Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 01, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MIDWEST HOLDING INC. | ||
Entity Central Index Key | 355,379 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 18,006,301 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 | ||
Entity Voluntary Filers | No |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Investments, available for sale, at fair value | ||
Fixed maturities (amortized cost: $24,279,231 and $18,062,280, respectively) | $ 23,271,277 | $ 17,717,248 |
Equity securities (cost: $0 and $75,000, respectively) | 75,000 | |
Equity method investments | 978,744 | |
Equity securities, at cost | $ 140,250 | 124,250 |
Mortgage loans on real estate, held for investment | 349,386 | |
Real estate, held for investment | $ 529,769 | 541,809 |
Policy Loans | 420,775 | 374,186 |
Total investments | 24,362,071 | 20,160,623 |
Cash and cash equivalents | 1,192,336 | 2,310,047 |
Amounts recoverable from reinsurers | 12,212,656 | 12,636,910 |
Interest and dividends due and accrued | 264,791 | 179,197 |
Due premiums | 640,073 | 584,526 |
Deferred acquisition costs, net | 2,765,063 | 2,646,970 |
Value of business acquired, net | 2,039,110 | 1,763,952 |
Intangible assets | 700,000 | 700,000 |
Goodwill | 1,129,824 | 1,129,824 |
Property and equipment, net | 217,565 | 329,835 |
Assets associated with business held for sale (see Note 3) | 16,870,241 | 17,691,344 |
Other assets | 532,674 | 293,890 |
Total assets | 62,926,404 | 60,427,118 |
Liabilities: | ||
Future Policy Benefits, Claims and Deposit-type Contracts | 24,155,140 | 22,728,938 |
Policy claims | 839,859 | 925,039 |
Deposit-type contracts | 13,897,421 | 10,722,227 |
Advance premiums | 57,699 | 82,504 |
Total policy liabilities | 38,950,119 | 34,458,708 |
Accounts payable and accrued expenses | 1,013,313 | 938,018 |
Liabilities associated with business held for sale (see Note 3) | 15,508,998 | 16,443,657 |
Surplus notes | 550,000 | 550,000 |
Total liabilities | $ 56,022,430 | $ 52,390,383 |
Commitments and Contingencies (See Note 8) | ||
Stockholders' Equity: | ||
Common stock, $0.001 par value. Authorized 120,000,000 shares; issued and outstanding 18,006,301 and 13,167,654 shares, respectively. | $ 18,006 | $ 13,168 |
Additional paid-in capital | 31,584,529 | 29,583,631 |
Accumulated deficit | (23,685,525) | (21,167,496) |
Accumulated other comprehensive loss | (1,013,213) | (392,745) |
Total stockholders' equity | 6,903,974 | 8,036,735 |
Total liabilities and stockholders' equity | 62,926,404 | 60,427,118 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock | 74 | 74 |
Series B Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock | $ 103 | $ 103 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized costs of fixed maturities (in dollars) | $ 24,279,231 | $ 18,062,280 |
Amortized costs of equity securities (in dollars) | $ 0 | $ 75,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 18,006,301 | 13,167,654 |
Common stock, shares outstanding | 18,006,301 | 13,167,654 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, liquidation preference per share | $ 6 | $ 6 |
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 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, liquidation preference per share | $ 6 | $ 6 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 102,669 | 102,669 |
Preferred stock, shares outstanding | 102,669 | 102,669 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income: | ||
Premiums | $ 3,424,377 | $ 4,007,810 |
Investment income (loss), net of expenses | 306,531 | (9,883) |
Net realized (losses) gains on investments | (117,364) | 346,304 |
Miscellaneous income | 171,571 | 295,246 |
Total Income | 3,785,115 | 4,639,477 |
Expenses: | ||
Death and other benefits | 908,658 | 1,313,095 |
Interest credited | 533,646 | 403,556 |
Increase in benefit reserves | 777,111 | 1,072,740 |
Amortization of deferred acquisition costs | 469,674 | 625,680 |
Salaries and benefits | 1,940,345 | 2,359,140 |
Other operating expenses | 2,578,288 | 2,771,172 |
Total Expenses | 7,207,722 | 8,545,383 |
Operating Loss | (3,422,607) | $ (3,905,906) |
Bargain purchase gain for business acquisition | 904,578 | |
Loss before income taxes | $ (2,518,029) | $ (3,905,906) |
Income tax expense | ||
Net loss | $ (2,518,029) | $ (3,905,906) |
Less: Loss attributable to noncontrolling interest | (460,920) | |
Net loss attributable to Midwest Holding Inc. | $ (2,518,029) | (3,444,986) |
Comprehensive income (loss): | ||
Unrealized (losses) gains on investments arising during period | (737,832) | 388,277 |
Less: reclassification adjustment for net realized (losses) gains on investments | 117,364 | (4,391) |
Other comprehensive (loss) income | $ (620,468) | 383,886 |
Less: Comprehensive (loss) income attributable to noncontrolling interest | 36,540 | |
Total comprehensive (loss) income attributable to Midwest Holding Inc. | $ (620,468) | 347,346 |
Comprehensive loss attributable to Midwest Holding Inc. | $ (3,138,497) | $ (3,097,640) |
Net loss attributable to Midwest Holding Inc. per common share, basic and diluted | $ (0.18) | $ (0.32) |
Consolidated Statements of Stoc
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, 2013 | $ 10,999,078 | $ 74 | $ 9,121 | $ 25,131,714 | $ (1,917) | $ (17,722,510) | $ (740,091) | $ 6,676,391 | $ 4,322,687 |
Non-cash compensation expense | 1,917 | $ 1,917 | 1,917 | ||||||
Stock Issued During Period, Value, New Issues | 616,012 | $ 103 | $ 615,909 | 616,012 | |||||
Repurchases of common stock | $ (58,252) | $ (47) | (58,205) | (58,252) | |||||
Changes in equity of non-controlling interest | $ 4,094 | $ 3,894,213 | 3,898,307 | $ (3,898,307) | |||||
Net loss | $ (3,905,906) | $ (3,444,986) | (3,444,986) | (460,920) | |||||
Other comprehensive income | 383,886 | $ 347,346 | 347,346 | $ 36,540 | |||||
Balance at Dec. 31, 2014 | $ 8,036,735 | $ 177 | $ 13,168 | $ 29,583,631 | $ (21,167,496) | $ (392,745) | 8,036,735 | ||
Non-cash compensation expense | |||||||||
Stock Issued During Period, Value, New Issues | $ 250,181 | $ 71 | 250,110 | 250,181 | |||||
Preferred stock dividend | (56,057) | (56,057) | (56,057) | ||||||
Merger of First Wyoming Capital Corporation | 1,811,612 | $ 4,767 | $ 1,806,845 | 1,811,612 | |||||
Net loss | (2,518,029) | $ (2,518,029) | (2,518,029) | ||||||
Other comprehensive income | (620,468) | $ (620,468) | (620,468) | ||||||
Balance at Dec. 31, 2015 | $ 6,903,974 | $ 177 | $ 18,006 | $ 31,584,529 | $ (23,685,525) | $ (1,013,213) | $ 6,903,974 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Cash Flows from Operating Activities: | ||
Net loss | $ (2,518,029) | $ (3,905,906) |
Adjustments to arrive at cash provided by operating activities: | ||
Net premium and discount on investments | 173,915 | 162,790 |
Depreciation and amortization | 400,870 | 403,902 |
Deferred acquisition costs capitalized | (552,466) | (549,831) |
Amortization of deferred acquisition costs | 469,674 | 625,680 |
Net realized losses (gains) on investments | 117,364 | $ (346,516) |
Bargain purchase gain for business acquired | (904,578) | |
Equity in the net loss of unconsolidated subsidiaries | $ 357,437 | $ 438,174 |
Non-cash compensation expense | 1,917 | |
Changes in operating assets and liabilities: | ||
Amounts recoverable from reinsurers | $ 424,254 | 729,367 |
Interest and dividends due and accrued | (44,596) | (2,180) |
Due premiums | (21,568) | 1,578 |
Policy liabilities | 1,185,036 | 586,355 |
Other assets and liabilities | (219,213) | (474,739) |
Other assets and liabilities held for sale | (68,864) | (4,828) |
Net cash (used for) operating activities | (1,200,764) | (2,334,237) |
Cash Flows from Investing Activities: | ||
Purchases | (16,090,449) | (14,079,958) |
Proceeds from sale or maturity | 13,594,158 | 9,584,680 |
Purchases | (964,450) | (164,362) |
Proceeds from sale or maturity | $ 869,528 | 76,311 |
Purchases | (61,383) | |
Proceeds from sale or maturity | $ 9,000 | 1,955,500 |
Proceeds from payments on mortgage loans on real estate, held for investment | 349,386 | 316,183 |
Net change in policy loans | (46,589) | $ (4,673) |
Acquisition of First Wyoming Capital Corporation | $ 315,546 | |
Net change in notes receivable | $ 27,383 | |
Net change in short-term investments | 1,180,314 | |
Net purchases of property and equipment | $ (37,084) | (132,124) |
Net cash (used for) investing activities | $ (2,000,954) | (1,302,129) |
Cash Flows from Financing Activities: | ||
Repurchases of common stock | $ (58,252) | |
Issuance of common stock | $ 286,722 | |
Issuance of preferred stock | $ 616,012 | |
Preferred stock dividend | $ (56,057) | |
Receipts on deposit-type contracts | 2,387,104 | $ 2,409,659 |
Withdrawals on deposit-type contracts | (533,762) | (398,984) |
Net cash provided by financing activities | 2,084,007 | 2,568,435 |
Net (decrease) in cash and cash equivalents | (1,117,711) | (1,067,931) |
Cash and cash equivalents: | ||
Beginning | 2,310,047 | 3,377,978 |
Ending | $ 1,192,336 | 2,310,047 |
Supplemental Disclosure of Non-Cash Information | ||
Exchange of common stock for non-controlling interest | $ 3,861,767 | |
Common stock issued on the First Wyoming acquisition | $ 1,811,612 | |
Total | $ 1,811,612 | $ 3,861,767 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 5.00 10 First Wyoming Capital Corporation (“First Wyoming”) was incorporated in Wyoming on July 8, 2009, for the primary purpose of organizing a life insurance subsidiary. The Company was in the development stage through 2011. The year 2012 was the first year during which it was considered an operating company. From 2009 to 2012, Midwest acquired shares of capital stock of First Wyoming resulting in a 22.2 In 2010, American Life completed the purchase of a 100 100 In August, 2010, Midwest began an exempt offering of shares to existing holders in the state of Nebraska at $ 5.00 7,400,000 1.3 6.00 74,159 In 2011, First Wyoming Life Insurance Company (“FWLIC”), was incorporated and domiciled in Wyoming and became a subsidiary of First Wyoming with an ownership interest of 99.9 In 2011, Midwest acquired all of the issued and outstanding capital stock of Old Reliance Insurance Company (“Old Reliance”), an Arizona-domiciled life insurance company. American Life merged into Old Reliance following the purchase, with the survivor changing its name to American Life & Security Corp. and domiciled in Arizona. In the transaction, the sole shareholder of Old Reliance received: (i) approximately $ 1.6 500,000 150,000 Midwest During the third quarter of 2011, Midwest obtained control of Security “Security Capital” In August 2011, Midwest acquired a controlling interest ownership of Hot Dot, Inc. ("Hot Dot"), a company organized in August 2011 to develop, manufacture, and market the Hot Dot Alert Patch. From its inception, the operating results of Hot Dot were consolidated with those of Midwest, due to Midwest's control of the Board of Directors. On September 12, 2012, Hot Dot repurchased 1,000,000 750,000 1,500,000 775,000 Midwest 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 client, generate fee income for Midwest. Services provided vary based on the respective needs of the client and can include some or all aspects of back-office accounting and policy administration. Midwest has been able to perform its TPA services using its existing in-house resources. On November 25, 2013, Midwest entered into a Plan and Agreement of Exchange (the “Exchange Agreement”) with Great Plains and Security Capital in order to acquire the outstanding shares of each company held by their shareholders (other than those shares already held by Midwest.) Under the Exchange Agreement with Great Plains, the Great Plains shareholders received approximately 1.298 0.162 During the first quarter of 2014, the Company purchased additional shares of Pacific Northwest Capital Corporation (PNC) which increased Midwest's ownership to 22.4 Northstar Financial Corp. (“Northstar”) was a Minnesota corporation organized on April 15, 2010, for the purpose of forming and/or acquiring a Minnesota-domiciled life insurance company or life insurance –related companies in Minnesota. On December 18, 2015, Midwest and Northstar entered into a plan and agreement for Midwest to acquire the remaining outstanding stock of Northstar by distributing Midwest's voting common stock to shareholders of Northstar at a ratio of 1.27 The closing date of the acquisition was March 15, 2016. Basis of presentation: The accompanying consolidated financial statements include the accounts of Midwest, our wholly owned subsidiaries American Life, American Life's wholly owned subsidiaries Capital Reserve and Great Plains Life Assurance Company, and the 99.9 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 as a group of similar products on an overall portfolio basis. These consolidated financial statements have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) in the United States of America. All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform to the current period's presentation with no impact on results of operations or total stockholders' 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, 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, 2015 or 2014. Included within the Company's equity securities carried at cost and equity method investments are certain privately placed common stocks for several development stage 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, 2015 and 2014, primarily due the sale of three of the mortgage loans during the fourth quarter of 2014 with the two remaining loans being sold during January 2015. 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, 2015 and 2014 the Company did not have any short-term investments. Real estate, held for investment: Real estate, held for investment is comprised of ten condominiums in Hawaii acquired in the purchase of Old Reliance. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 Cash: The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2015 and 2014, the Company had no cash equivalents. 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, 2015 analysis that all deferred acquisition costs were recoverable. The following table provides information about deferred acquisition costs (“DAC”) for the years ended December 31, 2015 and 2014, respectively. Year Ended December 31, 2015 2014 Balance at beginning of period $ 2,646,970 $ 2,722,819 Capitalization of commissions, sales and issue expenses 552,466 549,831 Change in DAC due to unrealized investment losses 35,301 - Gross amortization (469,674 ) (625,680 ) Balance at end of period $ 2,765,063 $ 2,646,970 Value of business acquired Value of business acquired ("VOBA") 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. American Life purchased Capital Reserve during 2010, resulting in an initial capitalized asset for value of business acquired of $ 116,326 375,000 348,010 The remaining capitalized and SNL asset balances at December 31, 2015, of $ 46,531 139,204 1,288,207 506,600 ten 183,698 175,254 Additionally, American Life purchased Old Reliance in August 2011, resulting in an initial capitalized asset for value of business acquired of $ 824,485 47,745 41,951 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, 2015 and 2014 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, 2015 and 2014, the fair value of the Company's reporting unit 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 the reporting unit incorporates multiple inputs including, 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, 2015 and 2014, 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 7 3 157,388 174,658 864,526 713,167 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, 2015 or 2014. 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 2012. 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, 2015 and 2014. 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 $ 0.001 120,000,000 18,006,301 13,167,654 At December 31, 2015 and 2014, the Company had 1,179 10 6.50 The Class A preferred shares are non-cumulative, non-voting and convertible by the holder to voting common shares after May, 2015, at a rate of 1.3 0.001 2,000,000 74,159 The Class B preferred shares are non-cumulative, non-voting and convertible by the holder to voting common shares after May 1, 2017 at a rate of 2.0 0.001 1,000,000 7 56,057 102,669 The Company evaluated its Class B preferred stock for potential embedded derivatives. In doing so, the company first concluded that the nature of the host contract was more equity than debt like. The embedded conversion features were determined not to be derivatives as net settlement does not exist given the lack of trading activity in the company's stock. Additionally, the conversion features are clearly and closely related to an equity host contract. Consideration was also given to whether a beneficial conversion feature should be recognized in additional paid in capital for the intrinsic value of the conversion feature at the issuance date. The preferred stock is not mandatorily redeemable but may be redeemed at the time of a deemed liquidation. Holders could elect redemption upon the occurrence of certain deemed liquidation events, including mergers in which the company is a constituent party and sales of substantially all the assets of the corporation, that are within the Company's control, if the Company does not dissolve the corporation. As such, the preferred stock is recognized in permanent equity. The redemption feature was determined to not be a derivative as settlement would be gross. 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, 2015 and 2014 were 14,081,926 10,654,483 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 (Idaho • 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: Revenue from Contracts with Customers (Topic 606) regarding accounting for revenue recognition that identifies the accounting treatment for an entity's contracts with customers. Although insurance contracts are excluded from this ASU, other customer contracts of the Company would be covered. This guidance is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases . Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard 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. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions [Abstract] | |
Acquisitions | Note 2. Acquisitions On October 27, 2015, Midwest acquired 100 1.37 4,767,400 100 1,811,612 3 5 3 16.5 13.5 The First Wyoming acquisition was accounted for under the acquisition method of accounting, which requires the consideration transferred and all assets and liabilities assumed to be recorded at fair value. Prior to the acquisition, Midwest held 22.1 810,500 30,410 642,150 198,760 3 27 3 18.0 13.5 The following table summarizes the preliminary fair value of the consideration transferred and the preliminary fair value of First Wyoming assets acquired and liabilities assumed: Fair value of Common stock of Midwest issued as consideration $ 1,811,612 Fair value of Midwest's previously held equity interest in First Wyoming 642,150 $ 2,453,762 Recognized preliminary amounts of identifiable assets acquired and liabilities assumed: Investment securities $ 3,961,937 Cash 315,546 VOBA 506,600 Other assets 92,045 Benefit reserves (611,110 ) Policy claims (41,754 ) Deposit-type contracts (799,990 ) Other liabilities (64,934 ) Total identifiable net assets 3,358,340 Bargain purchase gain (904,578 ) $ 2,453,762 The fair value of the Midwest common stock issued as consideration , the fair value of our previously held equity interest in First Wyoming, and the assets acquired and liabilities assumed from our acquisition of First Wyoming was based on a preliminary valuation and our estimates and assumptions are subject to change within the measurement period. The primary areas that are not yet finalized are related to the fair value of Midwest common stock issued , the fair value of our previously held equity interest in First Wyoming, and the fair value of VOBA. Measurement period adjustments will be applied to the period that the adjustment is identified in our consolidated financial statements. The transaction resulted in a preliminary bargain purchase gain of $ 904,578 VOBA is being amortized on a straight-line basis over ten Acquisition costs relating to the business combination totaling $ 123,219 Total income and net loss of $ 71,165 73,939 The following table presents unaudited pro forma consolidated total income and net loss as if the acquisition had occurred as of January 1, 2014 (the earliest date presented). Year ended December 31, (unaudited) 2015 2014 Premiums $ 3,723,084 $ 4,382,288 Investment income 414,970 699,238 Miscellaneous income 48,864 214,254 Total income $ 4,186,918 $ 5,295,780 Net loss $ (4,338,051 ) $ (4,215,594 ) The unaudited pro forma total income and net loss above was adjusted to exclude the bargain purchase gain of $ 904,578 158,677 247,635 122,903 80,992 198,760 50,660 |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 12 Months Ended |
Dec. 31, 2015 | |
Assets and Liabilities Held for Sale [Abstract] | |
Assets and Liabilities Held for Sale | Note 3. Assets and Liabilities Held for Sale In December, 2015, American Life entered into a purchase agreement with an unaffiliated for $ 50,000 2016. As of December 31, 2015, Midwest has classified $ 16.9 15.5 The net changes in the held for sale assets have been shown in the Other Assets and Liabilities Held for Sale line on the Consolidated Statements of Cash Flows. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interests [Abstract] | |
Noncontrolling Interests | Note 4. Noncontrolling Interests The effects on our equity of changes in our ownership interest in equity securities were as follows: Year Ended December 31, 2014 Net (loss) attributable to Midwest Holding Inc. $ (3,444,986 ) Transfers (to) from noncontrolling interest: Increase in Midwest Holding Inc.'s additional paid-in capital for Great Plains Financial and First Wyoming Capital stock purchases, net of change in ownership 3,861,768 Change from net loss attributable to Midwest Holding Inc. and transfers from noncontrolling interests $ 416,782 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | Note 5. Investments The amortized cost and estimated fair value of investments classified as available-for-sale as of December 31, 2015 and 2014 are as follows: Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value December 31, 2015: Fixed maturities: U.S. government obligations $ 3,256,704 $ 6,610 $ 69,815 $ 3,193,499 States and political subdivisions -- general obligations 1,001,993 - 6,942 995,051 States and political subdivisions -- special revenue 275,333 - 1,997 273,336 Corporate 19,745,201 1,468 937,278 18,809,391 Total fixed maturities 24,279,231 8,078 1,016,032 23,271,277 December 31, 2014: Fixed maturities: U.S. government obligations $ 3,031,743 $ 106,673 $ 22,350 $ 3,116,066 States and political subdivisions -- general obligations 998,778 4,971 29,095 974,654 States and political subdivisions -- special revenue 1,197,350 2,649 35,034 1,164,965 Corporate 12,834,409 1,904 374,750 12,461,563 Total fixed maturities 18,062,280 116,197 461,229 17,717,248 Equity securities: Preferred corporate stock 75,000 - - 75,000 Total equity securities 75,000 - - 75,000 Total $ 18,137,280 $ 116,197 $ 461,229 $ 17,792,248 The Company had four securities that individually exceed 10% of the total of the state and political subdivisions categories as of December 31, 2015. The amortized cost, fair value, credit rating, and description of the security is as follows: Amortized Estimated Cost Fair Value Credit Rating December 31, 2015: Fixed maturities: States and political subdivisions -- general obligations Maricopa County Arizona School District No. 31 $ 336,419 $ 334,481 AA Longview Washington Refunding Taxable 166,303 165,297 N/R New York State Taxable Series 163,331 162,179 AA+ Philadelphia PA Authority for Industrial 149,352 148,662 AA Total $ 815,405 $ 810,619 The following table summarizes, for all securities in an unrealized loss position at December 31, 2015 and 2014, 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. December 31, 2015 December 31, 2014 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 $ 2,484,188 $ 62,343 14 $ 107,273 $ 3,963 1 States and political subdivisions -- general obligations 660,596 5,004 5 - - - States and political subdivisions -- special revenue 248,146 1,618 2 - - - Corporate 15,320,916 796,204 97 8,092,678 258,647 41 Greater than 12 months: U.S. government obligations 305,055 7,472 3 1,096,399 18,387 8 States and political subdivisions -- general obligations 334,481 1,938 1 654,822 29,095 3 States and political subdivisions -- special revenue 25,190 379 1 1,052,184 35,034 9 Corporate 3,166,108 141,074 22 3,626,258 116,103 22 Total fixed maturities $ 22,544,653 $ 1,016,032 145 $ 14,629,614 $ 461,229 84 Based on our review of the securities in an unrealized loss position at December 31, 2015 and 2014, 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, 2015, 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, 2015, 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 $ 209,648 $ 209,084 Due after one year through five years 1,530,385 1,521,658 Due after five years through ten years 14,433,713 13,851,865 Due after ten years 8,105,485 7,688,670 $ 24,279,231 $ 23,271,277 The Company is required to hold assets on deposit for the benefit of policyholders in accordance with statutory rules and regulations. At December 31, 2015 and 2014, these required deposits had a total amortized cost of $ 6,186,865 3,185,698 6,000,376 3,262,233 The components of net investment income (loss) for the years ended December 31, 2015 and 2014 are as follows: Year Ended December 31, 2015 2014 Fixed maturities $ 681,999 $ 401,138 Equity securities 186 83 Cash and short-term investments 7 3,965 Equity in the net loss of unconsolidated subsidiaries (357,437 ) (438,175 ) Other 44,863 99,477 369,618 66,488 Less investment expenses (63,087 ) (76,371 ) $ 306,531 $ (9,883 ) Proceeds for the years ended December 31, 2015 and 2014 from sales of investments classified as available for sale were $ 13,394,158 8,288,570 148,661 50,974 266,025 46,795 In 2014, Midwest sold its investment in the equity securities, at cost, back to Hot Dot and Northern Plains for a gain of $ 90,812 251,104 As of December 31, 2015, all mortgage loans were under contract to be sold. The sales were completed on January 15, 2015. The following table summarizes the activity in the mortgage loans on real estate, held for investment account for the years ended December 31, 2015 and 2014. Year Ended December 31, 2015 2014 Balance at beginning of period $ 349,386 $ 665,569 Proceeds from payments on mortgage loans on real estate, held for investment - (3,931 ) Proceeds from settlement on mortgage loans on real estate, held for investment (349,386 ) (312,252 ) Balance at end of period $ - $ 349,386 |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Fair Values of Financial Instruments Instruments [Abstract] | |
Fair Values of Financial Instruments | Note 6. 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, 2015, 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 of preferred stock of publicly traded companies. The fair values of our preferred equity securities are based on prices obtained from independent pricing services and these securities are classified within Level 2 in the fair value hierarchy. Equity method investments : The equity method investment is comprised of the Company's investment in First Wyoming. This security has no active trading and the fair value for this security is not readily determinable. Therefore, this investment has 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. Mortgage loans are categorized as Level 3 in the fair value hierarchy. Deposit-type contracts: The fair value for direct and assumed liabilities under deposit-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 deposit-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 deposit-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 $ 229,405 196,927 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, 2015 and 2014. Significant Quoted Other Significant In Active Observable Unobservable Estimated Markets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value December 31, 2015 Fixed maturities: U.S. government obligations $ - $ 3,193,499 $ - $ 3,193,499 States and political subdivisions — general obligations - 995,051 - 995,051 States and political subdivisions — special revenue - 273,336 - 273,336 Corporate - 18,809,391 - 18,809,391 Total fixed maturities $ - $ 23,271,277 $ - $ 23,271,277 December 31, 2014 Fixed maturities: U.S. government obligations $ - $ 3,116,066 $ - $ 3,116,066 States and political subdivisions — general obligations - 974,654 - 974,654 States and political subdivisions — special revenue - 1,164,965 - 1,164,965 Corporate - 12,461,563 - 12,461,563 Total fixed maturities - 17,717,248 - 17,717,248 Equity securities: Preferred corporate stock - 75,000 - 75,000 Total equity securities - 75,000 - 75,000 Total $ - $ 17,792,248 $ - $ 17,792,248 There were no transfers of financial instruments between Level 1 and Level 2 during the years ended December 31, 2015 or 2014. 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, 2015 and 2014, respectively: December 31, 2015 Fair Value Measurements at 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: Policy loans $ 420,775 $ - $ - $ 420,775 $ 420,775 Cash and cash equivalents 1,192,336 1,192,336 - - 1,192,336 Liabilities: Policyholder deposits (Deposit-type contracts) 13,897,421 - - 13,897,421 13,897,421 Surplus notes and accrued interest payable 779,405 - - 768,022 768,022 December 31, 2014 Fair Value Measurements at 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 $ 349,386 $ - $ - $ 349,386 $ 349,386 Policy loans 374,186 - - 374,186 374,186 Cash and cash equivalents 2,310,047 2,310,047 - - 2,310,047 Liabilities: Policyholder deposits (Investment-type contracts) 10,722,227 - - 10,722,227 10,722,227 Surplus notes and accrued interest payable 746,927 - - 739,042 739,042 |
Income Tax Matters
Income Tax Matters | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Matters [Abstract] | |
Income Tax Matters | Note 7. Income Tax Matters Significant components of the Company's deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows: Year Ended December 31, 2015 2014 Deferred tax assets: Loss carryforwards $ 8,962,587 $ 7,598,830 Capitalized costs 667,264 802,000 Unrealized losses on investments 356,495 121,110 Benefit reserves 1,071,997 1,239,298 Total deferred tax assets 11,058,343 9,761,238 Less valuation allowance (9,287,024 ) (8,112,743 ) Total deferred tax assets, net of valuation allowance 1,771,319 1,648,495 Deferred tax liabilities: Policy acquisition costs 593,654 908,021 Due premiums 234,468 220,823 Value of business acquired 693,297 249,351 Intangible assets 238,000 238,000 Property and equipment 11,900 32,300 Total deferred tax liabilities 1,771,319 1,648,495 Net deferred tax assets $ - $ - At December 31, 2015 and 2014, the Company recorded a valuation allowance of $ 9,287,024 8,112,743 Loss carryforwards for tax purposes as of December 31, 2015, have expiration dates that range from 2024 2035 There was no income tax expense for the years ended December 31, 2015 and 2014. This differed from the amounts computed by applying the statutory U.S. federal income tax rate of 34 Year Ended December 31, 2015 2014 Computed expected income tax benefit $ (1,163,686 ) $ (1,171,295 ) Increase (reduction) in income taxes resulting from: Meals, entertainment and political contributions 46,315 24,141 Dividends received deduction (44 ) (20 ) Noncontrolling interests - 10,597 True-up benefit reserves and 2014 NOL; and First Wyoming Capital Merger 178,519 25,732 224,790 60,450 Tax benefit before valuation allowance (938,896 ) (1,110,845 ) Change in valuation allowance 938,896 1,110,845 Net income tax expenses $ - $ - |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Reinsurance | Note 8. Reinsurance A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2015 and 2014 and for the years ended December 31, 2015 and 2014 is as follows: Year Ended December 31, 2015 2014 Balance sheets: Benefit and claim reserves assumed $ 2,763,779 $ 2,678,376 Benefit and claim reserves ceded 12,212,656 12,636,910 Year Ended December 31, 2015 2014 Statements of comprehensive income: Premiums assumed $ 36,777 $ 35,466 Premiums ceded 498,787 340,464 Benefits assumed 57,317 82,897 Benefits ceded 904,867 983,168 Commissions assumed 21 44 Commissions ceded 3,399 6,216 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, 2015: 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 Optimum Re Insurance Company A- $ - $ 154,928 $ 184,474 $ - $ 339,402 Sagicor Life Insurance Company A- - 412,884 11,689,455 229,085 11,873,254 $ - $ 567,812 $ 11,873,929 $ 229,085 $ 12,212,656 During 1999, Old Reliance entered into a 75 75 25 11,873,254 12,143,472 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. 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, 2015 and 2014, no contingency reserve was established. |
Deposit-Type Contracts
Deposit-Type Contracts | 12 Months Ended |
Dec. 31, 2015 | |
Deposit-Type Contracts [Abstract] | |
Deposit-Type Contracts | Note 9. 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, 2015 and 2014: Year Ended December 31, 2015 2014 Beginning balance $ 10,722,227 $ 8,422,105 First Wyoming Life beginning balance 799,990 - Change in deposit-type contracts assumed from SNL (1,200 ) (114,109 ) Deposits received 2,387,104 2,409,659 Investment earnings 533,646 403,556 Withdrawals (533,762 ) (398,984 ) Contract Charges (10,584 ) - Ending balance $ 13,897,421 $ 10,722,227 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 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10. 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 which we closed and cancelled in January 2015. Great Plains Financial entered into a lease on May 1, 2011 for office space in Pierre, South Dakota, which expired 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, 2015 and 2014 was $ 232,130 227,182 2016 $ 198,030 2017 149,481 2018 136,557 2019 141,412 2020 146,477 Later years 483,333 Total $ 1,255,290 |
Statutory Net Income and Surplu
Statutory Net Income and Surplus | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Net Income and Surplus | Note 11. 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, Great Plains Life, and First Wyoming Life are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Missouri, South Dakota, and Wyoming 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. Subsequent to year-end, the Arizona regulators required us to make a $ 1.0 Statutory Net Loss for the Years Ended December 31, 2015 2014 American Life $ 1,275,874 $ 1,465,181 Capital Reserve $ 77,720 $ 123,940 Great Plains Life $ 436,268 $ 112,890 First Wyoming Life $ 493,511 $ 311,803 Statutory Capital and Surplus as of December 31, 2015 2014 American Life $ 2,526,392 $ 2,429,604 Capital Reserve $ 1,464,044 $ 1,332,772 Great Plains Life $ 1,663,368 $ 2,025,982 First Wyoming Life $ 2,715,494 $ 3,272,791 |
Surplus Notes
Surplus Notes | 12 Months Ended |
Dec. 31, 2015 | |
Surplus Notes [Abstract] | |
Surplus Notes | Note 12. Surplus Notes The following provides a summary of the American Life's surplus notes along with issue dates, maturity dates, face amounts, and interest rates as of December 31, 2015: Creditor Issue Date Maturity Date Face Amount Interest Rate David G. Elmore September 1, 2006 September 1, 2016 $ 250,000 7 % David G. Elmore August 4, 2011 August 1, 2016 300,000 5 % Any payments and/or repayments must be approved by the Arizona Department of Insurance. As of December 31, 2015, the Company has accrued $ 229,405 |
Investment in Pacific Northwest
Investment in Pacific Northwest Capital Corporation | 12 Months Ended |
Dec. 31, 2015 | |
Investment in Pacific Northwest Capital Corporation [Abstract] | |
Investment in Pacific Northwest Capital Corporation | Note 13. Investment in Pacific Northwest Capital Corporation During the first quarter of 2014, we purchased additional shares of Pacific Northwest Capital Corporation (Pacific Northwest). The purchase increased our total investment in Pacific Northwest to 850,000 22.4 As a result of the increased ownership of Pacific Northwest, the Company changed its method of carrying the investment from cost to equity as required by GAAP. Under the equity method, the Company records its proportionate share of the earnings of Pacific Northwest. There was no effect of the change in accounting method for the year ended December 31, 2015. The effect of the change in accounting method for the year ended December 31, 2014, was to increase loss before provision for income taxes and net loss by $ 72,306 zero |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14. Related Party Transactions 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, 2015 and 2014 amounted to $ 154,670 295,093 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15. Subsequent Events All of the effects of subsequent events that provide additional evidence about conditions that existed at December 31, 2015, 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. On January 29, 2015, the Department of Insurance of the state of Arizona required that Midwest make a capital contribution to American Life. The transaction was recorded for statutory purposes as of December 31, 2015 1.0 1.0 On March 15, 2016, we acquired Northstar Financial Corp., a Minnesota corporation (“Northstar”) pursuant to an agreement dated December 18, 2015. Northstar became a wholly-owned subsidiary of ours. We have exchanged 1.27 4,198,250 primary 2.2 The Company will account for the acquisition of Northstar as an Asset Acquisition. |
Schedule I Summary of Investmen
Schedule I Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information [Abstract] | |
Summary of Investments - Other Than Investments in Related Parties | Midwest Holding Inc. and Subsidiaries Summary of Investments — Other Than Investments in Related Parties December 31, 2015 Amount Recognized in Amortized Consolidated Cost Fair Value Balance Sheets Type of Investment Fixed maturity securities, available for sale: U.S. government obligations $ 3,256,704 $ 3,193,499 $ 3,193,499 States and political subdivisions -- general obligations 1,001,993 995,051 995,051 States and political subdivisions -- special revenue 275,333 273,336 273,336 Corporate 19,745,201 18,809,391 18,809,391 Total fixed maturity securities $ 24,279,231 $ 23,271,277 $ 23,271,277 Equity securities, at cost 140,250 140,250 Real estate, held for investment 529,769 529,769 Policy loans 420,775 420,775 Total Investments $ 25,370,025 $ 24,362,071 See accompanying Report of Independent Registered Public Accounting Firm |
Schedule II Condensed Financial
Schedule II Condensed Financial Information of Registrant Balance Sheets | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information [Abstract] | |
Condensed Financial Information of Registrant Balance Sheets | Midwest Holding Inc. (Parent Company) Condensed Financial Information of Registrant Balance Sheets As of December 31, 2015 2014 Assets: Investment in subsidiaries (1) $ 7,640,794 $ 5,988,239 Equity method investments - 978,744 Equity securities, at cost 140,250 124,250 Total investments 7,781,044 7,091,233 Cash and cash equivalents 212,422 1,132,057 Property and equipment, net 85,339 85,654 Other assets 381,149 243,066 Total assets $ 8,459,954 $ 8,552,010 Liabilities and Stockholders' Equity Liabilities: Accounts payable and accrued expenses 1,555,980 515,275 Total liabilities 1,555,980 515,275 Stockholders' Equity: Preferred stock, Series A 74 74 Preferred stock, Series B 103 103 Common stock 18,006 13,168 Additional paid-in capital 31,584,529 29,583,631 Accumulated deficit (23,685,525 ) (21,167,496 ) Accumulated other comprehensive loss (1,013,213 ) (392,745 ) Total Midwest Holding Inc.'s stockholders' equity 6,903,974 8,036,735 Total liabilities and stockholders' equity $ 8,459,954 $ 8,552,010 (1) Eliminated in consolidation. See accompanying Report of Independent Registered Public Accounting Firm |
Schedule II Condensed Financi24
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income | 12 Months Ended |
Dec. 31, 2015 | |
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 As of December 31, 2015 2014 Income: Investment (loss) income, net of expenses $ (363,263 ) $ (443,847 ) Net realized gain on investments - 341,914 Miscellaneous income 536,997 630,690 173,734 528,757 Expenses: General 1,562,147 1,940,913 Loss before income tax expense (1,388,413 ) (1,412,156 ) Income tax expense - - Loss before equity in loss of consolidated subsidiaries (1,388,413 ) (1,412,156 ) Equity in loss of consolidated subsidiaries (2,034,194 ) (2,032,830 ) Bargain purchase gain for business acquisition 904,578 - Net loss attributable to Midwest Holding Inc. $ (2,518,029 ) $ (3,444,986 ) Comprehensive loss: Unrealized gains (losses) on investments arising during period (620,468 ) 347,346 Less: reclassification adjustment for net realized gains on investments - - Other comprehensive (loss) income (620,468 ) 347,346 Comprehensive loss attributable to Midwest Holding Inc. $ (3,138,497 ) $ (3,097,640 ) See accompanying Report of Independent Registered Public Accounting Firm |
Schedule II Condensed Financi25
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 Cash Flows from Operating Activities: Net loss $ (2,518,029 ) $ (3,444,986 ) Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: Equity in net loss of consolidated subsidiaries 747,476 (1,199,861 ) Depreciation 43,825 43,825 Net realized gain on investments - (341,914 ) Bargain purchase gain for business acquired (904,578 ) - Loss from equity method investments 357,437 438,175 Non-cash compensation expense - 1,917 Other assets and liabilities 986,290 (675,343 ) Net cash (used in) operating activities (1,287,579 ) (5,178,187 ) Cash Flows from Investing Activities: Equity securities carried at cost: Purchases - (61,383 ) Proceeds from equity securities carried at cost 9,000 1,955,500 Acquisition of First Wyoming Capital Corporation 165,759 - Net change in notes receivable - 27,383 Merger of Great Plains Investment in New Mexico Capital Corporation - (20,000 ) Purchases of property and equipment (37,480 ) (60,895 ) Net cash provided by investing activities 137,279 1,840,605 Cash Flows from Financing Activities: Issurance of common stock 286,722 - Repurchases of common stock - (58,252 ) Proceeds from issuance of preferred stock - 616,012 Preferred stock dividend (56,057 ) - Net transfers from noncontrolling interest - 3,861,767 Net cash provided by financing activities 230,665 4,419,527 Net (decrease) increase in cash and cash equivalents (919,635 ) 1,081,945 Cash and cash equivalents: Beginning 1,132,057 50,112 Ending $ 212,422 $ 1,132,057 Year Ended December 31, 2015 2014 Supplemental Disclosure of Non-Cash Information Exchange of common stock for non-controlling interest $ - $ 3,861,767 Common stock issued on the First Wyoming acquisition 1,811,682 - 1,811,682 3,861,767 See accompanying Report of Independent Registered Public Accounting Firm |
Schedule III Supplementary Insu
Schedule III Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | Midwest Holding Inc. and Subsidiaries Supplementary Insurance Information As of December 31, 2015 For the Year Ended December 31, 2015 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 (Loss) Reserves Costs Expenses Life Insurance $ 2,765,063 $ 38,892,420 $ 113,757 $ 3,424,377 $ 306,531 $ 2,219,415 $ 469,674 $ 4,518,633 As of December 31, 2014 For the Year Ended December 31, 2014 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 $ 2,646,970 $ 34,376,204 $ 82,504 $ 4,007,810 $ (9,883 $ 2,789,391 $ 625,680 $ 5,130,312 See accompanying Report of Independent Registered Public Accounting Firm |
Schedule IV Reinsurance Informa
Schedule IV Reinsurance Information | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance Information [Abstract] | |
Reinsurance Information | 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, 2015 Life insurance in force 252,791,000 147,714,000 15,349,000 120,426,000 12.75 % Life insurance premiums $ 2,963,317 $ 498,787 $ 36,777 $ 3,425,327 1.07 % Year ended December 31, 2014 Life insurance in force 245,498,000 141,321,000 13,913,000 118,090,000 11.78 % Life insurance premiums $ 4,312,808 $ 340,464 $ 35,466 $ 4,007,810 0.88 % See accompanying Report of Independent Registered Public Accounting Firm |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Midwest Holding Inc. and Subsidiaries Valuation and Qualifying Accounts Year Ended December 31, 2015 2014 Accumulated Depreciation: Beginning of the year 713,167 545,646 Depreciation expense 157,387 174,658 Disposals (6,028 ) (7,137 ) End of the year $ 864,526 $ 713,167 See accompanying Report of Independent Registered Public Accounting Firm |
Nature of Operations and Summ29
Nature of Operations and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2015 | |
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 subsidiaries American Life, American Life's wholly owned subsidiaries Capital Reserve and Great Plains Life Assurance Company, and the 99.9 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 as a group of similar products on an overall portfolio basis. These consolidated financial statements have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) in the United States of America. All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform to the current period's presentation with no impact on results of operations or total stockholders' 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, 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, 2015 or 2014. Included within the Company's equity securities carried at cost and equity method investments are certain privately placed common stocks for several development stage 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, 2015 and 2014, primarily due the sale of three of the mortgage loans during the fourth quarter of 2014 with the two remaining loans being sold during January 2015. |
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, 2015 and 2014 the Company did not have any short-term investments. |
Real estate, held for investment | Real estate, held for investment: Real estate, held for investment is comprised of ten condominiums in Hawaii acquired in the purchase of Old Reliance. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 |
Cash | Cash: The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2015 and 2014, the Company had no cash equivalents. |
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, 2015 analysis that all deferred acquisition costs were recoverable. The following table provides information about deferred acquisition costs (“DAC”) for the years ended December 31, 2015 and 2014, respectively. Year Ended December 31, 2015 2014 Balance at beginning of period $ 2,646,970 $ 2,722,819 Capitalization of commissions, sales and issue expenses 552,466 549,831 Change in DAC due to unrealized investment losses 35,301 - Gross amortization (469,674 ) (625,680 ) Balance at end of period $ 2,765,063 $ 2,646,970 |
Value of business acquired | Value of business acquired Value of business acquired ("VOBA") 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. American Life purchased Capital Reserve during 2010, resulting in an initial capitalized asset for value of business acquired of $ 116,326 375,000 348,010 The remaining capitalized and SNL asset balances at December 31, 2015, of $ 46,531 139,204 1,288,207 506,600 ten 183,698 175,254 Additionally, American Life purchased Old Reliance in August 2011, resulting in an initial capitalized asset for value of business acquired of $ 824,485 47,745 41,951 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, 2015 and 2014 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, 2015 and 2014, the fair value of the Company's reporting unit 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 the reporting unit incorporates multiple inputs including, 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, 2015 and 2014, 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 7 3 157,388 174,658 864,526 713,167 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, 2015 or 2014. |
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 2012. 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, 2015 and 2014. |
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 $ 0.001 120,000,000 18,006,301 13,167,654 At December 31, 2015 and 2014, the Company had 1,179 10 6.50 The Class A preferred shares are non-cumulative, non-voting and convertible by the holder to voting common shares after May, 2015, at a rate of 1.3 0.001 2,000,000 74,159 The Class B preferred shares are non-cumulative, non-voting and convertible by the holder to voting common shares after May 1, 2017 at a rate of 2.0 0.001 1,000,000 7 56,057 102,669 The Company evaluated its Class B preferred stock for potential embedded derivatives. In doing so, the company first concluded that the nature of the host contract was more equity than debt like. The embedded conversion features were determined not to be derivatives as net settlement does not exist given the lack of trading activity in the company's stock. Additionally, the conversion features are clearly and closely related to an equity host contract. Consideration was also given to whether a beneficial conversion feature should be recognized in additional paid in capital for the intrinsic value of the conversion feature at the issuance date. The preferred stock is not mandatorily redeemable but may be redeemed at the time of a deemed liquidation. Holders could elect redemption upon the occurrence of certain deemed liquidation events, including mergers in which the company is a constituent party and sales of substantially all the assets of the corporation, that are within the Company's control, if the Company does not dissolve the corporation. As such, the preferred stock is recognized in permanent equity. The redemption feature was determined to not be a derivative as settlement would be gross. 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, 2015 and 2014 were 14,081,926 10,654,483 |
Risks 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 (Idaho • 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: Revenue from Contracts with Customers (Topic 606) regarding accounting for revenue recognition that identifies the accounting treatment for an entity's contracts with customers. Although insurance contracts are excluded from this ASU, other customer contracts of the Company would be covered. This guidance is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases . Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard 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 Summ30
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | |
Schedule of Deferred Policy Acquisition Costs | Year Ended December 31, 2015 2014 Balance at beginning of period $ 2,646,970 $ 2,722,819 Capitalization of commissions, sales and issue expenses 552,466 549,831 Change in DAC due to unrealized investment losses 35,301 - Gross amortization (469,674 ) (625,680 ) Balance at end of period $ 2,765,063 $ 2,646,970 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | Fair value of Common stock of Midwest issued as consideration $ 1,811,612 Fair value of Midwest's previously held equity interest in First Wyoming 642,150 $ 2,453,762 Recognized preliminary amounts of identifiable assets acquired and liabilities assumed: Investment securities $ 3,961,937 Cash 315,546 VOBA 506,600 Other assets 92,045 Benefit reserves (611,110 ) Policy claims (41,754 ) Deposit-type contracts (799,990 ) Other liabilities (64,934 ) Total identifiable net assets 3,358,340 Bargain purchase gain (904,578 ) $ 2,453,762 |
Schedule of Pro Forma Information | Year ended December 31, (unaudited) 2015 2014 Premiums $ 3,723,084 $ 4,382,288 Investment income 414,970 699,238 Miscellaneous income 48,864 214,254 Total income $ 4,186,918 $ 5,295,780 Net loss $ (4,338,051 ) $ (4,215,594 ) |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interests [Abstract] | |
Schedule of Movement In Noncontrolling Interest | Year Ended December 31, 2014 Net (loss) attributable to Midwest Holding Inc. $ (3,444,986 ) Transfers (to) from noncontrolling interest: Increase in Midwest Holding Inc.'s additional paid-in capital for Great Plains Financial and First Wyoming Capital stock purchases, net of change in ownership 3,861,768 Change from net loss attributable to Midwest Holding Inc. and transfers from noncontrolling interests $ 416,782 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Schedule of Available for Sale Investments | Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value December 31, 2015: Fixed maturities: U.S. government obligations $ 3,256,704 $ 6,610 $ 69,815 $ 3,193,499 States and political subdivisions -- general obligations 1,001,993 - 6,942 995,051 States and political subdivisions -- special revenue 275,333 - 1,997 273,336 Corporate 19,745,201 1,468 937,278 18,809,391 Total fixed maturities 24,279,231 8,078 1,016,032 23,271,277 December 31, 2014: Fixed maturities: U.S. government obligations $ 3,031,743 $ 106,673 $ 22,350 $ 3,116,066 States and political subdivisions -- general obligations 998,778 4,971 29,095 974,654 States and political subdivisions -- special revenue 1,197,350 2,649 35,034 1,164,965 Corporate 12,834,409 1,904 374,750 12,461,563 Total fixed maturities 18,062,280 116,197 461,229 17,717,248 Equity securities: Preferred corporate stock 75,000 - - 75,000 Total equity securities 75,000 - - 75,000 Total $ 18,137,280 $ 116,197 $ 461,229 $ 17,792,248 |
Schedule of Amortized Cost, Fair Value, Credit Rating | Amortized Estimated Cost Fair Value Credit Rating December 31, 2015: Fixed maturities: States and political subdivisions -- general obligations Maricopa County Arizona School District No. 31 $ 336,419 $ 334,481 AA Longview Washington Refunding Taxable 166,303 165,297 N/R New York State Taxable Series 163,331 162,179 AA+ Philadelphia PA Authority for Industrial 149,352 148,662 AA Total $ 815,405 $ 810,619 |
Schedule of Unrealized Loss of Securities | December 31, 2015 December 31, 2014 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 $ 2,484,188 $ 62,343 14 $ 107,273 $ 3,963 1 States and political subdivisions -- general obligations 660,596 5,004 5 - - - States and political subdivisions -- special revenue 248,146 1,618 2 - - - Corporate 15,320,916 796,204 97 8,092,678 258,647 41 Greater than 12 months: U.S. government obligations 305,055 7,472 3 1,096,399 18,387 8 States and political subdivisions -- general obligations 334,481 1,938 1 654,822 29,095 3 States and political subdivisions -- special revenue 25,190 379 1 1,052,184 35,034 9 Corporate 3,166,108 141,074 22 3,626,258 116,103 22 Total fixed maturities $ 22,544,653 $ 1,016,032 145 $ 14,629,614 $ 461,229 84 |
Schedule of Fixed Maturities | Amortized Estimated Cost Fair Value Due in one year or less $ 209,648 $ 209,084 Due after one year through five years 1,530,385 1,521,658 Due after five years through ten years 14,433,713 13,851,865 Due after ten years 8,105,485 7,688,670 $ 24,279,231 $ 23,271,277 |
Components of Net Investment Income | Year Ended December 31, 2015 2014 Fixed maturities $ 681,999 $ 401,138 Equity securities 186 83 Cash and short-term investments 7 3,965 Equity in the net loss of unconsolidated subsidiaries (357,437 ) (438,175 ) Other 44,863 99,477 369,618 66,488 Less investment expenses (63,087 ) (76,371 ) $ 306,531 $ (9,883 ) |
Schedule of Mortgage Loan Activity | Year Ended December 31, 2015 2014 Balance at beginning of period $ 349,386 $ 665,569 Proceeds from payments on mortgage loans on real estate, held for investment - (3,931 ) Proceeds from settlement on mortgage loans on real estate, held for investment (349,386 ) (312,252 ) Balance at end of period $ - $ 349,386 |
Fair Values of Financial Inst34
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Values of Financial Instruments 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 December 31, 2015 Fixed maturities: U.S. government obligations $ - $ 3,193,499 $ - $ 3,193,499 States and political subdivisions — general obligations - 995,051 - 995,051 States and political subdivisions — special revenue - 273,336 - 273,336 Corporate - 18,809,391 - 18,809,391 Total fixed maturities $ - $ 23,271,277 $ - $ 23,271,277 December 31, 2014 Fixed maturities: U.S. government obligations $ - $ 3,116,066 $ - $ 3,116,066 States and political subdivisions — general obligations - 974,654 - 974,654 States and political subdivisions — special revenue - 1,164,965 - 1,164,965 Corporate - 12,461,563 - 12,461,563 Total fixed maturities - 17,717,248 - 17,717,248 Equity securities: Preferred corporate stock - 75,000 - 75,000 Total equity securities - 75,000 - 75,000 Total $ - $ 17,792,248 $ - $ 17,792,248 |
Schedule of Financial Assets and Liabilities at Fair Value | December 31, 2015 Fair Value Measurements at 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: Policy loans $ 420,775 $ - $ - $ 420,775 $ 420,775 Cash and cash equivalents 1,192,336 1,192,336 - - 1,192,336 Liabilities: Policyholder deposits (Deposit-type contracts) 13,897,421 - - 13,897,421 13,897,421 Surplus notes and accrued interest payable 779,405 - - 768,022 768,022 December 31, 2014 Fair Value Measurements at 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 $ 349,386 $ - $ - $ 349,386 $ 349,386 Policy loans 374,186 - - 374,186 374,186 Cash and cash equivalents 2,310,047 2,310,047 - - 2,310,047 Liabilities: Policyholder deposits (Investment-type contracts) 10,722,227 - - 10,722,227 10,722,227 Surplus notes and accrued interest payable 746,927 - - 739,042 739,042 |
Income Tax Matters (Tables)
Income Tax Matters (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Matters [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Year Ended December 31, 2015 2014 Deferred tax assets: Loss carryforwards $ 8,962,587 $ 7,598,830 Capitalized costs 667,264 802,000 Unrealized losses on investments 356,495 121,110 Benefit reserves 1,071,997 1,239,298 Total deferred tax assets 11,058,343 9,761,238 Less valuation allowance (9,287,024 ) (8,112,743 ) Total deferred tax assets, net of valuation allowance 1,771,319 1,648,495 Deferred tax liabilities: Policy acquisition costs 593,654 908,021 Due premiums 234,468 220,823 Value of business acquired 693,297 249,351 Intangible assets 238,000 238,000 Property and equipment 11,900 32,300 Total deferred tax liabilities 1,771,319 1,648,495 Net deferred tax assets $ - $ - |
Schedule of Effective Tax Rate Reconciliation | Year Ended December 31, 2015 2014 Computed expected income tax benefit $ (1,163,686 ) $ (1,171,295 ) Increase (reduction) in income taxes resulting from: Meals, entertainment and political contributions 46,315 24,141 Dividends received deduction (44 ) (20 ) Noncontrolling interests - 10,597 True-up benefit reserves and 2014 NOL; and First Wyoming Capital Merger 178,519 25,732 224,790 60,450 Tax benefit before valuation allowance (938,896 ) (1,110,845 ) Change in valuation allowance 938,896 1,110,845 Net income tax expenses $ - $ - |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance [Abstract] | |
Summary of Significant Reinsurance Amounts | Year Ended December 31, 2015 2014 Balance sheets: Benefit and claim reserves assumed $ 2,763,779 $ 2,678,376 Benefit and claim reserves ceded 12,212,656 12,636,910 Year Ended December 31, 2015 2014 Statements of comprehensive income: Premiums assumed $ 36,777 $ 35,466 Premiums ceded 498,787 340,464 Benefits assumed 57,317 82,897 Benefits ceded 904,867 983,168 Commissions assumed 21 44 Commissions ceded 3,399 6,216 |
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 Optimum Re Insurance Company A- $ - $ 154,928 $ 184,474 $ - $ 339,402 Sagicor Life Insurance Company A- - 412,884 11,689,455 229,085 11,873,254 $ - $ 567,812 $ 11,873,929 $ 229,085 $ 12,212,656 |
Deposit-Type Contracts (Tables)
Deposit-Type Contracts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deposit Type Contracts [Abstract] | |
Schedule of Contracts | Year Ended December 31, 2015 2014 Beginning balance $ 10,722,227 $ 8,422,105 First Wyoming Life beginning balance 799,990 - Change in deposit-type contracts assumed from SNL (1,200 ) (114,109 ) Deposits received 2,387,104 2,409,659 Investment earnings 533,646 403,556 Withdrawals (533,762 ) (398,984 ) Contract Charges (10,584 ) - Ending balance $ 13,897,421 $ 10,722,227 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Minimum Payments | 2016 $ 198,030 2017 149,481 2018 136,557 2019 141,412 2020 146,477 Later years 483,333 Total $ 1,255,290 |
Statutory Net Income and Surp39
Statutory Net Income and Surplus (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Accounting Practices Disclosure | Statutory Net Loss for the Years Ended December 31, 2015 2014 American Life $ 1,275,874 $ 1,465,181 Capital Reserve $ 77,720 $ 123,940 Great Plains Life $ 436,268 $ 112,890 First Wyoming Life $ 493,511 $ 311,803 Statutory Capital and Surplus as of December 31, 2015 2014 American Life $ 2,526,392 $ 2,429,604 Capital Reserve $ 1,464,044 $ 1,332,772 Great Plains Life $ 1,663,368 $ 2,025,982 First Wyoming Life $ 2,715,494 $ 3,272,791 |
Surplus Notes (Tables)
Surplus Notes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Surplus Notes [Abstract] | |
Summary of Surplus Notes | Creditor Issue Date Maturity Date Face Amount Interest Rate David G. Elmore September 1, 2006 September 1, 2016 $ 250,000 7 % David G. Elmore August 4, 2011 August 1, 2016 300,000 5 % |
Nature of Operations and Summ41
Nature of Operations and Summary of Significant Accounting Policies (Schedule of Deferred Acquisition Costs) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Nature of Operations and Summary of Significant Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 2,646,970 | $ 2,722,819 |
Capitalization of commissions, sales and issue expenses | 552,466 | $ 549,831 |
Change in DAC due to unrealized investment losses | 35,301 | |
Gross amortization | (469,674) | $ (625,680) |
Balance at the end of period | $ 2,765,063 | $ 2,646,970 |
Nature of Operations and Summ42
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Oct. 31, 2014USD ($)shares | Sep. 12, 2012USD ($)shares | Aug. 31, 2010USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2011USD ($)shares | Dec. 31, 2010USD ($) | Dec. 31, 2009$ / sharesshares | Dec. 18, 2015shares | Nov. 25, 2013shares | Dec. 31, 2012 | Aug. 31, 2011USD ($) | |
Stock Issued During Period Shares Issue Price (in dollars per share) | $ / shares | $ 5 | |||||||||||
Issuances of stock, net of capital raising expenses | $ 250,181 | $ 616,012 | ||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | ||||||||||
Common Stock, Shares Authorized (in shares) | shares | 120,000,000 | 120,000,000 | ||||||||||
Common stock, shares issued (in shares) | shares | 18,006,301 | 13,167,654 | ||||||||||
Common stock, shares outstanding (in shares) | shares | 18,006,301 | 13,167,654 | ||||||||||
Warrants outstanding | shares | 1,179 | 1,179 | ||||||||||
Number of shares of voting common stock issuable upon exercise of warrant | shares | 10 | 1.27 | ||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 6.50 | |||||||||||
Weighted Average Number of Shares Outstanding, Basic (in shares) | shares | 14,081,926 | 10,654,483 | ||||||||||
Depreciation | $ 157,388 | $ 174,658 | ||||||||||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 864,526 | 713,167 | ||||||||||
Value of business acquired | 2,039,110 | $ 1,763,952 | ||||||||||
Preferred stock dividend | 56,057 | |||||||||||
Face Amount | $ 550,000 | $ 550,000 | ||||||||||
Residential Real Estate [Member] | ||||||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 50 years | |||||||||||
Furniture and Fixtures [Member] | Minimum [Member] | ||||||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||||||
Furniture and Fixtures [Member] | Maximum [Member] | ||||||||||||
Property, Plant and Equipment, Useful Life | 7 years | |||||||||||
Software [Member] | ||||||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||||||
Hot Dot, Inc [Member] | ||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 775,000 | $ 750,000 | ||||||||||
Stock Issued During Period, Shares, Acquisitions (in shares) | shares | 1,500,000 | 1,000,000 | ||||||||||
Security Capital Corporation [Member] | ||||||||||||
Number of shares of voting common stock issuable upon exercise of warrant | shares | 0.162 | |||||||||||
Capital Reserve Life Insurance Company [Member] | ||||||||||||
Ownership percentage | 100.00% | 100.00% | ||||||||||
Cost Of Acquired Entity In Addition To Statutory Capital and Surplus | $ 116,326 | |||||||||||
Business Acquisition, Asset Representing Ceding Commission | $ 139,204 | |||||||||||
Value of business acquired | 46,531 | |||||||||||
Security National Life Insurance Company [Member] | ||||||||||||
Insurance Ceding Commission Paid | 375,000 | |||||||||||
Business Acquisition, Asset Representing Ceding Commission | 348,010 | |||||||||||
Value of business acquired | $ 1,288,207 | |||||||||||
Old Reliance [Member] | ||||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | shares | 150,000 | |||||||||||
Cash payment for acquisition | $ 1,600,000 | |||||||||||
Value of business acquired | $ 824,485 | |||||||||||
Amortization of Other Deferred Charges | $ 47,745 | 41,951 | ||||||||||
Face Amount | $ 500,000 | |||||||||||
Great Plains Financial Corporation [Member] | ||||||||||||
Number of shares of voting common stock issuable upon exercise of warrant | shares | 1.298 | |||||||||||
First Wyoming Life Insurance Company [Member] | ||||||||||||
Ownership percentage | 99.90% | 99.90% | 22.20% | |||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 10 years | |||||||||||
Value of business acquired | $ 506,600 | |||||||||||
Amortization of Other Deferred Charges | $ 183,698 | $ 175,254 | ||||||||||
Pacific Northwest Capital Corporation [Member] | ||||||||||||
Ownership percentage | 22.40% | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Conversion Ratio | 1.3 | |||||||||||
Preferred Stock, Shares Issued (in shares) | shares | 74,159 | 74,159 | ||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares authorized (in shares) | shares | 2,000,000 | 2,000,000 | ||||||||||
Preferred stock, shares outstanding (in shares) | shares | 74,159 | 74,159 | ||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Conversion Ratio | 2 | |||||||||||
Preferred Stock, Shares Issued (in shares) | shares | 102,669 | 102,669 | ||||||||||
Stated dividend rate | 7.00% | |||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares authorized (in shares) | shares | 1,000,000 | 1,000,000 | ||||||||||
Preferred stock, shares outstanding (in shares) | shares | 102,669 | 102,669 | ||||||||||
Preferred stock dividend | $ 56,057 | |||||||||||
Intra State Offering [Member] | ||||||||||||
Stock Issued During Period Shares Issue Price (in dollars per share) | $ / shares | $ 6 | |||||||||||
Issuances of stock, net of capital raising expenses | $ 7,400,000 | |||||||||||
Conversion Ratio | 1.3 | |||||||||||
Preferred Stock, Shares Issued (in shares) | shares | 74,159 | |||||||||||
Intra State Offering [Member] | Convertible Preferred Stock [Member] | ||||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | shares | 2,000,000 | |||||||||||
Stock Issued During Period Shares Issue Price (in dollars per share) | $ / shares | $ 5 | |||||||||||
Percentage Of Oversale On Final Offering | 10.00% |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||
Oct. 31, 2015USD ($)shares | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 28, 2015USD ($) | |
Business Acquisition [Line Items] | |||||
Loss on equity method investment | $ (357,437) | $ (438,174) | |||
Bargain purchase gain for business acquisition | $ 904,578 | 904,578 | |||
Total income | 3,785,115 | $ 4,639,477 | |||
Net loss | $ (2,518,029) | (3,905,906) | |||
Equity method investments | 978,744 | ||||
Midwest [Member] | |||||
Business Acquisition [Line Items] | |||||
Loss on equity method investment | $ (357,437) | $ (438,175) | |||
Elimination of Midwest Investment in First Wyoming | 642,150 | ||||
Elimination of unrealized gain on Midwest due to First Wyoming | $ 30,410 | ||||
Bargain purchase gain for business acquisition | 904,578 | ||||
Total income | 173,734 | $ 528,757 | |||
Net loss | $ (1,388,413) | (1,412,156) | |||
Equity method investments | 978,744 | ||||
First Wyoming Life Insurance Company [Member] | |||||
Business Acquisition [Line Items] | |||||
Conversion Ratio | 1.37 | ||||
Loss on equity method investment | $ (198,760) | ||||
Elimination of Midwest Investment in First Wyoming | $ 642,150 | 158,677 | 247,635 | ||
Shares converted | shares | 4,767,400 | ||||
Voting common stock | $ 1,811,612 | ||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 10 years | ||||
Total income | 4,186,918 | 5,295,780 | |||
Amortization of value of business acquired | 50,660 | 50,660 | |||
Bargain purchase gain for business acquisition | $ 904,578 | ||||
Ownership percentage | 100.00% | ||||
Acquisition costs | $ 123,219 | ||||
Total income | $ 71,165 | ||||
Net loss | $ (73,939) | ||||
Discount rate | 16.50% | ||||
Expected long term growth | 3.00% | ||||
Capitalization rate | 13.50% | ||||
Equity method investments | $ 810,500 | ||||
Ownership percentage prior to acquisition | 22.10% | ||||
First Wyoming Life Insurance Company [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected cash flow growth | 3.00% | ||||
First Wyoming Life Insurance Company [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected cash flow growth | 5.00% | ||||
First Wyoming Life Insurance Company [Member] | Midwest [Member] | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 18.00% | ||||
Expected long term growth | 3.00% | ||||
Capitalization rate | 13.50% | ||||
First Wyoming Life Insurance Company [Member] | Midwest [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected cash flow growth | 3.00% | ||||
First Wyoming Life Insurance Company [Member] | Midwest [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected cash flow growth | 27.00% | ||||
First Wyoming Life Insurance Company [Member] | Elimination Of TPA Fees [Member] | |||||
Business Acquisition [Line Items] | |||||
Total income | $ 122,903 | $ 80,992 |
Acquisitions (Schedule of Asset
Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||
Bargain purchase gain | $ (904,578) | $ (904,578) | |
First Wyoming Life Insurance Company [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of Common stock of Midwest issued as consideration | 1,811,612 | ||
Fair value of Midwest's previously held equity interest in First Wyoming | 642,150 | $ 158,677 | $ 247,635 |
Total consideration | 2,453,762 | ||
Investment securities | 3,961,937 | ||
Cash | 315,546 | ||
VOBA | 506,600 | ||
Other Assets | 92,045 | ||
Benefit reserves | (611,110) | ||
Policy claims | (41,754) | ||
Deposit type-contracts | (799,990) | ||
Other liabilities | (64,934) | ||
Total identifiable net assets | 3,358,340 | ||
Bargain purchase gain | (904,578) | ||
Total | $ 2,453,762 |
Acquisitions (Schedule of Pro F
Acquisitions (Schedule of Pro Forma Information) (Details) - First Wyoming Life Insurance Company [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Premiums | $ 3,723,084 | $ 4,382,288 |
Investment income | 414,970 | 699,238 |
Miscellaneous income | 48,864 | 214,254 |
Total income | 4,186,918 | 5,295,780 |
Net loss | $ (4,338,051) | $ (4,215,594) |
Assets and Liabilities Held f46
Assets and Liabilities Held for Sale (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Assets and Liabilities Held for Sale [Abstract] | ||
Expected proceeds from purchase agreement | $ 50,000 | |
Assets of discontinued operations | 16,870,241 | $ 17,691,344 |
Liabilities of discontinued operations | $ 15,508,998 | $ 16,443,657 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net (loss) attributable to Midwest Holding Inc. | $ (2,518,029) | $ (3,444,986) |
Transfers (to) from noncontrolling interest: | ||
Increase in Midwest Holding Inc's additional paid-in capital, net of change in ownership | ||
Change from net loss attributable to Midwest Holding Inc. and transfers from noncontrolling interests | $ 416,782 | |
Great Plains Financial Corporation [Member] | ||
Transfers (to) from noncontrolling interest: | ||
Increase in Midwest Holding Inc's additional paid-in capital, net of change in ownership | $ 3,861,768 |
Investments (Schedule of Availa
Investments (Schedule of Available for Sale Investments) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortized Cost | $ 18,137,280 | |
Gross Unrealized Gains | 116,197 | |
Gross Unrealized Losses | 461,229 | |
Estimated Fair Value | 17,792,248 | |
Fixed Maturities [Member] | ||
Amortized Cost | $ 24,279,231 | 18,062,280 |
Gross Unrealized Gains | 8,078 | 116,197 |
Gross Unrealized Losses | 1,016,032 | 461,229 |
Estimated Fair Value | 23,271,277 | 17,717,248 |
Fixed Maturities [Member] | Us Treasury and Government [Member] | ||
Amortized Cost | 3,256,704 | 3,031,743 |
Gross Unrealized Gains | 6,610 | 106,673 |
Gross Unrealized Losses | 69,815 | 22,350 |
Estimated Fair Value | 3,193,499 | 3,116,066 |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ||
Amortized Cost | $ 1,001,993 | 998,778 |
Gross Unrealized Gains | 4,971 | |
Gross Unrealized Losses | $ 6,942 | 29,095 |
Estimated Fair Value | 995,051 | 974,654 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ||
Amortized Cost | $ 275,333 | 1,197,350 |
Gross Unrealized Gains | 2,649 | |
Gross Unrealized Losses | $ 1,997 | 35,034 |
Estimated Fair Value | 273,336 | 1,164,965 |
Fixed Maturities [Member] | Corporate Debt Securities [Member] | ||
Amortized Cost | 19,745,201 | 12,834,409 |
Gross Unrealized Gains | 1,468 | 1,904 |
Gross Unrealized Losses | 937,278 | 374,750 |
Estimated Fair Value | 18,809,391 | 12,461,563 |
Equity Securities [Member] | ||
Amortized Cost | $ 140,250 | $ 75,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Estimated Fair Value | $ 75,000 | |
Equity Securities [Member] | Preferred Stock [Member] | ||
Amortized Cost | $ 75,000 | |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Estimated Fair Value | $ 75,000 |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost, Fair Value, Credit Rating) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortized Cost | $ 24,279,231 | $ 18,062,280 |
States and Political Subdivisions General Obligations [Member] | ||
Amortized Cost | 815,405 | |
Estimated Fair Value | 810,619 | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Maricopa County Arizona School District No. 31 [Member] | ||
Amortized Cost | 336,419 | |
Estimated Fair Value | $ 334,481 | |
Credit Rating | AA | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Longview Washington Refunding Taxable [Member] | ||
Amortized Cost | $ 166,303 | |
Estimated Fair Value | $ 165,297 | |
Credit Rating | N/R | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | New York State Taxable Series [Member] | ||
Amortized Cost | $ 163,331 | |
Estimated Fair Value | $ 162,179 | |
Credit Rating | AA+ | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Philadelphia PA Authority for Industrial [Member] | ||
Amortized Cost | $ 149,352 | |
Estimated Fair Value | $ 148,662 | |
Credit Rating | AA |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss of Securities) (Details) - Fixed Maturities [Member] | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Estimated Fair Value, Total | $ 22,544,653 | $ 14,629,614 |
Gross Unrealized Loss, Total | $ 1,016,032 | $ 461,229 |
Number of Securities, Total | 145 | 84 |
Us Treasury and Government [Member] | ||
Estimated Fair Value, Less than 12 months | $ 2,484,188 | $ 107,273 |
Gross Unrealized Loss, Less than 12 months | $ 62,343 | $ 3,963 |
Number of Securities, Less than 12 months | 14 | 1 |
Estimated Fair value, Greater than 12 months | $ 305,055 | $ 1,096,399 |
Gross Unrealized Loss, Greater than 12 months | $ 7,472 | $ 18,387 |
Number of Securities, Greater than 12 months | 3 | 8 |
States and Political Subdivisions General Obligations [Member] | ||
Estimated Fair Value, Less than 12 months | $ 660,596 | |
Gross Unrealized Loss, Less than 12 months | $ 5,004 | |
Number of Securities, Less than 12 months | 5 | |
Estimated Fair value, Greater than 12 months | $ 334,481 | $ 654,822 |
Gross Unrealized Loss, Greater than 12 months | $ 1,938 | $ 29,095 |
Number of Securities, Greater than 12 months | 1 | 3 |
States and Political Subdivisions Special Revenue [Member] | ||
Estimated Fair Value, Less than 12 months | $ 248,146 | |
Gross Unrealized Loss, Less than 12 months | 1,618 | |
Estimated Fair value, Greater than 12 months | 25,190 | $ 1,052,184 |
Gross Unrealized Loss, Greater than 12 months | $ 379 | $ 35,034 |
Number of Securities, Greater than 12 months | 1 | 9 |
Corporate Debt Securities [Member] | ||
Estimated Fair Value, Less than 12 months | $ 15,320,916 | $ 8,092,678 |
Gross Unrealized Loss, Less than 12 months | $ 796,204 | $ 258,647 |
Number of Securities, Less than 12 months | 97 | 41 |
Estimated Fair value, Greater than 12 months | $ 3,166,108 | $ 3,626,258 |
Gross Unrealized Loss, Greater than 12 months | $ 141,074 | $ 116,103 |
Number of Securities, Greater than 12 months | 22 | 22 |
Investments (Schedule of Fixed
Investments (Schedule of Fixed Maturities) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Investments [Abstract] | ||
Amortized Cost, Due in one year or less | $ 209,648 | |
Amortized Cost, Due after one year through five years | 1,530,385 | |
Amortized Cost, Due after five years through ten years | 14,433,713 | |
Amortized Cost, Due after ten years | 8,105,485 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost | 24,279,231 | $ 18,062,280 |
Estimated Fair Value, Due in one year or less | 209,084 | |
Estimated Fair Value, Due after one year through five years | 1,521,658 | |
Estimated Fair Value, Due after five years through ten years | 13,851,865 | |
Estimated Fair Value, Due after ten years | 7,688,670 | |
Available-for-sale Securities, Debt Securities, Estimated Fair Value | $ 23,271,277 | $ 17,717,248 |
Investments (Components of Net
Investments (Components of Net Investment Income) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net investment income | $ 369,618 | $ 66,488 |
Less investment expenses | (63,087) | (76,371) |
Total | 306,531 | (9,883) |
Fixed Maturities [Member] | ||
Net investment income | 681,999 | 401,138 |
Equity Securities [Member] | ||
Net investment income | 186 | 83 |
Cash and Cash Equivalents [Member] | ||
Net investment income | 7 | 3,965 |
Equity Method Investments [Member] | ||
Net investment income | (357,437) | (438,175) |
Other Long Term Investment [Member] | ||
Net investment income | $ 44,863 | $ 99,477 |
Investments (Schedule of Mortga
Investments (Schedule of Mortgage Loan Activity) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Investments [Abstract] | ||
Balance at beginning of period | $ 349,386 | $ 665,569 |
Proceeds from payments on mortgage loans on real estate, held for investment | (3,931) | |
Proceeds from settlement on mortgage loans on real estate, held for investment | $ (349,386) | (312,252) |
Balance at end of period | $ 349,386 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Investments [Abstract] | ||
Separate Account Assets | $ 6,186,865 | $ 3,185,698 |
Assets On Deposits Fair Value | 6,000,376 | 3,262,233 |
Proceeds From Sale Of Available-For-Sale Securities | 13,394,158 | 8,288,570 |
Available-for-sale Securities, Gross Realized Losses | 266,025 | 46,795 |
Schedule of Equity Method Investments [Line Items] | ||
Available-for-sale Securities, Gross Realized Gains | $ 148,661 | 50,974 |
Hot Dot [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Available-for-sale Securities, Gross Realized Gains | 90,812 | |
Northern Plains [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Available-for-sale Securities, Gross Realized Gains | $ 251,104 |
Fair Values of Financial Inst55
Fair Values of Financial Instruments (Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | $ 17,792,248 | |
Fixed Maturities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | $ 23,271,277 | 17,717,248 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 75,000 | |
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 | 3,193,499 | 3,116,066 |
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 | 995,051 | 974,654 |
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 | 273,336 | 1,164,965 |
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 | $ 18,809,391 | 12,461,563 |
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 | |
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 | ||
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 | ||
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] | 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 | $ 17,792,248 | |
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 | $ 23,271,277 | 17,717,248 |
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 | |
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 | 3,193,499 | 3,116,066 |
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 | 995,051 | 974,654 |
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 | 273,336 | 1,164,965 |
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 | $ 18,809,391 | 12,461,563 |
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 | |
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] | 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 Inst56
Fair Values of Financial Instruments (Schedule of Financial Assets and Liabilities at Fair Value) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | |||
Mortgage loans on real estate, held for investment | $ 349,386 | ||
Cash and cash equivalents | $ 1,192,336 | 2,310,047 | $ 3,377,978 |
Liabilities: | |||
Surplus Notes and Accrued Interest Payable | $ 550,000 | $ 550,000 | |
Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Mortgage loans on real estate, held for investment | |||
Policy loans | |||
Cash and cash equivalents | $ 1,192,336 | $ 2,310,047 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | |||
Surplus Notes and Accrued Interest Payable | |||
Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Mortgage loans on real estate, held for investment | |||
Policy loans | |||
Cash and cash equivalents | |||
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | |||
Surplus Notes and Accrued Interest Payable | |||
Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Mortgage loans on real estate, held for investment | $ 349,386 | ||
Policy loans | $ 420,775 | $ 374,186 | |
Cash and cash equivalents | |||
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | $ 13,897,421 | $ 10,722,227 | |
Surplus Notes and Accrued Interest Payable | 768,022 | 739,042 | |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
Assets: | |||
Mortgage loans on real estate, held for investment | 349,386 | ||
Policy loans | 420,775 | 374,186 | |
Cash and cash equivalents | 1,192,336 | 2,310,047 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | 13,897,421 | 10,722,227 | |
Surplus Notes and Accrued Interest Payable | 779,405 | 746,927 | |
Estimate Of Fair Value, Fair Value Disclosure [Member] | |||
Assets: | |||
Mortgage loans on real estate, held for investment | 349,386 | ||
Policy loans | 420,775 | 374,186 | |
Cash and cash equivalents | 1,192,336 | 2,310,047 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | 13,897,421 | 10,722,227 | |
Surplus Notes and Accrued Interest Payable | $ 768,022 | $ 739,042 |
Fair Values of Financial Inst57
Fair Values of Financial Instruments (Narrative) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Values of Financial Instruments Instruments [Abstract] | ||
Accrued interest | $ 229,405 | $ 196,927 |
Income Tax Matters (Schedule of
Income Tax Matters (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Loss carryforwards | $ 8,962,587 | $ 7,598,830 |
Capitalized costs | 667,264 | 802,000 |
Unrealized losses on investments | 356,495 | 121,110 |
Benefit reserves | 1,071,997 | 1,239,298 |
Total deferred tax assets | 11,058,343 | 9,761,238 |
Less valuation allowance | (9,287,024) | (8,112,743) |
Total deferred tax assets, net of valuation allowance | 1,771,319 | 1,648,495 |
Deferred tax liabilities: | ||
Policy acquisition costs | 593,654 | 908,021 |
Due premiums | 234,468 | 220,823 |
Value of business acquired | 693,297 | 249,351 |
Intangible assets | 238,000 | 238,000 |
Property and equipment | 11,900 | 32,300 |
Total deferred tax liabilities | $ 1,771,319 | $ 1,648,495 |
Net deferred tax assets |
Income Tax Matters (Schedule 59
Income Tax Matters (Schedule of Effective Tax Rate Reconciliation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Matters [Abstract] | ||
Computed expected income tax benefit | $ (1,163,686) | $ (1,171,295) |
Increase (reduction) in income taxes resulting from: | ||
Meals, entertainment and political contributions | 46,315 | 24,141 |
Dividends received deduction | $ (44) | (20) |
Noncontrolling interests | 10,597 | |
True-up benefit reserves and 2014 NOL; and First Wyoming Capital Merger | $ 178,519 | 25,732 |
Income Tax Reconciliation, Deductions | 224,790 | 60,450 |
Tax benefit before valuation allowance | (938,896) | (1,110,845) |
Change in valuation allowance | $ 938,896 | $ 1,110,845 |
Net income tax expense |
Income Tax Matters (Narrative)
Income Tax Matters (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Matters [Abstract] | ||
Deferred Tax Assets, Valuation Allowance | $ 9,287,024 | $ 8,112,743 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 34.00% | |
Minimum [Member] | ||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2024 | |
Maximum [Member] | ||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2035 |
Reinsurance (Summary of Signifi
Reinsurance (Summary of Significant Reinsurance Amounts) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Balance sheets: | ||
Benefit and claim reserves assumed | $ 2,763,779 | $ 2,678,376 |
Benefit and claim reserves ceded | 12,212,656 | 12,636,910 |
Statements of comprehensive income: | ||
Premiums assumed | 36,777 | 35,466 |
Premiums ceded | 498,787 | 340,464 |
Benefits assumed | 57,317 | 82,897 |
Benefits ceded | 904,867 | 983,168 |
Commissions assumed | 21 | 44 |
Commissions ceded | $ 3,399 | $ 6,216 |
Reinsurance (Schedule of Signif
Reinsurance (Schedule of Significant Reinsurance Balances) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Recoverable on Paid Losses | ||
Recoverable on Unpaid Losses | $ 567,812 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | 11,873,929 | |
Ceded Due Premiums | 229,085 | |
Total Amount Recoverable from Reinsurer | $ 12,212,656 | $ 12,636,910 |
Optimum Reinsurance Company [Member] | ||
AM Best Rating | A- | |
Recoverable on Paid Losses | ||
Recoverable on Unpaid Losses | $ 154,928 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | $ 184,474 | |
Ceded Due Premiums | ||
Total Amount Recoverable from Reinsurer | $ 339,402 | |
Sagicor Life Insurance Company [Member] | ||
AM Best Rating | A- | |
Recoverable on Paid Losses | ||
Recoverable on Unpaid Losses | $ 412,884 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | 11,689,455 | |
Ceded Due Premiums | 229,085 | |
Total Amount Recoverable from Reinsurer | $ 11,873,254 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2000 | Dec. 31, 1999 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amounts recoverable from reinsurers | $ 12,212,656 | $ 12,636,910 | ||
Sagicor Life Insurance Company [Member] | ||||
Percentage Of Co Insurance Agreement | 25.00% | 75.00% | ||
Premiums, Percentage Assumed to Net | 75.00% | |||
Amounts recoverable from reinsurers | $ 11,873,254 | $ 12,143,472 |
Deposit-Type Contracts (Schedul
Deposit-Type Contracts (Schedule of Contracts) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Beginning balance | $ 10,722,227 | $ 8,422,105 |
Deposits received | 2,387,104 | 2,409,659 |
Investment earnings | 533,646 | 403,556 |
Withdrawals | (533,762) | $ (398,984) |
Contract Charges | (10,584) | |
Ending balance | 13,897,421 | $ 10,722,227 |
Security National Life Insurance Company [Member] | ||
Change in deposit-type contracts assumed from Security National | (1,200) | $ (114,109) |
First Wyoming Life Insurance Company [Member] | ||
Beginning balance | $ 799,990 | |
Ending balance | $ 799,990 |
Deposit-Type Contracts (Narrati
Deposit-Type Contracts (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Security National Life Insurance Company [Member] | |
Premiums, Percentage Assumed to Net | 100.00% |
Commitments and Contingencies66
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies [Abstract] | ||
Operating Leases, Rent Expense | $ 232,130 | $ 227,182 |
2,016 | 198,030 | |
2,017 | 149,481 | |
2,018 | 136,557 | |
2,019 | 141,412 | |
2,020 | 146,477 | |
Later years | 483,333 | |
Total | $ 1,255,290 |
Statutory Net Income and Surp67
Statutory Net Income and Surplus (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
American Life and Security Corporation [Member] | |||
Statutory net loss | $ 1,275,874 | $ 1,465,181 | |
Statutory capital and surplus | 2,526,392 | 2,429,604 | |
Capital contribution payment | $ 1,000,000 | ||
Capital Reserve Life Insurance Company [Member] | |||
Statutory net loss | 77,720 | 123,940 | |
Statutory capital and surplus | 1,464,044 | 1,332,772 | |
Great Plains Financial Corporation [Member] | |||
Statutory net loss | 436,268 | 112,890 | |
Statutory capital and surplus | 1,663,368 | 2,025,982 | |
First Wyoming Life Insurance Company [Member] | |||
Statutory net loss | 493,511 | 311,803 | |
Statutory capital and surplus | $ 2,715,494 | $ 3,272,791 |
Surplus Notes (Summary of Surpl
Surplus Notes (Summary of Surplus Notes) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Face Amount | $ 550,000 | $ 550,000 |
Surplus note, September 1, 2006 [Member] | David Elmore [Member] | ||
Issue Date | Sep. 1, 2006 | |
Maturity Date | Sep. 1, 2016 | |
Face Amount | $ 250,000 | |
Interest Rate | 7.00% | |
Surplus note, August 4, 2011 [Member] | David Elmore [Member] | ||
Issue Date | Aug. 4, 2011 | |
Maturity Date | Aug. 1, 2016 | |
Face Amount | $ 300,000 | |
Interest Rate | 5.00% |
Surplus Notes (Narrative) (Deta
Surplus Notes (Narrative) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Interest Payable | $ 229,405 | $ 196,927 |
Surplus Notes [Member] | ||
Interest Payable | $ 229,405 |
Investment in Pacific Northwe70
Investment in Pacific Northwest Capital Corporation (Narrative) (Details) - Pacific Northwest [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2014 | |
Equity Method Investment Number Of Shares Acquired | 850,000 | |
Effect Of Changes In Accounting Method | $ 72,306 | |
Equity Method Investment, Ownership Percentage | 22.40% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
American Life and Security Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Amount of transaction | $ 154,670 | $ 295,093 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ in Millions | 1 Months Ended | ||
Mar. 15, 2016USD ($)shares | Feb. 22, 2016USD ($) | Feb. 19, 2016USD ($) | |
Subsequent Event [Line Items] | |||
Capital contribution payment | $ 1 | $ 1 | |
Northstar Financial Corporation [Member] | |||
Subsequent Event [Line Items] | |||
Conversion Ratio | 1.27 | ||
Shares converted | shares | 4,198,250 | ||
Cash | $ 2.2 |
Schedule I Summary of Investm73
Schedule I Summary of Investments - Other Than Investments in Related Parties (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized Cost | $ 18,137,280 | |
Available-for-sale Securities | 17,792,248 | |
Amount Recognized in Consolidated Balance Sheets | $ 23,271,277 | 17,717,248 |
Real estate, held for investment, Cost | 529,769 | |
Policy loans, Cost | 420,775 | |
Total investments, Cost | $ 25,370,025 | |
Equity method investments | 978,744 | |
Real estate, held for investment, Amount Recognized in Consolidated Balance Sheets | $ 529,769 | 541,809 |
Policy loans, Amount Recognized in Consolidated Balance Sheets | 420,775 | 374,186 |
Total investments, Amount Recognized in Consolidated Balance Sheets | 24,362,071 | 20,160,623 |
Fixed Maturities [Member] | ||
Amortized Cost | 24,279,231 | 18,062,280 |
Available-for-sale Securities | 23,271,277 | 17,717,248 |
Amount Recognized in Consolidated Balance Sheets | 23,271,277 | |
Fixed Maturities [Member] | Us Treasury and Government [Member] | ||
Amortized Cost | 3,256,704 | 3,031,743 |
Available-for-sale Securities | 3,193,499 | 3,116,066 |
Amount Recognized in Consolidated Balance Sheets | 3,193,499 | |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ||
Amortized Cost | 1,001,993 | 998,778 |
Available-for-sale Securities | 995,051 | 974,654 |
Amount Recognized in Consolidated Balance Sheets | 995,051 | |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ||
Amortized Cost | 275,333 | 1,197,350 |
Available-for-sale Securities | 273,336 | 1,164,965 |
Amount Recognized in Consolidated Balance Sheets | 273,336 | |
Fixed Maturities [Member] | Corporate Debt Securities [Member] | ||
Amortized Cost | 19,745,201 | 12,834,409 |
Available-for-sale Securities | 18,809,391 | 12,461,563 |
Amount Recognized in Consolidated Balance Sheets | 18,809,391 | |
Equity Securities [Member] | ||
Amortized Cost | 140,250 | 75,000 |
Available-for-sale Securities | $ 75,000 | |
Equity method investments | $ 140,250 |
Schedule II Condensed Financi74
Schedule II Condensed Financial Information of Registrant Balance Sheets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets | ||||
Equity method investments | $ 978,744 | |||
Equity securities, at cost | $ 140,250 | 124,250 | ||
Total investments | 24,362,071 | 20,160,623 | ||
Cash and cash equivalents | 1,192,336 | 2,310,047 | $ 3,377,978 | |
Property and equipment, net | 217,565 | 329,835 | ||
Other assets | 532,674 | 293,890 | ||
Total assets | 62,926,404 | 60,427,118 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable and accrued expenses | 1,013,313 | 938,018 | ||
Total liabilities | 56,022,430 | 52,390,383 | ||
Stockholders' Equity: | ||||
Common stock | 18,006 | 13,168 | ||
Additional paid-in capital | 31,584,529 | 29,583,631 | ||
Accumulated deficit | (23,685,525) | (21,167,496) | ||
Accumulated other comprehensive loss | (1,013,213) | (392,745) | ||
Total Midwest Holding Inc.'s stockholders' equity | 6,903,974 | 8,036,735 | 10,999,078 | |
Total liabilities and stockholders' equity | 62,926,404 | 60,427,118 | ||
Series A Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock | 74 | 74 | ||
Series B Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock | 103 | 103 | ||
Parent Company [Member] | ||||
Assets | ||||
Investment in subsidiaries | [1] | $ 7,640,794 | 5,988,239 | |
Equity method investments | 978,744 | |||
Equity securities, at cost | $ 140,250 | 124,250 | ||
Total investments | 7,781,044 | 7,091,233 | ||
Cash and cash equivalents | 212,422 | 1,132,057 | $ 50,112 | |
Property and equipment, net | 85,339 | 85,654 | ||
Other assets | 381,149 | 243,066 | ||
Total assets | 8,459,954 | 8,552,010 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable and accrued expenses | 1,555,980 | 515,275 | ||
Total liabilities | 1,555,980 | 515,275 | ||
Stockholders' Equity: | ||||
Common stock | 18,006 | 13,168 | ||
Additional paid-in capital | 31,584,529 | 29,583,631 | ||
Accumulated deficit | (23,685,525) | (21,167,496) | ||
Accumulated other comprehensive loss | (1,013,213) | (392,745) | ||
Total Midwest Holding Inc.'s stockholders' equity | 6,903,974 | 8,036,735 | ||
Total liabilities and stockholders' equity | 8,459,954 | 8,552,010 | ||
Parent Company [Member] | Series A Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock | 74 | 74 | ||
Parent Company [Member] | Series B Preferred Stock [Member] | ||||
Stockholders' Equity: | ||||
Preferred stock | $ 103 | $ 103 | ||
[1] | Eliminated in consolidation. |
Schedule II Condensed Financi75
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income: | |||
Investment (loss) income, net of expenses | $ 306,531 | $ (9,883) | |
Net realized gain on investments | (117,364) | 346,304 | |
Miscellaneous income | 171,571 | 295,246 | |
Revenues | $ 3,785,115 | $ 4,639,477 | |
Expenses: | |||
Income tax expense | |||
Loss before equity in loss of consolidated subsidiaries | $ (2,518,029) | $ (3,905,906) | |
Equity in loss of consolidated subsidiaries | $ 460,920 | ||
Bargain purchase gain for business acquisition | $ 904,578 | $ 904,578 | |
Net loss attributable to Midwest Holding Inc. | (2,518,029) | $ (3,444,986) | |
Comprehensive income (loss): | |||
Unrealized gains (losses) on investments arising during period | (737,832) | 388,277 | |
Less: reclassification adjustment for net realized (losses) gains on investments | 117,364 | (4,391) | |
Other comprehensive (loss) income | (620,468) | 383,886 | |
Total comprehensive (loss) income attributable to Midwest Holding Inc. | (620,468) | 347,346 | |
Parent Company [Member] | |||
Income: | |||
Investment (loss) income, net of expenses | $ (363,263) | (443,847) | |
Net realized gain on investments | 341,914 | ||
Miscellaneous income | $ 536,997 | 630,690 | |
Revenues | 173,734 | 528,757 | |
Expenses: | |||
General | 1,562,147 | 1,940,913 | |
Loss before income tax expense | $ (1,388,413) | $ (1,412,156) | |
Income tax expense | |||
Loss before equity in loss of consolidated subsidiaries | $ (1,388,413) | $ (1,412,156) | |
Equity in loss of consolidated subsidiaries | (2,034,194) | $ (2,032,830) | |
Bargain purchase gain for business acquisition | 904,578 | ||
Net loss attributable to Midwest Holding Inc. | (2,518,029) | $ (3,444,986) | |
Comprehensive income (loss): | |||
Unrealized gains (losses) on investments arising during period | $ (620,468) | $ 347,346 | |
Less: reclassification adjustment for net realized (losses) gains on investments | |||
Other comprehensive (loss) income | $ (620,468) | $ 347,346 | |
Total comprehensive (loss) income attributable to Midwest Holding Inc. | $ (3,138,497) | $ (3,097,640) |
Schedule II Condensed Financi76
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | |||
Net loss | $ (2,518,029) | $ (3,444,986) | |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||
Depreciation | 400,870 | 403,902 | |
Net realized gain on investments | 117,364 | $ (346,304) | |
Bargain purchase gain for business acquired | $ (904,578) | (904,578) | |
Equity in the net loss of unconsolidated subsidiaries | $ 357,437 | $ 438,174 | |
Non-cash compensation expense | 1,917 | ||
Other assets and liabilities | $ (219,213) | (474,739) | |
Cash Flows from Investing Activities: | |||
Purchases | (964,450) | (164,362) | |
Proceeds from equity securities carried at cost | $ 869,528 | 76,311 | |
Net change in notes receivable | $ 27,383 | ||
Merger of Great Plains Investment in New Mexico Capital Corporation | $ 315,546 | ||
Purchases of property and equipment | (37,084) | $ (132,124) | |
Cash Flows from Financing Activities: | |||
Issuance of common stock | $ 286,722 | ||
Repurchases of common stock | $ (58,252) | ||
Proceeds from issuance of preferred stock | $ 616,012 | ||
Preferred stock dividend | $ (56,057) | ||
Net increase (decrease) in cash and cash equivalents | (1,117,711) | $ (1,067,931) | |
Cash and cash equivalents: | |||
Beginning | 2,310,047 | 3,377,978 | |
Ending | $ 1,192,336 | 2,310,047 | |
Supplemental Disclosure of Non-Cash Information | |||
Exchange of common stock for non-controlling interest | $ 3,861,767 | ||
Common stock issued on the First Wyoming acquisition | $ 1,811,612 | ||
Total | 1,811,612 | $ 3,861,767 | |
Parent Company [Member] | |||
Cash Flows from Operating Activities: | |||
Net loss | (2,518,029) | (3,444,986) | |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||
Equity in net loss of consolidated subsidiaries | 747,476 | (1,199,861) | |
Depreciation | $ 43,825 | 43,825 | |
Net realized gain on investments | $ (341,914) | ||
Bargain purchase gain for business acquired | $ (904,578) | ||
Equity in the net loss of unconsolidated subsidiaries | $ 357,437 | $ 438,175 | |
Non-cash compensation expense | 1,917 | ||
Other assets and liabilities | $ 986,290 | (675,343) | |
Net cash (used for) operating activities | $ (1,287,579) | (5,178,187) | |
Cash Flows from Investing Activities: | |||
Purchases | 61,383 | ||
Proceeds from equity securities carried at cost | $ 9,000 | $ 1,955,500 | |
Acquisition of First Wyoming Capital Corporation | $ 165,759 | ||
Net change in notes receivable | $ 27,383 | ||
Merger of Great Plains Investment in New Mexico Capital Corporation | (20,000) | ||
Purchases of property and equipment | $ (37,480) | (60,895) | |
Net cash provided by investing activities | 137,279 | $ 1,840,605 | |
Cash Flows from Financing Activities: | |||
Issuance of common stock | $ 286,722 | ||
Repurchases of common stock | $ (58,252) | ||
Proceeds from issuance of preferred stock | $ 616,012 | ||
Preferred stock dividend | $ (56,057) | ||
Net transfers from noncontrolling interest | $ 3,861,767 | ||
Net cash provided by (used in) financing activities | $ 230,665 | 4,419,527 | |
Net increase (decrease) in cash and cash equivalents | (919,635) | 1,081,945 | |
Cash and cash equivalents: | |||
Beginning | 1,132,057 | 50,112 | |
Ending | $ 212,422 | 1,132,057 | |
Supplemental Disclosure of Non-Cash Information | |||
Exchange of common stock for non-controlling interest | $ 3,861,767 | ||
Common stock issued on the First Wyoming acquisition | $ 1,811,682 | ||
Total | $ 1,811,682 | $ 3,861,767 |
Schedule III Supplementary In77
Schedule III Supplementary Insurance Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Future Policy Benefits, Claims and Deposit-type Contracts | $ 24,155,140 | $ 22,728,938 |
Life Insurance Segment [Member] | ||
Deferred Policy Acquisition Costs | 2,765,063 | 2,646,970 |
Future Policy Benefits, Claims and Deposit-type Contracts | 38,892,420 | 34,376,204 |
Advance Premiums | 113,757 | 82,504 |
Premium Revenue | 3,424,377 | 4,007,810 |
Net Investment Income (Loss) | 306,531 | (9,883) |
Death and Other Benefits and Increase in Benefit Reserves | 2,219,415 | 2,789,391 |
Amortization of Deferred Policy Acquisition Costs | 469,674 | 625,680 |
Other Operating Expenses | $ 4,518,633 | $ 5,130,312 |
Schedule IV Reinsurance Infor78
Schedule IV Reinsurance Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Premiums ceded | $ 498,787 | $ 340,464 |
Premiums assumed | 36,777 | 35,466 |
Premiums | 3,424,377 | 4,007,810 |
Life Insurance Force [Member] | ||
Direct Premiums Earned | 252,791,000 | 245,498,000 |
Premiums ceded | 147,714,000 | 141,321,000 |
Premiums assumed | 15,349,000 | 13,913,000 |
Premiums | $ 120,426,000 | $ 118,090,000 |
Premiums, Percentage Assumed to Net | 12.75% | 11.78% |
Life Insurance Segment [Member] | ||
Direct Premiums Earned | $ 2,963,317 | $ 4,312,808 |
Premiums ceded | 498,787 | 340,464 |
Premiums assumed | 36,777 | 35,466 |
Premiums | $ 3,425,327 | $ 4,007,810 |
Premiums, Percentage Assumed to Net | 1.07% | 0.88% |
Valuation and Qualifying Acco79
Valuation and Qualifying Accounts (Details) - Reduced Depreciation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning of the year | $ 713,167 | $ 545,646 |
Charged (credited) to costs and expenses | 157,387 | 174,658 |
Disposals | (6,028) | (7,137) |
End of the year | $ 864,526 | $ 713,167 |