INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Deferred Tax Assets and Liabilities

The tax effect of significant differences representing deferred tax assets and liabilities are as follows:



($ in thousands)	As of December 31, 2021		As of December 31, 2020
General expenses	$	1,548	$	1,448
Unearned premiums	1,436		1,313
Claims liabilities	751		698


NOL carryforward	1,459		632
Impairment on real estate owned	147		147


Unrealized loss on interest rate swaps	—		130
Deferred tax assets	5,341		4,368

Unrealized gains on trading securities	—		(3)
Depreciation	(99)		(95)
Deferred policy acquisition costs	(1,540)		(1,555)
Pre-1984 policyholder surplus account	(265)		(331)
Unrealized gains on securities available-for-sale	(537)		(1,083)
Unrealized gains on equity securities	(497)		(595)
Deferred tax liabilities	(2,938)		(3,662)

Net deferred tax asset	$	2,403	$	706

Changes in Temporary Differences in Federal Income Tax

The appropriate income tax effects of changes in temporary differences are as follows:


($ in thousands)	Year ended December 31,
	2021		2020
Deferred policy acquisition costs	$	(15)	$	(55)
Other-than-temporary impairments	—		(28)

Trading securities	(3)		2
Unearned premiums	(123)		(25)
General expenses	(100)		(179)
Depreciation	4		2
Claims liabilities	(53)		(53)


Impact of repeal of special provision on pre-1984 policyholder surplus	(66)		(66)
NOL carryforward	(827)		(632)
Unrealized losses on equity securities	(98)		(72)

Deferred income tax benefit	$	(1,281)	$	(1,106)

Schedule of Effective Income Tax Rate Reconciliation

Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows:


	Year ended December 31,
	2021		2020
Federal income tax rate applied to pre-tax income (loss)	21.0	%	21.0	%
Dividends received deduction and tax-exempt interest	(1.0)	%	0.1	%
Company owned life insurance	(2.2)	%	0.7	%
Rate differential - NOL carryback	(8.1)	%	—	%




Other, net	5.2	%	—	%
Effective federal income tax rate	14.9	%	21.8	%