Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2016

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 the 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,
	2016		2015
	(in thousands)
Agents’ commissions	$	15,286	$	15,997
Premium taxes		2,578		3,121
Deferred underwriting expenses		1,436		1,294
Total deferred policy acquisition costs	$	19,300	$	20,412

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

	Year Ended December 31,
	2016			2015			2014
	(in thousands)
Balance, beginning of year	$	20,412		$	19,649		$	19,171
Policy acquisition costs deferred		43,209			45,604			44,295
Amortization expense during the year		(44,321	)		(44,841	)		(43,817	)
Balance, end of year	$	19,300		$	20,412		$	19,649