Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 19, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 0-18649 | ||
Entity Registrant Name | National Security Group, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 63-1020300 | ||
Entity Address, Address Line One | 661 East Davis Street | ||
Entity Address, City or Town | Elba, | ||
Entity Address, State or Province | AL | ||
Entity Address, Postal Zip Code | 36323 | ||
City Area Code | 334 | ||
Local Phone Number | 897-2273 | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | ||
Trading Symbol | NSEC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,632,216 | ||
Entity Common Stock, Shares Outstanding | 2,530,678 | ||
Entity Central Index Key | 0000865058 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Investments | ||
Fixed maturities held-to-maturity, at amortized cost (estimated fair value: 2019 - $1,345; 2018 - $1,443) | $ 1,290,000 | $ 1,449,000 |
Fixed maturities available-for-sale, at estimated fair value (cost: 2019 - $97,102; 2018 - $96,877) | 100,260,000 | 95,125,000 |
Equity securities, at estimated fair value (cost: 2019 - $2,127; 2018 - $1,842) | 5,303,000 | 4,306,000 |
Trading securities | 149,000 | 107,000 |
Receivable for securities sold | 56,000 | 0 |
Mortgage loans on real estate, at cost | 147,000 | 156,000 |
Investment real estate, at book value | 2,934,000 | 2,945,000 |
Policy loans | 1,895,000 | 1,854,000 |
Company owned life insurance | 4,655,000 | 4,600,000 |
Other invested assets | 2,280,000 | 2,148,000 |
Total Investments | 118,969,000 | 112,690,000 |
Cash and cash equivalents | 11,809,000 | 5,676,000 |
Accrued investment income | 706,000 | 774,000 |
Policy receivables and agents' balances, net | 12,028,000 | 11,185,000 |
Reinsurance recoverable | 276,000 | 1,772,000 |
Deferred policy acquisition costs | 7,666,000 | 7,834,000 |
Property and equipment, net | 1,630,000 | 1,649,000 |
Income tax recoverable | 0 | 1,463,000 |
Deferred income tax asset, net | 0 | 716,000 |
Other assets | 850,000 | 472,000 |
Total Assets | 153,934,000 | 144,231,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Property and casualty benefit and loss reserves | 7,199,000 | 8,208,000 |
Accident and health benefit and loss reserves | 4,046,000 | 3,803,000 |
Life and annuity benefit and loss reserves | 34,269,000 | 33,671,000 |
Unearned premiums | 30,555,000 | 29,999,000 |
Policy and contract claims | 1,053,000 | 792,000 |
Other policyholder funds | 1,350,000 | 1,515,000 |
Short-term notes payable and current portion of long-term debt | 500,000 | 2,200,000 |
Long-term debt | 13,664,000 | 12,152,000 |
Accrued income taxes | 226,000 | 0 |
Deferred income tax liability | 96,000 | 0 |
Other liabilities | 7,515,000 | 6,025,000 |
Total Liabilities | 100,473,000 | 98,365,000 |
Contingencies | ||
Shareholders' equity | ||
Common stock | 2,532,000 | 2,527,000 |
Additional paid-in capital | 5,602,000 | 5,554,000 |
Accumulated other comprehensive income (loss) | 2,443,000 | (1,570,000) |
Retained earnings | 42,891,000 | 39,355,000 |
Treasury stock, at cost, 436 shares | (7,000) | 0 |
Total Shareholders' Equity | 53,461,000 | 45,866,000 |
Total Liabilities and Shareholders' Equity | $ 153,934,000 | $ 144,231,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2019USD ($)shares |
Investments | |
Fixed maturities held-to-maturity, at estimated fair value | $ 1,345 |
Fixed maturities available-for-sale, at cost | 97,102 |
Equity securities, at cost | $ 2,127 |
Treasury stock (in shares) | shares | 436 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | ||
Net premiums earned | $ 59,883 | $ 60,856 |
Net investment income | 3,876 | 3,941 |
Net investment gains (losses) | 3,055 | (552) |
Other income | 585 | 612 |
Total Revenues | 67,399 | 64,857 |
BENEFITS, LOSSES AND EXPENSES | ||
Policyholder benefits and settlement expenses | 38,598 | 40,409 |
Amortization of deferred policy acquisition costs | 3,459 | 3,597 |
Commissions | 7,429 | 7,555 |
General and administrative expenses | 9,698 | 8,839 |
Taxes, licenses and fees | 2,470 | 2,157 |
Interest expense | 1,165 | 1,235 |
Total Benefits, Losses and Expenses | 62,819 | 63,792 |
Income Before Income Taxes | 4,580 | 1,065 |
INCOME TAX EXPENSE (BENEFIT) | ||
Current | 768 | (1,045) |
Deferred | (255) | 1,331 |
Total income tax expense | 513 | 286 |
Net Income | $ 4,067 | $ 779 |
INCOME PER COMMON SHARE BASIC AND DILUTED (in dollars per share) | $ 1.61 | $ 0.31 |
DIVIDENDS DECLARED PER SHARE (in dollars per share) | $ 0.21 | $ 0.20 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 4,067 | $ 779 |
Other comprehensive income (loss), net of tax | ||
Unrealized gains (losses) on securities, net of reclassification adjustment of $14 and $100 for 2019 and 2018, respectively | 3,879 | (2,404) |
Unrealized gain on interest rate swap | 134 | 295 |
Other comprehensive income (loss), net of tax | 4,013 | (2,109) |
Comprehensive income (loss) | $ 8,080 | $ (1,330) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Reclassification adjustment | $ 14 | $ 100 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock | Additional Paid-in Capital | Treasury Stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of change in accounting principle | $ 2,107 | $ (2,107) | ||||
Balance at Dec. 31, 2017 | $ 47,625 | 36,974 | 2,646 | $ 2,522 | $ 5,483 | $ 0 |
Comprehensive income (loss): | ||||||
Net income | 779 | 779 | ||||
Other comprehensive income (loss) (net of tax) | (2,109) | (2,109) | ||||
Common stock issued | 76 | 5 | 71 | 0 | ||
Cash dividends | (505) | (505) | ||||
Balance at Dec. 31, 2018 | 45,866 | 39,355 | (1,570) | 2,527 | 5,554 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock reacquired | (7) | (7) | ||||
Comprehensive income (loss): | ||||||
Net income | 4,067 | 4,067 | ||||
Other comprehensive income (loss) (net of tax) | 4,013 | 4,013 | ||||
Common stock issued | 53 | 5 | 48 | 0 | ||
Cash dividends | (531) | (531) | ||||
Balance at Dec. 31, 2019 | $ 53,461 | $ 42,891 | $ 2,443 | $ 2,532 | $ 5,602 | $ (7) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net income | $ 4,067 | $ 779 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense and amortization/accretion, net | 365 | 312 |
Net (gains) losses on investments | (3,055) | 552 |
Deferred income taxes | (255) | 1,331 |
Amortization of deferred policy acquisition costs | 3,459 | 3,597 |
Changes in assets and liabilities: | ||
Change in receivable for securities sold | (56) | 0 |
Change in accrued investment income | 68 | (6) |
Change in reinsurance recoverable | 1,496 | (1,406) |
Policy acquisition costs deferred | (3,291) | (3,307) |
Change in accrued income taxes | 1,689 | (1,070) |
Change in net policy liabilities and claims | (199) | 1,969 |
Change in other assets/liabilities, net | 1,086 | 420 |
Other, net | (1) | 6 |
Net cash provided by operating activities | 5,373 | 3,177 |
Cash Flows from Investing Activities | ||
Available-for-sale securities | (18,359) | (16,621) |
Trading securities and short-term investments | (37) | 0 |
Property and equipment | (105) | (29) |
Held-to-maturity securities | 173 | 179 |
Available-for-sale securities | 17,972 | 14,172 |
Real estate held for investment | 11 | 188 |
Proceeds from company owned life insurance | 2,031 | 0 |
Other invested assets, net | (30) | (38) |
Net cash provided by (used in) investing activities | 1,656 | (2,149) |
Cash Flows from Financing Activities | ||
Change in other policyholder funds | (165) | (191) |
Change in short-term notes payable | (200) | (1,300) |
Dividends paid | (531) | (505) |
Net cash used in financing activities | (896) | (1,996) |
Net change in cash and cash equivalents | 6,133 | (968) |
Cash and cash equivalents, beginning of year | 5,676 | 6,644 |
Cash and cash equivalents, end of period | $ 11,809 | $ 5,676 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated in the consolidated financial statements. The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which includes information and disclosures not presented herein. Description of Business NSIC is licensed in the states of Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee and Texas and was organized in 1947 to provide life and burial insurance policies to the home service market. Business is produced by both company and independent agents. Primary products include ordinary life, accident and health, supplemental hospital, and cancer insurance products. NSFC is licensed in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Oklahoma, South Carolina, Tennessee and West Virginia. In addition, NSFC operates on a surplus lines basis in Louisiana. NSFC operates in various property and casualty lines, the most significant of which are: dwelling fire and extended coverage, homeowners and mobile homeowners. Omega is licensed in the states of Alabama and Louisiana. Omega currently has no insurance policies inforce but is party to an intercompany reinsurance agreement with NSFC. Intercompany transactions are eliminated upon consolidation in the accompanying consolidated financial statements. The Company is incorporated under the laws of the State of Delaware. Its common stock is traded on the NASDAQ Global Market under the ticker symbol NSEC. Pursuant to the regulations of the United States Securities and Exchange Commission (SEC), the Company is considered a “Smaller Reporting Company” as defined by SEC Rule 12b-2 of the Exchange Act. The Company has elected to comply with the scaled disclosure requirements of Regulation S-K and only two years of financial statements are included herein. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies. Actual results could differ from the estimates used in preparing these consolidated financial statements. Concentration of Risk The Company's property and casualty subsidiaries, composing 91.2% of consolidated direct written premium, produced business during 2019 in eight states. However, 51% of property and casualty segment direct written premium is generated in the states of Alabama, Mississippi and Louisiana, subjecting the Company to significant geographic concentration. Consequently, adverse weather conditions or changes in the legal, regulatory or economic environment could adversely impact the Company. The Company's life, accident and health insurance subsidiary, composing approximately 8.8% of consolidated direct written premium, is licensed in seven states. However, over 78% of life segment direct premium is generated in the states of Alabama and Georgia. Consequently, changes in the legal, regulatory or economic environment in these states could adversely impact the Company. For the year ended December 31, 2019, one agency individually produced greater than 5% of the Company's direct written premium. Investments The Company's investment securities are classified as follows: • Held-to-maturity investments are fixed maturity securities for which the Company has the positive intent and ability to hold to maturity. These securities are reported at cost, adjusted for amortization of premiums and accretion of discounts which are recognized in interest income using methods which approximate level yields over the period to maturity. • Trading securities are securities acquired with the intent to sell in the near term and are carried at fair value with changes in fair value reported in earnings. • Securities available-for-sale are fixed maturity securities and equity securities not classified as either held-to-maturity or trading. These securities are reported at fair value. Substantially all of our fixed maturity and equity securities are classified as available-for-sale. Changes in fair value of trading securities are reported in the statement of operations. Changes in fair value of fixed maturity securities available-for-sale are reported as net unrealized gains or losses as a component of other comprehensive income. Changes in fair value of equity securities available-for-sale are reported as investment gains/losses in the statement of operations. Investment gains and losses on fixed maturity securities arise when the investments are sold. Investment gains and losses on the sale of fixed maturity investments available-for-sale are determined using the specific-identification method and include write downs for fixed maturity securities considered to be other-than-temporarily impaired. When a fixed maturity security has a decline in value, where fair value is below amortized cost, an other-than-temporary impairment (OTTI) is triggered in circumstances where: • the Company has the intent to sell the security • it is more-likely-than-not that the Company will be required to sell the security before recovery of its amortized cost basis • the Company does not expect to recover the entire amortized cost basis of the security If the Company intends to sell the security or if it is more-likely-than-not the Company will be required to sell the security before recovery, an OTTI is recognized as a realized loss in the statement of operations equal to the difference between the security's amortized cost and its fair value. If the Company does not intend to sell the security or it is not more-likely-than-not that the Company will be required to sell the security before recovery, the OTTI is separated into an amount representing the credit loss, which is recognized as an investment loss in the statement of operations, and the amount related to all other factors, which is recognized in other comprehensive income. Interest on fixed income securities is credited to income as it accrues on the principal amounts outstanding adjusted for amortization of premiums and accretion of discounts computed utilizing the interest method. Premiums and discounts on mortgage backed securities amortize or accrete using anticipated prepayments with changes in anticipated prepayments accounted for prospectively. The model used to determine anticipated prepayment assumptions for mortgage backed securities uses separate home sale, refinancing, curtailment and pay-off assumptions derived from a variety of industry sources. Mortgage backed security valuations are subject to prospective adjustments in yield due to changes in prepayment assumptions. The utilization of the prospective method will result in a recalculated effective yield that will equate the carrying amount of the investment to the present value of the projected future cash flows. The recalculated yield is used to accrue income on investments for subsequent periods. Mortgage loans and policy loans are stated at the unpaid principal balance of such loans, net of any related allowance for loan losses. Investment real estate is reported at cost, less allowances for depreciation computed on the straight-line basis. Investment real estate consists primarily of undeveloped commercial real estate. Other investments consist primarily of investments in notes and equity investments in limited liability companies. The Company has no influence or control over the operating or financial policies of the limited liability companies, and consequently, these investments are accounted for using the cost method. The Company owns life insurance (COLI) contracts on certain management and supervisory employees each having a face amount of approximately $2,000,000 (including cash surrender value at the time of payment). The Company's original investment in currently inforce company owned life insurance is $4,082,000 . The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. The Company is the owner and principal beneficiary of these policies. The life insurance contracts are carried at their current cash surrender value. Cash surrender value at December 31, 2019 and December 31, 2018 was $4,655,000 and $4,600,000 , respectively. Changes in cash surrender values are included in the statement of operations. The change in surrender value included in the statement of operations for the years ended December 31, 2019 and 2018 was an increase of $295,000 and an decrease of $374,000 , respectively. Proceeds from the COLI contracts are recorded when the benefits become payable under the terms of the policy and proceeds in excess of cash surrender value are recognized as a gain on company owned life insurance. Cash and cash equivalents consist of demand deposit and money market accounts and investments with maturities of three months or less when purchased. Cash and cash equivalents are carried at cost, which approximates fair value. Investments with other-than-temporary impairment in value are written down to estimated realizable values and losses recognized as a component of investments gains and losses in the Consolidated Statements of Operations. The fair value of the investment becomes its new cost basis. Fair Values of Financial Instruments The Company uses the following methods and assumptions to estimate fair values: Investments • Fixed income security fair values are based on quoted market prices when available. If not available, fair values are based on values obtained from investment brokers and independent pricing services. • Equity security fair values are based on quoted market prices. • Multiple observable inputs are not available for some of our investments, primarily private placements and limited partnerships. Management values these investments either using non-binding broker quotes or pricing models that utilize market based assumptions that have limited observable inputs. These investments compose less than 1% of total assets. Receivables and reinsurance recoverable - The carrying amounts reported approximate fair value. Interest rate swaps - The estimated fair value of the interest rate swaps is based on valuations received from financial institution counterparties. Trust preferred securities obligations and line of credit obligations - The carrying amounts reported for these instruments are equal to the principal balance outstanding and approximate fair value. Policy Receivables Receivable balances are reported at unpaid balances, less a provision for credit losses. Accounts Receivable Accounts receivable are reported at net realizable value. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables, and once these receivables are determined to be uncollectible, they are written off through a charge against an existing allowance account or against earnings. Property and Equipment Property and equipment is carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Significant costs incurred for internally developed software are capitalized and amortized over estimated useful lives of 3 years . Maintenance, repairs, and minor renovations are charged to expense as incurred. Upon sale or retirement of property and equipment, the costs and related accumulated depreciation are eliminated from the respective account and the resulting gain or loss is included in the statement of operations. The Company provides for depreciation of property and equipment using the straight-line method designed to amortize costs over estimated useful lives. Estimated useful lives range up to 40 years for buildings and from 3- 10 years for equipment, furniture and fixtures. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Leases The Company leases automobiles and some office equipment. The Company accounts for leases existing prior to January 1, 2019 under their original classification and omits any new costs classified as initial direct costs. The Company classified all leases as operating leases and accounts for separate lease and nonlease components as a single lease component. Leases are not considered material and the Company recognizes a right of use (ROU) asset which is included in other assets and a corresponding lease liability in other liabilities. The ROU asset recognized by the Company at December 31, 2019 was $389,000 and the corresponding lease liability was $427,000 . Statement of Cash Flows For purposes of reporting cash flows, cash includes cash-on-hand, demand deposits with banks and overnight investments consisting primarily of repurchase agreements. Premium Revenue Life insurance premiums are recognized as revenues when due. Property and casualty insurance premiums include direct writings plus reinsurance assumed less reinsurance ceded and are recognized on a pro-rata basis over the terms of the policies. Unearned premiums represent that portion of direct premiums written that are applicable to the unexpired terms of policy contracts in force and is reported as a liability. Prepaid reinsurance premiums represent the unexpired portion of premiums ceded to reinsurers and are reported as an asset. Deferred Policy Acquisition Costs The costs of acquiring new insurance business are deferred and amortized over the lives of the policies. Deferred costs include commissions, premium taxes, other agency compensation and expenses, and other underwriting expenses directly related to the level of new business produced. Acquisition costs relating to life contracts are amortized over the premium paying period of the contracts, or the first renewal period of term policies, if earlier. Assumptions utilized in amortization are consistent with those utilized in computing policy liabilities. The method of computing the deferred policy acquisition costs for property and casualty policies limits the amount deferred to a percentage of related unearned premiums. Policy Liabilities The liability for future life insurance policy benefits is computed using a net level premium method including the following assumptions: Years of Issue Interest Rate 1947 - 1968 4% 1969 - 1978 6% graded to 5% 1979 - 2003 7% graded to 6% 2004 - 2012 5.25% 2013 - 2014 4.25% 2015 - 2019 4% Mortality assumptions include various percentages of the 1955-60 and 1965-70 Select and Ultimate Basic Male Mortality Table. Withdrawal assumptions are based on the Company's experience. Policyholder Benefit and Claim Settlement Expenses The liability for unpaid claims represents the estimated liability for unpaid loss and loss adjustment expenses incurred but not yet reported under insurance contracts for loss events that have occurred on or before the balance sheet date. The liability for claims and related adjustment expenses are determined using case-basis evaluations and statistical analysis and represent estimates of the ultimate net cost of all losses incurred through December 31 of each year. Liability estimates are continually reviewed and adjusted as necessary; such adjustments are included in the period in which they are determined. Liability estimates are based on reports of losses from policyholders, individual case loss estimates, and estimates of losses incurred but not yet reported. Policyholder benefit and settlement expenses in the consolidated statement of operations include paid claims, settlement cost and changes in claim liability estimates. Loss and adjustment expenses charged to earnings are net of amounts recovered and estimates of recoverable amounts under ceded reinsurance contracts. Earnings Per Share Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,529,652 at December 31, 2019 and 2,525,325 at December 31, 2018 . The Company did no t have any dilutive securities as of December 31, 2019 and 2018. Reinsurance The Company's insurance operations re-insure certain risks in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. See Note 10 for additional information regarding the Company's reinsurance practices. Income Taxes The Company files a consolidated United States federal income tax return that includes the holding company and its subsidiaries. The Company is currently subject to a statutory rate of 21%. Tax related interest and penalties are reported as components of income tax expense. The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes arise from the recognition of temporary differences between financial statement carrying amounts and the tax basis of the Company's assets and liabilities and capital or operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. The effect of a change in tax rates is recognized in the period the new rate is enacted. Changes in deferred tax assets and liabilities are included as a component of income tax expense, with the exception of changes impacting other comprehensive income. Changes in deferred tax assets and liabilities associated with components of other comprehensive income are charged or credited to other comprehensive income. The Company evaluates all tax positions taken on its U.S. federal income tax return. No material uncertainties exist for any tax positions taken by the Company. Contingencies Liabilities for loss contingencies arising from, but not limited to, litigation, claims, assessments, fines and penalties are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Significant attorney fees are estimated and recorded when incurred. Reclassifications Certain 2018 amounts have been reclassified from the prior year consolidated financial statements to conform to the 2019 presentation. Advertising The Company expenses advertising costs as incurred. Concentration of Credit Risk The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At December 31, 2019 , the net amount exceeding FDIC insured limits was $ 6,766,000 at three financial institutions. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At December 31, 2019 , the single largest balance due from one agent totaled $349,000 . Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet its obligation could result in losses to the insurance subsidiaries. Allowances for losses on reinsurance recoverables are established if amounts are believed to be uncollectible. At December 31, 2019 and December 31, 2018, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At December 31, 2019 , management does not believe the Company is exposed to any significant credit risk related to its reinsurance program. Treasury Shares Treasury shares are reported at cost and are reflected on the Consolidated Balance Sheets as a reduction of total equity. Accounting Changes Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance to simplify the accounting for income taxes. The guidance removes certain exceptions to general principles in the income tax guidance and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this new guidance. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued guidance to that removes, modifies and adds to the disclosure requirements related to fair value measurements. The guidance removes the requirements to disclose the amount and reasons for transfers between Level 1 and Level 2 assets, the policy for timing and transfers between levels and the valuation process for Level 3 fair value measurements. The guidance modifies disclosure requirements for investments in certain entities that calculate net asset value and clarifies the purpose of the measurement uncertainty disclosure. The guidance adds requirements to disclose changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements and to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued guidance to improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The guidance improves timeliness of recognizing changes in the liability for future policy benefits and modifies the rate used to discount future cash flows. The guidance will simplify and improve accounting for certain market-based options or guarantees associated with deposit type contracts and simplify the amortization of deferred policy acquisition costs. The guidance also introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. Due to the nature and extent of the changes required to the Company’s life insurance operations, the adoption of this standard is expected to have a material impact on the consolidated financial statements. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued guidance that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Financial Instruments - Credit Losses In June 2016, the FASB issued guidance that replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB released additional guidance in November 2018 that provides scope clarification. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued guidance to simplify the accounting for nonemployee share-based payment awards. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company does not make any material share-based payments. The Company adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on its financial position or results of operations. Derivatives and Hedging In August 2017, the FASB issued guidance that amends and simplifies hedge accounting guidance in order to enable entities to better portray the economic results of their risk management activities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. The Company adopted this guidance on January 1, 2019 and had two swaps designated as cash flow hedges. One expired March 15, 2019 and one expires March 15, 2020. The adoption of this guidance did not have a significant impact on our financial position, results of operations, cash flows or related disclosures. Leases In February 2016, the FASB issued guidance that requires lessees (for capital and operating leases) to recognize the lease liability and right-of-use (ROU) asset at the commencement date of the lease. Additional transition guidance was issued in 2018 and 2019. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company adopted this guidance on January 1, 2019 and recorded a ROU asset of $299,000 and corresponding lease liability of $306,000 . The ROU asset and operating lease liability are included in other assets and other liabilities, respectively, on our Consolidated Balance Sheets as of January 1, 2019. The Company elected the package of practical expedients permitted under the guidance, which allowed the Company to account for existing leases under their current classification, as well as omit any new costs classified as initial direct costs, under the new guidance. Based on this election, the Company kept existing agreements as operating leases. The Company also elected the practical expedient allowing an accounting policy election by class of underlying asset, to account for separate lease and nonlease components as a single lease component. The Company leases automobiles and some office equipment. These leases are not considered material. Adoption of this guidance had no material impact on the Company's financial position, results of operations, cash flows or related disclosures. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entities [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company holds passive interests in limited partnerships that are considered to be Variable Interest Entities (VIE) under the provisions of ASC 810 Consolidation . The Company is not the primary beneficiary of the entities and is not required to consolidate under ASC 810. The entities are private placement investment funds formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnerships. The carrying value of the investments totals $317,000 and is included as a component of Other Invested Assets in the accompanying consolidated balance sheets. In December 2005, the Company formed National Security Capital Trust I, a statutory trust created under the Delaware Statutory Trust Act, for the sole purpose of issuing, in private placement transactions, $9,000,000 of trust preferred securities (TPS) and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $9,279,000 of variable rate subordinated debentures issued by the Company. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $9,005,000 . The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the trust. The Subordinated Debentures, disclosed in Note 8, are reported in the accompanying consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $279,000 and are included in Other Assets in the accompanying consolidated balance sheets. In June 2007, the Company formed National Security Capital Trust II for the sole purpose of issuing, in private placement transactions, $3,000,000 of trust preferred securities and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $3,093,000 unsecured junior subordinated deferrable interest debentures. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $2,995,000 . The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the Trust. The Subordinated Debentures, disclosed in Note 8, are reported in the accompanying consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $93,000 and are included in Other Assets in the accompanying consolidated balance sheets. |
STATUTORY ACCOUNTING PRACTICES
STATUTORY ACCOUNTING PRACTICES | 12 Months Ended |
Dec. 31, 2019 | |
Statutory Accounting Practices [Abstract] | |
STATUTORY ACCOUNTING PRACTICES | STATUTORY ACCOUNTING PRACTICES The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) which vary in certain respects from reporting practices prescribed or permitted by insurance regulatory authorities. The significant differences for statutory reporting include: (a) acquisition costs of acquiring new business are charged to operations as incurred, (b) life policy liabilities are established utilizing interest and mortality factors specified by regulatory authorities, (c) the Asset Valuation Reserve (AVR) and the Interest Maintenance Reserve (IMR) are recorded as liabilities in the life subsidiary, and (d) non-admitted assets (primarily furniture and equipment, agents' debit balances and prepaid expenses) are charged directly to surplus. Statutory net income (loss) and capital and surplus, excluding intercompany transactions, are summarized as follows: ($ in thousands) 2019 2018 NSIC - including realized capital gains of $272 and $71, respectively $ 1,378 $ 1,558 NSFC - including realized capital gains (losses) of $(10) and $39, respectively $ 2,644 $ 786 Omega - including realized capital gains (losses) of $(21) and $7, respectively $ 593 $ (64 ) Statutory risk-based adjusted capital: NSIC - including AVR of $968 and $766, respectively $ 17,210 $ 16,043 NSFC - including investment in Omega of $7,930 and $7,280, respectively $ 36,264 $ 34,645 Omega $ 11,430 $ 10,783 The above amounts exclude allocation of direct expenses of the Company. NSIC, NSFC and Omega are in compliance with statutory restrictions with regard to minimum amounts of surplus and capital. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Our investment in available-for-sale securities, which are reported at fair value, includes fixed maturity securities and equity securities. Net unrealized gains or losses on fixed maturities are reported after-tax as a component of other comprehensive income. Changes in fair value of equity securities are reported in investment gains/losses as a component of net income. The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2019 are as follows: ($ in thousands) Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government corporations and agencies $ 4,131 $ 150 $ — $ 4,281 Agency mortgage backed securities 32,283 861 157 32,987 Asset backed securities 10,307 71 104 10,274 Private label mortgage backed securities 6,815 441 4 7,252 Corporate bonds 36,074 1,816 70 37,820 States, municipalities and political subdivisions 6,669 109 1 6,777 Foreign governments 823 46 — 869 Total Fixed Maturities 97,102 3,494 336 100,260 Equity securities 2,127 3,176 — 5,303 Total $ 99,229 $ 6,670 $ 336 $ 105,563 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2019 are as follows: ($ in thousands) Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Agency mortgage backed securities $ 1,290 $ 55 $ — $ 1,345 Total $ 1,290 $ 55 $ — $ 1,345 The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2018 are as follows: ($ in thousands) Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government corporations and agencies $ 4,820 $ 31 $ 107 $ 4,744 Agency mortgage backed securities 27,492 159 545 27,106 Asset backed securities 10,901 7 248 10,660 Private label mortgage backed securities 5,869 105 27 5,947 Corporate bonds 36,935 407 1,551 35,791 States, municipalities and political subdivisions 10,059 105 91 10,073 Foreign governments 801 3 — 804 Total Fixed Maturities 96,877 817 2,569 95,125 Equity securities 1,842 2,464 — 4,306 Total $ 98,719 $ 3,281 $ 2,569 $ 99,431 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2018 are as follows: ($ in thousands) Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Agency mortgage backed securities $ 1,449 $ 16 $ 22 $ 1,443 Total $ 1,449 $ 16 $ 22 $ 1,443 The amortized cost and aggregate fair value of debt securities at December 31, 2019 , by contractual maturity, are presented in the following table. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ($ in thousands) Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 2,136 $ 2,133 Due after one year through five years 17,397 17,945 Due after five years through ten years 25,683 26,516 Due after ten years 51,886 53,666 Total $ 97,102 $ 100,260 Held-to-maturity securities: Due after one year through five years $ 29 $ 30 Due after five years through ten years 4 5 Due after ten years 1,257 1,310 Total $ 1,290 $ 1,345 A summary of securities available-for-sale with unrealized losses as of December 31, 2019 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2019 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Agency mortgage backed securities $ 5,663 $ 104 $ 1,751 $ 53 $ 7,414 $ 157 18 Asset backed securities 4,241 33 1,579 71 5,820 104 9 Private label mortgage backed securities 1,060 4 — — 1,060 4 1 Corporate bonds 6,363 54 1,484 16 7,847 70 14 States, municipalities and political subdivisions 512 1 — — 512 1 1 $ 17,839 $ 196 $ 4,814 $ 140 $ 22,653 $ 336 43 There were no securities held-to-maturity with unrealized losses as of December 31, 2019 . A summary of securities available-for-sale with unrealized losses as of December 31, 2018 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position U.S. Government corporations and agencies $ — $ — $ 3,209 $ 107 $ 3,209 $ 107 6 Agency mortgage backed securities 5,504 45 10,969 500 16,473 545 38 Asset backed securities 5,824 146 2,741 102 8,565 248 12 Private label mortgage backed securities 1,348 27 — — 1,348 27 2 Corporate bonds 16,583 709 9,823 842 26,406 1,551 51 States, municipalities and political subdivisions 1,242 10 4,420 81 5,662 91 11 $ 30,501 $ 937 $ 31,162 $ 1,632 $ 61,663 $ 2,569 120 A summary of securities held-to-maturity with unrealized losses as of December 31, 2018 along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Agency mortgage backed securities $ 1,026 $ 22 $ — $ — $ 1,026 $ 22 2 $ 1,026 $ 22 $ — $ — $ 1,026 $ 22 2 The Company conducts periodic reviews to identify and evaluate securities in an unrealized loss position in order to identify other-than-temporary impairments. For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more-likely-than-not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes. Management has evaluated each security in a significant unrealized loss position in the fixed maturity investment portfolio. The Company has no material exposure to sub-prime mortgage loans and approximately 5% of the fixed income investment portfolio is rated below investment grade. Based on a review of the available financial information, the prospect for future earnings of each company and consideration of the Company’s intent and ability to hold the securities until market values recovered, it was determined that, other than the impairment described below, the securities in an accumulated loss position in the portfolio were temporary impairments. For the year ended December 31, 2019 , the Company realized no other-than-temporary impairments. For the year ended December 31, 2018, the Company realized $16,000 other-than-temporary impairments. At December 31, 2019 , the three largest losses not realized as an impairment in the fixed maturity portfolio totaled $60,000 , $23,000 and $20,000 . Each of these losses were driven by changes in market interest rates. At December 31, 2018, the three largest losses not realized as an impairment was in the fixed maturity portfolio totaled $145,000 , $99,000 and $94,000 . Major categories of investment income are summarized as follows: ($ in thousands) Year ended 2019 2018 Fixed maturities $ 3,752 $ 3,803 Equity securities 86 106 Mortgage loans on real estate 8 7 Investment real estate 4 3 Policy loans 142 142 Other 30 25 4,022 4,086 Less: Investment expenses 146 145 Net investment income $ 3,876 $ 3,941 Major categories of investment gains and losses are summarized as follows: ($ in thousands) Year ended 2019 2018 Realized gains on fixed maturities $ 18 $ 128 Realized gains on equity securities 233 — Gains on trading securities 5 — Change in fair value of equity securities 712 (203 ) Change in surrender value of company owned life insurance 295 (374 ) Realized gain on company owned life insurance 1,792 — Other gains (losses), principally real estate — (87 ) Other-than-temporary impairments — (16 ) Net investment gains (losses) $ 3,055 $ (552 ) An analysis of the net change in unrealized gains (losses) on available-for-sale securities follows: ($ in thousands) December 31, December 31, 2018 Fixed maturities $ 4,910 $ (3,042 ) Deferred income tax (1,031 ) 638 Change in net unrealized gains (losses) on available-for-sale securities $ 3,879 $ (2,404 ) |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying consolidated balance sheets. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt with values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. Assets/Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 are summarized in the following table by the type of inputs applicable to the fair value measurements: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale U.S. Government corporations and agencies $ 4,281 $ 4,281 $ — $ — Agency mortgage backed securities 32,987 19,330 13,657 — Asset backed securities 10,274 2,601 7,673 — Corporate bonds 37,820 — 37,820 — Private label asset backed securities 7,252 1,060 6,192 — States, municipalities and political subdivisions 6,777 — 6,777 — Foreign governments 869 869 — — Trading securities 149 149 — — Equity securities 5,303 3,988 — 1,315 Total Financial Assets $ 105,712 $ 32,278 $ 72,119 $ 1,315 Financial Liabilities Interest rate swap $ (65 ) $ — $ — $ (65 ) Total Financial Liabilities $ (65 ) $ — $ — $ (65 ) The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with quoted market prices in active markets for identical assets are reflected within Level 1 while securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. As of December 31, 2019 , Level 3 fair value measurements of assets include $1,315,000 of equity securities in a local community bank whose value is based on an evaluation of the financial statements of the entity. The Company does not develop the unobservable inputs used in measuring fair value. As of December 31, 2019 , Level 3 fair value measurements of liabilities include $65,000 net fair value of various interest rate swap agreements whose value is based on analysis provided by a third party that utilizes financial modeling tools and assumptions on interest and other factors. The Company does not develop the unobservable inputs used in measuring fair value. Additional information regarding the interest rate swap agreements is provided in Note 8. The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2019 : ($ in thousands) For the year December 31, 2019 Equity Securities Interest Rate Swap Beginning balance $ 1,125 $ (234 ) Total gains or losses (realized and unrealized): Included in earnings 645 — Included in other comprehensive income — 169 Purchases: — — Sales: (455 ) — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,315 $ (65 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2019: $ — $ — For the year ended December 31, 2019 , there were no assets or liabilities measured at fair values on a nonrecurring basis. Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 are summarized in the following table by the type of inputs applicable to the fair value measurements: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale U.S. Government corporations and agencies $ 4,744 $ 4,147 $ 597 $ — Agency mortgage backed securities 27,106 11,756 15,350 — Asset backed securities 10,660 2,939 7,721 — Corporate bonds 35,791 — 35,791 — Private label asset backed securities 5,947 — 5,947 — States, municipalities and political subdivisions 10,073 — 10,073 — Foreign governments 804 804 — — Trading securities 107 107 — — Equity securities available-for-sale 4,306 3,181 — 1,125 Total Financial Assets $ 99,538 $ 22,934 $ 75,479 $ 1,125 Financial Liabilities Interest rate swap $ (234 ) $ — $ — $ (234 ) Total Financial Liabilities $ (234 ) $ — $ — $ (234 ) The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2018 : ($ in thousands) For the year ended December 31, 2018 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,073 $ (608 ) Total gains or losses (realized and unrealized): Included in earnings 52 — Included in other comprehensive income — 374 Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,125 $ (234 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2018: $ — $ — For the year ended December 31, 2018, there were no assets or liabilities measured at fair values on a nonrecurring basis. The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. See Note 8 for additional information about the interest rate swap agreements. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value. The carrying amount and estimated fair value of the Company’s financial instruments as of December 31, 2019 and December 31, 2018 are as follows: ($ in thousands) December 31, 2019 December 31, 2018 Assets and related instruments Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Held-to-maturity securities $ 1,290 $ 1,345 $ 1,449 $ 1,443 Mortgage loans 147 147 156 156 Policy loans 1,895 1,895 1,854 1,854 Company owned life insurance 4,655 4,655 4,600 4,600 Other invested assets 2,280 2,280 2,148 2,148 Liabilities and related instruments Other policyholder funds 1,350 1,350 1,515 1,515 Short-term notes payable and current portion of long-term debt 500 500 2,200 2,200 Long-term debt 13,664 13,664 12,152 12,152 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Major categories of property and equipment are summarized as follows: ($ in thousands) December 31, 2019 December 31, 2018 Building and improvements $ 3,472 $ 3,378 Electronic data processing equipment 1,470 1,504 Furniture and fixtures 483 477 5,425 5,359 Less accumulated depreciation 3,795 3,710 Property and equipment, net $ 1,630 $ 1,649 Depreciation expense for the year ended December 31, 2019 was $124,000 ( $161,000 for the year ended December 31, 2018). |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognizes tax-related interest and penalties as a component of tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is not subject to examinations by authorities related to its U.S. federal or state income tax filings for years prior to 2014. Tax returns have been filed through the year 2018. Net deferred tax liabilities are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of the enacted tax laws. Management believes that, based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. The Company recognized a net deferred tax liability position of $96,000 at December 31, 2019 and a net deferred tax asset position of $716,000 at December 31, 2018 . At December 31, 2018, the Company recognized an AMT credit in income tax recoverable of $1,622,000 . Of this amount, $1,074,000 was recovered with the 2018 return and Management anticipates the remaining $548,000 will be recovered by 2020 pursuant to allowable amounts under the Tax Cuts and Jobs Act enacted in 2017. The tax effect of significant differences representing deferred tax assets and liabilities are as follows: ($ in thousands) As of December 31, As of December 31, General expenses $ 1,269 $ 1,067 Unearned premiums 1,288 1,265 Claims liabilities 645 552 Impairment on real estate owned 119 119 Unrealized losses on securities available-for-sale — 368 Unrealized loss on interest rate swaps 14 49 Deferred tax assets 3,335 3,420 Trading securities (1 ) — Depreciation (93 ) (79 ) Deferred policy acquisition costs (1,610 ) (1,645 ) Pre-1984 policyholder surplus account (397 ) (463 ) Unrealized gains on securities available-for-sale (667 ) — Unrealized gains on equity securities (663 ) (517 ) Deferred tax liabilities (3,431 ) (2,704 ) Net deferred tax asset (liability) $ (96 ) $ 716 The appropriate income tax effects of changes in temporary differences are as follows: ($ in thousands) Year ended 2019 2018 Deferred policy acquisition costs $ (35 ) $ (61 ) Other-than-temporary impairments — (3 ) Trading securities 1 — Unearned premiums (23 ) 4 General expenses (202 ) 2 Depreciation 14 (9 ) Claims liabilities (93 ) (68 ) AMT credit — 1,575 Impact of repeal of special provision on pre-1984 policyholder surplus (66 ) (66 ) Unrealized gains (losses) on equity securities 149 (43 ) Deferred income tax expense (benefit) $ (255 ) $ 1,331 Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows: Year ended 2019 2018 Federal income tax rate applied to pre-tax income/loss 21.0 % 21.0 % Dividends received deduction and tax-exempt interest (0.3 )% (2.4 )% Company owned life insurance (9.6 )% 7.4 % Other, net 0.1 % 0.9 % Effective federal income tax rate 11.2 % 26.9 % |
NOTES PAYABLE AND LONG-TERM DEB
NOTES PAYABLE AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LONG-TERM DEBT | NOTES PAYABLE AND LONG-TERM DEBT Short-term debt and current portion of long-term debt consisted of the following as of December 31, 2019 and December 31, 2018 : ($ in thousands) December 31, December 31, 2019 2018 Current portion of installment note payable due in November with variable interest rate equal to the WSJ prime rate plus 0.5%. Unsecured. $ 500 $ 2,200 $ 500 $ 2,200 Long-term debt consisted of the following as of December 31, 2019 and December 31, 2018 : ($ in thousands) December 31, December 31, 2019 2018 Promissory note with variable interest rate equal to the WSJ prime rate plus 0.5%; maturity November 2023. Annual installment payments beginning November 2020. Unsecured. $ 1,500 $ — Subordinated debentures issued on December 15, 2005 with floating rate interest equal to 3-Month LIBOR plus 375 basis points; net of $150,000 in debt issuance cost ($159,000 in 2018); maturity December 15, 2035. Interest payable quarterly. Redeemable prior to maturity. Unsecured. 9,129 9,120 Subordinated debentures issued on June 21, 2007 with floating rate interest equal to 3-Month LIBOR plus 340 basis points; net of $58,000 in debt issuance cost ($61,000 in 2018); maturity June 15, 2037. Interest payable quarterly. Redeemable prior to maturity. Unsecured. 3,035 3,032 $ 13,664 $ 12,152 Annual maturities of all outstanding debt for the next five years and beyond are as follows: ($ in thousands) 2020 2021 2022 2023 2024 Thereafter $ 500 $ 500 $ 500 $ 500 $ — $ 12,164 The Company has entered into various swap agreements related to the trust preferred securities. On March 19, 2009, the Company entered into a forward swap effective September 17, 2012, with a notional amount of $3,000,000 and designated the swap as a hedge against changes in cash flows attributable to changes in the benchmark interest rate (LIBOR) associated with the subordinated debentures issued June 21, 2007. Quarterly, commencing September 17, 2012, under the terms of the forward swap, which expired on March 15, 2019, the Company paid interest at a fixed rate of 7.02% until March 15, 2019. On May 26, 2010, the Company entered into a forward swap with a notional amount of $9,000,000 effective December 15, 2015, which hedges against changes in cash flows following the termination of the fixed rate period. Quarterly, commencing March 16, 2016 under the terms of the forward swap, the Company pays interest at a fixed rate of 8.49% until March 15, 2020. The swaps entered into in 2009 and 2010 have fair values of $0 and $65,000 (liability), respectively, for a total liability of $65,000 at December 31, 2019 ( $234,000 at December 31, 2018 ). The swap liability is reported as a component of other liabilities on the consolidated balance sheets. A net valuation gain of $134,000 (net of tax) is included in accumulated other comprehensive income related to the swap agreements at December 31, 2019 . A net valuation gain of $295,000 (net of tax) was included in accumulated other comprehensive income related to the swap at December 31, 2018 . We use dollar offset at the hedge's inception and for each reporting period thereafter to assess whether the derivative used in a hedging transaction is expected to be, and has been, effective in offsetting changes in the fair value of the hedged item. Since inception, no portion of the hedged item has been deemed ineffective. For all hedges, we discontinue hedge accounting if it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge. The Company’s interest rate swaps include provisions requiring the Company to post collateral when the derivative is in a net liability position. At December 31, 2019 , the Company has securities on deposit with fair market values of $294,000 (all of which is posted as collateral). At December 31, 2018 , the Company had securities on deposit with fair market values of $932,000 (all of which is posted as collateral). See Note 5 for additional information about the interest rate swaps. |
POLICY AND CLAIM RESERVES
POLICY AND CLAIM RESERVES | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
POLICY AND CLAIM RESERVES | POLICY AND CLAIM RESERVES The Company regularly updates its reserve estimates as new information becomes available and events occur that may impact the resolution of unsettled claims. Reserve estimation can be an inherently uncertain process and reserve estimates can be revised up or down depending on changes in circumstances. Changes in prior years' reserve estimates are reflected in the results of operations in the year such changes are determined. The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense: ($ in thousands) Year ended 2019 2018 Summary of claims and claim adjustment expense reserves Balance, beginning of year $ 8,208 $ 7,075 Less reinsurance recoverable on unpaid losses 1,384 327 Net balances at beginning of year 6,824 6,748 Net losses: Provision for claims and claim adjustment expenses for claims arising in current year 35,312 36,457 Estimated claims and claim adjustment expenses for claims arising in prior years (1,333 ) (722 ) Total increases 33,979 35,735 Claims and claim adjustment expense payments for claims arising in: Current year 30,179 31,833 Prior years 3,674 3,826 Total payments 33,853 35,659 Net balance at end of period 6,950 6,824 Plus reinsurance recoverable on unpaid losses 249 1,384 Claims and claim adjustment expense reserves at end of period $ 7,199 $ 8,208 Claim and claim adjustment expense reserves before reinsurance recoverable at December 31, 2019 was down compared to the same period last year. Reserves were higher at December 31, 2018 primarily due to losses associated with Hurricane Michael. Reinsurance recoverable on unpaid losses was also higher in 2018 due to amounts recoverable on unpaid losses associated with Hurricane Michael. The estimate for claims arising in prior years was reduced $1,332,000 in 2019 (reduced $722,000 in 2018) due to favorable loss development during the year on claims arising in prior years. The Company has a geographic exposure to catastrophe losses in certain areas of the country. Catastrophes can be caused by various events including hurricanes, windstorms, earthquakes, hail, severe winter weather, explosions and fires, and the incidence and severity of catastrophes are inherently unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Most catastrophe losses are restricted to small geographic areas; however, hurricanes and earthquakes may produce significant damage in large, heavily populated areas. The Company generally seeks to reduce its exposure to catastrophes through individual risk selection and the purchase of catastrophe reinsurance. At December 31, 2019, the Company's estimate of unpaid losses and adjustment expenses for claims incurred in prior years related to catastrophes that exceeded our retention totaled $24,000 before reinsurance ( $18,000 in 2018). The claim development table that follows presents incurred and cumulative paid claims and adjustment expense by accident year. Information presented is undiscounted and net of reinsurance. Homeowners, Dwelling Fire and Other Liability For the Years Ended December 31, 2010 1 2011 1 2012 1 2013 1 2014 1 2015 1 2016 1 2017 1 2018 1 2019 Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years IBNR Reserves Dec. 31, 2019 Cumulative Number of Reported Claims 2010 $ 30,610 $ 29,918 $ 29,805 $ 29,718 $ 29,687 $ 29,672 $ 29,641 $ 29,660 $ 29,659 $ 29,654 $ — 5,891 2011 — 35,203 33,957 34,233 34,711 34,806 34,650 34,658 34,663 34,751 50 8,132 2012 — — 29,959 30,190 30,402 30,091 29,948 29,885 29,827 29,834 5 5,203 2013 — — — 27,436 27,147 27,076 27,023 27,191 27,236 27,022 7 5,213 2014 — — — — 25,929 26,422 26,290 26,225 26,130 26,096 — 4,752 2015 — — — — — 31,484 30,861 30,360 30,890 30,960 363 5,852 2016 — — — — — — 36,287 35,343 35,399 35,144 — 5,189 2017 — — — — — — — 40,210 38,958 38,642 99 5,328 2018 — — — — — — — — 37,079 36,195 438 4,788 2019 — — — — — — — — — 35,929 2,827 4,616 Total $ 324,227 1 Required supplementary information (unaudited) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance Unaudited ($ in thousands) Years 2010 1 2011 1 2012 1 2013 1 2014 1 2015 1 2016 1 2017 1 2018 1 2019 2010 $ 26,064 $ 29,201 $ 29,404 $ 29,507 $ 29,639 $ 29,640 $ 29,640 $ 29,660 $ 29,659 $ 29,654 2011 — 31,488 33,080 33,484 34,167 34,622 34,621 34,641 34,647 34,650 2012 — — 26,162 29,135 29,614 29,765 29,834 29,835 29,823 29,824 2013 — — — 24,157 26,114 26,487 26,661 26,788 26,976 27,011 2014 — — — — 22,844 25,461 25,800 26,033 26,095 26,094 2015 — — — — — 25,923 30,066 30,190 30,296 30,366 2016 — — — — — — 31,893 34,722 35,029 35,139 2017 — — — — — — — 35,209 38,245 38,499 2018 — — — — — — — — 32,456 35,543 2019 — — — — — — — — — 30,796 Total $ 317,576 All outstanding liabilities before 2008, net of reinsurance 290 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6,941 1 Required supplementary information (unaudited) The cumulative number of reported claims presented above is reported on a per claimant basis. Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance (Required Supplementary Information - Unaudited) Years 1 2 3 4 5 6 7 8 9 10 88.4 % 9.2 % 0.9 % 0.6 % 0.3 % 0.4 % 0.1 % — % — % 0.1 % The tables presented above represent homeowners, dwelling fire and other liability lines of business. The Company combined the data for these lines of business because the policy coverage and payout pattern for homeowners and dwelling fire are not materially different. Also, other liability is combined with dwelling fire because liability coverage is only sold as an additional coverage offered only with the dwelling fire policy. The Company offers no stand alone liability products. Management periodically estimates the liability for claims that have been reported but not paid and for claims incurred but not reported (IBNR). Management utilizes expected losses along with historical data analysis of paid and incurred loss development patterns over the past ten years to aide in establishing the claims liability. Management also separately evaluates any recent large events in establishing claim reserves. The Company also engages a consulting actuary to review managements' estimates of claim liabilities each year. There has been no material change in reserving methodology in 2019 compared to prior years. As shown in the table above depicting average annual payout of incurred claims, 88.4% of claims are settled within twelve months of the date of loss and cumulatively, 97.6% of claims are settled within two years of the date of loss. While reserves for reported but unpaid and incurred but not reported claims can ultimately prove to be excessive or deficient, the short duration of the Company's claim liabilities serves to lesson the uncertainty compared to longer tail lines of insurance. The Company has no material exposure to difficult to estimate long tail liabilities such as toxic waste cleanup, asbestos related illness or other environmental remediation exposures. Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses ($ in thousands) December 31, 2019 December 31, 2018 Net outstanding liabilities Homeowners' insurance $ 2,651 $ 2,418 Dwelling fire insurance 2,623 2,602 Other Liability insurance 1,667 1,804 Other short-duration insurance lines 9 — Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance 6,950 6,824 Reinsurance recoverable on unpaid claims Homeowners' insurance 203 537 Dwelling fire insurance 46 847 Other Liability insurance — — Other short-duration insurance lines — — Total reinsurance recoverable on unpaid claims 249 1,384 Insurance lines other than short-duration — — Unallocated claims adjustment expenses — — Other — — — — Total gross liability for unpaid claims and claim adjustment expense $ 7,199 $ 8,208 Accident and Health Claim Reserves The Company, through its life insurance subsidiary, underwrites a limited number of short duration accident and health contracts. These claims are typically settled in three years or less and the reserve for unpaid claims totaled $417,000 at December 31, 2019 ( $358,000 at December 31, 2018). These claims are a component of policy and contract claims which totaled $1,053,000 at December 31, 2019 ( $792,000 at December 31, 2018). Cumulative incurred and paid claims over the last three years, along with annual percentage payouts related to accident and health claims, is as follows: For the Years Ended December 31, 2017 1 2018 1 2019 Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years IBNR Reserves Dec. 31, 2019 Cumulative Number of Reported Claims 2017 $ 1,008 $ 964 $ 917 $ — 1,612 2018 1,037 1,120 — 1,469 2019 935 417 1,174 1 Required supplementary information (unaudited) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years 2017 1 2018 1 2019 2017 $ 725 $ 881 $ 916 2018 747 991 2019 614 1 Required supplementary information (unaudited) Average Annual Percentage Payout of Incurred Claims by Age Required supplementary information (unaudited) Years 1 2 3 70.5% 21.8% 7.6% |
REINSURANCE
REINSURANCE | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE The Company's insurance operations utilize reinsurance in the risk management process in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is placed through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance contracts do not relieve the insurance subsidiaries of the obligation indemnify policyholders with respect to the underlying insurance contracts. Failure of re-insurers to honor their obligations could result in credit related losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. In the normal course of business, NSFC seeks to reduce the loss that may arise from catastrophes or other individually significant large loss events that cause unfavorable underwriting results or have adverse impacts on regulatory capital levels by re-insuring certain levels of risk in various areas of exposure with reinsurance companies. NSFC maintains a catastrophe reinsurance agreement to cover losses from catastrophic events, primarily hurricanes and tropical storms. Under the catastrophe reinsurance program, the Company retains the first $4,000,000 in losses from the first catastrophe event and $2,000,000 from a second catastrophe event. Catastrophe reinsurance coverage is maintained in three layers as follows: Layer Reinsurers' Limits of Liability First Layer 100% of $13,500,000 in excess of $4,000,000 retention Second Layer 100% of $25,000,000 in excess of $17,500,000 Third Layer 100% of $30,000,000 in excess of $42,500,000 Underlying 2nd Event 100% of $2,000,000 in excess of $2,000,000 retention Each reinsurance layer covers events occurring from January 1 through December 31 of the contract year. All significant reinsurance companies under the program carry A.M. Best ratings of A- (Excellent) or higher, or equivalent ratings. The Company's catastrophe reinsurance contract allows for one reinstatement. The Company maintains reinstatement premium protection (RPP) to cover reinstatement premiums incurred. The RPP further reduces risk from a major catastrophe and serves to protect the Company's capital position by reducing the modeled 100 year event net cost. Amounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period. In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 of coverage per individual life. Cost is amortized over the reinsurance contract period. At December 31, 2019 , the largest reinsurance recoverable of a single reinsurer was $ 10,000 ($ 125,000 at December 31, 2018). Amounts reported as ceded incurred losses were related to development of losses from prior year catastrophes. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company and its subsidiaries have an established retirement savings plan (401K Plan). All full-time employees are eligible to participate, and all employer contributions are fully vested for employees who have completed 1,000 hours of service in the year of contribution. Company matching contributions for the year ended December 31, 2019 and 2018 amounted to $181,000 and $182,000 , respectively. The Company contributes dollar-for-dollar matching contributions up to 5% of compensation subject to government limits. The Company established a non-qualified plan under which Company directors are allowed to defer all or a portion of directors' fees into various investment options. A supplemental executive retirement plan (SERP) covers named executive officers, with the Company contributing 15% of executive compensation to the plan. Contributions to the plan are fully vested upon the earlier of death, disability, change in control, or ten years of participation in the plan. Costs for amounts related to the non-qualified deferred compensation plans for the year ended December 31, 2019 and 2018 amounted to an approximate increase of $573,000 and decrease of $53,000 in employee benefit related expenses, respectively. The Company and its subsidiaries established an Employee Stock Ownership Plan (ESOP) in January 2010, to enable eligible employees to acquire a proprietary interest in the Company's common stock and to provide retirement and other benefits to such employees. There were no contributions during the year ended December 31, 2019 and contributions of $232,000 during the year ended December 31, 2018. All contributions were made in cash for purchase of Company shares in the open market. The Company has not allocated newly issued shares directly to the plan and the plan has no |
REGULATORY REQUIREMENTS AND DIV
REGULATORY REQUIREMENTS AND DIVIDEND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Requirements and Dividend Restrictions [Abstract] | |
REGULATORY REQUIREMENTS AND DIVIDEND RESTRICTIONS | REGULATORY REQUIREMENTS AND DIVIDEND RESTRICTIONS The Company is dependent on dividends from its insurance subsidiaries to fund operations and for the payment of shareholder dividends. Dividend payments from the insurance subsidiaries are subject to regulatory review/approval and statutory limitations. The statutory limitations are outlined as follows: The amount of dividends paid from NSIC to the Company in any year may not exceed, without prior approval of regulatory authorities, the greater of 10% of statutory surplus as of the end of the preceding year, or the statutory net gain from operations for the preceding year. At December 31, 2019, NSIC's retained earnings unrestricted for the payment of dividends in the next twelve months amounted to $1,624,000 . NSFC is similarly restricted in the amount of dividends payable to the Company; dividends may not exceed the greater of 10% of statutory surplus as of the end of the preceding year, or net income for the preceding year. At December 31, 2019, NSFC's retained earnings unrestricted for the payment of dividends in the next twelve months amounted to $3,626,000 . The payment of any subsidiary dividend requires prior notice to the regulatory authorities who may disallow the dividend if, in their judgment, payment of the dividend would have an adverse effect on the surplus of the subsidiary. Additionally, there are other considerations that can limit the payment of dividends to amounts less than statutory limits. Some of these considerations include potential adverse impact on regulatory capital ratios and impact on ratings issued by rating agencies such as A.M. Best and Demotech. At December 31, 2019, securities with market values of $3,188,000 ( $3,031,000 at December 31, 2018) were pledged with various states pursuant to statutory requirements. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY During the year ended December 31, 2019 and year ended December 31, 2018 , changes in shareholders' equity consisted of net income of $4,067,000 and net income of $779,000 , respectively; dividends paid of $531,000 in 2019 and $505,000 in 2018; other comprehensive income of $4,013,000 in 2019 and other comprehensive loss of $2,109,000 in 2018; common stock issued of $53,000 in 2019 and $76,000 in 2018; and the purchase of treasury shares of $7,000 in 2019. Other comprehensive income/loss consisted of changes in accumulated unrealized gains/losses on securities available-for-sale and changes in accumulated unrealized losses on interest rate swaps. Preferred Stock Preferred Stock may be issued in one or more series as shall from time to time be determined and authorized by the Board of Directors. The directors may make specific provisions regarding (a) the voting rights, if any (b) whether such dividends are to be cumulative or noncumulative (c) the redemption provisions, if any (d) participating rights, if any (e) any sinking fund or other retirement provisions (f) dividend rates (g) the number of shares of such series and (h) liquidation preference. There is currently no Preferred Stock issued or outstanding. Common Stock The holders of the Class A Common Stock will have one-twentieth of one vote per share, and the holders of the common stock will have one vote per share. There is currently no Class A Common Stock issued or outstanding. In the event of any liquidation, dissolution or distribution of the assets of the Company remaining after the payments to the holders of the Preferred Stock of the full preferential amounts to which they may be entitled as provided in the resolution or resolutions creating any series thereof, the remaining assets of the Company shall be divided and distributed among the holders of both classes of common stock, except as may otherwise be provided in any such resolution or resolutions. The table below provides information regarding the Company's preferred and common stock as of December 31, 2019 and December 31, 2018 : December 31, 2019 December 31, 2018 Authorized Issued Outstanding Authorized Issued Outstanding Preferred Stock, $1 par value 500,000 — — 500,000 — — Class A Common Stock, $1 par value 2,000,000 — — 2,000,000 — — Common Stock, $1 par value 3,000,000 2,531,552 2,531,116 3,000,000 2,527,136 2,527,136 On May 17, 2019, 4,416 shares of common stock were issued to directors as compensation under the 2009 Equity Incentive Plan previously approved by shareholders. Treasury Stock Treasury stock may be purchased pursuant to the share repurchase plan authorized by the Board of Directors in November 2019. The Board authorized the repurchase of up to $1,000,000 of the Company's outstanding common stock. The plan expires in May 2020. During 2019, 436 shares of common stock were repurchased and placed in treasury. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) ("AOCI") includes certain items that are reported directly within a separate component of shareholders' equity. The following table presents changes in AOCI balances: ($ in thousands) Year ended 2019 2018 Unrealized Gains (Losses) on Cash Flow Hedges Balance at beginning of period $ (185 ) $ (480 ) Other comprehensive income for period: Other comprehensive gain before reclassifications 134 295 Net current period other comprehensive income 134 295 Balance at end of period $ (51 ) $ (185 ) Unrealized Gains (Losses) on Available-for-Sale Securities Balance at beginning of period $ (1,385 ) $ 3,126 Other comprehensive income (loss) for period: Other comprehensive income (loss) before reclassifications 3,865 (2,304 ) Reclassification adjustment - gains on equity securities — (2,107 ) Amounts reclassified from accumulated other comprehensive income (loss) 14 (100 ) Net current period other comprehensive income (loss) 3,879 (4,511 ) Balance at end of period $ 2,494 $ (1,385 ) Total Accumulated Other Comprehensive Income (Loss) at end of period $ 2,443 $ (1,570 ) The following table presents the amounts reclassified out of AOCI for the year ended December 31, 2019 : ($ in thousands) Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 18 Net investment gains 18 Total before tax (4 ) Tax expense $ 14 Net of Tax The following table presents the amounts reclassified out of AOCI for the year ended December 31, 2018 : ($ in thousands) Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 127 Net investment gains 127 Total before tax (27 ) Tax expense $ 100 Net of Tax |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
SEGMENTS | SEGMENTS The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. Management organizes the business utilizing a niche strategy focusing on lower valued dwellings and older homes that can be difficult to insure in the standard insurance market. Our chief decision makers (Chief Executive Officer, Chief Financial Officer and subsidiary President) review results and operating plans making decisions on resource allocations on a company-wide basis. The Company’s products are primarily produced through independent agents within the states in which we operate. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and supplemental accident and health insurance. Total assets by industry segment at December 31, 2019 and December 31, 2018 are summarized below: ($ in thousands) Assets by industry segment Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations December 31, 2019 $ 153,934 $ 83,917 $ 65,605 $ 4,412 December 31, 2018 $ 144,231 $ 80,994 $ 59,479 $ 3,758 Net income by business segment for the years ended December 31, 2019 and 2018 is summarized below: ($ in thousands) Year ended December 31, 2019 P&C Insurance Operations Life Insurance Operations Non-Insurance Operations Inter- company Eliminations Total REVENUE Net premiums earned $ 54,019 $ 5,864 $ — $ — $ 59,883 Net investment income 1,683 2,677 56 (540 ) 3,876 Investment gains 2,178 861 16 — 3,055 Other income 575 853 1,019 (1,862 ) 585 58,455 10,255 1,091 (2,402 ) 67,399 BENEFITS AND EXPENSES Policyholder benefits paid 33,979 5,027 — (408 ) 38,598 Amortization of deferred policy acquisition costs 2,723 736 — — 3,459 Commissions 7,148 281 — — 7,429 General and administrative expenses 8,616 1,948 1,128 (1,994 ) 9,698 Taxes, licenses and fees 2,185 285 — — 2,470 Interest expense — 43 1,122 — 1,165 54,651 8,320 2,250 (2,402 ) 62,819 Income (Loss) Before Income Taxes 3,804 1,935 (1,159 ) — 4,580 INCOME TAX EXPENSE (BENEFIT) 359 397 (243 ) — 513 Net Income (Loss) $ 3,445 $ 1,538 $ (916 ) $ — $ 4,067 ($ in thousands) Year ended December 31, 2018 P&C Insurance Operations Life Insurance Operations Non-Insurance Operations Inter-company Eliminations Total REVENUE Net premiums earned $ 54,837 $ 6,019 $ — $ — $ 60,856 Net investment income 1,704 2,722 55 (540 ) 3,941 Investment gains (losses) (474 ) (78 ) — — (552 ) Other income 609 1,078 1,006 (2,081 ) 612 56,676 9,741 1,061 (2,621 ) 64,857 BENEFITS AND EXPENSES Policyholder benefits paid 35,735 5,242 — (568 ) 40,409 Amortization of deferred policy acquisition costs 2,759 838 — — 3,597 Commissions 7,267 288 — — 7,555 General and administrative expenses 8,472 2,111 309 (2,053 ) 8,839 Taxes, licenses and fees 1,937 220 — — 2,157 Interest expense — 48 1,187 — 1,235 56,170 8,747 1,496 (2,621 ) 63,792 Income (Loss) Before Income Taxes 506 994 (435 ) — 1,065 INCOME TAX EXPENSE (BENEFIT) (97 ) 232 151 — 286 Net Income (Loss) $ 603 $ 762 $ (586 ) $ — $ 779 The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the years ended December 31, 2019 and 2018, respectively: ($ in thousands) Years ended 2019 2018 Life, accident and health operations premiums written: Traditional life insurance $ 4,181 $ 4,336 Accident and health insurance 1,770 1,831 Gross life, accident and health 5,951 6,167 Reinsurance premium ceded (77 ) (81 ) Net life, accident and health premiums written $ 5,874 $ 6,086 Property and Casualty operations premiums written: Dwelling fire & extended coverage $ 38,847 $ 37,598 Homeowners (Including mobile homeowners) 20,507 21,214 Other liability 2,224 2,195 Gross property and casualty 61,578 61,007 Reinsurance premium ceded (7,041 ) (6,376 ) Net property and casualty written $ 54,537 $ 54,631 Consolidated gross premiums written $ 67,529 $ 67,174 Reinsurance premium ceded (7,118 ) (6,457 ) Consolidated net premiums written $ 60,411 $ 60,717 The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the years ended December 31, 2019 and 2018, respectively: ($ in thousands) Years ended 2019 2018 Life, accident and health operations premiums earned: Traditional life insurance $ 4,165 $ 4,273 Accident and health insurance 1,776 1,827 Gross life, accident and health 5,941 6,100 Reinsurance premium ceded (77 ) (81 ) Net life, accident and health premiums earned $ 5,864 $ 6,019 Property and Casualty operations premiums earned: Dwelling fire & extended coverage $ 38,090 $ 37,232 Homeowners (Including mobile homeowners) 20,758 21,801 Other liability 2,212 2,180 Gross property and casualty 61,060 61,213 Reinsurance premium ceded (7,041 ) (6,376 ) Net property and casualty earned $ 54,019 $ 54,837 Consolidated gross premiums earned $ 67,001 $ 67,313 Reinsurance premium ceded (7,118 ) (6,457 ) Consolidated net premiums earned $ 59,883 $ 60,856 |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES In the ordinary course of business, the Company and its subsidiaries are routinely a defendant in or party to pending or threatened legal actions and proceedings related to the conduct of their insurance operations. These suits can involve alleged breaches of contracts, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of the Company's subsidiaries, and other miscellaneous causes of action. It is inherently difficult to predict the outcome of such matters, particularly when the claimant seeks very large or indeterminate damages or when the matters present novel legal theories or involve multiple parties. An accrued liability is established when loss contingencies are both probable and estimable. However, there is potential loss exposure in excess of any accrued amounts. The Company monitors pending matters for further development that could affect the amount of the accrued liability. The Company's property & casualty subsidiaries had one action remaining in Texas filed in the aftermath of Hurricane Ike at December 31, 2018. This is an individual action with allegations of underpayment of a hurricane-related claim. The suit seeks a variety of remedies, including actual and/or punitive damages in unspecified amounts and/or declaratory relief. There are no other individual actions deemed material by management based upon evaluation of information presently available. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest during the year ended December 31, 2019 was $1,185,000 ( $1,231,000 in 2018). Cash received from income taxes during the year ended December 31, 2019 was $921,000 . Cash paid for income taxes during the year ended December 31, 2018 was $25,000 . During the year ended December 31, 2019 , non-cash changes in equity included $5,000 in common stock issued to Directors in lieu of cash compensation along with a corresponding $48,000 increase in additional paid-in capital. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Management has evaluated subsequent events and their potential effects on these consolidated financial statements through the filing date of this Form 10-K. |
Schedule I. Summary of Investm
Schedule I. Summary of Investments Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I. Summary of Investments Other Than Investments in Related Parties | THE NATIONAL SECURITY GROUP, INC. ($ in thousands) December 31, 2019 December 31, 2018 Cost Fair Value Amount per the Balance Sheet Cost Fair Value Amount per the Balance Sheet Securities Held-to-Maturity: Agency mortgage backed securities $ 1,290 $ 1,345 $ 1,290 $ 1,449 $ 1,443 $ 1,449 Total Securities Held-to-Maturity 1,290 1,345 1,290 1,449 1,443 1,449 Securities Available-for-Sale: Equity Securities: Banks and insurance companies 843 2,335 2,335 1,064 2,044 2,044 Industrial and all other 1,284 2,968 2,968 778 2,262 2,262 Total equity securities 2,127 5,303 5,303 1,842 4,306 4,306 Debt Securities: U.S. Government corporations and agencies 4,131 4,281 4,281 4,820 4,744 4,744 Agency mortgage backed securities 32,283 32,987 32,987 27,492 27,106 27,106 Asset backed securities 10,307 10,274 10,274 10,901 10,660 10,660 Private label asset backed securities 6,815 7,252 7,252 5,869 5,947 5,947 Corporate bonds 36,074 37,820 37,820 36,935 35,791 35,791 States, municipalities and political subdivisions 6,669 6,777 6,777 10,059 10,073 10,073 Foreign governments 823 869 869 801 804 804 Total Debt Securities 97,102 100,260 100,260 96,877 95,125 95,125 Total Available-for-Sale 99,229 105,563 105,563 98,719 99,431 99,431 Total Securities 100,519 106,908 106,853 100,168 100,874 100,880 Trading securities 149 149 149 107 107 107 Mortgage loans on real estate 147 147 147 156 156 156 Investment real estate 2,934 2,934 2,934 2,945 2,945 2,945 Policy loans 1,895 1,895 1,895 1,854 1,854 1,854 Company owned life insurance 4,082 4,655 4,655 4,315 4,600 4,600 Other invested assets 2,336 2,336 2,336 2,148 2,148 2,148 Total investments $ 112,062 $ 119,024 $ 118,969 $ 111,693 $ 112,684 $ 112,690 |
Schedule II. Condensed Financia
Schedule II. Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information of Registrant [Abstract] | |
Scheule II. Condensed Financial Information of Registrant | Schedule II. Condensed Financial Information of Registrant THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY) BALANCE SHEETS ( $ in thousands ) December 31, 2019 2018 Assets Fixed maturities available-for-sale, at estimated fair value $ 294 $ 932 Investment real estate, at book value 356 356 Cash 3,393 523 Investment in subsidiaries (equity method) eliminated upon consolidation 65,329 59,229 Income tax recoverable 491 1,012 Deferred income tax asset 714 601 Other assets 525 490 Total Assets $ 71,102 $ 63,143 Liabilities and Shareholders' Equity Liabilities Accrued general expenses $ 3,412 $ 2,691 Interest rate swaps 65 234 Short-term notes payable 500 2,200 Long-term debt 13,664 12,152 Total Liabilities 17,641 17,277 Total Shareholders' Equity 53,461 45,866 Total Liabilities and Shareholders' Equity $ 71,102 $ 63,143 THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY) STATEMENTS OF INCOME ($ in thousands ) Years Ended December 31, 2019 2018 Income Dividends (eliminated upon consolidation) $ 2,750 $ 750 Net realized investment gains 16 — Holding company management service fees 1,019 1,006 Other income 56 55 3,841 1,811 Expenses State taxes 51 43 Interest 1,122 1,187 Other expenses 1,077 266 2,250 1,496 Income before income taxes and equity in undistributed earnings of 1,591 315 Income tax expense (benefit) (243 ) 151 Income before equity in undistributed earnings of subsidiaries 1,834 164 Equity in undistributed earnings of subsidiaries 2,233 615 Net income $ 4,067 $ 779 THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY) STATEMENTS OF CASH FLOWS ($ in thousands ) Years Ended December 31, 2019 2018 Cash Flows from Operating Activities: Net income $ 4,067 $ 779 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsidiaries (2,233 ) (615 ) Net realized investment gains (16 ) — Income taxes 370 58 Other, net 750 (137 ) Net cash provided by operating activities 2,938 85 Cash Flows from Investing Activities: Net sales of investments 663 490 Net cash provided by investing activities 663 490 Cash Flows from Financing Activities: Net repayments of debt (200 ) (1,300 ) Cash dividends (531 ) (505 ) Net cash used in financing activities (731 ) (1,805 ) Net change in cash and cash equivalents 2,870 (1,230 ) Cash and cash equivalents, at beginning of year 523 1,753 Cash and cash equivalents, at end of year $ 3,393 $ 523 Notes to Condensed Financial Information of Registrant Note 1 - Basis of Presentation Pursuant to the rules and regulations of the Securities and Exchange Commission, the Condensed Financial Information of the Registrant does not include all of the information and notes normally included with financial statements prepared in accordance with generally accepted accounting principles. It is, therefore, suggested that this Condensed Financial Information be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Registrant’s Annual Report as referenced in Form 10-K, Part II, Item 8, page 45. Note 2 - Cash Dividends and Asset Transfers from Insurance Subsidiaries In 2019, cash dividends of $2,750,000 were paid to the Registrant by its subsidiaries ( $750,000 in 2018). |
Schedule III. Supplementary Ins
Schedule III. Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Schedule III. Supplementary Insurance Information | Schedule III. Supplementary Insurance Information THE NATIONAL SECURITY GROUP, INC. ($ in thousands ) Deferred Acquisition Costs Future Policy Benefits Unearned Premiums Unpaid Losses At December 31, 2019: Life and accident and health insurance $ 4,227 $ 38,315 $ 10 $ 1,053 Property and casualty insurance 3,439 — 30,545 7,199 Total $ 7,666 $ 38,315 $ 30,555 $ 8,252 At December 31, 2018: Life and accident and health insurance $ 4,416 $ 37,474 $ 10 $ 792 Property and casualty insurance 3,418 — 29,989 7,075 Total $ 7,834 $ 37,474 $ 29,999 $ 7,867 Premium Revenue Net Investment Income Other Income Benefits, Claims, Losses and Settlement Expenses Commissions, Amortization General Expenses, Taxes, Licenses and Fees For the year ended December 31, 2019: Life and accident and health insurance $ 5,864 $ 2,677 $ 853 $ 5,027 $ 1,017 $ 2,233 Property and casualty insurance 54,019 1,683 575 33,979 9,871 10,801 Other — 56 1,019 — — 1,128 Total $ 59,883 $ 4,416 $ 2,447 $ 39,006 $ 10,888 $ 14,162 For the year ended December 31, 2018: Life and accident and health insurance $ 6,019 $ 2,722 $ 1,078 $ 5,242 $ 1,126 $ 2,331 Property and casualty insurance 54,837 1,704 609 35,735 10,026 10,409 Other — 55 1,006 — — 309 Total $ 60,856 $ 4,481 $ 2,693 $ 40,977 $ 11,152 $ 13,049 Note: Investment income and other operating expenses are reported separately by segment and not allocated. |
Schedule IV. Reinsurance
Schedule IV. Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance [Abstract] | |
Schedule IV. Reinsurance | Schedule IV. Reinsurance THE NATIONAL SECURITY GROUP, INC. ($ in thousands ) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net For the year ended December 31, 2019 Life insurance in force $ 202,663 $ 9,761 $ — $ 192,902 — % Premiums: Life insurance and accident and health insurance $ 5,941 $ 77 $ — $ 5,864 — % Property and casualty insurance 61,060 7,041 — 54,019 — % Total premiums $ 67,001 $ 7,118 $ — $ 59,883 — % For the year ended December 31, 2018 Life insurance in force $ 203,209 $ 9,730 $ — $ 193,479 — % Premiums: Life insurance and accident and health insurance $ 6,100 $ 81 $ — $ 6,019 — % Property and casualty insurance 61,213 6,376 — 54,837 — % Total premiums $ 67,313 $ 6,457 $ — $ 60,856 — % |
Schedule V. Valuation and Quali
Schedule V. Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule V. Valuation and Qualifying Accounts | Schedule V. Valuation and Qualifying Accounts The National Security Group, Inc. Years ended December 31, 2019 and 2018 ( $ in thousands ) 2019 2018 Balance, January 1 Allowance for Doubtful Accounts $ 4 $ 4 Additions 4 8 Deletions 3 8 Balance, December 31 Allowance for Doubtful Accounts $ 5 $ 4 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The accompanying consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated in the consolidated financial statements. The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which includes information and disclosures not presented herein. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies.  Actual results could differ from the estimates used in preparing these consolidated financial statements. |
Concentration of Risk | The Company's property and casualty subsidiaries, composing 91.2% of consolidated direct written premium, produced business during 2019 in eight states. However, 51% of property and casualty segment direct written premium is generated in the states of Alabama, Mississippi and Louisiana, subjecting the Company to significant geographic concentration. Consequently, adverse weather conditions or changes in the legal, regulatory or economic environment could adversely impact the Company. The Company's life, accident and health insurance subsidiary, composing approximately 8.8% of consolidated direct written premium, is licensed in seven states. However, over 78% of life segment direct premium is generated in the states of Alabama and Georgia. Consequently, changes in the legal, regulatory or economic environment in these states could adversely impact the Company. For the year ended December 31, 2019, one agency individually produced greater than 5% of the Company's direct written premium. |
Investments | The Company's investment securities are classified as follows: • Held-to-maturity investments are fixed maturity securities for which the Company has the positive intent and ability to hold to maturity. These securities are reported at cost, adjusted for amortization of premiums and accretion of discounts which are recognized in interest income using methods which approximate level yields over the period to maturity. • Trading securities are securities acquired with the intent to sell in the near term and are carried at fair value with changes in fair value reported in earnings. • Securities available-for-sale are fixed maturity securities and equity securities not classified as either held-to-maturity or trading. These securities are reported at fair value. Substantially all of our fixed maturity and equity securities are classified as available-for-sale. Changes in fair value of trading securities are reported in the statement of operations. Changes in fair value of fixed maturity securities available-for-sale are reported as net unrealized gains or losses as a component of other comprehensive income. Changes in fair value of equity securities available-for-sale are reported as investment gains/losses in the statement of operations. Investment gains and losses on fixed maturity securities arise when the investments are sold. Investment gains and losses on the sale of fixed maturity investments available-for-sale are determined using the specific-identification method and include write downs for fixed maturity securities considered to be other-than-temporarily impaired. When a fixed maturity security has a decline in value, where fair value is below amortized cost, an other-than-temporary impairment (OTTI) is triggered in circumstances where: • the Company has the intent to sell the security • it is more-likely-than-not that the Company will be required to sell the security before recovery of its amortized cost basis • the Company does not expect to recover the entire amortized cost basis of the security If the Company intends to sell the security or if it is more-likely-than-not the Company will be required to sell the security before recovery, an OTTI is recognized as a realized loss in the statement of operations equal to the difference between the security's amortized cost and its fair value. If the Company does not intend to sell the security or it is not more-likely-than-not that the Company will be required to sell the security before recovery, the OTTI is separated into an amount representing the credit loss, which is recognized as an investment loss in the statement of operations, and the amount related to all other factors, which is recognized in other comprehensive income. Interest on fixed income securities is credited to income as it accrues on the principal amounts outstanding adjusted for amortization of premiums and accretion of discounts computed utilizing the interest method. Premiums and discounts on mortgage backed securities amortize or accrete using anticipated prepayments with changes in anticipated prepayments accounted for prospectively. The model used to determine anticipated prepayment assumptions for mortgage backed securities uses separate home sale, refinancing, curtailment and pay-off assumptions derived from a variety of industry sources. Mortgage backed security valuations are subject to prospective adjustments in yield due to changes in prepayment assumptions. The utilization of the prospective method will result in a recalculated effective yield that will equate the carrying amount of the investment to the present value of the projected future cash flows. The recalculated yield is used to accrue income on investments for subsequent periods. Mortgage loans and policy loans are stated at the unpaid principal balance of such loans, net of any related allowance for loan losses. Investment real estate is reported at cost, less allowances for depreciation computed on the straight-line basis. Investment real estate consists primarily of undeveloped commercial real estate. Other investments consist primarily of investments in notes and equity investments in limited liability companies. The Company has no influence or control over the operating or financial policies of the limited liability companies, and consequently, these investments are accounted for using the cost method. The Company owns life insurance (COLI) contracts on certain management and supervisory employees each having a face amount of approximately $2,000,000 (including cash surrender value at the time of payment). The Company's original investment in currently inforce company owned life insurance is $4,082,000 . The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. The Company is the owner and principal beneficiary of these policies. The life insurance contracts are carried at their current cash surrender value. Cash surrender value at December 31, 2019 and December 31, 2018 was $4,655,000 and $4,600,000 , respectively. Changes in cash surrender values are included in the statement of operations. The change in surrender value included in the statement of operations for the years ended December 31, 2019 and 2018 was an increase of $295,000 and an decrease of $374,000 , respectively. Proceeds from the COLI contracts are recorded when the benefits become payable under the terms of the policy and proceeds in excess of cash surrender value are recognized as a gain on company owned life insurance. Cash and cash equivalents consist of demand deposit and money market accounts and investments with maturities of three months or less when purchased. Cash and cash equivalents are carried at cost, which approximates fair value. Investments with other-than-temporary impairment in value are written down to estimated realizable values and losses recognized as a component of investments gains and losses in the Consolidated Statements of Operations. The fair value of the investment becomes its new cost basis. |
Fair Values of Financial Instruments | The Company uses the following methods and assumptions to estimate fair values: Investments • Fixed income security fair values are based on quoted market prices when available. If not available, fair values are based on values obtained from investment brokers and independent pricing services. • Equity security fair values are based on quoted market prices. • Multiple observable inputs are not available for some of our investments, primarily private placements and limited partnerships. Management values these investments either using non-binding broker quotes or pricing models that utilize market based assumptions that have limited observable inputs. These investments compose less than 1% of total assets. Receivables and reinsurance recoverable - The carrying amounts reported approximate fair value. Interest rate swaps - The estimated fair value of the interest rate swaps is based on valuations received from financial institution counterparties. Trust preferred securities obligations and line of credit obligations - The carrying amounts reported for these instruments are equal to the principal balance outstanding and approximate fair value. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with quoted market prices in active markets for identical assets are reflected within Level 1 while securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying consolidated balance sheets. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt with values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value. |
Policy Receivables | Receivable balances are reported at unpaid balances, less a provision for credit losses. |
Accounts Receivable | Accounts receivable are reported at net realizable value. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables, and once these receivables are determined to be uncollectible, they are written off through a charge against an existing allowance account or against earnings. |
Property and Equipment | Property and equipment is carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Significant costs incurred for internally developed software are capitalized and amortized over estimated useful lives of 3 years . Maintenance, repairs, and minor renovations are charged to expense as incurred. Upon sale or retirement of property and equipment, the costs and related accumulated depreciation are eliminated from the respective account and the resulting gain or loss is included in the statement of operations. The Company provides for depreciation of property and equipment using the straight-line method designed to amortize costs over estimated useful lives. Estimated useful lives range up to 40 years for buildings and from 3- 10 years for equipment, furniture and fixtures. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. |
Leases | The Company leases automobiles and some office equipment. The Company accounts for leases existing prior to January 1, 2019 under their original classification and omits any new costs classified as initial direct costs. The Company classified all leases as operating leases and accounts for separate lease and nonlease components as a single lease component. Leases are not considered material and the Company recognizes a right of use (ROU) asset which is included in other assets and a corresponding lease liability in other liabilities. The ROU asset recognized by the Company at December 31, 2019 was $389,000 and the corresponding lease liability was $427,000 . |
Statement of Cash Flows | For purposes of reporting cash flows, cash includes cash-on-hand, demand deposits with banks and overnight investments consisting primarily of repurchase agreements. |
Premium Revenue | Life insurance premiums are recognized as revenues when due. Property and casualty insurance premiums include direct writings plus reinsurance assumed less reinsurance ceded and are recognized on a pro-rata basis over the terms of the policies. Unearned premiums represent that portion of direct premiums written that are applicable to the unexpired terms of policy contracts in force and is reported as a liability. Prepaid reinsurance premiums represent the unexpired portion of premiums ceded to reinsurers and are reported as an asset. |
Deferred Policy Acquisition Costs | The costs of acquiring new insurance business are deferred and amortized over the lives of the policies. Deferred costs include commissions, premium taxes, other agency compensation and expenses, and other underwriting expenses directly related to the level of new business produced. Acquisition costs relating to life contracts are amortized over the premium paying period of the contracts, or the first renewal period of term policies, if earlier. Assumptions utilized in amortization are consistent with those utilized in computing policy liabilities. The method of computing the deferred policy acquisition costs for property and casualty policies limits the amount deferred to a percentage of related unearned premiums. |
Policy Liabilities | The liability for future life insurance policy benefits is computed using a net level premium method including the following assumptions: Years of Issue Interest Rate 1947 - 1968 4% 1969 - 1978 6% graded to 5% 1979 - 2003 7% graded to 6% 2004 - 2012 5.25% 2013 - 2014 4.25% 2015 - 2019 4% Mortality assumptions include various percentages of the 1955-60 and 1965-70 Select and Ultimate Basic Male Mortality Table. Withdrawal assumptions are based on the Company's experience. |
Policyholder Benefit and Claim Settlement Expenses | The liability for unpaid claims represents the estimated liability for unpaid loss and loss adjustment expenses incurred but not yet reported under insurance contracts for loss events that have occurred on or before the balance sheet date. The liability for claims and related adjustment expenses are determined using case-basis evaluations and statistical analysis and represent estimates of the ultimate net cost of all losses incurred through December 31 of each year. Liability estimates are continually reviewed and adjusted as necessary; such adjustments are included in the period in which they are determined. Liability estimates are based on reports of losses from policyholders, individual case loss estimates, and estimates of losses incurred but not yet reported. Policyholder benefit and settlement expenses in the consolidated statement of operations include paid claims, settlement cost and changes in claim liability estimates. Loss and adjustment expenses charged to earnings are net of amounts recovered and estimates of recoverable amounts under ceded reinsurance contracts. |
Earnings Per Share | Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,529,652 at December 31, 2019 and 2,525,325 at December 31, 2018 . The Company did no t have any dilutive securities as of December 31, 2019 and 2018. |
Reinsurance | The Company's insurance operations re-insure certain risks in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. See Note 10 for additional information regarding the Company's reinsurance practices The Company's insurance operations utilize reinsurance in the risk management process in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is placed through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance contracts do not relieve the insurance subsidiaries of the obligation indemnify policyholders with respect to the underlying insurance contracts. Failure of re-insurers to honor their obligations could result in credit related losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. Amounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period. In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 |
Income Taxes | The Company files a consolidated United States federal income tax return that includes the holding company and its subsidiaries. The Company is currently subject to a statutory rate of 21%. Tax related interest and penalties are reported as components of income tax expense. The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes arise from the recognition of temporary differences between financial statement carrying amounts and the tax basis of the Company's assets and liabilities and capital or operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. The effect of a change in tax rates is recognized in the period the new rate is enacted. Changes in deferred tax assets and liabilities are included as a component of income tax expense, with the exception of changes impacting other comprehensive income. Changes in deferred tax assets and liabilities associated with components of other comprehensive income are charged or credited to other comprehensive income. The Company evaluates all tax positions taken on its U.S. federal income tax return. No material uncertainties exist for any tax positions taken by the Company. |
Contingencies | Liabilities for loss contingencies arising from, but not limited to, litigation, claims, assessments, fines and penalties are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Significant attorney fees are estimated and recorded when incurred. |
Reclassifications | Certain 2018 amounts have been reclassified from the prior year consolidated financial statements to conform to the 2019 presentation. |
Advertising | The Company expenses advertising costs as incurred. |
Concentration of Credit Risk | The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At December 31, 2019 , the net amount exceeding FDIC insured limits was $ 6,766,000 at three financial institutions. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At December 31, 2019 , the single largest balance due from one agent totaled $349,000 . Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet its obligation could result in losses to the insurance subsidiaries. Allowances for losses on reinsurance recoverables are established if amounts are believed to be uncollectible. At December 31, 2019 and December 31, 2018, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At December 31, 2019 , management does not believe the Company is exposed to any significant credit risk related to its reinsurance program. |
Treasury Shares | Treasury shares are reported at cost and are reflected on the Consolidated Balance Sheets as a reduction of total equity. |
Accounting Changes Not Yet Adopted and Recently Adopted Accounting Standards | Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued guidance to that removes, modifies and adds to the disclosure requirements related to fair value measurements. The guidance removes the requirements to disclose the amount and reasons for transfers between Level 1 and Level 2 assets, the policy for timing and transfers between levels and the valuation process for Level 3 fair value measurements. The guidance modifies disclosure requirements for investments in certain entities that calculate net asset value and clarifies the purpose of the measurement uncertainty disclosure. The guidance adds requirements to disclose changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements and to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued guidance to improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The guidance improves timeliness of recognizing changes in the liability for future policy benefits and modifies the rate used to discount future cash flows. The guidance will simplify and improve accounting for certain market-based options or guarantees associated with deposit type contracts and simplify the amortization of deferred policy acquisition costs. The guidance also introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. Due to the nature and extent of the changes required to the Company’s life insurance operations, the adoption of this standard is expected to have a material impact on the consolidated financial statements. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued guidance that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Financial Instruments - Credit Losses In June 2016, the FASB issued guidance that replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB released additional guidance in November 2018 that provides scope clarification. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued guidance to simplify the accounting for nonemployee share-based payment awards. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company does not make any material share-based payments. The Company adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on its financial position or results of operations. Derivatives and Hedging In August 2017, the FASB issued guidance that amends and simplifies hedge accounting guidance in order to enable entities to better portray the economic results of their risk management activities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. The Company adopted this guidance on January 1, 2019 and had two swaps designated as cash flow hedges. One expired March 15, 2019 and one expires March 15, 2020. The adoption of this guidance did not have a significant impact on our financial position, results of operations, cash flows or related disclosures. Leases In February 2016, the FASB issued guidance that requires lessees (for capital and operating leases) to recognize the lease liability and right-of-use (ROU) asset at the commencement date of the lease. Additional transition guidance was issued in 2018 and 2019. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company adopted this guidance on January 1, 2019 and recorded a ROU asset of $299,000 and corresponding lease liability of $306,000 . The ROU asset and operating lease liability are included in other assets and other liabilities, respectively, on our Consolidated Balance Sheets as of January 1, 2019. The Company elected the package of practical expedients permitted under the guidance, which allowed the Company to account for existing leases under their current classification, as well as omit any new costs classified as initial direct costs, under the new guidance. Based on this election, the Company kept existing agreements as operating leases. The Company also elected the practical expedient allowing an accounting policy election by class of underlying asset, to account for separate lease and nonlease components as a single lease component. The Company leases automobiles and some office equipment. These leases are not considered material. Adoption of this guidance had no material impact on the Company's financial position, results of operations, cash flows or related disclosures. |
Consolidation, Variable Interest Entities | The Company holds passive interests in limited partnerships that are considered to be Variable Interest Entities (VIE) under the provisions of ASC 810 Consolidation . The Company is not the primary beneficiary of the entities and is not required to consolidate under ASC 810. The entities are private placement investment funds formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnerships. The carrying value of the investments totals $317,000 and is included as a component of Other Invested Assets in the accompanying consolidated balance sheets. |
Derivatives | The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. The swap liability is reported as a component of other liabilities on the consolidated balance sheets. We use dollar offset at the hedge's inception and for each reporting period thereafter to assess whether the derivative used in a hedging transaction is expected to be, and has been, effective in offsetting changes in the fair value of the hedged item. Since inception, no portion of the hedged item has been deemed ineffective. For all hedges, we discontinue hedge accounting if it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge. |
Business Segment | The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and supplemental accident and health insurance. The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Liability for Future Policy Benefits | The liability for future life insurance policy benefits is computed using a net level premium method including the following assumptions: Years of Issue Interest Rate 1947 - 1968 4% 1969 - 1978 6% graded to 5% 1979 - 2003 7% graded to 6% 2004 - 2012 5.25% 2013 - 2014 4.25% 2015 - 2019 4% |
STATUTORY ACCOUNTING PRACTICES
STATUTORY ACCOUNTING PRACTICES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Statutory Accounting Practices [Abstract] | |
Statutory Accounting Practices Disclosure | Statutory net income (loss) and capital and surplus, excluding intercompany transactions, are summarized as follows: ($ in thousands) 2019 2018 NSIC - including realized capital gains of $272 and $71, respectively $ 1,378 $ 1,558 NSFC - including realized capital gains (losses) of $(10) and $39, respectively $ 2,644 $ 786 Omega - including realized capital gains (losses) of $(21) and $7, respectively $ 593 $ (64 ) Statutory risk-based adjusted capital: NSIC - including AVR of $968 and $766, respectively $ 17,210 $ 16,043 NSFC - including investment in Omega of $7,930 and $7,280, respectively $ 36,264 $ 34,645 Omega $ 11,430 $ 10,783 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Schedule of Amortized Cost and Aggregate Fair Values of Investments in Available-for-Sale Securities | The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2018 are as follows: ($ in thousands) Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government corporations and agencies $ 4,820 $ 31 $ 107 $ 4,744 Agency mortgage backed securities 27,492 159 545 27,106 Asset backed securities 10,901 7 248 10,660 Private label mortgage backed securities 5,869 105 27 5,947 Corporate bonds 36,935 407 1,551 35,791 States, municipalities and political subdivisions 10,059 105 91 10,073 Foreign governments 801 3 — 804 Total Fixed Maturities 96,877 817 2,569 95,125 Equity securities 1,842 2,464 — 4,306 Total $ 98,719 $ 3,281 $ 2,569 $ 99,431 The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2019 are as follows: ($ in thousands) Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government corporations and agencies $ 4,131 $ 150 $ — $ 4,281 Agency mortgage backed securities 32,283 861 157 32,987 Asset backed securities 10,307 71 104 10,274 Private label mortgage backed securities 6,815 441 4 7,252 Corporate bonds 36,074 1,816 70 37,820 States, municipalities and political subdivisions 6,669 109 1 6,777 Foreign governments 823 46 — 869 Total Fixed Maturities 97,102 3,494 336 100,260 Equity securities 2,127 3,176 — 5,303 Total $ 99,229 $ 6,670 $ 336 $ 105,563 |
Schedule of Held-to-Maturity Securities | The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2019 are as follows: ($ in thousands) Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Agency mortgage backed securities $ 1,290 $ 55 $ — $ 1,345 Total $ 1,290 $ 55 $ — $ 1,345 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2018 are as follows: ($ in thousands) Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Agency mortgage backed securities $ 1,449 $ 16 $ 22 $ 1,443 Total $ 1,449 $ 16 $ 22 $ 1,443 |
Schedule of Amortized Cost and Aggregate Fair Value of Debt Securities, by Contractual Maturity | The amortized cost and aggregate fair value of debt securities at December 31, 2019 , by contractual maturity, are presented in the following table. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ($ in thousands) Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 2,136 $ 2,133 Due after one year through five years 17,397 17,945 Due after five years through ten years 25,683 26,516 Due after ten years 51,886 53,666 Total $ 97,102 $ 100,260 Held-to-maturity securities: Due after one year through five years $ 29 $ 30 Due after five years through ten years 4 5 Due after ten years 1,257 1,310 Total $ 1,290 $ 1,345 |
Schedule of Securities with Unrealized Losses | A summary of securities available-for-sale with unrealized losses as of December 31, 2019 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2019 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Agency mortgage backed securities $ 5,663 $ 104 $ 1,751 $ 53 $ 7,414 $ 157 18 Asset backed securities 4,241 33 1,579 71 5,820 104 9 Private label mortgage backed securities 1,060 4 — — 1,060 4 1 Corporate bonds 6,363 54 1,484 16 7,847 70 14 States, municipalities and political subdivisions 512 1 — — 512 1 1 $ 17,839 $ 196 $ 4,814 $ 140 $ 22,653 $ 336 43 There were no securities held-to-maturity with unrealized losses as of December 31, 2019 . A summary of securities available-for-sale with unrealized losses as of December 31, 2018 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position U.S. Government corporations and agencies $ — $ — $ 3,209 $ 107 $ 3,209 $ 107 6 Agency mortgage backed securities 5,504 45 10,969 500 16,473 545 38 Asset backed securities 5,824 146 2,741 102 8,565 248 12 Private label mortgage backed securities 1,348 27 — — 1,348 27 2 Corporate bonds 16,583 709 9,823 842 26,406 1,551 51 States, municipalities and political subdivisions 1,242 10 4,420 81 5,662 91 11 $ 30,501 $ 937 $ 31,162 $ 1,632 $ 61,663 $ 2,569 120 A summary of securities held-to-maturity with unrealized losses as of December 31, 2018 along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows: ($ in thousands) Less than 12 months 12 months or longer Total December 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Agency mortgage backed securities $ 1,026 $ 22 $ — $ — $ 1,026 $ 22 2 $ 1,026 $ 22 $ — $ — $ 1,026 $ 22 2 |
Summary of Major Categories of Investment Income | Major categories of investment income are summarized as follows: ($ in thousands) Year ended 2019 2018 Fixed maturities $ 3,752 $ 3,803 Equity securities 86 106 Mortgage loans on real estate 8 7 Investment real estate 4 3 Policy loans 142 142 Other 30 25 4,022 4,086 Less: Investment expenses 146 145 Net investment income $ 3,876 $ 3,941 |
Schedule of Realized Investments Gains (Losses) | Major categories of investment gains and losses are summarized as follows: ($ in thousands) Year ended 2019 2018 Realized gains on fixed maturities $ 18 $ 128 Realized gains on equity securities 233 — Gains on trading securities 5 — Change in fair value of equity securities 712 (203 ) Change in surrender value of company owned life insurance 295 (374 ) Realized gain on company owned life insurance 1,792 — Other gains (losses), principally real estate — (87 ) Other-than-temporary impairments — (16 ) Net investment gains (losses) $ 3,055 $ (552 ) |
Schedule of Net Change in Unrealized Appreciation | An analysis of the net change in unrealized gains (losses) on available-for-sale securities follows: ($ in thousands) December 31, December 31, 2018 Fixed maturities $ 4,910 $ (3,042 ) Deferred income tax (1,031 ) 638 Change in net unrealized gains (losses) on available-for-sale securities $ 3,879 $ (2,404 ) |
FAIR VALUE OF FINANCIAL ASSET_2
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 are summarized in the following table by the type of inputs applicable to the fair value measurements: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale U.S. Government corporations and agencies $ 4,281 $ 4,281 $ — $ — Agency mortgage backed securities 32,987 19,330 13,657 — Asset backed securities 10,274 2,601 7,673 — Corporate bonds 37,820 — 37,820 — Private label asset backed securities 7,252 1,060 6,192 — States, municipalities and political subdivisions 6,777 — 6,777 — Foreign governments 869 869 — — Trading securities 149 149 — — Equity securities 5,303 3,988 — 1,315 Total Financial Assets $ 105,712 $ 32,278 $ 72,119 $ 1,315 Financial Liabilities Interest rate swap $ (65 ) $ — $ — $ (65 ) Total Financial Liabilities $ (65 ) $ — $ — $ (65 ) Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 are summarized in the following table by the type of inputs applicable to the fair value measurements: ($ in thousands) Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale U.S. Government corporations and agencies $ 4,744 $ 4,147 $ 597 $ — Agency mortgage backed securities 27,106 11,756 15,350 — Asset backed securities 10,660 2,939 7,721 — Corporate bonds 35,791 — 35,791 — Private label asset backed securities 5,947 — 5,947 — States, municipalities and political subdivisions 10,073 — 10,073 — Foreign governments 804 804 — — Trading securities 107 107 — — Equity securities available-for-sale 4,306 3,181 — 1,125 Total Financial Assets $ 99,538 $ 22,934 $ 75,479 $ 1,125 Financial Liabilities Interest rate swap $ (234 ) $ — $ — $ (234 ) Total Financial Liabilities $ (234 ) $ — $ — $ (234 ) |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2019 : ($ in thousands) For the year December 31, 2019 Equity Securities Interest Rate Swap Beginning balance $ 1,125 $ (234 ) Total gains or losses (realized and unrealized): Included in earnings 645 — Included in other comprehensive income — 169 Purchases: — — Sales: (455 ) — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,315 $ (65 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2019: $ — $ — The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2018 : ($ in thousands) For the year ended December 31, 2018 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,073 $ (608 ) Total gains or losses (realized and unrealized): Included in earnings 52 — Included in other comprehensive income — 374 Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,125 $ (234 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2018: $ — $ — |
Schedule of Fair Value, by Balance Sheet Grouping | The carrying amount and estimated fair value of the Company’s financial instruments as of December 31, 2019 and December 31, 2018 are as follows: ($ in thousands) December 31, 2019 December 31, 2018 Assets and related instruments Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Held-to-maturity securities $ 1,290 $ 1,345 $ 1,449 $ 1,443 Mortgage loans 147 147 156 156 Policy loans 1,895 1,895 1,854 1,854 Company owned life insurance 4,655 4,655 4,600 4,600 Other invested assets 2,280 2,280 2,148 2,148 Liabilities and related instruments Other policyholder funds 1,350 1,350 1,515 1,515 Short-term notes payable and current portion of long-term debt 500 500 2,200 2,200 Long-term debt 13,664 13,664 12,152 12,152 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Major categories of property and equipment are summarized as follows: ($ in thousands) December 31, 2019 December 31, 2018 Building and improvements $ 3,472 $ 3,378 Electronic data processing equipment 1,470 1,504 Furniture and fixtures 483 477 5,425 5,359 Less accumulated depreciation 3,795 3,710 Property and equipment, net $ 1,630 $ 1,649 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of significant differences representing deferred tax assets and liabilities are as follows: ($ in thousands) As of December 31, As of December 31, General expenses $ 1,269 $ 1,067 Unearned premiums 1,288 1,265 Claims liabilities 645 552 Impairment on real estate owned 119 119 Unrealized losses on securities available-for-sale — 368 Unrealized loss on interest rate swaps 14 49 Deferred tax assets 3,335 3,420 Trading securities (1 ) — Depreciation (93 ) (79 ) Deferred policy acquisition costs (1,610 ) (1,645 ) Pre-1984 policyholder surplus account (397 ) (463 ) Unrealized gains on securities available-for-sale (667 ) — Unrealized gains on equity securities (663 ) (517 ) Deferred tax liabilities (3,431 ) (2,704 ) Net deferred tax asset (liability) $ (96 ) $ 716 |
Changes in Temporary Differences in Federal Income Tax | The appropriate income tax effects of changes in temporary differences are as follows: ($ in thousands) Year ended 2019 2018 Deferred policy acquisition costs $ (35 ) $ (61 ) Other-than-temporary impairments — (3 ) Trading securities 1 — Unearned premiums (23 ) 4 General expenses (202 ) 2 Depreciation 14 (9 ) Claims liabilities (93 ) (68 ) AMT credit — 1,575 Impact of repeal of special provision on pre-1984 policyholder surplus (66 ) (66 ) Unrealized gains (losses) on equity securities 149 (43 ) Deferred income tax expense (benefit) $ (255 ) $ 1,331 |
Schedule of Effective Income Tax Rate Reconciliation | Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows: Year ended 2019 2018 Federal income tax rate applied to pre-tax income/loss 21.0 % 21.0 % Dividends received deduction and tax-exempt interest (0.3 )% (2.4 )% Company owned life insurance (9.6 )% 7.4 % Other, net 0.1 % 0.9 % Effective federal income tax rate 11.2 % 26.9 % |
NOTES PAYABLE AND LONG-TERM D_2
NOTES PAYABLE AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term debt and current portion of long-term debt consisted of the following as of December 31, 2019 and December 31, 2018 : ($ in thousands) December 31, December 31, 2019 2018 Current portion of installment note payable due in November with variable interest rate equal to the WSJ prime rate plus 0.5%. Unsecured. $ 500 $ 2,200 $ 500 $ 2,200 |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following as of December 31, 2019 and December 31, 2018 : ($ in thousands) December 31, December 31, 2019 2018 Promissory note with variable interest rate equal to the WSJ prime rate plus 0.5%; maturity November 2023. Annual installment payments beginning November 2020. Unsecured. $ 1,500 $ — Subordinated debentures issued on December 15, 2005 with floating rate interest equal to 3-Month LIBOR plus 375 basis points; net of $150,000 in debt issuance cost ($159,000 in 2018); maturity December 15, 2035. Interest payable quarterly. Redeemable prior to maturity. Unsecured. 9,129 9,120 Subordinated debentures issued on June 21, 2007 with floating rate interest equal to 3-Month LIBOR plus 340 basis points; net of $58,000 in debt issuance cost ($61,000 in 2018); maturity June 15, 2037. Interest payable quarterly. Redeemable prior to maturity. Unsecured. 3,035 3,032 $ 13,664 $ 12,152 |
Schedule of Maturities of Long-term Debt | Annual maturities of all outstanding debt for the next five years and beyond are as follows: ($ in thousands) 2020 2021 2022 2023 2024 Thereafter $ 500 $ 500 $ 500 $ 500 $ — $ 12,164 |
POLICY AND CLAIM RESERVES (Tabl
POLICY AND CLAIM RESERVES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Reconciliation of Policy and Claim Reserves | The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense: ($ in thousands) Year ended 2019 2018 Summary of claims and claim adjustment expense reserves Balance, beginning of year $ 8,208 $ 7,075 Less reinsurance recoverable on unpaid losses 1,384 327 Net balances at beginning of year 6,824 6,748 Net losses: Provision for claims and claim adjustment expenses for claims arising in current year 35,312 36,457 Estimated claims and claim adjustment expenses for claims arising in prior years (1,333 ) (722 ) Total increases 33,979 35,735 Claims and claim adjustment expense payments for claims arising in: Current year 30,179 31,833 Prior years 3,674 3,826 Total payments 33,853 35,659 Net balance at end of period 6,950 6,824 Plus reinsurance recoverable on unpaid losses 249 1,384 Claims and claim adjustment expense reserves at end of period $ 7,199 $ 8,208 |
Short-duration Insurance Contracts, Claims Development | Cumulative incurred and paid claims over the last three years, along with annual percentage payouts related to accident and health claims, is as follows: For the Years Ended December 31, 2017 1 2018 1 2019 Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years IBNR Reserves Dec. 31, 2019 Cumulative Number of Reported Claims 2017 $ 1,008 $ 964 $ 917 $ — 1,612 2018 1,037 1,120 — 1,469 2019 935 417 1,174 1 Required supplementary information (unaudited) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years 2017 1 2018 1 2019 2017 $ 725 $ 881 $ 916 2018 747 991 2019 614 1 Required supplementary information (unaudited) Average Annual Percentage Payout of Incurred Claims by Age Required supplementary information (unaudited) Years 1 2 3 70.5% 21.8% 7.6% For the Years Ended December 31, 2010 1 2011 1 2012 1 2013 1 2014 1 2015 1 2016 1 2017 1 2018 1 2019 Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance ($ in thousands) Years IBNR Reserves Dec. 31, 2019 Cumulative Number of Reported Claims 2010 $ 30,610 $ 29,918 $ 29,805 $ 29,718 $ 29,687 $ 29,672 $ 29,641 $ 29,660 $ 29,659 $ 29,654 $ — 5,891 2011 — 35,203 33,957 34,233 34,711 34,806 34,650 34,658 34,663 34,751 50 8,132 2012 — — 29,959 30,190 30,402 30,091 29,948 29,885 29,827 29,834 5 5,203 2013 — — — 27,436 27,147 27,076 27,023 27,191 27,236 27,022 7 5,213 2014 — — — — 25,929 26,422 26,290 26,225 26,130 26,096 — 4,752 2015 — — — — — 31,484 30,861 30,360 30,890 30,960 363 5,852 2016 — — — — — — 36,287 35,343 35,399 35,144 — 5,189 2017 — — — — — — — 40,210 38,958 38,642 99 5,328 2018 — — — — — — — — 37,079 36,195 438 4,788 2019 — — — — — — — — — 35,929 2,827 4,616 Total $ 324,227 1 Required supplementary information (unaudited) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance Unaudited ($ in thousands) Years 2010 1 2011 1 2012 1 2013 1 2014 1 2015 1 2016 1 2017 1 2018 1 2019 2010 $ 26,064 $ 29,201 $ 29,404 $ 29,507 $ 29,639 $ 29,640 $ 29,640 $ 29,660 $ 29,659 $ 29,654 2011 — 31,488 33,080 33,484 34,167 34,622 34,621 34,641 34,647 34,650 2012 — — 26,162 29,135 29,614 29,765 29,834 29,835 29,823 29,824 2013 — — — 24,157 26,114 26,487 26,661 26,788 26,976 27,011 2014 — — — — 22,844 25,461 25,800 26,033 26,095 26,094 2015 — — — — — 25,923 30,066 30,190 30,296 30,366 2016 — — — — — — 31,893 34,722 35,029 35,139 2017 — — — — — — — 35,209 38,245 38,499 2018 — — — — — — — — 32,456 35,543 2019 — — — — — — — — — 30,796 Total $ 317,576 All outstanding liabilities before 2008, net of reinsurance 290 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 6,941 1 Required supplementary information (unaudited) |
Short-duration Insurance Contracts, Schedule of Historical Claims Duration | Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance (Required Supplementary Information - Unaudited) Years 1 2 3 4 5 6 7 8 9 10 88.4 % 9.2 % 0.9 % 0.6 % 0.3 % 0.4 % 0.1 % — % — % 0.1 % |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses ($ in thousands) December 31, 2019 December 31, 2018 Net outstanding liabilities Homeowners' insurance $ 2,651 $ 2,418 Dwelling fire insurance 2,623 2,602 Other Liability insurance 1,667 1,804 Other short-duration insurance lines 9 — Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance 6,950 6,824 Reinsurance recoverable on unpaid claims Homeowners' insurance 203 537 Dwelling fire insurance 46 847 Other Liability insurance — — Other short-duration insurance lines — — Total reinsurance recoverable on unpaid claims 249 1,384 Insurance lines other than short-duration — — Unallocated claims adjustment expenses — — Other — — — — Total gross liability for unpaid claims and claim adjustment expense $ 7,199 $ 8,208 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Reinsurance | Catastrophe reinsurance coverage is maintained in three layers as follows: Layer Reinsurers' Limits of Liability First Layer 100% of $13,500,000 in excess of $4,000,000 retention Second Layer 100% of $25,000,000 in excess of $17,500,000 Third Layer 100% of $30,000,000 in excess of $42,500,000 Underlying 2nd Event 100% of $2,000,000 in excess of $2,000,000 retention |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class | The table below provides information regarding the Company's preferred and common stock as of December 31, 2019 and December 31, 2018 : December 31, 2019 December 31, 2018 Authorized Issued Outstanding Authorized Issued Outstanding Preferred Stock, $1 par value 500,000 — — 500,000 — — Class A Common Stock, $1 par value 2,000,000 — — 2,000,000 — — Common Stock, $1 par value 3,000,000 2,531,552 2,531,116 3,000,000 2,527,136 2,527,136 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents changes in AOCI balances: ($ in thousands) Year ended 2019 2018 Unrealized Gains (Losses) on Cash Flow Hedges Balance at beginning of period $ (185 ) $ (480 ) Other comprehensive income for period: Other comprehensive gain before reclassifications 134 295 Net current period other comprehensive income 134 295 Balance at end of period $ (51 ) $ (185 ) Unrealized Gains (Losses) on Available-for-Sale Securities Balance at beginning of period $ (1,385 ) $ 3,126 Other comprehensive income (loss) for period: Other comprehensive income (loss) before reclassifications 3,865 (2,304 ) Reclassification adjustment - gains on equity securities — (2,107 ) Amounts reclassified from accumulated other comprehensive income (loss) 14 (100 ) Net current period other comprehensive income (loss) 3,879 (4,511 ) Balance at end of period $ 2,494 $ (1,385 ) Total Accumulated Other Comprehensive Income (Loss) at end of period $ 2,443 $ (1,570 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amounts reclassified out of AOCI for the year ended December 31, 2019 : ($ in thousands) Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 18 Net investment gains 18 Total before tax (4 ) Tax expense $ 14 Net of Tax The following table presents the amounts reclassified out of AOCI for the year ended December 31, 2018 : ($ in thousands) Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 127 Net investment gains 127 Total before tax (27 ) Tax expense $ 100 Net of Tax |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Total assets by industry segment at December 31, 2019 and December 31, 2018 are summarized below: ($ in thousands) Assets by industry segment Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations December 31, 2019 $ 153,934 $ 83,917 $ 65,605 $ 4,412 December 31, 2018 $ 144,231 $ 80,994 $ 59,479 $ 3,758 Net income by business segment for the years ended December 31, 2019 and 2018 is summarized below: ($ in thousands) Year ended December 31, 2019 P&C Insurance Operations Life Insurance Operations Non-Insurance Operations Inter- company Eliminations Total REVENUE Net premiums earned $ 54,019 $ 5,864 $ — $ — $ 59,883 Net investment income 1,683 2,677 56 (540 ) 3,876 Investment gains 2,178 861 16 — 3,055 Other income 575 853 1,019 (1,862 ) 585 58,455 10,255 1,091 (2,402 ) 67,399 BENEFITS AND EXPENSES Policyholder benefits paid 33,979 5,027 — (408 ) 38,598 Amortization of deferred policy acquisition costs 2,723 736 — — 3,459 Commissions 7,148 281 — — 7,429 General and administrative expenses 8,616 1,948 1,128 (1,994 ) 9,698 Taxes, licenses and fees 2,185 285 — — 2,470 Interest expense — 43 1,122 — 1,165 54,651 8,320 2,250 (2,402 ) 62,819 Income (Loss) Before Income Taxes 3,804 1,935 (1,159 ) — 4,580 INCOME TAX EXPENSE (BENEFIT) 359 397 (243 ) — 513 Net Income (Loss) $ 3,445 $ 1,538 $ (916 ) $ — $ 4,067 ($ in thousands) Year ended December 31, 2018 P&C Insurance Operations Life Insurance Operations Non-Insurance Operations Inter-company Eliminations Total REVENUE Net premiums earned $ 54,837 $ 6,019 $ — $ — $ 60,856 Net investment income 1,704 2,722 55 (540 ) 3,941 Investment gains (losses) (474 ) (78 ) — — (552 ) Other income 609 1,078 1,006 (2,081 ) 612 56,676 9,741 1,061 (2,621 ) 64,857 BENEFITS AND EXPENSES Policyholder benefits paid 35,735 5,242 — (568 ) 40,409 Amortization of deferred policy acquisition costs 2,759 838 — — 3,597 Commissions 7,267 288 — — 7,555 General and administrative expenses 8,472 2,111 309 (2,053 ) 8,839 Taxes, licenses and fees 1,937 220 — — 2,157 Interest expense — 48 1,187 — 1,235 56,170 8,747 1,496 (2,621 ) 63,792 Income (Loss) Before Income Taxes 506 994 (435 ) — 1,065 INCOME TAX EXPENSE (BENEFIT) (97 ) 232 151 — 286 Net Income (Loss) $ 603 $ 762 $ (586 ) $ — $ 779 |
Schedule of Gross and Net Premiums Written | The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the years ended December 31, 2019 and 2018, respectively: ($ in thousands) Years ended 2019 2018 Life, accident and health operations premiums written: Traditional life insurance $ 4,181 $ 4,336 Accident and health insurance 1,770 1,831 Gross life, accident and health 5,951 6,167 Reinsurance premium ceded (77 ) (81 ) Net life, accident and health premiums written $ 5,874 $ 6,086 Property and Casualty operations premiums written: Dwelling fire & extended coverage $ 38,847 $ 37,598 Homeowners (Including mobile homeowners) 20,507 21,214 Other liability 2,224 2,195 Gross property and casualty 61,578 61,007 Reinsurance premium ceded (7,041 ) (6,376 ) Net property and casualty written $ 54,537 $ 54,631 Consolidated gross premiums written $ 67,529 $ 67,174 Reinsurance premium ceded (7,118 ) (6,457 ) Consolidated net premiums written $ 60,411 $ 60,717 |
Schedule of Gross and Net Premiums Earned | The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the years ended December 31, 2019 and 2018, respectively: ($ in thousands) Years ended 2019 2018 Life, accident and health operations premiums earned: Traditional life insurance $ 4,165 $ 4,273 Accident and health insurance 1,776 1,827 Gross life, accident and health 5,941 6,100 Reinsurance premium ceded (77 ) (81 ) Net life, accident and health premiums earned $ 5,864 $ 6,019 Property and Casualty operations premiums earned: Dwelling fire & extended coverage $ 38,090 $ 37,232 Homeowners (Including mobile homeowners) 20,758 21,801 Other liability 2,212 2,180 Gross property and casualty 61,060 61,213 Reinsurance premium ceded (7,041 ) (6,376 ) Net property and casualty earned $ 54,019 $ 54,837 Consolidated gross premiums earned $ 67,001 $ 67,313 Reinsurance premium ceded (7,118 ) (6,457 ) Consolidated net premiums earned $ 59,883 $ 60,856 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Accounting Policies [Abstract] | |||
Weighted average number of shares outstanding | 2,529,652 | 2,525,325 | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | |
Cash, uninsured amount | $ 6,766,000 | ||
Operating lease, right-of-use asset | 389,000 | $ 299,000 | |
Operating lease, liability | 427,000 | $ 306,000 | |
Concentration Risk [Line Items] | |||
Policy receivables and agents' balances, net | 12,028,000 | $ 11,185,000 | |
Single Largest Agent Balance Due | |||
Concentration Risk [Line Items] | |||
Policy receivables and agents' balances, net | $ 349,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Concentration of Risk) (Details) | 12 Months Ended |
Dec. 31, 2019customer | |
Direct Written Premium | |
Concentration Risk [Line Items] | |
Number of major customers | 1 |
Direct Written Premium | Minimum | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 5.00% |
P&C Insurance Operations | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Number of states in which entity operates | 8 |
P&C Insurance Operations | Sales Revenue, Segment | Product Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 91.20% |
P&C Insurance Operations | Sales Revenue, Segment | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 51.00% |
Life Insurance Operations | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Number of states in which entity operates | 7 |
Life Insurance Operations | Sales Revenue, Segment | Product Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 8.80% |
Life Insurance Operations | Sales Revenue, Segment | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 78.00% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Investments) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Company owned life insurance policy face amount | $ 2,000,000 | |
Payments to acquire life insurance policies | 4,082,000 | |
Cash surrender value of life insurance | 4,655,000 | $ 4,600,000 |
Increase (decrease) in cash surrender value of company owned life insurance | $ 295,000 | $ (374,000) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Fair Value) (Details) | Dec. 31, 2019 |
Private Equity Funds | Maximum | |
Schedule of Investments [Line Items] | |
Percent of net assets | 1.00% |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Property and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Software and Software Development Costs | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Building | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Equipment, Furniture and Fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Equipment, Furniture and Fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Accounting Policies [Abstract] | ||
Operating lease, right-of-use asset | $ 389 | $ 299 |
Operating lease, liability | $ 427 | $ 306 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES (Policy Liabilities) (Details) | Dec. 31, 2019 |
Years of Issue, 1947 - 1968 | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 4.00% |
Years of Issue, 1969 - 1978 | Minimum | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 6.00% |
Years of Issue, 1969 - 1978 | Maximum | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 5.00% |
Years of Issue, 1979 - 2003 | Minimum | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 7.00% |
Years of Issue, 1979 - 2003 | Maximum | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 6.00% |
Years of Issue, 2004 - 2012 | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 5.25% |
Years of Issue, 2013 - 2014 | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 4.25% |
Years of Issue, 2015 - 2019 | |
Schedule of Liability for Life Insurance [Line Items] | |
Interest Rate | 4.00% |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES (Income Taxes) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Federal income tax rate applied to pre-tax income/loss | 21.00% | 21.00% |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2007 | Dec. 31, 2005 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||
Carrying amount of investments | $ 317 | ||
Trust Preferred Security Offering, 2005 | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred securities | $ 9,000 | ||
Subordinated debt | 9,279 | ||
Proceeds from issuance of trust preferred securities | 9,005 | ||
Equity investment | $ 279 | ||
Trust Preferred Security Offering, 2007 | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred securities | $ 3,000 | ||
Proceeds from issuance of trust preferred securities | 2,995 | ||
Equity investment | 93 | ||
Trust Preferred Security Offering, 2007 | Unsecured Debt | |||
Variable Interest Entity [Line Items] | |||
Subordinated debt | $ 3,093 | ||
Maximum | |||
Variable Interest Entity [Line Items] | |||
Limited partnership, percent owned | 1.00% |
STATUTORY ACCOUNTING PRACTICE_2
STATUTORY ACCOUNTING PRACTICES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory Accounting Practices [Line Items] | ||
Net investment gains (losses) | $ 3,055 | $ (552) |
NSIC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Accounting Practices, Statutory Net Income Amount | 1,378 | 1,558 |
Tier One Risk Based Capital | 17,210 | 16,043 |
Net investment gains (losses) | 272 | 71 |
Asset Valuation Reserve | 968 | 766 |
NSFC | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Accounting Practices, Statutory Net Income Amount | 2,644 | 786 |
Tier One Risk Based Capital | 36,264 | 34,645 |
Net investment gains (losses) | (10) | 39 |
Investment in Omega One | 7,930 | 7,280 |
Omega | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Accounting Practices, Statutory Net Income Amount | 593 | (64) |
Tier One Risk Based Capital | 11,430 | 10,783 |
Net investment gains (losses) | $ (21) | $ 7 |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Gain (Loss) on Securities [Line Items] | ||
Held-to-maturity securities, unrealized losses | $ 0 | $ 22,000 |
Other-than-temporary impairments, available-for-sale securities | 0 | 16,000 |
Single largest loss position | 60,000 | 145,000 |
Second largest loss position | 23,000 | 99,000 |
Third largest loss position | $ 20,000 | $ 94,000 |
Maximum | ||
Gain (Loss) on Securities [Line Items] | ||
Percent of investment portfolio below investment grade | 5.00% |
INVESTMENTS (Available-for-Sale
INVESTMENTS (Available-for-Sale Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | $ 97,102 | $ 96,877 |
Fixed maturities, Gross Unrealized Gains | 3,494 | 817 |
Fixed maturities, Gross Unrealized Losses | 336 | 2,569 |
Fixed maturities, Fair Value | 100,260 | 95,125 |
Equity securities, Amortized Cost | 2,127 | 1,842 |
Equity securities, Gross Unrealized Gains | 3,176 | 2,464 |
Equity securities, Gross Unrealized Losses | 0 | 0 |
Equity securities, Fair Value | 5,303 | 4,306 |
Amortized Cost | 99,229 | 98,719 |
Gross Unrealized Gains | 6,670 | 3,281 |
Gross Unrealized Losses | 336 | 2,569 |
Fair Value | 105,563 | 99,431 |
U.S. Government corporations and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 4,131 | 4,820 |
Fixed maturities, Gross Unrealized Gains | 150 | 31 |
Fixed maturities, Gross Unrealized Losses | 0 | 107 |
Fixed maturities, Fair Value | 4,281 | 4,744 |
Agency mortgage backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 32,283 | 27,492 |
Fixed maturities, Gross Unrealized Gains | 861 | 159 |
Fixed maturities, Gross Unrealized Losses | 157 | 545 |
Fixed maturities, Fair Value | 32,987 | 27,106 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 10,307 | 10,901 |
Fixed maturities, Gross Unrealized Gains | 71 | 7 |
Fixed maturities, Gross Unrealized Losses | 104 | 248 |
Fixed maturities, Fair Value | 10,274 | 10,660 |
Private label mortgage backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 6,815 | 5,869 |
Fixed maturities, Gross Unrealized Gains | 441 | 105 |
Fixed maturities, Gross Unrealized Losses | 4 | 27 |
Fixed maturities, Fair Value | 7,252 | 5,947 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 36,074 | 36,935 |
Fixed maturities, Gross Unrealized Gains | 1,816 | 407 |
Fixed maturities, Gross Unrealized Losses | 70 | 1,551 |
Fixed maturities, Fair Value | 37,820 | 35,791 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 6,669 | 10,059 |
Fixed maturities, Gross Unrealized Gains | 109 | 105 |
Fixed maturities, Gross Unrealized Losses | 1 | 91 |
Fixed maturities, Fair Value | 6,777 | 10,073 |
Foreign governments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Amortized Cost | 823 | 801 |
Fixed maturities, Gross Unrealized Gains | 46 | 3 |
Fixed maturities, Gross Unrealized Losses | 0 | 0 |
Fixed maturities, Fair Value | $ 869 | $ 804 |
INVESTMENTS (Held-to-Maturity S
INVESTMENTS (Held-to-Maturity Securities) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 1,290,000 | $ 1,449,000 |
Held-to-maturity securities, unrealized gains | 55,000 | 16,000 |
Held-to-maturity securities, unrealized losses | 0 | 22,000 |
Fair Value | 1,345,000 | 1,443,000 |
Agency mortgage backed securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 1,290,000 | 1,449,000 |
Held-to-maturity securities, unrealized gains | 55,000 | 16,000 |
Held-to-maturity securities, unrealized losses | 0 | 22,000 |
Fair Value | $ 1,345,000 | $ 1,443,000 |
INVESTMENTS (Amortized Cost and
INVESTMENTS (Amortized Cost and Aggregate Fair Value of Debt Securities, by Contractual Maturity) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments [Abstract] | ||
Available-for-sale Securities, Due in one year or less, Amortized Cost | $ 2,136 | |
Available-for-sale Securities, Due in one year or less, Fair Value | 2,133 | |
Available-for-sale Securities, Due after one year through five years, Amortized Cost | 17,397 | |
Available-for-sale Securities, Due after one year through five years, Fair Value | 17,945 | |
Available-for-sale Securities, Due after five years through ten years, Amortized Cost | 25,683 | |
Available-for-sale Securities, Due after five years through ten years, Fair Value | 26,516 | |
Available-for-sale Securities, Due after ten years, Amortized Cost | 51,886 | |
Available-for-sale Securities, Due after ten years, Fair Value | 53,666 | |
Fixed maturities, Amortized Cost | 97,102 | $ 96,877 |
Available-for-sale Securities, Fair Value | 100,260 | |
Held-to-maturity Securities, Due after one year through five years, Amortized Cost | 29 | |
Held-to-maturity Securities, Due after one year through five years, Fair Value | 30 | |
Held-to-maturity Securities, Due after five years through ten years, Amortized Cost | 4 | |
Held-to-maturity Securities, Due after five years through ten years, Fair Value | 5 | |
Held-to-maturity Securities, Due after ten years, Amortized Cost | 1,257 | |
Held-to-maturity Securities, Due after ten years, Fair Value | 1,310 | |
Held-to-maturity Securities, Amortized Cost | 1,290 | 1,449 |
Debt Securities, Held-to-maturity, Fair Value | $ 1,345 | $ 1,443 |
INVESTMENTS (Schedule of Contin
INVESTMENTS (Schedule of Continuous Losses) (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 17,839 | $ 30,501 |
Less than 12 Months, Gross Unrealized Losses | 196 | 937 |
12 Months or Longer, Fair Value | 4,814 | 31,162 |
12 Months or Longer, Gross Unrealized Losses | 140 | 1,632 |
Total Fair Value | 22,653 | 61,663 |
Total Gross Unrealized Losses | $ 336 | $ 2,569 |
Total Securities in a Loss Position | 43 | 120 |
U.S. Government corporations and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 0 | |
Less than 12 Months, Gross Unrealized Losses | 0 | |
12 Months or Longer, Fair Value | 3,209 | |
12 Months or Longer, Gross Unrealized Losses | 107 | |
Total Fair Value | 3,209 | |
Total Gross Unrealized Losses | $ 107 | |
Total Securities in a Loss Position | 6 | |
Agency mortgage backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 5,663 | $ 5,504 |
Less than 12 Months, Gross Unrealized Losses | 104 | 45 |
12 Months or Longer, Fair Value | 1,751 | 10,969 |
12 Months or Longer, Gross Unrealized Losses | 53 | 500 |
Total Fair Value | 7,414 | 16,473 |
Total Gross Unrealized Losses | $ 157 | $ 545 |
Total Securities in a Loss Position | 18 | 38 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 4,241 | $ 5,824 |
Less than 12 Months, Gross Unrealized Losses | 33 | 146 |
12 Months or Longer, Fair Value | 1,579 | 2,741 |
12 Months or Longer, Gross Unrealized Losses | 71 | 102 |
Total Fair Value | 5,820 | 8,565 |
Total Gross Unrealized Losses | $ 104 | $ 248 |
Total Securities in a Loss Position | 9 | 12 |
Private label mortgage backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 1,060 | $ 1,348 |
Less than 12 Months, Gross Unrealized Losses | 4 | 27 |
12 Months or Longer, Fair Value | 0 | 0 |
12 Months or Longer, Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 1,060 | 1,348 |
Total Gross Unrealized Losses | $ 4 | $ 27 |
Total Securities in a Loss Position | 1 | 2 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 6,363 | $ 16,583 |
Less than 12 Months, Gross Unrealized Losses | 54 | 709 |
12 Months or Longer, Fair Value | 1,484 | 9,823 |
12 Months or Longer, Gross Unrealized Losses | 16 | 842 |
Total Fair Value | 7,847 | 26,406 |
Total Gross Unrealized Losses | $ 70 | $ 1,551 |
Total Securities in a Loss Position | 14 | 51 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 512 | $ 1,242 |
Less than 12 Months, Gross Unrealized Losses | 1 | 10 |
12 Months or Longer, Fair Value | 0 | 4,420 |
12 Months or Longer, Gross Unrealized Losses | 0 | 81 |
Total Fair Value | 512 | 5,662 |
Total Gross Unrealized Losses | $ 1 | $ 91 |
Total Securities in a Loss Position | 1 | 11 |
INVESTMENTS (Held-to-Maturity,
INVESTMENTS (Held-to-Maturity, Unrealized Losses) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Schedule of Held-to-maturity Securities [Line Items] | |
Less than 12 Months, Fair Value | $ 1,026 |
Less than 12 Months, Gross Unrealized Losses | 22 |
12 Months or Longer, Fair Value | 0 |
12 Months or Longer, Gross Unrealized Losses | 0 |
Total Fair Value | 1,026 |
Total Gross Unrealized Losses | $ 22 |
Total Securities in a Loss Position | 2 |
Agency mortgage backed securities | |
Schedule of Held-to-maturity Securities [Line Items] | |
Less than 12 Months, Fair Value | $ 1,026 |
Less than 12 Months, Gross Unrealized Losses | 22 |
12 Months or Longer, Fair Value | 0 |
12 Months or Longer, Gross Unrealized Losses | 0 |
Total Fair Value | 1,026 |
Total Gross Unrealized Losses | $ 22 |
Total Securities in a Loss Position | 2 |
INVESTMENTS (Major Categories o
INVESTMENTS (Major Categories of Investment Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | $ 4,022 | $ 4,086 |
Less: Investment expenses | 146 | 145 |
Net investment income | 3,876 | 3,941 |
Fixed maturities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | 3,752 | 3,803 |
Equity securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | 86 | 106 |
Mortgage loans on real estate | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | 8 | 7 |
Investment real estate | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | 4 | 3 |
Policy loans | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | 142 | 142 |
Other | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Gross investment income | $ 30 | $ 25 |
INVESTMENTS (Major Categories_2
INVESTMENTS (Major Categories of Investment Gains and Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | $ 3,055 | $ (552) |
Other-than-temporary impairments | 0 | (16) |
Gains on trading securities | 5 | 0 |
Realized gains on fixed maturities | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | 18 | 128 |
Equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | 233 | 0 |
Change in fair value of equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | 712 | (203) |
Change in surrender value of company owned life insurance | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | 295 | (374) |
Realized gain on company owned life insurance | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | 1,792 | 0 |
Other gains (losses), principally real estate | ||
Gain (Loss) on Securities [Line Items] | ||
Net investment gains (losses) | $ 0 | $ (87) |
INVESTMENTS (Schedule of Unreal
INVESTMENTS (Schedule of Unrealized Appreciation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments [Abstract] | ||
Fixed maturities | $ 4,910 | $ (3,042) |
Deferred income tax | (1,031) | 638 |
Change in net unrealized gains (losses) on available-for-sale securities | $ 3,879 | $ (2,404) |
FAIR VALUE OF FINANCIAL ASSET_3
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Narrative) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurements of assets | $ 1,315,000 | |
Fair value measurements of liabilities | (65,000) | |
Nonrecurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | $ 0 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL ASSET_4
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Assets/Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | $ 100,260 | $ 95,125 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 149 | 107 |
Total Financial Assets | 105,712 | 99,538 |
Total Financial Liabilities | (65) | (234) |
Recurring Basis | Financial Liabilities | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | (65) | (234) |
Recurring Basis | U.S. Government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 4,281 | 4,744 |
Recurring Basis | Agency mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 32,987 | 27,106 |
Recurring Basis | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 10,274 | 10,660 |
Recurring Basis | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 37,820 | 35,791 |
Recurring Basis | Private label mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 7,252 | 5,947 |
Recurring Basis | States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 6,777 | 10,073 |
Recurring Basis | Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 869 | 804 |
Recurring Basis | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 5,303 | 4,306 |
Recurring Basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 149 | 107 |
Total Financial Assets | 32,278 | 22,934 |
Total Financial Liabilities | 0 | 0 |
Recurring Basis | Level 1 | Financial Liabilities | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | 0 | 0 |
Recurring Basis | Level 1 | U.S. Government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 4,281 | 4,147 |
Recurring Basis | Level 1 | Agency mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 19,330 | 11,756 |
Recurring Basis | Level 1 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 2,601 | 2,939 |
Recurring Basis | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 1 | Private label mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 1,060 | 0 |
Recurring Basis | Level 1 | States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 1 | Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 869 | 804 |
Recurring Basis | Level 1 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 3,988 | 3,181 |
Recurring Basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Total Financial Assets | 72,119 | 75,479 |
Total Financial Liabilities | 0 | 0 |
Recurring Basis | Level 2 | Financial Liabilities | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | 0 | 0 |
Recurring Basis | Level 2 | U.S. Government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 597 |
Recurring Basis | Level 2 | Agency mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 13,657 | 15,350 |
Recurring Basis | Level 2 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 7,673 | 7,721 |
Recurring Basis | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 37,820 | 35,791 |
Recurring Basis | Level 2 | Private label mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 6,192 | 5,947 |
Recurring Basis | Level 2 | States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 6,777 | 10,073 |
Recurring Basis | Level 2 | Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 2 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Total Financial Assets | 1,315 | 1,125 |
Total Financial Liabilities | (65) | (234) |
Recurring Basis | Level 3 | Financial Liabilities | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | (65) | (234) |
Recurring Basis | Level 3 | U.S. Government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Agency mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Private label mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | States, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Foreign governments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | 0 | 0 |
Recurring Basis | Level 3 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, Fair Value | $ 1,315 | $ 1,125 |
FAIR VALUE OF FINANCIAL ASSET_5
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Level 3 Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Securities | ||
Ending balance | $ 1,315 | |
Interest Rate Swap | ||
Ending balance | (65) | |
Recurring Basis | Interest rate swap | ||
Interest Rate Swap | ||
Beginning balance | (234) | $ (608) |
Included in earnings | 0 | 0 |
Included in other comprehensive income | 169 | 374 |
Purchases: | 0 | 0 |
Sales: | 0 | 0 |
Issuances: | 0 | 0 |
Settlements: | 0 | 0 |
Transfers in/(out) of Level 3 | 0 | 0 |
Ending balance | (65) | (234) |
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held | 0 | 0 |
Recurring Basis | Total Fixed Maturities | ||
Equity Securities | ||
Beginning balance: | 1,125 | 1,073 |
Included in earnings | 645 | 52 |
Included in other comprehensive income | 0 | 0 |
Purchases: | 0 | 0 |
Sales: | (455) | 0 |
Issuances: | 0 | 0 |
Settlements: | 0 | 0 |
Transfers in/(out) of Level 3 | 0 | 0 |
Ending balance | 1,315 | 1,125 |
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL ASSET_6
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Fair Value of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other policyholder funds | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | $ 1,350 | $ 1,515 |
Estimated Fair Value, Liabilities | 1,350 | 1,515 |
Short-term notes payable and current portion of long-term debt | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | 500 | 2,200 |
Estimated Fair Value, Liabilities | 500 | 2,200 |
Long-term debt | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | 13,664 | 12,152 |
Estimated Fair Value, Liabilities | 13,664 | 12,152 |
Held-to-maturity securities | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 1,290 | 1,449 |
Estimated Fair Value, Assets | 1,345 | 1,443 |
Mortgage loans on real estate | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 147 | 156 |
Estimated Fair Value, Assets | 147 | 156 |
Policy loans | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 1,895 | 1,854 |
Estimated Fair Value, Assets | 1,895 | 1,854 |
Company owned life insurance | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 4,655 | 4,600 |
Estimated Fair Value, Assets | 4,655 | 4,600 |
Other invested assets | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 2,280 | 2,148 |
Estimated Fair Value, Assets | $ 2,280 | $ 2,148 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,425 | $ 5,359 |
Less accumulated depreciation | 3,795 | 3,710 |
Property and equipment, net | 1,630 | 1,649 |
Depreciation expense | 124 | 161 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,472 | 3,378 |
Electronic data processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,470 | 1,504 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 483 | $ 477 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
AMT Credit | $ 1,622 | |
Recoveries | 1,074 | |
Anticipated recoveries in next fiscal year | $ 548 | |
Deferred income tax liability | (96) | 0 |
Net deferred tax asset | $ 0 | $ 716 |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
General expenses | $ 1,269 | $ 1,067 |
Unearned premiums | 1,288 | 1,265 |
Claims liabilities | 645 | 552 |
Impairment on real estate owned | 119 | 119 |
Unrealized losses on securities available-for-sale | 0 | 368 |
Unrealized loss on interest rate swaps | 14 | 49 |
Deferred tax assets | 3,335 | 3,420 |
Deferred Tax Liabilities, Unrealized Losses on Trading Securities | 1 | 0 |
Depreciation | (93) | (79) |
Deferred policy acquisition costs | (1,610) | (1,645) |
Pre-1984 policyholder surplus account | (397) | (463) |
Unrealized gains on securities available-for-sale | (667) | 0 |
Unrealized gains on equity securities | (663) | (517) |
Deferred tax liabilities | (3,431) | (2,704) |
Net deferred tax asset (liability) | $ (96) | $ 716 |
INCOME TAXES (Schedule of Inco
INCOME TAXES (Schedule of Income Tax Effects of Changes in Temporary Differences) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Deferred policy acquisition costs | $ (35) | $ (61) |
Other-than-temporary impairments | 0 | (3) |
Trading securities | 1 | 0 |
Unearned premiums | (23) | 4 |
General expenses | (202) | 2 |
Depreciation | 14 | (9) |
Claims liabilities | (93) | (68) |
AMT credit | 0 | 1,575 |
Impact of repeal of special provision on pre-1984 policyholder surplus | (66) | (66) |
Unrealized gains (losses) on equity securities | 149 | (43) |
Deferred income tax expense (benefit) | $ (255) | $ 1,331 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax rate applied to pre-tax income/loss | 21.00% | 21.00% |
Dividends received deduction and tax-exempt interest | (0.30%) | (2.40%) |
Company owned life insurance | (9.60%) | 7.40% |
Other, net | 0.10% | 0.90% |
Effective federal income tax rate | 11.20% | 26.90% |
NOTES PAYABLE AND LONG-TERM D_3
NOTES PAYABLE AND LONG-TERM DEBT (Short-Term Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Short-term notes payable and current portion of long-term debt | $ 500 | $ 2,200 |
Notes Payable to Banks | Unsecured Debt | ||
Short-term Debt [Line Items] | ||
Short-term notes payable and current portion of long-term debt | $ 500 | $ 2,200 |
Interest rate description | WSJ | |
Basis spread on variable rate | 0.50% |
NOTES PAYABLE AND LONG-TERM D_4
NOTES PAYABLE AND LONG-TERM DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Jun. 21, 2007 | Dec. 15, 2005 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 13,664 | $ 12,152 | ||
Unsecured Debt | Promissory Note | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 1,500 | 0 | ||
Unsecured Debt | Trust Preferred Security Offering, 2005 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 9,129 | 9,120 | ||
Payment terms | Interest payments due quarterly | |||
Debt issuance costs, net | $ 150 | 159 | ||
Unsecured Debt | Trust Preferred Security Offering, 2005 | Three-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Unsecured Debt | Trust Preferred Security Offering, 2007 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 3,035 | 3,032 | ||
Payment terms | Interest payments due quarterly | |||
Debt issuance costs, net | $ 58 | $ 61 | ||
Unsecured Debt | Trust Preferred Security Offering, 2007 | Three-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.40% |
NOTES PAYABLE AND LONG-TERM D_5
NOTES PAYABLE AND LONG-TERM DEBT (Narrative) (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2010 | May 26, 2010 | Dec. 31, 2009 | Mar. 19, 2009 | |
Debt Instrument [Line Items] | ||||||
Derivative, notional amount | $ 9,000,000 | $ 3,000,000 | ||||
Derivative, fixed interest rate | 8.49% | 7.02% | ||||
Cash flow hedge, derivative instrument liabilities at fair value | $ 65,000 | $ 234,000 | ||||
Unrealized gain on interest rate swap | 134,000 | 295,000 | ||||
Securities on deposit | 294,000 | |||||
Interest rate swap | ||||||
Debt Instrument [Line Items] | ||||||
Cash flow hedge, liability at fair value | $ 0 | |||||
Cash flow hedging | ||||||
Debt Instrument [Line Items] | ||||||
Cash flow hedge, liability at fair value | $ 65,000 | |||||
Collateral Pledged [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Available-for-sale securities pledged as collateral | $ 294,000 | $ 932,000 |
NOTES PAYABLE AND LONG-TERM D_6
NOTES PAYABLE AND LONG-TERM DEBT (Maturity of Outstanding Debt) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 500 |
2021 | 500 |
2022 | 500 |
2023 | 500 |
2024 | 0 |
Thereafter | $ 12,164 |
POLICY AND CLAIM RESERVES (Prop
POLICY AND CLAIM RESERVES (Property and Casualty Reserve) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balance, beginning of year | $ 7,199 | $ 8,208 | |
Less reinsurance recoverable on unpaid losses | 276 | 1,772 | |
Net losses: | |||
Estimated claims and claim adjustment expenses for claims arising in prior years | (1,332) | (722) | |
Consolidated Property and Casualty Insurance Entity | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balance, beginning of year | 7,199 | 8,208 | $ 7,075 |
Less reinsurance recoverable on unpaid losses | 249 | 1,384 | 327 |
Net balances at beginning of year | 6,950 | 6,824 | $ 6,748 |
Net losses: | |||
Provision for claims and claim adjustment expenses for claims arising in current year | 35,312 | 36,457 | |
Estimated claims and claim adjustment expenses for claims arising in prior years | (1,333) | (722) | |
Total increases | 33,979 | 35,735 | |
Claims and claim adjustment expense payments for claims arising in: | |||
Current year | 30,179 | 31,833 | |
Prior years | 3,674 | 3,826 | |
Total payments | $ 33,853 | $ 35,659 |
POLICY AND CLAIM RESERVES (Narr
POLICY AND CLAIM RESERVES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Insurance [Abstract] | ||
Estimated claims and claim adjustment expenses for claims arising in prior years | $ 1,332,000 | $ 722,000 |
Reserve for unpaid claims | 417,000 | 358,000 |
Policy and contract claims | $ 1,053,000 | 792,000 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Average annual payout of incurred claims settled within twelve months | 70.50% | |
Homeowners, Dwelling Fire and Other Liability | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Average annual payout of incurred claims settled within twelve months | 88.40% | |
Average annual payout of incurred claims settled within twenty four months | 97.60% | |
Catastrophe | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Claims and claim adjustment expense payments for claims arising in prior year | $ 24,000 | $ 18,000 |
POLICY AND CLAIM RESERVES (Clai
POLICY AND CLAIM RESERVES (Claims) (Details) $ in Thousands | Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($)claim | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 6,950 | $ 6,824 | ||||||||
Accident Year 2017 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 917 | 964 | $ 1,008 | |||||||
IBNR Reserves | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 1,612 | |||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 916 | 881 | $ 725 | |||||||
Accident Year 2018 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 1,120 | 1,037 | ||||||||
IBNR Reserves | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 1,469,000 | |||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 991 | $ 747 | ||||||||
Accident Year 2019 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 935 | |||||||||
IBNR Reserves | $ 417 | |||||||||
Cumulative Number of Reported Claims | claim | 1,174 | |||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 614 | |||||||||
Homeowners, Dwelling Fire and Other Liability | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 324,227 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2010 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 29,654 | 29,659 | 29,660 | $ 29,641 | $ 29,672 | $ 29,687 | $ 29,718 | $ 29,805 | $ 29,918 | $ 30,610 |
IBNR Reserves | 0 | |||||||||
Cumulative Number of Reported Claims | claim | 5,891,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2011 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 34,751 | 34,663 | 34,658 | 34,650 | 34,806 | 34,711 | 34,233 | 33,957 | 35,203 | |
IBNR Reserves | 50 | |||||||||
Cumulative Number of Reported Claims | claim | 8,132,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2012 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 29,834 | 29,827 | 29,885 | 29,948 | 30,091 | 30,402 | 30,190 | 29,959 | ||
IBNR Reserves | 5 | |||||||||
Cumulative Number of Reported Claims | claim | 5,203,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2013 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 27,022 | 27,236 | 27,191 | 27,023 | 27,076 | 27,147 | 27,436 | |||
IBNR Reserves | 7 | |||||||||
Cumulative Number of Reported Claims | claim | 5,213,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2014 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 26,096 | 26,130 | 26,225 | 26,290 | 26,422 | 25,929 | ||||
IBNR Reserves | 0 | |||||||||
Cumulative Number of Reported Claims | claim | 4,752,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2015 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 30,960 | 30,890 | 30,360 | 30,861 | 31,484 | |||||
IBNR Reserves | 363 | |||||||||
Cumulative Number of Reported Claims | claim | 5,852,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2016 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 35,144 | 35,399 | 35,343 | 36,287 | ||||||
IBNR Reserves | 0 | |||||||||
Cumulative Number of Reported Claims | claim | 5,189,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2017 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 38,642 | 38,958 | 40,210 | |||||||
IBNR Reserves | 99 | |||||||||
Cumulative Number of Reported Claims | claim | 5,328,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2018 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 36,195 | 37,079 | ||||||||
IBNR Reserves | 438 | |||||||||
Cumulative Number of Reported Claims | claim | 4,788,000 | |||||||||
Homeowners, Dwelling Fire and Other Liability | Accident Year 2019 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 35,929 | |||||||||
IBNR Reserves | 2,827 | |||||||||
Cumulative Number of Reported Claims | claim | 4,616,000 | |||||||||
Accident and Health Claim | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 317,576 | |||||||||
All outstanding liabilities before 2008, net of reinsurance | 290 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 6,941 | |||||||||
Accident and Health Claim | Accident Year 2010 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 29,654 | 29,659 | 29,660 | 29,640 | 29,640 | 29,639 | 29,507 | 29,404 | 29,201 | $ 26,064 |
Accident and Health Claim | Accident Year 2011 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 34,650 | 34,647 | 34,641 | 34,621 | 34,622 | 34,167 | 33,484 | 33,080 | $ 31,488 | |
Accident and Health Claim | Accident Year 2012 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 29,824 | 29,823 | 29,835 | 29,834 | 29,765 | 29,614 | 29,135 | $ 26,162 | ||
Accident and Health Claim | Accident Year 2013 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 27,011 | 26,976 | 26,788 | 26,661 | 26,487 | 26,114 | $ 24,157 | |||
Accident and Health Claim | Accident Year 2014 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 26,094 | 26,095 | 26,033 | 25,800 | 25,461 | $ 22,844 | ||||
Accident and Health Claim | Accident Year 2015 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 30,366 | 30,296 | 30,190 | 30,066 | $ 25,923 | |||||
Accident and Health Claim | Accident Year 2016 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 35,139 | 35,029 | 34,722 | $ 31,893 | ||||||
Accident and Health Claim | Accident Year 2017 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 38,499 | 38,245 | $ 35,209 | |||||||
Accident and Health Claim | Accident Year 2018 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | 35,543 | $ 32,456 | ||||||||
Accident and Health Claim | Accident Year 2019 | ||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | $ 30,796 |
POLICY AND CLAIM RESERVES (Aver
POLICY AND CLAIM RESERVES (Average Annual Percentage Payout of Incurred Claims by Age) (Details) | Dec. 31, 2019 |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 1 | 70.50% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 2 | 21.80% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 3 | 7.60% |
Homeowners, Dwelling Fire and Other Liability | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 1 | 88.40% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 2 | 9.20% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 3 | 0.90% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 4 | 0.60% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 5 | 0.30% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 6 | 0.40% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 7 | 0.10% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 8 | 0.00% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 9 | 0.00% |
Average Annual Percentage Payout of Incurred Claims by Age (in Years), Net of Reinsurance, year 10 | 0.10% |
POLICY AND CLAIM RESERVES (Deve
POLICY AND CLAIM RESERVES (Development to the Liability for Unpaid Claims and Claim Adjustment Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | $ 6,950 | $ 6,824 |
Total reinsurance recoverable on unpaid claims | 249 | 1,384 |
Insurance lines other than short-duration | 0 | 0 |
Unallocated claims adjustment expenses | 0 | 0 |
Other | 0 | 0 |
Aggregate reconciling items | 0 | 0 |
Total gross liability for unpaid claims and claim adjustment expense | 7,199 | 8,208 |
Homeowners' insurance | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 2,651 | 2,418 |
Total reinsurance recoverable on unpaid claims | 203 | 537 |
Dwelling fire insurance | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 2,623 | 2,602 |
Total reinsurance recoverable on unpaid claims | 46 | 847 |
Other Liability insurance | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 1,667 | 1,804 |
Total reinsurance recoverable on unpaid claims | 0 | 0 |
Other short-duration insurance lines | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 9 | 0 |
Total reinsurance recoverable on unpaid claims | $ 0 | $ 0 |
REINSURANCE (Details)
REINSURANCE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance Maintained by Layers [Line Items] | ||
Catastrophe reinsurance retention | $ 4,000,000 | |
Life insurance policy reinsurance limit | 50,000 | |
Reinsurance recoverable | 276,000 | $ 1,772,000 |
Single Reinsurer | ||
Reinsurance Maintained by Layers [Line Items] | ||
Reinsurance recoverable | 10,000 | $ 125,000 |
First Catastrophe Event | ||
Reinsurance Maintained by Layers [Line Items] | ||
Catastrophe reinsurance retention | 4,000,000 | |
Second Catastrophe Event | ||
Reinsurance Maintained by Layers [Line Items] | ||
Catastrophe reinsurance retention | $ 2,000,000 | |
First Layer | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 13,500,000 | |
Reinsurer's limit of liability | $ 17,500,000 | |
Second Layer | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 25,000,000 | |
Reinsurer's limit of liability | $ 42,500,000 | |
Third Layer | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 30,000,000 | |
Reinsurer's limit of liability | $ 72,500,000 | |
Underlying 2nd Event | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 2,000,000 | |
Reinsurer's limit of liability | $ 2,000,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)hours | Dec. 31, 2018USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Minimum hours of service completed in year of contribution | hours | 1,000 | |
Matching contribution | $ 181,000 | $ 182,000 |
Employer matching contribution, percent | 5.00% | |
Cash contributions to ESOP | $ 0 | 232,000 |
ESOP debt structure | 0 | |
Non-Qualified Deferred Compensation Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Deferred compensation arrangement | $ 573,000 | $ 53,000 |
Executive Officers | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Employer matching contribution, percent | 15.00% |
REGULATORY REQUIREMENTS AND D_2
REGULATORY REQUIREMENTS AND DIVIDEND RESTRICTIONS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statutory Accounting Practices [Line Items] | ||
Assets held by insurance regulators | $ 3,188,000 | $ 3,031,000 |
Life Insurance Operations | ||
Statutory Accounting Practices [Line Items] | ||
Statutory amount available for dividend payments | 1,624,000 | |
P&C Insurance Operations | ||
Statutory Accounting Practices [Line Items] | ||
Statutory amount available for dividend payments | $ 3,626,000 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Net income | $ 4,067,000 | $ 779,000 | |
Dividends paid | (531,000) | (505,000) | |
Other comprehensive income, net of tax | 4,013,000 | (2,109,000) | |
Common stock issued | 53,000 | $ 76,000 | |
Treasury stock acquired | $ 7,000 | ||
Stock repurchase program, authorized amount | $ 1,000,000 | ||
Shares of common stock repurchased and placed in treasury | 436 |
SHAREHOLDERS' EQUITY (Preferred
SHAREHOLDERS' EQUITY (Preferred and Common Stock) (Details) - $ / shares | Dec. 31, 2019 | May 17, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||
Preferred stock, par value | $ 1 | $ 1 | |
Preferred stock, shares authorized | 500,000 | 500,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value | $ 1 | $ 1 | |
Common stock, shares authorized | 3,000,000 | 3,000,000 | |
Common stock, shares issued | 2,531,552 | 2,527,136 | |
Common stock, shares outstanding | 2,531,116 | 2,527,136 | |
Directors | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 4,416 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, par value | $ 1 | $ 1 | |
Common stock, shares authorized | 2,000,000 | 2,000,000 | |
Common stock, shares issued | 0 | 0 | |
Common stock, shares outstanding | 0 | 0 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Changes in AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ (1,570) | |
Other comprehensive income (loss), net of tax | 4,013 | $ (2,109) |
Ending balance | 2,443 | (1,570) |
Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (185) | (480) |
Other comprehensive gain before reclassifications | 134 | 295 |
Other comprehensive income (loss), net of tax | 134 | 295 |
Ending balance | (51) | (185) |
Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (1,385) | 3,126 |
Other comprehensive gain before reclassifications | 3,865 | (2,304) |
Reclassification adjustment - gains on equity securities | 0 | (2,107) |
Amounts reclassified from accumulated other comprehensive income (loss) | 14 | (100) |
Other comprehensive income (loss), net of tax | 3,879 | (4,511) |
Ending balance | $ 2,494 | $ (1,385) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Amounts reclassified out of AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Net investment gains | $ 3,055 | $ (552) |
Tax expense | (513) | (286) |
Net Income | 4,067 | 779 |
Amounts Reclassified from Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Net investment gains | 18 | 127 |
Total before tax | 18 | 127 |
Tax expense | (4) | (27) |
Net Income | $ 14 | $ 100 |
SEGMENTS (Narrative) (Details)
SEGMENTS (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2019Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
SEGMENTS (Schedule of Segment R
SEGMENTS (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Assets | $ 153,934 | $ 144,231 |
Net premiums earned | 59,883 | 60,856 |
Net investment income | 3,876 | 3,941 |
Investment gains (losses) | 3,055 | (552) |
Other income | 585 | 612 |
Total Revenues | 67,399 | 64,857 |
Policyholder benefits paid | 38,598 | 40,409 |
Amortization of deferred policy acquisition costs | 3,459 | 3,597 |
Commissions | 7,429 | 7,555 |
General and administrative expenses | 9,698 | 8,839 |
Taxes, licenses and fees | 2,470 | 2,157 |
Interest expense | 1,165 | 1,235 |
Total Benefits, Losses and Expenses | 62,819 | 63,792 |
Income Before Income Taxes | 4,580 | 1,065 |
Total income tax expense | 513 | 286 |
Net Income | 4,067 | 779 |
Inter- company Eliminations | ||
Segment Reporting Information [Line Items] | ||
Net premiums earned | 0 | 0 |
Net investment income | (540) | (540) |
Investment gains (losses) | 0 | 0 |
Other income | (1,862) | (2,081) |
Total Revenues | (2,402) | (2,621) |
Policyholder benefits paid | (408) | (568) |
Amortization of deferred policy acquisition costs | 0 | 0 |
Commissions | 0 | 0 |
General and administrative expenses | (1,994) | (2,053) |
Taxes, licenses and fees | 0 | 0 |
Interest expense | 0 | 0 |
Total Benefits, Losses and Expenses | (2,402) | (2,621) |
Income Before Income Taxes | 0 | 0 |
Total income tax expense | 0 | 0 |
Net Income | 0 | 0 |
P&C Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 83,917 | 80,994 |
Net premiums earned | 54,019 | 54,837 |
Net investment income | 1,683 | 1,704 |
Investment gains (losses) | 2,178 | (474) |
Other income | 575 | 609 |
Total Revenues | 58,455 | 56,676 |
Policyholder benefits paid | 33,979 | 35,735 |
Amortization of deferred policy acquisition costs | 2,723 | 2,759 |
Commissions | 7,148 | 7,267 |
General and administrative expenses | 8,616 | 8,472 |
Taxes, licenses and fees | 2,185 | 1,937 |
Interest expense | 0 | 0 |
Total Benefits, Losses and Expenses | 54,651 | 56,170 |
Income Before Income Taxes | 3,804 | 506 |
Total income tax expense | 359 | (97) |
Net Income | 3,445 | 603 |
Life Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 65,605 | 59,479 |
Net premiums earned | 5,864 | 6,019 |
Net investment income | 2,677 | 2,722 |
Investment gains (losses) | 861 | (78) |
Other income | 853 | 1,078 |
Total Revenues | 10,255 | 9,741 |
Policyholder benefits paid | 5,027 | 5,242 |
Amortization of deferred policy acquisition costs | 736 | 838 |
Commissions | 281 | 288 |
General and administrative expenses | 1,948 | 2,111 |
Taxes, licenses and fees | 285 | 220 |
Interest expense | 43 | 48 |
Total Benefits, Losses and Expenses | 8,320 | 8,747 |
Income Before Income Taxes | 1,935 | 994 |
Total income tax expense | 397 | 232 |
Net Income | 1,538 | 762 |
Non-Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,412 | 3,758 |
Net premiums earned | 0 | 0 |
Net investment income | 56 | 55 |
Investment gains (losses) | 16 | 0 |
Other income | 1,019 | 1,006 |
Total Revenues | 1,091 | 1,061 |
Policyholder benefits paid | 0 | 0 |
Amortization of deferred policy acquisition costs | 0 | 0 |
Commissions | 0 | 0 |
General and administrative expenses | 1,128 | 309 |
Taxes, licenses and fees | 0 | 0 |
Interest expense | 1,122 | 1,187 |
Total Benefits, Losses and Expenses | 2,250 | 1,496 |
Income Before Income Taxes | (1,159) | (435) |
Total income tax expense | (243) | 151 |
Net Income | $ (916) | $ (586) |
SEGMENTS (Schedule of Gross and
SEGMENTS (Schedule of Gross and Net Premiums Written) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 67,529 | $ 67,174 |
Reinsurance premium ceded | (7,118) | (6,457) |
Net premiums written | 60,411 | 60,717 |
P&C Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 61,578 | 61,007 |
Reinsurance premium ceded | (7,041) | (6,376) |
Net premiums written | 54,537 | 54,631 |
P&C Insurance Operations | Dwelling fire & extended coverage | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 38,847 | 37,598 |
P&C Insurance Operations | Homeowners (Including mobile homeowners) | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 20,507 | 21,214 |
P&C Insurance Operations | Other liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 2,224 | 2,195 |
Life Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 5,951 | 6,167 |
Reinsurance premium ceded | (77) | (81) |
Net premiums written | 5,874 | 6,086 |
Life Insurance Operations | Traditional life insurance | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 4,181 | 4,336 |
Life Insurance Operations | Accident and health insurance | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 1,770 | $ 1,831 |
SEGMENTS (Schedule of Gross a_2
SEGMENTS (Schedule of Gross and Net Premiums Earned) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Gross premiums earned | $ 67,001 | $ 67,313 |
Reinsurance premium ceded | (7,118) | (6,457) |
Net premiums earned | 59,883 | 60,856 |
Life Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 5,941 | 6,100 |
Reinsurance premium ceded | (77) | (81) |
Net premiums earned | 5,864 | 6,019 |
Life Insurance Operations | Traditional life insurance | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 4,165 | 4,273 |
Life Insurance Operations | Accident and health insurance | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 1,776 | 1,827 |
P&C Insurance Operations | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 61,060 | 61,213 |
Reinsurance premium ceded | (7,041) | (6,376) |
Net premiums earned | 54,019 | 54,837 |
P&C Insurance Operations | Dwelling fire & extended coverage | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 38,090 | 37,232 |
P&C Insurance Operations | Homeowners (Including mobile homeowners) | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 20,758 | 21,801 |
P&C Insurance Operations | Other liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | $ 2,212 | $ 2,180 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | Dec. 31, 2018claim |
Hurricane | Texas | |
Loss Contingencies [Line Items] | |
Pending claims, number | 1 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 1,185 | $ 1,231 |
Income taxes (received) paid | (921) | 25 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase in equity | 53 | 76 |
Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase in equity | 5 | 5 |
Common Stock | Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock issued | 5 | |
Additional Paid-in Capital | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase in equity | $ 48 | $ 71 |
Schedule I. Summary of Inves_2
Schedule I. Summary of Investments Other Than Investments in Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | $ 112,062 | $ 111,693 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 119,024 | 112,684 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 118,969 | 112,690 |
Held-to-maturity securities | Agency mortgage backed securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 1,290 | 1,449 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 1,345 | 1,443 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 1,290 | 1,449 |
Held-to-maturity securities | Total Debt Securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 1,290 | 1,449 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 1,345 | 1,443 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 1,290 | 1,449 |
Total Fixed Maturities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 99,229 | 98,719 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 105,563 | 99,431 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 105,563 | 99,431 |
Total Fixed Maturities | Agency mortgage backed securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 32,283 | 27,492 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 32,987 | 27,106 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 32,987 | 27,106 |
Total Fixed Maturities | Total Debt Securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 97,102 | 96,877 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 100,260 | 95,125 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 100,260 | 95,125 |
Total Fixed Maturities | Banks and insurance companies | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 843 | 1,064 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 2,335 | 2,044 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 2,335 | 2,044 |
Total Fixed Maturities | Industrial and all other | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 1,284 | 778 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 2,968 | 2,262 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 2,968 | 2,262 |
Total Fixed Maturities | Equity securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 2,127 | 1,842 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 5,303 | 4,306 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 5,303 | 4,306 |
Total Fixed Maturities | U.S. Government corporations and agencies | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 4,131 | 4,820 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 4,281 | 4,744 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 4,281 | 4,744 |
Total Fixed Maturities | Asset backed securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 10,307 | 10,901 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 10,274 | 10,660 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 10,274 | 10,660 |
Total Fixed Maturities | Private label mortgage backed securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 6,815 | 5,869 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 7,252 | 5,947 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 7,252 | 5,947 |
Total Fixed Maturities | Corporate bonds | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 36,074 | 36,935 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 37,820 | 35,791 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 37,820 | 35,791 |
Total Fixed Maturities | States, municipalities and political subdivisions | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 6,669 | 10,059 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 6,777 | 10,073 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 6,777 | 10,073 |
Total Fixed Maturities | Foreign governments | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 823 | 801 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 869 | 804 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 869 | 804 |
Total Securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 100,519 | 100,168 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 106,908 | 100,874 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 106,853 | 100,880 |
Trading Security | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 149 | 107 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 149 | 107 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 149 | 107 |
Mortgage loans on real estate | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 147 | 156 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 147 | 156 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 147 | 156 |
Investment real estate | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 2,934 | 2,945 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 2,934 | 2,945 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 2,934 | 2,945 |
Policy loans | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 1,895 | 1,854 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 1,895 | 1,854 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 1,895 | 1,854 |
Company owned life insurance change in surrender value | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 4,082 | 4,315 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 4,655 | 4,600 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | 4,655 | 4,600 |
Other invested assets | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Cost | 2,336 | 2,148 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Fair Value | 2,336 | 2,148 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties, Amount | $ 2,336 | $ 2,148 |
Schedule II. Condensed Financ_2
Schedule II. Condensed Financial Information of Registrant (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | |||
Fixed maturities available-for-sale, at estimated fair value | $ 100,260 | $ 95,125 | |
Investment real estate, at book value | 2,934 | 2,945 | |
Cash and cash equivalents | 11,809 | 5,676 | |
Deferred income tax asset | 0 | 716 | |
Other assets | 850 | 472 | |
Total Assets | 153,934 | 144,231 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term notes payable and current portion of long-term debt | 500 | 2,200 | |
Total Liabilities | 100,473 | 98,365 | |
Stockholders' Equity Attributable to Parent | 53,461 | 45,866 | $ 47,625 |
Total Liabilities and Shareholders' Equity | 153,934 | 144,231 | |
Parent Company | |||
ASSETS | |||
Fixed maturities available-for-sale, at estimated fair value | 294 | 932 | |
Investment real estate, at book value | 356 | 356 | |
Cash and cash equivalents | 3,393 | 523 | $ 1,753 |
Investment in subsidiaries (equity method) eliminated upon consolidation | 65,329 | 59,229 | |
Income tax recoverable | 491 | 1,012 | |
Deferred income tax asset | 714 | 601 | |
Other assets | 525 | 490 | |
Total Assets | 71,102 | 63,143 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Accrued general expenses | 3,412 | 2,691 | |
Interest rate swaps | 65 | 234 | |
Short-term notes payable and current portion of long-term debt | 500 | 2,200 | |
Notes Payable | 13,664 | 12,152 | |
Total Liabilities | 17,641 | 17,277 | |
Stockholders' Equity Attributable to Parent | 53,461 | 45,866 | |
Total Liabilities and Shareholders' Equity | $ 71,102 | $ 63,143 |
Schedule II. Condensed Financ_3
Schedule II. Condensed Financial Information of Registrant (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income | ||
Other income | $ 585 | $ 612 |
Total Revenues | 67,399 | 64,857 |
Expenses | ||
Interest expense | 1,165 | 1,235 |
Income tax expense (benefit) | 513 | 286 |
Parent Company | ||
Income | ||
Dividends (eliminated upon consolidation) | 2,750 | 750 |
Net realized investment gains | 16 | 0 |
Holding company management service fees | 1,019 | 1,006 |
Other income | 56 | 55 |
Total Revenues | 3,841 | 1,811 |
Expenses | ||
State taxes | 51 | 43 |
Interest expense | 1,122 | 1,187 |
Other expenses | 1,077 | 266 |
Operating Expenses | 2,250 | 1,496 |
Income before income taxes and equity in undistributed earnings of subsidiaries | 1,591 | 315 |
Income tax expense (benefit) | (243) | 151 |
Income before equity in undistributed earnings of subsidiaries | 1,834 | 164 |
Equity in undistributed earnings of subsidiaries | 2,233 | 615 |
Net income | $ 4,067 | $ 779 |
Schedule II. Condensed Financ_4
Schedule II. Condensed Financial Information of Registrant (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Income taxes | $ (255) | $ 1,331 |
Other, net | (1) | 6 |
Net cash provided by operating activities | 5,373 | 3,177 |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||
Net cash provided by (used in) investing activities | 1,656 | (2,149) |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||
Net cash used in financing activities | (896) | (1,996) |
Cash and cash equivalents, beginning of year | 5,676 | |
Cash and cash equivalents, end of period | 11,809 | 5,676 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net income | 4,067 | 779 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity in undistributed earnings of subsidiaries | (2,233) | (615) |
Net realized investment gains (losses) | (16) | 0 |
Income taxes | 370 | 58 |
Other, net | 750 | (137) |
Net cash provided by operating activities | 2,938 | 85 |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||
Net sales of investments | 663 | 490 |
Net cash provided by (used in) investing activities | 663 | 490 |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||
Net repayments of debt | (200) | (1,300) |
Cash dividends | (531) | (505) |
Net cash used in financing activities | (731) | (1,805) |
Net change in cash and cash equivalents | 2,870 | (1,230) |
Cash and cash equivalents, beginning of year | 523 | 1,753 |
Cash and cash equivalents, end of period | $ 3,393 | $ 523 |
Schedule II. Condensed Financ_5
Schedule II. Condensed Financial Information of Registrant (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Cash dividends paid to parent company by consolidated subsidiaries | $ 2,750 | $ 750 |
Schedule III. Supplementary I_2
Schedule III. Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Deferred Policy Acquisition Cost | $ 7,666 | $ 7,834 |
Supplementary Insurance Information, Future Policy Benefits | 38,315 | 37,474 |
Supplementary Insurance Information, Unearned Premiums | 30,555 | 29,999 |
Supplementary Insurance Information, Unpaid Losses | 8,252 | 7,867 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Premium Revenue | 59,883 | 60,856 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Net Investment Income | 4,416 | 4,481 |
Supplementary Insurance Inforamtion, Other Income | 2,447 | 2,693 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Benefit, Claim, Loss and Settlement Expenses | 39,006 | 40,977 |
Supplementary Insurance Information, Commissions and Amortization of Deferred Policy Acquisition Costs | 10,888 | 11,152 |
Supplementary Insurance Information, General Expenses, Taxes, Licenses and Fees | 14,162 | 13,049 |
Life Insurance Operations | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Deferred Policy Acquisition Cost | 4,227 | 4,416 |
Supplementary Insurance Information, Future Policy Benefits | 38,315 | 37,474 |
Supplementary Insurance Information, Unearned Premiums | 10 | 10 |
Supplementary Insurance Information, Unpaid Losses | 1,053 | 792 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Premium Revenue | 5,864 | 6,019 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Net Investment Income | 2,677 | 2,722 |
Supplementary Insurance Inforamtion, Other Income | 853 | 1,078 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Benefit, Claim, Loss and Settlement Expenses | 5,027 | 5,242 |
Supplementary Insurance Information, Commissions and Amortization of Deferred Policy Acquisition Costs | 1,017 | 1,126 |
Supplementary Insurance Information, General Expenses, Taxes, Licenses and Fees | 2,233 | 2,331 |
P&C Insurance Operations | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Deferred Policy Acquisition Cost | 3,439 | 3,418 |
Supplementary Insurance Information, Future Policy Benefits | 0 | 0 |
Supplementary Insurance Information, Unearned Premiums | 30,545 | 29,989 |
Supplementary Insurance Information, Unpaid Losses | 7,199 | 7,075 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Premium Revenue | 54,019 | 54,837 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Net Investment Income | 1,683 | 1,704 |
Supplementary Insurance Inforamtion, Other Income | 575 | 609 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Benefit, Claim, Loss and Settlement Expenses | 33,979 | 35,735 |
Supplementary Insurance Information, Commissions and Amortization of Deferred Policy Acquisition Costs | 9,871 | 10,026 |
Supplementary Insurance Information, General Expenses, Taxes, Licenses and Fees | 10,801 | 10,409 |
Non-Insurance Operations | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | ||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Premium Revenue | 0 | 0 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Net Investment Income | 56 | 55 |
Supplementary Insurance Inforamtion, Other Income | 1,019 | 1,006 |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information, Benefit, Claim, Loss and Settlement Expenses | 0 | 0 |
Supplementary Insurance Information, Commissions and Amortization of Deferred Policy Acquisition Costs | 0 | 0 |
Supplementary Insurance Information, General Expenses, Taxes, Licenses and Fees | $ 1,128 | $ 309 |
Schedule IV. Reinsurance (Detai
Schedule IV. Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Direct Premiums, Life Insurance in Force | $ 202,663 | $ 203,209 |
Ceded Premiums, Life Insurance in Force | 9,761 | 9,730 |
Assumed Premiums, Life Insurance in Force | 0 | 0 |
Premiums, Net, Life Insurance in Force | $ 192,902 | $ 193,479 |
Life Insurance in Force Premiums, Percentage Assumed to Net | 0.00% | 0.00% |
Direct Premiums Earned | $ 67,001 | $ 67,313 |
Ceded Premiums Earned | 7,118 | 6,457 |
Assumed Premiums Earned | 0 | 0 |
Net premiums earned | $ 59,883 | $ 60,856 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Premium, Percentage Assumed to Net | 0.00% | 0.00% |
Life Insurance Operations | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Direct Premiums Earned | $ 5,941 | $ 6,100 |
Ceded Premiums Earned | 77 | 81 |
Assumed Premiums Earned | 0 | 0 |
Net premiums earned | $ 5,864 | $ 6,019 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Premium, Percentage Assumed to Net | 0.00% | 0.00% |
P&C Insurance Operations | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Direct Premiums Earned | $ 61,060 | $ 61,213 |
Ceded Premiums Earned | 7,041 | 6,376 |
Assumed Premiums Earned | 0 | 0 |
Net premiums earned | $ 54,019 | $ 54,837 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Premium, Percentage Assumed to Net | 0.00% | 0.00% |
Schedule V. Valuation and Qua_2
Schedule V. Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, January 1 Allowance for Doubtful Accounts | $ 5 | $ 4 | $ 4 |
Additions | 4 | 8 | |
Deletions | 3 | 8 | |
Balance, December 31 Allowance for Doubtful Accounts | $ 5 | $ 4 |