Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1182

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 3
Chunk 1182
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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 reinsurance contracts known as treaties or through facultative contracts placed on substantial individual
risks. Ceded reinsurance is treated as the risk and liability of the assuming companies.

The ceding of insurance does not legally discharge
us from primary liability under our policies, and we must pay the loss if the reinsurer fails to meet its obligation.

Amounts recoverable from reinsurers are estimated
in a manner consistent with the associated claim liability. Beginning on December 31, 2022, credit losses are recognized through an allowance
account developed using the CECL model. See Part II, Item 8, Note 2 “Recent Accounting Pronouncements” for additional information.
The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer
credit standing, disputes, applicable coverage defenses and other relevant factors. Management has concluded that it is not necessary
to record an allowance for expected credit losses related to reinsurance recoverables. All of our significant reinsurance partners are
rated “A-” (Excellent) or better by AM Best, and there is no history of write-offs.

Goodwill and Other Intangibles

Goodwill assets arise from business combinations and consist of
the excess of the fair value of consideration paid over the tangible and intangible assets acquired and liabilities assumed. We evaluate
goodwill and other intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate
that it is more likely than not that the carrying amount of goodwill and other intangible assets may exceed their fair value.

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When performing our goodwill impairment analyses, we typically first
assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying
amount. In making our assessment, we evaluate a number of factors including operating results, key changes in the reporting unit, business
plans, macroeconomic conditions, and industry considerations. Inherent uncertainties exist with respect to these factors and to our judgment
in applying them when we make our assessment