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INSURANCE OPERATIONS | 6 Months Ended
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Jun. 30, 2025
Insurance [Abstract] |
INSURANCE OPERATIONS | INSURANCE OPERATIONS Deferred Policy Acquisition Costs The Company defers certain costs incurred in connection with acquiring or renewing insurance policies, called Deferred Policy Acquisition Costs (“DPAC”). DPAC is reported as an asset and is amortized over the estimated life of the insurance policies. The following table presents the beginning and ending balances and the changes in DPAC for the periods presented (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
DPAC, beginning of period | $ | 115,830 |  |  | $ | 106,632 |  |  | $ | 121,178 |  |  | $ | 109,985 |
Capitalized Costs | 70,321 |  |  | 66,544 |  |  | 124,428 |  |  | 117,396 |
Amortization of DPAC | (60,930) |  |  | (56,032) |  |  | (120,385) |  |  | (110,237) |
DPAC, end of period | $ | 125,221 |  |  | $ | 117,144 |  |  | $ | 125,221 |  |  | $ | 117,144 |
Regulatory Requirements and Restrictions The Insurance Entities are subject to regulations and standards of the Florida Office of Insurance Regulation (“FLOIR”). The Insurance Entities are also subject to regulations and standards of regulatory authorities in other states where they are licensed, although as Florida-domiciled insurers, their principal regulatory authority is the FLOIR. These standards and regulations include a requirement that the Insurance Entities maintain specified levels of statutory capital and restrict the timing and amount of dividends and other distributions that may be paid by the Insurance Entities to the parent company. Except in the case of extraordinary dividends, these standards generally permit dividends to be paid from statutory unassigned funds of the regulated insurance company subsidiary and are limited based on the subsidiary insurer’s level of statutory net income and statutory capital and surplus. The maximum dividend that may be paid by the Insurance Entities to their immediate parent company, Protection Solutions, Inc. (“PSI”), without prior regulatory approval is limited by the provisions of the Florida Insurance Code. These dividends are referred to as “ordinary dividends.” However, if the dividend, together with other dividends paid within the preceding 12 months, exceeds this statutory limit or is paid from sources other than earned surplus, the entire dividend is generally considered an “extraordinary dividend” and must receive prior regulatory approval. In accordance with Florida Insurance Code and based on the calculations performed by the Company as of June 30, 2025, UPCIC and APPCIC currently are not able to pay any ordinary dividends for the six months ended June 30, 2025. For the six months ended June 30, 2025 and 2024, no dividends were paid from the Insurance Entities to PSI. The Florida Insurance Code requires a residential property insurance company to maintain statutory surplus as to policyholders of at least $15.0 million or ten percent of the insurer’s total liabilities, whichever is greater. The following table presents the amount of capital and surplus calculated in accordance with statutory accounting principles, which differs from GAAP, and an amount representing ten percent of total liabilities for each of the Insurance Entities as of the dates presented (in thousands):
| June 30, 2025 |  | December 31, 2024
Statutory capital and surplus |  |  |
UPCIC | $ | 417,715 |  |  | $ | 385,530 |
APPCIC | $ | 29,195 |  |  | $ | 27,985 |
Ten percent of total liabilities |  |  |
UPCIC | $ | 181,530 |  |  | $ | 161,438 |
APPCIC | $ | 3,077 |  |  | $ | 3,179 |
As of the dates in the table above, the Insurance Entities each exceeded the minimum statutory capitalization requirement. The Insurance Entities also met the capitalization requirements of the other states in which they are licensed as of June 30, 2025. The following table summarizes combined net income (loss) for the Insurance Entities determined in accordance with statutory accounting practices for the periods presented (in thousands):
| Three Months Ended June 30, 2025 |  | Six Months Ended June 30, |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Combined net income (loss) | $ | 55,186 |  |  | $ | 16,982 |  |  | $ | 46,944 |  |  | $ | 14,328 |  |  |  |  |
The Insurance Entities must annually meet NAIC risk-based capital (“RBC”) requirements, which measure the appropriate capital level considering the company's size and risk profile. Regulators use RBC to determine actions for insurers in weak or deteriorating conditions. Based on their annual reports, each Insurance Entity reported a surplus as regards to policyholders that are above the RBC requirements as of December 31, 2024. The Insurance Entities are required by various state laws and regulations to maintain certain assets in depository accounts. The following table represents assets held by insurance regulators as of the dates presented (in thousands):
| June 30, 2025 |  | December 31, 2024
Restricted cash and cash equivalents |  |  |
Florida | $ | 1,800 |  |  | $ | 1,800 |
Georgia | 35 |  |  | 35 |
North Carolina | 800 |  |  | 800 |
Total | $ | 2,635 |  |  | $ | 2,635 |
Investments |  |  |
Hawaii | $ | 2,935 |  |  | $ | 2,853 |
Massachusetts | 130 |  |  | 127 |
South Carolina | 140 |  |  | 137 |
Virginia | 335 |  |  | 328 |
Total | $ | 3,540 |  |  | $ | 3,445 |
In addition, the Company has restricted cash on deposit with its variable interest entity. See “—Note 14 (Variable Interest Entities)” for a discussion of restricted cash held in a trust account.

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