Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1148

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 3
Chunk 1148
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For additional information on our investments,
see Part II, Item 8, Note 4 “Investments” and Note 5 “Fair Value Measurements.”

Deferred Policy Acquisition Costs

Certain direct policy acquisition costs consisting of commissions,
state premium taxes, and other direct underwriting expenses that vary with and are primarily related to the production of business are
deferred and amortized over the effective period of the related insurance policies as the underlying policy premiums are earned.

At December 31, 2024 and 2023, deferred policy
acquisition costs (“DAC”) and the related liability for unearned premiums were as follows:

    December 31, 

    2024  
    2023 
  
    Deferred policy acquisition costs 
    $26,300  
    $26,790 
  
    Liability for unearned premiums 
     126,498  
     126,100 

The method followed in computing DAC limits the
amount of 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 expected to be incurred as the premium is earned. Future changes in estimates,
the most significant of which is expected losses and loss adjustment expenses, may require adjustments to DAC. If the estimation of net
realizable value indicates that DAC are not recoverable, they would be written off or a premium deficiency reserve would be established.

Income Taxes

Current income taxes represent amounts paid or
owed to the federal government and certain states whose payment is based upon net income (subject to regulatory adjustments) generated
by the Company. The generation of net losses may result in income tax benefits, a portion of which may be in the form of refunds of prior
income taxes paid to taxing authorities. We use the asset and liability method of accounting for deferred income taxes. Deferred income
taxes arise from the recognition of temporary differences between financial statement carrying amounts and the income tax bases of our
assets and liabilities. A valuation allowance is established when it is more likely than not that some portion of the deferred income
tax asset will not be realized. Total income taxes reflect both current income taxes and the change in the net deferred income tax asset
or liability, excluding amounts attributed to accumulated other comprehensive income.

We had gross deferred income tax assets of $15,946
at December 31, 2024, and $18,172 at December 31, 2023, arising primarily from unearned premiums, loss reserve