Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 541

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1B
Chunk 541
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 receivable related to the multi-peril crop and crop hail insurance.

Accounts billed directly to the policyholder are provided grace
payment and cancellation notice periods per state insurance regulations.

Direct Auto also provides for agency billing for a portion of their
agents. Accounts billed to agents are due within 60 days of the statement date. The agent is responsible for all past due balances. As
part of its agent appointment, Direct Auto requires a personal guarantee for all balances due to Direct Auto from the principal of the
contracted agency.

Beginning on December 31, 2022, the premium and agents’ receivable
balances are reported net of an allowance for expected credit losses. See Part II, Item 8, Note 2 “Recent Accounting Pronouncements”
for additional information. We recognized $425 of credit losses for these receivables at the time of adoption of CECL. Therefore, there
was no beginning balance of credit losses as of January 1, 2022, and all 2022 activity was the result of adoption. As a result of the
transition from the previous accounting treatment, we did not record a cumulative effect adjustment to retained earnings at the time of
adoption. Given the nature of these receivables, the Company has elected to use a loss-rate method to determine the expected credit losses.
The allowance is based upon the Company’s ongoing review of amounts outstanding and write-offs. Management may also evaluate current
economic conditions and reasonable/supportable forecasts to adjust this calculation as deemed necessary.

58 

Policy Acquisition Costs

We defer our policy acquisition costs, consisting
primarily of commissions, premium taxes, and certain other underwriting costs, reduced by ceding commissions, which vary with and relate
directly to the production of business. We amortize these deferred policy acquisition costs over the period in which we earn the premiums.
The method we follow in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable
value, which gives effect to the premium to be earned, related investment income, losses and loss adjustment expenses, and certain other
costs we expect to incur as we earn the premium.

Property and Equipment

We report property and equipment at cost less
accumulated depreciation. Depreciation is typically computed using the straight-line method based upon estimated useful lives of the assets.

Losses and Loss Adjustment Expenses

Liabilities for unpaid losses and loss adjustment expenses are estimates
at a given point in time of the amounts we expect to pay with respect to policyholder claims