Company: NODK
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001174947-25-001356
Chunk: 23

Company: NI Holdings, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 establishes a fair value hierarchy that prioritizes
the inputs to valuation methods used to measure fair value. The three levels of the fair value hierarchy are as follows:

    Level 1:
    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

    Level 2:
    Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.  Level 2 includes fixed income securities with quoted prices that are traded less frequently than exchange traded instruments.  Valuation techniques include matrix pricing which is a mathematical technique used widely in the industry to value fixed income securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

    Level 3:
    Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
  
The Company bases its fair values on the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements,
in accordance with the fair value hierarchy. Fair value measurements for assets where there exists limited or no observable market data
and, therefore, are based primarily upon the estimates of the Company or other third-parties, are often calculated based on the characteristics
of the asset, the economic and competitive environment, and other such factors. Management uses its best judgment in estimating the fair
value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for
substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which could have
been realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective
period-end and have not been re-evaluated or updated for purposes of our consolidated financial statements subsequent to those respective
dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different
than the amounts reported at each period-end. Additionally, changes in the underlying assumptions used, including discount rates and estimates
of future cash flows, could significantly affect the results of current or future valuations.

The Company uses quoted values and other data provided by an