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Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2012

Deferred Policy Acquisition Costs [Abstract]

4.	Deferred Policy Acquisition Costs

The Company incurs certain costs related to acquiring policies. These costs are deferred and expensed over the life of the related policies. Major categories of the Company’s deferred policy acquisition costs are summarized as follows:


	December 31,
	2012		2011
			(As Adjusted)
	(In thousands)
Agents’ commissions	$	13,418	$	11,745
Premium taxes		3,814		3,569
Deferred underwriting expenses		1,187		1,264

Total deferred policy acquisition costs	$	18,419	$	16,578

The following summarizes the activity in the deferred policy acquisition costs:


	Year Ended December 31,
	2012			2011			2010
				(As Adjusted)			(As Adjusted)
	(In thousands)
Balance, beginning of year	$	16,578		$	15,137		$	15,997
Policy acquisition costs deferred		40,961			36,064			28,223
Amortization expense during the year		(39,120	)		(34,623	)		(29,083	)

Balance, end of year	$	18,419		$	16,578		$	15,137

- Definition

Disclosure of accounting policy for capitalizing costs incurred to write or acquire insurance contracts, the basis for and methodology for capitalizing such costs, the accounting for such deferred acquisition costs (DAC) when modifications or internal replacements of related insurance contracts occur and the effect on results of operations, and the methodology and amount of amortization. This disclosure addresses the nature, type, and amount of capitalized costs incurred to write or acquire insurance contracts.

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