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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Deferred income tax effects of temporary differences

Deferred income taxes represent the temporary differences between the GAAP and tax basis of the Company’s assets and liabilities. The tax effects of temporary differences are as follows for the periods presented (in thousands):

		As of June 30,				As of December 31,
		2012				2011
Deferred income tax assets:
Unearned premiums		$	12,276			$	9,007
Advanced premiums			1,918				1,451
Unpaid losses and LAE			2,935				3,139
Stock-based compensation			4,377				4,341
Accrued wages			833				958
Allowance for uncollectible receivables			190				276
Additional tax basis of securities			482				2,407
Unrealized losses on investments			5,114				6,425
Total deferred income tax assets			28,125				28,004
Deferred income tax liabilities:
Deferred policy acquisition costs, net			(6,845	)			(5,013	)
Total deferred income tax liabilities			(6,845	)			(5,013	)
Net deferred income tax asset		$	21,280			$	22,991

Reconciles the statutory federal income tax rate to the Company' s effective tax rate

The following table reconciles the statutory federal income tax rate to the Company’s effective tax rate for the periods presented:

		Three Months Ended June  30,								Six Months Ended June  30,
		2012				2011				2012				2011
Statutory federal income tax rate			35.0	%			35.0	%			35.0	%			35.0	%
Increases resulting from:
Disallowed meals & entertainment			0.2	%			0.1	%			0.2	%			0.1	%
Disallowed compensation			1.0	%			2.0	%			0.7	%			1.2	%
State income tax, net of federal tax benefit (1)			3.6	%			3.6	%			3.6	%			3.6	%
Other, net (2)			0.3	%			1.8	%			0.1	%			0.8	%
Effective tax rate			40.1	%			42.5	%			39.6	%			40.7	%

(1) Included in income tax is State of Florida income tax at a statutory tax rate of 5.5%.

(2) Other, net, includes estimated penalties and interest of 1.8% and 0.7% for the three and six months ended June 30, 2011, respectively, regarding an underpayment of estimated taxes in 2011.

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- Definition

Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319

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