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Investments

12 Months Ended

Dec. 31, 2023

Note 3 - Investments

Fixed-Maturity Securities

The amortized cost, estimated fair value, and unrealized gains and losses on investments in fixed-maturity securities classified as available-for-sale as of December 31, 2023 and 2022 are summarized as follows:

	December 31, 2023

	Cost or		Gross		Gross Unrealized Losses						Estimated		Net
	Amortized		Unrealized		Less than			More than			Fair		Unrealized
Category	Cost		Gains		12 Months			12 Months			Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies (1)	$	20,954,764	$	1,799	$	(17,373	)	$	-		$	20,939,190	$	(15,574	)

Political subdivisions of States,
Territories and Possessions		16,607,713		-		-			(3,209,161	)		13,398,552		(3,209,161	)

Corporate and other bonds
Industrial and miscellaneous		75,993,042		-		-			(5,885,296	)		70,107,746		(5,885,296	)

Residential mortgage and other asset
backed securities (2)		50,905,423		113,761		(2,144	)		(6,541,731	)		44,475,309		(6,430,114	)
Total fixed-maturity securities	$	164,460,942	$	115,560	$	(19,517	)	$	(15,636,188	)	$	148,920,797	$	(15,540,145	)

	December 31, 2022

	Cost or		Gross		Gross Unrealized Losses						Estimated		Net
	Amortized		Unrealized		Less than			More than			Fair		Unrealized
Category	Cost		Gains		12 Months			12 Months			Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies (1)	$	23,874,545	$	1,479	$	(6,928	)	$	-		$	23,869,096	$	(5,449	)

Political subdivisions of States,
Territories and Possessions		17,108,154		-		(2,195,273	)		(1,771,494	)		13,141,387		(3,966,767	)

Corporate and other bonds
Industrial and miscellaneous		80,338,464		-		(5,796,994	)		(2,458,985	)		72,082,485		(8,255,979	)

Residential mortgage and other asset
backed securities (2)		53,597,264		58,398		(882,664	)		(7,150,803	)		45,622,195		(7,975,069	)
Total fixed-maturity securities	$	174,918,427	$	59,877	$	(8,881,859	)	$	(11,381,282	)	$	154,715,163	$	(20,203,264	)

	(1)	In October 2022, KICO placed certain U.S. Treasury securities to fulfill the required collateral for a sale leaseback transaction in a designated custodian account (see Note 9 – Debt - “Equipment Financing”). As of December 31, 2023 and 2022, the amount of required collateral was approximately $6,999,000 and $8,691,000, respectively. As of December 31, 2023 and 2022, the estimated fair value of the eligible collateral was approximately $6,999,000 and $8,691,000, respectively.

	(2)	KICO has placed certain residential mortgage backed securities as eligible collateral in a designated custodian account related to its membership in the Federal Home Loan Bank of New York ("FHLBNY") (see Note 9 – Debt – “Federal Home Loan Bank”). The eligible collateral would be pledged to FHLBNY if KICO draws an advance from the FHLBNY credit line. As of December 31, 2023, the estimated fair value of the eligible investments was approximately $11,412,000. KICO will retain all rights regarding all securities if pledged as collateral. As of December 31, 2023 and 2022 there was no outstanding balance on the FHLBNY credit line.

A summary of the amortized cost and estimated fair value of the Company’s investments in available-for-sale fixed-maturity securities by contractual maturity as of December 31, 2023 and 2022 is shown below:

	December 31, 2023				December 31, 2022
	Amortized		Estimated		Amortized		Estimated
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	34,729,120	$	34,461,172	$	16,359,100	$	16,307,991
One to five years		31,803,338		30,416,618		18,605,987		14,085,113
Five to ten years		31,596,410		27,330,377		54,559,158		52,230,283
More than 10 years		15,426,651		12,237,321		31,796,918		26,469,581
Residential mortgage and other asset backed securities		50,905,423		44,475,309		53,597,264		45,622,195
Total	$	164,460,942	$	148,920,797	$	174,918,427	$	154,715,163

The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

Equity Securities

The cost and estimated fair value of, and gross unrealized gains and losses on, investments in equity securities as of December 31, 2023 and 2022 are as follows:

	December 31, 2023
			Gross		Gross			Estimated
Category	Cost		Gains		Losses			Fair Value

Equity Securities:
Preferred stocks	$	13,583,942	$	-	$	(2,870,027	)	$	10,713,915
Fixed income exchange traded funds		3,711,232				(669,232	)		3,042,000
Mutual Funds		622,209		314,816		-			937,025
FHLBNY common stock		69,400		-		-			69,400
Total	$	17,986,783	$	314,816	$	(3,539,259	)	$	14,762,340

	December 31, 2022
			Gross		Gross			Estimated
Category	Cost		Gains		Losses			Fair Value

Equity Securities:
Preferred stocks	$	13,583,942	$	-	$	(3,589,313	)	$	9,994,629
Fixed income exchange traded funds,		3,711,232				(821,632	)		2,889,600
Mutual funds		716,626		158,635		-			875,261
FHLBNY common stock		74,900		-		-			74,900
Total	$	18,086,700	$	158,635	$	(4,410,945	)	$	13,834,390

Other Investments

The cost and estimated fair value of, and gross unrealized gains on, the Company’s other investments as of December 31, 2023 and 2022 are as follows:

	December 31, 2023						December 31, 2022
			Gross		Estimated				Gross		Estimated
Category	Cost		Gains		Fair Value		Cost		Gains		Fair Value

Other Investments:
Hedge fund	$	1,987,040	$	1,910,110	$	3,897,150	$	1,987,040	$	784,612	$	2,771,652

Held-to-Maturity Securities

The cost or amortized cost and estimated fair value of, and gross unrealized gains and losses on, investments in held-to-maturity fixed-maturity securities as of December 31, 2023 and 2022 are summarized as follows:

	December 31, 2023
													Net
	Cost or		Gross		Gross Unrealized Losses						Estimated		Unrealized
	Amortized		Unrealized		Less than			More than			Fair		Gains/
Category	Cost		Gains		12 Months			12 Months			Value		(Losses)

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,228,860	$	15,045	$	(6,914	)	$	(18,163	)	$	1,218,828	$	(10,032	)

Political subdivisions of States,
Territories and Possessions		499,170		890		-			-			500,060		890

Exchange traded debt		304,111		-		-			(70,111	)		234,000		(70,111	)

Corporate and other bonds
Industrial and miscellaneous		5,020,400		-		-			(867,140	)		4,153,260		(867,140	)
Total	$	7,052,541	$	15,935	$	(6,914	)	$	(955,414	)	$	6,106,148	$	(946,393	)

	December 31, 2022
													Net
	Cost or		Gross		Gross Unrealized Losses						Estimated		Unrealized
	Amortized		Unrealized		Less than			More than			Fair		Gains/
Category	Cost		Gains		12 Months			12 Months			Value		(Losses)

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,228,560	$	28,400	$	(34,077	)	$	-		$	1,222,883	$	(5,677	)

Political subdivisions of States,
Territories and Possessions		498,638		2,092		-			-			500,730		2,092

Exchange traded debt		304,111		-		(29,111	)		-			275,000		(29,111	)

Corporate and other bonds
Industrial and miscellaneous		5,734,831		36,968		(809,746	)		(360,278	)		4,601,775		(1,133,056	)
Total	$	7,766,140	$	67,460	$	(872,934	)	$	(360,278	)	$	6,600,388	$	(1,165,752	)

Held-to-maturity U.S. Treasury securities are held in trust pursuant to various states’ minimum fund requirements.

A summary of the amortized cost and the estimated fair value of the Company’s investments in held-to-maturity securities by contractual maturity as of December 31, 2023 and 2022 is shown below:

	December 31, 2023				December 31, 2022
	Amortized		Estimated		Amortized		Estimated
Remaining Time to Maturity	Cost		Fair Value		Cost		Fair Value

Less than one year	$	-	$	-	$	708,535	$	743,575
One to five years		1,121,288		1,097,101		1,120,507		1,088,522
Five to ten years		1,414,911		1,270,770		1,402,704		1,200,720
More than 10 years		4,516,342		3,738,277		4,534,394		3,567,571
Total	$	7,052,541	$	6,106,148	$	7,766,140	$	6,600,388

The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

Investment Income

Major categories of the Company’s net investment income are summarized as follows:

	Years ended
	December 31,
	2023		2022

Income:
Fixed-maturity securities	$	5,352,304	$	4,211,229
Equity securities		707,835		1,058,351
Cash and cash equivalents		255,905		63,683
Total		6,316,044		5,333,263
Expenses:
Investment expenses		307,362		396,485
Net investment income	$	6,008,682	$	4,936,778

Proceeds from the redemption of fixed-maturity securities held-to-maturity were $750,000 and $1,000,000 for the years ended December 31, 2023 and 2022, respectively.

Proceeds from the sale and maturity of fixed-maturity securities available-for-sale were $61,935,658 and $25,606,590 for the years ended December 31, 2023 and 2022, respectively.

Proceeds from the sale of equity securities were $99,917 and $19,379,047 for the years ended December 31, 2023 and 2022, respectively.

The Company’s net gains (losses) on investments for the years ended December 31, 2023 and 2022 are summarized as follows:

	Years ended
	December 31,
	2023			2022
Realized Gains (Losses)

Fixed-maturity securities:
Gross realized gains	$	2,428		$	143,622
Gross realized losses		(21,239	)		(208,955	)
		(18,811	)		(65,333	)

Equity securities:
Gross realized gains		-			1,384,432
Gross realized losses		-			(2,048,395	)
		-			(663,963	)

Other Investments:
Gross realized gains		-			589,233
Gross realized losses		-			-
		-			589,233

Net realized losses		(18,811	)		(140,063	)

Unrealized (Losses) Gains

Equity Securities:
Gross gains		1,027,867			-
Gross losses		-			(6,494,380	)
		1,027,867			(6,494,380	)

Other Investments:
Gross gains		1,125,498			-
Gross losses		-			(2,757,422	)
		1,125,498			(2,757,422	)

Net unrealized gains (losses)		2,153,365			(9,251,802	)

Net gains (losses) on investments	$	2,134,554		$	(9,391,865	)

Allowance for Credit Losses

At December 31, 2023 and 2022, there were 140 and 155 fixed-maturity securities, respectively, that accounted for the gross unrealized losses. The Company determined that none of the unrealized losses were deemed to be credit losses for its portfolio of investments for the years ended December 31, 2023 and 2022. Significant factors influencing the Company’s determination that unrealized losses were temporary included credit quality considerations, the magnitude of the unrealized losses in relation to each security’s cost, the nature of the investment and interest rate environment factors, and management’s intent and ability to hold the investment for a period of time sufficient to allow for an anticipated recovery of estimated fair value to the Company’s cost basis.

The Company held available-for-sale securities with unrealized losses representing declines that were considered temporary at December 31, 2023 and 2022 as follows:

	December 31, 2023
	Less than 12 months							12 months or more							Total
	Estimated					No. of		Estimated					No. of		Estimated
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies	$	5,974,440	$	(17,373	)		1	$	-		-			-	$	5,974,440	$	(17,373	)

Political subdivisions of
States, Territories and
Possessions		-		-			-		13,398,552		(3,209,161	)		13		13,398,552		(3,209,161	)

Corporate and other
bonds industrial and
miscellaneous		-		-			-		70,107,746		(5,885,296	)		85		70,107,746		(5,885,296	)

Residential mortgage and
other asset backed securities		88,988		(2,144	)		4		38,675,604		(6,541,731	)		37		38,764,592		(6,543,875	)

Total fixed-maturity
securities	$	6,063,428	$	(19,517	)		5	$	122,181,902	$	(15,636,188	)		135	$	128,245,330	$	(15,655,705	)

	December 31, 2022
	Less than 12 months							12 months or more							Total
	Estimated					No. of		Estimated					No. of		Estimated
	Fair		Unrealized			Positions		Fair		Unrealized			Positions		Fair		Unrealized
Category	Value		Losses			Held		Value		Losses			Held		Value		Losses

Fixed-Maturity Securities:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies	$	18,918,196	$	(6,928	)		3	$	-		-			-	$	18,918,196	$	(6,928	)

Political subdivisions of
States, Territories and
Possessions		7,970,633		(2,195,273	)		9		5,170,753		(1,771,494	)		5		13,141,386		(3,966,767	)

Corporate and other
bonds industrial and
miscellaneous		56,910,104		(5,796,994	)		75		15,172,381		(2,458,985	)		15		72,082,485		(8,255,979	)

Residential mortgage and
other asset backed securities		10,145,880		(882,664	)		22		34,753,178		(7,150,803	)		26		44,899,058		(8,033,467	)

Total fixed-maturity
securities	$	93,944,813	$	(8,881,859	)		109	$	55,096,312	$	(11,381,282	)		46	$	149,041,125	$	(20,263,141	)