Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2018

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 policies.  We defer incremental costs that result directly from, and are essential to, the acquisition or renewal of an insurance policy.

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,
	2018		2017
	(in thousands)
Agents’ commissions	$	14,953	$	15,238
Premium taxes		3,161		3,395
Deferred underwriting expenses		1,620		1,618
Total deferred policy acquisition costs	$	19,734	$	20,251

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

	Year Ended December 31,
	2018			2017			2016
	(in thousands)
Balance, beginning of year	$	20,251		$	19,300		$	20,412
Policy acquisition costs deferred		45,252			43,960			43,209
Amortization expense during the year		(45,769	)		(43,009	)		(44,321	)
Balance, end of year	$	19,734		$	20,251		$	19,300