Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 935

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 2
Chunk 935
---
40 

Investments

Our fixed income securities and equity securities are classified
as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or a recognized
independent pricing service at the reporting date for those or similar investments. Changes in unrealized investment gains or losses on
the fixed income securities, net of applicable income taxes, are reflected directly in shareholders’ equity as a component of other
comprehensive income (loss) and, accordingly, have no effect on net income (loss). Changes in unrealized investment gains or losses on
equity securities are reported in net income (loss). Investment income from fixed income securities is recognized when earned, and realized
investment gains (losses) are recognized when investments are sold, the fair value of equity securities change, or credit impairments
are recognized.

For additional information on our investments,
see Part II, Item 8, Note 4 “Investments” and Note 5 “Fair Value Measurements.”

Deferred Policy Acquisition Costs

Certain direct policy acquisition costs consisting of commissions,
state premium taxes, and other direct underwriting expenses that vary with and are primarily related to the production of business are
deferred and amortized over the effective period of the related insurance policies as the underlying policy premiums are earned.

At December 31, 2024 and 2023, deferred policy
acquisition costs (“DAC”) and the related liability for unearned premiums were as follows:

    December 31, 

    2024  
    2023 
  
    Deferred policy acquisition costs 
    $26,300  
    $26,790 
  
    Liability for unearned premiums 
     126,498  
     126,100 

The method followed in computing DAC limits the
amount of 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 expected to be incurred as the premium is earned. Future changes in estimates,
the most significant of which is expected losses and loss adjustment expenses, may require adjustments to DAC. If the estimation of net
realizable value indicates that DAC are not recoverable, they would be written off or a premium deficiency reserve would be established.

Income Taxes

Current income taxes represent amounts paid or
owed to the federal government and certain states whose payment is based upon net income (subject to regulatory adjustments) generated
by the Company. The generation of net losses may result in income