Variable Interest Entity

9 Months Ended

Sep. 30, 2015

(5)	Variable Interest Entity

Our consolidated financial statements include Monarch Delaware because we have determined Monarch Delaware is a VIE, we have a variable interest in Monarch Delaware and we are the primary beneficiary. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. The primary beneficiary of a VIE is defined as the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. On an ongoing basis, we assess whether we are the primary beneficiary of VIEs in which we have a relationship.

The carrying amount of our VIE consolidated assets and liabilities are as follows.

	September 30, 2015			December 31, 2014
ASSETS	(Dollars in Thousands)
Investments
Debt maturities, held to maturity, at amortized cost	$	21,877		$	-
Equity securities, available for sale, at fair value		1,350			-

Total investments		23,227			-

Cash and short term investments		13,492			-
Premiums receivable, net		326			-
Deferred policy acquisition costs		168			-
Deferred income taxes, net		665			-
Other assets		178			-

Total assets	$	38,056		$	-

LIABILITIES AND SHAREHOLDERS' EQUITY
Unpaid losses and LAE	$	112		$	-
Unearned premiums		1,072			-
Income taxes payable		110			-
Accounts payable and accrued expenses		249			-
Debt		5,000			-

Total liabilities	$	6,543		$	-

Shareholders' equity:
Common stock, $0.01 par value. Issued and outstanding 100 shares		-			-
Additional paid-in capital		32,413			-
Accumulated other comprehensive income
Unrealized net gains on investments, available for sale		(234	)		-
Total accumulated other comprehensive income		(234	)		-
Retained earnings		(666	)		-
Total shareholders' equity		31,513			-
Total liabilities and shareholders' equity	$	38,056		$	-