Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1177

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 3
Chunk 1177
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2023.

Beginning on December 31, 2022, credit losses are recognized through
an allowance account. See Part II, Item 8, Note 2 “Recent Accounting Pronouncements” for additional information. We, along
with our investment advisors, frequently review our investment portfolio for declines in fair value that could be indicative of credit
losses. The available-for-sale impairment model requires an 

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estimate of expected credit losses only when the fair value of the available-for-sale
fixed income security is below its amortized cost basis. The Company considers a number of factors when determining if an allowance for
credit losses is necessary including payment and default history, credit spreads, credit ratings and rating actions, and probability of
default. The Company determines the credit loss component of fixed income securities by utilizing discounted cash flow modeling to determine
the present value of the security and comparing the present value with the amortized cost of the security. If the amortized cost is greater
than the present value of the expected cash flows, the difference is considered a credit loss and recognized as an impairment loss in
net realized investment gains (losses). Credit impairments are recognized as an allowance on the Consolidated Balance Sheet with a corresponding
adjustment to earnings.

For fixed income securities that the Company does not intend to
sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the
Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss
component in net realized investment gains (losses). The impairment related to all other factors (non-credit factors) is reported in other
comprehensive income. The allowance is adjusted for any additional credit losses and subsequent recoveries. Upon recognizing a credit
loss, the cost basis is not adjusted.

For fixed income securities that the Company intends to sell or
for which it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount
of the impairment is included in net investment gains (losses). The new cost basis of the investment is the previous amortized cost basis
less the impairment recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair
value.

The Company reports investment income accrued separately from fixed
income investments, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued. Investment
income accrued is