Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Provision for Income Tax

Our provision for income tax (benefit) expense for 2018, 2017 and 2016 consisted of the following:

	2018			2017			2016
Current	$	(11,296,704	)	$	(2,139,061	)	$	8,496,405
Deferred		(4,179,805	)		7,137,423			2,030,865
Federal income tax (benefit) expense	$	(15,476,509	)	$	4,998,362		$	10,527,270

Reconciliation of Federal Income Tax Rate

The reasons for such difference and the related tax effects are as follows:

	2018			2017			2016
(Loss) income before income taxes	$	(48,236,849	)	$	12,114,462		$	41,328,407
Computed “expected” taxes		(10,129,738	)		4,240,062			14,464,942
Tax-exempt interest		(1,521,090	)		(3,241,530	)		(3,951,926	)
Proration		405,204			518,948			629,697
Effect of tax reform		—			4,752,547			—
Dividends received deduction		(99,726	)		(508,409	)		(691,616	)
Net operating loss carryback		(4,210,523	)		—			—
Tax benefit on exercise of options		(25,938	)		(873,515	)		—
Other, net		105,302			110,259			76,173
Federal income tax (benefit) expense	$	(15,476,509	)	$	4,998,362		$	10,527,270

Schedule of 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, 2018 and 2017 are as follows:

	2018			2017
Deferred tax assets:
Unearned premium	$	15,634,433		$	15,511,854
Loss reserves		7,644,415			4,164,246
Net operating loss carryforward		3,090,010			683,979
Net state operating loss carryforward - DGI Parent		8,070,196			7,713,201
Net unrealized losses		3,782,145			713,549
Other		2,517,791			2,300,595
Total gross deferred tax assets		40,738,990			31,087,424
Less valuation allowance		(8,334,663	)		(7,977,668	)
Net deferred tax assets		32,404,327			23,109,756
Deferred tax liabilities:
Deferred policy acquisition costs		12,729,176			12,660,871
Loss reserve transition adjustment		2,339,068			—
Other		4,266,328			3,320,042
Total gross deferred tax liabilities		19,334,572			15,980,913
Net deferred tax asset	$	13,069,755		$	7,128,843