Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 01, 2017 | Jun. 30, 2016 | |
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 | 22,558,956 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 13,500,000 | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Voluntary Filers | No |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, available for sale, at fair value | ||
Fixed maturities (amortized cost: $29,024,083 and $24,279,231, respectively) | $ 27,738,939 | $ 23,271,277 |
Equity securities (cost: $0 and $75,000, respectively) | ||
Equity method investments | ||
Equity securities, at cost | 140,250 | |
Mortgage loans on real estate, held for investment | ||
Real estate, held for investment | 517,729 | 529,769 |
Policy Loans | 412,583 | 420,775 |
Total investments | 28,669,251 | 24,362,071 |
Cash and cash equivalents | 661,545 | 1,192,336 |
Amounts recoverable from reinsurers | 11,704,055 | 12,212,656 |
Interest due and accrued | 312,054 | 264,791 |
Due premiums | 670,989 | 640,073 |
Deferred acquisition costs, net | 2,568,799 | 2,765,063 |
Value of business acquired, net | 1,726,192 | 2,039,110 |
Intangible assets | 700,000 | 700,000 |
Goodwill | 1,129,824 | |
Property and equipment, net | 158,471 | 217,565 |
Assets associated with business held for sale (see Note 3) | 16,870,241 | |
Other assets | 95,773 | 532,674 |
Total assets | 47,267,129 | 62,926,404 |
Liabilities: | ||
Benefit reserves | 24,606,543 | 24,155,140 |
Policy claims | 565,148 | 839,859 |
Deposit-type contracts | 16,012,567 | 13,897,421 |
Advance premiums | 52,074 | 57,699 |
Total policy liabilities | 41,236,332 | 38,950,119 |
Accounts payable and accrued expenses | 1,211,875 | 1,013,313 |
Liabilities associated with business held for sale (see Note 3) | 15,508,998 | |
Surplus notes | 550,000 | 550,000 |
Total liabilities | 42,998,207 | 56,022,430 |
Commitments and Contingencies (See Note 8) | ||
Stockholders' Equity: | ||
Common stock, $0.001 par value. Authorized 120,000,000 shares; issued and outstanding 22,558,956 and 18,006,301 shares as of December 31, 2016 and 2015, respectively. | 22,559 | 18,006 |
Additional paid-in capital | 33,036,924 | 31,584,529 |
Accumulated deficit | (27,533,447) | (23,685,525) |
Accumulated other comprehensive loss | (1,257,291) | (1,013,213) |
Total stockholders' equity | 4,268,922 | 6,903,974 |
Total liabilities and stockholders' equity | 47,267,129 | 62,926,404 |
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, 2016 | Dec. 31, 2015 |
Amortized costs of fixed maturities (in dollars) | $ 29,024,083 | $ 24,279,231 |
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 | 22,558,956 | 18,006,301 |
Common stock, shares outstanding | 22,558,956 | 18,006,301 |
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, 2016 | Dec. 31, 2015 | |
Income: | ||
Premiums | $ 3,517,458 | $ 3,424,377 |
Investment income, net of expenses | 878,991 | 663,968 |
Loss on equity method investment | (420,720) | (357,437) |
Net realized gains (losses) on investments | 31,504 | (117,364) |
Miscellaneous income | 107,015 | 171,571 |
Total Income | 4,114,248 | 3,785,115 |
Expenses: | ||
Death and other benefits | 803,091 | 908,658 |
Interest credited | 776,541 | 533,646 |
Increase in benefit reserves | 751,743 | 777,111 |
Amortization of deferred acquisition costs | 367,235 | 469,674 |
Salaries and benefits | 2,345,311 | 1,940,345 |
Goodwill impairment | 1,129,824 | |
Other operating expenses | 3,114,951 | 2,578,288 |
Total Expenses | 9,288,448 | 7,207,722 |
Operating Loss | (5,174,448) | (3,422,607) |
Bargain purchase gain for business acquisition | 1,326,526 | 904,578 |
Loss before income taxes | (3,847,922) | (2,518,029) |
Income tax expense | ||
Net loss | (3,847,922) | (2,518,029) |
Comprehensive loss: | ||
Unrealized losses on investments arising during period | (212,574) | (737,832) |
Less: reclassification adjustment for net realized (gains) losses on investments | (31,504) | 117,364 |
Other comprehensive loss | (244,078) | (620,468) |
Comprehensive loss | $ (4,092,000) | $ (3,138,497) |
Net loss per common share, basic and diluted | $ (0.18) | $ (0.18) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2014 | $ 177 | $ 13,168 | $ 29,583,631 | $ (21,167,496) | $ (392,745) | $ 8,036,735 |
Non-cash compensation expense | ||||||
Issuances of common stock | 71 | 250,110 | 250,181 | |||
Preferred stock dividend | (56,057) | (56,057) | ||||
Merger of First Wyoming Capital Corporation | (4,767) | (1,806,845) | (1,811,612) | |||
Net loss | (2,518,029) | (2,518,029) | ||||
Other comprehensive loss | (620,468) | (620,468) | ||||
Balance at Dec. 31, 2015 | 177 | 18,006 | 31,584,529 | (23,685,525) | (1,013,213) | 6,903,974 |
Preferred stock dividend | (43,120) | (43,120) | ||||
Acquisition of Northstar Financial Corporation | 4,553 | 2,401,321 | 2,405,874 | |||
Merger of First Wyoming Capital Corporation | (905,806) | (905,806) | ||||
Net loss | (3,847,922) | (3,847,922) | ||||
Other comprehensive loss | (244,078) | (244,078) | ||||
Balance at Dec. 31, 2016 | $ 177 | $ 22,559 | $ 33,036,924 | $ (27,533,447) | $ (1,257,291) | $ 4,268,922 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (3,847,922) | $ (2,518,029) |
Adjustments to arrive at cash provided by operating activities: | ||
Net premium and discount on investments | 213,055 | 173,915 |
Depreciation and amortization | 381,582 | 400,870 |
Deferred acquisition costs capitalized | (178,419) | (552,466) |
Amortization of deferred acquisition costs | 367,235 | 469,674 |
Net realized losses (gains) on investments | (31,504) | 117,364 |
Goodwill impairment | 1,129,824 | |
Bargain purchase gain for business acquired | (1,326,526) | (904,578) |
Loss on equity method investment | 420,720 | 357,437 |
Non-cash compensation expense | ||
Changes in operating assets and liabilities: | ||
Amounts recoverable from reinsurers | 508,601 | 424,254 |
Interest and dividends due and accrued | (47,263) | (44,596) |
Due premiums | (30,916) | (21,568) |
Policy liabilities | 939,095 | 1,185,036 |
Other assets and liabilities | 575,313 | (219,213) |
Other assets and liabilities held for sale | (68,864) | |
Net cash used for operating activities | (927,125) | (1,200,764) |
Securities available for sale: | ||
Purchases | (19,213,405) | (16,090,449) |
Proceeds from sale or maturity | 14,387,936 | 13,594,158 |
Securities associated with business held for sale | ||
Purchases | (964,450) | |
Proceeds from sale or maturity | 52,703 | 869,528 |
Net change in equity securities carried at cost: | ||
Proceeds from sale | 30,250 | 9,000 |
Proceeds from payments on mortgage loans on real estate, held for investment | 349,386 | |
Sale of Capital Reserve Life Insurance Company | 1,432,446 | |
Net change in policy loans | 8,192 | (46,589) |
Acquisition of Northstar Financial Corporation | 2,427,394 | |
Acquisition of First Wyoming Capital Corporation | 315,546 | |
Net change in notes receivable | ||
Net purchases of property and equipment | (33,180) | (37,084) |
Net cash used for investing activities | (907,664) | (2,000,954) |
Cash Flows from Financing Activities: | ||
Issuance of common stock | 286,722 | |
Issuance of preferred stock | ||
Preferred stock dividend | (43,120) | (56,057) |
Receipts on deposit-type contracts | 2,433,781 | 2,387,104 |
Withdrawals on deposit-type contracts | (1,086,663) | (533,762) |
Net cash provided by financing activities | 1,303,998 | 2,084,007 |
Net decrease in cash and cash equivalents | (530,791) | (1,117,711) |
Cash and cash equivalents: | ||
Beginning | 1,192,336 | 2,310,047 |
Ending | 661,545 | 1,192,336 |
Supplemental Disclosure of Non-Cash Information | ||
Common stock issued on the First Wyoming acquisition and measurement period adjustment | (905,806) | 1,811,612 |
Common stock issued on Northstar Acquisition | 2,405,874 | |
Total | $ 1,500,068 | $ 1,811,612 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 operating a financial services company. The Company is in the life insurance business and operates through its wholly owned subsidiary, American Life & Security Corp. (American Life). The Company has made several acquisitions of life insurance companies and related entities since 2008, all of which have been merged into the Company or into American Life. Basis of presentation: The accompanying consolidated financial statements include the accounts of Midwest and/or our wholly owned subsidiary American Life. Hereafter, entities are collectively referred to as the Company, we, our or us. Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of life insurance products through American Life. The product offerings, the underwriting processes, and the marketing processes are similar. The Companys 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 periods 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 Companys 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, 2016 or 2015. Included within the Companys equity securities carried at cost and equity method investments are certain privately placed common stocks for some 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 loans 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, 2016 due to the mortgage loans being sold in 2014 and 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. Short-term investments : Short-term investments are stated at cost and consist of certificates of deposit. At December 31, 2016 and 2015 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. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 years. Cash: The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2016 and 2015, 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, 2016 analysis that all deferred acquisition costs were recoverable. The following table provides information about deferred acquisition costs (DAC) for the years ended December 31, 2016 and 2015, respectively. Year Ended December 31, 2016 2015 Balance at beginning of period $ 2,765,063 $ 2,646,970 Capitalization of commissions, sales and issue expenses 178,419 552,466 Change in DAC due to unrealized investment losses (7,448 ) 35,301 Gross amortization (367,235 ) (469,674 ) Balance at end of period $ 2,568,799 $ 2,765,063 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. 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, 2016 and 2015 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, 201 6, was less than therefore was required d Based upon our fair value analysis, the Company determined that the full amount of the goodwill should be written off as of December 31, 2016. 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, 2016 and 2015, the sum of the future discounted cash flows exceeded the carrying value of the indefinite-lived intangible assets. The assumptions and estimates used to determine future values are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our revenue forecasts. Property and equipment: Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over 3 to 7 years and computer software and equipment is generally depreciated over 3 years. Depreciation expense totaled $103,623 and $157,387 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 Companys 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, 2016 or 2015. 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 it believes 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, 2016 and 2015. Revenue recognition and related expenses: Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due. Amounts received as payment for annuities and/or non-traditional contracts such as interest sensitive whole life contracts, single payment endowment contracts, single payment juvenile contracts and other contracts without life contingencies are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for administrative and contract-holder services and cost of insurance, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the consolidated statements of cash flows. Amounts received under our multi-benefit policy form are allocated to the life insurance portion of the multi-benefit life insurance arrangement and the annuity portion based upon the signed policy. Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts. Acquisition costs are amortized over the life of the premiums produced. Traditional life insurance products are treated as long duration contracts, which generally remain in force for the lifetime of the insured. Comprehensive loss: Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive loss includes unrealized gains and losses from marketable securities classified as available for sale, net of applicable taxes. Common and preferred stock and earnings (loss) per share: The par value per common share is $0.001 with 100,000,000 shares authorized and 20,000,000 preferred shares authorized. At December 31, 2016 and 2015, the Company had 22,558,956 and 18,006,301 common shares issued and outstanding, respectively. At December 31, 2016 and 2015, the Company had 1,179 warrants outstanding. The warrants were exercisable through December 31, 2016 for 10 shares of voting common stock at an exercise price of $6.50 per share. No warrants were exercised during 2016 and 2015 and are now expired. 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 common shares for each preferred share (subject to customary anti-dilution adjustments). There is no stated dividend rate on the Class A shares, but the holders of Class A shares will receive a dividend on each outstanding share of Class A preferred stock in an amount equal to the amount of the dividend payable on each share of common stock. The par value per preferred share is $0.001 with 2,000,000 shares authorized. At both December 31, 2016 and 2015, the Company had 74,159 Class A preferred shares issued and outstanding. The Class B preferred shares are non-cumulative, non-voting and convertible by the holder or the Company share. The 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 Companys 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 Class B 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 Company, that are within the Companys control, if the Company does not dissolve it. 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 Companys 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, 2016 and 2015 were 21,625,878 New accounting standards: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments Credit Losses In March 2016, the FASB issued ASU 2016-07, Investments Equity Method and Joint Ventures In February 2016, the FASB issued ASU 2016-02, Leases In January 2016, the FASB issued ASU 2016-1, Financial InstrumentsOverall Effective January 1, 2016, the Company adopted ASU No. 2015-16, Business Combinations below. |
Recent Acquisitions
Recent Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Recent Acquisitions | Note 2. Recent Acquisitions On March 15, 2016, Midwest acquired Northstar Financial Corporation (Northstar), an inactive Minnesota corporation, pursuant to an Agreement and Plan of Merger dated December 18, 2015. Pursuant to this merger, Midwest exchanged 1.27 shares of its voting common stock for each share of Northstar common stock, or approximately 4,553,000 shares. The merger of Northstar was recorded as an asset acquisition. The assets (primarily cash) and liabilities of Northstar were recorded in the Companys consolidated financial statements at their estimated fair values as of the acquisition date. On October 27, 2015, Midwest acquired 100% of all of the outstanding shares that it did not previously own of First Wyoming Capital Corporation (First Wyoming), a Wyoming corporation, pursuant to an Agreement and Plan of Merger dated July 31, 2015 under which First Wyoming became a wholly-owned subsidiary of Midwest. Pursuant to the Merger Agreement, Midwest issued approximately 4,767,400 shares to the former shareholders of First Wyoming other than Midwest. The fair value of the Midwest shares exchanged to acquire 100% of the remaining outstanding shares of First Wyoming that it did not previously own was estimated by applying the income approach to be $905,806, which is different from our preliminary estimate of $1,811,612 as disclosed in Note 2 of our 2015 10-K. This fair value measurement was based on significant inputs that are not observable in the market. Key assumptions include projected total income growth of between 3% and 16%, expected long term growth of 3%, a discount rate of 16.0%, and a terminal value based on earnings and a capitalization rate of 13.0%. Subsequent to the closing, First Wyoming merged into Midwest and on September 1, 2016 First Wyoming Life, the life insurance subsidiary of First Wyoming, merged into American Life. 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% of the outstanding shares of First Wyoming, which it had recorded in its financial statements under the equity method of accounting at a book value of $810,500 with a related accumulated other comprehensive loss of $30,410. The fair value of our previously held equity interest in First Wyoming was determined to be $221,430, resulting in a loss of $619,480 on the previously held equity interest. The preliminary fair value of our previously held equity interest in First Wyoming as disclosed in Note 2 of the 2015 10-K was determined to be $642,150 resulting in a loss of $198,760, which was included in net investment income (loss) in the 2015 10-K consolidated statement of comprehensive income for the year ended December 31, 2015 and the remaining $420,720 was recognized in the period ended September 30, 2016 10-Q 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 $ 905,806 Fair value of Midwest's previously held equity interest in First Wyoming 221,430 $ 1,127,236 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 (2,231,104 ) $ 1,127,236 All amounts related to the business combination are finalized and are no longer provisional. The transaction resulted in a bargain purchase gain of $2,231,104 and, of that amount, $904,578 was included in the bargain purchase gain for business acquisition line item in the consolidated statement of comprehensive income for the year ended December 31, 2015. The remaining $1,326,526 was included in the consolidated statement of comprehensive income for the period ended September 30, 2016. The bargain purchase gain was driven by the fact that as a standalone company, First Wyoming Life would have been required to significantly increase its administrative operations in Cheyenne, Wyoming, in the near future, the cost of which would be prohibitive to a small life insurance company such as First Wyoming Life. Value of business acquired (VOBA) is being amortized on a straight-line basis over ten years which approximates the earnings pattern of the related policies. Acquisition costs relating to the business combination with First Wyoming totaling $123,219 were expensed as incurred and are included in the other operating expenses line item in the consolidated statement of comprehensive income for the year ended December 31, 2015 . Total income and net loss of $71,165 and $73,939, respectively, were included in the 2015 10-K Consolidated Statements of Comprehensive Income from the October 27, 2015 acquisition date through December 31, 2015. Operations of the acquired entity and its subsidiary (First Wyoming Life) were immediately integrated with the Companys operations. The following table presents unaudited pro forma consolidated total income and net loss as if the acquisition had occurred as of January 1, 2015 (earliest period shown). Year ended December 31, (unaudited) 2015 Premiums $ 3,723,084 Investment income 414,972 Miscellaneous income 48,864 Total income $ 4,186,920 Net loss $ (4,338,598 ) The unaudited pro forma total income and net loss above was adjusted to eliminate the equity method investment loss of $158,677 recorded for the year ended December 31, 2015. The pro forma amounts above also included an adjustment for the elimination of TPA fees paid by First Wyoming to Midwest of $122,903 for the year ended December 31, 2015. The unaudited proforma net loss presented above also includes adjustments for the amortization of VOBA for the year ending December 31, 2015 of $50,660. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [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 a third party to sell its interest in its dormant subsidiary, Capital Reserve Life Insurance Company (Capital Reserve). Under the terms of the purchase agreement, American Life received cash which approximated the statutory surplus of Capital Reserve. The sale of Capital Reserve was effective as of August 29, 2016. Prior to the sale of Capital Reserve, Midwest had $16.9 million and $15.5 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities [Abstract] | |
Investments | Note 4. Investments The amortized cost and estimated fair value of investments classified as available-for-sale as of December 31, 2016 and 2015 are as follows: Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value December 31, 2016: Fixed maturities: U.S. government obligations $ 3,390,545 $ - $ 166,326 $ 3,224,219 States and political subdivisions -- general obligations 383,730 732 3,067 381,395 States and political subdivisions -- special revenue 275,262 5,633 3,160 277,735 Corporate 24,974,546 16,232 1,135,188 23,855,590 Total fixed maturities $ 29,024,083 $ 22,597 $ 1,307,741 $ 27,738,939 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 The Company had five Amortized Estimated Cost Fair Value Credit Rating December 31, 2016: Fixed maturities: States and political subdivisions -- general obligations Bellingham Wash $ 110,988 $ 109,633 AA+ Longview Washington Refunding 163,172 161,460 NR Memphis Tenn 109,570 110,302 AA States and political subdivisions -- special revenue Philadelphia PA Auth For Indl Dev City Svc Agreement 149,411 146,973 AA Riviera Beach FLA Pub Impt Rev 100,392 106,025 AA Total $ 633,533 $ 634,393 The following table summarizes, for all securities in an unrealized loss position at December 31, 2016 and 2015, 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, 2016 December 31, 2015 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 $ 3,224,219 $ 166,326 17 $ 2,484,188 $ 62,343 14 States and political subdivisions -- general obligations 271,093 3,066 2 660,569 5,004 5 States and political subdivisions -- special revenue 171,711 3,160 2 248,146 1,618 2 Corporate 19,737,965 935,546 112 15,320,916 796,204 97 Greater than 12 months: U.S. government obligations - - - 305,055 7,472 3 States and political subdivisions -- general obligations - - - 334,481 1,938 1 States and political subdivisions -- special revenue - - - 25,190 379 1 Corporate 2,558,275 199,643 12 3,166,108 141,074 22 Total fixed maturities $ 25,963,263 $ 1,307,741 145 $ 22,544,653 $ 1,016,032 145 Based on our review of the securities in an unrealized loss position at December 31, 2016 and 2015, no other-than-temporary impairments were deemed necessary. The Company had one bond related to non-investment grade, Diamond Offshore Drilling, Inc., which has an unrealized loss of $90,807. The remaining unrealized loss of $1,216,934 was related to investment grade bonds. The amortized cost and estimated fair value of fixed maturities at December 31, 2016, 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 $ - $ - Due after one year through five years 1,319,856 1,299,868 Due after five years through ten years 13,739,800 13,196,864 Due after ten years 13,964,427 13,242,207 $ 29,024,083 $ 27,738,939 The Company is required to hold assets on deposit for the benefit of policyholders in accordance with statutory rules and regulations. At December 31, 2016 and 2015, these required deposits had a total amortized cost of $2,747,571 and $6,186,865 and fair values of $2,635,225 and $6,000,376, respectively. The components of net investment income for Year Ended December 2016 2015 Fixed maturities $ 889,860 $ 681,999 Equity securities 1,434 186 Other 58,849 44,870 950,143 727,055 Less investment expenses (71,152 ) (63,087 ) Investment income, net of expenses $ 878,991 $ 663,968 Proceeds for the years ended December 31, 2016 and 2015 from sales of investments classified as available for sale were $14,179,936 As of December 31, 2014 Year Ended December 31, 2016 2015 Balance at beginning of period $ - $ 349,386 Proceeds from settlement on mortgage loans on real estate, held for investment - (349,386 ) Balance at end of period $ - $ - |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Fair Values of Financial Instruments | Note 5. 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 entitys 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 entitys 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, 2016, 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. Cash: 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. 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. 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 $261,971 and $229,405 in carrying value of the surplus notes as of December 31, 2016 and 2015, respectively. These liabilities are categorized as Level 3 in the fair value hierarchy. The following table presents the Companys fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of December 31, 2016 and 2015. Significant Quoted Other Significant In Active Observable Unobservable Estimated Markets Inputs Inputs Fair (Level 1) (Level 2) (Level 3) Value December 31, 2016 Fixed maturities: U.S. government obligations $ - $ 3,224,219 $ - $ 3,224,219 States and political subdivisions general obligations - 381,395 - 381,395 States and political subdivisions special revenue - 277,735 - 277,735 Corporate - 23,855,590 - 23,855,590 Total fixed maturities $ - $ 27,738,939 $ - $ 27,738,939 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 There were no transfers of financial instruments between Level 1 and Level 2 during the years ended December 31, 2016 or 2015. 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. 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, 2016 and 2015, respectively: December 31, 2016 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 $ 412,583 $ - $ - $ 412,583 $ 412,583 Cash and cash equivalents 661,545 661,545 - - 661,545 Liabilities: Policyholder deposits (Deposit-type contracts) 16,012,567 - - 16,012,567 16,012,567 Surplus notes and accrued interest payable 811,971 - - 808,602 808,602 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 (Investment-type contracts) 13,897,421 - - 13,897,421 13,897,421 Surplus notes and accrued interest payable 779,405 - - 768,022 768,022 |
Income Tax Matters
Income Tax Matters | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Matters | Note 6. Income Tax Matters Significant components of the Companys deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows: Year Ended December 31, 2016 2015 Deferred tax assets: Loss carryforwards $ 9,705,974 $ 8,962,587 Capitalized costs 667,264 667,264 Unrealized losses on investments 436,949 356,495 Benefit reserves 984,640 1,071,997 Total deferred tax assets 11,794,827 11,058,343 Less valuation allowance (10,170,638 ) (9,287,024 ) Total deferred tax assets, net of valuation allowance 1,624,189 1,771,319 Deferred tax liabilities: Policy acquisition costs 571,148 593,654 Due premiums 228,136 234,468 Value of business acquired 586,905 693,297 Intangible assets 238,000 238,000 Property and equipment - 11,900 Total deferred tax liabilities 1,624,189 1,771,319 Net deferred tax assets $ - $ - At December 31, 2016 and 2015, the Company recorded a valuation allowance of 10,170,638 Loss carry forwards for tax purposes as of December 31, 2016, have expiration dates that range from 2024 through 2036. There was no income tax expense for the years ended December 31, 2016 and 2015. This differed from the amounts computed by applying the statutory U.S. federal income tax rate of 34% to pretax income, as a result of the following: Year Ended December 31, 2016 2015 Computed expected income tax benefit $ (1,308,293 ) $ (856,129 ) Increase (reduction) in income taxes resulting from: Bargain purchase gain (451,019 ) (307,557 ) Meals, entertainment and political contributions 18,956 46,315 Goodwill impairment 384,140 - Other (Benefit reserves and NOL true-up/merger of First Wyoming 2015) (53,722 ) 178,519 (101,645 ) (82,767 ) Tax benefit before valuation allowance (1,409,938 ) (938,896 ) Change in valuation allowance 1,409,938 938,896 Net income tax expenses $ - $ - |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Note 7. Reinsurance A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2016 and 2015 and for the years ended December 31, 2016 and 2015 is as follows: Year Ended December 31, 2016 2015 Balance sheets: Benefit and claim reserves assumed $ 2,470,063 $ 2,763,779 Benefit and claim reserves ceded 11,704,055 12,212,656 Year Ended December 31, 2016 2015 Statements of comprehensive income: Premiums assumed $ 24,064 $ 36,777 Premiums ceded 287,780 498,787 Benefits assumed 43,602 57,317 Benefits ceded 696,159 904,867 Commissions assumed 35 21 Commissions ceded 1,649 3,399 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, 2016: 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- $ - $ 77,032 $ 180,681 $ - $ 257,713 Sagicor Life Insurance Company A- - 284,617 11,403,908 242,183 11,446,342 $ - $ 361,649 $ 11,584,589 $ 242,183 $ 11,704,055 Effective 1999, American Life entered into a 75% coinsurance agreement with Sagicor Life (Sagicor) whereby 75% of certain business is ceded to Sagicor. During 2000, the remaining 25% was coinsured with Sagicor. At December 31, 2016 and 2015, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by American Life to Sagicor were $11,446,342 and $11,873,254, respectively. American Life remains contingently liable on this ceded reinsurance should Sagicor be unable to meet their obligations The use of reinsurance does not relieve American Life 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 American Life has failed to pay policy claims (individually or in the aggregate) with respect to our ceded business. American Life 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, 2016 and 2015, no contingency reserve was established. |
Deposit-Type Contracts
Deposit-Type Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Separate Accounts Disclosure [Abstract] | |
Deposit-Type Contracts | Note 8. Deposit-Type Contracts The Companys 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, 2016 and 2015: Year Ended December 31, 2016 2015 Beginning balance $ 13,897,421 $ 10,722,227 First Wyoming Life beginning balance - 799,990 Change in deposit-type contracts assumed from SNL - (1,200 ) Deposits received 2,433,781 2,387,104 Investment earnings 776,541 533,646 Withdrawals (1,086,661 ) (533,762 ) Contract Charges (8,515 ) (10,584 ) Ending balance $ 16,012,567 $ 13,897,421 Under the terms of American Lifes coinsurance agreement with SNL, American Life assumes certain deposit-type contract obligations, as shown in the table above. The |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9. 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 Companys 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 state of Nebraska are currently conducting a routine regulatory examination for the period 2013 through 2016 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 $341,424 2017 $ 149,481 2018 136,557 2019 141,412 2020 146,477 2021 151,543 Later years 331,790 Total $ 1,057,260 |
Statutory Net Income and Surplu
Statutory Net Income and Surplus | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Net Income and Surplus | Note 10. 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 Nebraska Department of Insurance. 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. First Wyoming Life and Great Plains Life merged with American Life as of September 1, 2016 and December 31, 2016, respectively. Capital Reserve was sold effective August 29, 2016. The December 31, 2015 numbers in the table below have been restated to include the First Wyoming Life and Great Plains Life balances into American Life to be consistent with the December 31, 2016 statutory statement filing. The following table summarizes the statutory net loss and statutory capital and surplus of American Life as of December 31, 2016 and 2015 and for the years ended December 31, 2016 and 2015. The amounts below as of and for the year ended December 31, 2015 are based on the respective companys audited statutory financial statements. The audit American Life's is Statutory Net Loss for the Years Ended December 31, 2016 2015 American Life $ 1,979,009 $ 2,085,450 Capital Reserve N/A $ 77,720 Statutory Capital and Surplus as of December 31, 2016 2015 American Life $ 3,817,756 $ 5,288,649 Capital Reserve N/A $ 1,464,044 |
Surplus Notes
Surplus Notes | 12 Months Ended |
Dec. 31, 2016 | |
Surplus Notes [Abstract] | |
Surplus Notes | Note 11. Surplus Notes The following provides a summary of the American Lifes surplus notes along with issue dates, maturity dates, face amounts, and interest rates as of December 31, 2016: 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 Nebraska Department of Insurance. As of December 31, 2016, the Company has accrued $261,971 of interest expense under accounts payable and accrued expenses on the consolidated balance sheet. No payments were made in the years ended December 31, 2016 and 2015. The surplus notes for $300,000 and $250,000 matured on August 1, 2016 and September 1, 2016, respectively. Due to the nature of surplus notes, a repayment cannot be made without the prior approval of the Nebraska insurance regulators. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12. 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 Companys subsidiary |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events All of the effects of subsequent events that provide additional evidence about conditions that existed at December 31, 2016, 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 |
Schedule I Summary of Investmen
Schedule I Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [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, 2016 Amount Recognized in Amortized Consolidated Cost Fair Value Balance Sheets Type of Investment Fixed maturity securities, available for sale: U.S. government obligations $ 3,390,545 $ 3,224,219 $ 3,224,219 States and political subdivisions -- general obligations 383,730 381,395 381,395 States and political subdivisions -- special revenue 275,262 277,735 277,735 Corporate 24,974,546 23,855,590 23,855,590 Total fixed maturity securities $ 29,024,083 $ 27,738,939 $ 27,738,939 Real estate, held for investment 517,729 517,729 Policy loans 412,583 412,583 Total Investments $ 29,954,395 $ 28,669,251 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, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Information of Registrant Balance Sheets | Midwest Holding Inc. (Parent Company) Condensed Financial Information of Registrant Balance Sheets As of December 31, 2016 2015 Assets: Investment in subsidiaries (1) $ 4,424,693 $ 7,640,794 Equity securities, at cost - 140,250 Total investments 4,424,693 7,781,044 Cash and cash equivalents 112,563 212,422 Property and equipment, net 78,790 85,339 Other assets 153,502 381,149 Total assets $ 4,769,548 $ 8,459,954 Liabilities and Stockholders' Equity Liabilities: Accounts payable and accrued expenses 500,626 1,555,980 Total liabilities 500,626 1,555,980 Stockholders' Equity: Preferred stock, Series A 74 74 Preferred stock, Series B 103 103 Common stock 22,559 18,006 Additional paid-in capital 33,036,924 31,584,529 Accumulated deficit (27,533,447 ) (23,685,525 ) Accumulated other comprehensive loss (1,257,291 ) (1,013,213 ) Total Midwest Holding Inc.'s stockholders' equity 4,268,922 6,903,974 Total liabilities and stockholders' equity $ 4,769,548 $ 8,459,954 (1) Eliminated in consolidation. See accompanying Report of Independent Registered Public Accounting Firm |
Schedule II Condensed Financi22
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [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, 2016 2015 Income: Investment loss, net of expenses $ (5,635 ) $ (5,826 ) Net realized loss on investments (117,500 ) - Loss on equity method investment (420,720 ) (357,437 ) Miscellaneous income 515,667 536,997 (28,188 ) 173,734 Expenses: General 2,054,032 1,562,147 Loss before income tax expense (2,082,220 ) (1,388,413 ) Income tax expense - - Loss before equity in loss of consolidated subsidiaries (2,082,220 ) (1,388,413 ) Equity in loss of consolidated subsidiaries (3,092,228 ) (2,034,194 ) Bargain purchase gain for business acquisition 1,326,526 904,578 Net loss $ (3,847,922 ) $ (2,518,029 ) Comprehensive loss: Unrealized losses (212,574 ) (737,832 ) Less: reclassification adjustment for net realized (gains) losses (31,504 ) 117,364 Other comprehensive loss (244,078 ) (620,468 ) Comprehensive loss $ (4,092,000 ) $ (3,138,497 ) See accompanying Report of Independent Registered Public Accounting Firm |
Schedule II Condensed Financi23
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [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, 2016 2015 Cash Flows from Operating Activities: Net loss $ (3,847,922 ) $ (2,518,029 ) Adjustments to reconcile net loss to net cash and cash equivalents used in Equity in net loss of consolidated subsidiaries 2,972,023 747,476 Depreciation 31,931 43,825 Net realized gain on investments 117,500 - Bargain purchase gain for business acquired (1,326,526 ) (904,578 ) Equity in the net loss of unconsolidated subsidiaries 420,720 357,437 Other assets and liabilities (861,791 ) 986,290 Net cash used in (2,494,065 ) (1,287,579 ) Cash Flows from Investing Activities: Equity securities carried at cost: Proceeds from equity securities carried at cost 30,250 9,000 Acquisition of First Wyoming Capital Corporation - 165,759 Issurance of common stock acquisition of Northstar Financial 2,427,394 - Purchases of property and equipment (20,318 ) (37,480 ) Net cash provided by investing activities 2,437,326 137,279 Cash Flows from Financing Activities: Issurance of common stock - 286,722 Preferred stock dividend (43,120 ) (56,057 ) Net cash provided by financing activities (43,120 ) 230,665 Net decrease in (99,859 ) (919,635 ) Cash and cash equivalents: Beginning 212,422 1,132,057 Ending $ 112,563 $ 212,422 See accompanying Report of Independent Registered Public Accounting Firm Midwest Holding Inc. (Parent Company) Condensed Financial Information of Registrant Supplemental Cash Flow Information 2016 2015 Supplemental Disclosure of Non-Cash Information Common stock issued on the First Wyoming acquisition and measurement period adjustment $ (905,806 ) $ 1,811,612 Common stock issued on Northstar Acquisition 2,405,874 - $ 1,500,068 $ 1,811,612 See accompanying Report of Independent Registered Public Accounting Firm |
Schedule III Supplementary Insu
Schedule III Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | Midwest Holding Inc. and Subsidiaries Supplementary Insurance Information As of December 31, 2016 For the Year Ended December 31, 2016 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 $ 2,568,799 $ 41,184,258 $ 52,074 $ 3,517,458 $ 878,991 $ 2,331,375 $ 367,235 $ 6,590,086 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 $ 57,699 $ 3,424,377 $ 663,968 $ 2,219,415 $ 469,674 $ 4,518,633 See accompanying Report of Independent Registered Public Accounting Firm |
Schedule IV Reinsurance Informa
Schedule IV Reinsurance Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [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, 2016 Life insurance in force $ 229,981,000 $ 110,670,000 $ 3,879,000 $ 123,190,000 3.15 % Life insurance premiums $ 3,253,742 $ 287,780 $ 24,064 $ 3,517,458 0.68 % 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 $ 2,962,367 $ 498,787 $ 36,777 $ 3,424,377 1.07 % See accompanying Report of Independent Registered Public Accounting Firm |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Midwest Holding Inc. and Subsidiaries Valuation and Qualifying Accounts Year Ended December 31, 2016 2015 Accumulated Depreciation: Beginning of the year 864,526 713,167 Depreciation expense 103,623 157,387 Disposals (6,285 ) (6,028 ) End of the year $ 961,864 $ 864,526 See accompanying Report of Independent Registered Public Accounting Firm |
Nature of Operations and Summ27
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: The accompanying consolidated financial statements include the accounts of Midwest and/or our wholly owned subsidiary American Life. Hereafter, entities are collectively referred to as the Company, we, our or us. Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of life insurance products through American Life. The product offerings, the underwriting processes, and the marketing processes are similar. The Companys 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 periods 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 Companys 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, 2016 or 2015. Included within the Companys equity securities carried at cost and equity method investments are certain privately placed common stocks for some 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 loans 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, 2016 due to the mortgage loans being sold in 2014 and 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. |
Short-term investments | Short-term investments : Short-term investments are stated at cost and consist of certificates of deposit. At December 31, 2016 and 2015 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. Real estate is carried at depreciated cost. Depreciation on residential real estate is computed on a straight-line basis over 50 years. |
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, 2016 and 2015, 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, 2016 analysis that all deferred acquisition costs were recoverable. The following table provides information about deferred acquisition costs (DAC) for the years ended December 31, 2016 and 2015, respectively. Year Ended December 31, 2016 2015 Balance at beginning of period $ 2,765,063 $ 2,646,970 Capitalization of commissions, sales and issue expenses 178,419 552,466 Change in DAC due to unrealized investment losses (7,448 ) 35,301 Gross amortization (367,235 ) (469,674 ) Balance at end of period $ 2,568,799 $ 2,765,063 |
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. 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, 2016 and 2015 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, 201 6, was less than therefore was required d Based upon our fair value analysis, the Company determined that the full amount of the goodwill should be written off as of December 31, 2016. 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, 2016 and 2015, the sum of the future discounted cash flows exceeded the carrying value of the indefinite-lived intangible assets. The assumptions and estimates used to determine future values are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our revenue forecasts. |
Property and equipment | Property and equipment: Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over 3 to 7 years and computer software and equipment is generally depreciated over 3 years. Depreciation expense totaled $103,623 and $157,387 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 Companys 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, 2016 or 2015. |
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 it believes 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, 2016 and 2015. |
Revenue recognition and related expenses | Revenue recognition and related expenses: Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due. Amounts received as payment for annuities and/or non-traditional contracts such as interest sensitive whole life contracts, single payment endowment contracts, single payment juvenile contracts and other contracts without life contingencies are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for administrative and contract-holder services and cost of insurance, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the consolidated statements of cash flows. Amounts received under our multi-benefit policy form are allocated to the life insurance portion of the multi-benefit life insurance arrangement and the annuity portion based upon the signed policy. Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts. Acquisition costs are amortized over the life of the premiums produced. Traditional life insurance products are treated as long duration contracts, which generally remain in force for the lifetime of the insured. |
Comprehensive loss | Comprehensive loss: Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive loss includes unrealized gains and losses from marketable securities classified as available for sale, net of applicable taxes. |
Common and preferred stock and earnings (loss) per share | Common and preferred stock and earnings (loss) per share: The par value per common share is $0.001 with 100,000,000 shares authorized and 20,000,000 preferred shares authorized. At December 31, 2016 and 2015, the Company had 22,558,956 and 18,006,301 common shares issued and outstanding, respectively. At December 31, 2016 and 2015, the Company had 1,179 warrants outstanding. The warrants were exercisable through December 31, 2016 for 10 shares of voting common stock at an exercise price of $6.50 per share. No warrants were exercised during 2016 and 2015 and are now expired. 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 common shares for each preferred share (subject to customary anti-dilution adjustments). There is no stated dividend rate on the Class A shares, but the holders of Class A shares will receive a dividend on each outstanding share of Class A preferred stock in an amount equal to the amount of the dividend payable on each share of common stock. The par value per preferred share is $0.001 with 2,000,000 shares authorized. At both December 31, 2016 and 2015, the Company had 74,159 Class A preferred shares issued and outstanding. The Class B preferred shares are non-cumulative, non-voting and convertible by the holder or the Company share. The 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 Companys 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 Class B 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 Company, that are within the Companys control, if the Company does not dissolve it. 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 Companys 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, 2016 and 2015 were 21,625,878 |
New accounting standards | New accounting standards: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments Credit Losses In March 2016, the FASB issued ASU 2016-07, Investments Equity Method and Joint Ventures In February 2016, the FASB issued ASU 2016-02, Leases In January 2016, the FASB issued ASU 2016-1, Financial InstrumentsOverall Effective January 1, 2016, the Company adopted ASU No. 2015-16, Business Combinations below. |
Nature of Operations and Summ28
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Policy Acquisition Costs | Year Ended December 31, 2016 2015 Balance at beginning of period $ 2,765,063 $ 2,646,970 Capitalization of commissions, sales and issue expenses 178,419 552,466 Change in DAC due to unrealized investment losses (7,448 ) 35,301 Gross amortization (367,235 ) (469,674 ) Balance at end of period $ 2,568,799 $ 2,765,063 |
Recent Acquisitions (Tables)
Recent Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | 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 $ 905,806 Fair value of Midwest's previously held equity interest in First Wyoming 221,430 $ 1,127,236 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 (2,231,104 ) |
Schedule of Pro Forma Information | Year ended December 31, (unaudited) 2015 Premiums $ 3,723,084 Investment income 414,972 Miscellaneous income 48,864 Total income $ 4,186,920 Net loss $ (4,338,598 ) |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities [Abstract] | |
Schedule of Available for Sale Investments | Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value December 31, 2016: Fixed maturities: U.S. government obligations $ 3,390,545 $ - $ 166,326 $ 3,224,219 States and political subdivisions -- general obligations 383,730 732 3,067 381,395 States and political subdivisions -- special revenue 275,262 5,633 3,160 277,735 Corporate 24,974,546 16,232 1,135,188 23,855,590 Total fixed maturities $ 29,024,083 $ 22,597 $ 1,307,741 $ 27,738,939 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 |
Schedule of Amortized Cost, Fair Value, Credit Rating | Amortized Estimated Cost Fair Value Credit Rating December 31, 2016: Fixed maturities: States and political subdivisions -- general obligations Bellingham Wash $ 110,988 $ 109,633 AA+ Longview Washington Refunding 163,172 161,460 NR Memphis Tenn 109,570 110,302 AA States and political subdivisions -- special revenue Philadelphia PA Auth For Indl Dev City Svc Agreement 149,411 146,973 AA Riviera Beach FLA Pub Impt Rev 100,392 106,025 AA Total $ 633,533 $ 634,393 |
Schedule of Unrealized Loss of Securities | December 31, 2016 December 31, 2015 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 $ 3,224,219 $ 166,326 17 $ 2,484,188 $ 62,343 14 States and political subdivisions -- general obligations 271,093 3,066 2 660,569 5,004 5 States and political subdivisions -- special revenue 171,711 3,160 2 248,146 1,618 2 Corporate 19,737,965 935,546 112 15,320,916 796,204 97 Greater than 12 months: U.S. government obligations - - - 305,055 7,472 3 States and political subdivisions -- general obligations - - - 334,481 1,938 1 States and political subdivisions -- special revenue - - - 25,190 379 1 Corporate 2,558,275 199,643 12 3,166,108 141,074 22 Total fixed maturities $ 25,963,263 $ 1,307,741 145 $ 22,544,653 $ 1,016,032 145 |
Schedule of Fixed Maturities | Amortized Estimated Cost Fair Value Due in one year or less $ - $ - Due after one year through five years 1,319,856 1,299,868 Due after five years through ten years 13,739,800 13,196,864 Due after ten years 13,964,427 13,242,207 $ 29,024,083 $ 27,738,939 |
Components of Net Investment Income | Year Ended December 2016 2015 Fixed maturities $ 889,860 $ 681,999 Equity securities 1,434 186 Other 58,849 44,870 950,143 727,055 Less investment expenses (71,152 ) (63,087 ) Investment income, net of expenses $ 878,991 $ 663,968 |
Schedule of Mortgage Loan Activity | Year Ended December 31, 2016 2015 Balance at beginning of period $ - $ 349,386 Proceeds from settlement on mortgage loans on real estate, held for investment - (349,386 ) Balance at end of period $ - $ - |
Fair Values of Financial Inst31
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [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, 2016 Fixed maturities: U.S. government obligations $ - $ 3,224,219 $ - $ 3,224,219 States and political subdivisions general obligations - 381,395 - 381,395 States and political subdivisions special revenue - 277,735 - 277,735 Corporate - 23,855,590 - 23,855,590 Total fixed maturities $ - $ 27,738,939 $ - $ 27,738,939 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 |
Schedule of Financial Assets and Liabilities at Fair Value | December 31, 2016 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 $ 412,583 $ - $ - $ 412,583 $ 412,583 Cash and cash equivalents 661,545 661,545 - - 661,545 Liabilities: Policyholder deposits (Deposit-type contracts) 16,012,567 - - 16,012,567 16,012,567 Surplus notes and accrued interest payable 811,971 - - 808,602 808,602 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 (Investment-type contracts) 13,897,421 - - 13,897,421 13,897,421 Surplus notes and accrued interest payable 779,405 - - 768,022 768,022 |
Income Tax Matters (Tables)
Income Tax Matters (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Year Ended December 31, 2016 2015 Deferred tax assets: Loss carryforwards $ 9,705,974 $ 8,962,587 Capitalized costs 667,264 667,264 Unrealized losses on investments 436,949 356,495 Benefit reserves 984,640 1,071,997 Total deferred tax assets 11,794,827 11,058,343 Less valuation allowance (10,170,638 ) (9,287,024 ) Total deferred tax assets, net of valuation allowance 1,624,189 1,771,319 Deferred tax liabilities: Policy acquisition costs 571,148 593,654 Due premiums 228,136 234,468 Value of business acquired 586,905 693,297 Intangible assets 238,000 238,000 Property and equipment - 11,900 Total deferred tax liabilities 1,624,189 1,771,319 Net deferred tax assets $ - $ - |
Schedule of Effective Tax Rate Reconciliation | Year Ended December 31, 2016 2015 Computed expected income tax benefit $ (1,308,293 ) $ (856,129 ) Increase (reduction) in income taxes resulting from: Bargain purchase gain (451,019 ) (307,557 ) Meals, entertainment and political contributions 18,956 46,315 Goodwill impairment 384,140 - Other (Benefit reserves and NOL true-up/merger of First Wyoming 2015) (53,722 ) 178,519 (101,645 ) (82,767 ) Tax benefit before valuation allowance (1,409,938 ) (938,896 ) Change in valuation allowance 1,409,938 938,896 Net income tax expenses $ - $ - |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Summary of Significant Reinsurance Amounts | Year Ended December 31, 2016 2015 Balance sheets: Benefit and claim reserves assumed $ 2,470,063 $ 2,763,779 Benefit and claim reserves ceded 11,704,055 12,212,656 Year Ended December 31, 2016 2015 Statements of comprehensive income: Premiums assumed $ 24,064 $ 36,777 Premiums ceded 287,780 498,787 Benefits assumed 43,602 57,317 Benefits ceded 696,159 904,867 Commissions assumed 35 21 Commissions ceded 1,649 3,399 |
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- $ - $ 77,032 $ 180,681 $ - $ 257,713 Sagicor Life Insurance Company A- - 284,617 11,403,908 242,183 11,446,342 $ - $ 361,649 $ 11,584,589 $ 242,183 $ 11,704,055 |
Deposit-Type Contracts (Tables)
Deposit-Type Contracts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deposit Type Contracts [Abstract] | |
Schedule of Contracts | Year Ended December 31, 2016 2015 Beginning balance $ 13,897,421 $ 10,722,227 First Wyoming Life beginning balance - 799,990 Change in deposit-type contracts assumed from SNL - (1,200 ) Deposits received 2,433,781 2,387,104 Investment earnings 776,541 533,646 Withdrawals (1,086,661 ) (533,762 ) Contract Charges (8,515 ) (10,584 ) Ending balance $ 16,012,567 $ 13,897,421 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | 2017 $ 149,481 2018 136,557 2019 141,412 2020 146,477 2021 151,543 Later years 331,790 Total $ 1,057,260 |
Statutory Net Income and Surp36
Statutory Net Income and Surplus (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Accounting Practices Disclosure | Statutory Net Loss for the Years Ended December 31, 2016 2015 American Life $ 1,979,009 $ 2,085,450 Capital Reserve N/A $ 77,720 Statutory Capital and Surplus as of December 31, 2016 2015 American Life $ 3,817,756 $ 5,288,649 Capital Reserve N/A $ 1,464,044 |
Surplus Notes (Tables)
Surplus Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 Summ38
Nature of Operations and Summary of Significant Accounting Policies (Schedule of Deferred Acquisition Costs) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 2,765,063 | $ 2,646,970 |
Capitalization of commissions, sales and issue expenses | 178,419 | 552,466 |
Change in DAC due to unrealized investment losses | (7,448) | 35,301 |
Gross amortization | (367,235) | (469,674) |
Balance at the end of period | $ 2,568,799 | $ 2,765,063 |
Nature of Operations and Summ39
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2010 | |
Issuances of stock, net of capital raising expenses | $ | $ 250,181 | ||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized (in shares) | 120,000,000 | 120,000,000 | |
Common stock, shares issued (in shares) | 22,558,956 | 18,006,301 | |
Common stock, shares outstanding (in shares) | 22,558,956 | 18,006,301 | |
Warrants outstanding | 1,179 | 1,179 | |
Number of shares of voting common stock issuable upon exercise of warrant | 10 | 10 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 6.50 | $ 6.50 | |
Weighted Average Number of Shares Outstanding, Basic (in shares) | 21,625,878 | 14,081,926 | |
Depreciation | $ | $ 103,623 | $ 157,387 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ | 961,864 | 864,526 | |
Stock Issued During Period, Value, Acquisitions | $ | 2,405,874 | ||
Value of business acquired | $ | 1,726,192 | 2,039,110 | |
Preferred stock dividend | $ | 43,120 | 56,057 | |
Face Amount | $ | $ 550,000 | $ 550,000 | |
Series A Preferred Stock [Member] | |||
Conversion Ratio | 1.3 | ||
Preferred Stock, Shares Issued (in shares) | 74,159 | 74,159 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 | |
Preferred stock, shares outstanding (in shares) | 74,159 | 74,159 | |
Series B Preferred Stock [Member] | |||
Conversion Ratio | 2 | ||
Preferred Stock, Shares Issued (in 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) | 1,000,000 | 1,000,000 | |
Preferred stock, shares outstanding (in shares) | 102,669 | 102,669 | |
Preferred stock dividend | $ | $ 43,120 | $ 56,057 | |
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 | ||
Computer Software, Intangible Asset [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Capital Reserve Life Insurance Company [Member] | |||
Ownership percentage | 0.00% | 100.00% | 100.00% |
Business Acquisition, Asset Representing Ceding Commission | $ | $ 0 | ||
Value of business acquired | $ | $ 0 |
Recent Acquisitions (Narrative)
Recent Acquisitions (Narrative) (Details) | Mar. 15, 2016shares | Oct. 31, 2015USD ($) | Oct. 31, 2015USD ($)shares | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 28, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||
Loss on equity method investment | $ (420,720) | $ (357,437) | ||||||
Bargain purchase gain for business acquisition | $ (904,578) | 1,326,526 | 904,578 | |||||
Total income | 4,114,248 | 3,785,115 | ||||||
Net loss | (3,847,922) | (2,518,029) | ||||||
Equity method investments | ||||||||
Northstar Financial Corporation [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Conversion Ratio | 1.27 | |||||||
Shares converted | shares | 4,553,000 | |||||||
First Wyoming Life Insurance Company [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Loss on equity method investment | 198,760 | |||||||
Elimination of Midwest Investment in First Wyoming | $ 420,720 | 158,677 | ||||||
Shares converted | shares | 4,767,400 | |||||||
Voting common stock | $ 1,811,612 | $ 905,806 | ||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 10 years | |||||||
Total income | 4,186,920 | |||||||
Bargain purchase gain for business acquisition | $ 2,231,104 | |||||||
Ownership percentage | 100.00% | 100.00% | ||||||
Acquisition costs | $ 123,219 | $ 123,219 | ||||||
Total income | 71,165 | |||||||
Net loss | $ 73,939 | |||||||
Discount rate | 16.00% | |||||||
Expected long term growth | 3.00% | |||||||
Capitalization rate | 13.00% | |||||||
Equity method investments | $ 810,500 | |||||||
Ownership percentage prior to acquisition | 22.10% | |||||||
First Wyoming Life Insurance Company [Member] | Elimination Of TPA Fees [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total income | 122,903 | |||||||
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 | 16.00% | |||||||
Parent Company [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Loss on equity method investment | $ 619,480 | (420,720) | (357,437) | |||||
Elimination of Midwest Investment in First Wyoming | 221,430 | 642,150 | ||||||
Elimination of unrealized gain on Midwest due to First Wyoming | $ 30,410 | |||||||
Bargain purchase gain for business acquisition | 1,326,526 | 904,578 | ||||||
Total income | (28,188) | 173,734 | ||||||
Net loss | $ (2,082,220) | $ (1,388,413) | ||||||
Parent Company [Member] | First Wyoming Life Insurance Company [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Discount rate | 18.00% | |||||||
Expected long term growth | 3.00% | |||||||
Capitalization rate | 13.00% | |||||||
Parent Company [Member] | First Wyoming Life Insurance Company [Member] | Minimum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Projected cash flow growth | 3.00% | |||||||
Parent Company [Member] | First Wyoming Life Insurance Company [Member] | Maximum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Projected cash flow growth | 13.00% |
Recent Acquisitions (Schedule o
Recent Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||
Bargain purchase gain | $ 904,578 | $ (1,326,526) | $ (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 | 905,806 | |||
Fair value of Midwest's previously held equity interest in First Wyoming | $ 420,720 | $ 158,677 | |||
Total consideration | 1,127,236 | ||||
Investment securities | 3,961,937 | 3,961,937 | |||
Cash | 315,546 | 315,546 | |||
VOBA | 506,600 | 506,600 | |||
Other Assets | 92,045 | 92,045 | |||
Benefit reserves | (611,110) | (611,110) | |||
Policy claims | (41,754) | (41,754) | |||
Deposit type-contracts | (799,990) | (799,990) | |||
Other liabilities | (64,934) | (64,934) | |||
Total identifiable net assets | 3,358,340 | 3,358,340 | |||
Bargain purchase gain | (2,231,104) | ||||
Total | $ 1,127,236 | $ 1,127,236 |
Recent Acquisitions (Schedule42
Recent Acquisitions (Schedule of Pro Forma Information) (Details) - First Wyoming Life Insurance Company [Member] | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | |
Premiums | $ 3,723,084 |
Investment income | 414,972 |
Miscellaneous income | 48,864 |
Total income | 4,186,920 |
Net loss | $ (4,338,598) |
Assets and Liabilities Held f43
Assets and Liabilities Held for Sale (Details) - USD ($) | Dec. 31, 2016 | Aug. 28, 2016 | Dec. 31, 2015 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Assets of discontinued operations | $ 16,900,000 | $ 16,870,241 | |
Liabilities of discontinued operations | $ 15,500,000 | $ 15,508,998 | |
Net Gain on Capital reserve | 26,000 | ||
Cash book value | 50,000 | ||
Unrealized gains on the fair market value of bonds | 17,000 | ||
Write-off of VOBA | $ 40,714 |
Investments (Schedule of Availa
Investments (Schedule of Available for Sale Investments) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Cost or Amortized Cost | ||
Estimated Fair Value | ||
Fixed Maturities [Member] | ||
Cost or Amortized Cost | 29,024,083 | 24,279,231 |
Gross Unrealized Gains | 22,597 | 8,078 |
Gross Unrealized Losses | 1,307,741 | 1,016,032 |
Estimated Fair Value | 27,738,939 | 23,271,277 |
Fixed Maturities [Member] | U.S. government obligations [Member] | ||
Cost or Amortized Cost | 3,390,545 | 3,256,704 |
Gross Unrealized Gains | 6,610 | |
Gross Unrealized Losses | 166,326 | 69,815 |
Estimated Fair Value | 3,224,219 | 3,193,499 |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ||
Cost or Amortized Cost | 383,730 | 1,001,993 |
Gross Unrealized Gains | 732 | |
Gross Unrealized Losses | 3,067 | 6,942 |
Estimated Fair Value | 381,395 | 995,051 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ||
Cost or Amortized Cost | 275,262 | 275,333 |
Gross Unrealized Gains | 5,663 | |
Gross Unrealized Losses | 3,160 | 1,997 |
Estimated Fair Value | 277,735 | 273,336 |
Fixed Maturities [Member] | Corporate [Member] | ||
Cost or Amortized Cost | 24,974,546 | 19,745,201 |
Gross Unrealized Gains | 16,232 | 1,468 |
Gross Unrealized Losses | 1,135,188 | 937,278 |
Estimated Fair Value | $ 23,855,590 | $ 18,809,391 |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost, Fair Value, Credit Rating) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amortized Cost | $ 29,024,083 | $ 24,279,231 |
States and Political Subdivisions General Obligations [Member] | ||
Amortized Cost | 633,533 | |
Estimated Fair Value | 634,393 | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Bellingham Wash [Member] | ||
Amortized Cost | 110,988 | |
Estimated Fair Value | $ 109,633 | |
Credit Rating | AA+ | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Longview Washington Refunding [Member] | ||
Amortized Cost | $ 163,172 | |
Estimated Fair Value | $ 161,460 | |
Credit Rating | NR | |
States and Political Subdivisions General Obligations [Member] | Us States and Political Subdivisions Debt Securities [Member] | Memphis Tenn [Member] | ||
Amortized Cost | $ 109,570 | |
Estimated Fair Value | $ 110,302 | |
Credit Rating | AA | |
States and Political Subdivisions Special Revenue [Member] | Us States and Political Subdivisions Debt Securities [Member] | Philadelphia PA Auth For Indl Dev City Svc Agreementl [Member] | ||
Amortized Cost | $ 149,411 | |
Estimated Fair Value | $ 146,973 | |
Credit Rating | AA | |
States and Political Subdivisions Special Revenue [Member] | Us States and Political Subdivisions Debt Securities [Member] | Riviera Beach FLA Pub Impt Rev [Member] | ||
Amortized Cost | $ 100,392 | |
Estimated Fair Value | $ 106,025 | |
Credit Rating | AA |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss of Securities) (Details) - Fixed Maturities [Member] | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Estimated Fair Value, Total | $ 25,963,263 | $ 22,544,653 |
Gross Unrealized Loss, Total | $ 1,307,741 | $ 1,016,032 |
Number of Securities, Total | 146 | 145 |
U.S. government obligations [Member] | ||
Estimated Fair Value, Less than 12 months | $ 3,224,219 | $ 2,484,188 |
Gross Unrealized Loss, Less than 12 months | $ 166,326 | $ 62,343 |
Number of Securities, Less than 12 months | 17 | 14 |
Estimated Fair value, Greater than 12 months | $ 305,055 | |
Gross Unrealized Loss, Greater than 12 months | $ 7,472 | |
Number of Securities, Greater than 12 months | 3 | |
States and Political Subdivisions General Obligations [Member] | ||
Estimated Fair Value, Less than 12 months | $ 271,093 | $ 660,596 |
Gross Unrealized Loss, Less than 12 months | $ 3,066 | $ 5,004 |
Number of Securities, Less than 12 months | 2 | 5 |
Estimated Fair value, Greater than 12 months | $ 334,481 | |
Gross Unrealized Loss, Greater than 12 months | $ 1,938 | |
Number of Securities, Greater than 12 months | 1 | |
States and Political Subdivisions Special Revenue [Member] | ||
Estimated Fair Value, Less than 12 months | $ 171,711 | $ 248,146 |
Gross Unrealized Loss, Less than 12 months | $ 3,160 | $ 1,618 |
Number of Securities, Less than 12 months | 2 | 2 |
Estimated Fair value, Greater than 12 months | $ 25,190 | |
Gross Unrealized Loss, Greater than 12 months | $ 379 | |
Number of Securities, Greater than 12 months | 1 | |
Corporate [Member] | ||
Estimated Fair Value, Less than 12 months | $ 19,737,965 | $ 15,320,916 |
Gross Unrealized Loss, Less than 12 months | $ 935,546 | $ 796,204 |
Number of Securities, Less than 12 months | 112 | 97 |
Estimated Fair value, Greater than 12 months | $ 2,558,275 | $ 3,166,108 |
Gross Unrealized Loss, Greater than 12 months | $ 199,643 | $ 141,074 |
Number of Securities, Greater than 12 months | 12 | 22 |
Investments (Schedule of Fixed
Investments (Schedule of Fixed Maturities) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Marketable Securities [Abstract] | ||
Amortized Cost, Due in one year or less | ||
Amortized Cost, Due after one year through five years | 1,319,856 | |
Amortized Cost, Due after five years through ten years | 13,739,800 | |
Amortized Cost, Due after ten years | 13,964,427 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost | 29,024,083 | $ 24,279,231 |
Estimated Fair Value, Due in one year or less | ||
Estimated Fair Value, Due after one year through five years | 1,299,868 | |
Estimated Fair Value, Due after five years through ten years | 13,196,864 | |
Estimated Fair Value, Due after ten years | 13,242,207 | |
Available-for-sale Securities, Debt Securities, Estimated Fair Value | $ 27,738,939 | $ 23,271,277 |
Investments (Components of Net
Investments (Components of Net Investment Income) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net investment income | $ 950,143 | $ 727,055 |
Less investment expenses | (71,152) | (63,087) |
Investment income, net of expenses | 878,991 | 663,968 |
Fixed Maturities [Member] | ||
Net investment income | 889,860 | 681,999 |
Equity Securities [Member] | ||
Net investment income | 1,434 | 186 |
Other [Member] | ||
Net investment income | $ 58,849 | $ 44,870 |
Investments (Schedule of Mortga
Investments (Schedule of Mortgage Loan Activity) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Marketable Securities [Abstract] | ||
Balance at beginning of period | $ 349,386 | |
Proceeds from settlement on mortgage loans on real estate, held for investment | (349,386) | |
Balance at end of period |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Investments [Abstract] | ||
Separate Account Assets | $ 2,747,571 | $ 6,186,865 |
Assets On Deposits Fair Value | 2,635,225 | 6,000,376 |
Proceeds From Sale Of Available-For-Sale Securities | 14,179,936 | 13,394,158 |
Available-for-sale Securities, Gross Realized Gains | 178,104 | 148,661 |
Available-for-sale Securities, Gross Realized Losses | 54,610 | $ 266,025 |
Non-Investment Grade [Member] | ||
Investments [Abstract] | ||
Unrealized loss on bond | 90,807 | |
Investment Grade [Member] | ||
Investments [Abstract] | ||
Unrealized loss on bond | $ 1,216,934 |
Fair Values of Financial Inst51
Fair Values of Financial Instruments (Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
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] | ||
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 | ||
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 | ||
Fixed Maturities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 27,738,939 | 23,271,277 |
Fixed Maturities [Member] | 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 | ||
Fixed Maturities [Member] | 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 | 27,738,939 | 23,271,277 |
Fixed Maturities [Member] | 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 | ||
Fixed Maturities [Member] | U.S. government obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 3,224,219 | 3,193,499 |
Fixed Maturities [Member] | U.S. government obligations [Member] | 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 | ||
Fixed Maturities [Member] | U.S. government obligations [Member] | 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 | 3,224,219 | 3,193,499 |
Fixed Maturities [Member] | U.S. government obligations [Member] | 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 | ||
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 381,395 | 995,051 |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | 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 | ||
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | 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 | 381,395 | 995,051 |
Fixed Maturities [Member] | States and Political Subdivisions General Obligations [Member] | 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 | ||
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 277,735 | 273,336 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | 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 | ||
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | 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 | 277,735 | 273,336 |
Fixed Maturities [Member] | States and Political Subdivisions Special Revenue [Member] | 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 | ||
Fixed Maturities [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, available for sale, equity securities | 23,855,590 | 18,809,391 |
Fixed Maturities [Member] | Corporate [Member] | 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 | ||
Fixed Maturities [Member] | Corporate [Member] | 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 | 23,855,590 | 18,809,391 |
Fixed Maturities [Member] | Corporate [Member] | 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 Values of Financial Inst52
Fair Values of Financial Instruments (Schedule of Financial Assets and Liabilities at Fair Value) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | |||
Mortgage loans on real estate, held for investment | |||
Cash and cash equivalents | $ 661,545 | 1,192,336 | $ 2,310,047 |
Liabilities: | |||
Surplus notes and accrued interest payable | 550,000 | 550,000 | |
Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Policy loans | |||
Cash and cash equivalents | 661,545 | 1,192,336 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | |||
Surplus notes and accrued interest payable | |||
Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
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: | |||
Policy loans | 412,583 | 420,775 | |
Cash and cash equivalents | |||
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | 16,012,567 | 13,897,421 | |
Surplus notes and accrued interest payable | 808,602 | 768,022 | |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
Assets: | |||
Policy loans | 412,583 | 420,775 | |
Cash and cash equivalents | 661,545 | 1,192,336 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | 16,012,567 | 13,897,421 | |
Surplus notes and accrued interest payable | 811,971 | 779,405 | |
Estimate Of Fair Value, Fair Value Disclosure [Member] | |||
Assets: | |||
Policy loans | 412,583 | 420,775 | |
Cash and cash equivalents | 661,545 | 1,192,336 | |
Liabilities: | |||
Policyholder deposits (Deposit-type contracts) | 16,012,567 | 13,897,421 | |
Surplus notes and accrued interest payable | $ 808,602 | $ 768,022 |
Fair Values of Financial Inst53
Fair Values of Financial Instruments (Narrative) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, All Other Investments [Abstract] | ||
Accrued interest | $ 261,971 | $ 229,405 |
Income Tax Matters (Schedule of
Income Tax Matters (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Loss carryforwards | $ 9,705,974 | $ 8,962,587 |
Capitalized costs | 667,264 | 667,264 |
Unrealized losses on investments | 436,949 | 356,495 |
Benefit reserves | 984,640 | 1,071,997 |
Total deferred tax assets | 11,794,827 | 11,058,343 |
Less valuation allowance | (10,170,638) | (9,287,024) |
Total deferred tax assets, net of valuation allowance | 1,624,189 | 1,771,319 |
Deferred tax liabilities: | ||
Policy acquisition costs | 571,148 | 593,654 |
Due premiums | 228,136 | 234,468 |
Value of business acquired | 586,905 | 693,297 |
Intangible assets | 238,000 | 238,000 |
Property and equipment | 11,900 | |
Total deferred tax liabilities | 1,624,189 | 1,771,319 |
Net deferred tax assets |
Income Tax Matters (Schedule 55
Income Tax Matters (Schedule of Effective Tax Rate Reconciliation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Computed expected income tax benefit | $ (1,308,293) | $ (856,129) |
Increase (reduction) in income taxes resulting from: | ||
Bargain purchase gain | (451,019) | (307,557) |
Meals, entertainment and political contributions | 18,956 | 46,315 |
Goodwill impairment | 384,140 | |
Other (Benefit reserves and NOL true-up/merger of First Wyoming 2015) | (53,722) | 178,519 |
Income Tax Reconciliation, Deductions | (101,645) | (82,767) |
Tax benefit before valuation allowance | (1,409,938) | (938,896) |
Change in valuation allowance | 1,409,938 | 938,896 |
Net income tax expense |
Income Tax Matters (Narrative)
Income Tax Matters (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Matters [Abstract] | ||
Deferred Tax Assets, Valuation Allowance | $ 10,170,638 | $ 9,287,024 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 34.00% | 34.00% |
Maximum [Member] | ||
Income Tax Matters [Abstract] | ||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2036 | |
Minimum [Member] | ||
Income Tax Matters [Abstract] | ||
Operating Loss Carryforwards, Expiration Dates | Dec. 31, 2024 |
Reinsurance (Summary of Signifi
Reinsurance (Summary of Significant Reinsurance Amounts) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance sheets: | ||
Benefit and claim reserves assumed | $ 2,470,063 | $ 2,763,779 |
Benefit and claim reserves ceded | 11,704,055 | 12,212,656 |
Statements of comprehensive income: | ||
Premiums assumed | 24,064 | 36,777 |
Premiums ceded | 287,780 | 498,787 |
Benefits assumed | 43,602 | 57,317 |
Benefits ceded | 696,159 | 904,867 |
Commissions assumed | 35 | 21 |
Commissions ceded | $ 1,649 | $ 3,399 |
Reinsurance (Schedule of Signif
Reinsurance (Schedule of Significant Reinsurance Balances) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Recoverable on Unpaid Losses | $ 361,649 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | 11,584,589 | |
Ceded Due Premiums | 242,183 | |
Total Amount Recoverable from Reinsurer | $ 11,704,055 | $ 12,212,656 |
Sagicor Life Insurance Company [Member] | ||
AM Best Rating | A- | |
Recoverable on Unpaid Losses | $ 284,617 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | 11,403,908 | |
Ceded Due Premiums | 242,183 | |
Total Amount Recoverable from Reinsurer | $ 11,446,342 | |
Optimum Reinsurance Company [Member] | ||
AM Best Rating | A- | |
Recoverable on Unpaid Losses | $ 77,032 | |
Recoverable on Benefit Reserves/Deposit-type Contracts | 180,681 | |
Ceded Due Premiums | ||
Total Amount Recoverable from Reinsurer | $ 257,713 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2000 | Dec. 31, 1999 | Dec. 31, 2016 | Dec. 31, 2015 | |
Amounts recoverable from reinsurers | $ 11,704,055 | $ 12,212,656 | ||
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 | $ 11,446,342 | $ 11,873,254 |
Deposit-Type Contracts (Schedul
Deposit-Type Contracts (Schedule of Contracts) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Beginning balance | $ 13,897,421 | $ 10,722,227 |
Deposits received | 2,433,781 | 2,387,104 |
Investment earnings | 776,541 | 533,646 |
Withdrawals | (1,086,661) | (533,762) |
Contract Charges | (8,515) | (10,584) |
Ending balance | 16,012,567 | 13,897,421 |
Security National Life Insurance Company [Member] | ||
Change in deposit-type contracts assumed from SNL | (1,200) | |
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, 2016 | |
Security National Life Insurance Company [Member] | |
Premiums, Percentage Assumed to Net | 100.00% |
Commitments and Contingencies62
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Leases, Rent Expense | $ 341,424 | $ 232,130 |
2,017 | 149,481 | |
2,018 | 136,557 | |
2,019 | 141,412 | |
2,020 | 146,477 | |
2,021 | 151,543 | |
Later years | 331,790 | |
Total | $ 1,057,260 |
Statutory Net Income and Surp63
Statutory Net Income and Surplus (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
American Life and Security Corporation [Member] | |||
Statutory net loss | $ 1,979,009 | $ 2,085,450 | |
Statutory capital and surplus | 3,817,756 | 5,288,649 | |
Capital contribution payment | $ 10 | ||
Capital Reserve Life Insurance Company [Member] | |||
Statutory net loss | 77,720 | ||
Statutory capital and surplus | $ 1,464,044 |
Surplus Notes (Summary of Surpl
Surplus Notes (Summary of Surplus Notes) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Face Amount | $ 550,000 | $ 550,000 |
David Elmore [Member] | Surplus Notes One [Member] | ||
Issue Date | Sep. 1, 2006 | |
Maturity Date | Sep. 1, 2016 | |
Face Amount | $ 250,000 | |
Interest Rate | 7.00% | |
David Elmore [Member] | Surplus Notes Two [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, 2016 | Dec. 31, 2015 |
Interest Payable | $ 261,971 | $ 229,405 |
Surplus Notes [Member] | ||
Interest Payable | $ 261,971 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
American Life and Security Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Amount of transaction | $ 63,500 | $ 154,670 |
Schedule I Summary of Investm67
Schedule I Summary of Investments - Other Than Investments in Related Parties (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Amortized Cost | ||
Fair Value | ||
Amount Recognized in Consolidated Balance Sheets | 27,738,939 | 23,271,277 |
Real estate, held for investment, Cost | 517,729 | |
Policy loans, Cost | 412,583 | |
Total investments, Cost | 29,954,395 | |
Real estate, held for investment, Amount Recognized in Consolidated Balance Sheets | 517,729 | 529,769 |
Policy loans, Amount Recognized in Consolidated Balance Sheets | 412,583 | 420,775 |
Total investments, Amount Recognized in Consolidated Balance Sheets | 28,669,251 | 24,362,071 |
Fixed Maturities [Member] | ||
Amortized Cost | 29,024,083 | 24,279,231 |
Fair Value | 27,738,939 | 23,271,277 |
Amount Recognized in Consolidated Balance Sheets | 27,738,939 | |
U.S. government obligations [Member] | Fixed Maturities [Member] | ||
Amortized Cost | 3,390,545 | 3,256,704 |
Fair Value | 3,224,219 | 3,193,499 |
Amount Recognized in Consolidated Balance Sheets | 3,224,219 | |
States and Political Subdivisions General Obligations [Member] | Fixed Maturities [Member] | ||
Amortized Cost | 383,730 | 1,001,993 |
Fair Value | 381,395 | 995,051 |
Amount Recognized in Consolidated Balance Sheets | 381,395 | |
States and Political Subdivisions Special Revenue [Member] | Fixed Maturities [Member] | ||
Amortized Cost | 275,262 | 275,333 |
Fair Value | 277,735 | 273,336 |
Amount Recognized in Consolidated Balance Sheets | 277,735 | |
Corporate [Member] | Fixed Maturities [Member] | ||
Amortized Cost | 24,974,546 | 19,745,201 |
Fair Value | 23,855,590 | $ 18,809,391 |
Amount Recognized in Consolidated Balance Sheets | $ 23,855,590 |
Schedule II Condensed Financi68
Schedule II Condensed Financial Information of Registrant Balance Sheets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets | ||||
Equity method investments | ||||
Equity securities, at cost | 140,250 | |||
Total investments | 28,669,251 | 24,362,071 | ||
Cash and cash equivalents | 661,545 | 1,192,336 | $ 2,310,047 | |
Property and equipment, net | 158,471 | 217,565 | ||
Other assets | 95,773 | 532,674 | ||
Total assets | 47,267,129 | 62,926,404 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable and accrued expenses | 1,211,875 | 1,013,313 | ||
Total liabilities | 42,998,207 | 56,022,430 | ||
Stockholders' Equity: | ||||
Common stock | 22,559 | 18,006 | ||
Additional paid-in capital | 33,036,924 | 31,584,529 | ||
Accumulated deficit | (27,533,447) | (23,685,525) | ||
Accumulated other comprehensive loss | (1,257,291) | (1,013,213) | ||
Total Midwest Holding Inc.'s stockholders' equity | 5,875,404 | 6,903,974 | ||
Total liabilities and stockholders' equity | 47,267,129 | 62,926,404 | ||
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] | 4,424,693 | 7,640,794 | |
Equity securities, at cost | 140,250 | |||
Total investments | 4,424,693 | 7,781,044 | ||
Cash and cash equivalents | 112,563 | 212,422 | $ 1,132,057 | |
Property and equipment, net | 78,790 | 85,339 | ||
Other assets | 153,502 | 381,149 | ||
Total assets | 4,769,548 | 8,459,954 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable and accrued expenses | 500,626 | 1,555,980 | ||
Total liabilities | 500,626 | 1,555,980 | ||
Stockholders' Equity: | ||||
Common stock | 22,559 | 18,006 | ||
Additional paid-in capital | 33,036,924 | 31,584,529 | ||
Accumulated deficit | (27,533,447) | (23,685,525) | ||
Accumulated other comprehensive loss | (1,257,291) | (1,013,213) | ||
Total Midwest Holding Inc.'s stockholders' equity | 4,268,922 | 6,903,974 | ||
Total liabilities and stockholders' equity | 4,769,548 | 8,459,954 | ||
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 Financi69
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Income (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income: | |||
Investment loss, net of expenses | $ 878,991 | $ 663,968 | |
Net realized loss on investments | 31,504 | (117,364) | |
Loss on equity method investment | (420,720) | (357,437) | |
Miscellaneous income | 107,015 | 171,571 | |
Revenues | 4,114,248 | 3,785,115 | |
Expenses: | |||
Income tax expense | |||
Loss before equity in loss of consolidated subsidiaries | (3,847,922) | (2,518,029) | |
Bargain purchase gain for business acquisition | $ (904,578) | 1,326,526 | 904,578 |
Comprehensive income (loss): | |||
Unrealized gains (losses) on investments arising during period | (212,574) | (737,832) | |
Less: reclassification adjustment for net realized (losses) gains on investments | (31,504) | 117,364 | |
Other comprehensive loss | (244,078) | (620,468) | |
Total comprehensive (loss) income attributable to Midwest Holding Inc. | (244,078) | (620,468) | |
Parent Company [Member] | |||
Income: | |||
Investment loss, net of expenses | (5,635) | (5,826) | |
Net realized loss on investments | (117,500) | ||
Loss on equity method investment | (420,720) | (357,437) | |
Miscellaneous income | 515,667 | 536,997 | |
Revenues | (28,188) | 173,734 | |
Expenses: | |||
General | 2,054,032 | 1,562,147 | |
Loss before income tax expense | (2,082,220) | (1,388,413) | |
Income tax expense | |||
Loss before equity in loss of consolidated subsidiaries | (2,082,220) | (1,388,413) | |
Equity in loss of consolidated subsidiaries | (3,092,228) | (2,034,194) | |
Bargain purchase gain for business acquisition | 1,326,526 | 904,578 | |
Net loss attributable to Midwest Holding Inc. | (3,847,922) | (2,518,029) | |
Comprehensive income (loss): | |||
Unrealized gains (losses) on investments arising during period | (212,574) | (737,832) | |
Less: reclassification adjustment for net realized (losses) gains on investments | (31,504) | 81,504 | |
Other comprehensive loss | (244,078) | (620,468) | |
Total comprehensive (loss) income attributable to Midwest Holding Inc. | $ (4,092,000) | $ (3,138,497) |
Schedule II Condensed Financi70
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||
Depreciation | $ 381,582 | $ 400,870 | |
Net realized gain on investments | (31,504) | 117,364 | |
Bargain purchase gain for business acquired | $ 904,578 | (1,326,526) | (904,578) |
Equity in the net loss of unconsolidated subsidiaries | 420,720 | 357,437 | |
Non-cash compensation expense | |||
Other assets and liabilities | 575,313 | (219,213) | |
Cash Flows from Investing Activities: | |||
Proceeds from equity securities carried at cost | 52,703 | 869,528 | |
Acquisition of First Wyoming Capital Corporation | 315,546 | ||
Net change in notes receivable | |||
Merger of Great Plains Investment in New Mexico Capital Corporation | 2,427,394 | ||
Purchases of property and equipment | (33,180) | (37,084) | |
Cash Flows from Financing Activities: | |||
Issuance of common stock | 286,722 | ||
Proceeds from issuance of preferred stock | |||
Preferred stock dividend | (43,120) | (56,057) | |
Net increase (decrease) in cash and cash equivalents | (530,791) | (1,117,711) | |
Cash and cash equivalents: | |||
Beginning | 1,192,336 | 2,310,047 | |
Ending | 661,545 | 1,192,336 | |
Supplemental Disclosure of Non-Cash Information | |||
Common stock issued on the First Wyoming acquisition | (905,806) | 1,811,612 | |
Common stock issued on Northstar Acquisition | 2,405,874 | ||
Total | 1,500,068 | 1,811,612 | |
Parent Company [Member] | |||
Cash Flows from Operating Activities: | |||
Net loss | (3,847,922) | (2,518,029) | |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||
Equity in net loss of consolidated subsidiaries | 2,972,023 | 747,476 | |
Depreciation | 31,931 | 43,825 | |
Net realized gain on investments | 117,500 | ||
Bargain purchase gain for business acquired | (1,326,526) | (904,578) | |
Equity in the net loss of unconsolidated subsidiaries | $ (619,480) | 420,720 | 357,437 |
Other assets and liabilities | (861,791) | 986,290 | |
Net cash (used for) operating activities | (2,494,065) | (1,287,579) | |
Cash Flows from Investing Activities: | |||
Proceeds from equity securities carried at cost | 30,250 | 9,000 | |
Acquisition of First Wyoming Capital Corporation | 165,759 | ||
Merger of Great Plains Investment in New Mexico Capital Corporation | 2,427,394 | ||
Purchases of property and equipment | (20,318) | (37,480) | |
Net cash provided by investing activities | 2,437,326 | 137,279 | |
Cash Flows from Financing Activities: | |||
Issuance of common stock | 286,722 | ||
Repurchases of common stock | |||
Preferred stock dividend | (43,120) | (56,057) | |
Net cash provided by (used in) financing activities | (43,120) | 230,665 | |
Net increase (decrease) in cash and cash equivalents | (99,859) | (919,635) | |
Cash and cash equivalents: | |||
Beginning | 212,422 | 1,132,057 | |
Ending | 112,563 | 212,422 | |
Supplemental Disclosure of Non-Cash Information | |||
Common stock issued on the First Wyoming acquisition | (905,806) | 1,811,682 | |
Common stock issued on Northstar Acquisition | 2,405,874 | ||
Total | $ 1,500,068 | $ 1,811,682 |
Schedule III Supplementary In71
Schedule III Supplementary Insurance Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Future Policy Benefits, Claims and Deposit-type Contracts | $ 24,606,543 | $ 24,155,140 |
Life Insurance Segment [Member] | ||
Deferred Policy Acquisition Costs | 2,568,799 | 2,765,063 |
Future Policy Benefits, Claims and Deposit-type Contracts | 41,184,258 | 38,892,420 |
Advance Premiums | 52,074 | 57,699 |
Premium Revenue | 3,517,458 | 3,424,377 |
Net Investment Income (Loss) | 878,991 | 663,968 |
Death and Other Benefits and Increase in Benefit Reserves | 2,331,375 | 2,219,415 |
Amortization of Deferred Policy Acquisition Costs | 367,235 | 469,674 |
Other Operating Expenses | $ 6,590,086 | $ 4,518,633 |
Schedule IV Reinsurance Infor72
Schedule IV Reinsurance Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Premiums ceded | $ 287,780 | $ 498,787 |
Premiums assumed | 24,064 | 36,777 |
Premiums | 3,517,458 | 3,424,377 |
Life Insurance Force [Member] | ||
Direct Premiums Earned | 229,981,000 | 252,791,000 |
Premiums ceded | 110,670,000 | 147,714,000 |
Premiums assumed | 3,879,000 | 15,349,000 |
Premiums | $ 123,190,000 | $ 120,426,000 |
Premiums, Percentage Assumed to Net | 3.15% | 12.75% |
Life Insurance Segment [Member] | ||
Direct Premiums Earned | $ 3,253,742 | $ 2,962,367 |
Premiums ceded | 287,780 | 498,787 |
Premiums assumed | 24,064 | 36,777 |
Premiums | $ 3,517,458 | $ 3,424,377 |
Premiums, Percentage Assumed to Net | 0.68% | 1.07% |
Valuation and Qualifying Acco73
Valuation and Qualifying Accounts (Details) - Reduced Depreciation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning of the year | $ 864,526 | $ 713,167 |
Depreciation expense | 103,623 | 157,387 |
Disposals | (6,285) | (6,028) |
End of the year | $ 961,864 | $ 864,526 |