Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 966

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 2
Chunk 966
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 the
contracted agency.

Beginning on December 31, 2022, the premium and agents’ receivable
balances are reported net of an allowance for expected credit losses. See Part II, Item 8, Note 2 “Recent Accounting Pronouncements”
for additional information. We recognized $425 of credit losses for these receivables at the time of adoption of CECL. Therefore, there
was no beginning balance of credit losses as of January 1, 2022, and all 2022 activity was the result of adoption. As a result of the
transition from the previous accounting treatment, we did not record a cumulative effect adjustment to retained earnings at the time of
adoption. Given the nature of these receivables, the Company has elected to use a loss-rate method to determine the expected credit losses.
The allowance is based upon the Company’s ongoing review of amounts outstanding and write-offs. Management may also evaluate current
economic conditions and reasonable/supportable forecasts to adjust this calculation as deemed necessary.

58 

Policy Acquisition Costs

We defer our policy acquisition costs, consisting
primarily of commissions, premium taxes, and certain other underwriting costs, reduced by ceding commissions, which vary with and relate
directly to the production of business. We amortize these deferred policy acquisition costs over the period in which we earn the premiums.
The method we follow in computing deferred policy acquisition costs limits the amount of such 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 we expect to incur as we earn the premium.

Property and Equipment

We report property and equipment at cost less
accumulated depreciation. Depreciation is typically computed using the straight-line method based upon estimated useful lives of the assets.

Losses and Loss Adjustment Expenses

Liabilities for unpaid losses and loss adjustment expenses are estimates
at a given point in time of the amounts we expect to pay with respect to policyholder claims based on facts and circumstances then known.
At the time of establishing our estimates, we recognize that our ultimate liability for losses and loss adjustment expenses may differ
from these estimates. We base our estimates of liabilities for unpaid losses and loss adjustment expenses on assumptions as to future
loss trends, expected claims severity, judicial theories of liability, and other factors. During the loss adjustment period, we may learn
additional facts regarding certain claims, and, consequently, it often becomes necessary for us to refine and adjust