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Income Taxes | 9 Months Ended
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Sep. 30, 2012
Income Taxes [Abstract] |
Income Taxes |
9. | Income Taxes
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 September 30, |  |  | As of December 31, |
|  | 2012 |  |  | 2011 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Unearned premiums |  | $ | 12,330 |  |  | $ | 9,007 |
Advanced premiums |  |  | 1,392 |  |  |  | 1,451 |
Unpaid losses and LAE |  |  | 3,249 |  |  |  | 3,139 |
Stock-based compensation |  |  | 2,845 |  |  |  | 4,341 |
Accrued wages |  |  | 909 |  |  |  | 958 |
Allowance for uncollectible receivables |  |  | 193 |  |  |  | 276 |
Additional tax basis of securities |  |  | 225 |  |  |  | 2,407 |
Unrealized losses on investments |  |  | 1,993 |  |  |  | 6,425 |
Total deferred income tax assets |  |  | 23,136 |  |  |  | 28,004 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Deferred policy acquisition costs, net |  |  | (6,951 | ) |  |  | (5,013 | )
Total deferred income tax liabilities |  |  | (6,951 | ) |  |  | (5,013 | )
Net deferred income tax asset |  | $ | 16,185 |  |  | $ | 22,991 |
A valuation allowance is deemed unnecessary as of September 30, 2012 and December 31, 2011, because management believes it is probable that the Company will generate taxable income sufficient to realize the tax benefits associated with the net deferred income tax asset shown above in the near future. Tax years that remain open for purposes of examination of the Company’s income tax liability by taxing authorities include the years ended December 31, 2011, 2010 and 2009. The Company’s 2009 consolidated federal income tax return is currently under examination by the Internal Revenue Service. The following table reconciles the statutory federal income tax rate to the Company’s effective tax rate for the periods presented:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
Statutory federal income tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Increases (decreases) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Disallowed meals & entertainment |  |  | 0.5 | % |  |  | 1.3 | % |  |  | 0.3 | % |  |  | 0.1 | %
Disallowed compensation |  |  | 3.5 | % |  |  | 25.4 | % |  |  | 1.5 | % |  |  | 2.0 | %
True-up to prior year tax returns |  |  | -1.7 | % |  |  | -43.2 | % |  |  | -0.4 | % |  |  | -1.3 | %
State income tax, net of federal tax benefit (1) |  |  | 3.6 | % |  |  | 3.6 | % |  |  | 3.6 | % |  |  | 3.6 | %
Other, net |  |  | — |  |  |  | -0.5 | % |  |  | — |  |  |  | 0.6 | %
Effective tax rate |  |  | 40.9 | % |  |  | 21.6 | % |  |  | 40.0 | % |  |  | 40.0 | %
(1) | Included in income tax is State of Florida income tax at a statutory tax rate of 5.5%.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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