Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 511

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1B
Chunk 511
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 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 discounting, net unrealized
investment losses, and net operating loss carryforwards. A valuation allowance is required to be established for any portion of the deferred
income tax asset for which we believe it is more likely than not that it will not be realized. A valuation allowance of $2,506 and $505 was
maintained at December 31, 2024, and December 31, 2023, respectively.

We had gross deferred income tax liabilities of $6,116 at December
31, 2024, and $9,254 at December 31, 2023, arising primarily from deferred policy acquisition costs and other intangible assets.

We exercise significant judgment in evaluating
the amount and timing of recognition of the resulting income tax liabilities and assets. These judgments require us to make projections
of future taxable income. The judgments and estimates we make in determining our deferred income tax assets, which are inherently subjective,
are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require
us to record a valuation allowance against our deferred income tax assets.

As of December 31, 2024, we had no material unrecognized