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Fair Value of Financial Instruments and Real Estate

12 Months Ended

Dec. 31, 2023

Fair Value of Financial Instruments and Real Estate

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, 2023 and 2022 are as follows:

		December 31, 2023								December 31, 2022
		Carrying Value				Fair Value				Carrying Value				Fair Value

Fixed-maturity securities-held-to maturity, Level 1		$	7,052,541			$	6,106,148			$	7,766,140			$	6,600,388
Cash and cash equivalents, Level 1		$	8,976,998			$	8,976,998			$	11,958,228			$	11,958,228
Premiums receivable, net, Level 1		$	13,604,808			$	13,604,808			$	13,880,504			$	13,880,504
Reinsurance receivables, net, Level 3		$	75,593,912			$	75,593,912			$	66,465,061			$	66,465,061
Real estate, net of accumulated depreciation, Level 3 (1)		$	1,992,529			$	3,540,000			$	2,050,644			$	2,800,000
Reinsurance balances payable, Level 3		$	12,837,140			$	12,837,140			$	13,061,966			$	13,061,966

(1)

Real estate consists of a complex which includes an office building, a house and vacant land located in Kingston, New York. The $740,000 increase in fair value of real estate is due to favorable rezoning of the properties in late 2023.