Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 96

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 96
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 of crop insurance, over the period of risk. The portion of premiums
that could be earned in the future is deferred and reported as unearned premiums. When policies lapse, the Company reverses the unearned
portion of the written premium and removes the applicable unearned premium. Policy-related fee income is recognized when collected.

The period of risk for our crop insurance program, which is comprised
of primarily spring-planted crops, typically runs from April 1 (the approximate time when farmers can begin to work their fields) through
December 15 (last date claims can be made for the most recent planting season).

Premiums and Agents’ Balances
Receivable

Premiums and agents’ balances receivable include both direct
and agent billed premiums as well as crop notes receivable related to the multi-peril crop and crop hail insurance.

Accounts billed directly to the policyholder are provided grace
payment and cancellation notice periods per state insurance regulations.

Direct Auto also provides for agency billing for a portion of their
agents. Accounts billed to agents are due within 60 days of the statement date. The agent is responsible for all past due balances. As
part of its agent appointment, Direct Auto requires a personal guarantee for all balances due to Direct Auto from the principal of 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