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Fair Value of Financial Instruments and Real Estate

12 Months Ended

Dec. 31, 2021

Fair Value of Financial Instruments and Real Estate

5. Fair Value of Financial Instruments and Real Estate

Note 5 - Fair Value of Financial Instruments and Real Estate

The Company uses the following methods and assumptions in estimating the fair value of financial instruments and real estate:

Equity securities, available-for-sale fixed income securities, and other investments: Fair value disclosures for these investments are included in “Note 3 - Investments” and “Note 4 – Fair Value Measurements”.

Cash and cash equivalents: The carrying values of cash and cash equivalents approximate their fair values because of the short-term nature of these instruments.

Premiums receivable and reinsurance receivables: The carrying values reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values due to the short-term nature of the assets.

Real estate: The estimated fair value was based on an appraisal prepared using the sales comparison approach, and accordingly the real estate is a Level 3 asset under the fair value hierarchy.

Reinsurance balances payable: The carrying value reported in the consolidated balance sheets for these financial instruments approximates fair value.

The estimated fair values of the Company’s financial instruments and real estate as of December 31, 2021 and 2020 are as follows:

		December 31, 2021								December 31, 2020
		Carrying				Estimated				Carrying				Estimated
		Value				Fair Value				Value				Fair Value
Fixed-maturity securities-held-to maturity		$	8,266,334			$	8,753,159			$	7,368,815			$	8,194,824
Cash and cash equivalents		$	24,290,598			$	24,290,598			$	19,463,742			$	19,463,742
Premiums receivable, net		$	12,318,336			$	12,318,336			$	11,819,639			$	11,819,639
Reinsurance receivables, net		$	40,292,438			$	40,292,438			$	45,460,729			$	45,460,729
Real estate, net of accumulated depreciation		$	2,144,464			$	2,144,464			$	2,219,999			$	2,705,000
Reinsurance balances payable		$	12,961,568			$	12,961,568			$	6,979,735			$	6,979,735

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- References

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- Definition

Disclosure of accounting policy for determining the fair value of financial instruments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 60
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7493716&loc=d3e21868-110260

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=123594938&loc=d3e13279-108611

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