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Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2014

Schedule Of Assumptions Used To Determine Fair Value

The following table summarizes some key assumptions the service used to determine fair value as of March 31, 2014 and December 31, 2013:



	2014	2013
Cumulative probability of earning maximum rate until maturity	—%	—%
Cumulative probability of principal returned prior to maturity	95.5%	95.6%
Cumulative probability of default at some future point	4.5%	4.4%

Schedule Of Fair Value Assets Measured On Recurring Basis

The following table presents, by level, the financial assets carried at fair value measured on a recurring basis as of March 31, 2014 and December 31, 2013. The table does not include cash on hand and also does not include assets which are measured at historical cost or any basis other than fair value. Level 3 assets are comprised solely of ARS.



As of March 31, 2014	Level 1		Level 2		Level 3		Total
Short-term Investments	$	8,941,000	$	—	$	—	$	8,941,000
Equity Securities
Common stock and nonredeemable preferred stock	36,286,771		—		—		36,286,771
Fixed Maturities
Obligations of states and political subdivisions*	—		70,915,065		—		70,915,065
Corporate debt securities*	—		19,011,098		933,400		19,944,498
Total	$	45,227,771	$	89,926,163	$	933,400	$	136,087,334



As of December 31, 2013	Level 1		Level 2		Level 3		Total
Short-term Investments	$	7,926,373	$	—	$	—	$	7,926,373
Equity Securities
Common stock and nonredeemable preferred stock	36,144,065		—		—		36,144,065
Fixed Maturities
Obligations of states and political subdivisions*	—		72,091,721		—		72,091,721
Corporate debt securities*	—		18,417,992		935,700		19,353,692
Total	$	44,070,438	$	90,509,713	$	935,700	$	135,515,851

*Denotes fair market value obtained from pricing services.

Schedule Of Carrying Value And Fair Value Of Financial Assets Disclosed

The carrying amounts and fair values of these financial instruments (please note investments are disclosed in a previous table) as of March 31, 2014 and December 31, 2013 are presented in the following table:



As of March 31, 2014	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash	$	20,592,694	$	20,592,694	$	20,592,694	$	—	$	—
Cost-basis investments	2,268,417		2,478,305		—		—		2,478,305
Accrued dividends and interest	1,124,075		1,124,075		1,124,075		—		—
Total Financial Assets	$	23,985,186	$	24,195,074	$	21,716,769	$	—	$	2,478,305
Financial Liabilities
Contingent consideration	$	341,250	$	341,250	$	—	$	—	$	341,250
Total Financial Liabilities	$	341,250	$	341,250	$	—	$	—	$	341,250



As of December 31, 2013	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash	$	23,626,761	$	23,626,761	$	23,626,761	$	—	$	—
Cost-basis investments	1,927,429		2,069,302		—		—		2,069,302
Accrued dividends and interest	1,006,698		1,006,698		1,006,698		—		—
Total Financial Assets	$	26,560,888	$	26,702,761	$	24,633,459	$	—	$	2,069,302
Financial Liabilities
Contingent consideration	$	341,250	$	341,250	$	—	$	—	$	341,250
Total Financial Liabilities	$	341,250	$	341,250	$	—	$	—	$	341,250

Schedule Of Fair Value Assets Measured At Unobservable Inputs Reconciliation

The following table presents a reconciliation of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3), which are all ARS securities, for the period ended March 31, 2014 and the year ended December 31, 2013:



Changes in fair value during the period ended:	2014			2013
Beginning balance at January 1	$	935,700		$	932,200
Redemptions and sales	—			—
Realized gain – included in net realized gain on investments	—			—
Unrealized (loss) gain - included in other comprehensive income	(2,300		)	3,500
Ending balance, net	$	933,400		$	935,700

Reconciliation Of Liabilities Measured At Fair Value On A Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table presents a reconciliation of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), consisting solely of contingent acquisition consideration, for the period ended March 31, 2014 and the year ended December 31, 2013:



Changes in fair value during the period ended:	2014		2013
Beginning balance at January 1	$	341,250	$	691,250
Addition of contingent consideration	—		—
Payment for contingent consideration	—		(350,000		)
Ending balance, net	$	341,250	$	341,250

Schedule Of Estimated Fair Value Hierarchy Of Investments And Related Impairments Recognized

The following table summarizes the corresponding estimated fair value hierarchy of such investments at March 31, 2014 and December 31, 2013 and the related impairments recognized:



As of March 31, 2014	Valuation Method	Impaired	Level 1		Level 2		Level 3		Total at Estimated Fair Value		Impairment Losses
Cost method investments	Fair Value	Yes	$	—	$	—	$	22,682	$	22,682	$	(10,062	)
Total cost method investments			$	—	$	—	$	22,682	$	22,682	$	(10,062	)



As of December 31, 2013	Valuation Method	Impaired	Level 1		Level 2		Level 3		Total at Estimated Fair Value		Impairment Losses
Cost method investments	Fair Value	Yes	$	—	$	—	$	32,744	$	32,744	$	(34,070	)
Total cost method investments			$	—	$	—	$	32,744	$	32,744	$	(34,070	)

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details