Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1606

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 5
Chunk 1606
---
 any change to a previously recorded valuation
allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from
continuing operations.

The Company has elected to reclassify any tax effects stranded in
accumulated other comprehensive income as a result of a change in income tax rates to retained earnings.

Earnings Per Share

Earnings per share are computed by dividing net income available
to common shareholders for the period by the weighted average number of common shares outstanding for the same period. Unearned shares
related to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants. Unearned
shares related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are
not considered outstanding until they are earned by award participants. See Part II, Item 8, Note 12 “Benefit Plans” and Note
18 “Share-Based Compensation.”

Credit Risk

Our primary investment objective is to earn competitive
returns by investing in a diversified portfolio of securities. Our portfolio of fixed income securities and, to a lesser extent, short-term
investments, is subject to credit risk. We define this risk as the potential loss in fair value resulting from adverse changes in the
borrower’s ability to repay the debt. We manage this risk by performing an analysis of prospective investments and through regular
reviews of our portfolio by our management team and investment advisors. We also limit the amount of our total investment portfolio that
we invest in any one security.

Property and liability insurance coverages are
marketed through captive agents in North Dakota and through independent insurance agencies located throughout all other operating areas.
All business, except for the majority of Direct Auto’s business, is billed directly to the policyholders.

We maintain cash balances primarily at one bank,
which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250. During the normal course of business,
balances are maintained above the FDIC insurance limit. The Company maintains short-term investment balances in investment grade money
market accounts that are insured by the Securities Investor Protection Corporation (“SIPC”) up to $500. During the normal
course of business, balances for these accounts are often maintained in excess of the SIPC insurance limit.

Reinsurance

The Company limits the maximum net loss that can
arise from large risks or risks in concentrated areas of exposure by reinsuring (ceding) certain levels of risks to reinsurers, either
on an automatic basis under general re