113 | 1,906,265 | 729,441 |
Total liabilities | 63,888,824 | 66,234,810 | 66,652,911 | 64,919,443 | 58,911,948 |
Total liabilities and shareholders' equity | 69,397,927 | 72,001,388 | 74,089,816 | 73,196,020 | 64,155,354 |
Cash Flows from Operating Activities | ' | ' | ' | ' | ' |
General and accrued expenses | 2,047,234 | 2,751,683 | 1,838,850 | 1,246,632 | 328,248 |
Net cash used in operating activities | 2,170,268 | -1,085,083 | -1,027,075 | -1,883,572 | 6,034,783 |
Cash flows from investing activities | ' | ' | ' | ' | ' |
Purchases of short term investments | -274,666 | -1,998,668 | -1,440,195 | -1,752,658 | -1,814,142 |
Net cash used in investing activities | -1,889,877 | -1,071,534 | -880,499 | -201,093 | -4,033,810 |
Net increase (decrease) in cash and cash equivalents | 280,390 | -2,156,617 | -1,912,974 | -2,090,065 | 3,000,973 |
Cash and cash equivalents, beginning of period | 10,194,375 | 10,194,375 | 10,194,375 | 10,194,375 | 7,193,402 |
Cash and cash equivalents, end of the period | 10,474,765 | 8,037,758 | 8,281,401 | 8,104,310 | 10,194,375 |
As Previously Reported | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 1,430,735 | 1,353,322 | 2,002,812 | ' | ' |
Short-term investments | 10,994,564 | 8,563,817 | 7,923,223 | ' | ' |
Total assets | 67,344,137 | 69,247,707 | 72,303,083 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
General and other accrued expenses payable | 722,885 | 727,443 | 785,380 | ' | ' |
Total liabilities | 61,835,034 | 63,481,129 | 64,866,178 | ' | ' |
Total liabilities and shareholders' equity | 67,344,137 | 69,247,707 | 72,303,083 | ' | ' |
Cash Flows from Operating Activities | ' | ' | ' | ' | ' |
General and accrued expenses | -6,556 | -1,998 | 52,117 | ' | ' |
Net cash used in operating activities | 116,478 | -3,838,764 | -2,813,808 | ' | ' |
Cash flows from investing activities | ' | ' | ' | ' | ' |
Purchases of short term investments | -7,264,906 | -5,929,423 | -5,932,051 | ' | ' |
Net cash used in investing activities | -8,880,117 | -5,002,289 | -5,372,355 | ' | ' |
Net increase (decrease) in cash and cash equivalents | -8,763,640 | -8,841,053 | -8,191,563 | ' | ' |
Cash and cash equivalents, beginning of period | 10,194,375 | 10,194,375 | 10,194,375 | 10,194,375 | ' |
Cash and cash equivalents, end of the period | 1,430,735 | 1,353,322 | 2,002,812 | ' | ' |
Adjustment | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' |
Cash and cash equivalents | 9,044,030 | 6,684,436 | 6,278,589 | ' | ' |
Short-term investments | -6,990,240 | -3,930,755 | -4,491,856 | ' | ' |
Total assets | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Liabilities: | ' | ' | ' | ' | ' |
General and other accrued expenses payable | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Total liabilities | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Total liabilities and shareholders' equity | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Cash Flows from Operating Activities | ' | ' | ' | ' | ' |
General and accrued expenses | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Net cash used in operating activities | 2,053,790 | 2,753,681 | 1,786,733 | ' | ' |
Cash flows from investing activities | ' | ' | ' | ' | ' |
Purchases of short term investments | 6,990,240 | 3,930,755 | 4,491,856 | ' | ' |
Net cash used in investing activities | 6,990,240 | 3,930,755 | 4,491,856 | ' | ' |
Net increase (decrease) in cash and cash equivalents | 9,044,030 | 6,684,436 | 6,278,589 | ' | ' |
Cash and cash equivalents, beginning of period | 0 | 0 | 0 | 0 | ' |
Cash and cash equivalents, end of the period | $9,044,030 | $6,684,436 | $6,278,589 | ' | ' |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2012 | Mar. 03, 2014 | Jan. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Jan. 24, 2014 | Mar. 14, 2014 | Feb. 01, 2014 | Mar. 03, 2014 | Jan. 31, 2014 |
Inter-Atlantic Management, Inc Member | April 1, 2014 Through May 31, 2016 Member | Minimum [Member] | Maximum [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
catastrophe reinsurance program [Member] | Inter-Atlantic Management, Inc Member | Inter-Atlantic Management, Inc Member | May 31, 2016 Through May 31, 2017 Member | |||||||||
Stock Issued During Period, Value, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | $150,000 | ' | ' |
Quota Share Ratio Reinsurance Program Third Party Reinsurers | ' | ' | ' | ' | ' | ' | ' | 90.00% | ' | ' | ' | ' |
Base Rent Increase | ' | ' | ' | ' | 11,597 | ' | ' | ' | ' | ' | ' | 12,720 |
Stock Issued During Period, Shares, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | 288,462 | ' | ' |
Sale of Stock, Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.52 | ' | ' |
Equity Method Investment, Ownership Percentage | ' | 99.15% | ' | 5.00% | ' | ' | ' | ' | ' | 5.00% | ' | ' |
Common Stock, Shares, Issued | 17,181,140 | ' | 900,000 | 11,512,301 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' |
Reinsurance Recoverables | 46,281,756 | ' | 36,080,628 | ' | ' | 60,000,000 | 80,000,000 | ' | 110,000,000 | ' | ' | ' |
Reinsurance Retention Policy, Excess Retention, Amount Reinsured | ' | ' | ' | ' | ' | ' | ' | ' | $4,000,000 | ' | ' | ' |