Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2013

Insurance [Abstract]

Deferred Policy Acquisition Costs

4. Deferred Policy Acquisition Costs

Deferred policy acquisition costs represent those costs that are incremental and directly related to the successful acquisition of new or renewal of existing insurance contracts. We defer incremental costs that result directly from, and are essential to, the acquisition or renewal of an insurance contract.

We also defer a portion of employee total compensation costs directly related to time spent performing specific acquisition or renewal activities.

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,
	2013		2012
	(In thousands)
Agents’ commissions	$	15,511	$	13,418
Premium taxes		2,526		3,814
Deferred underwriting expenses		1,134		1,187
Total deferred policy acquisition costs	$	19,171	$	18,419

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

	Year Ended December 31,
	2013		2012		2011
	(In thousands)
Balance, beginning of year	$	18,419	$	16,578	$	15,137
Policy acquisition costs deferred		41,278		40,961		36,064
Amortization expense during the year		(40,526)		(39,120)		(34,623)
Balance, end of year	$	19,171	$	18,419	$	16,578