Acquisition (Tables)

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Summary of Purchase Price and Purchase Price Allocation

The following table summarizes the consideration paid for WAIC and the preliminary allocation of the purchase price.

	January 2, 2015
	(Amounts in thousands)
Consideration
Cash	$	8,000
Less: Amount held in escrow	2,000
Fair value of total consideration transferred	$	6,000
Acquisition-related costs	$	231
Recognized amounts of identifiable assets acquired and liabilities assumed
Total assets	$	31,078
Total liabilities	(26,478		)
Total identifiable net assets	4,600
Intangible asset - state insurance license	1,400
Total	$	6,000

Schedule of Pro Forma Information

Pursuant to an October 22, 2014 Stock Purchase Agreement, the Company purchased all the issued and outstanding shares of WAIC, a California domiciled property and casualty insurance company, on January 2, 2015. The Company paid $8 million in cash for the shares of WAIC, of which $2 million has been withheld in escrow for up to three years as security for any loss development on claims incurred on or prior to June 30, 2014. Based on its most recent evaluation of the claims reserves for WAIC for loss incurred on or prior to June 30, 2014, the Company estimates that it will recover the $2 million held in escrow and, therefore, the Company has deducted it from cash consideration to arrive at the fair value of total consideration transferred. In accordance with requirements to obtain regulatory approval, the Company made a $15 million cash capital contribution to WAIC on January 12, 2015.

The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based upon estimates of their fair values at the acquisition date. The following table summarizes the consideration paid for WAIC and the preliminary allocation of the purchase price.

	January 2, 2015
	(Amounts in thousands)
Consideration
Cash	$	8,000
Less: Amount held in escrow	2,000
Fair value of total consideration transferred	$	6,000
Acquisition-related costs	$	231
Recognized amounts of identifiable assets acquired and liabilities assumed
Total assets	$	31,078
Total liabilities	(26,478		)
Total identifiable net assets	4,600
Intangible asset - state insurance license	1,400
Total	$	6,000

The intangible asset has an indefinite life. See Note 7 for further discussion.

The fair value of the total assets acquired includes cash, investments, receivables, deferred taxes, other assets, and fixed assets. The fair value of the total liabilities assumed includes loss and loss adjustment expenses, unearned premiums, accounts payable, and other accrued liabilities.

The following table reflects the amount of revenue and net income of WAIC included in the Company's consolidated statement of operations for the three-month period ended March 31, 2015.

	Three Months ended March 31, 2015
	(Amounts in thousands)
WAIC
Revenue (1)	$	6,863
Net loss	(2,014		)

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1. Includes net premiums earned, net investment income, and net realized investment gains/losses.