Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 01, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'MIDWEST HOLDING INC. | ' | ' |
Entity Central Index Key | '0000355379 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 9,120,239 | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $0 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Investments, available for sale, at fair value | ' | ' |
Fixed maturities (amortized cost: $14,932,459 and $10,615,033, respectively) | $14,190,707 | $10,533,463 |
Equity securities (cost: $75,000 and $1,274,111 respectively) | 75,000 | 1,250,977 |
Equity method investments | 1,800,859 | 1,887,196 |
Equity securities, at cost | 1,273,938 | 1,267,938 |
Mortgage loans on real estate, held for investment | 665,569 | 677,011 |
Real estate, held for investment | 553,849 | 565,889 |
Policy loans | 369,513 | 274,664 |
Notes receivable | 27,383 | 27,383 |
Short-term investments | 1,180,314 | 1,171,280 |
Total investments | 20,137,132 | 17,655,801 |
Cash and cash equivalents | 3,377,978 | 4,346,555 |
Amounts recoverable from reinsurers | 30,660,618 | 32,265,463 |
Interest and dividends due and accrued | 189,280 | 146,938 |
Due premiums | 653,137 | 820,123 |
Deferred acquisition costs, net | 2,722,819 | 2,650,957 |
Value of business acquired, net | 821,771 | 964,557 |
Intangible assets | 700,000 | 700,000 |
Goodwill | 1,129,824 | 1,129,824 |
Property and equipment, net | 372,368 | 445,860 |
Other assets | 1,473,745 | 1,752,685 |
Total assets | 62,238,672 | 62,878,763 |
Liabilities: | ' | ' |
Benefit reserves | 33,866,409 | 33,588,589 |
Policy claims | 529,139 | 571,870 |
Deposit-type contracts | 14,739,655 | 12,865,671 |
Advance premiums | 87,850 | 86,743 |
Total policy liabilities | 49,223,053 | 47,112,873 |
Accounts payable and accrued expenses | 1,451,464 | 874,642 |
Surplus notes | 550,000 | 650,000 |
Total liabilities | 51,224,517 | 48,637,515 |
Commitments and Contingencies (See Note 8) | ' | ' |
Stockholders' Equity: | ' | ' |
Common stock, $0.001 par value. Authorized 120,000,000 shares; issued and outstanding 9,120,239 and 9,106,717 shares, respectively. | 9,121 | 9,106 |
Additional paid-in capital | 25,131,714 | 25,361,520 |
Stock subscription receivable | -1,917 | -13,417 |
Accumulated deficit | -17,707,433 | -15,756,994 |
Accumulated other comprehensive loss | -740,091 | -64,352 |
Total Midwest Holding Inc.'s stockholders' equity | 6,691,468 | 9,535,937 |
Noncontrolling interests | 4,322,687 | 4,705,311 |
Total stockholders' equity | 11,014,155 | 14,241,248 |
Total liabilities and stockholders' equity | 62,238,672 | 62,878,763 |
Series A Preferred Stock [Member] | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred stock | $74 | $74 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Amortized costs of fixed maturities (in dollars) | $14,932,459 | $10,615,033 |
Amortized costs of equity securities (in dollars) | $75,000 | $1,274,111 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 9,120,239 | 9,106,717 |
Common stock, shares outstanding | 9,120,239 | 9,106,717 |
Series A Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 74,159 | 74,159 |
Preferred stock, shares outstanding | 74,159 | 74,159 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income: | ' | ' |
Premiums | $4,331,329 | $4,208,659 |
Investment income, net of expenses | 521,746 | 480,183 |
Net realized gains on investments | 5,736 | 134,120 |
Miscellaneous income | 246,328 | 103,175 |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | 278,513 |
Realized gain on initial consolidation of Great Plains Financial Corp. | ' | 118,612 |
Total Income | 5,105,139 | 5,323,262 |
Expenses: | ' | ' |
Death and other benefits | 676,524 | 814,306 |
Increase in benefit reserves | 1,282,878 | 993,103 |
Amortization of deferred acquisition costs | 861,840 | 631,121 |
Salaries and benefits | 1,945,723 | 2,344,268 |
Other operating expenses | 2,556,094 | 3,059,773 |
Total Expenses | 7,323,059 | 7,842,571 |
Loss before income tax expense | -2,217,920 | -2,519,309 |
Income tax expense | ' | ' |
Net loss | -2,217,920 | -2,519,309 |
Less: Loss attributable to noncontrolling interests | -267,481 | -861,622 |
Net loss attributable to Midwest Holding Inc. | -1,950,439 | -1,657,687 |
Comprehensive income (loss) | ' | ' |
Unrealized (losses) gains on investments arising during period | -701,973 | 442,286 |
Less: reclassification adjustment for net realized gains on investments | -5,736 | -134,120 |
Other comprehensive (loss) income | -707,709 | 308,166 |
Less: Comprehensive (loss) attributable to noncontrolling interest | -31,970 | ' |
Total comprehensive (loss) income attributable to Midwest Holding, Inc. | -675,739 | 308,166 |
Comprehensive loss attributable to Midwest Holding Inc. | ($2,626,178) | ($1,349,521) |
Net loss attributable to Midwest Holding Inc. per common share, basic and diluted | ($0.29) | ($0.18) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscription Receivable [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total Midwest Holding Inc.'s Stockholders' Equity [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2011 | $11,595,345 | $74 | $9,106 | $24,668,440 | ($24,917) | ($14,099,307) | ($391,051) | $10,162,345 | $1,433,000 |
Non cash compensation expense | 11,500 | ' | ' | ' | 11,500 | ' | ' | 11,500 | ' |
Changes in equity of noncontrolling interests | 4,827,013 | ' | ' | 693,080 | ' | ' | 18,533 | 711,613 | 4,133,933 |
Net loss | -2,519,309 | ' | ' | ' | ' | -1,657,687 | ' | -1,657,687 | -861,622 |
Other comprehensive income (loss) | 308,166 | ' | ' | ' | ' | ' | 308,166 | 308,166 | ' |
Balance at Dec. 31, 2012 | 14,241,248 | 74 | 9,106 | 25,361,520 | -13,417 | -15,756,994 | -64,352 | 9,535,937 | 4,705,311 |
Non cash compensation expense | 11,500 | ' | ' | ' | 11,500 | ' | ' | 11,500 | ' |
Issuances of common stock, net of capital raising expenses | ' | ' | 60 | -60 | ' | ' | ' | ' | ' |
Repurchases of common stock | -215,783 | ' | -45 | -215,738 | ' | ' | ' | -215,738 | ' |
Changes in equity of noncontrolling interests | -97,181 | ' | ' | -14,008 | ' | ' | ' | -14,008 | -83,173 |
Net loss | -2,217,920 | ' | ' | ' | ' | -1,950,439 | ' | -1,950,439 | -267,481 |
Other comprehensive income (loss) | -707,709 | ' | ' | ' | ' | ' | -675,739 | -675,739 | -31,970 |
Balance at Dec. 31, 2013 | $11,014,155 | $74 | $9,121 | $25,131,714 | ($1,917) | ($17,707,433) | ($740,091) | $6,691,468 | $4,322,687 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows from Operating Activities: | ' | ' |
Net loss | ($2,217,920) | ($2,519,309) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | ' | ' |
Amortization of premium and discount on investments | 138,957 | 98,436 |
Depreciation and amortization | 322,809 | 366,366 |
Deferred acquisition costs capitalized | -933,702 | -1,173,683 |
Amortization of deferred acquisition costs | 861,840 | 631,121 |
Net realized gains on investments | -5,736 | -134,120 |
Gain on deconsolidation of Hot Dot, Inc. | ' | -278,513 |
Gain on initial consolidation of Great Plains Financial Corporation | ' | -118,612 |
Equity in the net loss (income) of unconsolidated subsidiaries | 10,023 | -36,043 |
Non cash compensation expense | 11,500 | 11,500 |
Changes in operating assets and liabilities: | ' | ' |
Amounts recoverable from reinsurers | 1,604,845 | 1,679,278 |
Interest and dividends due and accrued | -42,342 | 31,847 |
Due premiums | 166,986 | -556,861 |
Policy liabilities | -260,257 | -765,665 |
Other assets and liabilities | 855,762 | 63,586 |
Net cash provided by (used in) operating activities | 512,765 | -2,700,672 |
Cash Flows from Investing Activities: | ' | ' |
Purchases | -10,334,469 | -14,528,678 |
Proceeds from sale or maturity | 7,088,586 | 12,342,364 |
Purchases | -15,000 | -30,000 |
Proceeds from sale or maturity | 9,000 | 11,250 |
Proceeds from payments on mortgage loans on real estate, held for investment | 11,442 | 238,454 |
Net change in policy loans | -94,849 | 50,475 |
Net change in notes receivable | ' | 144,999 |
Net change in short-term investments | -9,034 | 512,975 |
Purchases of property and equipment | -94,491 | -174,710 |
Deconsolidation of Hot Dot, Inc. (Note 12) | ' | -2,322,867 |
Acquisitions of businesses, net of cash and cash equivalents acquired | ' | 4,087,454 |
Net cash (used in) provided by investing activities | -3,438,815 | 331,716 |
Cash Flows from Financing Activities: | ' | ' |
Repurchases of common stock | -215,783 | ' |
Net proceeds from issuing equity in Hot Dot, Inc. | ' | 3,350,409 |
Payments on surplus notes | -100,000 | -300,000 |
Net transfers to noncontrolling interests | -97,181 | -81,218 |
Receipts on deposit-type contracts | 2,636,959 | 1,397,385 |
Withdrawals on deposit-type contracts | -266,522 | -120,790 |
Net cash provided by financing activities | 1,957,473 | 4,245,786 |
Net increase (decrease) in cash and cash equivalents | -968,577 | 1,876,830 |
Cash and cash equivalents: | ' | ' |
Beginning | 4,346,555 | 2,469,725 |
Ending | 3,377,978 | 4,346,555 |
Business Acquisition [Line Items] | ' | ' |
Change in noncontrolling interest | ' | -4,751,930 |
Gain on initial consolidation of Great Plains Financial | ' | 118,612 |
Equity investment in Great Plains Financial at initial consolidation date | ' | -1,174,142 |
Hot Dot, Inc [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | 39,735 |
Notes receivable | ' | 75,000 |
Intangible asset | ' | 989,900 |
Property and equipment | ' | 54,750 |
Gain on deconsolidation | ' | 278,513 |
Equity investment in Hot Dot at deconsolidation date | ' | -570,190 |
Change in noncontrolling interest | ' | -3,175,575 |
Other liabilities | ' | -15,000 |
Total consideration received | ' | -2,322,867 |
Great Plains Financial Corporation [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Investments | ' | -2,663,248 |
Amounts recoverable from reinsurers | ' | -38,754 |
Due premiums | ' | -92,315 |
Other assets | ' | -1,439,607 |
Benefit reserves | ' | 1,221,816 |
Policy claims | ' | 38,380 |
Deposit-type contracts | ' | 737,230 |
Gain on initial consolidation of Great Plains Financial | ' | 118,612 |
Equity investment in Great Plains Financial at initial consolidation date | ' | 1,174,142 |
Change in noncontrolling interest | ' | 4,751,930 |
Other liabilities | ' | 279,268 |
Net assets acquired | ' | $4,087,454 |
Nature_of_Operations_and_Summa
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | ' | ||||||||
Note 1. Nature of Operations and Summary of Significant Accounting Policies | |||||||||
Nature of operations: Midwest Holding Inc. (Midwest or the Company) was incorporated in Nebraska on October 31, 2003 for the primary purpose of organizing a life insurance subsidiary. From 2003 to May 2009, Midwest was focused on raising capital, first through private placements and finally through an intra-state offering of 2,000,000 common shares at $5.00 per share. These offerings sold out, including a 10% oversale on the final offering. Midwest became operational during the year ended December 31, 2009. Upon capitalizing American Life & Security Corp. (American Life) and acquiring Capital Reserve Life Insurance Company (Capital Reserve), as described below, Midwest deemed it prudent to raise additional capital to fund primarily the expansion of the life insurance operation. Beginning in 2009, American Life, a wholly owned subsidiary of Midwest, was authorized to do business in the State of Nebraska. American Life was also granted a certificate of authority to write insurance in the State of Nebraska on September 1, 2009. American Life is engaged in the business of underwriting, selling, and servicing life insurance and annuity policies. | |||||||||
During the second quarter of 2010, American Life completed the purchase of a 100% ownership interest in Capital Reserve, a dormant insurance company domiciled in Missouri. The purchase was effective as of January 1, 2010. Capital Reserve is licensed in the states of Kansas and Missouri. Currently, 100% of the policies issued by Capital Reserve are reinsured to an unaffiliated reinsurer. | |||||||||
In August, 2010, Midwest began an exempt offering of shares to existing holders in the state of Nebraska at $5.00 per share. Midwest raised approximately $7,400,000 before capital raising expenses through this offering that extended into 2011. Additionally, Midwest offered a newly-created class of preferred shares to residents of Latin America. The preferred shares are non-voting and convert to common shares in 2015 at the rate of 1.3 common shares for each preferred share (subject to customary anti-dilution adjustments). The shares were sold at $6.00 per share and a total of 74,159 were sold in 2010. | |||||||||
On November 8, 2010, the Company entered into an agreement to acquire all of the issued and outstanding capital stock of Old Reliance Insurance Company (Old Reliance), an Arizona-domiciled life insurance company. The plan provided for American Life to merge into Old Reliance following the purchase, with the survivor changing its name to American Life & Security Corp. In the transaction, the sole shareholder of Old Reliance received: (i) Approximately $1.6 million in cash, (ii) $500,000 in the form of a surplus debenture issued by American Life, and (iii) 150,000 shares of voting common stock of the Company ($750,000 fair value). The transaction including the merger was consummated on August 3, 2011. | |||||||||
During the third quarter of 2011, control was attained on a previous noncontrolling interest in Security Capital Corporation (Security Capital), an Arkansas corporation formerly known as Arkansas Security Capital Corporation. Security Capital is a development stage company that has not conducted operations apart from raising capital. | |||||||||
In August 2011, the Company acquired a controlling interest ownership of Hot Dot, Inc. (Hot Dot), a company organized to develop, manufacture, and market the Alert Patch. Additionally, Midwest controls a majority of the Board of Directors. During the third quarter of 2011, Hot Dot purchased certain assets of IonX Capital Holding Inc. The consideration paid by Hot Dot was $1.05 million in cash. The purchase price was primarily allocated to a patent asset for a thermochromatic patch for monitoring and detecting body temperature. On September 12, 2012, Hot Dot repurchased 1,000,000 shares of Hot Dot stock from Midwest for a purchase price of $750,000. As a result of the stock repurchase by Hot Dot, Midwest ceased to have a controlling financial interest in Hot Dot and subsequently deconsolidated Hot Dot on the effective date of the stock repurchase. The deconsolidation of Hot Dot is discussed in greater detail in Note 12. Hot Dot is a development stage company that has not conducted operations apart from raising capital and acquiring the patent mentioned previously. | |||||||||
The Company commenced its third party administrative ("TPA") services in 2012 as an additional revenue source. These agreements, for various levels of administrative services on behalf of each company, generate fee income for the Company. Services provided to each company vary based on their needs and can include some or all aspects of back-office accounting and policy administration. The Company has been able to perform its TPA services using its existing in-house resources. | |||||||||
During the first quarter of 2012, the Company purchased additional shares of Great Plains Financial Corporation (Great Plains Financial). As a result of the increased ownership, the Company changed its method of carrying the investment from cost to equity. During the third quarter of 2012, the Company began providing TPA services to Great Plains Financial and Great Plains Financial's wholly owned subsidiary, Great Plains Life Assurance Company (Great Plains Life). At the end of the third quarter of 2012, Mark Oliver, our Chief Executive Officer and a member of our Board of Directors, was assigned to serve as President of the Company in addition to his role as Executive Vice President, CEO, and CFO of Great Plains Financial. During the fourth quarter of 2012, the Company purchased additional shares of Great Plains Financial, which increased our ownership to 24.5% as of December 31, 2012. As a result of the Company's ability to significantly influence the operations of Great Plains Financial, the Company began consolidating Great Plains Financial during fourth quarter of 2012. An additional purchase of shares in the first quarter of 2013 increased our ownership of Great Plains Financial to 25.7% as of December 31, 2013. | |||||||||
Basis of presentation: The accompanying consolidated financial statements include the accounts of Midwest, our wholly owned subsidiary American Life, American Life's wholly owned subsidiary Capital Reserve, Midwest's 60% owned subsidiary, Security Capital Corporation, Midwest's 25.7% owned subsidiary, Great Plains Financial, and Great Plains Financial's wholly owned subsidiary, Great Plains Life. The consolidated statements of comprehensive income include the results of Hot Dot through September 12, 2012, the date on which we deconsolidated Hot Dot. Hereafter, entities are collectively referred to as the "Company," "we," "our" or "us." | |||||||||
Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of life insurance products through its subsidiaries. The product offerings, the underwriting processes, and the marketing processes are similar. The Company's product offerings consist of a multi-benefit life insurance policy that combines cash value life insurance with a tax deferred annuity and a single premium term life product. These product offerings are underwritten, marketed, and managed primarily as a group of similar products on an overall portfolio basis. | |||||||||
These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform with the current period's presentation with no impact on results of operations or total stockholder's equity. | |||||||||
Investments: All fixed maturities and a portion of the equity securities owned by the Company are considered available-for-sale and are included in the consolidated financial statements at their fair value as of the financial statement date. Bond premiums and discounts are amortized using the scientific-yield method over the term of the bonds. Realized gains and losses on securities sold during the year are determined using the specific identification method. Unrealized holding gains and losses, net of applicable income taxes, are included in comprehensive loss. | |||||||||
Declines in the fair value of available for sale securities below their amortized cost are evaluated to assess whether any other-than-temporary impairment loss should be recorded. In determining if these losses are expected to be other-than-temporary, the Company considers severity of impairment, duration of impairment, forecasted recovery period, industry outlook, financial condition of the issuer, projected cash flows, issuer credit ratings and the intent and ability of the Company to hold the investment until the recovery of the cost. | |||||||||
The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the statement of comprehensive income as an other-than-temporary impairment. If the Company does not expect to recover the amortized basis, does not plan to sell the security and if it is not more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. The Company recognizes the credit loss portion in the income statement and the noncredit loss portion in accumulated other comprehensive loss. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected cash flows with the amortized cost basis of the debt security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the effective interest rate implicit in the fixed income security at the date of acquisition. Cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings, and estimates regarding timing and amount of recoveries associated with a default. No other-than-temporary impairments were recognized during the years ended December 31, 2013 or 2012. | |||||||||
Included within the Company's equity securities carried at cost and equity method investments are certain privately placed common stocks for several holding companies organized for the purpose of forming life insurance subsidiaries. Our privately placed common stocks are recorded using cost basis or the equity method of accounting, depending on the facts and circumstances of each investment. These securities do not have a readily determinable fair value. The Company does not control these entities economically, and therefore does not consolidate these entities. The Company reports the earnings from privately placed common stocks accounted for under the equity method in net investment income. | |||||||||
Investment income consists of interest, dividends, gains and losses from equity method investments, and real estate income, which are recognized on an accrual basis and amortization of premiums and discounts. | |||||||||
Mortgage loans on real estate, held for investment: Mortgage loans on real estate, held for investment are carried at unpaid principal balances. Interest income on mortgage loans on real estate, held for investment is recognized in net investment income at the contract interest rate when earned. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement. Valuation allowances on mortgage loans are established based upon losses expected by management to be realized in connection with future dispositions or settlement of mortgage loans, including foreclosures. The Company establishes valuation allowances for estimated impairments on an individual loan basis as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan's original effective interest rate. These evaluations are revised as conditions change and new information becomes available. No valuation allowance was established for mortgage loans on real estate, held for investment as of December 31, 2013 and 2012, primarily as a result of the seller's guaranteed performance of the mortgage loans acquired as part of the Old Reliance transaction. | |||||||||
Policy loans: Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. No valuation allowance is established for these policy loans as the amount of the loan is fully secured by the death benefit of the policy and cash surrender value. | |||||||||
Notes receivable: Notes receivable are stated at their outstanding principal amount. Outstanding notes accrue interest based on the terms of the respective note agreements. | |||||||||
Short-term investments: Short-term investments are stated at cost and consist of certificates of deposit. At December 31, 2013 and 2012, the cost of these investments approximates fair value due to the short duration to maturity. | |||||||||
Real estate, held for investment: Real estate, held for investment is comprised of ten condominiums in Hawaii. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 years. | |||||||||
Cash and cash equivalents: The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2013 and 2012, cash equivalents consisted primarily of money market accounts. The Company has cash on deposit with financial institutions which at times may exceed the Federal Deposit Insurance Corporation insurance limits. The Company has not suffered any losses in the past and does not believe it is exposed to any significant credit risk in these balances. | |||||||||
Deferred acquisition costs: Deferred acquisition costs consist of incremental direct costs, net of amounts ceded to reinsurers, that result directly from and are essential to the contract acquisition transaction and would not have been incurred by the Company had the contract acquisition not occurred, are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. The Company evaluates the types of acquisition costs it capitalizes. The Company capitalizes agent compensation and benefits and other expenses that are directly related to the successful acquisition of contracts. The Company also capitalizes expenses directly related to activities performed by the Company, such as underwriting, policy issuance, and processing fees incurred in connection with successful contract acquisitions. | |||||||||
Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. The Company determined during its December 31, 2013 analysis that all deferred acquisition costs were recoverable. | |||||||||
The following table provides information about deferred acquisition costs for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 2,650,957 | $ | 2,108,395 | |||||
Capitalization of commissions, sales and issue expenses | 933,702 | 1,173,683 | |||||||
Gross amortization | (861,840 | ) | (631,121 | ) | |||||
Balance at end of period | $ | 2,722,819 | $ | 2,650,957 | |||||
Value of business acquired: Value of business acquired represents the estimated value assigned to purchased companies or insurance in force of the assumed policy obligations at the date of acquisition of a block of policies. As previously discussed, American Life purchased Capital Reserve during 2010, resulting in an initial capitalized asset for value of business acquired of $116,326. This asset is being amortized on a straight-line basis, which approximates the earnings pattern of the related policies, over ten years. The Company recognized amortization expense of $11,633 for each of the years ended December 31, 2013 and 2012 relative to this transaction. | |||||||||
Additionally, the Company paid an upfront ceding commission of $375,000 to Security National Life Insurance Company (SNL). An initial asset was established for the value of this business acquired totaling $348,010, representing primarily the ceding commission. This asset is being amortized on a straight-line basis, which approximates the earnings pattern of the related policies, over ten years, resulting in annual amortization of $34,801. Amortization recognized during each of the years ended December 31, 2013 and 2012 relative to this transaction totaled $34,801. The agreement has an automatic renewal provision unless the Company notifies SNL of its intention not to renew, no less than 180 days prior to the expiration of the then current agreement. Each automatic renewal period is for one year. This reinsurance remains in place. | |||||||||
Additionally, American Life purchased Old Reliance in August 2011, resulting in an initial capitalized asset for value of business acquired of $824,485. This asset is being amortized over the life of the related policies (refer to "revenue recognition and related expenses" discussed later regarding amortization methods). Amortization recognized during the years ended December 31, 2013 and 2012 totaled $96,353 and $117,542, respectively. | |||||||||
Recoverability of value of business acquired is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. The Company determined during its December 31, 2013 analysis that all value of business acquired were recoverable. | |||||||||
Goodwill and Other Intangible Assets: Goodwill represents the excess of the amounts paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill is tested for impairment at least annually in the fourth quarter or more frequently if events or circumstances change that would indicate that a triggering event has occurred. | |||||||||
In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. | |||||||||
The Company elected to forgo the qualitative impairment analysis and performed the first step of the goodwill quantitative analysis to determine if the fair value of the reporting unit was in excess of the carrying value. As of December 31, 2013, the fair value of the Company's reporting units exceeded the carrying value of the net assets assigned to that unit and the Company was not required to perform further testing for impairment. Management's determination of the fair value of each reporting unit incorporates multiple inputs including discounted cash flow calculations, peer company price to earnings multiples, and assumptions that market participants would make in valuing the reporting unit. Other assumptions can include levels of economic capital, future business growth, and earnings projections. | |||||||||
The Company assesses the recoverability of indefinite-lived intangible assets at least annually or whenever events or circumstances suggest that the carrying value of an identifiable indefinite-lived intangible asset may exceed the sum of the future discounted cash flows expected to result from its use and eventual disposition. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. | |||||||||
The Company compared the carrying value of its identifiable indefinite-lived intangible assets to the sum of the future discounted cash flows. As of December 31, 2013, the sum of the future discounted cash flows exceeded the carrying value of the indefinite-lived intangible assets. The assumptions and estimates used to determine future values are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our revenue forecasts. | |||||||||
Property and equipment: Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over 3 to 7 years and computer software and equipment is generally depreciated over 3 years. Depreciation expense totaled $167,982 and $154,702 for the years ended December 31, 2013 and 2012, respectively. The accumulated depreciation totaled $545,646 and $377,664 as of December 31, 2013 and December 31, 2012, respectively. | |||||||||
Maintenance and repairs are expensed as incurred. Replacements and improvements which extend the useful life of the asset are capitalized. The net book value of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in earnings. | |||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its fair value. The Company determined that no such events occurred that would indicate the carrying amounts may not be recoverable. | |||||||||
Reinsurance: In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The amounts reported in the consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. The Company generally strives to diversify its credit risks related to reinsurance ceded. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company's primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers including their activities with respect to claim settlement practices and commutations, and establishes allowances for uncollectible reinsurance recoverable as appropriate. There were no allowances as of December 31, 2013 or 2012. | |||||||||
Benefit reserves: The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. | |||||||||
Policy claims: Policy claims are based on reported claims plus estimated incurred but not reported claims developed from trends of historical data applied to current exposure. | |||||||||
Deposit-type contracts: Deposit-type contracts consist of amounts on deposit associated with deferred annuity riders, premium deposit funds and supplemental contracts without life contingencies. | |||||||||
Income taxes: The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state or local tax examinations by tax authorities for the years before 2010. The provision for income taxes is based on income as reported in the financial statements. The income tax provision is calculated under the asset and liability method. Deferred tax assets are recorded based on the differences between the financial statement and tax basis of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments, insurance reserves, and deferred acquisition costs. A deferred tax asset valuation allowance is established when there is uncertainty that such assets would be realized. The Company has no uncertain tax positions that they believe are more-likely-than not that the benefit will not to be realized. When applicable, the Company recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company had no accruals for payments of interest and penalties at December 31, 2013 and 2012. | |||||||||
Revenue recognition and related expenses: Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due. | |||||||||
Amounts received as payment for annuities and/or non-traditional contracts such as interest sensitive whole life contracts, single payment endowment contracts, single payment juvenile contracts and other contracts without life contingencies are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for administrative and contract-holder services and cost of insurance, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the Consolidated Statements of Cash Flows. | |||||||||
Amounts received under our multi-benefit policy form are allocated to the life insurance portion of the multi-benefit life insurance arrangement and the annuity portion based upon the signed policy. | |||||||||
Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts. Acquisition costs are amortized over the life of the premiums produced. Traditional life insurance products are treated as long duration contracts, which generally remain in force for the lifetime of the insured. | |||||||||
Comprehensive loss: Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive loss includes unrealized gains and losses from marketable securities classified as available for sale, net of applicable taxes. | |||||||||
Common and preferred stock and earnings (loss) per share: The par value per common share is $0.001 with 120,000,000 shares authorized. At December 31, 2013 and 2012, the Company had 9,120,239 and 9,106,717 common shares issued and outstanding, respectively. | |||||||||
The Class A preferred shares are non-cumulative, non-voting and convertible to common shares after five years at a rate of 1.3 common shares for each preferred share (subject to customary anti-dilution adjustments). The par value per preferred share is $0.001 with 2,000,000 shares authorized. At both December 31, 2013 and 2012, the Company had 74,159 preferred shares issued and outstanding. | |||||||||
Earnings (loss) per share attributable to the Company's common stockholders were computed based on the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the years ended December 31, 2013 and 2012 were 9,111,004 and 9,106,717 shares, respectively. | |||||||||
Stock subscription receivable: Our Board of Directors approved the issuance of 40,000 shares of voting common stock on March 7, 2010 to Mark Oliver, our Chief Executive Officer and a member of our Board of Directors. The shares were issued for $1.15 per share, which was the approximate fair value of the shares as of the date of issuance. The purchase price was paid by Mr. Oliver through delivery of a five-year promissory note secured by a pledge of the shares purchased. The balance of the receivable as of December 31, 2013 and December 31, 2012 was $1,917 and $13,417, respectively. This receivable was partially forgiven, resulting in non-cash compensation expense of $11,500 for each of the years ended December 31, 2013 and 2012. | |||||||||
Risk and uncertainties: Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our consolidated financial statements. The more significant of those risks and uncertainties, as well as the Company's method for mitigating the risks, are presented below and throughout the notes to the consolidated financial statements. | |||||||||
Estimates-The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are: fair value of certain invested assets, deferred acquisition costs, value of business acquired, goodwill, and future contract benefits. | |||||||||
Reinsurance-Reinsurance contracts do not relieve us from our obligations to insureds. Failure of reinsurers to honor their obligations could result in losses to the Company; consequently, allowances are established for amounts deemed uncollectible when necessary. We evaluate the financial condition of our reinsurers to minimize our exposure to losses from reinsurer insolvencies. Management believes that any liabilities arising from this contingency would not be material to the Company's financial position. | |||||||||
Investment Risk-The Company is exposed to risks that issuers of securities owned by the Company will default or that interest rates will change and cause a decrease in the value of our investments. As interest rates decline, the velocity at which these securities pay down the principal may increase. Management mitigates these risks by conservatively investing in investment-grade securities and by matching maturities of our investments with the anticipated payouts of our liabilities. | |||||||||
Liquidity Risk-The Company has investments in development stage companies, which are either seeking to raise capital to form life insurance subsidiaries in their respective states of incorporation (Arkansas, Colorado, Idaho, Minnesota and New Mexico) or have recently formed a life insurance subsidiary (South Dakota and Wyoming). There is no public market for shares of these investments, and there is no assurance that one will develop. Therefore, the shares will have limited marketability for an indefinite period of time. There is not currently, and may never be, an active market in these securities, and there is no assurance that any of these securities will ever become publicly traded or that an active trading market will develop or be sustained. Consequently, we may not be able to liquidate our investment in these securities. | |||||||||
Interest Rate Risk-Interest rate risk arises from the price sensitivity of investments to changes in interest rates. Interest and dividend income represent the greatest portion of an investment's return for most fixed maturity securities in stable interest rate environments. The changes in the fair value of such investments are inversely related to changes in market interest rates. As interest rates fall, the interest and dividend streams of existing fixed-rate investments become more valuable and fair values rise. As interest rates rise, the opposite effect occurs. The Company attempts to mitigate its exposure to adverse interest rate movements through staggering the maturities of the fixed maturity investments and through maintaining cash and other short term investments to assure sufficient liquidity to meet its obligations and to address reinvestment risk considerations. Due to the composition of our book of insurance business, we believe it is unlikely that we would encounter large surrender activity due to an interest rate increase that would force the disposal of fixed maturities at a loss. | |||||||||
Credit Risk-The Company is exposed to credit risk through counterparties and within the investment portfolio. Credit risk relates to the uncertainty associated with an obligor's ability to make timely payments of principal and interest in accordance with the contractual terms of an instrument or contract. The Company manages its credit risk through established investment credit policies and guidelines which address the quality of creditors and counterparties, concentration limits, diversification practices and acceptable risk levels. These policies and guidelines are regularly reviewed and approved by senior management. | |||||||||
Regulatory Factors-The Company is highly regulated by the jurisdictions in which our entities are domiciled and licensed to conduct business. Such regulations, among other things, limit the amount of rate increases on policies and impose restrictions on the amount and type of investments and the minimum surplus required to conduct business in the state. The impact of the regulatory initiatives in response to the recent financial crisis, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, could subject the Company to substantial additional regulation. | |||||||||
Vulnerability Due to Certain Concentrations-The Company monitors economic and regulatory developments that have the potential to impact our business. Federal legislation has allowed banks and other financial organizations to have greater participation in insurance businesses. This legislation may present an increased level of competition for sales of the Company's products. | |||||||||
New Accounting Standards: In February 2013, the FASB issued guidance regarding the reporting of reclassifications out of accumulated other comprehensive income (AOCI). The guidance requires entities to provide information about the amounts reclassified out of AOCI by component. Significant amounts reclassified out of AOCI that are required under U.S. GAAP to be reclassified to net income in their entirety in the same reporting period must be presented either on the face of the statement, where net income is presented, or in the footnotes. For amounts that are not required under U.S. GAAP that provide additional detail about those amounts. The Company adopted this new guidance as of January 1, 2013 with no material impact to the consolidated financial statements. | |||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740)-Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward or Tax Credit Carryforward Exists, which finalizes Proposed ASU No. EITF-13C, and requires an entity's unrecognized tax benefit to be presented in its financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with one exception. That exception states that, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The ASU applies prospectively for reporting periods beginning after December 15, 2013. Retrospective application and early adoption are also permitted. We do not expect ASU No. 2013-02 or ASU No. 2013-11 to have a material impact on our consolidated financial statements. | |||||||||
All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did not relate to accounting policies and procedures pertinent or material to the Company at this time. | |||||||||
Noncontrolling_Interests
Noncontrolling Interests | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Noncontrolling Interests [Abstract] | ' | ||||||||
Noncontrolling Interests | ' | ||||||||
Note 2. Noncontrolling Interests | |||||||||
The effects on our equity of changes in our ownership interest in equity securities were as follows. | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Net loss attributable to Midwest Holding Inc. | $ | (1,950,439 | ) | $ | (1,657,687 | ) | |||
Transfers (to) from noncontrolling interests: | |||||||||
Increase in Midwest Holding Inc.'s additional paid-in | |||||||||
capital for Great Plains Financial stock purchases, | |||||||||
net of change in ownership | - | 104,977 | |||||||
Increase in Midwest Holding Inc.'s additional paid-in | |||||||||
capital for Hot Dot equity issuances, net of change in | |||||||||
ownership | - | 588,103 | |||||||
Change from net income (loss attributable to Midwest Holding Inc. | |||||||||
and transfers from noncontrolling interests | $ | (1,950,439 | ) | $ | (964,607 | ) |
Investments
Investments | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Investments [Abstract] | ' | |||||||||||||||||
Investments | ' | |||||||||||||||||
Note 3. Investments | ||||||||||||||||||
The amortized cost and estimated fair value of investments classified as available-for-sale as of December 31, 2013 and 2012 are as follows: | ||||||||||||||||||
Gross | Gross | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||||
December 31, 2013: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
U.S. government obligations | $ | 2,483,199 | $ | 23,398 | $ | 43,502 | $ | 2,463,095 | ||||||||||
States and political subdivisions - general obligations | 1,147,325 | - | 107,030 | 1,040,295 | ||||||||||||||
States and political subdivisions - special revenue | 1,573,336 | - | 118,944 | 1,454,392 | ||||||||||||||
Corporate | 9,728,599 | 2,378 | 498,052 | 9,232,925 | ||||||||||||||
Total fixed maturities | 14,932,459 | 25,776 | 767,528 | 14,190,707 | ||||||||||||||
Equity securities: | ||||||||||||||||||
Preferred corporate stock | 75,000 | - | - | 75,000 | ||||||||||||||
Total equity securities | 75,000 | - | - | 75,000 | ||||||||||||||
Total | $ | 15,007,459 | $ | 25,776 | $ | 767,528 | $ | 14,265,707 | ||||||||||
December 31, 2012: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
U.S. government obligations | $ | 2,126,977 | $ | 89,748 | $ | - | $ | 2,216,725 | ||||||||||
States and political subdivisions - general obligations | 1,219,757 | 1,298 | 22,620 | 1,198,435 | ||||||||||||||
States and political subdivisions - special revenue | 1,766,140 | 2,242 | 44,229 | 1,724,153 | ||||||||||||||
Corporate | 5,502,159 | 19,630 | 127,639 | 5,394,150 | ||||||||||||||
Total fixed maturities | 10,615,033 | 112,918 | 194,488 | 10,533,463 | ||||||||||||||
Equity securities: | ||||||||||||||||||
Common corporate stock | 1,199,111 | 1,850 | 24,984 | 1,175,977 | ||||||||||||||
Preferred corporate stock | 75,000 | - | - | 75,000 | ||||||||||||||
Total equity securities | 1,274,111 | 1,850 | 24,984 | 1,250,977 | ||||||||||||||
Total | $ | 11,889,144 | $ | 114,768 | $ | 219,472 | $ | 11,784,440 | ||||||||||
The Company had one security that individually exceeds 10% of the total of the state and political subdivisions categories as of December 31, 2013. The amortized cost, fair value, credit rating, and description of the security is as follows: | ||||||||||||||||||
Amortized | Estimated Fair | |||||||||||||||||
Cost | Value | Credit Rating | ||||||||||||||||
December 31, 2013: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
States and political subdivisions - general obligations | ||||||||||||||||||
Maricopa County Arizona School District No. 31 | $ | 341,390 | $ | 332,112 | AA- | |||||||||||||
The following table summarizes, for all securities in an unrealized loss position at December 31, 2013 and 2012, the estimated fair value, pre-tax gross unrealized loss and number of securities by length of time that those securities have been continuously in an unrealized loss position. | ||||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Gross | Number | Gross | Number | |||||||||||||||
Estimated | Unrealized | of | Estimated | Unrealized | of | |||||||||||||
Fair Value | Loss | Securities | Fair Value | Loss | Securities | |||||||||||||
Fixed Maturities: | ||||||||||||||||||
Less than 12 months: | ||||||||||||||||||
U.S. government obligations | $ | 578,914 | $ | 43,502 | 6 | $ | - | $ | - | - | ||||||||
States and political subdivisions - | ||||||||||||||||||
general obligations | 320,416 | 32,506 | 3 | 730,863 | 14,810 | 5 | ||||||||||||
States and political subdivisions - | ||||||||||||||||||
special revenue | 653,897 | 56,717 | 11 | 1,256,996 | 35,403 | 12 | ||||||||||||
Corporate | 7,998,855 | 498,052 | 73 | 3,607,480 | 114,620 | 22 | ||||||||||||
Greater than 12 months: | ||||||||||||||||||
States and political subdivisions - | ||||||||||||||||||
general obligations | 719,879 | 74,524 | 4 | 226,846 | 7,810 | 1 | ||||||||||||
States and political subdivisions - | ||||||||||||||||||
special revenue | 800,495 | 62,227 | 6 | 202,390 | 8,826 | 1 | ||||||||||||
Corporate | - | - | - | 86,400 | 13,019 | 1 | ||||||||||||
Total fixed maturities | $ | 11,072,456 | $ | 767,528 | 103 | $ | 6,110,975 | $ | 194,488 | 42 | ||||||||
Equity Securities: | ||||||||||||||||||
Less than 12 months: | ||||||||||||||||||
Common corporate stock | $ | - | $ | - | - | $ | 1,072,325 | $ | 24,984 | 3 | ||||||||
Total equity securities | - | - | - | 1,072,325 | 24,984 | 3 | ||||||||||||
Total | $ | 11,072,456 | $ | 767,528 | 103 | $ | 7,183,300 | $ | 219,472 | 45 | ||||||||
Based on our review of the securities in an unrealized loss position at December 31, 2013 and 2012, no other-than-temporary impairments were deemed necessary. Management believes that the Company will fully recover its cost basis in the securities held at December 31, 2013, and management does not have the intent to sell nor is it more likely than not that the Company will be required to sell such securities until they recover or mature. The temporary impairments shown herein are primarily the result of the current interest rate environment rather than credit factors that would imply other-than-temporary impairment. | ||||||||||||||||||
The amortized cost and estimated fair value of fixed maturities at December 31, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||
Amortized | Estimated | |||||||||||||||||
Cost | Fair Value | |||||||||||||||||
Due in one year or less | $ | 1,325,740 | $ | 1,324,378 | ||||||||||||||
Due after one year through five years | 2,262,985 | 2,254,934 | ||||||||||||||||
Due after five years through ten years | 8,398,569 | 7,943,789 | ||||||||||||||||
Due after ten years | 2,945,165 | 2,667,606 | ||||||||||||||||
$ | 14,932,459 | $ | 14,190,707 | |||||||||||||||
The Company is required to hold assets on deposit for the benefit of policyholders in accordance with statutory rules and regulations. At December 31, 2013 and 2012, these required deposits had a total amortized cost of $2,967,441 and $2,603,290 and fair values of $2,912,017 and $2,668,972, respectively. | ||||||||||||||||||
The components of net investment income for the years ended December 31, 2013 and 2012 are as follows: | ||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Fixed maturities | $ | 398,377 | $ | 349,677 | ||||||||||||||
Equity securities | 32,493 | 11,363 | ||||||||||||||||
Cash and short-term investments | 14,804 | 8,913 | ||||||||||||||||
Gain from equity method investments | (10,023 | ) | 36,043 | |||||||||||||||
Other | 132,634 | 131,584 | ||||||||||||||||
568,285 | 537,580 | |||||||||||||||||
Less investment expenses | (46,539 | ) | (57,397 | ) | ||||||||||||||
$ | 521,746 | $ | 480,183 | |||||||||||||||
Proceeds for the years ended December 31, 2013 and 2012 from sales of investments classified as available-for-sale were $6,877,586 and $12,353,614, respectively. Gross gains of $145,124 and $188,486 and gross losses of $139,388 and $54,366 were realized on those sales during the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||||||
As of December 31, 2013, no mortgage loans were in a delinquent status and all interest on mortgage loans was current. The following table summarizes the activity in the mortgage loans on real estate, held for investment account for the years ended December 31, 2013 and 2012. | ||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Balance at beginning of period | $ | 677,011 | $ | 915,465 | ||||||||||||||
Proceeds from payments on mortgage loans on real estate, held for investment | (11,442 | ) | (238,454 | ) | ||||||||||||||
Balance at end of period | $ | 665,569 | $ | 677,011 |
Fair_Values_of_Financial_Instr
Fair Values of Financial Instruments | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Fair Values of Financial Instruments [Abstract] | ' | |||||||||||||||
Fair Values of Financial Instruments | ' | |||||||||||||||
Note 4. Fair Values of Financial Instruments | ||||||||||||||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. We use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: | ||||||||||||||||
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. | ||||||||||||||||
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | ||||||||||||||||
Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability. | ||||||||||||||||
A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the valuation inputs, or their ability to be observed, may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur. | ||||||||||||||||
A description of the valuation methodologies used for assets measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. | ||||||||||||||||
Fixed maturities: Fixed maturities are recorded at fair value on a recurring basis utilizing a third-party pricing source. The valuations are reviewed and validated quarterly through random testing by comparisons to separate pricing models or other third party pricing services. For the period ended December 31, 2013, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third party prices were changed from the values received. Securities with prices based on validated quotes from pricing services are reflected within Level 2. | ||||||||||||||||
Equity securities, available for sale: Equity securities consist principally of common stock of publicly and privately traded companies and preferred stock of publicly traded companies. The fair values of publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. The fair values of a portion of our preferred equity securities are based on prices obtained from independent pricing services and these securities are generally classified within Level 2 in the fair value hierarchy. | ||||||||||||||||
Equity method investments: The equity method investments are comprised of the Company's investments in First Wyoming and Hot Dot. These securities have no active trading and the fair value for these securities is not readily determinable. Therefore, these investments have been omitted from the following fair value disclosure tables. | ||||||||||||||||
Cash and cash equivalents and short-term investments: The carrying value of cash and cash equivalents and short-term investments approximate the fair value because of the short maturity of the instruments. | ||||||||||||||||
Policy loans: Policy loans are stated at unpaid principal balances. As these loans are fully collateralized by the cash surrender value of the underlying insurance policies, the carrying value of the policy loans approximates their fair value. Policy loans are categorized as Level 3 in the fair value hierarchy. | ||||||||||||||||
Notes Receivable: Fair values for short-term notes receivable approximate carrying value. The carrying amount is a reasonable estimate of the fair value because of the relatively short time between the origination of the loan and its expected repayment. These receivables are categorized as Level 3 in the fair value hierarchy. | ||||||||||||||||
Mortgage loans on real estate, held for investment: The fair values of mortgage loans on real estate, held for investment are estimated by discounting scheduled cash flows through the scheduled maturities of the loans, using interest rates currently being offered for similar loans to borrowers with similar credit ratings. As part of the Old Reliance purchase agreement, the seller guaranteed the performance of the mortgage loans and accordingly we believe book value is equal to fair value. We periodically evaluate the financial condition of the seller and his guarantee. We know of no circumstances that indicated that the guarantor would be unable to perform nor are any loans non-performing such that his guarantee would be triggered. Mortgage loans are categorized as Level 3 in the fair value hierarchy. | ||||||||||||||||
Investment-type contracts: The fair value for direct and assumed liabilities under investment-type insurance contracts (accumulation annuities) is calculated using a discounted cash flow approach. Cash flows are projected using actuarial assumptions and discounted to the valuation date using risk-free rates adjusted for credit risk and nonperformance risk of the liabilities. Liabilities under investment-type insurance contracts that are wholly ceded by Capital Reserve to a non-affiliated reinsurer are carried at cash surrender value which approximates fair value. The fair values for insurance contracts other than investment-type contracts are not required to be disclosed. These liabilities are categorized as Level 3 in the fair value hierarchy. | ||||||||||||||||
Surplus notes: The fair value for surplus notes is calculated using a discounted cash flow approach. Cash flows are projected utilizing scheduled repayments and discounted to the valuation date using market rates currently available for debt with similar remaining maturities. These notes are structured such that all interest is paid at maturity. In the following fair value measurement tables, the Company has included accrued interest expense of approximately $164,000 and $132,000 in carrying value of the surplus notes as of December 31, 2013 and 2012, respectively. These liabilities are categorized as Level 3 in the fair value hierarchy. | ||||||||||||||||
The following table presents the Company's fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of December 31, 2013 and 2012. | ||||||||||||||||
Significant | ||||||||||||||||
Quoted | Other | Significant | ||||||||||||||
in Active | Observable | Unobservable | Estimated | |||||||||||||
Markets | Inputs | Inputs | Fair | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||
31-Dec-13 | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
U.S. government obligations | $ | - | $ | 2,463,095 | $ | - | $ | 2,463,095 | ||||||||
States and political subdivisions - general obligations | - | 1,040,295 | - | 1,040,295 | ||||||||||||
States and political subdivisions - special revenue | - | 1,454,392 | - | 1,454,392 | ||||||||||||
Corporate | - | 9,232,925 | - | 9,232,925 | ||||||||||||
Total fixed maturities | - | 14,190,707 | - | 14,190,707 | ||||||||||||
Equity securities: | ||||||||||||||||
Preferred corporate stock | - | 75,000 | - | 75,000 | ||||||||||||
Total equity securities | - | 75,000 | - | 75,000 | ||||||||||||
Total | $ | - | $ | 14,265,707 | $ | - | $ | 14,265,707 | ||||||||
31-Dec-12 | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
U.S. government obligations | $ | - | $ | 2,216,725 | $ | - | $ | 2,216,725 | ||||||||
States and political subdivisions - general obligations | - | 1,198,435 | - | 1,198,435 | ||||||||||||
States and political subdivisions - special revenue | - | 1,724,153 | - | 1,724,153 | ||||||||||||
Corporate | - | 5,394,150 | - | 5,394,150 | ||||||||||||
Total fixed maturities | - | 10,533,463 | - | 10,533,463 | ||||||||||||
Equity securities: | ||||||||||||||||
Common corporate stock | 1,175,977 | - | - | 1,175,977 | ||||||||||||
Preferred corporate stock | - | 75,000 | - | 75,000 | ||||||||||||
Total equity securities | 1,175,977 | 75,000 | - | 1,250,977 | ||||||||||||
Total | $ | 1,175,977 | $ | 10,608,463 | $ | - | $ | 11,784,440 | ||||||||
There were no transfers of financial instruments between Level 1 and Level 2 during the years ended December 31, 2013 or 2012. | ||||||||||||||||
Accounting standards require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring basis are discussed above. There were no financial assets or financial liabilities measured at fair value on a non-recurring basis. Equity securities carried at cost are privately placed common stocks for several recently formed holding companies organized for the purpose of forming life insurance subsidiaries. These common stocks are recorded using the cost basis of accounting. These securities have no active trading and the fair value for these securities is not readily determinable. The Company does not control these entities economically, and therefore does not consolidate these entities. | ||||||||||||||||
The following disclosure contains the carrying values, estimated fair values and their corresponding placement in the fair value hierarchy, for financial assets and financial liabilities as of December 31, 2013 and 2012, respectively: | ||||||||||||||||
31-Dec-13 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets | ||||||||||||||||
for Identical | Significant Other | Significant | ||||||||||||||
Assets and | Observable | Unobservable | ||||||||||||||
Carrying | Liabilities | Inputs | Inputs | Fair | ||||||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | Value | ||||||||||||
Assets: | ||||||||||||||||
Mortgage loans on real estate, held for | ||||||||||||||||
investment | $ | 665,569 | $ | - | $ | - | $ | 690,591 | $ | 690,591 | ||||||
Policy loans | 369,513 | - | - | 369,513 | 369,513 | |||||||||||
Notes receivable | 27,383 | - | - | 27,383 | 27,383 | |||||||||||
Short-term investments | 1,180,314 | 1,180,314 | - | - | 1,180,314 | |||||||||||
Cash and cash equivalents | 3,377,978 | 3,377,978 | - | - | 3,377,978 | |||||||||||
Liabilities: | ||||||||||||||||
Policyholder deposits | ||||||||||||||||
(Investment-type contracts) | 14,739,655 | - | - | 14,739,655 | 14,739,655 | |||||||||||
Surplus Notes and Accrued Interest Payable | 714,000 | - | - | 704,192 | 704,192 | |||||||||||
31-Dec-12 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets | ||||||||||||||||
for Identical | Significant Other | Significant | ||||||||||||||
Assets and | Observable | Unobservable | ||||||||||||||
Carrying | Liabilities | Inputs | Inputs | Fair | ||||||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | Value | ||||||||||||
Assets: | ||||||||||||||||
Mortgage loans on real estate, held for | ||||||||||||||||
investment | $ | 677,011 | $ | - | $ | - | $ | 706,434 | $ | 706,434 | ||||||
Policy loans | 274,664 | - | - | 274,664 | 274,664 | |||||||||||
Notes receivable | 27,383 | - | - | 27,383 | 27,383 | |||||||||||
Short-term investments | 1,171,280 | 1,171,280 | - | - | 1,171,280 | |||||||||||
Cash and cash equivalents | 4,346,555 | 4,346,555 | - | - | 4,346,555 | |||||||||||
Liabilities: | ||||||||||||||||
Policyholder deposits | ||||||||||||||||
(Investment-type contracts) | 12,865,671 | - | - | 13,163,620 | 13,163,620 | |||||||||||
Surplus Notes and Accrued Interest Payable | 782,000 | - | - | 777,218 | 777,218 |
Income_Tax_Matters
Income Tax Matters | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Matters [Abstract] | ' | ||||||||
Income Tax Matters | ' | ||||||||
Note 5. Income Tax Matters | |||||||||
Significant components of the Company's deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Deferred tax assets: | |||||||||
Loss carryforwards | $ | 6,594,919 | $ | 6,061,739 | |||||
Capitalized costs | 821,248 | 898,240 | |||||||
Unrealized losses on investments | 252,196 | 28,181 | |||||||
Benefit reserves | 1,235,692 | 1,157,055 | |||||||
Total deferred tax assets | 8,904,055 | 8,145,215 | |||||||
Less valuation allowance | (7,132,984 | ) | (6,208,648 | ) | |||||
Total deferred tax assets, net of valuation allowance | 1,771,071 | 1,936,567 | |||||||
Deferred tax liabilities: | |||||||||
Policy acquisition costs | 978,902 | 1,018,676 | |||||||
Due premiums | 222,067 | 278,842 | |||||||
Value of business acquired | 279,402 | 327,949 | |||||||
Intangible assets | 238,000 | 238,000 | |||||||
Property and equipment | 52,700 | 73,100 | |||||||
Total deferred tax liabilities | 1,771,070 | 1,936,567 | |||||||
Net deferred tax assets | $ | - | $ | - | |||||
At December 31, 2013 and 2012, the Company recorded a valuation allowance of $7,132,984 and $6,208,648, respectively, on the deferred tax assets to reduce the total to an amount that management believes will ultimately be realized. Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. | |||||||||
Loss carryforwards for tax purposes as of December 31, 2013, have expiration dates that range from 2024 through 2028. | |||||||||
There was no income tax expense for the years ended December 31, 2013 and 2012. This differed from the amounts computed by applying the statutory U.S. federal income tax rate of 34% to pretax income, as a result of the following: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Computed expected income tax benefit | $ | (669,045 | ) | $ | (563,614 | ) | |||
Increase (reduction) in income taxes resulting from: | |||||||||
Meals, entertainment and political contributions | 29,497 | 21,585 | |||||||
Dividends received deduction | (5,452 | ) | (20,284 | ) | |||||
True-up of provision to actual | - | (110,899 | ) | ||||||
Deconsolidation of Hot Dot, Inc. | - | (336,566 | ) | ||||||
Noncontrolling interests | (17,632 | ) | - | ||||||
Other | (37,689 | ) | 105,426 | ||||||
(31,276 | ) | (340,738 | ) | ||||||
Tax benefit before valuation allowance | (700,321 | ) | (904,352 | ) | |||||
Change in valuation allowance | 700,321 | 904,352 | |||||||
Net income tax expense | $ | - | $ | - |
Reinsurance
Reinsurance | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Reinsurance [Abstract] | ' | |||||||||||||||||
Reinsurance | ' | |||||||||||||||||
Note 6. Reinsurance | ||||||||||||||||||
A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 is as follows: | ||||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Balance sheets: | ||||||||||||||||||
Benefit and claim reserves assumed | $ | 2,814,704 | $ | 2,887,596 | ||||||||||||||
Benefit and claim reserves ceded | 30,660,618 | 32,265,463 | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Statements of comprehensive income: | ||||||||||||||||||
Premiums assumed | $ | 30,002 | $ | 32,469 | ||||||||||||||
Premiums ceded | 362,851 | 410,680 | ||||||||||||||||
Benefits assumed | 42,099 | 79,287 | ||||||||||||||||
Benefits ceded | 760,017 | 675,990 | ||||||||||||||||
Commissions assumed | 38 | 66 | ||||||||||||||||
Commissions ceded | 4,432 | 12,849 | ||||||||||||||||
The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer along with the A.M. Best credit rating as of December 31, 2013: | ||||||||||||||||||
Recoverable on | Total Amount | |||||||||||||||||
Recoverable | Recoverable | Benefit | Ceded | Recoverable | ||||||||||||||
AM Best | on Paid | on Unpaid | Reserves/Deposit- | Due | from | |||||||||||||
Reinsurer | Rating | Losses | Losses | type Contracts | Premiums | Reinsurer | ||||||||||||
SNL | NR | $ | - | $ | 98,542 | $ | 17,262,833 | $ | 67,033 | $ | 17,294,342 | |||||||
Optimum Re Insurance Company | A- | - | 19,008 | 464,031 | - | 483,039 | ||||||||||||
Sagicor Life Insurance Company | A- | - | 230,487 | 12,871,122 | 218,372 | 12,883,237 | ||||||||||||
$ | 348,037 | $ | 30,597,986 | $ | 285,405 | $ | 30,660,618 | |||||||||||
Capital Reserve has a 100% coinsurance agreement with SNL whereby 100% of the business written by Capital Reserve is ceded to SNL. At December 31, 2013 and 2012, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by Capital Reserve to SNL were $17,294,342 and $18,266,601, respectively. Capital Reserve remains contingently liable on this ceded reinsurance should SNL be unable to meet their obligations. | ||||||||||||||||||
During 1999, Old Reliance entered into a 75% coinsurance agreement with Sagicor Life (Sagicor) whereby 75% of the business written by Old Reliance is ceded to Sagicor. During 2000, Old Reliance coinsured the remaining 25% with Sagicor. At December 31, 2013 and 2012, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by Old Reliance to Sagicor were $12,883,237 and $13,530,051, respectively. Old Reliance remains contingently liable on this ceded reinsurance should Sagicor be unable to meet their obligations. | ||||||||||||||||||
The use of reinsurance does not relieve the Company of its primary liability to pay the full amount of the insurance benefit in the event of the failure of a reinsurer to honor its contractual obligation. No reinsurer of business ceded by the Company has failed to pay policy claims (individually or in the aggregate) with respect to our ceded business. At December 31, 2013, the Company had over 98% of its reinsurance recoverable amounts concentrated with two reinsurers, Sagicor and SNL. SNL, who is not rated by A.M. Best, accounted for $17.3 million of reinsurance recoverable. | ||||||||||||||||||
The Company monitors several factors that it considers relevant to satisfy itself as to the ongoing ability of a reinsurer to meet all obligations of the reinsurance agreements. These factors include the credit rating of the reinsurer, the financial strength of the reinsurer, significant changes or events of the reinsurer, and any other relevant factors. If the Company believes that any reinsurer would not be able to satisfy its obligations with the Company, a separate contingency reserve may be established. At December 31, 2013 and 2012, no contingency reserve was established. | ||||||||||||||||||
DepositType_Contracts
Deposit-Type Contracts | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Deposit-Type Contracts [Abstract] | ' | ||||||||
Deposit-Type Contracts | ' | ||||||||
Note 7. Deposit-Type Contracts | |||||||||
The Company's deposit-type contracts represent the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. Liabilities for these deposit-type contracts are included without reduction for potential surrender charges. This liability is equal to the accumulated account deposits, plus interest credited, and less policyholder withdrawals. The following table provides information about deposit-type contracts for the years ended December 31, 2013 and 2012: | |||||||||
Year Ended | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Beginning balance | $ | 12,865,671 | $ | 11,933,276 | |||||
Change in deposit-type contracts from Old Reliance | |||||||||
and Great Plains Life acquisition | - | 737,230 | |||||||
Change in deposit-type contracts assumed from SNL | (66,572 | ) | (219,011 | ) | |||||
Change in deposit-type contracts fully ceded by Capital Reserve | (683,070 | ) | (958,644 | ) | |||||
Deposits received | 2,636,959 | 1,397,385 | |||||||
Investment earnings | 253,189 | 96,225 | |||||||
Withdrawals | (266,522 | ) | (120,790 | ) | |||||
Ending balance | $ | 14,739,655 | $ | 12,865,671 | |||||
Under the terms of American Life's coinsurance agreement with SNL, American Life assumes certain deposit-type contract obligations, as shown in the table above. Additionally, Capital Reserve cedes 100% of its direct business to SNL. Accordingly, this amount is presented within the corresponding single line above. The remaining deposits, withdrawals and interest credited represent those for American Life's direct business. | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Note 8. Commitments and Contingencies | ||||
Legal Proceedings: We are involved in litigation incidental to our operations from time to time. We are not presently a party to any legal proceedings other than litigation arising in the ordinary course of our business, and we are not aware of any claims that could materially affect our financial position or results of operations. | ||||
Regulatory Matters: State regulatory bodies, the SEC, and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning the Company's compliance with laws in relation to, but not limited to, insurance and securities. The issues involved in information requests and regulatory matters vary widely. The Company cooperates in these inquiries. Agencies from the states of Arizona, Missouri, and Wyoming are currently conducting a routine regulatory examination for the period 2009 through 2012 as required by state statutes. | ||||
Office Lease: The Company leases office space in Lincoln, Nebraska under an agreement executed October 17, 2013 that expires on January 31, 2024. The Company also subleases office space for a satellite office in Kearney, Nebraska, which was executed on June 11, 2012 and expires on May 1, 2015. Great Plains Financial entered into a lease on May 1, 2011 for office space in Pierre, South Dakota, which expires on April 30, 2014. Great Plains also entered into a lease on October 4, 2013 for office space in Mitchell, South Dakota, which expires on November 30, 2016. Rent expense for the years ended December 31, 2013 and 2012 was $175,476 and $147,957, respectively. Future minimum payments are as follows: | ||||
2014 | $ | 167,002 | ||
2015 | 144,038 | |||
2016 | 137,088 | |||
2017 | 133,603 | |||
2018 | 136,557 | |||
Later years | 771,222 | |||
Total | $ | 1,489,510 |
Statutory_Net_Income_and_Surpl
Statutory Net Income and Surplus | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Statutory Net Income and Surplus [Abstract] | ' | ||||||
Statutory Net Income and Surplus | ' | ||||||
Note 9. Statutory Net Income and Surplus | |||||||
American Life is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Arizona Department of Insurance. Likewise, Capital Reserve and Great Plains Life are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Missouri and South Dakota Departments of Insurance, respectively. Statutory practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis. The following table summarizes the statutory net loss and statutory capital and surplus of American Life, Capital Reserve, and Great Plains Life as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012. | |||||||
Statutory Capital and Surplus as of | |||||||
31-Dec-13 | 31-Dec-12 | ||||||
American Life | $ | 1,840,429 | $ | 1,981,613 | |||
Capital Reserve | $ | 1,280,970 | $ | 1,396,147 | |||
Great Plains Life | $ | 2,103,988 | $ | 2,180,787 | |||
Statutory Net Loss for the Years Ended December 31, | |||||||
2013 | 2012 | ||||||
American Life | $ | 154,371 | $ | 911,049 | |||
Capital Reserve | $ | 115,884 | $ | 66,813 | |||
Great Plains Life | $ | 160,698 | $ | 116,914 |
Surplus_Notes
Surplus Notes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Surplus Notes [Abstract] | ' | ||||||||||
Surplus Notes | ' | ||||||||||
Note 10. Surplus Notes | |||||||||||
The following provides a summary of the Company's surplus notes along with issue dates, maturity dates, face amounts, and interest rates as of December 31, 2013: | |||||||||||
Creditor | Issue Date | Maturity Date | Face Amount | Interest Rate | |||||||
First American Capital Corporation | 1-Sep-06 | 1-Sep-16 | $ | 250,000 | 7 | % | |||||
David G. Elmore | 4-Aug-11 | 1-Aug-16 | 300,000 | 5 | % | ||||||
Any payments and/or repayments must be approved by the Arizona Department of Insurance. As of December 31, 2013, the Company has accrued $164,449 of interest expense under accounts payable and accrued expenses on the consolidated balance sheet. During the first quarter of 2013, the repayment of the interest and principal on a portion of the surplus notes was approved by the Arizona Department of Insurance. On January 4, 2013, the Company paid down $100,000 of principal and approximately $7,000 of accrued interest. | |||||||||||
Consolidation_and_Deconsolidat
Consolidation and Deconsolidation of Hot Dot | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Consolidation and Deconsolidation of Hot Dot [Abstract] | ' | |||||
Consolidation and Deconsolidation of Hot Dot | ' | |||||
Note 11. Consolidation and Deconsolidation of Hot Dot | ||||||
In August 2011, the Company acquired a controlling interest ownership of Hot Dot, Inc., a company organized to develop, manufacture, and market the Alert Patch. During the third quarter of 2011, Hot Dot purchased certain assets of IonX Capital Holding Inc. The consideration paid by Hot Dot was $1.05 million in cash. The purchase price was primarily allocated to a patent asset for a thermochromatic patch for monitoring and detecting body temperature. This patent asset is being amortized over fifteen years, its estimated useful life. On September 12, 2012, Hot Dot repurchased 1,000,000 shares of Hot Dot stock from Midwest for a purchase price of $750,000. As a result of the stock repurchase by Hot Dot, Midwest ceased to have a controlling financial interest in Hot Dot and subsequently deconsolidated Hot Dot on the effective date of the stock repurchase. Hot Dot is a development stage company that has not conducted operations apart from raising capital. | ||||||
The following table summarizes the cash impact of the deconsolidation of Hot Dot at the date of deconsolidation: | ||||||
Investments, available for sale, equity securities | $ | 39,735 | ||||
Notes receivable | 75,000 | |||||
Intangible asset | 989,900 | |||||
Property and equipment | 54,750 | |||||
Gain on deconsolidation | 278,513 | |||||
Equity investment in Hot Dot at deconsolidation date | (570,190 | ) | ||||
Change in noncontrolling interest | (3,175,575 | ) | ||||
Other liabilities | (15,000 | ) | ||||
$ | (2,322,867 | ) | ||||
Midwest determined that the fair value of Hot Dot on the date of deconsolidation approximated carrying value as Hot Dot has no active trading. The fair value for Hot Dot was determined through the use of unobservable assumptions about market participants. Hot Dot is regularly bringing in new investors at or above the prices paid by the Company. Accordingly, the Company has asserted that a willing market participant would purchase the security for the same price as the Company paid until such time as the development stage company commences operations. Midwest determined the deconsolidation date fair value of its remaining 16.45% interest in Hot Dot to be $570,190. As a result of the deconsolidation, Midwest recognized a gain of $278,513 recorded in realized gain on deconsolidation of Hot Dot, Inc. on the consolidated statements of comprehensive income for the year ended December 31, 2012. The results of Hot Dot have been reflected in Midwest's consolidated financial statements up to the date of the stock repurchase by Hot Dot. Subsequent to the deconsolidation of Hot Dot, the company accounts for its investment in Hot Dot using the equity method. | ||||||
The following pro forma information presents the combined results of the Company as though Hot Dot was accounted for as an equity method investment by the Company and not consolidated into the Company's financial statements since the Company's purchase of the investment during the third quarter of 2011. | ||||||
Year Ended | ||||||
31-Dec-12 | ||||||
Premiums | $ | 4,208,659 | ||||
Other income | 719,486 | |||||
Expenses | (6,730,258 | ) | ||||
Net loss | (1,802,113 | ) | ||||
Less: Loss attributable to noncontrolling interests | (24,091 | ) | ||||
Net loss attributable to Midwest Holding Inc. | (1,778,022 | ) | ||||
Net loss attributable to Midwest Holding Inc. per common share | $ | (0.20 | ) |
Investment_in_Great_Plains_Fin
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation [Abstract] | ' | ||||
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation | ' | ||||
Note 12. Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation | |||||
During the first quarter of 2012, the Company purchased additional shares of Great Plains Financial Corporation (Great Plains Financial). The purchase increased our total investment in Great Plains Financial to 819,000 shares. Our aggregate ownership percentage increased to approximately 21% as a result of the purchases. As a result of the increased ownership, the Company changed its method of carrying the investment from cost to equity. | |||||
During the third quarter of 2012, the Company began providing TPA services to Great Plains Financial and Great Plains Financial's wholly owned subsidiary, Great Plains Life Assurance Company (Great Plains Life). At the end of the third quarter of 2012, Mark Oliver, our Chief Executive Officer and a member of our Board of Directors, was assigned to serve as President of the Company in addition to his role as Executive Vice President, CEO, and CFO of Great Plains Financial. During the fourth quarter of 2012, the Company purchased additional shares of Great Plains Financial, which increased our ownership to 24.5% as of December 31, 2012. As a result of the Company's ability to significantly influence the operations of Great Plains Financial, the Company began consolidating Great Plains Financial during fourth quarter of 2012. An additional purchase of shares in the first quarter of 2013 increased our ownership of Great Plains Financial to 25.7% as of December 31, 2013. | |||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||
Investments, available for sale, fixed maturities | $ | 519,540 | |||
Investments, available for sale, equity securities | 963,486 | ||||
Short-term investments | 1,168,530 | ||||
Cash and cash equivalents | 4,087,454 | ||||
Amounts recoverable from reinsurers | 38,754 | ||||
Interest and dividends due and accrued | 11,692 | ||||
Due premiums | 92,315 | ||||
Furniture and equipment, net | 22,383 | ||||
Other assets | 1,417,224 | ||||
Benefit reserves | (1,221,816 | ) | |||
Policy claims | (38,380 | ) | |||
Deposit-type contracts | (737,230 | ) | |||
Other liabilities | (279,268 | ) | |||
Net assets acquired | 6,044,684 | ||||
Change in noncontrolling interests | (4,751,930 | ) | |||
Equity investment in Great Plains Financial at initial consolidation date | (1,174,142 | ) | |||
Gain on initial consolidation of Great Plains Financial | $ | 118,612 | |||
During 2012, the Company recognized a gain of $118,612 on the consolidated statements of comprehensive income for the excess of the acquisition date fair value of its previously held equity interest over its carrying value on the acquisition date. After the recognition of this gain, the new carrying value of Great Plains was equal to the acquisition date fair value of the previously held equity interest. | |||||
The following pro forma information presents the combined results of the Company as though the consolidation of Great Plains into the Company's financial statements occurred on January 1, 2012. | |||||
Year Ended | |||||
31-Dec-12 | |||||
Premiums | $ | 5,494,457 | |||
Other income | 1,176,681 | ||||
Expenses | (9,419,078 | ) | |||
Net loss | (2,747,940 | ) | |||
Less: Loss attributable to noncontrolling interests | (794,485 | ) | |||
Net loss attributable to Midwest Holding Inc. | (1,953,455 | ) | |||
Net loss attributable to Midwest Holding Inc. per common share | $ | (0.21 | ) | ||
During the second quarter of 2012, the Company obtained significant influence over First Wyoming Capital Corporation (First Wyoming) by filling First Wyoming's top executive management positions and a majority of its board of director seats with employees and directors of the Company. At this time, the Company began reporting its investment in First Wyoming under the equity method. Our total investment in First Wyoming is 896,500 shares. Our aggregate ownership percentage was approximately 22.65% as of December 31, 2013. | |||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 13. Related Party Transactions | |
American Life had a general agent contract with a corporation owned by an officer of Midwest. The agreement, which was approved by the Board of Directors of Midwest and American Life, specifies that the corporation, a licensed insurance agency, shall receive an override commission on business written in exchange for managing the Company's marketing. In addition, the agency must pay for all sales conventions, contests, prizes, awards and training seminars. Total payments made by American Life during the years ended December 31, 2013 and 2012 were $25,608 and $49,327, respectively. This agreement was terminated in October 2011; however override payments are still being made for renewal business. | |
The Company commenced its third party administrative ("TPA") services in 2012 as an additional revenue source. These services are offered to the Company's subsidiaries and to non-consolidated entities. These agreements, for various levels of administrative services on behalf of each company, generate fee income for the Company. Services provided vary based on their needs and can include some or all aspects of back-office accounting and policy administration. We have been able to perform our TPA services using our existing in-house resources. Fees earned during the years ended December 31, 2013 and 2012 amounted to $238,947 and $84,003, respectively. | |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 14. Subsequent Events | |
All of the effects of subsequent events that provide additional evidence about conditions that existed at December 31, 2013, including the estimates inherent in the process of preparing consolidated financial statements, are recognized in the consolidated financial statements. The Company does not recognize subsequent events that provide evidence about conditions that did not exist at the date of the consolidated financial statements but arose after, but before the consolidated financial statements were available to be issued. In some cases, non-recognized subsequent events are disclosed to keep the consolidated financial statements from being misleading. | |
The Company has evaluated subsequent events through the date that the consolidated financial statements were issued. | |
On February 11, 2014, Midwest filed Form S-4, Registration of Securities Issued in Business Combination Transactions, related the proposed merger of Midwest, Great Plains Financial, and Security Capital. On November 25, 2013, the Company entered into a Plan and Agreement of Exchange (the "Exchange Agreement") with Great Plains Financial and Security Capital whereby the shareholders of Great Plains Financial and Security Capital will receive shares of Midwest voting common stock equal to an agreed upon value of shares currently owned in each respective company. If the Exchange Agreement is approved by the shareholders of each of Great Plains and Security Capital, Great Plains and Security Capital will become wholly owned subsidiaries of Midwest. Approval is expected in the second quarter of 2014. | |
Schedule_I_Summary_of_Investme
Schedule I Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Supplemental Information [Abstract] | ' | |||||||||
Summary of Investments - Other Than Investments in Related Parties | ' | |||||||||
Schedule I | ||||||||||
Midwest Holding Inc. and Subsidiaries | ||||||||||
Summary of Investments - Other Than Investments in Related Parties | ||||||||||
31-Dec-13 | ||||||||||
Amount | ||||||||||
Recognized in | ||||||||||
Consolidated | ||||||||||
Cost | Fair Value | Balance Sheets | ||||||||
Type of Investment | ||||||||||
Fixed maturity securities, available for sale: | ||||||||||
U.S. government obligations | $ | 2,483,199 | $ | 2,463,095 | $ | 2,463,095 | ||||
States and political subdivisions - general obligations | 1,147,325 | 1,040,295 | 1,040,295 | |||||||
States and political subdivisions - special revenue | 1,573,336 | 1,454,392 | 1,454,392 | |||||||
Corporate | 9,728,599 | 9,232,925 | 9,232,925 | |||||||
Total fixed maturity securities | 14,932,459 | 14,190,707 | 14,190,707 | |||||||
Equity securities: | ||||||||||
Preferred corporate stock | 75,000 | 75,000 | 75,000 | |||||||
Total equity securities | 75,000 | $ | 75,000 | 75,000 | ||||||
Equity method investments | 1,800,859 | 1,800,859 | ||||||||
Equity securities, at cost | 1,273,938 | 1,273,938 | ||||||||
Mortgage loans on real estate, held for investment | 665,569 | 665,569 | ||||||||
Real estate, held for investment | 553,849 | 553,849 | ||||||||
Policy loans | 369,513 | 369,513 | ||||||||
Notes receivable | 27,383 | 27,383 | ||||||||
Short-term investments | 1,180,314 | 1,180,314 | ||||||||
Total investments | $ | 20,878,884 | $ | 20,137,132 |
Schedule_II_Condensed_Financia
Schedule II Condensed Financial Information of Registrant Balance Sheets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Information [Abstract] | ' | ||||||||
Condensed Financial Information of Registrant Balance Sheets | ' | ||||||||
Schedule II | |||||||||
Midwest Holding Inc. (Parent Company) | |||||||||
Condensed Financial Information of Registrant | |||||||||
Balance Sheets | |||||||||
As of December 31, | |||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Investment in subsidiaries (1) | $ | 5,483,331 | $ | 7,098,917 | |||||
Equity method investments | 1,800,859 | 1,887,196 | |||||||
Equity securities, at cost | 208,750 | 217,750 | |||||||
Notes receivable | 27,383 | 27,383 | |||||||
Total investments | 7,520,323 | 9,231,246 | |||||||
Cash and cash equivalents | 50,112 | 152,909 | |||||||
Property and equipment, net | 68,584 | 105,936 | |||||||
Other assets | 165,059 | 205,711 | |||||||
Total assets | $ | 7,804,078 | $ | 9,695,802 | |||||
Liabilities and Stockholders' Equity | |||||||||
Liabilities: | |||||||||
Accounts payable and accrued expenses | 1,112,610 | 159,865 | |||||||
Total liabilities | 1,112,610 | 159,865 | |||||||
Stockholders' Equity: | |||||||||
Preferred stock, Series A | 74 | 74 | |||||||
Common stock | 9,121 | 9,106 | |||||||
Additional paid-in capital | 25,131,714 | 25,361,520 | |||||||
Stock subscription receivable | (1,917 | ) | (13,417 | ) | |||||
Accumulated deficit | (17,707,433 | ) | (15,756,994 | ) | |||||
Accumulated other comprehensive loss | (740,091 | ) | (64,352 | ) | |||||
Total Midwest Holding Inc.'s stockholders' equity | 6,691,468 | 9,535,937 | |||||||
Total liabilities and stockholders' equity | $ | 7,804,078 | $ | 9,695,802 | |||||
____________________ | |||||||||
-1 | Eliminated in consolidation. |
Schedule_II_Condensed_Financia1
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Information [Abstract] | ' | ||||||||
Condensed Financial Information of Registrant Statements of Comprehensive Income | ' | ||||||||
Midwest Holding Inc. (Parent Company) | |||||||||
Condensed Financial Information of Registrant | |||||||||
Statements of Comprehensive Income | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Income: | |||||||||
Investment income, net of expenses | $ | 6,079 | $ | 12,240 | |||||
Net realized gain on investments | - | 783 | |||||||
Miscellaneous income | 583,202 | 347,929 | |||||||
Realized gain on deconsolidation of Hot Dot, Inc. | - | 278,513 | |||||||
Realized gain on initial consolidation of Great Plains Financial | - | 118,612 | |||||||
589,281 | 758,077 | ||||||||
Expenses: | |||||||||
General | 2,054,302 | 1,577,535 | |||||||
Loss before income tax expense | (1,465,021 | ) | (819,458 | ) | |||||
Income tax expense | - | - | |||||||
Loss before equity in loss of consolidated subsidiaries | (1,465,021 | ) | (819,458 | ) | |||||
Equity in loss of consolidated subsidiaries | (485,418 | ) | (838,229 | ) | |||||
Net loss attributable to Midwest Holding Inc. | $ | (1,950,439 | ) | $ | (1,657,687 | ) | |||
Comprehensive loss: | |||||||||
Unrealized gains (losses) on investments arising during period | (675,739 | ) | 308,949 | ||||||
Less: reclassification adjustment for net realized gains on investments | - | (783 | ) | ||||||
Other comprehensive income (loss) | (675,739 | ) | 308,166 | ||||||
Comprehensive loss attributable to Midwest Holding Inc. | $ | (2,626,178 | ) | $ | (1,349,521 | ) |
Schedule_II_Condensed_Financia2
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Information [Abstract] | ' | ||||||||
Condensed Financial Information of Registrant Statements of Cash Flows | ' | ||||||||
Midwest Holding Inc. (Parent Company) | |||||||||
Condensed Financial Information of Registrant | |||||||||
Statements of Cash Flows | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Cash Flows from Operating Activities: | |||||||||
Net loss | $ | (1,950,439 | ) | $ | (1,657,687 | ) | |||
Adjustments to reconcile net loss to net cash and cash equivalents used in operating | |||||||||
activities: | |||||||||
Equity in net loss of consolidated subsidiaries | 1,002,152 | 838,229 | |||||||
Depreciation | 39,687 | 49,074 | |||||||
Net realized gain on investments | - | (783 | ) | ||||||
Gain on deconsolidation of Hot Dot, Inc. | - | (278,513 | ) | ||||||
Gain on initial consolidation of Great Plains Financial Corporation | - | (118,612 | ) | ||||||
Gain from equity method investments | 10,024 | (36,043 | ) | ||||||
Non-cash compensation expense | 11,500 | 11,500 | |||||||
Changes in operating assets and liabilities: | |||||||||
Interest and dividends due and accrued | - | 256 | |||||||
Other assets and liabilities | 993,397 | 203,306 | |||||||
Net cash used in operating activities | 106,321 | (989,273 | ) | ||||||
Cash Flows from Investing Activities: | |||||||||
Securities available for sale: | |||||||||
Purchases | - | (1,398,303 | ) | ||||||
Sales, maturities and calls | 9,000 | 68,388 | |||||||
Net change of mortgage loans on real estate, held for investment | - | 230,000 | |||||||
Proceeds from payments on notes receivable | - | 220,000 | |||||||
Purchases of property and equipment | (2,335 | ) | (30,292 | ) | |||||
Net cash used in investing activities | 6,665 | (910,207 | ) | ||||||
Cash Flows from Financing Activities: | |||||||||
Repurchases of common stock | (215,783 | ) | - | ||||||
Net proceeds from issuing equity in Hot Dot, Inc. | - | 588,103 | |||||||
Net transfers from noncontrolling interests | - | 104,977 | |||||||
Net cash provided by financing activities | (215,783 | ) | 693,080 | ||||||
Net (decrease) in cash and cash equivalents | (102,797 | ) | (1,206,400 | ) | |||||
Cash and cash equivalents: | |||||||||
Beginning | 152,909 | 1,359,309 | |||||||
Ending | $ | 50,112 | $ | 152,909 |
Schedule_III_Supplementary_Ins
Schedule III Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Supplementary Insurance Information [Abstract] | ' | ||||||||||||||||||||||||
Supplementary Insurance Information | ' | ||||||||||||||||||||||||
Schedule III | |||||||||||||||||||||||||
Midwest Holding Inc. and Subsidiaries | |||||||||||||||||||||||||
Supplementary Insurance Information | |||||||||||||||||||||||||
As of December 31, 2013 | For the Year Ended December 31, 2013 | ||||||||||||||||||||||||
Future Policy | Death and | Amortization | |||||||||||||||||||||||
Benefits, | Other Benefits | of Deferred | |||||||||||||||||||||||
Deferred Policy | Claims and | Net | and Increase | Policy | Other | ||||||||||||||||||||
Acquisition | Deposit-type | Advance | Premium | Investment | in Benefit | Acquisition | Operating | ||||||||||||||||||
Costs | Contracts | Premiums | Revenue | Income | Reserves | Costs | Expenses | ||||||||||||||||||
Life Insurance | $ | 2,722,819 | $ | 49,135,203 | $ | 87,850 | $ | 4,331,329 | $ | 521,746 | $ | 1,959,402 | $ | 861,840 | $ | 4,501,817 | |||||||||
As of December 31, 2012 | For the Year Ended December 31, 2012 | ||||||||||||||||||||||||
Future Policy | Death and | Amortization | |||||||||||||||||||||||
Benefits, | Other Benefits | of Deferred | |||||||||||||||||||||||
Deferred Policy | Claims and | Net | and Increase | Policy | Other | ||||||||||||||||||||
Acquisition | Deposit-type | Advance | Premium | Investment | in Benefit | Acquisition | Operating | ||||||||||||||||||
Costs | Contracts | Premiums | Revenue | Income | Reserves | Costs | Expenses | ||||||||||||||||||
Life Insurance | $ | 2,650,957 | $ | 47,026,130 | $ | 86,743 | $ | 4,208,659 | $ | 480,183 | $ | 1,807,409 | $ | 631,121 | $ | 5,404,041 |
Schedule_IV_Reinsurance_Inform
Schedule IV Reinsurance Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Reinsurance Information [Abstract] | ' | |||||||||||||||
Reinsurance Information | ' | |||||||||||||||
Schedule IV | ||||||||||||||||
Midwest Holding Inc. and Subsidiaries | ||||||||||||||||
Reinsurance Information | ||||||||||||||||
Percentage | ||||||||||||||||
Assumed | of Amount | |||||||||||||||
Ceded to Other | from Other | Assumed to | ||||||||||||||
Gross Amount | Companies | Companies | Net Amount | Net | ||||||||||||
Year ended December 31, 2013 | ||||||||||||||||
Life insurance in force | $ | 274,944,000 | $ | 153,161,000 | $ | 2,605,000 | $ | 124,388,000 | 2.09 | % | ||||||
Life insurance premiums | $ | 4,656,704 | $ | 355,377 | $ | 30,002 | $ | 4,331,329 | 0.69 | % | ||||||
Year ended December 31, 2012 | ||||||||||||||||
Life insurance in force | $ | 273,097,000 | $ | 156,478,000 | $ | 2,757,000 | $ | 119,376,000 | 2.31 | % | ||||||
Life insurance premiums | $ | 4,586,870 | $ | 410,680 | $ | 32,469 | $ | 4,208,659 | 0.77 | % |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Valuation and Qualifying Accounts [Abstract] | ' | |||||||
Valuation and Qualifying Accounts | ' | |||||||
Schedule V | ||||||||
Midwest Holding Inc. and Subsidiaries | ||||||||
Valuation and Qualifying Accounts | ||||||||
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Accumulated Depreciation: | ||||||||
Beginning of the year | $ | 377,664 | $ | 222,962 | ||||
Depreciation expense | 167,982 | 154,702 | ||||||
End of the year | $ | 545,646 | $ | 377,664 |
Nature_of_Operations_and_Summa1
Nature of Operations and Summary of Significant Accounting Policies (Policy) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Basis of presentation | ' | ||||||||
Basis of presentation: The accompanying consolidated financial statements include the accounts of Midwest, our wholly owned subsidiary American Life, American Life's wholly owned subsidiary Capital Reserve, Midwest's 60% owned subsidiary, Security Capital Corporation, Midwest's 25.7% owned subsidiary, Great Plains Financial, and Great Plains Financial's wholly owned subsidiary, Great Plains Life. The consolidated statements of comprehensive income include the results of Hot Dot through September 12, 2012, the date on which we deconsolidated Hot Dot. Hereafter, entities are collectively referred to as the "Company," "we," "our" or "us." | |||||||||
Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of life insurance products through its subsidiaries. The product offerings, the underwriting processes, and the marketing processes are similar. The Company's product offerings consist of a multi-benefit life insurance policy that combines cash value life insurance with a tax deferred annuity and a single premium term life product. These product offerings are underwritten, marketed, and managed primarily as a group of similar products on an overall portfolio basis. | |||||||||
These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform with the current period's presentation with no impact on results of operations or total stockholder's equity. | |||||||||
Investments | ' | ||||||||
Investments: All fixed maturities and a portion of the equity securities owned by the Company are considered available-for-sale and are included in the consolidated financial statements at their fair value as of the financial statement date. Bond premiums and discounts are amortized using the scientific-yield method over the term of the bonds. Realized gains and losses on securities sold during the year are determined using the specific identification method. Unrealized holding gains and losses, net of applicable income taxes, are included in comprehensive loss. | |||||||||
Declines in the fair value of available for sale securities below their amortized cost are evaluated to assess whether any other-than-temporary impairment loss should be recorded. In determining if these losses are expected to be other-than-temporary, the Company considers severity of impairment, duration of impairment, forecasted recovery period, industry outlook, financial condition of the issuer, projected cash flows, issuer credit ratings and the intent and ability of the Company to hold the investment until the recovery of the cost. | |||||||||
The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the statement of comprehensive income as an other-than-temporary impairment. If the Company does not expect to recover the amortized basis, does not plan to sell the security and if it is not more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. The Company recognizes the credit loss portion in the income statement and the noncredit loss portion in accumulated other comprehensive loss. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected cash flows with the amortized cost basis of the debt security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the effective interest rate implicit in the fixed income security at the date of acquisition. Cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings, and estimates regarding timing and amount of recoveries associated with a default. No other-than-temporary impairments were recognized during the years ended December 31, 2013 or 2012. | |||||||||
Included within the Company's equity securities carried at cost and equity method investments are certain privately placed common stocks for several holding companies organized for the purpose of forming life insurance subsidiaries. Our privately placed common stocks are recorded using cost basis or the equity method of accounting, depending on the facts and circumstances of each investment. These securities do not have a readily determinable fair value. The Company does not control these entities economically, and therefore does not consolidate these entities. The Company reports the earnings from privately placed common stocks accounted for under the equity method in net investment income. | |||||||||
Investment income consists of interest, dividends, gains and losses from equity method investments, and real estate income, which are recognized on an accrual basis and amortization of premiums and discounts. | |||||||||
Mortgage loans on real estate, held for investment | ' | ||||||||
Mortgage loans on real estate, held for investment: Mortgage loans on real estate, held for investment are carried at unpaid principal balances. Interest income on mortgage loans on real estate, held for investment is recognized in net investment income at the contract interest rate when earned. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement. Valuation allowances on mortgage loans are established based upon losses expected by management to be realized in connection with future dispositions or settlement of mortgage loans, including foreclosures. The Company establishes valuation allowances for estimated impairments on an individual loan basis as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan's original effective interest rate. These evaluations are revised as conditions change and new information becomes available. No valuation allowance was established for mortgage loans on real estate, held for investment as of December 31, 2013 and 2012, primarily as a result of the seller's guaranteed performance of the mortgage loans acquired as part of the Old Reliance transaction. | |||||||||
Policy loans | ' | ||||||||
Policy loans: Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. No valuation allowance is established for these policy loans as the amount of the loan is fully secured by the death benefit of the policy and cash surrender value. | |||||||||
Notes receivable | ' | ||||||||
Notes receivable: Notes receivable are stated at their outstanding principal amount. Outstanding notes accrue interest based on the terms of the respective note agreements. | |||||||||
Short-term investments | ' | ||||||||
Short-term investments: Short-term investments are stated at cost and consist of certificates of deposit. At December 31, 2013 and 2012, the cost of these investments approximates fair value due to the short duration to maturity. | |||||||||
Real estate, held for investment | ' | ||||||||
Real estate, held for investment: Real estate, held for investment is comprised of ten condominiums in Hawaii. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 years. | |||||||||
Cash and cash equivalents | ' | ||||||||
Cash and cash equivalents: The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2013 and 2012, cash equivalents consisted primarily of money market accounts. The Company has cash on deposit with financial institutions which at times may exceed the Federal Deposit Insurance Corporation insurance limits. The Company has not suffered any losses in the past and does not believe it is exposed to any significant credit risk in these balances. | |||||||||
Deferred acquisition costs | ' | ||||||||
Deferred acquisition costs: Deferred acquisition costs consist of incremental direct costs, net of amounts ceded to reinsurers, that result directly from and are essential to the contract acquisition transaction and would not have been incurred by the Company had the contract acquisition not occurred, are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. The Company evaluates the types of acquisition costs it capitalizes. The Company capitalizes agent compensation and benefits and other expenses that are directly related to the successful acquisition of contracts. The Company also capitalizes expenses directly related to activities performed by the Company, such as underwriting, policy issuance, and processing fees incurred in connection with successful contract acquisitions. | |||||||||
Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. The Company determined during its December 31, 2013 analysis that all deferred acquisition costs were recoverable. | |||||||||
The following table provides information about deferred acquisition costs for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 2,650,957 | $ | 2,108,395 | |||||
Capitalization of commissions, sales and issue expenses | 933,702 | 1,173,683 | |||||||
Gross amortization | (861,840 | ) | (631,121 | ) | |||||
Balance at end of period | $ | 2,722,819 | $ | 2,650,957 | |||||
Value of business acquired | ' | ||||||||
Value of business acquired: Value of business acquired represents the estimated value assigned to purchased companies or insurance in force of the assumed policy obligations at the date of acquisition of a block of policies. As previously discussed, American Life purchased Capital Reserve during 2010, resulting in an initial capitalized asset for value of business acquired of $116,326. This asset is being amortized on a straight-line basis, which approximates the earnings pattern of the related policies, over ten years. The Company recognized amortization expense of $11,633 for each of the years ended December 31, 2013 and 2012 relative to this transaction. | |||||||||
Additionally, the Company paid an upfront ceding commission of $375,000 to Security National Life Insurance Company (SNL). An initial asset was established for the value of this business acquired totaling $348,010, representing primarily the ceding commission. This asset is being amortized on a straight-line basis, which approximates the earnings pattern of the related policies, over ten years, resulting in annual amortization of $34,801. Amortization recognized during each of the years ended December 31, 2013 and 2012 relative to this transaction totaled $34,801. The agreement has an automatic renewal provision unless the Company notifies SNL of its intention not to renew, no less than 180 days prior to the expiration of the then current agreement. Each automatic renewal period is for one year. This reinsurance remains in place. | |||||||||
Additionally, American Life purchased Old Reliance in August 2011, resulting in an initial capitalized asset for value of business acquired of $824,485. This asset is being amortized over the life of the related policies (refer to "revenue recognition and related expenses" discussed later regarding amortization methods). Amortization recognized during the years ended December 31, 2013 and 2012 totaled $96,353 and $117,542, respectively. | |||||||||
Recoverability of value of business acquired is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. The Company determined during its December 31, 2013 analysis that all value of business acquired were recoverable. | |||||||||
Goodwill and Other Intangible Assets | ' | ||||||||
Goodwill and Other Intangible Assets: Goodwill represents the excess of the amounts paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill is tested for impairment at least annually in the fourth quarter or more frequently if events or circumstances change that would indicate that a triggering event has occurred. | |||||||||
In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. | |||||||||
The Company elected to forgo the qualitative impairment analysis and performed the first step of the goodwill quantitative analysis to determine if the fair value of the reporting unit was in excess of the carrying value. As of December 31, 2013, the fair value of the Company's reporting units exceeded the carrying value of the net assets assigned to that unit and the Company was not required to perform further testing for impairment. Management's determination of the fair value of each reporting unit incorporates multiple inputs including discounted cash flow calculations, peer company price to earnings multiples, and assumptions that market participants would make in valuing the reporting unit. Other assumptions can include levels of economic capital, future business growth, and earnings projections. | |||||||||
The Company assesses the recoverability of indefinite-lived intangible assets at least annually or whenever events or circumstances suggest that the carrying value of an identifiable indefinite-lived intangible asset may exceed the sum of the future discounted cash flows expected to result from its use and eventual disposition. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. | |||||||||
The Company compared the carrying value of its identifiable indefinite-lived intangible assets to the sum of the future discounted cash flows. As of December 31, 2013, the sum of the future discounted cash flows exceeded the carrying value of the indefinite-lived intangible assets. The assumptions and estimates used to determine future values are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our revenue forecasts. | |||||||||
Property and equipment | ' | ||||||||
Property and equipment: Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over 3 to 7 years and computer software and equipment is generally depreciated over 3 years. Depreciation expense totaled $167,982 and $154,702 for the years ended December 31, 2013 and 2012, respectively. The accumulated depreciation totaled $545,646 and $377,664 as of December 31, 2013 and December 31, 2012, respectively. | |||||||||
Maintenance and repairs are expensed as incurred. Replacements and improvements which extend the useful life of the asset are capitalized. The net book value of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in earnings. | |||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its fair value. The Company determined that no such events occurred that would indicate the carrying amounts may not be recoverable. | |||||||||
Reinsurance | ' | ||||||||
Reinsurance: In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The amounts reported in the consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. The Company generally strives to diversify its credit risks related to reinsurance ceded. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company's primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers including their activities with respect to claim settlement practices and commutations, and establishes allowances for uncollectible reinsurance recoverable as appropriate. There were no allowances as of December 31, 2013 or 2012. | |||||||||
Benefit reserves | ' | ||||||||
Benefit reserves: The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. | |||||||||
Policy claims | ' | ||||||||
Policy claims: Policy claims are based on reported claims plus estimated incurred but not reported claims developed from trends of historical data applied to current exposure. | |||||||||
Deposit-type contracts | ' | ||||||||
Deposit-type contracts: Deposit-type contracts consist of amounts on deposit associated with deferred annuity riders, premium deposit funds and supplemental contracts without life contingencies. | |||||||||
Income taxes | ' | ||||||||
Income taxes: The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state or local tax examinations by tax authorities for the years before 2010. The provision for income taxes is based on income as reported in the financial statements. The income tax provision is calculated under the asset and liability method. Deferred tax assets are recorded based on the differences between the financial statement and tax basis of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments, insurance reserves, and deferred acquisition costs. A deferred tax asset valuation allowance is established when there is uncertainty that such assets would be realized. The Company has no uncertain tax positions that they believe are more-likely-than not that the benefit will not to be realized. When applicable, the Company recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company had no accruals for payments of interest and penalties at December 31, 2013 and 2012. | |||||||||
Revenue recognition and related expenses | ' | ||||||||
Revenue recognition and related expenses: Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due. | |||||||||
Amounts received as payment for annuities and/or non-traditional contracts such as interest sensitive whole life contracts, single payment endowment contracts, single payment juvenile contracts and other contracts without life contingencies are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for administrative and contract-holder services and cost of insurance, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the Consolidated Statements of Cash Flows. | |||||||||
Amounts received under our multi-benefit policy form are allocated to the life insurance portion of the multi-benefit life insurance arrangement and the annuity portion based upon the signed policy. | |||||||||
Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts. Acquisition costs are amortized over the life of the premiums produced. Traditional life insurance products are treated as long duration contracts, which generally remain in force for the lifetime of the insured. | |||||||||
Comprehensive loss | ' | ||||||||
Comprehensive loss: Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive loss includes unrealized gains and losses from marketable securities classified as available for sale, net of applicable taxes. | |||||||||
Common and preferred stock and earnings (loss) per share | ' | ||||||||
Common and preferred stock and earnings (loss) per share: The par value per common share is $0.001 with 120,000,000 shares authorized. At December 31, 2013 and 2012, the Company had 9,120,239 and 9,106,717 common shares issued and outstanding, respectively. | |||||||||
The Class A preferred shares are non-cumulative, non-voting and convertible to common shares after five years at a rate of 1.3 common shares for each preferred share (subject to customary anti-dilution adjustments). The par value per preferred share is $0.001 with 2,000,000 shares authorized. At both December 31, 2013 and 2012, the Company had 74,159 preferred shares issued and outstanding. | |||||||||
Earnings (loss) per share attributable to the Company's common stockholders were computed based on the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the years ended December 31, 2013 and 2012 were 9,111,004 and 9,106,717 shares, respectively. | |||||||||
Stock subscription receivable | ' | ||||||||
Stock subscription receivable: Our Board of Directors approved the issuance of 40,000 shares of voting common stock on March 7, 2010 to Mark Oliver, our Chief Executive Officer and a member of our Board of Directors. The shares were issued for $1.15 per share, which was the approximate fair value of the shares as of the date of issuance. The purchase price was paid by Mr. Oliver through delivery of a five-year promissory note secured by a pledge of the shares purchased. The balance of the receivable as of December 31, 2013 and December 31, 2012 was $1,917 and $13,417, respectively. This receivable was partially forgiven, resulting in non-cash compensation expense of $11,500 for each of the years ended December 31, 2013 and 2012. | |||||||||
Risk and uncertainties | ' | ||||||||
Risk and uncertainties: Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our consolidated financial statements. The more significant of those risks and uncertainties, as well as the Company's method for mitigating the risks, are presented below and throughout the notes to the consolidated financial statements. | |||||||||
Estimates-The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are: fair value of certain invested assets, deferred acquisition costs, value of business acquired, goodwill, and future contract benefits. | |||||||||
Reinsurance-Reinsurance contracts do not relieve us from our obligations to insureds. Failure of reinsurers to honor their obligations could result in losses to the Company; consequently, allowances are established for amounts deemed uncollectible when necessary. We evaluate the financial condition of our reinsurers to minimize our exposure to losses from reinsurer insolvencies. Management believes that any liabilities arising from this contingency would not be material to the Company's financial position. | |||||||||
Investment Risk-The Company is exposed to risks that issuers of securities owned by the Company will default or that interest rates will change and cause a decrease in the value of our investments. As interest rates decline, the velocity at which these securities pay down the principal may increase. Management mitigates these risks by conservatively investing in investment-grade securities and by matching maturities of our investments with the anticipated payouts of our liabilities. | |||||||||
Liquidity Risk-The Company has investments in development stage companies, which are either seeking to raise capital to form life insurance subsidiaries in their respective states of incorporation (Arkansas, Colorado, Idaho, Minnesota and New Mexico) or have recently formed a life insurance subsidiary (South Dakota and Wyoming). There is no public market for shares of these investments, and there is no assurance that one will develop. Therefore, the shares will have limited marketability for an indefinite period of time. There is not currently, and may never be, an active market in these securities, and there is no assurance that any of these securities will ever become publicly traded or that an active trading market will develop or be sustained. Consequently, we may not be able to liquidate our investment in these securities. | |||||||||
Interest Rate Risk-Interest rate risk arises from the price sensitivity of investments to changes in interest rates. Interest and dividend income represent the greatest portion of an investment's return for most fixed maturity securities in stable interest rate environments. The changes in the fair value of such investments are inversely related to changes in market interest rates. As interest rates fall, the interest and dividend streams of existing fixed-rate investments become more valuable and fair values rise. As interest rates rise, the opposite effect occurs. The Company attempts to mitigate its exposure to adverse interest rate movements through staggering the maturities of the fixed maturity investments and through maintaining cash and other short term investments to assure sufficient liquidity to meet its obligations and to address reinvestment risk considerations. Due to the composition of our book of insurance business, we believe it is unlikely that we would encounter large surrender activity due to an interest rate increase that would force the disposal of fixed maturities at a loss. | |||||||||
Credit Risk-The Company is exposed to credit risk through counterparties and within the investment portfolio. Credit risk relates to the uncertainty associated with an obligor's ability to make timely payments of principal and interest in accordance with the contractual terms of an instrument or contract. The Company manages its credit risk through established investment credit policies and guidelines which address the quality of creditors and counterparties, concentration limits, diversification practices and acceptable risk levels. These policies and guidelines are regularly reviewed and approved by senior management. | |||||||||
Regulatory Factors-The Company is highly regulated by the jurisdictions in which our entities are domiciled and licensed to conduct business. Such regulations, among other things, limit the amount of rate increases on policies and impose restrictions on the amount and type of investments and the minimum surplus required to conduct business in the state. The impact of the regulatory initiatives in response to the recent financial crisis, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, could subject the Company to substantial additional regulation. | |||||||||
Vulnerability Due to Certain Concentrations-The Company monitors economic and regulatory developments that have the potential to impact our business. Federal legislation has allowed banks and other financial organizations to have greater participation in insurance businesses. This legislation may present an increased level of competition for sales of the Company's products. | |||||||||
New Accounting Standards | ' | ||||||||
New Accounting Standards: In February 2013, the FASB issued guidance regarding the reporting of reclassifications out of accumulated other comprehensive income (AOCI). The guidance requires entities to provide information about the amounts reclassified out of AOCI by component. Significant amounts reclassified out of AOCI that are required under U.S. GAAP to be reclassified to net income in their entirety in the same reporting period must be presented either on the face of the statement, where net income is presented, or in the footnotes. For amounts that are not required under U.S. GAAP that provide additional detail about those amounts. The Company adopted this new guidance as of January 1, 2013 with no material impact to the consolidated financial statements. | |||||||||
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740)-Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward or Tax Credit Carryforward Exists, which finalizes Proposed ASU No. EITF-13C, and requires an entity's unrecognized tax benefit to be presented in its financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with one exception. That exception states that, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The ASU applies prospectively for reporting periods beginning after December 15, 2013. Retrospective application and early adoption are also permitted. We do not expect ASU No. 2013-02 or ASU No. 2013-11 to have a material impact on our consolidated financial statements. | |||||||||
All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did not relate to accounting policies and procedures pertinent or material to the Company at this time. | |||||||||
Nature_of_Operations_and_Summa2
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Schedule of Deferred Policy Acquisition Costs | ' | ||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 2,650,957 | $ | 2,108,395 | |||||
Capitalization of commissions, sales and issue expenses | 933,702 | 1,173,683 | |||||||
Gross amortization | (861,840 | ) | (631,121 | ) | |||||
Balance at end of period | $ | 2,722,819 | $ | 2,650,957 | |||||
Noncontrolling_Interests_Table
Noncontrolling Interests (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Noncontrolling Interests [Abstract] | ' | ||||||||
Schedule of Movement In Noncontrolling Interest | ' | ||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Net loss attributable to Midwest Holding Inc. | $ | (1,950,439 | ) | $ | (1,657,687 | ) | |||
Transfers (to) from noncontrolling interests: | |||||||||
Increase in Midwest Holding Inc.'s additional paid-in | |||||||||
capital for Great Plains Financial stock purchases, | |||||||||
net of change in ownership | - | 104,977 | |||||||
Increase in Midwest Holding Inc.'s additional paid-in | |||||||||
capital for Hot Dot equity issuances, net of change in | |||||||||
ownership | - | 588,103 | |||||||
Change from net income (loss attributable to Midwest Holding Inc. | |||||||||
and transfers from noncontrolling interests | $ | (1,950,439 | ) | $ | (964,607 | ) |
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Investments [Abstract] | ' | |||||||||||||||||
Schedule of Available for Sale Investments | ' | |||||||||||||||||
Gross | Gross | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||||||
December 31, 2013: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
U.S. government obligations | $ | 2,483,199 | $ | 23,398 | $ | 43,502 | $ | 2,463,095 | ||||||||||
States and political subdivisions - general obligations | 1,147,325 | - | 107,030 | 1,040,295 | ||||||||||||||
States and political subdivisions - special revenue | 1,573,336 | - | 118,944 | 1,454,392 | ||||||||||||||
Corporate | 9,728,599 | 2,378 | 498,052 | 9,232,925 | ||||||||||||||
Total fixed maturities | 14,932,459 | 25,776 | 767,528 | 14,190,707 | ||||||||||||||
Equity securities: | ||||||||||||||||||
Preferred corporate stock | 75,000 | - | - | 75,000 | ||||||||||||||
Total equity securities | 75,000 | - | - | 75,000 | ||||||||||||||
Total | $ | 15,007,459 | $ | 25,776 | $ | 767,528 | $ | 14,265,707 | ||||||||||
December 31, 2012: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
U.S. government obligations | $ | 2,126,977 | $ | 89,748 | $ | - | $ | 2,216,725 | ||||||||||
States and political subdivisions - general obligations | 1,219,757 | 1,298 | 22,620 | 1,198,435 | ||||||||||||||
States and political subdivisions - special revenue | 1,766,140 | 2,242 | 44,229 | 1,724,153 | ||||||||||||||
Corporate | 5,502,159 | 19,630 | 127,639 | 5,394,150 | ||||||||||||||
Total fixed maturities | 10,615,033 | 112,918 | 194,488 | 10,533,463 | ||||||||||||||
Equity securities: | ||||||||||||||||||
Common corporate stock | 1,199,111 | 1,850 | 24,984 | 1,175,977 | ||||||||||||||
Preferred corporate stock | 75,000 | - | - | 75,000 | ||||||||||||||
Total equity securities | 1,274,111 | 1,850 | 24,984 | 1,250,977 | ||||||||||||||
Total | $ | 11,889,144 | $ | 114,768 | $ | 219,472 | $ | 11,784,440 | ||||||||||
Schedule of Amortized Cost, Fair Value, Credit Rating | ' | |||||||||||||||||
Amortized | Estimated Fair | |||||||||||||||||
Cost | Value | Credit Rating | ||||||||||||||||
December 31, 2013: | ||||||||||||||||||
Fixed maturities: | ||||||||||||||||||
States and political subdivisions - general obligations | ||||||||||||||||||
Maricopa County Arizona School District No. 31 | $ | 341,390 | $ | 332,112 | AA- | |||||||||||||
Schedule of Unrealized Loss of Securities | ' | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Gross | Number | Gross | Number | |||||||||||||||
Estimated | Unrealized | of | Estimated | Unrealized | of | |||||||||||||
Fair Value | Loss | Securities | Fair Value | Loss | Securities | |||||||||||||
Fixed Maturities: | ||||||||||||||||||
Less than 12 months: | ||||||||||||||||||
U.S. government obligations | $ | 578,914 | $ | 43,502 | 6 | $ | - | $ | - | - | ||||||||
States and political subdivisions - | ||||||||||||||||||
general obligations | 320,416 | 32,506 | 3 | 730,863 | 14,810 | 5 | ||||||||||||
States and political subdivisions - | ||||||||||||||||||
special revenue | 653,897 | 56,717 | 11 | 1,256,996 | 35,403 | 12 | ||||||||||||
Corporate | 7,998,855 | 498,052 | 73 | 3,607,480 | 114,620 | 22 | ||||||||||||
Greater than 12 months: | ||||||||||||||||||
States and political subdivisions - | ||||||||||||||||||
general obligations | 719,879 | 74,524 | 4 | 226,846 | 7,810 | 1 | ||||||||||||
States and political subdivisions - | ||||||||||||||||||
special revenue | 800,495 | 62,227 | 6 | 202,390 | 8,826 | 1 | ||||||||||||
Corporate | - | - | - | 86,400 | 13,019 | 1 | ||||||||||||
Total fixed maturities | $ | 11,072,456 | $ | 767,528 | 103 | $ | 6,110,975 | $ | 194,488 | 42 | ||||||||
Equity Securities: | ||||||||||||||||||
Less than 12 months: | ||||||||||||||||||
Common corporate stock | $ | - | $ | - | - | $ | 1,072,325 | $ | 24,984 | 3 | ||||||||
Total equity securities | - | - | - | 1,072,325 | 24,984 | 3 | ||||||||||||
Total | $ | 11,072,456 | $ | 767,528 | 103 | $ | 7,183,300 | $ | 219,472 | 45 | ||||||||
Schedule of Fixed Maturities | ' | |||||||||||||||||
Amortized | Estimated | |||||||||||||||||
Cost | Fair Value | |||||||||||||||||
Due in one year or less | $ | 1,325,740 | $ | 1,324,378 | ||||||||||||||
Due after one year through five years | 2,262,985 | 2,254,934 | ||||||||||||||||
Due after five years through ten years | 8,398,569 | 7,943,789 | ||||||||||||||||
Due after ten years | 2,945,165 | 2,667,606 | ||||||||||||||||
$ | 14,932,459 | $ | 14,190,707 | |||||||||||||||
Components of Net Investment Income | ' | |||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Fixed maturities | $ | 398,377 | $ | 349,677 | ||||||||||||||
Equity securities | 32,493 | 11,363 | ||||||||||||||||
Cash and short-term investments | 14,804 | 8,913 | ||||||||||||||||
Gain from equity method investments | (10,023 | ) | 36,043 | |||||||||||||||
Other | 132,634 | 131,584 | ||||||||||||||||
568,285 | 537,580 | |||||||||||||||||
Less investment expenses | (46,539 | ) | (57,397 | ) | ||||||||||||||
$ | 521,746 | $ | 480,183 | |||||||||||||||
Schedule of Mortgage Loan Activity | ' | |||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Balance at beginning of period | $ | 677,011 | $ | 915,465 | ||||||||||||||
Proceeds from payments on mortgage loans on real estate, held for investment | (11,442 | ) | (238,454 | ) | ||||||||||||||
Balance at end of period | $ | 665,569 | $ | 677,011 |
Fair_Values_of_Financial_Instr1
Fair Values of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Fair Values of Financial Instruments [Abstract] | ' | |||||||||||||||
Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis | ' | |||||||||||||||
Significant | ||||||||||||||||
Quoted | Other | Significant | ||||||||||||||
in Active | Observable | Unobservable | Estimated | |||||||||||||
Markets | Inputs | Inputs | Fair | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||
31-Dec-13 | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
U.S. government obligations | $ | - | $ | 2,463,095 | $ | - | $ | 2,463,095 | ||||||||
States and political subdivisions - general obligations | - | 1,040,295 | - | 1,040,295 | ||||||||||||
States and political subdivisions - special revenue | - | 1,454,392 | - | 1,454,392 | ||||||||||||
Corporate | - | 9,232,925 | - | 9,232,925 | ||||||||||||
Total fixed maturities | - | 14,190,707 | - | 14,190,707 | ||||||||||||
Equity securities: | ||||||||||||||||
Preferred corporate stock | - | 75,000 | - | 75,000 | ||||||||||||
Total equity securities | - | 75,000 | - | 75,000 | ||||||||||||
Total | $ | - | $ | 14,265,707 | $ | - | $ | 14,265,707 | ||||||||
31-Dec-12 | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
U.S. government obligations | $ | - | $ | 2,216,725 | $ | - | $ | 2,216,725 | ||||||||
States and political subdivisions - general obligations | - | 1,198,435 | - | 1,198,435 | ||||||||||||
States and political subdivisions - special revenue | - | 1,724,153 | - | 1,724,153 | ||||||||||||
Corporate | - | 5,394,150 | - | 5,394,150 | ||||||||||||
Total fixed maturities | - | 10,533,463 | - | 10,533,463 | ||||||||||||
Equity securities: | ||||||||||||||||
Common corporate stock | 1,175,977 | - | - | 1,175,977 | ||||||||||||
Preferred corporate stock | - | 75,000 | - | 75,000 | ||||||||||||
Total equity securities | 1,175,977 | 75,000 | - | 1,250,977 | ||||||||||||
Total | $ | 1,175,977 | $ | 10,608,463 | $ | - | $ | 11,784,440 | ||||||||
Schedule of Financial Assets and Liabilities at Fair Value | ' | |||||||||||||||
31-Dec-13 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets | ||||||||||||||||
for Identical | Significant Other | Significant | ||||||||||||||
Assets and | Observable | Unobservable | ||||||||||||||
Carrying | Liabilities | Inputs | Inputs | Fair | ||||||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | Value | ||||||||||||
Assets: | ||||||||||||||||
Mortgage loans on real estate, held for | ||||||||||||||||
investment | $ | 665,569 | $ | - | $ | - | $ | 690,591 | $ | 690,591 | ||||||
Policy loans | 369,513 | - | - | 369,513 | 369,513 | |||||||||||
Notes receivable | 27,383 | - | - | 27,383 | 27,383 | |||||||||||
Short-term investments | 1,180,314 | 1,180,314 | - | - | 1,180,314 | |||||||||||
Cash and cash equivalents | 3,377,978 | 3,377,978 | - | - | 3,377,978 | |||||||||||
Liabilities: | ||||||||||||||||
Policyholder deposits | ||||||||||||||||
(Investment-type contracts) | 14,739,655 | - | - | 14,739,655 | 14,739,655 | |||||||||||
Surplus Notes and Accrued Interest Payable | 714,000 | - | - | 704,192 | 704,192 | |||||||||||
31-Dec-12 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets | ||||||||||||||||
for Identical | Significant Other | Significant | ||||||||||||||
Assets and | Observable | Unobservable | ||||||||||||||
Carrying | Liabilities | Inputs | Inputs | Fair | ||||||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | Value | ||||||||||||
Assets: | ||||||||||||||||
Mortgage loans on real estate, held for | ||||||||||||||||
investment | $ | 677,011 | $ | - | $ | - | $ | 706,434 | $ | 706,434 | ||||||
Policy loans | 274,664 | - | - | 274,664 | 274,664 | |||||||||||
Notes receivable | 27,383 | - | - | 27,383 | 27,383 | |||||||||||
Short-term investments | 1,171,280 | 1,171,280 | - | - | 1,171,280 | |||||||||||
Cash and cash equivalents | 4,346,555 | 4,346,555 | - | - | 4,346,555 | |||||||||||
Liabilities: | ||||||||||||||||
Policyholder deposits | ||||||||||||||||
(Investment-type contracts) | 12,865,671 | - | - | 13,163,620 | 13,163,620 | |||||||||||
Surplus Notes and Accrued Interest Payable | 782,000 | - | - | 777,218 | 777,218 |
Income_Tax_Matters_Tables
Income Tax Matters (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Matters [Abstract] | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Deferred tax assets: | |||||||||
Loss carryforwards | $ | 6,594,919 | $ | 6,061,739 | |||||
Capitalized costs | 821,248 | 898,240 | |||||||
Unrealized losses on investments | 252,196 | 28,181 | |||||||
Benefit reserves | 1,235,692 | 1,157,055 | |||||||
Total deferred tax assets | 8,904,055 | 8,145,215 | |||||||
Less valuation allowance | (7,132,984 | ) | (6,208,648 | ) | |||||
Total deferred tax assets, net of valuation allowance | 1,771,071 | 1,936,567 | |||||||
Deferred tax liabilities: | |||||||||
Policy acquisition costs | 978,902 | 1,018,676 | |||||||
Due premiums | 222,067 | 278,842 | |||||||
Value of business acquired | 279,402 | 327,949 | |||||||
Intangible assets | 238,000 | 238,000 | |||||||
Property and equipment | 52,700 | 73,100 | |||||||
Total deferred tax liabilities | 1,771,070 | 1,936,567 | |||||||
Net deferred tax assets | $ | - | $ | - | |||||
Schedule of Effective Tax Rate Reconciliation | ' | ||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Computed expected income tax benefit | $ | (669,045 | ) | $ | (563,614 | ) | |||
Increase (reduction) in income taxes resulting from: | |||||||||
Meals, entertainment and political contributions | 29,497 | 21,585 | |||||||
Dividends received deduction | (5,452 | ) | (20,284 | ) | |||||
True-up of provision to actual | - | (110,899 | ) | ||||||
Deconsolidation of Hot Dot, Inc. | - | (336,566 | ) | ||||||
Noncontrolling interests | (17,632 | ) | - | ||||||
Other | (37,689 | ) | 105,426 | ||||||
(31,276 | ) | (340,738 | ) | ||||||
Tax benefit before valuation allowance | (700,321 | ) | (904,352 | ) | |||||
Change in valuation allowance | 700,321 | 904,352 | |||||||
Net income tax expense | $ | - | $ | - |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Reinsurance [Abstract] | ' | |||||||||||||||||
Summary of Significant Reinsurance Amounts | ' | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Balance sheets: | ||||||||||||||||||
Benefit and claim reserves assumed | $ | 2,814,704 | $ | 2,887,596 | ||||||||||||||
Benefit and claim reserves ceded | 30,660,618 | 32,265,463 | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
Statements of comprehensive income: | ||||||||||||||||||
Premiums assumed | $ | 30,002 | $ | 32,469 | ||||||||||||||
Premiums ceded | 362,851 | 410,680 | ||||||||||||||||
Benefits assumed | 42,099 | 79,287 | ||||||||||||||||
Benefits ceded | 760,017 | 675,990 | ||||||||||||||||
Commissions assumed | 38 | 66 | ||||||||||||||||
Commissions ceded | 4,432 | 12,849 | ||||||||||||||||
Schedule of Significant Reinsurance Balances | ' | |||||||||||||||||
Recoverable on | Total Amount | |||||||||||||||||
Recoverable | Recoverable | Benefit | Ceded | Recoverable | ||||||||||||||
AM Best | on Paid | on Unpaid | Reserves/Deposit- | Due | from | |||||||||||||
Reinsurer | Rating | Losses | Losses | type Contracts | Premiums | Reinsurer | ||||||||||||
SNL | NR | $ | - | $ | 98,542 | $ | 17,262,833 | $ | 67,033 | $ | 17,294,342 | |||||||
Optimum Re Insurance Company | A- | - | 19,008 | 464,031 | - | 483,039 | ||||||||||||
Sagicor Life Insurance Company | A- | - | 230,487 | 12,871,122 | 218,372 | 12,883,237 | ||||||||||||
$ | 348,037 | $ | 30,597,986 | $ | 285,405 | $ | 30,660,618 | |||||||||||
DepositType_Contracts_Tables
Deposit-Type Contracts (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Deposit Type Contracts [Abstract] | ' | ||||||||
Schedule of Contracts | ' | ||||||||
Year Ended | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Beginning balance | $ | 12,865,671 | $ | 11,933,276 | |||||
Change in deposit-type contracts from Old Reliance | |||||||||
and Great Plains Life acquisition | - | 737,230 | |||||||
Change in deposit-type contracts assumed from SNL | (66,572 | ) | (219,011 | ) | |||||
Change in deposit-type contracts fully ceded by Capital Reserve | (683,070 | ) | (958,644 | ) | |||||
Deposits received | 2,636,959 | 1,397,385 | |||||||
Investment earnings | 253,189 | 96,225 | |||||||
Withdrawals | (266,522 | ) | (120,790 | ) | |||||
Ending balance | $ | 14,739,655 | $ | 12,865,671 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies [Abstract] | ' | |||
Schedule of Future Minimum Payments | ' | |||
2014 | $ | 167,002 | ||
2015 | 144,038 | |||
2016 | 137,088 | |||
2017 | 133,603 | |||
2018 | 136,557 | |||
Later years | 771,222 | |||
Total | $ | 1,489,510 |
Statutory_Net_Income_and_Surpl1
Statutory Net Income and Surplus (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Statutory Net Income and Surplus [Abstract] | ' | ||||||
Statutory Accounting Practices Disclosure | ' | ||||||
Statutory Capital and Surplus as of | |||||||
31-Dec-13 | 31-Dec-12 | ||||||
American Life | $ | 1,840,429 | $ | 1,981,613 | |||
Capital Reserve | $ | 1,280,970 | $ | 1,396,147 | |||
Great Plains Life | $ | 2,103,988 | $ | 2,180,787 | |||
Statutory Net Loss for the Years Ended December 31, | |||||||
2013 | 2012 | ||||||
American Life | $ | 154,371 | $ | 911,049 | |||
Capital Reserve | $ | 115,884 | $ | 66,813 | |||
Great Plains Life | $ | 160,698 | $ | 116,914 |
Surplus_Notes_Tables
Surplus Notes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Surplus Notes [Abstract] | ' | ||||||||||
Summary of Surplus Notes | ' | ||||||||||
Creditor | Issue Date | Maturity Date | Face Amount | Interest Rate | |||||||
First American Capital Corporation | 1-Sep-06 | 1-Sep-16 | $ | 250,000 | 7 | % | |||||
David G. Elmore | 4-Aug-11 | 1-Aug-16 | 300,000 | 5 | % | ||||||
Consolidation_and_Deconsolidat1
Consolidation and Deconsolidation of Hot Dot (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Consolidation and Deconsolidation of Hot Dot [Abstract] | ' | |||||
Summary of Cash Impact of Deconsolidation | ' | |||||
Investments, available for sale, equity securities | $ | 39,735 | ||||
Notes receivable | 75,000 | |||||
Intangible asset | 989,900 | |||||
Property and equipment | 54,750 | |||||
Gain on deconsolidation | 278,513 | |||||
Equity investment in Hot Dot at deconsolidation date | (570,190 | ) | ||||
Change in noncontrolling interest | (3,175,575 | ) | ||||
Other liabilities | (15,000 | ) | ||||
$ | (2,322,867 | ) | ||||
Schedule of Pro Forma Information | ' | |||||
Year Ended | ||||||
31-Dec-12 | ||||||
Premiums | $ | 4,208,659 | ||||
Other income | 719,486 | |||||
Expenses | (6,730,258 | ) | ||||
Net loss | (1,802,113 | ) | ||||
Less: Loss attributable to noncontrolling interests | (24,091 | ) | ||||
Net loss attributable to Midwest Holding Inc. | (1,778,022 | ) | ||||
Net loss attributable to Midwest Holding Inc. per common share | $ | (0.20 | ) |
Investment_in_Great_Plains_Fin1
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation [Abstract] | ' | ||||
Schedule of Assets Acquired and Liabilities Assumed | ' | ||||
Investments, available for sale, fixed maturities | $ | 519,540 | |||
Investments, available for sale, equity securities | 963,486 | ||||
Short-term investments | 1,168,530 | ||||
Cash and cash equivalents | 4,087,454 | ||||
Amounts recoverable from reinsurers | 38,754 | ||||
Interest and dividends due and accrued | 11,692 | ||||
Due premiums | 92,315 | ||||
Furniture and equipment, net | 22,383 | ||||
Other assets | 1,417,224 | ||||
Benefit reserves | (1,221,816 | ) | |||
Policy claims | (38,380 | ) | |||
Deposit-type contracts | (737,230 | ) | |||
Other liabilities | (279,268 | ) | |||
Net assets acquired | 6,044,684 | ||||
Change in noncontrolling interests | (4,751,930 | ) | |||
Equity investment in Great Plains Financial at initial consolidation date | (1,174,142 | ) | |||
Gain on initial consolidation of Great Plains Financial | $ | 118,612 | |||
Schedule of Pro Forma Information | ' | ||||
Year Ended | |||||
31-Dec-12 | |||||
Premiums | $ | 5,494,457 | |||
Other income | 1,176,681 | ||||
Expenses | (9,419,078 | ) | |||
Net loss | (2,747,940 | ) | |||
Less: Loss attributable to noncontrolling interests | (794,485 | ) | |||
Net loss attributable to Midwest Holding Inc. | (1,953,455 | ) | |||
Net loss attributable to Midwest Holding Inc. per common share | $ | (0.21 | ) | ||
Nature_of_Operations_and_Summa3
Nature of Operations and Summary of Significant Accounting Policies (Schedule of Deferred Acquisition Costs) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ' | ' |
Balance at beginning of period | $2,650,957 | $2,108,395 |
Capitalization of commissions, sales and issue expenses | 933,702 | 1,173,683 |
Gross amortization | -861,840 | -631,121 |
Balance at the end of period | $2,722,819 | $2,650,957 |
Nature_of_Operations_and_Summa4
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 07, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Jun. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Aug. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2009 | |
Retained Earnings [Member] | Director [Member] | Director [Member] | Director [Member] | Residential Real Estate [Member] | Furniture and Fixtures [Member] | Furniture and Fixtures [Member] | Software [Member] | Hot Dot, Inc [Member] | Capital Reserve Life Insurance Company [Member] | Capital Reserve Life Insurance Company [Member] | Capital Reserve Life Insurance Company [Member] | Capital Reserve Life Insurance Company [Member] | Security National Life Insurance Company [Member] | Security National Life Insurance Company [Member] | Old Reliance [Member] | Old Reliance [Member] | Old Reliance [Member] | Old Reliance [Member] | Great Plains Financial Corporation [Member] | Great Plains Financial Corporation [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Intra State Offering [Member] | Intra State Offering [Member] | ||||
Minimum [Member] | Maximum [Member] | Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | 2,000,000 |
Stock Issued During Period Shares Issue Price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6 | $5 |
Percentage Of Oversale On Final Offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Weighted average number of shares outstanding | 9,111,004 | 9,106,717 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | 25.70% | 24.50% | ' | ' | ' | ' |
Cost Of Acquired Entity In Addition To Statutory Capital and Surplus | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $116,326 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuances of common stock, net of capital raising expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,400,000 | ' |
Conversion Ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.3 | ' | 1.3 | ' |
Preferred Stock, Shares Issued (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74,159 | 74,159 | 74,159 | ' |
Cash payment for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,050,000 | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' |
Net assets acquired | ' | 6,044,684 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | ' | ' | ' | ' | ' | '50 years | '3 years | '7 years | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Capitalized Value of Business Acquired Asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,633 | 11,633 | ' | ' | 34,801 | 34,801 | 96,353 | 117,542 | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Remaining Amortization Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred acquisition costs | 861,840 | 631,121 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance Ceding Commission Paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 375,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Asset Representing Ceding Commission | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 348,010 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ceding Commission Asset, Annual Amortization Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 34,801 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 2,000,000 | ' | ' |
Preferred stock, shares outstanding (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74,159 | 74,159 | ' | ' |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized (in shares) | 120,000,000 | 120,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued (in shares) | 9,120,239 | 9,106,717 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares outstanding (in shares) | 9,120,239 | 9,106,717 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number Of Shares Approved For Issuance (in shares) | ' | ' | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due from Related Parties | ' | ' | ' | ' | 1,917 | 13,417 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price (in dollars per share) | ' | ' | ' | ' | ' | ' | $1.15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non cash compensation | 11,500 | 11,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-For-Sale Securities, Equity Securities | 75,000 | 1,250,977 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation | 167,982 | 154,702 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 545,646 | 377,664 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Acquisitions (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24.70% | ' | ' | ' | ' | ' |
Value of business acquired | $821,771 | $964,557 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $824,485 | ' | ' | ' | ' | ' | ' |
Noncontrolling_Interests_Detai
Noncontrolling Interests (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net loss attributable to Midwest Holding Inc. | ($1,950,439) | ($1,657,687) |
Transfers (to) from noncontrolling interests: | ' | ' |
Increase (Decrease) in Midwest Holding Inc's additional paid-in capital | -97,181 | 4,827,013 |
Change in equity from net loss attributable to Midwest Holding Inc. and excluding impact of transfers from noncontrolling interests | 1,950,439 | 964,607 |
Great Plains Financial Corporation [Member] | ' | ' |
Transfers (to) from noncontrolling interests: | ' | ' |
Increase (Decrease) in Midwest Holding Inc's additional paid-in capital | ' | 104,977 |
Hot Dot [Member] | ' | ' |
Transfers (to) from noncontrolling interests: | ' | ' |
Increase (Decrease) in Midwest Holding Inc's additional paid-in capital | ' | $588,103 |
Investments_Schedule_of_Availa
Investments (Schedule of Available for Sale Investments) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Amortized Cost | $15,007,459 | $11,889,144 |
Gross Unrealized Gains | 25,776 | 114,768 |
Gross Unrealized Losses | 767,528 | 219,472 |
Estimated Fair Value | 14,265,707 | 11,784,440 |
Fixed Maturities [Member] | ' | ' |
Amortized Cost | 14,932,459 | 10,615,033 |
Gross Unrealized Gains | 25,776 | 112,918 |
Gross Unrealized Losses | 767,528 | 194,488 |
Estimated Fair Value | 14,190,707 | 10,533,463 |
Fixed Maturities [Member] | Us Treasury and Government [Member] | ' | ' |
Amortized Cost | 2,483,199 | 2,126,977 |
Gross Unrealized Gains | 23,398 | 89,748 |
Gross Unrealized Losses | 43,502 | ' |
Estimated Fair Value | 2,463,095 | 2,216,725 |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ' | ' |
Amortized Cost | 1,147,325 | 1,219,757 |
Gross Unrealized Gains | ' | 1,298 |
Gross Unrealized Losses | 107,030 | 22,620 |
Estimated Fair Value | 1,040,295 | 1,198,435 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ' | ' |
Amortized Cost | 1,573,336 | 1,766,140 |
Gross Unrealized Gains | ' | 2,242 |
Gross Unrealized Losses | 118,944 | 44,229 |
Estimated Fair Value | 1,454,392 | 1,724,153 |
Fixed Maturities [Member] | Corporate Debt Securities [Member] | ' | ' |
Amortized Cost | 9,728,599 | 5,502,159 |
Gross Unrealized Gains | 2,378 | 19,630 |
Gross Unrealized Losses | 498,052 | 127,639 |
Estimated Fair Value | 9,232,925 | 5,394,150 |
Equity Securities [Member] | ' | ' |
Amortized Cost | 75,000 | 1,274,111 |
Gross Unrealized Gains | ' | 1,850 |
Gross Unrealized Losses | ' | 24,984 |
Estimated Fair Value | 75,000 | 1,250,977 |
Equity Securities [Member] | Common Stock [Member] | ' | ' |
Amortized Cost | ' | 1,199,111 |
Gross Unrealized Gains | ' | 1,850 |
Gross Unrealized Losses | ' | 24,984 |
Estimated Fair Value | ' | 1,175,977 |
Equity Securities [Member] | Preferred Stock [Member] | ' | ' |
Amortized Cost | 75,000 | 75,000 |
Gross Unrealized Gains | ' | ' |
Gross Unrealized Losses | ' | ' |
Estimated Fair Value | $75,000 | $75,000 |
Investments_Schedule_of_Amorti
Investments (Schedule of Amortized Cost, Fair Value, Credit Rating) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
Us States and Political Subdivisions Debt Securities [Member] | |||
Amortized Cost | $14,932,459 | $10,615,033 | $341,390 |
Estimated Fair Value | ' | ' | $332,112 |
Credit Rating | ' | ' | 'AA- |
Investments_Schedule_of_Unreal
Investments (Schedule of Unrealized Loss of Securities) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Estimated Fair Value, Total | $11,072,456 | $7,183,300 |
Gross Unrealized Loss, Total | 767,528 | 219,472 |
Number of Securities, Total | 103 | 45 |
Fixed Maturities [Member] | ' | ' |
Estimated Fair Value, Total | 11,072,456 | 6,110,975 |
Gross Unrealized Loss, Total | 767,528 | 194,488 |
Number of Securities, Total | 103 | 42 |
Fixed Maturities [Member] | Us Treasury and Government [Member] | ' | ' |
Estimated Fair Value, Less than 12 months | 578,914 | ' |
Gross Unrealized Loss, Less than 12 months | 43,502 | ' |
Number of Securities, Less than 12 months | 6 | ' |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ' | ' |
Estimated Fair Value, Less than 12 months | 320,416 | 730,863 |
Gross Unrealized Loss, Less than 12 months | 32,506 | 14,810 |
Number of Securities, Less than 12 months | 3 | 5 |
Estimated Fair value, Greater than 12 months | 719,879 | 226,846 |
Gross Unrealized Loss, Greater than 12 months | 74,524 | 7,810 |
Number of Securities, Greater than 12 months | 4 | 1 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ' | ' |
Estimated Fair Value, Less than 12 months | 653,897 | 1,256,996 |
Gross Unrealized Loss, Less than 12 months | 56,717 | 35,403 |
Number of Securities, Less than 12 months | 11 | 12 |
Estimated Fair value, Greater than 12 months | 800,495 | 202,390 |
Gross Unrealized Loss, Greater than 12 months | 62,227 | 8,826 |
Number of Securities, Greater than 12 months | 6 | 1 |
Fixed Maturities [Member] | Corporate Debt Securities [Member] | ' | ' |
Estimated Fair Value, Less than 12 months | 7,998,855 | 3,607,480 |
Gross Unrealized Loss, Less than 12 months | 498,052 | 114,620 |
Number of Securities, Less than 12 months | 73 | 22 |
Estimated Fair value, Greater than 12 months | ' | 86,400 |
Gross Unrealized Loss, Greater than 12 months | ' | 13,019 |
Number of Securities, Greater than 12 months | ' | 1 |
Equity Securities [Member] | ' | ' |
Estimated Fair Value, Total | ' | 1,072,325 |
Gross Unrealized Loss, Total | ' | 24,984 |
Number of Securities, Total | ' | 3 |
Equity Securities [Member] | Common Stock [Member] | ' | ' |
Estimated Fair Value, Less than 12 months | ' | 1,072,325 |
Gross Unrealized Loss, Less than 12 months | ' | $24,984 |
Number of Securities, Less than 12 months | ' | 3 |
Investments_Schedule_of_Fixed_
Investments (Schedule of Fixed Maturities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Investments [Abstract] | ' | ' |
Amortized Cost, Due in one year or less | $1,325,740 | ' |
Amortized Cost, Due after one year through five years | 2,262,985 | ' |
Amortized Cost, Due after five years through ten years | 8,398,569 | ' |
Amortized Cost, Due after ten years | 2,945,165 | ' |
Available-for-sale Securities, Debt Maturities, Amortized Cost | 14,932,459 | 10,615,033 |
Estimated Fair Value, Due in one year or less | 1,324,378 | ' |
Estimated Fair Value, Due after one year through five years | 2,254,934 | ' |
Estimated Fair Value, Due after five years through ten years | 7,943,789 | ' |
Estimated Fair Value, Due after ten years | 2,667,606 | ' |
Available-for-sale Securities, Debt Securities, Estimated Fair Value | $14,190,707 | $10,533,463 |
Investments_Components_of_Net_
Investments (Components of Net Investment Income) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net investment income | $521,746 | $480,183 |
Equity in the net (loss) income of unconsolidated subsidiaries | -10,023 | 36,043 |
Investment Income Insurance Entity Including Expenses | 568,285 | 537,580 |
Less investment expenses | -46,539 | -57,397 |
Fixed Maturities [Member] | ' | ' |
Net investment income | 398,377 | 349,677 |
Equity Securities [Member] | ' | ' |
Net investment income | 32,493 | 11,363 |
Cash and Cash Equivalents [Member] | ' | ' |
Net investment income | 14,804 | 8,913 |
Equity Method Investments [Member] | ' | ' |
Net investment income | -10,023 | 36,043 |
Other Long Term Investment [Member] | ' | ' |
Net investment income | $132,634 | $131,584 |
Investments_Schedule_of_Mortga
Investments (Schedule of Mortgage Loan Activity) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Investments [Abstract] | ' | ' |
Balance at beginning of period | $677,011 | $915,465 |
Proceeds from payments on mortgage loans on real estate, held for investment | -11,442 | -238,454 |
Balance at end of period | $665,569 | $677,011 |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Investments [Abstract] | ' | ' |
Number Of Debt Securities | 1 | ' |
Percentage Of Debt Securities | 10.00% | ' |
Separate Account Assets | $2,967,441 | $2,603,290 |
Assets On Deposits Fair Value | 2,912,017 | 2,668,972 |
Proceeds From Sale Of Available-For-Sale Securities | 7,088,586 | 12,342,364 |
Available-for-sale Securities, Gross Realized Gains | 145,124 | 188,486 |
Available-for-sale Securities, Gross Realized Losses | $139,388 | $54,366 |
Fair_Values_of_Financial_Instr2
Fair Values of Financial Instruments (Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | $14,265,707 | $11,784,440 |
Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 14,190,707 | 10,533,463 |
Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 75,000 | 1,250,977 |
Us Treasury and Government [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 2,463,095 | 2,216,725 |
States and Political Subdivisions General Obligations [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 1,040,295 | 1,198,435 |
States and Political Subdivisions Special Revenue [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 1,454,392 | 1,724,153 |
Corporate Debt Securities [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 9,232,925 | 5,394,150 |
Common Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | 1,175,977 |
Preferred Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 75,000 | 75,000 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | 1,175,977 |
Fair Value, Inputs, Level 1 [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | 1,175,977 |
Fair Value, Inputs, Level 1 [Member] | Us Treasury and Government [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | States and Political Subdivisions General Obligations [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | States and Political Subdivisions Special Revenue [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | 1,175,977 |
Fair Value, Inputs, Level 1 [Member] | Preferred Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 14,265,707 | 10,608,463 |
Fair Value, Inputs, Level 2 [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 14,190,707 | 10,533,463 |
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 75,000 | 75,000 |
Fair Value, Inputs, Level 2 [Member] | Us Treasury and Government [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 2,463,095 | 2,216,725 |
Fair Value, Inputs, Level 2 [Member] | States and Political Subdivisions General Obligations [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 1,040,295 | 1,198,435 |
Fair Value, Inputs, Level 2 [Member] | States and Political Subdivisions Special Revenue [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 1,454,392 | 1,724,153 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 9,232,925 | 5,394,150 |
Fair Value, Inputs, Level 2 [Member] | Common Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 2 [Member] | Preferred Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | 75,000 | 75,000 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Us Treasury and Government [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | States and Political Subdivisions General Obligations [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | States and Political Subdivisions Special Revenue [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | Fixed Maturities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Common Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Preferred Stock [Member] | Equity Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Investments, available for sale, equity securities | ' | ' |
Fair_Values_of_Financial_Instr3
Fair Values of Financial Instruments (Schedule of Financial Assets and Liabilities at Fair Value) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | $665,569 | $677,011 | ' |
Short-term investments | 1,180,314 | 1,171,280 | ' |
Cash and cash equivalents | 3,377,978 | 4,346,555 | 2,469,725 |
Liabilities: | ' | ' | ' |
Surplus Notes and Accrued Interest Payable | 550,000 | 650,000 | ' |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ' | ' | ' |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | 665,569 | 677,011 | ' |
Policy loans | 369,513 | 274,664 | ' |
Notes receivable | 27,383 | 27,383 | ' |
Short-term investments | 1,180,314 | 1,171,280 | ' |
Cash and cash equivalents | 3,377,978 | 4,346,555 | ' |
Liabilities: | ' | ' | ' |
Policyholder deposits (Investment-type contracts) | 14,739,655 | 12,865,671 | ' |
Surplus Notes and Accrued Interest Payable | 714,000 | 782,000 | ' |
Estimate Of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | 690,591 | 706,434 | ' |
Policy loans | 369,513 | 274,664 | ' |
Notes receivable | 27,383 | 27,383 | ' |
Short-term investments | 1,180,314 | 1,171,280 | ' |
Cash and cash equivalents | 3,377,978 | 4,346,555 | ' |
Liabilities: | ' | ' | ' |
Policyholder deposits (Investment-type contracts) | 14,739,655 | 13,163,620 | ' |
Surplus Notes and Accrued Interest Payable | 704,192 | 777,218 | ' |
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | ' | ' | ' |
Policy loans | ' | ' | ' |
Notes receivable | ' | ' | ' |
Short-term investments | 1,180,314 | 1,171,280 | ' |
Cash and cash equivalents | 3,377,978 | 4,346,555 | ' |
Liabilities: | ' | ' | ' |
Policyholder deposits (Investment-type contracts) | ' | ' | ' |
Surplus Notes and Accrued Interest Payable | ' | ' | ' |
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | ' | ' | ' |
Policy loans | ' | ' | ' |
Notes receivable | ' | ' | ' |
Short-term investments | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' |
Liabilities: | ' | ' | ' |
Policyholder deposits (Investment-type contracts) | ' | ' | ' |
Surplus Notes and Accrued Interest Payable | ' | ' | ' |
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Assets: | ' | ' | ' |
Mortgage loans on real estate, held for investment | 690,561 | 706,434 | ' |
Policy loans | 369,513 | 274,664 | ' |
Notes receivable | 27,383 | 27,383 | ' |
Short-term investments | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' |
Liabilities: | ' | ' | ' |
Policyholder deposits (Investment-type contracts) | 14,739,655 | 13,163,620 | ' |
Surplus Notes and Accrued Interest Payable | $704,192 | $777,218 | ' |
Fair_Values_of_Financial_Instr4
Fair Values of Financial Instruments (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Values of Financial Instruments [Abstract] | ' | ' |
Accrued interest | $164,000 | $132,000 |
Income_Tax_Matters_Schedule_of
Income Tax Matters (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Loss carryforwards | $6,594,919 | $6,061,739 |
Capitalized costs | 821,248 | 898,240 |
Unrealized losses on investments | 252,196 | 28,181 |
Benefit reserves | 1,235,692 | 1,157,055 |
Total deferred tax assets | 8,904,055 | 8,145,215 |
Less valuation allowance | -7,132,984 | -6,208,648 |
Total deferred tax assets, net of valuation allowance | 1,771,071 | 1,936,567 |
Deferred tax liabilities: | ' | ' |
Policy acquisition costs | 978,902 | 1,018,676 |
Due premiums | 222,067 | 278,842 |
Value of business acquired | 279,402 | 327,949 |
Intangible assets | 238,000 | 238,000 |
Property and equipment | 52,700 | 73,100 |
Total deferred tax liabilities | 1,771,070 | 1,936,567 |
Net deferred tax assets | ' | ' |
Income_Tax_Matters_Schedule_of1
Income Tax Matters (Schedule of Effective Tax Rate Reconciliation) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Matters [Abstract] | ' | ' |
Computed expected income tax benefit | ($669,045) | ($563,614) |
Increase (reduction) in income taxes resulting from: | ' | ' |
Meals, entertainment and political contributions | -29,497 | -21,585 |
Dividends received deduction | 5,452 | 20,284 |
True-up of provision to actual | ' | 110,899 |
Deconsolidation of Hot Dot, Inc. | ' | 336,566 |
Noncontrolling interests | 17,632 | ' |
Other | 37,689 | -105,426 |
Income Tax Reconciliation, Deductions | -31,276 | -340,738 |
Tax benefit before valuation allowance | -700,321 | -904,352 |
Change in valuation allowance | 700,321 | 904,352 |
Net income tax expense | ' | ' |
Income_Tax_Matters_Narrative_D
Income Tax Matters (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Minimum [Member] | Maximum [Member] | |||
Deferred Tax Assets, Valuation Allowance | $7,132,984 | $6,208,648 | ' | ' |
Operating Loss Carryforwards, Expiration Dates | ' | ' | 1-Jan-24 | 1-Jan-28 |
Reinsurance_Summary_of_Signifi
Reinsurance (Summary of Significant Reinsurance Amounts) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Balance sheets: | ' | ' |
Benefit and claim reserves assumed | $2,814,704 | $2,887,596 |
Benefit and claim reserves ceded | 30,660,618 | 32,265,463 |
Statements of comprehensive income: | ' | ' |
Premiums assumed | 30,002 | 32,469 |
Premiums ceded | 362,851 | 410,680 |
Benefits assumed | 42,099 | 79,287 |
Benefits ceded | 760,017 | 675,990 |
Commissions assumed | 38 | 66 |
Commissions ceded | $4,432 | $12,849 |
Reinsurance_Schedule_of_Signif
Reinsurance (Schedule of Significant Reinsurance Balances) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Security National Life Insurance Company [Member] | Optimum Reinsurance Company [Member] | Sagicor Life Insurance Company [Member] | |||
AM Best Rating | ' | ' | 'NR | 'A- | 'A- |
Recoverable on Paid Losses | ' | ' | ' | ' | ' |
Recoverable on Unpaid Losses | 348,037 | ' | 98,542 | 19,008 | 230,487 |
Recoverable on Benefit Reserves/Deposit-type Contracts | 30,597,986 | ' | 17,262,833 | 464,031 | 12,871,122 |
Ceded Due Premiums | 285,405 | ' | 67,033 | ' | 218,372 |
Total Amount Recoverable from Reinsurer | $30,660,618 | $32,265,463 | $17,294,342 | $483,039 | $12,883,237 |
Reinsurance_Narrative_Details
Reinsurance (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2000 | Dec. 31, 1999 | Dec. 31, 2013 | Dec. 31, 2012 |
Security National Life Insurance Company [Member] | Security National Life Insurance Company [Member] | Sagicor Life Insurance Company [Member] | Sagicor Life Insurance Company [Member] | Sagicor Life Insurance Company [Member] | Sagicor Life Insurance Company [Member] | |||
Percentage Of Co Insurance Agreement | ' | ' | 100.00% | ' | 25.00% | 75.00% | ' | ' |
Premiums, Percentage Assumed to Net | ' | ' | 100.00% | ' | ' | 75.00% | ' | ' |
Amounts recoverable from reinsurers | $30,660,618 | $32,265,463 | $17,294,342 | $18,266,601 | ' | ' | $12,883,237 | $13,530,051 |
Percentage Of Reinsurance Recoverables | ' | ' | 98.00% | ' | ' | ' | ' | ' |
Reinsurance Recoverable, Guarantee Benefits | ' | ' | $17,300,000 | ' | ' | ' | ' | ' |
DepositType_Contracts_Schedule
Deposit-Type Contracts (Schedule of Contracts) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Beginning balance | $12,865,671 | $11,933,276 |
Deposits received | 2,636,959 | 1,397,385 |
Investment earnings | 253,189 | 96,225 |
Withdrawals, net | -266,522 | -120,790 |
Ending balance | 14,739,655 | 12,865,671 |
Great Plains Financial Corporation [Member] | ' | ' |
Change in deposit-type contracts from Great Plains Life acquisition | ' | 737,230 |
Security National Life Insurance Company [Member] | ' | ' |
Change in deposit-type contracts assumed from Security National | -66,572 | -219,011 |
Capital Reserve Life Insurance Company [Member] | ' | ' |
Change in deposit-type contracts fully ceded by Capital Reserve | ($683,070) | ($958,644) |
DepositType_Contracts_Narrativ
Deposit-Type Contracts (Narrative) (Details) (Security National Life Insurance Company [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Security National Life Insurance Company [Member] | ' |
Premiums, Percentage Assumed to Net | 100.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies [Abstract] | ' | ' |
Operating Leases, Rent Expense | $175,476 | $147,957 |
2014 | 167,002 | ' |
2015 | 144,038 | ' |
2016 | 137,088 | ' |
2017 | 133,603 | ' |
2018 | 136,557 | ' |
Later years | 771,222 | ' |
Total | $1,489,510 | ' |
Statutory_Net_Income_and_Surpl2
Statutory Net Income and Surplus (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
American Life and Security Corporation [Member] | ' | ' |
Statutory capital and surplus | $1,840,429 | $1,981,613 |
Statutory net income (loss) | 154,371 | 911,049 |
Capital Reserve Life Insurance Company [Member] | ' | ' |
Statutory capital and surplus | 1,280,970 | 1,396,147 |
Statutory net income (loss) | 115,884 | 66,813 |
Great Plains Financial Corporation [Member] | ' | ' |
Statutory capital and surplus | 2,103,988 | 2,180,787 |
Statutory net income (loss) | $160,698 | $116,914 |
Surplus_Notes_Summary_of_Surpl
Surplus Notes (Summary of Surplus Notes) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Surplus Notes [Member] | Surplus Notes [Member] | |||
First American Capital Corporation [Member] | David Elmore [Member] | |||
Issue Date | ' | ' | 1-Sep-06 | 4-Aug-11 |
Maturity Date | ' | ' | 1-Sep-16 | 1-Aug-16 |
Face Amount | $550,000 | $650,000 | $250,000 | $300,000 |
Interest Rate | ' | ' | 7.00% | 5.00% |
Surplus_Notes_Narrative_Detail
Surplus Notes (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
Surplus Notes [Member] | |||
Interest Payable | $164,000 | $132,000 | $164,449 |
Debt Instrument, Periodic Payment, Principal | ' | ' | 100,000 |
Debt Instrument, Periodic Payment, Interest | ' | ' | $7,000 |
Consolidation_and_Deconsolidat2
Consolidation and Deconsolidation of Hot Dot (Summary of Cash Impact of Deconsolidation) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 12, 2012 |
Hot Dot [Member] | |||
Investments, available for sale, equity securities | $14,265,707 | $11,784,440 | $39,735 |
Notes receivable | ' | ' | 75,000 |
Intangible asset | ' | ' | 989,900 |
Property and equipment | ' | ' | 54,750 |
Gain on deconsolidation | ' | ' | 278,513 |
Equity investment in Hot Dot at deconsolidation date | 1,800,859 | 1,887,196 | -570,190 |
Change in noncontrolling interest | ' | ' | -3,175,575 |
Other liabilities | ' | ' | -15,000 |
Assets, Fair Value Disclosure, Total | ' | ' | ($2,322,867) |
Consolidation_and_Deconsolidat3
Consolidation and Deconsolidation of Hot Dot (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 12, 2012 | Dec. 31, 2012 | |
Hot Dot [Member] | Hot Dot [Member] | |||
Stock Issued During Period, Shares, Acquisitions (in shares) | ' | ' | 1,000,000 | ' |
Amount paid for acquisition | ' | ($4,087,454) | $1,050,000 | ' |
Stock Issued During Period, Value, Acquisitions | ' | ' | 750,000 | ' |
Percentage Of Deconsolidation Date Fair Value In Interest | ' | ' | 16.45% | ' |
Deconsolidation Fair Value To Be Determined | ' | ' | 570,190 | ' |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | $278,513 | ' | $278,513 |
Consolidation_and_Deconsolidat4
Consolidation and Deconsolidation of Hot Dot (Schedule of Pro Forma Information) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Consolidation and Deconsolidation of Hot Dot [Abstract] | ' |
Premiums | $4,208,659 |
Other income | 719,486 |
Expenses | -6,730,258 |
Net loss | -1,802,113 |
Less: Loss attributable to noncontrolling interests | -24,091 |
Net loss attributable to Midwest Holding Inc. | ($1,778,022) |
Net loss attributable to Midwest Holding Inc. per common share | ($0.20) |
Investment_in_Great_Plains_Fin2
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation (Narrative) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Great Plains Financial Corporation [Member] | Great Plains Financial Corporation [Member] | Great Plains Financial Corporation [Member] | First Wyoming [Member] | First Wyoming [Member] | |||
Equity Method Investment Number Of Shares Acquired | ' | ' | 819,000 | ' | ' | 896,500 | ' |
Equity Method Investment Period Increase Decrease | ' | ' | 21.00% | ' | ' | ' | ' |
Equity in the net (loss) income of unconsolidated subsidiaries | ($10,023) | $36,043 | ' | $118,612 | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | 24.70% | ' | 22.65% |
Investment_in_Great_Plains_Fin3
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation (Schedule of Assets Acquired and Liabilities Assumed) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation [Abstract] | ' |
Investments, available for sale, fixed maturities | $519,540 |
Investments, available for sale, equity securities | 963,486 |
Short-term investments | 1,168,530 |
Cash and cash equivalents | 4,087,454 |
Amounts recoverable from reinsurers | 38,754 |
Interest and dividends due and accrued | 11,692 |
Due premiums | 92,315 |
Furniture and equipment, net | 22,383 |
Other assets | 1,417,224 |
Benefit reserves | -1,221,816 |
Policy claims | -38,380 |
Deposit-type contracts | -737,230 |
Other liabilities | -279,268 |
Net assets acquired | 6,044,684 |
Change in noncontrolling interest | -4,751,930 |
Equity investment in Great Plains Financial at initial consolidation date | -1,174,142 |
Gain on initial consolidation of Great Plains Financial | $118,612 |
Investment_in_Great_Plains_Fin4
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation (Schedule of Pro Forma Information) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Investment in Great Plains Financial Corporation and First Wyoming Capital Corporation [Abstract] | ' |
Premiums | $5,494,457 |
Other income | 1,176,681 |
Expenses | 9,419,078 |
Net loss | -2,747,940 |
Less: Loss attributable to noncontrolling interests | -794,485 |
Net loss attributable to Midwest Holding Inc. | ($1,953,455) |
Net loss attributable to Midwest Holding Inc. per common share | ($0.21) |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | ' | ' |
Amount of transaction | $238,947 | $84,003 |
American Life and Security Corporation [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Amount of transaction | $25,608 | $49,327 |
Schedule_I_Summary_of_Investme1
Schedule I Summary of Investments - Other Than Investments in Related Parties (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Cost | $15,007,459 | $11,889,144 |
Available-for-sale Securities | 14,265,707 | 11,784,440 |
Amount Recognized in Consolidated Balance Sheets | 14,190,707 | 10,533,463 |
Equity Method Investments Amortized Cost | 1,800,859 | ' |
Equity Securities At Amortized Cost | 1,273,938 | ' |
Mortgage loans on real estate, held for investment, Cost | 665,569 | ' |
Real estate, held for investment, Cost | 553,849 | ' |
Policy loans, Cost | 369,513 | ' |
Notes receivable , Cost | 27,383 | ' |
Short-term investments, Cost | 1,180,314 | ' |
Total investments, Cost | 20,878,884 | ' |
Equity method investments | 1,800,859 | 1,887,196 |
Equity securities, at cost | 1,273,938 | 1,267,938 |
Mortgage loans on real estate, held for investment, Amount Recognized in Consolidated Balance Sheets | 665,569 | 677,011 |
Real estate, held for investment, Amount Recognized in Consolidated Balance Sheets | 553,849 | 565,889 |
Policy loans, Amount Recognized in Consolidated Balance Sheets | 369,513 | 274,664 |
Notes receivable, Amount Recognized in Consolidated Balance Sheets | 27,383 | 27,383 |
Short-term investments, Amount Recognized in Consolidated Balance Sheets | 1,180,314 | 1,171,280 |
Total investments, Amount Recognized in Consolidated Balance Sheets | 20,137,132 | 17,655,801 |
Fixed Maturities [Member] | ' | ' |
Cost | 14,932,459 | 10,615,033 |
Available-for-sale Securities | 14,190,707 | 10,533,463 |
Amount Recognized in Consolidated Balance Sheets | 14,190,707 | ' |
Fixed Maturities [Member] | Us Treasury and Government [Member] | ' | ' |
Cost | 2,483,199 | 2,126,977 |
Available-for-sale Securities | 2,463,095 | 2,216,725 |
Amount Recognized in Consolidated Balance Sheets | 2,463,095 | ' |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ' | ' |
Cost | 1,147,325 | 1,219,757 |
Available-for-sale Securities | 1,040,295 | 1,198,435 |
Amount Recognized in Consolidated Balance Sheets | 1,040,295 | ' |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ' | ' |
Cost | 1,573,336 | 1,766,140 |
Available-for-sale Securities | 1,454,392 | 1,724,153 |
Amount Recognized in Consolidated Balance Sheets | 1,454,392 | ' |
Fixed Maturities [Member] | Corporate Debt Securities [Member] | ' | ' |
Cost | 9,728,599 | 5,502,159 |
Available-for-sale Securities | 9,232,925 | 5,394,150 |
Amount Recognized in Consolidated Balance Sheets | 9,232,925 | ' |
Equity Securities [Member] | ' | ' |
Cost | 75,000 | 1,274,111 |
Available-for-sale Securities | 75,000 | 1,250,977 |
Amount Recognized in Consolidated Balance Sheets | 75,000 | ' |
Equity Securities [Member] | Preferred Stock [Member] | ' | ' |
Cost | 75,000 | 75,000 |
Available-for-sale Securities | 75,000 | 75,000 |
Amount Recognized in Consolidated Balance Sheets | $75,000 | ' |
Schedule_II_Condensed_Financia3
Schedule II Condensed Financial Information of Registrant Balance Sheets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Assets | ' | ' | ' | ||
Equity method investments | $1,800,859 | $1,887,196 | ' | ||
Equity securities, at cost | 1,273,938 | 1,267,938 | ' | ||
Notes receivable | 27,383 | 27,383 | ' | ||
Total investments | 20,137,132 | 17,655,801 | ' | ||
Cash and cash equivalents | 3,377,978 | 4,346,555 | 2,469,725 | ||
Property and equipment, net | 372,368 | 445,860 | ' | ||
Other assets | 1,473,745 | 1,752,685 | ' | ||
Total assets | 62,238,672 | 62,878,763 | ' | ||
Liabilities and Stockholders' Equity | ' | ' | ' | ||
Accounts payable and accrued expenses | 1,451,464 | 874,642 | ' | ||
Total liabilities | 51,224,517 | 48,637,515 | ' | ||
Stockholders' Equity: | ' | ' | ' | ||
Common stock | 9,121 | 9,106 | ' | ||
Additional paid-in capital | 25,131,714 | 25,361,520 | ' | ||
Stock subscription receivable | -1,917 | -13,417 | ' | ||
Accumulated deficit | -17,707,433 | -15,756,994 | ' | ||
Accumulated other comprehensive loss | -740,091 | -64,352 | ' | ||
Total Midwest Holding Inc.'s stockholders' equity | 11,014,155 | 14,241,248 | 11,595,345 | ||
Total liabilities and stockholders' equity | 62,238,672 | 62,878,763 | ' | ||
Parent Company [Member] | ' | ' | ' | ||
Assets | ' | ' | ' | ||
Investment in subsidiaries | 5,483,331 | [1] | 7,098,917 | [1] | ' |
Equity method investments | 1,800,859 | 1,887,196 | ' | ||
Equity securities, at cost | 208,750 | 217,750 | ' | ||
Notes receivable | 27,383 | 27,383 | ' | ||
Total investments | 7,520,323 | 9,231,246 | ' | ||
Cash and cash equivalents | 50,112 | 152,909 | 1,359,309 | ||
Property and equipment, net | 68,584 | 105,936 | ' | ||
Other assets | 165,059 | 205,711 | ' | ||
Total assets | 7,804,078 | 9,695,802 | ' | ||
Liabilities and Stockholders' Equity | ' | ' | ' | ||
Accounts payable and accrued expenses | 1,112,610 | 159,865 | ' | ||
Total liabilities | 1,112,610 | 159,865 | ' | ||
Stockholders' Equity: | ' | ' | ' | ||
Preferred stock, Series A | 74 | 74 | ' | ||
Common stock | 9,121 | 2,106 | ' | ||
Additional paid-in capital | 25,131,714 | 25,361,520 | ' | ||
Stock subscription receivable | -1,917 | -13,417 | ' | ||
Accumulated deficit | -17,707,433 | -15,756,994 | ' | ||
Accumulated other comprehensive loss | -740,091 | -64,352 | ' | ||
Total Midwest Holding Inc.'s stockholders' equity | 6,691,468 | 9,535,937 | ' | ||
Total liabilities and stockholders' equity | $7,804,078 | $9,695,802 | ' | ||
[1] | Eliminated in consolidation. |
Schedule_II_Condensed_Financia4
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income: | ' | ' |
Investment income, net of expenses | $521,746 | $480,183 |
Net realized gains on investments | -5,736 | -134,120 |
Miscellaneous income | 246,328 | 103,175 |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | -278,513 |
Revenues, Total | 5,105,139 | 5,323,262 |
Expenses: | ' | ' |
Loss before income tax expense | -2,217,920 | -2,519,309 |
Income tax expense | ' | ' |
Loss before equity in loss of consolidated subsidiaries | -2,217,920 | -2,519,309 |
Equity in loss of consolidated subsidiaries | 267,481 | 861,622 |
Net loss attributable to Midwest Holding Inc. | -1,950,439 | -1,657,687 |
Comprehensive income (loss) | ' | ' |
Unrealized (losses) gains on investments arising during period | -701,973 | 442,286 |
Less: reclassification adjustment for net realized gains on investments | -5,736 | -134,120 |
Other comprehensive (loss) income | -707,709 | 308,166 |
Total comprehensive (loss) income attributable to Midwest Holding, Inc. | -675,739 | 308,166 |
Parent Company [Member] | ' | ' |
Income: | ' | ' |
Investment income, net of expenses | 6,079 | 12,240 |
Net realized gains on investments | ' | -783 |
Miscellaneous income | 583,202 | 347,929 |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | -278,513 |
Realized gain on initial consolidation of Great Plains Financial | ' | -118,612 |
Revenues, Total | 589,281 | 758,077 |
Expenses: | ' | ' |
General | 2,054,302 | 1,577,535 |
Loss before income tax expense | -1,465,021 | -819,458 |
Income tax expense | ' | ' |
Loss before equity in loss of consolidated subsidiaries | -1,465,021 | -819,458 |
Equity in loss of consolidated subsidiaries | -485,418 | -838,229 |
Net loss attributable to Midwest Holding Inc. | -1,950,439 | -1,657,687 |
Comprehensive income (loss) | ' | ' |
Unrealized (losses) gains on investments arising during period | -675,739 | 308,949 |
Less: reclassification adjustment for net realized gains on investments | ' | -783 |
Other comprehensive (loss) income | -675,739 | 308,166 |
Total comprehensive (loss) income attributable to Midwest Holding, Inc. | ($2,626,178) | ($1,349,521) |
Schedule_II_Condensed_Financia5
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows from Operating Activities: | ' | ' |
Net loss attributable to Midwest Holding Inc. | ($1,950,439) | ($1,657,687) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | ' | ' |
Equity in net loss of consolidated subsidiaries | -267,481 | -861,622 |
Depreciation | 322,809 | 366,366 |
Net realized gains on investments | 5,736 | 134,120 |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | 278,513 |
Equity in the net (loss) income of unconsolidated subsidiaries | -10,023 | 36,043 |
Non cash compensation expense | 11,500 | 11,500 |
Changes in operating assets and liabilities: | ' | ' |
Interest and dividends due and accrued | 42,342 | -31,847 |
Other assets and liabilities | -855,762 | -63,586 |
Net cash used in operating activities | 512,765 | -2,700,672 |
Cash Flows from Investing Activities: | ' | ' |
Purchases | -10,334,469 | -14,528,678 |
Proceeds from sale or maturity | 7,088,586 | 12,342,364 |
Net change of mortgage loans on real estate, held for investment | 11,442 | 238,454 |
Net change in notes receivable | ' | 144,999 |
Purchases of property and equipment | -94,491 | -174,710 |
Net cash used in investing activities | -3,438,815 | 331,716 |
Cash Flows from Financing Activities: | ' | ' |
Repurchases of common stock | 215,783 | ' |
Net proceeds from issuing equity in Hot Dot, Inc. | ' | 3,350,409 |
Net transfers from noncontrolling interests | 97,181 | 81,218 |
Net cash provided by financing activities | 1,957,473 | 4,245,786 |
Net (decrease) in cash and cash equivalents | -968,577 | 1,876,830 |
Cash and cash equivalents: | ' | ' |
Beginning | 4,346,555 | 2,469,725 |
Ending | 3,377,978 | 4,346,555 |
Parent Company [Member] | ' | ' |
Cash Flows from Operating Activities: | ' | ' |
Net loss attributable to Midwest Holding Inc. | -1,950,439 | -1,657,687 |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | ' | ' |
Equity in net loss of consolidated subsidiaries | 485,418 | 838,229 |
Depreciation | 39,687 | 49,074 |
Net realized gains on investments | ' | 783 |
Realized gain on deconsolidation of Hot Dot, Inc. | ' | 278,513 |
Gain on initial consolidation of Great Plains Financial Corporation | ' | -118,612 |
Equity in the net (loss) income of unconsolidated subsidiaries | -10,024 | 36,043 |
Non cash compensation expense | 11,500 | 11,500 |
Changes in operating assets and liabilities: | ' | ' |
Interest and dividends due and accrued | ' | -256 |
Other assets and liabilities | -993,397 | -203,306 |
Net cash used in operating activities | 106,321 | -989,273 |
Cash Flows from Investing Activities: | ' | ' |
Purchases | ' | -1,398,303 |
Proceeds from sale or maturity | 9,000 | 68,388 |
Net change of mortgage loans on real estate, held for investment | ' | 230,000 |
Net change in notes receivable | ' | 220,000 |
Purchases of property and equipment | -2,335 | -30,292 |
Net cash used in investing activities | 6,665 | -910,207 |
Cash Flows from Financing Activities: | ' | ' |
Repurchases of common stock | 215,783 | ' |
Net proceeds from issuing equity in Hot Dot, Inc. | ' | 588,103 |
Net transfers from noncontrolling interests | ' | -104,977 |
Net cash provided by financing activities | -215,783 | 693,080 |
Net (decrease) in cash and cash equivalents | -102,797 | -1,206,400 |
Cash and cash equivalents: | ' | ' |
Beginning | 152,909 | 1,359,309 |
Ending | $50,112 | $152,909 |
Schedule_III_Supplementary_Ins1
Schedule III Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Benefit reserves | $33,866,409 | $33,588,589 |
Life Insurance Segment [Member] | ' | ' |
Deferred Policy Acquisition Costs | 2,722,819 | 2,650,957 |
Benefit reserves | 49,135,203 | 47,026,130 |
Advance Premiums | 87,850 | 86,743 |
Premium Revenue | 4,331,329 | 4,208,659 |
Net Investment Income | 521,746 | 480,183 |
Death and Other Benefits and Increase in Benefit Reserves | 1,959,402 | 1,807,409 |
Amortization of Deferred Policy Acquisition Costs | 861,840 | 631,121 |
Other Operating Expenses | $4,501,817 | $5,404,041 |
Schedule_IV_Reinsurance_Inform1
Schedule IV Reinsurance Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Premiums ceded | $362,851 | $410,680 |
Premiums assumed | 30,002 | 32,469 |
Premiums | 4,331,329 | 4,208,659 |
Life Insurance Force [Member] | ' | ' |
Direct Premiums Earned | 274,944,000 | 273,097,000 |
Premiums ceded | 153,161,000 | 156,478,000 |
Premiums assumed | 2,605,000 | 2,757,000 |
Premiums | 124,388,000 | 119,376,000 |
Premiums, Percentage Assumed to Net | 2.09% | 2.31% |
Life Insurance Segment [Member] | ' | ' |
Direct Premiums Earned | 4,656,704 | 4,586,870 |
Premiums ceded | 355,377 | 410,680 |
Premiums assumed | 30,002 | 32,469 |
Premiums | $4,331,329 | $4,208,659 |
Premiums, Percentage Assumed to Net | 0.69% | 0.77% |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Details) (Reduced Depreciation [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Reduced Depreciation [Member] | ' | ' |
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' |
Beginning of the year | $377,664 | $222,962 |
Charged (credited) to costs and expenses | 167,982 | 154,702 |
End of the year | $545,646 | $377,664 |