Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Provision for Income Tax (Benefit) Expense

Our provision for income tax (benefit) expense for 2022, 2021 and 2020 consisted of the following:

	2022			2021		2020
Current federal income tax	$	1,280,041		$	3,998,431	$	10,450,803
Deferred federal income tax		(2,958,735	)		1,085,903		6,448
Income tax (benefit) expense	$	(1,678,694	)	$	5,084,334	$	10,457,251

Reconciliation of Federal Income Tax Rate

Our effective tax rate is different from the amount computed at the statutory federal rate of 21%. The reasons for such difference and the related tax effects are as follows:

	2022			2021			2020
(Loss) income before income tax (benefit) expense	$	(3,638,099	)	$	30,338,508		$	63,272,503
Computed “expected” taxes		(764,001	)		6,371,087			13,287,226
Tax-exempt interest		(1,446,102	)		(1,491,154	)		(1,468,806	)
Proration		384,944			401,717			395,663
Dividends received deduction		(93,675	)		(115,713	)		(113,845	)
Net operating loss carryback		—			—			(1,640,084	)
Tax benefit on exercise of options		(360,452	)		(438,850	)		(302,901	)
Other, net		600,592			357,247			299,998
Income tax (benefit)  expense	$	(1,678,694	)	$	5,084,334		$	10,457,251

Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 are as follows:

	2022			2021
Deferred tax assets:
Unearned premium	$	17,560,126		$	16,674,502
Loss reserves		9,712,582			9,568,677
Net unrealized losses		11,088,307			—
Net operating loss carryforward		—			25,174
Net state operating loss carryforward - DGI Parent		8,068,185			7,865,563
Other		1,472,110			1,859,687
Total gross deferred tax assets		47,901,310			35,993,603
Less valuation allowance		(8,068,185	)		(7,865,563	)
Net deferred tax assets		39,833,125			28,128,040
Deferred tax liabilities:
Deferred policy acquisition costs		15,365,749			14,285,958
Loss reserve transition adjustment		856,267			1,148,529
Other		2,008,092			6,007,934
Total gross deferred tax liabilities		18,230,108			21,442,421
Net deferred tax asset	$	21,603,017		$	6,685,619