Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 12, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Positive Physicians Holdings, Inc. | |
Entity Central Index Key | 0001752039 | |
Trading Symbol | PPHI | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,615,500 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-38814 | |
Entity Tax Identification Number | 830824448 | |
Entity Address, Address Line One | 100 Berwyn Park, Suite 220 | |
Entity Address, Address Line Two | 850 Cassatt Road | |
Entity Address, City or Town | Berwyn | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19312 | |
City Area Code | 888 | |
Local Phone Number | 335-5335 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Available-for-sale bond securities, at fair value | $ 87,895,381 | $ 85,206,669 |
Equity securities, at fair value | 7,269,058 | 7,267,094 |
Equity securities, at net asset value | 4,244,663 | 4,051,399 |
Short-term investments, at fair value | 74,760 | 373,949 |
Total investments | 99,483,862 | 96,899,111 |
Cash and cash equivalents | 24,365,843 | 3,903,620 |
Accrued investment income | 628,960 | 627,213 |
Premiums receivable | 4,522,153 | 6,623,172 |
Reinsurance recoverable | 9,640,117 | 7,956,043 |
Income taxes recoverable | 1,297,444 | 1,297,757 |
Unearned ceded premiums | 1,564,396 | 573,379 |
Deferred acquisition costs | 3,658,457 | 3,985,193 |
Deferred income taxes | 1,223,634 | 1,676,091 |
Prepaid management fee | 9,642,857 | |
Other assets | 534,645 | 486,615 |
Total assets | 156,562,368 | 124,028,194 |
Liabilities | ||
Losses and loss adjustment expenses | 67,491,760 | 68,392,333 |
Unearned premiums | 12,754,554 | 13,202,626 |
Reinsurance payable | 1,363,481 | 1,203,027 |
Accounts payable, accrued, expenses, and other liabilities | 2,222,856 | 3,805,354 |
Note payable | 96,390 | 127,327 |
Due to affiliates | 202,288 | 309,310 |
Total liabilities | 84,131,329 | 87,039,977 |
Stockholders' Equity | ||
Common stock, $0.01 par value, 10,000,000 shares authorized; 3,615,500 shares issued and outstanding | 36,155 | |
Additional paid-in capital | 49,421,081 | 15,882,835 |
Retained earnings | 21,866,240 | 22,335,398 |
Accumulated other comprehensive income (loss) | 1,107,563 | (1,230,016) |
Total stockholders' equity | 72,431,039 | 36,988,217 |
Total liabilities and stockholders' equity | $ 156,562,368 | $ 124,028,194 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | |
Common stock, shares authorized | 10,000,000 | |
Common stock, shares issued | 3,615,500 | 0 |
Common stock, shares outstanding | 3,615,500 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Net premiums earned | $ 5,327,994 | $ 5,238,279 | $ 10,819,201 | $ 11,191,657 |
Net investment income | 939,865 | 828,041 | 2,419,772 | 1,274,283 |
Total revenues | 6,267,859 | 6,066,320 | 13,238,973 | 12,465,940 |
Expenses | ||||
Losses and loss adjustment expenses, net | 4,267,440 | 4,638,383 | 7,589,116 | 7,988,084 |
Other underwriting expenses | 2,785,060 | 2,909,821 | 6,285,437 | 5,957,411 |
Interest expense | 413 | 1,706 | 1,779 | 3,472 |
Total expenses | 7,052,913 | 7,549,910 | 13,876,332 | 13,948,967 |
Loss before provision for income taxes | (785,054) | (1,483,590) | (637,359) | (1,483,027) |
Provision for income taxes | (224,107) | (288,124) | (168,201) | (337,382) |
Net loss | $ (560,947) | $ (1,195,466) | $ (469,158) | $ (1,145,645) |
Loss per common share | ||||
Common stock - basic | $ (0.16) | $ (0.13) | ||
Common stock - diluted | (0.16) | (0.13) | ||
Common stock - basic and diluted | $ (0.16) | $ (0.13) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net loss | $ (560,947) | $ (1,195,466) | $ (469,158) | $ (1,145,645) |
Unrealized gain (loss) on securities: | ||||
Unrealized holding gain (loss) during the period, net of income tax (expense) benefit of $(277,179) and $57,058 for three months ended June 30, 2019 and 2018 and $(621,384) and $384,900 for six months ended June 30, 2019 and 2018, respectively | 1,042,739 | (209,509) | 2,309,331 | (1,451,988) |
Reclassification adjustments for losses included in net loss, net of income tax (expense) benefit of $6 and $1,367 for three months ended June 30, 2019 and 2018 and $(7,509) and $(921) for six months ended June 30, 2019 and 2018, respectively | (22) | (5,141) | 28,248 | 3,465 |
Other comprehensive income (loss) | 1,042,717 | (214,650) | 2,337,579 | (1,448,523) |
Comprehensive income (loss) | $ 481,770 | $ (1,410,116) | $ 1,868,421 | $ (2,594,168) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Unrealized holding gain during the period, net of income tax (expense) benefit | $ (277,179) | $ 57,058 | $ (621,384) | $ 384,900 |
Reclassification adjustments for losses included in net income, income tax benefit | $ 6 | $ 1,367 | $ (7,509) | $ (921) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2017 | $ 43,650,493 | $ 15,882,835 | $ 26,319,019 | $ 1,448,639 | |
Net loss | (1,145,645) | (1,145,645) | |||
Other comprehensive income (loss) | (1,448,523) | (1,448,523) | |||
Reclassification of unrealized gain of equity securities | 1,387,895 | (1,387,895) | |||
Balance at Jun. 30, 2018 | 41,056,325 | 15,882,835 | 26,561,269 | (1,387,779) | |
Balance at Dec. 31, 2018 | 36,988,217 | 15,882,835 | 22,335,398 | (1,230,016) | |
Issuance of common stock | 33,574,401 | $ 36,155 | 33,538,246 | ||
Net loss | (469,158) | (469,158) | |||
Other comprehensive income (loss) | 2,337,579 | 2,337,579 | |||
Balance at Jun. 30, 2019 | $ 72,431,039 | $ 36,155 | $ 49,421,081 | $ 21,866,240 | $ 1,107,563 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (469,158) | $ (1,145,645) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred income taxes | (168,927) | 46,421 |
Net realized loss (gain) on sales of investments | 179,944 | (57,600) |
Unrealized (gain) loss on equity securities | (1,205,213) | 34,350 |
Amortization of bond premiums | 113,397 | 131,808 |
Depreciation and amortization expense | 26,467 | 67,645 |
Changes in operating assets and liabilities: | ||
Accrued investment income | (1,747) | (46,123) |
Premiums receivable | 2,101,019 | 2,573,911 |
Reinsurance recoverable | (1,684,074) | 610,961 |
Income taxes recoverable | 313 | (384,373) |
Unearned ceded premiums | (991,017) | (624,014) |
Deferred acquisition costs | 326,736 | 179,575 |
Prepaid management fee | (9,642,857) | |
Other assets | (74,497) | 4,744 |
Losses and loss adjustment expenses | (900,573) | 1,041,367 |
Unearned premiums | (448,072) | (775,197) |
Reinsurance payable | 160,454 | 91,345 |
Accounts payable, accrued expenses, and other liabilities | (1,582,498) | (2,227,817) |
Due to affiliates | (107,022) | (359,458) |
Net cash flows used in operating activities | (14,367,325) | (838,100) |
Cash flows from investing activities: | ||
Proceeds from sales of bond securities | 5,993,685 | 12,498,839 |
Proceeds from sales of equity securities | 1,313,230 | 317,701 |
Purchases of bond securities | (5,786,607) | (10,102,743) |
Purchases of equity securities | (534,224) | (807,781) |
Net sales (purchases) of short-term investments | 300,000 | (699,568) |
Net cash flows provided by investing activities | 1,286,084 | 1,206,448 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 33,574,401 | |
Payments of notes payable | (30,937) | (29,675) |
Net cash flows provided by (used in) financing activities | 33,543,464 | (29,675) |
Net change in cash and cash equivalents | 20,462,223 | 338,673 |
Cash and cash equivalents, at beginning of period | 3,903,620 | 8,196,226 |
Cash and cash equivalents, at end of period | 24,365,843 | 8,534,899 |
Cash paid during the period for interest | $ 2,261 | $ 3,523 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization Positive Physicians Holdings, Inc. (the “Company”) is a newly formed Pennsylvania business corporation incorporated on May 1, 2018 for the purpose of acquiring three Pennsylvania based reciprocal insurance exchanges: Positive Physicians Insurance Exchange (“PPIX”), Professional Casualty Association (“PCA”), and Physicians’ Insurance Program Exchange (“PIPE”). In connection with the completion of the Company’s initial public offering, PPIX, PCA, and PIPE converted from reciprocal insurance exchanges into stock insurance companies and were merged together to form Positive Physicians Insurance Company (“Positive Insurance Company”), a wholly-owned subsidiary of the Company. The Company’s initial public offering and its acquisition of Positive Insurance Company were completed on March 27, 2019. Prior to that time, the Company had minimal assets and liabilities and had not engaged in any operations. References to Positive Insurance Company financial information in this Quarterly Report is to the financial information of PPIX, PCA, and PIPE on a consolidated basis. When used in this Quarterly Report, “we” and “our” mean PPIX, PCA, and PIPE prior to March 27, 2019, and Positive Insurance Company thereafter. Positive Insurance Company Positive Insurance Company writes medical malpractice insurance for healthcare providers practicing in Delaware, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, and South Carolina. Diversus Management, Inc. (“Diversus Management”) manages and administers essentially all of the operations of Positive Insurance Company under the terms of a management agreement. Diversus Management is a wholly owned subsidiary of Diversus, Inc. (“Diversus”). Pursuant to the terms of the agreement effective as of March 27, 2019, Diversus Management provides such administrative services to Positive Insurance Company in exchange for fees based on a percentage of Positive Insurance Company’s gross written premiums, less return premiums. Diversus Management may also earn quarterly performance management fees based on Positive Insurance Company’s combined ratio and net earned premiums. Positive Insurance Company remains responsible for all underwriting decisions and the payment of all claims and claims related expenses incurred under policies issued by Positive Insurance Company and for all sales commissions paid to producers. Products and Services Positive Insurance Company underwrites medical professional liability coverage for physicians, their corporations, medical groups, clinics and allied healthcare providers. Medical professional liability insurance (“MPLI”) protects physicians and other health care providers against liabilities arising from the rendering of, or failure to render, professional medical services. We offer claims-made coverage, claims-made plus, and occurrence-based policies in Pennsylvania, New Jersey, Ohio, Delaware, Maryland, South Carolina and Michigan. Our policies include coverage for the cost of defending claims. Claims-made policies provide coverage to the policyholder for claims reported during the period of coverage. We offer extended reporting endorsements, or tails, to cover claims reported after the policy expires. Occurrence-based policies provide coverage to the policyholders for all losses incurred during the policy coverage year regardless of when the claims are reported. Although we generate a majority of our premiums from individual and small group practices, we also insure several major physician groups. The Company accounts for its medical professional liability insurance business as a single reporting segment line of business. Option Agreement Upon completion of the conversions of PPIX, PCA, and PIPE and the securities offering, on March 27, 2019 the Company and Diversus entered into an option agreement whereby either party has the option to cause Diversus to merge with and become a wholly owned subsidiary of the Company. Under the terms of the agreement, the option may be exercised by either the Company or Diversus at any time (1) during the period beginning 2 years after completion of the conversions of the exchanges and ending 54 months after the completion of the conversions, or (2) if earlier than 2 years after the completion of the conversions, then such date that the majority stockholder of the Company no longer has the right to appoint a majority of the board of directors of the Company. In connection with any merger, the common stock shareholders of Diversus will receive either cash, common stock shares of the Company, or some combination thereof for their shares of Diversus’ common stock. In regards to the preferred stock shares of Diversus, they will either be paid out in cash or converted into common stock shares of Diversus as if such preferred stock shares were converted into Diversus’ common stock shares immediately prior to the effective date of the merger. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Our consolidated financial statements include our accounts and those of our wholly owned subsidiary. We have eliminated all inter-company accounts and transactions in consolidation. The Company was formed on May 1, 2018 and the financial statements of the Company for the period from May 1, 2018 through December 31, 2018 have been audited. The accompanying unaudited financial statements for 2018 have been prepared on a combined basis and reflect our historical financial information and results of operations of PPIX, PCA, and PIPE as if the conversions and merger took place as of January 1, 2018. Prior to the completion of the initial public offering, the Company, PPIX, PCA, and PIPE were under the common control of Diversus. Additionally, prior to March 27, 2019, the Company did not engage in substantive precombination activities, and accordingly, is not considered the acquirer of the net assets of Positive Insurance Company. The acquirer of these net assets is the majority stockholder of the Company. Accordingly, the accompanying unaudited financial statements do not reflect any adjustments to fair value as might have been determined had the Company accounted for the acquisition of Positive Insurance Company’s net assets as a business combination. The 2018 unaudited financial information is not necessarily indicative of the results of operations that would have been achieved if the conversions and merger had taken place at the beginning of 2018. We recommend you read the interim consolidated financial statements we include in this Form 10-Q Report in conjunction with the financial statements and the notes to our financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and notes. Actual results could differ from these estimates and such differences could be material. The Company’s principal estimates include the liability for losses and loss adjustment expenses, deferred acquisition costs, other-than-temporary impairments of investments, and valuation of deferred tax assets. Cash and Cash Equivalents The Company considers cash and cash equivalents to be cash on hand and depository bank accounts with original maturities of three months or less, are readily convertible to known amounts of cash, and present insignificant risk of changes in value due to changing interest rates. Investments Investments in fixed maturity securities are classified as available-for-sale and are stated at fair value. Unrealized holding gains and losses, net of related tax effects, on available-for-sale fixed maturity securities are recorded directly to accumulated other comprehensive income (loss). Investments in equity securities are stated at fair value and unrealized holding gains and losses are credited or charged to net income (loss) as incurred. We have ownership interests in limited partnership equity hedge funds. The partnership interests are measured at fair value using the funds’ net asset values as a practical expedient. Unrealized holding gains and losses on partnership interests are credited or charged to net income (loss) as incurred. There are no unfunded commitments related to these investments. The funds’ investment strategies are short/long-term equities in financial institutions and global opportunities, long-term equity securities, and fixed maturity and equity securities in global opportunities. Realized gains and losses on sales of equity and fixed maturity securities are recognized into income based upon the specific identification method. Interest and dividends are recognized as earned. Short-term investments are considered to be short-term, highly liquid investments that are less than one year in term to the dates of maturity at the purchase dates, and they present insignificant risk of changes in value due to changing interest rates. The Company regularly evaluates all of its investments based on current economic conditions, credit loss experience, and other specific developments. If there is a decline in a security’s net realizable value that is other than temporary, it is considered as a realized loss and the cost basis in the security is reduced to its estimated fair value. Other-than-temporary-impairments (“OTTI”) of fixed maturity securities are separated into credit and noncredit-related amounts when there are credit-related losses associated with the impaired fixed maturity security for which management asserts that it does not have the intent to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of its cost basis. The amount of the OTTI related to a credit loss is recognized in earnings, and the amount of the OTTI related to other factors is recorded in other comprehensive income (loss). A credit loss is determined by assessing whether the amortized cost basis of the security will be recovered, by comparing the present value of cash flows expected to be collected from the security, computed using original yield as the discount rate, to the amortized cost basis of the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is considered to be the "credit loss." Deferred Acquisition Costs Certain direct acquisition costs consisting of commissions, premium taxes and certain other direct underwriting expenses that vary with and are primarily related to the production of business are deferred and amortized over the effective period of the related insurance policies as the underlying policy premiums are earned. The method followed in computing deferred acquisition costs limits the amount of deferred costs to their estimated realizable value, which gives effect to the premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned. Future changes in estimates, the most significant of which is expected losses and loss adjustment expenses, may require adjustments to deferred policy acquisition costs. If the estimation of net realizable value indicates that the deferred acquisition costs are not recoverable, they would be written off. Prepaid Management Fee Prepaid management fee consisting of costs incurred by the Positive Insurance Company to execute a new management agreement with Diversus Management is being amortized on a straight-line basis over the Liability for Losses and Loss Adjustment Expenses Liability for losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on prior experience, actuarial assumptions and management judgments for losses incurred but not reported. Such liabilities are necessarily based on assumptions and estimates, and while management believes the amount is adequate, the ultimate liability may be in excess of or less than the amounts provided. The methods for making such estimates for establishing the resulting liabilities are continually reviewed. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based upon the assumption that past developments are an appropriate indicator of future events and involves a variety of actuarial techniques that analyze experience, trends, and other relevant factors. The uncertainties involved with the reserving process include internal factors, such as changes in claims handling procedure, as well external factors, such as economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final loss settlements may vary from the present estimates, particularly when those payments may not occur until well into the future. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends. We offer extended reporting coverage at no additional charge in the event of disability, death or retirement after a policyholder reaches the age of 55 and has been a mature-claims policyholder with the Company for at least one year. An extended reporting endorsement policy reserve is required to assure that premiums are not earned prematurely. This reserve is actuarially determined and the balance is included in unearned premiums in the consolidated balance sheets. Reinsurance We cede insurance risk to other insurance companies. This arrangement allows us to minimize the net loss potential arising from large risks. Reinsurance contracts do not relieve us of our obligation to its policyholders. Reinsurance premiums, losses, and loss adjustment expenses are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contract. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments, non-U.S. government bonds, premiums receivable, and balances recoverable from reinsurers. Non-U.S. government bonds are diversified, and no one investment accounts for greater than 5% of our invested assets. Cash and cash equivalents are deposited with financial institutions with balances that fluctuate in excess of federally insured limits. If the financial institutions were not to honor their contractual liability to us, we could incur losses. We are of the opinion that there is low risk because of the financial strength of the respective financial institutions. We are also subject to concentrations of credit risk through short-term money market investments. The credit risk related to short-term money market investments is minimized by our investing in money market funds or repurchase agreements, both secured by U.S. government securities. No one insured accounted for over 20% of premiums receivable as of June 30, 2019 and December 31, 2018 or gross written premium for the three months and six months ended June 30, 2019 and 2018. We have reinsurance contracts with various reinsurers all of whom have A.M. Best ratings of A or better. Revenue Recognition Premiums are earned on a daily pro rata basis over the terms of the insurance policies. Unearned premium reserves are established to cover the unexpired portion of the policies in force less amounts ceded to reinsurers. For consideration received for policies with effective dates subsequent to the reporting period, the Company records an advance premium liability in lieu of written premium. Comprehensive Income Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale fixed maturity securities and unrealized losses related to factors other than credit on fixed maturity securities, are reported as a separate component in the equity section in the accompanying consolidated balance sheets. Such items, along with net income (loss), are components of comprehensive income (loss), and are reflected in the accompanying consolidated statements of comprehensive income (loss). Reclassifications of realized gains and losses on sales of investments out of accumulated other comprehensive income (loss) are recorded in net investment income in the accompanying consolidated statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Prior to March 27, 2019, PPIX, PCA, and PIPE filed separate federal income tax returns. The Company did not recognize any interest and penalties in the accompanying consolidated statement of operations for the three months and six months ended June 30, 2019 and the combined statement of operations for the three months and six months ended June 30, 2018. PPIX, PCA, and PIPE remain subject to examination by the Internal Revenue Service for tax years 2015 through 2017. Reclassification The consolidated balance sheet of the Company as of March 31, 2019 inadvertently presented common stock at no par value per share. The consolidated balance sheet of the Company as of June 30, 2019 presents common stock at a par value of $0.01 per share. The misstatement in the balance sheet as of March 31, 2019 resulted in a reclassification of $33,580,925 from common stock to additional paid-in capital as of June 30, 2019. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | 4. Recent Accounting Pronouncements As an emerging growth company, we have elected to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. The following discussion includes effective dates for both public business entities and emerging growth companies, as well as whether specific guidance may be adopted early. Recently Adopted Accounting Pronouncements The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) ASU 2016-01 for the year ended December 31, 2018. The amendments in this ASU require among other things that equity investments to be measured at fair value (excluding those equity securities measured at fair value using net asset value as a practical expedient) with changes in fair value recognized in net income, simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, require an entity to present separately in other comprehensive income the portion of the total change in the fair value of the liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the consolidated financial statements, and clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. With the adoption of ASU 2016-01, a cumulative effect of unrealized holding gains and losses on previously classified available-for-sale equity securities included in accumulated other comprehensive income at January 1, 2018 are to be reclassified to retained earnings. At January 1, 2018, unrealized holding gains in equity securities, net of tax effect, of $1,387,895 were reclassified from accumulated other comprehensive income to retained earnings for the year ended December 31, 2018. Recently Issued Accounting Pronouncements New accounting rules and disclosure requirements can impact the results and the comparability of the Company’s consolidated financial statements. The following recently issued accounting pronouncements are relevant to the Company’s consolidated financial statements: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. In July 2019, the FASB decided to add a project to its technical agenda to propose staggered effective dates for certain accounting standards, including ASU 2016-13. The FASB has proposed an approach that ASU 2016-13 will be effective for Public Business Entities that are SEC filers, excluding smaller reporting companies such as the Company, for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, including smaller reporting companies like the Company, ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For all entities, early adoption will continue to be permitted; that is, early adoption is allowed for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (that is, effective January 1, 2019, for calendar-year-end companies). The FASB is currently in the process of drafting a proposed ASU for this project to be voted upon by FASB members after a 30-day comment period. The Company is currently a smaller reporting company, and if this proposal is approved and becomes effective, the Company’s expected adoption date for ASU 2016-13 would change from fiscal years beginning after December 15, 2019 to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Marketable Securities [Abstract] | |
Investments | 5. Investments We use fair value measurements to record fair value adjustments to certain assets to determine fair value disclosures. Fixed maturity available-for-sale securities and equity securities are recorded at fair value on a recurring basis. FASB ASC Topic 820 “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The three levels of the fair value hierarchy under ASC Topic 820 are as follows: Level 1: Quoted (unadjusted) prices for identical assets in active markets Level 2: Quoted prices for similar assets in active markets, quoted prices for identical or similar assets in nonactive markets (few transactions, limited information, noncurrent prices, high variability over time, etc., inputs other than quoted prices that are observable for the asset (interest rates, yield curves, volatilities, default rates, etc., and inputs that are derived principally from or corroborated by other observable market data. Level 3: Unobservable inputs that cannot be corroborated by observable market data. Under ASC Topic 820, we base fair values of assets on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy in FASB ASC Topic 820. Fair value measurements for assets where there exists limited or no observable market data and, therefore, are based primarily upon our or other third-party’s estimates, are often calculated based on the characteristics of the asset, the economic and competitive environment and other such factors. Management uses its best judgment in estimating the fair value of financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts we could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period end and have not been re-evaluated or updated for purposes of the consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end. Additionally, changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future valuations. We obtain one price for each security primarily from a third-party pricing service (“pricing service”), which generally uses quoted prices or other observable inputs for the determination of fair value. The pricing service normally derives the security prices through recently reported trades for identical or similar securities, making adjustments through the reporting date based upon available observable market information. For securities not actively traded, the pricing service may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, non-binding broker quotes, benchmark yields, credit spreads, default rates, and prepayment speeds. Because we are responsible for the determination of fair value, we perform analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest-level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Amortized cost/cost, gross unrealized gains, gross unrealized losses, and fair value of fixed maturity and equity securities by major security type for the results at June 30, 2019 and December 31, 2018 are as follows: Amortized Cost/Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2019 U.S. government $ 12,131,934 $ 138,643 $ 67,944 $ 12,202,633 States, territories, and possessions 1,104,357 47,057 — 1,151,414 Subdivisions of states, territories, and possessions 12,897,335 343,264 13,952 13,226,647 Industrial and miscellaneous 60,359,777 1,010,996 56,086 61,314,687 Total bonds 86,493,403 1,539,960 137,982 87,895,381 Common stocks 6,556,512 1,095,869 383,323 7,269,058 $ 93,049,915 $ 2,635,829 $ 521,305 $ 95,164,439 Amortized Cost/Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 U.S. government $ 12,859,101 $ 87,354 $ 208,699 $ 12,737,756 States, territories, and possessions 1,111,879 14,497 897 1,125,479 Subdivisions of states, territories, and possessions 13,230,690 105,965 44,591 13,292,064 Industrial and miscellaneous 59,561,984 14,030 1,524,644 58,051,370 Total bonds 86,763,654 221,846 1,778,831 85,206,669 Common stocks 7,568,810 524,526 826,242 7,267,094 $ 94,332,464 $ 746,372 $ 2,605,073 $ 92,473,763 At June 30, 2019 and December 31, 2018, contractual maturities of investments in bond securities are as follows: June 30, 2019 December 31, 2018 Amortized Cost/Cost Fair Value Amortized Cost/Cost Fair Value Due in less than one year $ 8,013,317 $ 8,000,989 $ 7,094,266 $ 6,549,872 Due after one year to five years 54,244,377 54,950,728 50,676,297 47,892,580 Due after five years to ten years 23,503,880 24,141,687 27,617,956 29,361,896 Due after ten years 731,829 801,977 1,375,135 1,402,321 $ 86,493,403 $ 87,895,381 $ 86,763,654 $ 85,206,669 Realized gains and losses are determined using the specific identification method. During the three months and six months ended June 30, 2019 and 2018, proceeds from maturity and sales and gross realized gains and losses on securities are: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Proceeds $ 2,329,834 $ 6,402,122 $ 7,306,915 $ 12,816,540 Gross gains 41,207 64,143 59,898 93,319 Gross losses 186,205 18,809 239,842 35,719 The components of net investment income for the three months and six months ended June 30, 2019 and 2018 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Bonds $ 561,161 $ 578,365 $ 1,126,231 $ 1,133,957 Cash and short-term investments 154,571 17,373 177,584 29,594 Common stocks 74,758 80,675 141,493 148,513 Limited partnerships — 1,383 1,626 (969 ) Other 6,875 — 13,750 — Net (loss) gain on sales of investments (144,998 ) 45,334 (179,944 ) 57,600 Unrealized gain (loss) on equity securities 318,616 139,393 1,205,213 (34,350 ) 970,983 862,523 2,485,953 1,334,345 Less investment expenses 31,118 34,482 66,181 60,062 Net investment income $ 939,865 $ 828,041 $ 2,419,772 $ 1,274,283 The fair value and unrealized losses of our securities that were temporarily impaired as of June 30, 2019 and December 31, 2018 are as follows: Less than 12 months 12 months or longer Total Description of securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2019: U.S. government $ 219,094 $ 2,033 $ 7,436,764 $ 65,911 $ 7,655,858 $ 67,944 Subdivisions of states, territories, and possessions 254,643 29 462,923 13,923 717,566 13,952 Industrial and miscellaneous 2,409,315 4,800 8,008,824 51,286 10,418,139 56,086 Total fixed maturities 2,883,052 6,862 15,908,511 131,120 18,791,563 137,982 Common stocks 932,012 73,418 917,372 309,905 1,849,384 383,323 Total temporarily impaired securities $ 3,815,064 $ 80,280 $ 16,825,883 $ 441,025 $ 20,640,947 $ 521,305 Less than 12 months 12 months or longer Total Description of securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2018: U.S. government $ 1,757,021 $ 5,521 $ 8,858,782 $ 203,178 $ 10,615,803 $ 208,699 States, territories, and possessions 410,416 897 — — 410,416 897 Subdivisions of states, territories, and possessions 3,138,650 11,729 1,993,170 32,862 5,131,820 44,591 Industrial and miscellaneous 28,187,416 563,317 25,787,215 961,327 53,974,631 1,524,644 Total fixed maturities 33,493,503 581,464 36,639,167 1,197,367 70,132,670 1,778,831 Common stocks 2,914,528 471,382 631,297 354,860 3,545,825 826,242 Total temporarily impaired securities $ 36,408,031 $ 1,052,846 $ 37,270,464 $ 1,552,227 $ 73,678,495 $ 2,605,073 Fair values of interest rate sensitive instruments may be affected by increases and decreases in prevailing interest rates, which generally translate, respectively, into decreases and increases in fair values of fixed maturity investments. The fair values of interest rate sensitive instruments also may be affected by the credit worthiness of the issuer, prepayment options, relative values of other investments, the liquidity of the instrument, and other general market conditions. We evaluated each security and took into account the severity and duration of the impairment, the current rating on the bond, and the outlook for the issuer according to independent analysts. We found that the declines in fair value are most likely attributable to increases in interest rates, and there is no evidence that the likelihood of not receiving all of the contractual cash flows as expected has changed. Our fixed maturity portfolio is managed by our investment committee in concert with an outside investment manager for investment grade bond investments. By agreement, the investment manager cannot sell any security without the consent of our investment committee if such sale will result in a net realized loss. We monitor our investment portfolio and review securities that have experienced a decline in fair value below cost to evaluate whether the decline is other than temporary. When assessing whether the amortized cost basis of the security will be recovered, we compare the present value of the cash flows likely to be collected, based on an evaluation of all available information relevant to the collectability of the security, to the amortized cost basis of the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as the “credit loss.” If there is a credit loss, the impairment is considered to be other-than-temporary. If we identify that an other-than-temporary impairment loss has occurred, we then determine whether we intend to sell the security, or if it is more likely than not that we will be required to sell the security prior to recovering the amortized cost basis less any current-period credit losses. If we determine that we do not intend to sell, and it is not more likely than not that we will be required to sell the security, the amount of the impairment loss related to the credit loss will be recorded in earnings, and the remaining portion of the other-than-temporary impairment loss will be recognized in other comprehensive income (loss), net of tax. If we determine that we intend to sell the security, or that it is more likely than not that we will be required to sell the security prior to recovering its amortized cost basis less any current-period credit losses, the full amount of the other-than-temporary impairment will be recognized in earnings. For the three months and six months ended June 30, 2019 and 2018, we determined that none of our securities were other-than-temporarily impaired. Adverse investment market conditions, or poor operating results of underlying investments, could result in impairment charges in the future. The table below presents the level within the fair value hierarchy generally utilized by us to estimate the fair value of assets disclosed on a recurring basis at June 30, 2019: . Total Level 1 Level 2 Level 3 U.S. government $ 12,202,633 $ — $ 12,202,633 $ — States, territories, and possessions 1,151,414 — 1,151,414 — Subdivisions of states, territories and possessions 13,226,647 — 13,226,647 — Industrial and miscellaneous 61,314,687 — 61,314,687 — Total bonds 87,895,381 — 87,895,381 — Common stocks 7,269,058 7,269,058 — — $ 95,164,439 $ 7,269,058 $ 87,895,381 $ — The table below presents the level within the fair value hierarchy generally utilized by us to estimate the fair value of assets disclosed on a recurring basis at December 31, 2018: Total Level 1 Level 2 Level 3 U.S. government $ 12,737,756 $ — $ 12,737,756 $ — States, territories, and possessions 1,125,479 — 1,125,479 — Subdivisions of states, territories and possessions 13,292,064 — 13,292,064 — Industrial and miscellaneous 58,051,370 — 58,051,370 — Total bonds 85,206,669 — 85,206,669 — Common stocks 7,267,094 7,267,094 — — $ 92,473,763 $ 7,267,094 $ 85,206,669 $ — At June 30, 2019 and December 31, 2018, we had ownership interests in limited partnerships. Our partnership interests are measured at fair value using the partnerships’ net asset values as a practical expedient. At June 30, 2019, the fair value and cost basis of these investments were $4,244,663 and $3,550,000, respectively. At December 31, 2018, the fair value and cost basis of these investments were $4,051,399 and $3,547,687, respectively. |
Deferred Acquisition Costs
Deferred Acquisition Costs | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Deferred Acquisition Costs | 6. Deferred Acquisition Costs The following table summarizes the components of deferred acquisition costs for the three months and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Balance, beginning of period $ 4,690,104 $ 4,826,311 $ 3,985,193 $ 4,078,322 Amount capitalized during the period 933,145 2,894,400 3,760,410 5,969,718 Amount amortized during the period 1,964,792 3,821,964 4,087,146 6,149,293 Balance, end of period $ 3,658,457 $ 3,898,747 $ 3,658,457 $ 3,898,747 |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Reinsurance | 7. Reinsurance Effective as of March 27, 2019, Positive Insurance Company entered into a new policy reinsurance agreement. Under the new agreement, we retain a portion of our exposure and pay to the reinsurers a portion of the premiums received on all policies reinsured. Insurance policies written by us are reinsured with other insurance companies principally to: • reduce net liability on individual risks; • mitigate the effect of individual loss occurrences; • stabilize underwriting results; and • increase our underwriting capacity. Under Pennsylvania law, each insured must maintain MPLI of at least $1,000,000 for each claim and $3,000,000 of annual aggregate coverage. We provide primary insurance coverage up to $500,000 per claim and $1,500,000 of annual aggregate coverage. The Pennsylvania Medical Care Availability and Reduction of Error (“MCARE”) Fund provides coverage for any losses above $500,000 per claim up to $1,000,000. In cases where coverage under the Pennsylvania MCARE Fund does not apply, the primary insurance provides coverage up to $1,000,000 per claim and $3,000,000 of annual aggregate coverage. We retain the first $300,000 on all polices and reinsurance covers the excess up to $1,000,000 that is not covered by the Pennsylvania MCARE Fund, and cede to reinsurers claims in excess of $1,000,000. Other states in which we write insurance require doctors to maintain certain minimum coverage and provide a fund that provides coverage for losses above a certain amount, but many states do not prescribe insurance requirements for doctors. We offer primary coverage up to $1,000,000 for each claim and $3,000,000 of annual aggregate coverage in Delaware, Maryland, Michigan, Ohio, New Jersey, and South Carolina. We retain the first $300,000 on all polices, and reinsurance covers the excess up to $1,000,000. If an insured in New Jersey requests, additional coverage of $1,000,000, each claim, each insured, each policy can be provided and is fully ceded to the reinsurer up to a maximum aggregate liability of $2,000,000 to the reinsurer per the term of the reinsurance agreement. In South Carolina and Michigan, the policy limits are $200,000, each claim, each insured, and we retain the first $100,000 and the reinsurer covers the next $100,000. We also purchase additional reinsurance coverage for clash, loss in excess of policy limits and extra contractual obligation claims. Our premiums under the new reinsurance agreement is based on a percentage of our earned premiums during the term of the agreement. The agreement terminates on April 1, 2020. Reinsurance does not legally discharge the insurance company issuing the policy from primary liability for the full amount due under the reinsured policies. However, the assuming reinsurer is obligated to reimburse the company issuing the policy to the extent of the coverage ceded. A primary factor in the selection of reinsurers from whom we purchase reinsurance is their financial strength. Our reinsurance arrangements are generally renegotiated annually. The insolvency or inability of any reinsurer to meet its obligations to us could have a material adverse effect on our results of operations or financial condition. Our reinsurance providers, the majority of whom are longstanding partners that understand our business, are all carefully selected with the help of our reinsurance broker. We monitor the solvency of reinsurers through regular review of their financial statements and, if available, their A.M. Best ratings. Hanover Re, our current reinsurance partner, has at least an “A” rating from A.M. Best. According to A.M. Best, companies with a rating of “A” or better “have an excellent ability to meet their ongoing obligations to policyholders.” We generally do not assume risks from other insurance companies. However, we are required by statute to participate in certain residual market pools. This participation requires us to assume business for exposures that are not insured in the voluntary marketplace. We participate in these residual markets pro rata on a market share basis, and as of June 30, 2019, our participation was not material. The effect of reinsurance on premiums written, amounts earned, and losses incurred for the three months and six months ended June 30, 2019 and 2018 is as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Premiums written: Direct $ 3,783,325 $ 3,411,489 $ 11,980,842 $ 11,959,869 Ceded 648,254 273,366 2,600,731 2,167,424 Premiums written, net of reinsurance $ 3,135,071 $ 3,138,123 $ 9,380,111 $ 9,792,445 Premiums earned: Direct $ 6,075,535 $ 5,968,691 $ 12,428,915 $ 12,735,067 Ceded 747,541 730,412 1,609,714 1,543,410 Premiums earned, net of reinsurance $ 5,327,994 $ 5,238,279 $ 10,819,201 $ 11,191,657 Losses and loss adjustment expenses incurred: Direct $ 6,365,077 $ 5,854,917 $ 10,276,266 $ 9,804,686 Ceded 2,097,637 1,216,534 2,687,150 1,816,602 Losses and loss adjustment expenses incurred, net of reinsurance $ 4,267,440 $ 4,638,383 $ 7,589,116 $ 7,988,084 |
Losses and Loss Adjustment Expe
Losses and Loss Adjustment Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Losses and Loss Adjustment Expenses | 8. Losses and Loss Adjustment Expenses The following tables provide a reconciliation of our beginning and ending unpaid losses and loss adjustment expense reserve balances for the six months ended June 30, 2019 and 2018. 2019 2018 Balance at January 1 $ 68,392,333 $ 68,374,554 Less: Reinsurance recoverable on liability for losses and loss adjustment expenses 7,956,043 8,585,851 Add: Reinsurance recoverable on claims paid 5,791 1,196,573 Net liability at January 1 60,442,081 60,985,276 Losses and loss adjustment expenses incurred, net: Current period 7,405,688 6,252,532 Prior periods 183,428 1,735,552 Total incurred losses and loss adjustment expenses 7,589,116 7,988,084 Less losses and loss adjustment expenses paid, net: Current period 203,366 133,579 Prior periods 9,246,084 7,849,105 Total losses and loss adjustment expenses paid 9,449,450 7,982,684 Net liability for losses and loss adjustment expenses, at end of period 58,581,747 60,990,676 Add: Reinsurance recoverable on liability for losses and loss adjustment expenses 9,640,117 7,974,890 Less: Reinsurance recoverable on claims paid 730,104 (450,355 ) Liability for losses and loss adjustment expenses, June 30 $ 67,491,760 $ 69,415,921 The liability for losses and loss adjustment expenses at June 30, 2019 and 2018 were $67,491,760 and $69,415,921, respectively. For the six months ended June 30, 2019 and 2018, $9,246,084 and $7,849,105, respectively, has been paid for incurred claims attributable to insured events of prior years. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. During the six months ended June 30, 2018, we experienced an unfavorable development of $1,735,552 primarily related to significant reserve strengthening in the 2014 and 2015 years for both claims-made and occurrence policies. These increases are due to greater amount of incurred expenses than was originally estimated. During the six months ended June 30, 2019, we experienced an unfavorable development of $183,428 in reserve strengthening from prior years while leaving most of the incurred related to the 2019 year based upon year to date actuarial estimates. Positive Insurance Company uses a combination of the Actual versus Expected Method, Bornhuetter-Ferguson Method, Expected Loss Ratio Method, Frequency/Severity Method, and the Loss Development Method in order to estimate its liability for losses and loss adjustment expenses. There were no significant changes in the methodologies and assumptions used to develop the liabilities for losses and loss adjustment expenses for the six months ended June 30, 2019 and 2018. |
Note Payable
Note Payable | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable | 9. Note Payable On December 12, 2014, PPIX entered into a loan agreement with a financial institution with proceeds totaling $300,000 to finance the development of a new policy system. The loan is secured by the equipment purchased with the proceeds received. The loan is being repaid on a monthly basis from January 2016 through December 2020 with interest calculated on the unpaid principal balance at a rate of 4%. At June 30, 2019 and December 31, 2018, the balance of the note was $96,390 and $127,327, respectively. At June 30, 2019 and December 31, 2018, PPIX was in compliance with all loan covenants. Future maturities of the note for the succeeding years are as follows at June 30, 2019: Year ending June 30, 2020 $ 63,650 2021 32,740 $ 96,390 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes At June 30, 2019 and December 31, 2018, we had no unrecognized tax benefits, no accrued interest and penalties, and no significant uncertain tax positions. No interest and penalties were recognized during the periods ended June 30, 2019 and December 31, 2018. At June 30, 2019 and December 31, 2018, we have unused net operating loss carryforwards (“NOL”) of $5,869,644 and $3,865,253, respectively, which will begin to expire in tax years 2038 and 2039. At June 30, 2019 and December 31, 2018, we have capital loss carryforwards of $344,510 and $164,566, respectively. Of the NOLs as of June 30, 2019, $5,310,679 are subject to limitations under Section 382 of the Internal Revenue Code. These NOLs are limited in the amount that can be utilized in any one year and may expire before they are realized. At this time, we do not expect that any of the remaining NOL carryforwards will expire before utilized. At June 30, 2019 and December 31, 2018, the Company had no other income tax related carryovers for net operating losses, alternative tax credits, or capital losses. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all 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 (including the impact of carryback and carryforward periods), projected future taxable income, and tax planning strategies in making this assessment. At June 30, 2019 and December 31, 2018, management determined that it is more likely than not that all of the deferred tax assets will be realized by the Company in future years. Accordingly, the Company did not record a valuation allowance against its deferred tax assets at June 30, 2019 and December 31, 2018. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Positive Insurance Company is managed by Diversus Management. Prior to March 27, 2019, Diversus Management, through former attorneys-in-fact of PPIX, PCA, and PIPE, earned management fees at 25% of gross written premiums of the exchanges. Simultaneously with the acquisition of PPIX, PCA, and PIPE and the initial public offering on March 27, 2019, Positive Insurance Company and Diversus Management entered into a new management agreement effective as of March 27, 2019 whereby Diversus Management provides administrative services to Positive Insurance Company in exchange for fees based on a percentage of Positive Insurance Company’s gross written premium, less return premium. For the three months ended June 30, 2019, Diversus Management earned management fees at 12% of gross written premiums of Positive Insurance Company. Diversus Management may also earn quarterly performance management fees based on Positive Insurance Company’s combined ratio and net earned premiums. Management fees incurred by us for the three months ended June 30, 2019 and 2018 were $530,180 and $852,872, respectively, which is recorded in other underwriting expenses in the consolidated statements of operations. Management fees incurred by us for the six months ended June 30, 2019 and 2018 were $2,579,559 and $2,989,967, respectively, which is recorded in other underwriting expenses in the consolidated statements of operations. In connection with the execution of the new management agreement with Diversus Management, the Company incurred costs of $10,000,000 to execute the agreement; such costs are presented as “prepaid management fees” in the accompany consolidated balance sheet at June 30, 2019 is being amortized on a straight-line basis over a period of seven years. For the three months and six months ended June 30, 2019, amortization expense was $357,143. We have contracts with Gateway Risk Services, LLC and Andrews Outsource Solutions LLC, both of which are wholly owned subsidiaries of Diversus, under which those companies provide claims processing and risk management services to us. We incurred fees under these contracts of $408,875 and $405,775 for the three months ended June 30, 2019 and 2018, respectively the six months ended June 30, 2019 and 2018 three months ended June 30, 2019 and 2018 six months ended June 30, 2019 and 2018 The Company and Diversus entered into a loan agreement dated as of March 29, 2019 to provide a $6,000,000 credit facility to Diversus for working capital purposes. Diversus may borrow in one or more advances up to $5,500,000 under a term loan and up to $500,000 under a revolving loan. Outstanding borrowings under the credit facility will bear interest at 8%, will be unsecured, and will be subordinate to the existing senior debt and other commercial loan obligations of Diversus. The loan is to be convertible into common stock shares of Diversus at a price of $1 per share at the option of the Company. At June 30, 2019, there was no outstanding balance of the credit facility. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Common Stock | 12. Common Stock The Company is authorized to issue 10,000,000 shares of $0.01 par value common stock. At December 31, 2018, there were no shares of common stock issued and outstanding. In connection with the completion of the initial public offering on March 27, 2019, 3,615,500 shares of the Company’s common stock were issued. There are no stock-based forms of compensation authorized to be issued by the Company at June 30, 2019. The Company’s principal source of liquidity will be dividend payments from Positive Insurance Company. Positive Insurance Company is restricted by the insurance laws of Pennsylvania as to the amount of dividends or other distributions it may pay to the Company. Positive Insurance Company may pay dividends to us after notice to, but without prior approval of, the Pennsylvania Insurance Department in an amount not to exceed the greater of (i) 10% of the surplus of Positive Insurance Company as reported on its most recent annual statement filed with the Pennsylvania Insurance Department, or (ii) the statutory net income of Positive Insurance Company for the period covered by such annual statement. Dividends in excess of this amount are considered “extraordinary” and are subject to the approval of the Pennsylvania Insurance Department. The order of the Pennsylvania Insurance Department approving the conversions of PPIX, PCA, and PIPE prohibits the declaration or payment of any dividend, return of capital, or other distribution by the Company to Insurance Capital Group, LLC and Enstar Holdings (US) LLC, the two principal stockholders of the Company, without the prior approval of the Pennsylvania Insurance Department, for a period of three years following the effective date of the conversions. Additionally, by the order of the Pennsylvania Insurance Department, Positive Insurance Company cannot pay a dividend to the Company for a period of three years following the effective date of the conversions without the approval of the Pennsylvania Insurance Department. The amount available for payment of dividends from Positive Insurance Company after the conversions without the prior approval of the Pennsylvania Insurance Department is approximately $3.7 million based upon the statutory surplus of Positive Insurance Company. Prior to its payment of any dividend, Positive Insurance Company will be required to provide notice of the dividend to the Pennsylvania Insurance Department. This notice must be provided to the Pennsylvania Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend. The Pennsylvania Insurance Department has the power to limit or prohibit dividends if Positive Insurance Company is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 13. Earnings Per Share As discussed in Note 1, the conversions of PPIX, PCA, and PIPE to stock insurance companies and the simultaneous acquisition of these companies resulted in the issuance of the Company’s common stock as of March 27, 2019. The weighted average number of common shares outstanding was 3,615,500 for the three months and six months ended June 30, 2019. For the period prior to the date of the conversions, we assumed that the net common shares issued in the initial public offering were outstanding since January 1, 2019. The following table presents a reconciliation of the numerators and denominators we used in the basic and diluted per share computations for our common stock: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic earnings per common share: Numerator: Net loss $ (560,947 ) $ — $ (469,158 ) $ — Denominator: Weighted average shares outstanding 3,615,500 — 3,615,500 — Basic earnings per common share $ (0.16 ) $ — $ (0.13 ) $ — |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and notes. Actual results could differ from these estimates and such differences could be material. The Company’s principal estimates include the liability for losses and loss adjustment expenses, deferred acquisition costs, other-than-temporary impairments of investments, and valuation of deferred tax assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash and cash equivalents to be cash on hand and depository bank accounts with original maturities of three months or less, are readily convertible to known amounts of cash, and present insignificant risk of changes in value due to changing interest rates. |
Investments | Investments Investments in fixed maturity securities are classified as available-for-sale and are stated at fair value. Unrealized holding gains and losses, net of related tax effects, on available-for-sale fixed maturity securities are recorded directly to accumulated other comprehensive income (loss). Investments in equity securities are stated at fair value and unrealized holding gains and losses are credited or charged to net income (loss) as incurred. We have ownership interests in limited partnership equity hedge funds. The partnership interests are measured at fair value using the funds’ net asset values as a practical expedient. Unrealized holding gains and losses on partnership interests are credited or charged to net income (loss) as incurred. There are no unfunded commitments related to these investments. The funds’ investment strategies are short/long-term equities in financial institutions and global opportunities, long-term equity securities, and fixed maturity and equity securities in global opportunities. Realized gains and losses on sales of equity and fixed maturity securities are recognized into income based upon the specific identification method. Interest and dividends are recognized as earned. Short-term investments are considered to be short-term, highly liquid investments that are less than one year in term to the dates of maturity at the purchase dates, and they present insignificant risk of changes in value due to changing interest rates. The Company regularly evaluates all of its investments based on current economic conditions, credit loss experience, and other specific developments. If there is a decline in a security’s net realizable value that is other than temporary, it is considered as a realized loss and the cost basis in the security is reduced to its estimated fair value. Other-than-temporary-impairments (“OTTI”) of fixed maturity securities are separated into credit and noncredit-related amounts when there are credit-related losses associated with the impaired fixed maturity security for which management asserts that it does not have the intent to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of its cost basis. The amount of the OTTI related to a credit loss is recognized in earnings, and the amount of the OTTI related to other factors is recorded in other comprehensive income (loss). A credit loss is determined by assessing whether the amortized cost basis of the security will be recovered, by comparing the present value of cash flows expected to be collected from the security, computed using original yield as the discount rate, to the amortized cost basis of the security. The shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is considered to be the "credit loss." |
Deferred Acquisition Costs | Deferred Acquisition Costs Certain direct acquisition costs consisting of commissions, premium taxes and certain other direct underwriting expenses that vary with and are primarily related to the production of business are deferred and amortized over the effective period of the related insurance policies as the underlying policy premiums are earned. The method followed in computing deferred acquisition costs limits the amount of deferred costs to their estimated realizable value, which gives effect to the premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned. Future changes in estimates, the most significant of which is expected losses and loss adjustment expenses, may require adjustments to deferred policy acquisition costs. If the estimation of net realizable value indicates that the deferred acquisition costs are not recoverable, they would be written off. |
Prepaid Management Fee | Prepaid Management Fee Prepaid management fee consisting of costs incurred by the Positive Insurance Company to execute a new management agreement with Diversus Management is being amortized on a straight-line basis over the |
Liability for Losses and Loss Adjustment Expenses | Liability for Losses and Loss Adjustment Expenses Liability for losses and loss adjustment expenses include an amount determined from individual case estimates and loss reports and an amount, based on prior experience, actuarial assumptions and management judgments for losses incurred but not reported. Such liabilities are necessarily based on assumptions and estimates, and while management believes the amount is adequate, the ultimate liability may be in excess of or less than the amounts provided. The methods for making such estimates for establishing the resulting liabilities are continually reviewed. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based upon the assumption that past developments are an appropriate indicator of future events and involves a variety of actuarial techniques that analyze experience, trends, and other relevant factors. The uncertainties involved with the reserving process include internal factors, such as changes in claims handling procedure, as well external factors, such as economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final loss settlements may vary from the present estimates, particularly when those payments may not occur until well into the future. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends. We offer extended reporting coverage at no additional charge in the event of disability, death or retirement after a policyholder reaches the age of 55 and has been a mature-claims policyholder with the Company for at least one year. An extended reporting endorsement policy reserve is required to assure that premiums are not earned prematurely. This reserve is actuarially determined and the balance is included in unearned premiums in the consolidated balance sheets. |
Reinsurance | Reinsurance We cede insurance risk to other insurance companies. This arrangement allows us to minimize the net loss potential arising from large risks. Reinsurance contracts do not relieve us of our obligation to its policyholders. Reinsurance premiums, losses, and loss adjustment expenses are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contract. |
Credit Risk | Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments, non-U.S. government bonds, premiums receivable, and balances recoverable from reinsurers. Non-U.S. government bonds are diversified, and no one investment accounts for greater than 5% of our invested assets. Cash and cash equivalents are deposited with financial institutions with balances that fluctuate in excess of federally insured limits. If the financial institutions were not to honor their contractual liability to us, we could incur losses. We are of the opinion that there is low risk because of the financial strength of the respective financial institutions. We are also subject to concentrations of credit risk through short-term money market investments. The credit risk related to short-term money market investments is minimized by our investing in money market funds or repurchase agreements, both secured by U.S. government securities. No one insured accounted for over 20% of premiums receivable as of June 30, 2019 and December 31, 2018 or gross written premium for the three months and six months ended June 30, 2019 and 2018. We have reinsurance contracts with various reinsurers all of whom have A.M. Best ratings of A or better. |
Revenue Recognition | Revenue Recognition Premiums are earned on a daily pro rata basis over the terms of the insurance policies. Unearned premium reserves are established to cover the unexpired portion of the policies in force less amounts ceded to reinsurers. For consideration received for policies with effective dates subsequent to the reporting period, the Company records an advance premium liability in lieu of written premium. |
Comprehensive Income | Comprehensive Income Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale fixed maturity securities and unrealized losses related to factors other than credit on fixed maturity securities, are reported as a separate component in the equity section in the accompanying consolidated balance sheets. Such items, along with net income (loss), are components of comprehensive income (loss), and are reflected in the accompanying consolidated statements of comprehensive income (loss). Reclassifications of realized gains and losses on sales of investments out of accumulated other comprehensive income (loss) are recorded in net investment income in the accompanying consolidated statements of operations. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Prior to March 27, 2019, PPIX, PCA, and PIPE filed separate federal income tax returns. The Company did not recognize any interest and penalties in the accompanying consolidated statement of operations for the three months and six months ended June 30, 2019 and the combined statement of operations for the three months and six months ended June 30, 2018. PPIX, PCA, and PIPE remain subject to examination by the Internal Revenue Service for tax years 2015 through 2017. |
Reclassification | Reclassification The consolidated balance sheet of the Company as of March 31, 2019 inadvertently presented common stock at no par value per share. The consolidated balance sheet of the Company as of June 30, 2019 presents common stock at a par value of $0.01 per share. The misstatement in the balance sheet as of March 31, 2019 resulted in a reclassification of $33,580,925 from common stock to additional paid-in capital as of June 30, 2019. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Marketable Securities [Abstract] | |
Schedule of Amortized Cost/Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Value of Fixed Maturity and Equity Securities | Amortized cost/cost, gross unrealized gains, gross unrealized losses, and fair value of fixed maturity and equity securities by major security type for the results at June 30, 2019 and December 31, 2018 are as follows: Amortized Cost/Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2019 U.S. government $ 12,131,934 $ 138,643 $ 67,944 $ 12,202,633 States, territories, and possessions 1,104,357 47,057 — 1,151,414 Subdivisions of states, territories, and possessions 12,897,335 343,264 13,952 13,226,647 Industrial and miscellaneous 60,359,777 1,010,996 56,086 61,314,687 Total bonds 86,493,403 1,539,960 137,982 87,895,381 Common stocks 6,556,512 1,095,869 383,323 7,269,058 $ 93,049,915 $ 2,635,829 $ 521,305 $ 95,164,439 Amortized Cost/Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 U.S. government $ 12,859,101 $ 87,354 $ 208,699 $ 12,737,756 States, territories, and possessions 1,111,879 14,497 897 1,125,479 Subdivisions of states, territories, and possessions 13,230,690 105,965 44,591 13,292,064 Industrial and miscellaneous 59,561,984 14,030 1,524,644 58,051,370 Total bonds 86,763,654 221,846 1,778,831 85,206,669 Common stocks 7,568,810 524,526 826,242 7,267,094 $ 94,332,464 $ 746,372 $ 2,605,073 $ 92,473,763 |
Schedule of Maturities of Investments in Bond Securities | At June 30, 2019 and December 31, 2018, contractual maturities of investments in bond securities are as follows: June 30, 2019 December 31, 2018 Amortized Cost/Cost Fair Value Amortized Cost/Cost Fair Value Due in less than one year $ 8,013,317 $ 8,000,989 $ 7,094,266 $ 6,549,872 Due after one year to five years 54,244,377 54,950,728 50,676,297 47,892,580 Due after five years to ten years 23,503,880 24,141,687 27,617,956 29,361,896 Due after ten years 731,829 801,977 1,375,135 1,402,321 $ 86,493,403 $ 87,895,381 $ 86,763,654 $ 85,206,669 |
Schedule of Realized Gains and Losses Securities | During the three months and six months ended June 30, 2019 and 2018, proceeds from maturity and sales and gross realized gains and losses on securities are: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Proceeds $ 2,329,834 $ 6,402,122 $ 7,306,915 $ 12,816,540 Gross gains 41,207 64,143 59,898 93,319 Gross losses 186,205 18,809 239,842 35,719 |
Schedule of Net Investment Income | The components of net investment income for the three months and six months ended June 30, 2019 and 2018 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Bonds $ 561,161 $ 578,365 $ 1,126,231 $ 1,133,957 Cash and short-term investments 154,571 17,373 177,584 29,594 Common stocks 74,758 80,675 141,493 148,513 Limited partnerships — 1,383 1,626 (969 ) Other 6,875 — 13,750 — Net (loss) gain on sales of investments (144,998 ) 45,334 (179,944 ) 57,600 Unrealized gain (loss) on equity securities 318,616 139,393 1,205,213 (34,350 ) 970,983 862,523 2,485,953 1,334,345 Less investment expenses 31,118 34,482 66,181 60,062 Net investment income $ 939,865 $ 828,041 $ 2,419,772 $ 1,274,283 |
The Fair Value and Unrealized Losses of Securities | The fair value and unrealized losses of our securities that were temporarily impaired as of June 30, 2019 and December 31, 2018 are as follows: Less than 12 months 12 months or longer Total Description of securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2019: U.S. government $ 219,094 $ 2,033 $ 7,436,764 $ 65,911 $ 7,655,858 $ 67,944 Subdivisions of states, territories, and possessions 254,643 29 462,923 13,923 717,566 13,952 Industrial and miscellaneous 2,409,315 4,800 8,008,824 51,286 10,418,139 56,086 Total fixed maturities 2,883,052 6,862 15,908,511 131,120 18,791,563 137,982 Common stocks 932,012 73,418 917,372 309,905 1,849,384 383,323 Total temporarily impaired securities $ 3,815,064 $ 80,280 $ 16,825,883 $ 441,025 $ 20,640,947 $ 521,305 Less than 12 months 12 months or longer Total Description of securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2018: U.S. government $ 1,757,021 $ 5,521 $ 8,858,782 $ 203,178 $ 10,615,803 $ 208,699 States, territories, and possessions 410,416 897 — — 410,416 897 Subdivisions of states, territories, and possessions 3,138,650 11,729 1,993,170 32,862 5,131,820 44,591 Industrial and miscellaneous 28,187,416 563,317 25,787,215 961,327 53,974,631 1,524,644 Total fixed maturities 33,493,503 581,464 36,639,167 1,197,367 70,132,670 1,778,831 Common stocks 2,914,528 471,382 631,297 354,860 3,545,825 826,242 Total temporarily impaired securities $ 36,408,031 $ 1,052,846 $ 37,270,464 $ 1,552,227 $ 73,678,495 $ 2,605,073 |
Schedule of Estimate Fair Value of Assets | The table below presents the level within the fair value hierarchy generally utilized by us to estimate the fair value of assets disclosed on a recurring basis at June 30, 2019: . Total Level 1 Level 2 Level 3 U.S. government $ 12,202,633 $ — $ 12,202,633 $ — States, territories, and possessions 1,151,414 — 1,151,414 — Subdivisions of states, territories and possessions 13,226,647 — 13,226,647 — Industrial and miscellaneous 61,314,687 — 61,314,687 — Total bonds 87,895,381 — 87,895,381 — Common stocks 7,269,058 7,269,058 — — $ 95,164,439 $ 7,269,058 $ 87,895,381 $ — The table below presents the level within the fair value hierarchy generally utilized by us to estimate the fair value of assets disclosed on a recurring basis at December 31, 2018: Total Level 1 Level 2 Level 3 U.S. government $ 12,737,756 $ — $ 12,737,756 $ — States, territories, and possessions 1,125,479 — 1,125,479 — Subdivisions of states, territories and possessions 13,292,064 — 13,292,064 — Industrial and miscellaneous 58,051,370 — 58,051,370 — Total bonds 85,206,669 — 85,206,669 — Common stocks 7,267,094 7,267,094 — — $ 92,473,763 $ 7,267,094 $ 85,206,669 $ — |
Deferred Acquisition Costs (Tab
Deferred Acquisition Costs (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Components of Deferred Acquisition Costs | The following table summarizes the components of deferred acquisition costs for the three months and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Balance, beginning of period $ 4,690,104 $ 4,826,311 $ 3,985,193 $ 4,078,322 Amount capitalized during the period 933,145 2,894,400 3,760,410 5,969,718 Amount amortized during the period 1,964,792 3,821,964 4,087,146 6,149,293 Balance, end of period $ 3,658,457 $ 3,898,747 $ 3,658,457 $ 3,898,747 |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Schedule of Effect of Reinsurance on Premiums Written, Amounts Earned, and Losses Incurred | The effect of reinsurance on premiums written, amounts earned, and losses incurred for the three months and six months ended June 30, 2019 and 2018 is as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Premiums written: Direct $ 3,783,325 $ 3,411,489 $ 11,980,842 $ 11,959,869 Ceded 648,254 273,366 2,600,731 2,167,424 Premiums written, net of reinsurance $ 3,135,071 $ 3,138,123 $ 9,380,111 $ 9,792,445 Premiums earned: Direct $ 6,075,535 $ 5,968,691 $ 12,428,915 $ 12,735,067 Ceded 747,541 730,412 1,609,714 1,543,410 Premiums earned, net of reinsurance $ 5,327,994 $ 5,238,279 $ 10,819,201 $ 11,191,657 Losses and loss adjustment expenses incurred: Direct $ 6,365,077 $ 5,854,917 $ 10,276,266 $ 9,804,686 Ceded 2,097,637 1,216,534 2,687,150 1,816,602 Losses and loss adjustment expenses incurred, net of reinsurance $ 4,267,440 $ 4,638,383 $ 7,589,116 $ 7,988,084 |
Losses and Loss Adjustment Ex_2
Losses and Loss Adjustment Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Insurance [Abstract] | |
Reconciliation of Beginning and Ending Unpaid Losses and Loss Adjustment Expense Reserve Balances | The following tables provide a reconciliation of our beginning and ending unpaid losses and loss adjustment expense reserve balances for the six months ended June 30, 2019 and 2018. 2019 2018 Balance at January 1 $ 68,392,333 $ 68,374,554 Less: Reinsurance recoverable on liability for losses and loss adjustment expenses 7,956,043 8,585,851 Add: Reinsurance recoverable on claims paid 5,791 1,196,573 Net liability at January 1 60,442,081 60,985,276 Losses and loss adjustment expenses incurred, net: Current period 7,405,688 6,252,532 Prior periods 183,428 1,735,552 Total incurred losses and loss adjustment expenses 7,589,116 7,988,084 Less losses and loss adjustment expenses paid, net: Current period 203,366 133,579 Prior periods 9,246,084 7,849,105 Total losses and loss adjustment expenses paid 9,449,450 7,982,684 Net liability for losses and loss adjustment expenses, at end of period 58,581,747 60,990,676 Add: Reinsurance recoverable on liability for losses and loss adjustment expenses 9,640,117 7,974,890 Less: Reinsurance recoverable on claims paid 730,104 (450,355 ) Liability for losses and loss adjustment expenses, June 30 $ 67,491,760 $ 69,415,921 |
Note Payable (Tables)
Note Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities of Note | Future maturities of the note for the succeeding years are as follows at June 30, 2019: Year ending June 30, 2020 $ 63,650 2021 32,740 $ 96,390 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerators and denominators we used in the basic and diluted per share | The following table presents a reconciliation of the numerators and denominators we used in the basic and diluted per share computations for our common stock: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic earnings per common share: Numerator: Net loss $ (560,947 ) $ — $ (469,158 ) $ — Denominator: Weighted average shares outstanding 3,615,500 — 3,615,500 — Basic earnings per common share $ (0.16 ) $ — $ (0.13 ) $ — |
Organization - Additional Infor
Organization - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | May 1, 2018 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019USD ($)InvestmentInsured$ / shares | Dec. 31, 2018USD ($)Insured | Mar. 31, 2019$ / shares | |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Prepaid management fee amortization period | 7 years | ||
Charges for extended reporting coverage | $ 0 | ||
Age for extended reporting coverage for policyholders | 55 years | ||
Minimum duration of policy for extended coverage | 1 year | ||
Number of investment accounted for greater than 5% | Investment | 0 | ||
Number of insured accounted for over 20% | Insured | 0 | 0 | |
Common stock, no par value | $ / shares | |||
Common stock, par value | $ / shares | $ 0.01 | ||
Additional paid-in capital | $ 49,421,081 | $ 15,882,835 | |
Reclassifications [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Additional paid-in capital | $ 33,580,925 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Details) | Jan. 01, 2018USD ($) |
Recent Accounting Pronouncements Narrative Details [Abstract] | |
Unrealized holding gains in equity securities, net of tax effect, reclassified from accumulated other comprehensive income to retained earnings | $ 1,387,895 |
Investments - Schedule of Major
Investments - Schedule of Major Security Type (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | $ 86,493,403 | $ 86,763,654 |
Debt Securities, Gross Unrealized Gains | 1,539,960 | 221,846 |
Debt Securities, Gross Unrealized Losses | 137,982 | 1,778,831 |
Debt Securities, Fair Value | 87,895,381 | 85,206,669 |
Equity Securities, Fair Value | 7,269,058 | 7,267,094 |
Amortized Cost/Cost | 93,049,915 | 94,332,464 |
Gross Unrealized Gains | 2,635,829 | 746,372 |
Gross Unrealized Losses | 521,305 | 2,605,073 |
Fair Value | 95,164,439 | 92,473,763 |
Industrial and miscellaneous [Member] | ||
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | 60,359,777 | 59,561,984 |
Debt Securities, Gross Unrealized Gains | 1,010,996 | 14,030 |
Debt Securities, Gross Unrealized Losses | 56,086 | 1,524,644 |
Debt Securities, Fair Value | 61,314,687 | 58,051,370 |
U.S. government [Member] | ||
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | 12,131,934 | 12,859,101 |
Debt Securities, Gross Unrealized Gains | 138,643 | 87,354 |
Debt Securities, Gross Unrealized Losses | 67,944 | 208,699 |
Debt Securities, Fair Value | 12,202,633 | 12,737,756 |
States, territories, and possessions [Member] | ||
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | 1,104,357 | 1,111,879 |
Debt Securities, Gross Unrealized Gains | 47,057 | 14,497 |
Debt Securities, Gross Unrealized Losses | 897 | |
Debt Securities, Fair Value | 1,151,414 | 1,125,479 |
Subdivisions of states, territories, and possessions [Member] | ||
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | 12,897,335 | 13,230,690 |
Debt Securities, Gross Unrealized Gains | 343,264 | 105,965 |
Debt Securities, Gross Unrealized Losses | 13,952 | 44,591 |
Debt Securities, Fair Value | 13,226,647 | 13,292,064 |
Common stock [Member] | ||
Marketable Securities [Line Items] | ||
Equity Securities, Amortized Cost/Cost | 6,556,512 | 7,568,810 |
Equity Securities, Gross Unrealized Gains | 1,095,869 | 524,526 |
Equity Securities, Gross Unrealized Losses | 383,323 | 826,242 |
Equity Securities, Fair Value | $ 7,269,058 | $ 7,267,094 |
Investments - Schedule of Matur
Investments - Schedule of Maturities of Investments in Bond Securities (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Marketable Securities [Line Items] | ||
Debt Securities, Amortized Cost/Cost | $ 86,493,403 | $ 86,763,654 |
Fair Value, Available-for-sale Securities | 87,895,381 | 85,206,669 |
Fixed Maturities | ||
Marketable Securities [Line Items] | ||
Amortized Cost, Due to mature One year or less | 8,013,317 | 7,094,266 |
Amortized Cost, Due to mature After one year through five years | 54,244,377 | 50,676,297 |
Amortized Cost, Due to mature After five years through ten years | 23,503,880 | 27,617,956 |
Amortized Cost, Due to mature After ten years | 731,829 | 1,375,135 |
Debt Securities, Amortized Cost/Cost | 86,493,403 | 86,763,654 |
Fair Value, Due to mature One year or less | 8,000,989 | 6,549,872 |
Fair Value, Due to mature After one year through five years | 54,950,728 | 47,892,580 |
Fair Value, Due to mature After five years through ten years | 24,141,687 | 29,361,896 |
Fair Value, Due to mature After ten years | 801,977 | 1,402,321 |
Fair Value, Available-for-sale Securities | $ 87,895,381 | $ 85,206,669 |
Investments - Schedule of Reali
Investments - Schedule of Realized Gains and Losses Securities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Marketable Securities [Abstract] | ||||
Proceeds | $ 2,329,834 | $ 6,402,122 | $ 7,306,915 | $ 12,816,540 |
Gross gains | 41,207 | 64,143 | 59,898 | 93,319 |
Gross losses | $ 186,205 | $ 18,809 | $ 239,842 | $ 35,719 |
Investments - Schedule of Net I
Investments - Schedule of Net Investment Income (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Marketable Securities [Line Items] | ||||
Gross investment income | $ 970,983 | $ 862,523 | $ 2,485,953 | $ 1,334,345 |
Limited partnerships | 1,383 | 1,626 | (969) | |
Net (loss) gain on sales of investments | (144,998) | 45,334 | (179,944) | 57,600 |
Unrealized gain (loss) on equity securities | 318,616 | 139,393 | 1,205,213 | (34,350) |
Less investment expenses | 31,118 | 34,482 | 66,181 | 60,062 |
Net investment income | 939,865 | 828,041 | 2,419,772 | 1,274,283 |
Bonds | ||||
Marketable Securities [Line Items] | ||||
Gross investment income | 561,161 | 578,365 | 1,126,231 | 1,133,957 |
Cash and short-term investments | ||||
Marketable Securities [Line Items] | ||||
Gross investment income | 154,571 | 17,373 | 177,584 | 29,594 |
Common stock [Member] | ||||
Marketable Securities [Line Items] | ||||
Gross investment income | 74,758 | $ 80,675 | 141,493 | $ 148,513 |
Other | ||||
Marketable Securities [Line Items] | ||||
Gross investment income | $ 6,875 | $ 13,750 |
Investments - Schedule of aggre
Investments - Schedule of aggregate fair value and unrealized loss (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Fixed Maturities | ||
Less than 12 months Fair Value | $ 2,883,052 | $ 33,493,503 |
Less than 12 months Unrealized Losses | 6,862 | 581,464 |
Greater than 12 months Fair Value | 15,908,511 | 36,639,167 |
Greater than 12 months Unrealized Losses | 131,120 | 1,197,367 |
Fair Value, Total | 18,791,563 | 70,132,670 |
Unrealized Losses, Total | 137,982 | 1,778,831 |
Fixed Maturities | U.S. government [Member] | ||
Less than 12 months Fair Value | 219,094 | 1,757,021 |
Less than 12 months Unrealized Losses | 2,033 | 5,521 |
Greater than 12 months Fair Value | 7,436,764 | 8,858,782 |
Greater than 12 months Unrealized Losses | 65,911 | 203,178 |
Fair Value, Total | 7,655,858 | 10,615,803 |
Unrealized Losses, Total | 67,944 | 208,699 |
Fixed Maturities | Subdivisions of states, territories, and possessions [Member] | ||
Less than 12 months Fair Value | 254,643 | 3,138,650 |
Less than 12 months Unrealized Losses | 29 | 11,729 |
Greater than 12 months Fair Value | 462,923 | 1,993,170 |
Greater than 12 months Unrealized Losses | 13,923 | 32,862 |
Fair Value, Total | 717,566 | 5,131,820 |
Unrealized Losses, Total | 13,952 | 44,591 |
Fixed Maturities | Industrial and miscellaneous [Member] | ||
Less than 12 months Fair Value | 2,409,315 | 28,187,416 |
Less than 12 months Unrealized Losses | 4,800 | 563,317 |
Greater than 12 months Fair Value | 8,008,824 | 25,787,215 |
Greater than 12 months Unrealized Losses | 51,286 | 961,327 |
Fair Value, Total | 10,418,139 | 53,974,631 |
Unrealized Losses, Total | 56,086 | 1,524,644 |
Fixed Maturities | States, territories, and possessions [Member] | ||
Less than 12 months Fair Value | 410,416 | |
Less than 12 months Unrealized Losses | 897 | |
Fair Value, Total | 410,416 | |
Unrealized Losses, Total | 897 | |
Equity Securities | ||
Less than 12 months Fair Value | 3,815,064 | 36,408,031 |
Less than 12 months Unrealized Losses | 80,280 | 1,052,846 |
Greater than 12 months Fair Value | 16,825,883 | 37,270,464 |
Greater than 12 months Unrealized Losses | 441,025 | 1,552,227 |
Fair Value, Total | 20,640,947 | 73,678,495 |
Unrealized Losses, Total | 521,305 | 2,605,073 |
Equity Securities | Common stock [Member] | ||
Less than 12 months Fair Value | 932,012 | 2,914,528 |
Less than 12 months Unrealized Losses | 73,418 | 471,382 |
Greater than 12 months Fair Value | 917,372 | 631,297 |
Greater than 12 months Unrealized Losses | 309,905 | 354,860 |
Fair Value, Total | 1,849,384 | 3,545,825 |
Unrealized Losses, Total | $ 383,323 | $ 826,242 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Marketable Securities [Abstract] | |||||
Impairment of investments | $ 0 | $ 0 | $ 0 | $ 0 | |
Ownership interest in four limited partnerships, fair value | 4,244,663 | 4,244,663 | $ 4,051,399 | ||
Ownership interest in four limited partnerships, cost | $ 3,550,000 | $ 3,550,000 | $ 3,547,687 |
Investments (Details - Assets M
Investments (Details - Assets Measured at Fair Value on a Recurring Basis) - Recurring [Member] - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Marketable Securities [Line Items] | ||
Estimated fair value of assets | $ 95,164,439 | $ 92,473,763 |
Level 1 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 7,269,058 | 7,267,094 |
Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 87,895,381 | 85,206,669 |
Fixed Maturities | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 87,895,381 | 85,206,669 |
Fixed Maturities | Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 87,895,381 | 85,206,669 |
Fixed Maturities | U.S. government [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 12,202,633 | 12,737,756 |
Fixed Maturities | U.S. government [Member] | Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 12,202,633 | 12,737,756 |
Fixed Maturities | States, territories, and possessions [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 1,151,414 | 1,125,479 |
Fixed Maturities | States, territories, and possessions [Member] | Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 1,151,414 | 1,125,479 |
Fixed Maturities | Subdivisions of states, territories, and possessions [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 13,226,647 | 13,292,064 |
Fixed Maturities | Subdivisions of states, territories, and possessions [Member] | Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 13,226,647 | 13,292,064 |
Fixed Maturities | Industrial and miscellaneous [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 61,314,687 | 58,051,370 |
Fixed Maturities | Industrial and miscellaneous [Member] | Level 2 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 61,314,687 | 58,051,370 |
Equity Securities | Common stock [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | 7,269,058 | 7,267,094 |
Equity Securities | Common stock [Member] | Level 1 [Member] | ||
Marketable Securities [Line Items] | ||
Estimated fair value of assets | $ 7,269,058 | $ 7,267,094 |
Deferred Acquisition Costs (Com
Deferred Acquisition Costs (Components of Deferred Acquisition Costs) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Insurance [Abstract] | ||||
Balance, beginning of period | $ 4,690,104 | $ 4,826,311 | $ 3,985,193 | $ 4,078,322 |
Amount capitalized during the period | 933,145 | 2,894,400 | 3,760,410 | 5,969,718 |
Amount amortized during the period | 1,964,792 | 3,821,964 | 4,087,146 | 6,149,293 |
Balance, end of period | $ 3,658,457 | $ 3,898,747 | $ 3,658,457 | $ 3,898,747 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Reinsurance Retention Policy [Line Items] | |
Retained risk amount | $ 300,000 |
Reinsurance coverage, maximum | $ 1,000,000 |
Agreement Termination Date | Apr. 1, 2020 |
Primary Insurance [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance, annual coverage limit | $ 1,500,000 |
Malpractice insurance, maximum coverage per Incident | 500,000 |
Pennsylvania Medical Care Availability And Reduction Of Error [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance, coverage floor | 500,000 |
Malpractice insurance, maximum coverage per Incident | 1,000,000 |
Primary insurance, Pennsylvania MCARE not applied [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance, annual coverage limit | 3,000,000 |
Malpractice insurance, maximum coverage per Incident | 1,000,000 |
Pennsylvania [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance, coverage floor | 1,000,000 |
Malpractice insurance, annual coverage limit | 3,000,000 |
Maryland, Delaware, Ohio, New Jersey, and South Carolina [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance, annual coverage limit | 3,000,000 |
Malpractice insurance, maximum coverage per Incident | 1,000,000 |
New Jersey [Member] | |
Reinsurance Retention Policy [Line Items] | |
Malpractice insurance additional coverage per incident | 1,000,000 |
Maximum aggregate liability ceded to reinsurer per the terms of reinsurance agreement | 2,000,000 |
Soth Carolina and Michigan [Member] | |
Reinsurance Retention Policy [Line Items] | |
Retained risk amount | 100,000 |
Malpractice insurance additional coverage per incident | 200,000 |
Reinsurance retention policy, excess retention, amount reinsured | $ 100,000 |
Reinsurance (Effect of Reinsura
Reinsurance (Effect of Reinsurance on Premiums Written, Amounts Earned, and Losses Incurred) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Premiums written: | ||||
Direct | $ 3,783,325 | $ 3,411,489 | $ 11,980,842 | $ 11,959,869 |
Ceded | 648,254 | 273,366 | 2,600,731 | 2,167,424 |
Premiums written, net of reinsurance | 3,135,071 | 3,138,123 | 9,380,111 | 9,792,445 |
Premiums earned: | ||||
Direct | 6,075,535 | 5,968,691 | 12,428,915 | 12,735,067 |
Ceded | 747,541 | 730,412 | 1,609,714 | 1,543,410 |
Premiums earned, net of reinsurance | 5,327,994 | 5,238,279 | 10,819,201 | 11,191,657 |
Losses and loss adjustment expenses incurred: | ||||
Direct | 6,365,077 | 5,854,917 | 10,276,266 | 9,804,686 |
Ceded | 2,097,637 | 1,216,534 | 2,687,150 | 1,816,602 |
Losses and loss adjustment expenses incurred, net of reinsurance | $ 4,267,440 | $ 4,638,383 | $ 7,589,116 | $ 7,988,084 |
Losses and Loss Adjustment Ex_3
Losses and Loss Adjustment Expenses (Reconciliation of Beginning and Ending Unpaid Losses and Loss Adjustment Expense Reserve Balances) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Insurance [Abstract] | ||
Balance at January 1 | $ 68,392,333 | $ 68,374,554 |
Less: Reinsurance recoverable on liability for losses and loss adjustment expenses | 7,956,043 | 8,585,851 |
Add: Reinsurance recoverable on claims paid | 5,791 | 1,196,573 |
Net liability at January 1 | 60,442,081 | 60,985,276 |
Losses and loss adjustment expenses incurred, net: | ||
Current period | 7,405,688 | 6,252,532 |
Prior periods | 183,428 | 1,735,552 |
Total incurred losses and loss adjustment expenses | 7,589,116 | 7,988,084 |
Less losses and loss adjustment expenses paid, net: | ||
Current period | 203,366 | 133,579 |
Prior periods | 9,246,084 | 7,849,105 |
Total losses and loss adjustment expenses paid | 9,449,450 | 7,982,684 |
Net liability for losses and loss adjustment expenses, at end of period | 58,581,747 | 60,990,676 |
Add: Reinsurance recoverable on liability for losses and loss adjustment expenses | 9,640,117 | 7,974,890 |
Less: Reinsurance recoverable on claims paid | 730,104 | (450,355) |
Liability for losses and loss adjustment expenses, June 30 | $ 67,491,760 | $ 69,415,921 |
Losses and Loss Adjustment Ex_4
Losses and Loss Adjustment Expenses - Additional Information (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Roll Forward In Liability For Unpaid Claims And Claims Adjustment Expense [Abstract] | ||||
Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance | $ 67,491,760 | $ 69,415,921 | $ 68,392,333 | $ 68,374,554 |
Prior periods | 9,246,084 | 7,849,105 | ||
Losses and loss adjustment expenses incurred, prior periods | $ 183,428 | $ 1,735,552 |
Note Payable - Additional Infor
Note Payable - Additional Information (Details) - USD ($) | Dec. 12, 2014 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
Proceeds of loan agreement | $ 300,000 | ||
Note payable, interest rate (percentage) | 4.00% | ||
Note payable | $ 96,390 | $ 127,327 |
Note Payable (Schedule of Futur
Note Payable (Schedule of Future Maturities of Note) (Details) | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 63,650 |
2021 | 32,740 |
Total | $ 96,390 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Unrecognized tax benefits, interest and penalties | 0 | 0 |
Significant uncertain tax positions | 0 | 0 |
Interest and penalties recognized | 0 | 0 |
Net operating loss carryforward | 5,869,644 | 3,865,253 |
Net capital loss carryforward | 344,510 | 164,566 |
Other income tax related carryovers for net operating losses, alternative tax credits, or capital losses | $ 0 | $ 0 |
Net operating loss carryforward, expiration year | 2038 | 2039 |
Deferred tax assets, valuation allowance | $ 0 | $ 0 |
Internal Revenue Code [Member] | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforward | $ 5,310,679 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Mar. 26, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 29, 2019 | Mar. 27, 2019 |
Related Party Transaction [Line Items] | |||||||
Earned management fee, percentage | 25.00% | 12.00% | |||||
Prepaid management fee | $ 9,642,857 | $ 9,642,857 | $ 10,000,000 | ||||
Prepaid management fee amortization period | 7 years | ||||||
Prepaid management amortization expense | 357,143 | $ 357,143 | |||||
Line of credit facility, maximum borrowing capacity | $ 6,000,000 | ||||||
Line of credit facility, Interest rate during period | 8.00% | ||||||
Debt instrument, convertible, conversion price | $ 1 | ||||||
Line of credit | 0 | $ 0 | |||||
Term Loan [member] | |||||||
Related Party Transaction [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 5,500,000 | ||||||
Revolving Loan [member] | |||||||
Related Party Transaction [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 500,000 | ||||||
Gateway Risk Services LLC and Andrews Outsource Solutions LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Fees under the contract | 408,875 | $ 405,775 | 808,250 | $ 811,750 | |||
Other Underwriting Expenses [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Management fees incurred | 530,180 | 852,872 | 2,579,559 | 2,989,967 | |||
Other Underwriting Expenses [Member] | Gateway Risk Services LLC and Andrews Outsource Solutions LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Commission income | $ 0 | $ 19,530 | $ 77,850 | $ 116,470 |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 27, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Subsidiary Sale Of Stock [Line Items] | |||
Common stock, shares authorized | 10,000,000 | ||
Common stock, par value | $ 0.01 | ||
Common stock, shares issued | 3,615,500 | 0 | |
Common stock, shares outstanding | 3,615,500 | 0 | |
Stock-based forms of compensation authorized to be issued | 0 | ||
Dividend payment restrictions | Positive Insurance Company may pay dividends to us after notice to, but without prior approval of, the Pennsylvania Insurance Department in an amount not to exceed the greater of (i) 10% of the surplus of Positive Insurance Company as reported on its most recent annual statement filed with the Pennsylvania Insurance Department, or (ii) the statutory net income of Positive Insurance Company for the period covered by such annual statement. Dividends in excess of this amount are considered “extraordinary” and are subject to the approval of the Pennsylvania Insurance Department | ||
Notice period prior to the payment of extraordinary dividend | 30 days | ||
Notice period prior to the payment of ordinary dividend. | 10 days | ||
PIC [Member] | |||
Subsidiary Sale Of Stock [Line Items] | |||
Maximum percentage of dividend payable without prior approval of insurance department | 10.00% | ||
Amount available for payment of dividends | $ 3.7 | ||
IPO [Member] | |||
Subsidiary Sale Of Stock [Line Items] | |||
Common stock issued during period | 3,615,500 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding | 3,615,500 | 3,615,500 |
Earnings per Share (Schedule of
Earnings per Share (Schedule of Calculations of Basic and Diluted Earnings Per Share) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net loss | $ (560,947) | $ (1,195,466) | $ (469,158) | $ (1,145,645) |
Denominator: | ||||
Weighted average shares outstanding | 3,615,500 | 3,615,500 | ||
Common stock - basic | $ (0.16) | $ (0.13) |