EDGAR 10-K Filing

Company CIK: 33992
Filing Year: 2025
Filename: 33992_10-K_2025_0000033992-25-000007.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS.
(a)Business Development
General
As used in this Annual Report, references to the “Company,” “we,” “us,” or “our” refer to Kingstone Companies, Inc. (“Kingstone”) and its subsidiaries.
We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2024 and 2023, respectively, 96.0% and 88.3% of KICO’s direct written premiums came from the New York policies. We refer to our New York business as our “Core” business and the business outside of New York as our “non-Core” business.
In addition, through our subsidiary, Cosi Agency, Inc. (“Cosi”), a multi-state licensed general agency, we access alternative distribution channels. See “Distribution” below for a discussion of our distribution channels. Cosi receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. Cosi retains the profit between the commission revenue received and the commission expense paid. Net Cosi revenue is deducted against commission expense and Cosi-related expenses are included in other operating expenses. Cosi-related operating expenses are not included in our stand-alone insurance underwriting business and, accordingly, its expenses are not included in the calculation of our combined ratio as described below.
Recent Developments
Developments During 2024
•Catastrophe Reinsurance Coverage
Effective July 1, 2024, KICO decreased the top limit of its catastrophe reinsurance coverage from $325,000,000 to $280,000,000, which, at the time, equated to more than a 1-in-100 year storm event according to the primary industry catastrophe model that we follow.
•Withdrawal from New Jersey
On October 2, 2023, the New Jersey Department of Banking & Insurance acknowledged KICO’s request to withdraw from the state effective January 1, 2024. The Department requested that KICO complete the withdrawal over a two year period.
•Change of Chairman of the Board
Our long-time Chairman of the Board of Directors, Barry Goldstein, retired on September 10, 2024. Thomas Newgarden, who joined our Board of Directors in 2024, became our Non-Executive Chairman concurrent with Mr. Goldstein's departure.
•Debt Exchange
On August 30, 2024, we entered into a Note Exchange Agreement (the “2024 Exchange Agreement”) with the existing holders (the “2024 Exchanging Noteholders”) of our then outstanding 12.00% Senior Notes due 2024 in the aggregate principal amount of $19,500,000 (the “2022 Notes”).
At the closing of the Exchange Agreement, the Exchanging Noteholders exchanged their respective 2022 Notes for new 13.75% Senior Notes due June 30, 2026 in the aggregate principal amount of $14,950,000 (the “2024 Notes”), $5,000,000 in cash and an extension of the expiration date of the warrants previously issued to the Exchanging Noteholders to June 30, 2026.
•Debt Prepayment
In 2024, we made three prepayments on the 2024 Notes. On September 30, 2024 we paid $3,000,000 in principal, plus accrued interest, on November 14, 2024 we paid $2,000,000 in principal, plus accrued interest, and on December 30, 2024 we paid $4,000,000 in principal, plus accrued interest. As a result of the prepayment, the remaining balance of the 2024 Notes was reduced to $5,950,000 at the end of 2024.
Developments During 2025
•Sale of Building
In February 2025, 15 Joys Lane LLC, our subsidiary, entered into a contract of sale with Ulster County, New York (the "County") for the sale to the County of our headquarters building in Kingston, New York, along with an adjacent mixed use property (collectively, the "Property"). The purchase price for the Property is $3,600,000. The closing of the sale is anticipated to take place in March 2025, subject to the satisfaction of the conditions to the closing.
•Debt Prepayment
In 2025, we made two additional prepayments on the 2024 Notes. On January 31, 2025 we paid $3,500,000 in principal, plus accrued interest and on February 24, 2025 we paid $2,450,000 in principal, plus accrued interest. As a result of these additional prepayments, the 2024 Notes have been paid in full.
(b)Business
Property and Casualty Insurance
Overview
Property and casualty insurance companies provide policies in exchange for premiums paid by their customers (the “insureds”). An insurance policy is a contract between the insurance company and its insureds where the insurance company agrees to pay for losses that are covered under the contract. Such contracts are subject to legal interpretation by courts, sometimes involving legislative rulings and/or arbitration. Property insurance generally covers the financial consequences of accidental losses to the insured’s property, such as a home and the personal property in it, or a business owner’s building, inventory and equipment. Casualty insurance (also referred to as liability insurance) generally covers the financial consequences related to the legal liability of an individual or an organization resulting from negligent acts and omissions that cause bodily injury and/or property damage to a third party. Claims for property coverage generally are reported and settled in a relatively short period of time, whereas those for casualty coverage may take many years to settle.
We derive substantially all of our revenue from KICO, including revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from our investment portfolio, and net realized gains and losses on investment securities. We also collect a variety of policy fees including installment fees, reinstatement fees, and non-sufficient fund fees related to situations involving extended premium payment plans. Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that coverage is provided (i.e., ratably over the life of the policy). All of our policies are 12 month policies; therefore, a significant period of time can elapse between the receipt of insurance premiums and the payment of insurance claims. During this time, KICO invests the premiums, earning investment income and generating net realized and unrealized gains and losses on associated investments. Our holding company earns investment income from its cash holdings.
Our expenses include the insurance underwriting expenses of KICO and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses. In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits.
Other operating expenses include our corporate expenses as a holding company. These corporate expenses include legal and auditing fees, executive employment costs, and other costs directly associated with being a public company.
The key measure of relative underwriting performance for an insurance company is the combined ratio. An insurance company’s combined ratio is calculated by taking the ratio of incurred loss and LAE to earned premiums (the
“loss and LAE ratio”) and adding it to the ratio of policy acquisition and other underwriting expenses to earned premiums (the “expense ratio”). A combined ratio under 100% indicates that an insurance company is generating an underwriting profit prior to the impact of investment income. After considering investment income and investment gains or losses, insurance companies operating at a combined ratio of greater than 100% can also be profitable.
Business; Strategy
We are a multi-line regional property and casualty insurance company writing business exclusively through retail and wholesale agents and brokers (“producers”) appointed by our wholly-owned subsidiary, KICO. We are licensed to write insurance policies in New York, New Jersey, Connecticut, Maine, Massachusetts, New Hampshire, Pennsylvania and Rhode Island. KICO is actively writing its property and casualty insurance products in New York. Additionally, our subsidiary, Cosi, a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies.
We seek to deliver an attractive return on capital and to provide consistent earnings growth through underwriting profits and income from our investment portfolio. Our goal is to allocate capital efficiently to those lines of business that generate sustainable underwriting profits and to avoid lines of business for which an underwriting profit is not likely. Our strategy is to be the preferred multi-line property and casualty insurance company for selected producers in the geographic markets in which we operate. We believe producers place profitable business with us because we provide excellent, consistent service to insureds and claimants. Producers also value our broad underwriting appetite coupled with competitive rate and commission structures.
Our principal objectives are to grow profitably while managing risk through prudent use of reinsurance in order to strengthen our capital base. We generate underwriting income through adequate pricing of insurance policies and by effectively managing our other underwriting and operating expenses. We are pursuing profitable growth through existing producers in existing markets, by developing new geographic markets and producer relationships, and by introducing niche products that are relevant to our producers and insureds.
For the year ended December 31, 2024, our gross written premiums totaled $242.0 million, an increase of 20.9% from the $200.2 million in gross written premiums for the year ended December 31, 2023.
Product Lines
Our product lines include the following:
Personal lines - Our largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies. Personal lines policies accounted for 94.1% of our gross written premiums for the year ended December 31, 2024.
Livery physical damage - We write for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs. These policies insure only the physical damage portion of insurance for such vehicles, with no liability coverage included. These policies accounted for 5.9% of our gross written premiums for the year ended December 31, 2024.
Other - We write canine legal liability policies and have a small participation in mandatory state joint underwriting associations. These policies accounted for 0.03% of our gross written premiums for the year ended December 31, 2024.
Our Competitive Strengths
Long History of Operations
KICO has been in operation in the State of New York since 1886. We have consistently sought to grow the amount of profitable business that we write by introducing new products, increasing volume written with our Select producers in existing markets, and developing new producer relationships and markets. The extensive heritage of our insurance company subsidiary and our commitment to the markets in which we operate is a competitive advantage with producers and insureds.
Strong Producer Relationships
Within our producers’ offices, we compete with other property and casualty insurance carriers available to those producers. We carefully select the producers that distribute our insurance policies and continuously monitor and evaluate their performance. We believe our insurance producers value their relationships with us because we provide excellent, consistent personal service coupled with competitive rates and commission levels. We have consistently been rated by insurance producers as above average in the important areas of underwriting, claims handling and service.
We offer our Select producers access to a variety of personal lines and specialty products, including some that are unique to us. We provide a multi-policy discount on homeowners policies in order to attract and retain more of this multi-line business. We have had a consistent presence in the New York market and our producers value the longevity of the relationship. We believe that the excellent service provided to our Select producers, our broad product offerings, and our competitive prices provide a strong foundation for profitable growth.
Sophisticated Pricing, Underwriting and Risk Management Practices
We believe that a significant underwriting advantage exists due to our local market presence and expertise. Our underwriting process evaluates and screens out certain risks based on their prior loss experience, cost of reinsurance, property condition, insurance scoring and driving record, and then is augmented by information collected from physical property inspections. We maintain certain policy exclusions that reduce our exposure to risks that can create severe losses. We target a preferred risk profile in order to reduce adverse selection from risks seeking the lowest premiums and minimal coverage levels.
Our underwriting procedures, premiums and policy terms support the goal of underwriting profitability of our personal lines policies. We adhere to a quarterly indication process and perform a rate review in each state and for each product at least annually. In 2022, we introduced our new Select homeowners, condo/tenant and dwelling fire programs in New York. This product incorporates by-peril rating and a host of new data sources to better match rate to risk. We also update property replacement costs to address inflation annually.
We manage coastal risk exposure through the use of individual catastrophe risk scoring, the inclusion of hurricane deductibles, non-renewals and the prudent use of reinsurance. We measure our risk exposure regularly and adjust our underwriting to manage growth in our probable maximum loss (PML).
Effective Utilization of Reinsurance
Our reinsurance treaties allow us to limit our exposure to the financial impact of catastrophe losses and to reduce our net liability on individual risks. Our reinsurance program is structured to enable us to grow our premium volume while maintaining regulatory capital and other financial ratios within thresholds used for regulatory oversight purposes.
Our reinsurance program also provides income from ceding commissions earned pursuant to quota share reinsurance contracts. The income we earn from ceding commissions subsidizes our fixed operating costs, which consist of other underwriting expenses. Quota share reinsurance treaties transfer a portion of the profit (or loss) associated with the subject insurance policies to the reinsurers.
Scalable, Low-Cost Operations
We focus on efficiently managing our expenses and invest in tools and processes that improve the effectiveness of underwriting risks and processing claims. We evaluate the costs and benefits of each new tool or process in order to achieve optimal results. While the majority of our policies are written for risks in downstate New York, our remote workforce model provides a low-cost operating environment.
We continue to invest in improving our online application and quoting systems for our personal lines products. We have leveraged a paperless workflow management and document storage tool that has improved efficiency and reduced costs. We provide an online payment portal that allows producers and insureds to make payments and to view policy information for all of our products in one location. Our ability to control the growth of operating and other expenses while expanding our operations and growing revenue is a key component of our business model and is important to our financial success.
In 2022, we completed the implementation of Kingstone 2.0, an effort to modernize the Company. Kingstone 2.0 included strategic hiring, development of the Select product, investments in new systems and retirement of the legacy
systems. We also adopted a framework of stronger rating, underwriting and catastrophe management disciplines. As a result, Kingstone 2.0 positioned the Company to be better able to navigate today’s challenging environment. In 2023, we embarked on a new strategy to optimize our in-force business, which we coined as “Kingstone 3.0”. The four pillars of this new strategy entail:
1.Aggressively reducing the non-Core book of business, which has had a disproportionately negative impact on underwriting results.
2.Adjusting pricing to stay ahead of loss trends, including inflation.
3.Tightly managing reinsurance requirements and costs, using risk selection and other underwriting capabilities to manage the growth rate of our PML.
4.Continuing expense reduction focus with a goal of reducing the net expense ratio to 33% by year-end 2024.
See detailed description of Kingstone 2.0 and Kingstone 3.0 in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) in this Annual Report.
Underwriting and Claims Management Philosophy
Our underwriting philosophy is to target niche segments for which we have detailed expertise and can take advantage of market conditions. We monitor results on a regular basis and our Select producers are reviewed by management on at least a semi-annual basis.
We believe that our rates are appropriately competitive with other carriers in our target markets. We do not seek to grow by competing based solely upon price. We seek to develop long-term relationships with our Select producers who understand and appreciate the path we have chosen. We carefully underwrite our business utilizing industry claims databases, insurance scoring reports, physical inspection of risks and other individual risk underwriting tools. We write homeowners and dwelling fire business in coastal markets and are cognizant of our exposure to hurricanes. We have mitigated this risk through appropriate catastrophe reinsurance and application of hurricane deductibles. We handle claims fairly while ensuring that coverage provisions and exclusions are properly applied. Our claims and underwriting expertise supports our ability to grow our profitable business.
Distribution
We generate business through our relationships with over 700 producers. We carefully select our producers by evaluating numerous factors such as their need for our products, premium production potential, loss history with other insurance companies that they represent, product and market knowledge, and agency size. We only distribute through agents and have never sought to distribute our products direct to the consumer. We monitor and evaluate the performance of our producers through periodic reviews of volume and profitability. Our senior executives are actively involved in managing our producer relationships.
Each producer is assigned to a staff underwriter and the producer can call that underwriter directly on any matter. We believe that the close relationship and personal service received from their underwriters is one of the reasons producers place their business with us. Our producers have access to a KICO producer interface and website portal that provides them the ability to quote risks for various products and to review policy forms and underwriting guidelines for all lines of business. We send out frequent “Producer Grams” in order to inform our producers of updates at KICO.
Competition; Market
The insurance industry is highly competitive. We constantly assess and make projections of market conditions and appropriate prices for our products, but we cannot fully know our profitability until all claims have been reported and settled.
Our active policyholders are located primarily in the downstate regions of New York State, our Core business. Under Kingstone 3.0, we are reducing our non-Core Northeast markets, which include New Jersey, Rhode Island, Massachusetts and Connecticut. In addition, we are licensed to write insurance policies in Maine, New Hampshire and Pennsylvania.
In 2022, we made the decision to reduce our footprint outside New York due to profitability concerns. We entered these states to diversify Kingstone’s footprint starting in 2017, and they have had a disproportionate impact on our underwriting results, especially in 2022. We have attempted to address these challenges and achieve profitability with a
series of rate and underwriting actions, but the impact we have worked towards was largely nullified by inflation. In addition to a new business moratorium in our non-Core states of Connecticut, Massachusetts, New Jersey and Rhode Island, we have been actively non-renewing policies subject to regulatory constraints and have materially lowered commission rates to our producers. Subject to our withdrawal agreement with the state of New Jersey, we will be non-renewing our entire book in such state over a two year period starting January 1, 2024. These actions reduced the size of our policies in force outside New York by 48% in 2023 and 65% in 2024.
In 2024, KICO was the 12th largest writer of homeowners insurance in the State of New York, according to data compiled by S&P Capital IQ. Based on the same data, in 2023, we had a 1.6% market share for this business. We compete with large national carriers as well as regional and local carriers in the property and casualty marketplace in New York and other states. We believe that many national and regional carriers have chosen to limit their rate of premium growth or to decrease their presence in Northeastern states due to the relatively high coastal population and associated catastrophe risk that exists in the region. Additionally, some of our largest competitors stopped writing business in New York in 2024. In July 2024, the New York Department of Financial Services approved the withdrawal of two carriers, wherein all policies were required to be non-renewed or canceled by December 31, 2024. This resulted in a large volume of new business for KICO in the second half of 2024.
Loss and Loss Adjustment Expense Reserves
We are required to establish reserves for unpaid losses, including reserves for claims loss adjustment expenses (“LAE”), which represent the expenses of settling and adjusting those claims. These reserves are balance sheet liabilities representing estimates of future amounts required to pay losses and loss expenses for claims that have occurred at or before the balance sheet date, whether already known to us or not yet reported. We establish these reserves after considering all information known to us as of the date they are recorded.
Loss reserves fall into two categories: case reserves for reported losses and LAE associated with specific reported claims, and reserves for losses and LAE that are incurred but not reported. We establish these two categories of loss reserves as follows:
Reserves for reported losses - When a claim is received, we establish a case reserve for the estimated amount of its ultimate settlement and its estimated loss expenses. We establish case reserves based upon the known facts about each claim at the time it is received and we may subsequently adjust case reserves as additional facts and information about the claim develops.
IBNR reserves - We also estimate reserves for loss and LAE amounts incurred but not reported (“IBNR”). IBNR reserves are calculated in bulk as an estimate of ultimate losses and LAE less reported losses and LAE. There are two types of IBNR; the first is a provision for claims that have occurred but are not yet reported or known. We refer to this as ‘Pure’ IBNR, and due to the fact that we write primarily quickly reported property lines of business, this type of IBNR does not make up a large portion of KICO’s total IBNR. The second type of IBNR is a provision for expected future development on known claims, from the evaluation date until the time claims are settled and closed. We refer to this as ‘Case Development’ IBNR and it makes up the majority of the IBNR that KICO records. Ultimate losses driving the determination of appropriate IBNR levels are projected by using generally accepted actuarial techniques.
The liability for loss and LAE represents our best estimate of the ultimate cost of all reported and unreported losses that are unpaid as of the balance sheet evaluation date. The liability for loss and LAE is estimated on an undiscounted basis, using individual case-based valuations, statistical analyses, and various actuarial procedures. The projection of future claim payments and reporting patterns is based on an analysis of our historical experience, supplemented by analyses of industry loss data. We believe that the reserves for loss and LAE are adequate to cover the ultimate cost of losses and claims to date. However, because of uncertainty from various sources, including changes in claims settlement patterns and handling procedures, litigation trends, judicial decisions, and economic conditions, actual loss experience may not conform to the assumptions used in determining the estimated amounts for such liabilities at the balance sheet date. As adjustments to these estimates become necessary, they are reflected in the period in which the estimates are changed. Because of the nature of the business historically written, we believe that we have limited exposure to asbestos and environmental claim liabilities.
We engage an independent external actuarial specialist (the “Appointed Actuary”) to opine on our recorded statutory reserves. The Appointed Actuary estimates a range of reasonable ultimate losses, along with a range and recommended central estimate of IBNR reserve amounts. Our carried IBNR reserves are based on an internal actuarial analysis and reflect management’s best estimate of unpaid loss and LAE liabilities, and fall within the range of those determined as reasonable by the Appointed Actuary.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Principal Revenue and Expense Items” in Item 7 of this Annual Report and Note 2 and Note 11 in the accompanying consolidated financial statements for additional information and details regarding loss and LAE reserves.
Reconciliation of Loss and Loss Adjustment Expenses
The table below shows the reconciliation of loss and LAE on a gross and net basis, reflecting changes in losses incurred and paid losses:
Years ended
December 31,
2024 2023
Balance at beginning of period $ 121,817,862 $ 118,339,513
Less reinsurance recoverables (33,288,650) (27,659,500)
Net balance, beginning of period 88,529,212 90,680,013
Incurred related to:
Current year 64,414,543 82,856,483
Prior years (1,779,827) (7,273)
Total incurred 62,634,716 82,849,210
Paid related to:
Current year 32,956,899 49,146,173
Prior years 24,319,238 35,853,838
Total paid 57,276,137 85,000,011
Net balance at end of period 93,887,791 88,529,212
Add reinsurance recoverables 32,322,637 33,288,650
Balance at end of period $ 126,210,428 $ 121,817,862
Our claims reserving practices are designed to set reserves that, in the aggregate, are adequate to pay all claims at their ultimate settlement value.
Loss and Loss Adjustment Expenses Development
The table below shows the net loss development of reserves held as of each calendar year-end from 2014 through 2024.
The first section of the table reflects the changes in our loss and LAE reserves after each subsequent calendar year of development. The table displays the re-estimated values of incurred losses and LAE at each succeeding calendar year-end, including payments made during the years indicated. The second section of the table shows by year the cumulative amounts of loss and LAE payments, net of amounts recoverable from reinsurers, as of the end of each succeeding year. An example with respect to the net loss and LAE reserves of $21,663,000 as of December 31, 2014 is as follows. By December 31, 2016 (two years later), $12,853,000 had actually been paid in settlement of the claims that relate to liabilities as of December 31, 2014. The re-estimated ultimate reserves two years later for those claims as of December 31, 2014 had decreased to $21,501,000.
The “cumulative redundancy (deficiency)” represents, as of December 31, 2024, the difference between the latest re-estimated liability and the amounts as originally estimated. A redundancy means that the original estimate was higher than the current estimate. A deficiency means that the current estimate is higher than the original estimate.
(in thousands of $) 2014
Reserve for loss and loss adjustment expenses, net of reinsurance recoverables 21,663 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888
Net reserve estimated as of One year later 21,200 23,107 25,899 33,203 51,664 64,811 62,632 87,011 90,673 86,749
Two years later 21,501 24,413 26,970 42,723 55,145 65,113 65,339 88,418 94,245
Three years later 22,576 25,509 33,298 43,780 56,346 67,291 67,135 92,642
Four years later 23,243 28,638 33,342 43,973 58,048 68,612 70,643
Five years later 25,442 28,506 33,120 43,774 57,957 71,022
Six years later 25,353 28,849 32,936 43,777 59,187
Seven years later 25,445 28,734 32,617 44,395
Eight years later 25,324 28,499 32,739
Nine years later 25,200 28,646
Ten years later 25,233
Net cumulative redundancy (deficiency) (3,570) (5,476) (6,779) (12,344) (18,661) (6,252) (7,996) (8,331) (3,565) 1,780
(in thousands of $) 2014
Cumulative amount of reserve paid, net of reinsurance recoverable through
One year later 8,500 8,503 9,900 15,795 23,075 27,454 20,137 32,419 35,854 24,319
Two years later 12,853 14,456 17,187 26,168 35,924 35,142 30,262 47,547 48,199
Three years later 16,564 19,533 23,484 32,704 40,264 42,365 40,702 57,171
Four years later 19,838 22,816 27,203 35,510 45,085 49,581 47,113
Five years later 21,976 25,210 28,833 37,846 48,650 52,938
Six years later 23,280 26,298 30,141 39,596 49,682
Seven years later 24,146 26,945 30,693 39,570
Eight years later 24,633 27,013 30,243
Nine years later 24,654 26,609
Ten years later 24,218
Net reserve -
December 31, 21,663 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888
* Reinsurance Recoverable 18,250 16,707 15,777 16,749 15,671 15,728 20,154 10,638 27,660 33,289 32,323
* Gross reserves -
December 31, 39,913 39,877 41,737 48,800 56,197 80,499 82,801 94,949 118,340 121,818 126,210
Net re-estimated reserve 25,233 28,646 32,739 44,395 59,187 71,022 70,643 92,642 94,245 86,749
Re-estimated reinsurance recoverable 23,280 21,090 20,336 20,612 18,650 15,052 20,266 11,726 26,669 29,410
Gross re-estimated reserve 48,513 49,736 53,075 65,007 77,837 86,074 90,909 104,368 120,914 116,159
Gross cumulative redundancy (deficiency) (8,600) (9,859) (11,338) (16,207) (21,640) (5,575) (8,108) (9,419) (2,574) 5,659
(Components may not sum to totals due to rounding)
Reinsurance
We purchase reinsurance to reduce our net liability on individual risks, to protect against possible catastrophes, to remain within a target ratio of net premiums written to policyholders’ surplus, and to expand our underwriting capacity. Participation in reinsurance arrangements does not relieve us from our obligations to policyholders. Our reinsurance program is structured to reflect our obligations and goals.
Reinsurance via quota share allows a carrier to write business without increasing its underwriting leverage above a level determined by management. The business written under a quota share reinsurance structure obligates a reinsurer to assume some portion of the risks involved, and gives the reinsurer the profit (or loss) associated with such in exchange for a ceding commission.
Effective January 1, 2023, we entered into a 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”). Upon the expiration of the 2023/2024 Treaty on January 1, 2024, we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”). Upon the expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”).
Excess of loss contracts provide coverage for individual loss occurrences exceeding a certain threshold. The quota share reinsurance treaties inure to the benefit of our excess of loss treaties, as the maximum net retention on any single risk occurrence is first limited through the excess of loss treaty, and then that loss is shared again through the quota share reinsurance treaty. Our maximum net retention under the 2021/2023 Treaty and excess of loss treaties for any one personal lines occurrence for dates of loss on or after December 31, 2021 through January 1, 2024 was $700,000. Effective January 1, 2024 through January 1, 2025, our maximum net retention under the 2024/2025 Treaty increased to $730,000. Effective January 1, 2022, we entered into an underlying excess of loss reinsurance treaty (“Underlying XOL Treaty”) covering the period from January 1, 2022 through January 1, 2023. The Underlying XOL Treaty provides 50% reinsurance coverage for losses, other than from a named storm, of $400,000 in excess of $600,000. Effective January 1, 2023, the Underlying XOL Treaty was renewed covering the period from January 1, 2023 through January 1, 2024. From January 1, 2022 through January 1, 2024, under the Underlying XOL Treaty, our maximum net retention for any one personal lines occurrence was further reduced from the retention of $700,000 under the 2021/2023 Treaty and the 2023/2024 Treaty to $500,000. From January 1, 2024 through January 1, 2025, under the Underlying XOL Treaty, our maximum net retention for any one personal lines occurrence was reduced from the retention of $730,000 under 2024/2025 Treaty to $530,000.
We previously earned ceding commission revenue under the quota share reinsurance treaties based on a provisional commission rate on all premiums ceded to the reinsurers as adjusted by a sliding scale based on the ultimate treaty year loss ratios on the policies reinsured under each agreement. The sliding scale provided minimum and maximum ceding commission rates in relation to specified ultimate loss ratios. Under the 2023/24 Treaty, KICO received a fixed provisional rate with no adjustment for sliding scale contingent commissions. Under the 2024/2025 Treaty, KICO received a fixed provisional rate with no adjustment for sliding scale contingent commissions. For the 2025/2026 Treaty, KICO will have a portion of the coverage at a fixed provisional rate with no adjustment and a portion that has a sliding scale contingent commission.
The 2023/2024 Treaty, 2024/2025 Treaty and 2025/2026 Treaty are on a “net” of catastrophe reinsurance basis, as opposed to the “gross” arrangement that existed in prior treaties. Under a “net” arrangement, all catastrophe reinsurance coverage above our catastrophe retention is purchased directly by us.
In 2024, we purchased catastrophe reinsurance to provide coverage of up to $280,000,000 for losses associated with a single event. One of the most commonly used catastrophe forecasting models prepared for us indicates that the catastrophe reinsurance treaties provide coverage in excess of our estimated probable maximum loss associated with a single more than one-in-100 year storm event. Effective January 1, 2023 through January 1, 2024, losses on personal lines policies were subject to the 2023/2024 Treaty, which covered 12.5% of catastrophe losses and resulted in a net retention by us of $8,750,000 of exposure per catastrophe occurrence. Effective January 1, 2024 through January 1, 2025, losses on personal lines policies were subject to the 2024/2025 Treaty, which will cover 5.0% of catastrophe losses and will result in a net retention by us of $4,750,000 of exposure for the first event of a named storm catastrophe occurrence. Our net retention for a second event of a named storm is $9,500,000. Effective July 1, 2022 and through June 30, 2023, we had reinstatement premium protection for $9,800,000 of catastrophe coverage in excess of $10,000,000. Effective July 1, 2023 and through June 30, 2024, we had reinstatement premium protection for $12,500,000 of catastrophe coverage in excess of $10,000,000. Effective July 1, 2024 and through June 30, 2025, we had reinstatement premium protection for $10,500,000 of catastrophe coverage in excess of $10,000,000. This protects us from having to pay an additional premium to reinstate
catastrophe coverage for an event up to this level. Additionally in 2024, we purchased winter storm specific catastrophe reinsurance that provides coverage to the extent of 71% of $4,500,000 of coverage after the first $5,500,000 of gross retention.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Principal Revenue and Expense Items” in Item 7 of this Annual Report and Note 2 and Note 11 in the accompanying consolidated financial statements for additional information.
Ratings
Many insurance buyers, agents, brokers and secured lenders use the ratings assigned by ratings agencies to assist them in assessing the financial strength and overall quality of the companies with which they do business and from which they are considering purchasing insurance or in determining the financial strength of the company that provides insurance with respect to the collateral they hold. Financial strength ratings are intended to provide an independent opinion of an insurer’s ability to meet its obligations to policyholders and are not an evaluation directed at investors. We currently have a Demotech rating of A (Excellent) which qualifies our policies for banks and finance companies. Demotech is the rating agency most commonly used by carriers focused on coastal property risks. The previous ratings from A.M. Best and Kroll Rating Agency for KICO and Kingstone Companies, Inc. were withdrawn at our request.
Catastrophe Losses
In 2024 we had catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers. Our predominant market, downstate New York, was affected by several events during 2024, one of which was a named storm, and one was a winter storm, and the remaining events were wind and thunderstorm. None of the catastrophe events in 2024 had a material impact on us. The effects of catastrophes during 2024 increased our net loss ratio by 1.9 percentage points. We were affected by several events during 2023, including a named storm and a major freezing event. The effects of catastrophes during 2023 increased our net loss ratio by 7.1 percentage points.
Government Regulation
Holding Company Regulation
We, as the parent of KICO, are subject to the insurance holding company laws of the state of New York. These laws generally require an insurance company to register with the New York State Department of Financial Services (the “DFS”) and to furnish annually financial and other information about the operations of companies within our holding company system. Generally, under these laws, all material transactions among companies in the holding company system to which KICO is a party must be fair and reasonable and, if material or of a specified category, require prior notice and approval or acknowledgement (absence of disapproval) by the DFS.
Change of Control
The insurance holding company laws of the state of New York require approval by the DFS for any change of control of an insurer. “Control” is generally defined as the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the company, whether through the ownership of voting securities, by contract or otherwise. Control is generally presumed to exist through the direct or indirect ownership of 10% or more of the voting securities of a domestic insurance company or any entity that controls a domestic insurance company; however, the ownership of less than 10% of such voting securities could constitute control under certain circumstances. Any future transactions that would constitute a change of control of KICO, including a change of control of Kingstone Companies, Inc., would generally require the party acquiring control to obtain the approval of the DFS (and in any other state in which KICO may operate). Obtaining these approvals may result in the material delay of, or deter, any such transaction. These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of Kingstone Companies, Inc., including through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be desirable.
State Insurance Regulation
Insurance companies are subject to regulation and supervision by the department of insurance in the state in which they are domiciled and, to a lesser extent, other states in which they conduct business. The primary purpose of such regulatory powers is to protect individual policyholders. State insurance authorities have broad regulatory, supervisory and administrative powers, including, among other things, the power to grant and revoke licenses to transact business, set the standards of solvency to be met and maintained, determine the nature of, and limitations on, investments and dividends, approve policy forms and rates, and in some instances to regulate unfair trade and claims practices.
KICO is required to file detailed financial statements and other reports with the insurance regulatory authorities in the states in which it is licensed to transact business. These financial statements are subject to periodic examination by the insurance regulators.
In addition, many states have laws and regulations that limit an insurer’s ability to withdraw from a particular market. For example, states may limit an insurer’s ability to cancel or not renew policies. Furthermore, certain states prohibit an insurer from withdrawing from one or more lines of business written in the state, except pursuant to a plan that is approved by the insurance regulatory authority. The state regulator may reject a plan that may lead to market disruption. Laws and regulations, including those in New York, that limit cancellation and non-renewal and that subject program withdrawals to prior approval requirements may restrict the ability of KICO to exit unprofitable markets. Such laws did not affect KICO’s ability to withdraw from the commercial liability market in New York State in 2019 and the commercial auto market in New York State in 2015.
Federal and State Legislative and Regulatory Changes
From time to time, various regulatory and legislative changes have been proposed in the insurance industry. Among the proposals that either have been or are being considered are the possible introduction of Federal regulation in addition to, or in lieu of, the current system of state regulation of insurers, and proposals in various state legislatures. Some of these proposals have been enacted to conform portions of their insurance laws and regulations to various model acts adopted by the National Association of Insurance Commissioners (the “NAIC”).
In 2017, the DFS implemented new comprehensive cybersecurity regulations, which became effective on March 1, 2017, with transitional implementation periods. On November 1, 2023, the DFS adopted substantive amendments updating the 2017 cybersecurity regulations. The adopted regulations require that a covered entity’s chief information security officer (“CISO”) have sufficient authority to ensure that cybersecurity risks are appropriately managed and require the CISO to report material cybersecurity issues. Covered entities are further required under the amendments to implement asset inventory management, develop and implement a business continuity and disaster recovery plan, and maintain backups protected from unauthorized alterations or destruction. The regulations update certain cybersecurity event reporting requirements, including notice and explanation of extortion payments, and amends the April 15 annual reporting requirement to include a written acknowledgment of any areas of material noncompliance and remediation plans signed by the entity’s highest-ranking executive and the CISO. Finally, the regulations update the factors the Superintendent may consider in assessing violations.
The newly-adopted regulations also apply newly enhanced requirements around periodic system testing, record keeping and maintenance of written incident and recovery plans. They further mandate specific technical approaches such as blocking common passwords and the use of multifactor authentication in certain instances. In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) became law. It established a Federal Insurance Office (the “FIO”) within the U.S. Department of the Treasury. The FIO is initially charged with monitoring all aspects of the insurance industry (other than health insurance, certain long-term care insurance and crop insurance), gathering data, and conducting a study on methods to modernize and improve the insurance regulatory system in the United States. The FIO releases reports summarizing and analyzing the Office’s oversight efforts, and general activities.
In September 2024, the FIO report noted that since its last report in 2023, the FIO continued to advance its data-focused efforts to better understand climate-related issues facing the U.S. homeowners insurance market that were first publicly announced on October 18, 2022.It further noted that it issued the 2023 preemption report stating that it did not take any action regarding the preemption of any state insurance measures that were inconsistent with a covered agreement.
On December 20, 2020, the Terrorism Risk Insurance Program Reauthorization Act of 2019 was enacted and is now scheduled to expire on December 31, 2027. The Terrorism Risk Insurance Program serves as a federal “backstop” for insurance claims related to acts of terrorism.
On November 15, 2021, the DFS issued its final Guidance for New York Domestic Insurers On Managing the Financial Risks from Climate Change. On June 15, 2022, the DFS released its 2021 annual report. The report references the creation of a standalone Climate Division, which was the source of the aforementioned guidance. In 2021, the Governor of the State of New York signed into law, effective January 28, 2022 and subsequently clarified by law taking effect March 15, 2023, legislation that seeks to prevent homeowner insurers from discriminating solely on the basis of breed of dog.
In 2021, the Comprehensive Insurance Disclosure Act was enacted in New York State. This law, as amended by a subsequent chapter amendment, requires any defendant to provide to the plaintiff, within a limited timeframe, proof of existence and the contents of any insurance agreement under which any person or entity may be liable to satisfy part or all of a judgment and details what the information and documentation includes. The new law applies to actions commenced on or after December 31, 2021.
In 2022, the New York legislature passed legislation to greatly expand wrongful death actions. This bill sought to expand the categories of claimants and scope of losses for which a wrongful death lawsuit could be brought. The bill was vetoed in January 2023. It was again passed in identical form in 2023 and again vetoed in December 2023. The bill was reintroduced in identical form in February 2024 and following two-house passage, vetoed again in December 2024.
In 2023, two related bills were chaptered amending the time periods available to an insurer for the investigation and settlement of claims arising out of states of emergency and disasters. This bill codified elements of existing regulations but shortened certain time periods and added additional reporting requirements. Specifically, the law requires that, within fifteen business days after receiving all the items, statements, and forms that the insurer required from the claimant for a non-commercial claim not suspected to be related to arson, the insurer advise the claimant in writing whether the insurer has accepted or rejected the claim. An insurer would be allowed two extensions of fifteen additional business days to continue its investigation, provided that the insurer notifies the claimant of the reasons additional time is needed for the investigation, with the second extension being available if the property is inaccessible. Commercial claims are granted a one-time thirty-day extension to determine whether the claim should be accepted or rejected, and additional thirty-day extensions are available if certain written notifications are made. If the insurer has accepted the claim, the claimant will have to be notified of the amount the insurer is offering to settle the claim and of all applicable policy provisions regarding the claimant's right to reject and appeal the insurer's offer. If the insurer rejects the claim, the insurer will have to inform the claimant of all applicable policy provisions regarding the claimant's right to appeal the decision including policy information, insurer contact information and DFS complaint filing procedure information. An insurer will be required to pay the claim not later than four business days from the settlement of the claim.
In 2024, the New York State legislature passed a DFS program bill that sought to bar the use of certain anticoncurrent causation clauses in non-commercial policies. Specifically, it intended to prohibit an insurance policy from excluding coverage for any loss of or damage to property resulting from water or water-borne material that backs up through sewers or drains, or overflows or is discharged from a sump, sump pump, or related equipment, on the ground that the loss or damage also may have been caused directly or indirectly by an excluded peril contributing concurrently or in any sequence to cause the loss. The bill was vetoed by the Governor in a message suggesting it needs further consideration.
In 2024, legislation was passed, and signed into law which requires the Superintendent of Insurance to issue regulations providing standards for hurricane windstorm deductibles which create, to the greatest extent possible, uniformity in the operation of such deductibles with respect to the triggering event. The regulations must be adopted by August 19, 2025.
The DFS adopted a circular letter in 2024 regarding the use of external consumer data and information sources (“ECDIS”) and artificial intelligence systems (“AIS”) by insurers. In broad strokes it reiterates the need to make sure that AI processes do not lead to outcomes that run afoul of the extensive body of existing anti-discrimination laws, including use of credit as governed by Insurance Law Article 28 credit usage. While this circular letter does not have the force of law, it articulated DFS’ expectations about the use of AIS and ECDIS. In the past, the release of a circular letter has preceded the issuance of draft and eventually final regulations in the area addressed.
State Regulatory Examinations
As part of their regulatory oversight process, state regulatory authorities conduct periodic detailed examinations of the financial reporting of insurance companies domiciled in their states, generally once every three to five years. Examinations are generally carried out in cooperation with the insurance regulators of other states under guidelines promulgated by the NAIC. The DFS commenced its examination of KICO in 2023 for the years 2019 through 2022. The examination was completed in 2024.
Risk-Based Capital Regulations
State regulatory authorities impose risk-based capital (“RBC”) requirements on insurance enterprises. The RBC Model serves as a benchmark for the regulation of insurance companies. RBC provides for targeted surplus levels based on formulas, which specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk, and are set forth in the RBC requirements. Such formulas focus on four general types of risk: (a) the risk with respect to the company’s assets (asset or default risk); (b) the risk of default on amounts due from reinsurers, policyholders, or other creditors (credit risk); (c) the risk of underestimating liabilities from business already written or inadequately pricing business to be written in the coming year (underwriting risk); and (d) the risk associated with items such as excessive premium growth, contingent liabilities, and other items not reflected on the balance sheet (off-balance sheet risk). The amount determined under such formulas is called the authorized control level RBC (“ACL”).
The RBC guidelines define specific capital levels based on a company’s ACL that are determined by the ratio of the company’s total adjusted capital (“TAC”) to its ACL. TAC is equal to statutory capital, plus or minus certain other specified adjustments. KICO’s TAC is above its ACL. As of December 31, 2024, the ratio of TAC to ACL was 5.62 and is in compliance with New York’s RBC requirements.
Dividend Limitations
Our ability to receive dividends from KICO is restricted by the state laws and insurance regulations of New York. These restrictions are related to surplus and net investment income. Dividends may be paid, without the need for DFS approval, from unassigned surplus and are restricted to the lesser of 10% of surplus or 100% of investment income (on a statutory accounting basis) for the trailing 36 months, less dividends by KICO paid during such period. At December 31, 2024, unassigned surplus was $13,658,183. KICO has an agreement with DFS that KICO may only pay dividends to us for purposes of paying operating expenses and debt obligations, and the maximum amount of dividends that can be paid in 12 months is $12 million without prior approval. See Item 5 (“Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends”) of this Annual Report for a further discussion as to KICO’s ability to pay dividends to us.
Insurance Regulatory Information System Ratios
The Insurance Regulatory Information System (“IRIS”) was developed by the NAIC and is intended primarily to assist state insurance regulators in meeting their statutory mandates to oversee the financial condition of insurance companies operating in their respective states. IRIS identifies thirteen industry ratios and specifies “usual values” for each ratio. Departure from the usual values on four or more of the ratios can lead to inquiries from individual state insurance commissioners as to certain aspects of an insurer’s business. As of December 31, 2024, KICO had three ratios outside the usual range.
Accounting Principles
Statutory accounting principles (“SAP”) are a basis of accounting developed by the NAIC. They are used to prepare the statutory financial statements of insurance companies and to assist insurance regulators in monitoring and regulating the solvency of insurance companies. SAP is primarily concerned with measuring an insurer’s policyholder surplus. Accordingly, statutory accounting focuses on valuing assets and liabilities of insurers at financial reporting dates in accordance with appropriate insurance law and regulatory provisions applicable in each insurer’s domiciliary state.
Generally accepted accounting principles (“GAAP”) are concerned with a company’s solvency, but are also concerned with other financial measurements, principally results of operations and cash flows. Accordingly, GAAP gives more consideration to appropriate matching of revenue and expenses and accounting for management’s stewardship of assets than does SAP. As a direct result, different types and amounts of assets and liabilities will be reflected in financial statements prepared in accordance with GAAP as compared to SAP.
Statutory accounting practices established by the NAIC and adopted in part by New York insurance regulators determine, among other things, the amount of statutory surplus and statutory net income of KICO and thus determine, in part, the amount of funds that are available for KICO to pay dividends to Kingstone Companies, Inc.
Legal Structure
We were incorporated in 1961 and assumed the name DCAP Group, Inc. in 1999. On July 1, 2009, we changed our name to Kingstone Companies, Inc.
Employees
As of December 31, 2024, we had 99 employees. None of our employees are covered by a collective bargaining agreement. We believe that our relationship with our employees is good.
Availability of Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”). Such reports and other information filed by us with the SEC are available free of charge at the investor relations section of our website at www.kingstonecompanies.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Copies are also available, without charge, by writing to Kingstone Companies, Inc., Investor Relations, 15 Joys Lane, Kingstone, New York 12401. The SEC also maintains a website, www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The inclusion of our website address in this Annual Report does not include or incorporate by reference the information on our website into this Annual Report.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS.
Based upon the following factors, as well as other factors affecting our operating results and financial condition, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. These factors, among others, may affect the accuracy of certain forward-looking statements contained in this Annual Report.
Risks Related to Our Business
As a property and casualty insurer, we may face significant losses from catastrophes and severe weather events.
Because of the exposure of our property and casualty business to catastrophic events and other severe weather events, our operating results and financial condition may vary significantly from one period to the next. Catastrophes can be caused by various natural and man-made disasters, including earthquakes, wildfires, tornadoes, hurricanes, severe winter weather, storms and certain types of terrorism. We currently have catastrophe reinsurance coverage with regard to losses of up to $285,000,000 ($275,000,000 in excess of $10,000,000). Effective January 1, 2025, $5,000,000 of losses in a catastrophe are subject to a quota share reinsurance treaty, which covers 10.0% of catastrophe losses such that we retain $4,250,000 of risk per catastrophe occurrence. With respect to any additional catastrophe losses of up to $275,000,000, we are 100% reinsured under our catastrophe reinsurance program. Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts. We may incur catastrophe losses in excess of: (i) those that we project would be incurred, (ii) those that external modeling firms estimate would be incurred, (iii) the average expected level used in pricing or (iv) our current reinsurance coverage limits. Despite our catastrophe management programs, we are exposed to catastrophes that could have a material adverse effect on our operating results and financial condition. Our liquidity could be constrained by a catastrophe, or multiple catastrophes, which may result in extraordinary losses or a downgrade of our financial strength ratings. In addition, the reinsurance losses that are incurred in connection with a catastrophe could have an adverse impact on the terms and conditions of future reinsurance treaties.
In addition, we are subject to claims arising from non-catastrophic weather events such as hurricanes, tropical storms, severe winter weather, rain, hail and high winds. The incidence and severity of weather conditions are largely unpredictable. There is generally an increase in the frequency and severity of claims when severe weather conditions occur.
Unanticipated increases in the severity or frequency of claims may adversely affect our operating results and financial condition.
Changes in the severity or frequency of claims may affect our profitability. Changes in homeowners claim severity are driven by inflation in the construction industry, in building materials and home furnishings, and by other economic and environmental factors, including increased demand for services and supplies in areas affected by catastrophes. Changes in bodily injury claim severity are driven primarily by inflation in the medical sector of the economy and by litigation costs. Changes in auto physical damage claim severity are driven primarily by inflation in auto repair costs, prices of auto parts and used car prices. However, changes in the level of the severity of claims are not limited to the effects of inflation and demand surge in these various sectors of the economy. Increases in claim severity can arise from unexpected events that are inherently difficult to predict, such as a change in the law or an inability to enforce exclusions and limitations contained in
our policies. Although we pursue various loss management initiatives to mitigate future increases in claim severity, there can be no assurances that these initiatives will successfully identify or reduce the effect of future increases in claim severity, and a significant increase in claim frequency could have an adverse effect on our operating results and financial condition.
A financial strength rating assigned to our insurance subsidiary was withdrawn at its request; this may impact our revenues and earnings.
Financial strength ratings are an important factor influencing the competitive position of insurance companies. The objective of the rating agencies’ rating systems is to provide an opinion as to an insurer’s financial strength and ability to meet ongoing obligations to its policyholders. The ratings of Kingstone Insurance Company (“KICO”), our insurance subsidiary, reflect the rating agencies’ opinion as to its financial strength and are not evaluations directed to investors in our securities, nor are they recommendations to buy, sell or hold our securities.
In July 2023, A.M. Best withdrew the financial strength rating and long-term issuer credit rating of KICO at KICO’s request. Previously, A.M. Best’s public rating for Kingstone Companies, Inc. was withdrawn.
Management believes that A.M. Best’s financial strength rating is more significant with regard to commercial liability insurance, as opposed to personal lines business. Since we have discontinued our commercial lines business, we believe that the withdrawal of A.M. Best’s ratings will not result in a material decrease in the amount of business that KICO will be able to write. Also, KICO has a Demotech financial stability rating of A (Exceptional) which generally makes its policies acceptable to mortgage lenders that require homeowners to purchase insurance from highly-rated carriers.
However, a prior A.M Best ratings downgrade resulted in a material decrease in the business of our subsidiary, Cosi, a multi-state licensed general agency that had partnered with name-brand carriers which require an A.M. Best “A-” rating from its partners.
The impact of pandemics and other public health issues (like COVID-19) and related risks could materially affect our results of operations, financial position and/or liquidity.
Beginning in March 2020, the global pandemic related to COVID-19 began to impact the global economy and our results of operations. Risks presented by the effects of pandemics like COVID-19 include, among others, the following:
Investments. Our corporate fixed income portfolio may be adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening in distressed industries. In addition, in recent years, many state and local governments have been operating under deficits or projected deficits. The severity and duration of these deficits could have an adverse impact on the collectability and valuation of our municipal bond portfolio. Our investment portfolio also includes mortgage-backed securities which could be adversely impacted by declines in real estate valuations and/or financial market disruption. Further disruptions in global financial markets could adversely impact our net investment income in future periods.
Adverse Legislative and/or Regulatory Action. Federal, state and local government actions to address and contain the impact of pandemic and other public health issues (like COVID-19) may adversely affect us. For example, we may be subject to legislative and/or regulatory action that seeks to retroactively mandate coverage for losses which our insurance policies were not designed or priced to cover. Currently, in some states there is proposed legislation to require insurers to cover business interruption claims irrespective of terms, exclusions or other conditions included in the policies that would otherwise preclude coverage. Regulatory restrictions or requirements could also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel or non-renew policies and our right to collect premiums.
Operational Disruptions and Heightened Cybersecurity Risks. Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our producers are unable to continue to work because of illness, government directives or otherwise. In addition, the interruption of our or their system capabilities could result in a deterioration of our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions. Having shifted to remote working arrangements, we also face a heightened risk of cybersecurity attacks or data security incidents and are more dependent on internet and telecommunications access and capabilities.
We may not be able to generate sufficient cash to service our debt obligations.
Our ability to make payments on our indebtedness will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to maintain a sufficient level of cash flows from operating activities to permit us to pay the principal, premium, if any, and interest on our indebtedness.
Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs or our ability to obtain credit on acceptable terms.
The capital and credit markets can experience periods of volatility and disruption. In some cases, markets have exerted downward pressure on the availability of liquidity and credit capacity. In the event that we need access to additional capital to support our operating expenses, make payments on our outstanding and any future indebtedness, pay for capital expenditures, or increase the amount of insurance that we seek to underwrite or to otherwise grow our business, our ability to obtain such capital may be limited and the cost of any such capital may be significant. Our access to additional financing will depend on a variety of factors, such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity as well as lenders’ perception of our long or short-term financial prospects. Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us. If a combination of these factors occurs, our internal sources of liquidity may prove to be insufficient and, in such case, we may not be able to successfully obtain additional financing on favorable terms.
We are exposed to significant financial and capital markets risk which may adversely affect our results of operations, financial condition and liquidity, and our net investment income can vary from period to period.
We are exposed to significant financial and capital markets risk, including changes in interest rates, equity prices, market volatility, general economic conditions, the performance of the economy in general, the performance of the specific obligors included in our portfolio, and other factors outside our control. Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates. Our investment portfolio contains interest rate sensitive instruments, such as fixed income securities, which may be adversely affected by changes in interest rates from governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A rise in interest rates would increase the net unrealized loss position of our investment portfolio, which would be offset by our ability to earn higher rates of return on funds reinvested. Conversely, a decline in interest rates would decrease the net unrealized loss position of our investment portfolio, which would be offset by lower rates of return on funds reinvested.
In addition, market volatility can make it difficult to value certain of our securities if trading becomes less frequent. As such, valuations may include assumptions or estimates that may have significant period to period changes which could have a material adverse effect on our consolidated results of operations or financial condition. If significant, continued volatility, changes in interest rates, changes in defaults, a lack of pricing transparency, market liquidity and declines in equity prices, individually or in tandem, could have a material adverse effect on our results of operations, financial condition or cash flows through realized losses, impairments, and changes in unrealized positions.
Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business.
We purchase reinsurance to reduce our net liability on individual risks, to protect against possible catastrophes, to remain within a target ratio of net premiums written to policyholders’ surplus and to expand our underwriting capacity. Participation in reinsurance arrangements does not relieve us from our obligations to policyholders. Our personal lines catastrophe reinsurance program was designed, utilizing our risk management methodology, to address our exposure to catastrophes. Market conditions beyond our control impact the availability and cost of the reinsurance we purchase. No assurances can be given that reinsurance will remain continuously available to us on terms and rates that are commercially reasonable. For example, our ability to afford reinsurance to reduce our catastrophe risk may be dependent upon our ability to adjust premium rates for its cost, and there are no assurances that the terms and rates for our current reinsurance program will continue to be available in the future. If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices that we consider acceptable, we will have to either accept an increase in our exposure risk, reduce our insurance writings or seek other alternatives.
Reinsurance subjects us to the credit risk of our reinsurers, which may have a material adverse effect on our operating results and financial condition.
The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including changes in market conditions, whether insured losses meet the qualifying conditions of the reinsurance contract and whether reinsurers, or their affiliates, have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract. Since we are primarily liable to an insured for the full amount of insurance coverage, our inability to collect a material recovery from a reinsurer could have a material adverse effect on our operating results and financial condition.
Applicable insurance laws regarding the change of control of our company may impede potential acquisitions that our stockholders might consider desirable.
We are subject to statutes and regulations of the state of New York which generally require that any person or entity desiring to acquire direct or indirect control of KICO, our insurance company subsidiary, obtain prior regulatory approval. In addition, a change of control of Kingstone Companies, Inc. would require such approval. These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of our company, including through transactions, and in particular unsolicited transactions. Some of our stockholders might consider such transactions to be desirable. Similar regulations may apply in other states in which we may operate.
The insurance industry is subject to extensive regulation that may affect our operating costs and limit the growth of our business, and changes within this regulatory environment may adversely affect our operating costs and limit the growth of our business.
We are subject to extensive laws and regulations. State insurance regulators are charged with protecting policyholders and have broad regulatory, supervisory and administrative powers over our business practices. These include, among other things, the power to grant and revoke licenses to transact business and the power to regulate and approve underwriting practices and rate changes, which may delay the implementation of premium rate changes, prevent us from making changes we believe are necessary to match rate to risk or delay or prevent our entry into new states. In addition, many states have laws and regulations that limit an insurer’s ability to cancel or not renew policies and that prohibit an insurer from withdrawing from one or more lines of business written in the state, except pursuant to a plan that is approved by state regulatory authorities. Laws and regulations that limit cancellation and non-renewal and that subject program withdrawals to prior approval requirements may restrict our ability to exit unprofitable markets.
Because the laws and regulations under which we operate are administered and enforced by a number of different governmental authorities, including state insurance regulators, state securities administrators and the SEC, each of which exercises a degree of interpretive latitude, we are subject to the risk that compliance with any particular regulator's or enforcement authority's interpretation of a legal issue may not result in compliance with another's interpretation of the same issue, particularly when compliance is judged in hindsight. In addition, there is risk that any particular regulator's or enforcement authority's interpretation of a legal issue may change over time to our detriment, or that changes in the overall legal and regulatory environment may, even in the absence of any change to a particular regulator's or enforcement authority's interpretation of a legal issue changing, cause us to change our views regarding the actions we need to take from a legal risk management perspective, thereby necessitating changes to our practices that may, in some cases, limit our ability to grow and/or to improve the profitability of our business.
While the United States federal government does not directly regulate the insurance industry, federal legislation and administrative policies can affect us. Congress and various federal agencies periodically discuss proposals that would provide for a federal charter for insurance companies. We cannot predict whether any such laws will be enacted or the effect that such laws would have on our business. Moreover, there can be no assurance that changes will not be made to current laws, rules and regulations, or that any other laws, rules or regulations will not be adopted in the future, that could adversely affect our business and financial condition.
We may not be able to maintain the requisite amount of risk-based capital, which may adversely affect our profitability and our ability to compete in the property and casualty insurance markets.
The DFS imposes risk-based capital requirements on insurance companies to ensure that insurance companies maintain appropriate levels of surplus to support their overall business operations and to protect customers against adverse developments, after taking into account default, credit, underwriting and off-balance sheet risks. If the amount of our capital falls below certain thresholds, we may face restrictions with respect to soliciting new business and/or keeping existing business. Similar regulations apply in other states in which we operate.
Changing climate conditions may adversely affect our financial condition, profitability or cash flows.
We recognize the scientific view that the world is getting warmer. Climate change, to the extent it produces rising temperatures and changes in weather patterns, could impact the frequency and/or severity of weather events and affect the affordability and availability of homeowners insurance.
Our operating results and financial condition may be adversely affected by the cyclical nature of the property and casualty business.
The property and casualty market is cyclical and has experienced periods characterized by relatively high levels of price competition, less restrictive underwriting standards and relatively low premium rates, followed by periods of relatively lower levels of competition, more selective underwriting standards and relatively high premium rates. A downturn in the profitability cycle of the property and casualty business could have a material adverse effect on our operating results and financial condition.
Because substantially all of our revenue is currently derived from sources located in New York, our business may be adversely affected by conditions in such state.
Approximately 96% of our revenue during the year ended December 31, 2024 was derived from sources located in the State of New York and, accordingly, is affected by the prevailing regulatory, economic, demographic, competitive and other conditions in the state. Changes in any of these conditions could make it costlier or difficult for us to conduct our business. Adverse regulatory developments in New York, which could include fundamental changes to the design or implementation of the insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition.
We are highly dependent on a relatively small number of insurance brokers for a large portion of our revenues.
We market our insurance products primarily through insurance brokers. A large percentage of our gross premiums written are sourced through a limited number of brokers. For the year ended December 31, 2024, 50 brokers provided a total of 51.2% of our total gross premiums written. The nature of our dependency on these brokers relates to the high volume of business they consistently refer to us. Our relationship with these brokers is based on the quality of the underwriting and claims services we provide to our clients and on our financial strength ratings. Any deterioration in these factors could result in these brokers advising clients to place their risks with other insurers rather than with us. A loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect on our financial condition and results of operations.
Actual claims incurred may exceed current reserves established for claims, which may adversely affect our operating results and financial condition.
Recorded claim reserves for our business are based on our best estimates of losses after considering known facts and interpretations of circumstances. Internal and external factors are considered. Internal factors include, but are not limited to, actual claims paid, pending levels of unpaid claims, product mix and contractual terms. External factors include, but are not limited to, changes in the law, court decisions, changes in regulatory requirements and economic conditions. Because reserves are estimates of the unpaid portion of losses that have occurred, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded reserves, and such variance may adversely affect our operating results and financial condition.
As a holding company, we are dependent on the results of operations of our subsidiary, KICO; there are restrictions on the payment of dividends by KICO.
We are a holding company and a legal entity separate and distinct from our operating subsidiary, KICO. As a holding company with limited operations of our own, currently the principal sources of our funds are dividends and other payments from KICO. Consequently, we must rely on KICO for our ability to repay debts, pay expenses and pay cash dividends to our stockholders.
State insurance laws limit the ability of KICO to pay dividends from unassigned surplus and require KICO to maintain specified minimum levels of statutory capital and surplus. Maximum allowable dividends by KICO to us are restricted to the lesser of 10% of surplus or 100% of net investment income (on a statutory accounting basis) for the trailing 36 months, less dividends paid by KICO during such period. As of December 31, 2024, KICO had unassigned surplus of approximately $13.7 million. The aggregate maximum amount of dividends permitted by law to be paid by an insurance
company does not necessarily define an insurance company’s actual ability to pay dividends. The actual ability to pay dividends may be further constrained by business and regulatory considerations, such as the impact of dividends on surplus, by our competitive position and by the amount of premiums that we can write. State insurance regulators have broad discretion to limit the payment of dividends by insurance companies. KICO has an agreement with DFS that KICO may only pay dividends to us for purposes of paying operating expenses and debt obligations and that the maximum amount of dividends that can be paid in a12 month period is $12 million without prior approval.
Our future results are dependent in part on our ability to successfully operate in an insurance industry that is highly competitive.
The insurance industry is highly competitive. Many of our competitors have well-established national reputations, substantially more capital and significantly greater marketing and management resources. Because of the competitive nature of the insurance industry, including competition for customers, agents and brokers, there can be no assurance that we will continue to effectively compete with our industry rivals, or that competitive pressures will not have a material adverse effect on our ability to grow our business and to maintain profitable operating results or financial condition.
If we lose key personnel or are unable to recruit qualified personnel, our ability to implement our business strategies could be delayed or hindered.
Our future success will depend, in part, upon the efforts of Meryl Golden, our President and Chief Executive Officer. The loss of Ms. Golden or other key personnel could prevent us from fully implementing our business strategies and could materially and adversely affect our business, financial condition and results of operations. As we continue to grow, we will need to recruit and retain additional qualified management personnel, but we may not be able to do so. Our ability to recruit and retain such personnel will depend upon a number of factors, such as our results of operations and prospects and the level of competition prevailing in the market for qualified personnel. Ms. Golden and we are parties to an employment agreement which expires on December 31, 2026.
Difficult conditions in the economy generally could adversely affect our business and operating results.
As with most businesses, we believe that difficult conditions in the economy could have an adverse effect on our business and operating results. General economic conditions also could adversely affect us in the form of consumer behavior, which may include decreased demand for our products. As consumers become more cost conscious, they may choose to purchase lower levels of insurance.
Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our reported results of operations and financial condition.
Our financial statements are subject to the application of generally accepted accounting principles, which are periodically revised, interpreted and/or expanded. Accordingly, we are required to adopt new guidance or interpretations, which may have a material adverse effect on our results of operations and financial condition that is either unexpected or has a greater impact than expected.
Our business could be adversely affected by a security breach or other attack involving our computer systems or those of one or more of our vendors.
Our business requires that we develop and maintain computer systems to run our operations and to store a significant volume of confidential data. Some of these systems rely on third-party vendors, through either a connection to, or an integration with, those third-parties’ systems. In the course of our operations, we acquire the personal confidential information of our customers and employees. We also store our intellectual property, trade secrets, and other sensitive business and financial information.
All of these systems are subject to “cyber attacks” by sophisticated third parties with substantial computing resources and capabilities, and to unauthorized or illegitimate actions by employees, consultants, agents and other persons with legitimate access to our systems. Such attacks or actions may include attempts to:
•steal, corrupt, or destroy data, including our intellectual property, financial data or the personal information of our customers or employees
•misappropriate funds
•disrupt or shut down our systems
•deny customers, agents, brokers, or others access to our systems, or
•infect our systems with viruses or malware.
While we can take defensive measures, there can be no assurance that we will be successful in preventing attacks or detecting and stopping them once they have begun. Our business could be significantly damaged by a security breach, data loss or corruption, or cyber attack. In addition to the potentially high costs of investigating and stopping such an event and implementing necessary fixes, we could incur substantial liability if confidential customer or employee information is stolen. In addition, such an event could cause a significant disruption of our ability to conduct our insurance operations. We have a cyber insurance policy to protect against the monetary impact of some of these risks. However, the occurrence of a security breach, data loss or corruption, or cyber-attack, if sufficiently severe, could have a material adverse effect on our business results.
We rely on our information technology and telecommunication systems, and the failure of these systems could materially and adversely affect our business.
Our business is highly dependent upon the successful and uninterrupted functioning of our information technology and telecommunications systems. We rely on these systems to support our operations. The failure of these systems could interrupt our operations and result in a material adverse effect on our business.
Risks Related to Our Common Stock
Our stock price may fluctuate significantly and be highly volatile and this may make it difficult for stockholders to resell shares of our common stock at the volume, prices and times they find attractive.
The market price of our common stock could be subject to significant fluctuations and be highly volatile, which may make it difficult for stockholders to resell shares of our common stock at the volume, prices and times they find attractive. There are many factors that will impact our stock price and trading volume, including, but not limited to, the factors listed above under “Risks Related to Our Business.”
Stock markets, in general, have experienced in recent years, and continue to experience, significant price and volume volatility, and the market price of our common stock may continue to be subject to similar market fluctuations that may be unrelated to our operating performance and prospects. Increased market volatility and fluctuations could result in a substantial decline in the market price of our common stock.
The trading volume in our common stock has been limited. As a result, stockholders may not experience liquidity in their investment in our common stock, thereby potentially limiting their ability to resell their shares at the volume, times and prices they find attractive.
Our common stock is currently traded on The Nasdaq Capital Market (“Nasdaq”). Our common stock has substantially less liquidity than the average trading market for many other publicly traded insurance and other companies. An active trading market for our common stock may not develop or, if developed, may not be sustained. Such stocks can be more volatile than stocks trading in an active public market. Therefore, stockholders have reduced liquidity and may not be able to sell their shares at the volume, prices and times that they desire.
There may be future issuances or resales of our common stock which may materially and adversely affect the market price of our common stock.
Subject to any required state insurance regulatory approvals, we are not restricted from issuing additional shares of our common stock in the future, including securities convertible into, or exchangeable or exercisable for, shares of our common stock. Our issuance of additional shares of common stock in the future will dilute the ownership interests of our then existing stockholders.
We have effective registration statements on Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), covering an aggregate of 2,900,000 shares of our common stock issuable under our Amended and Restated 2014 Equity Participation Plan (the "2014 Plan") and our 2024 Equity Participation Plan (the “2024 Plan”).
As of December 31, 2024, options to purchase 281,913 shares of our common stock, and 267,586 shares subject to unvested restricted stock grants, were outstanding under the 2014 Plan and the 2024 Plan and 941.245 shares were reserved for issuance thereunder. The shares issuable pursuant to the registration statements on Form S-8 will be freely tradable in the public market, except for shares held by our affiliates. As of December 31, 2024, there were also outstanding warrants
for the purchase of 642,025 shares of our common stock. The shares issuable pursuant to an exercise of the warrants may be freely tradeable in the public market under certain circumstances.
The 2014 Plan terminated in August 2024 and the 2024 Plan terminates in August 2034.
The sale of a substantial number of shares of our common stock or securities convertible into, or exchangeable or exercisable for, shares of our common stock, whether directly by us, by selling stockholders in future offerings or by our existing stockholders in the secondary market, the perception that such issuances or resales could occur or the availability for future issuances or resale of shares of our common stock or securities convertible into, or exchangeable or exercisable for, shares of our common stock could materially and adversely affect the market price of our common stock and our ability to raise capital through future offerings of equity or equity-related securities on attractive terms or at all.
In addition, our board of directors is authorized to designate and issue preferred stock without further stockholder approval, and we may issue other equity and equity-related securities that are senior to our common stock in the future for a number of reasons, including, without limitation, to repay our indebtedness, support operations and growth, maintain our capital ratios, and comply with any future changes in regulatory standards.
Anti-takeover provisions and the regulations to which we may be subject may make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to our stockholders.
We are a holding company incorporated in Delaware. Anti-takeover provisions in Delaware law and our restated certificate of incorporation and bylaws, as well as regulatory approvals required under state insurance laws, could make it more difficult for a third party to acquire control of us and may prevent stockholders from receiving a premium for their shares of common stock. Our certificate of incorporation provides that our board of directors may issue up to 2,500,000 shares of preferred stock, in one or more series, without stockholder approval and with such terms, preferences, rights and privileges as the board of directors may deem appropriate. These provisions, the control of our executive officers and directors over the election of our directors, and other factors may hinder or prevent a change in control, even if the change in control would be beneficial to, or sought by, our stockholders.
We do not currently pay dividends.
We have not paid cash dividends since September 2022. Our future dividend policy will be subject to the discretion of our Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions, and other factors. We can give no assurance that any dividends will be paid to holders of our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES.
Our principal executive offices are currently located at 15 Joys Lane, Kingston, New York 12401. Our insurance underwriting business is located principally at 15 Joys Lane, Kingston, New York 12401. Until March 2024, our insurance underwriting business also maintained an executive office located at 70 East Sunrise Highway, Valley Stream, New York 11581, at which we leased 4,985 square feet of space. In March 2024, the lease expired and was not renewed.
We own the building and the surrounding property at which our insurance underwriting business principally operates, free of mortgage. The property consists of a complex which includes the office building discussed above, a house and vacant land located in Kingston, New York. In late 2023, the property was rezoned to allow for residential development.
In February 2025, 15 Joys Lane LLC, our subsidiary, entered into a contract of sale with Ulster County, New York (the “County”) for the sale to the County of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”) . The purchase price for the Property is $3,600,000. The closing of the sale is anticipated to take place in March 2025, subject to the satisfaction of the conditions to the closing.
Effective March 1, 2025, we have leased new principal executive office space at 120 Wood Road, Kingston, New York 12401. The new offices are held pursuant to a lease which expires on March 31, 2030 with a five year renewal option.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS.
None.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is quoted on The Nasdaq Capital Market under the symbol “KINS.”
Holders
As of March 12, 2025, there were 210 record holders of our common stock.
Dividends
Holders of our common stock are entitled to dividends when, as and if declared by our Board of Directors out of funds legally available. We paid a cash dividend in each quarter from September 2011 through September 2022. On November 11, 2022, our Board of Directors determined to suspend regular quarterly dividends due to the need to retain cash to repay indebtedness.
Future dividend policy will be subject to the discretion of our Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions, and other factors. Therefore, we can give no assurance that future dividends of any kind will be paid to holders of our common stock.
Our ability to pay dividends depends, in part, on the ability of KICO to pay dividends to us. KICO, as an insurance subsidiary, is subject to significant regulatory restrictions limiting its ability to declare and pay dividends. In addition, there are restrictions related to surplus and net investment income. Without the prior approval of the DFS, dividends may be paid by insurance carriers from unassigned surplus and are restricted to the lesser of 10% of surplus or 100% of investment income (on a statutory accounting basis) for the trailing 36 months, less dividends paid by KICO during such period. As of December 31, 2023, KICO was not able pay any dividends to us without prior regulatory approval due to negative unassigned surplus of approximately $7,662,000. As of December 31, 2024 KICO had unassigned surplus of approximately $13,658,000. KICO has an agreement with DFS that KICO may only pay dividends up to $12,000,000 to us for purposes of paying operating expenses and debt obligations. See “Business - Government Regulation”, “Risk Factors - As a holding company, we are dependent on the results of operations of our subsidiary, KICO; there are restrictions on the payment of dividends by KICO” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation - Liquidity” in Items 1, 1A and 7, respectively, of this Annual Report.
In addition, pursuant to the 2022 Exchange Agreement and the 2024 Exchange Agreement, we were not permitted to pay any cash dividends without the approval of the holders of a majority of the outstanding principal amount of the 2022 Notes and the 2024 Notes. The 2022 Notes were exchanged in part for the 2024 Notes, and the 2024 Notes were paid in full on February 25, 2025.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
None.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. RESERVED.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Overview
We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th
largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2024 and 2023, respectively, 96.0% and 88.3% of KICO’s direct written premiums came from the New York policies. We refer to our New York business as our “Core” business and the business outside of New York as our “non-Core” business.
In addition, our subsidiary, Cosi Agency, Inc. (“Cosi”), a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. Cosi retains the profit between the commission revenue received and the commission expense paid (“Net Cosi Revenue”). Commission expense is reduced by Net Cosi Revenue. Cosi-related operating expenses are minimal and are included in other operating expenses.
We derive substantially all of our revenue from KICO, which includes revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from its portfolio, and net realized gains and losses on investment securities. All of KICO’s insurance policies are written for a one year term. Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that insurance coverage is provided (i.e., ratably over the one year life of the policy). A significant period of time can elapse from the receipt of insurance premiums to the payment of insurance claims. During this time, KICO invests the premiums, earns investment income and generates net realized and unrealized investment gains and losses on investments. Our holding company earns investment income from its cash holdings.
Our expenses include the insurance underwriting expenses of KICO and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses. In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits.
Other operating expenses include our corporate expenses as a holding company. These corporate expenses include legal and auditing fees, executive employment costs, and other costs directly associated with being a public company.
Principal Revenue and Expense Items
Net premiums earned: Net premiums earned is the earned portion of our written premiums, less that portion of premium that is ceded to third party reinsurers under reinsurance agreements. The amount ceded under these reinsurance agreements is based on a contractual formula contained in the individual reinsurance agreement. Insurance premiums are earned on a pro rata basis over the term of the policy. At the end of each reporting period, premiums written that are not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy. Our insurance policies have a term of one year. Accordingly, for a one-year policy written on July 1, 2023, we would earn half of the premiums in 2023 and the other half in 2024.
Ceding commission revenue: Commissions on reinsurance premiums ceded to quota share treaties are earned in a manner consistent with the recognition of the direct acquisition costs of the underlying insurance policies, generally on a pro-rata basis over the terms of the policies reinsured.
Net investment income and net gains (losses) on investments: We invest in cash and cash equivalents, short-term investments, fixed-maturity and equity securities, and other investments. Our net investment income includes interest and dividends earned on our invested assets, less investment expenses. Net realized gains and losses on our investments are reported separately from our net investment income. Net realized gains occur when our investment securities are sold for more than their costs or amortized costs, as applicable. Net realized losses occur when our investment securities are sold for less than their costs or amortized costs, as applicable, or are written down as a result of other-than-temporary impairment. We classify our fixed-maturity securities as either available-for-sale or held-to-maturity. Net unrealized gains (losses) on those securities classified as available-for-sale are reported separately within accumulated other comprehensive (loss) income on our balance sheet while our equity securities and other investments report changes in fair value through earnings. See Note 2 in the accompanying consolidated financial statements for a further discussion of our accounting policies following Item 16 of this Annual Report.
Other income: We recognize installment fee income and fees charged to reinstate a policy after it has been cancelled for non-payment.
Loss and loss adjustment expenses incurred: Loss and LAE incurred represent our largest expense item, and for any given reporting period include estimates of future claim payments, changes in those estimates from prior reporting periods and costs associated with investigating, defending and servicing claims. These expenses fluctuate based on the amount and types of risks we insure. We record loss and LAE related to estimates of future claim payments based on case-by-case valuations, statistical analyses and actuarial procedures. We seek to establish all reserves at the most likely ultimate liability based on our historical claims experience. It is typical for certain claims to take several years to settle and we revise our estimates as we receive additional information on such claims. Our ability to estimate loss and LAE accurately at the time of pricing our insurance policies is a critical factor affecting our profitability.
Commission expenses and other underwriting expenses: Other underwriting expenses include policy acquisition costs and other expenses related to the underwriting of policies. Policy acquisition costs represent the costs of originating new insurance policies that vary with, and are primarily related to, the production of insurance policies (principally commissions, premium taxes and certain underwriting salaries). Policy acquisition costs are deferred and recognized as expense as the related premiums are earned. Other underwriting expenses represent general and administrative expenses of our insurance business and are comprised of other costs associated with our insurance activities such as regulatory fees, telecommunication and technology costs, occupancy costs, employment costs, and legal and auditing fees.
Other operating expenses: Other operating expenses include the corporate expenses of our holding company, Kingstone Companies, Inc. These expenses include executive employment costs, legal and auditing fees, and other costs directly associated with being a public company.
Stock-based compensation: Non-cash equity compensation includes the fair value of stock grants issued to our directors, officers and employees, and amortization of stock options issued to the same.
Depreciation and amortization: Depreciation and amortization includes the amortization of intangibles related to the acquisition of KICO, depreciation of the real estate used in KICO’s operations, as well as depreciation of capital expenditures for information technology projects, office equipment and furniture.
Interest expense: Interest expense represents amounts we incur on our outstanding indebtedness at the applicable interest rates. Interest expense also includes amortization of debt discount and issuance costs.
Income tax expense: We incur federal income tax expense on our consolidated statement of operations as well as state income tax expense for our non-insurance underwriting subsidiaries.
Product Lines
Our product lines include the following:
Personal lines: Our largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies.
Commercial liability: Through July 2019, we offered businessowners policies, which consist primarily of small business retail, service, and office risks, with limited property exposures. We also wrote artisan’s liability policies for small independent contractors with smaller sized workforces. In addition, we wrote special multi-peril policies for larger and more specialized businessowners risks, including those with limited residential exposures. Further, we offered commercial umbrella policies written above our supporting commercial lines policies.
In May 2019, due to the poor performance of this line we placed a moratorium on new commercial lines and new commercial umbrella submissions while we further reviewed this business. In July 2019, due to the continuing poor performance of these lines, we made the decision to no longer underwrite commercial lines or commercial umbrella risks. In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of December 31, 2024 and 2023, there were no commercial liability policies in-force. As of December 31, 2024, these expired policies represent approximately 14.4% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.
Livery physical damage: We write for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs. These policies insure only the physical damage portion of insurance for such vehicles, with no liability coverage included.
Other: We write canine legal liability policies and have a small participation in mandatory state joint underwriting associations.
Key GAAP and Non-GAAP Measures
We utilize the following key GAAP and non-GAAP measures in analyzing the results of our insurance underwriting business. See "Non-GAAP Financial Measures" for a reconciliation of the below non-GAAP measures to the most directly comparable GAAP measure:
Net loss ratio: The net loss ratio is a measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of net losses and LAE incurred to net premiums earned.
Underlying loss ratio: The underlying loss ratio is a non-GAAP ratio, which is computed as the GAAP net loss ratio excluding the effect of prior year loss reserve development and catastrophes losses. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by prior year loss reserve development and catastrophe losses. Catastrophe losses cause our loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The underlying loss ratio should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.
Net loss ratio excluding the effect of catastrophes: The net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of catastrophes on the net loss ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The net loss ratio excluding the effect of catastrophes should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.
Net loss ratio excluding commercial lines business: The net loss ratio excluding commercial lines business is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of commercial lines on the net loss ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by losses from commercial lines business. Our commercial lines business has been in run-off effective July 2019. Commercial lines losses cause our net loss ratios to vary between periods as a result of changes to their loss reserves during the run-off period and have an impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The net loss ratio excluding commercial lines business should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.
Net underwriting expense ratio: The net underwriting expense ratio is a measure of an insurance company’s operational efficiency in administering its business. Expressed as a percentage, this is the ratio of the sum of acquisition costs (the most significant being commissions paid to our producers) and other underwriting expenses less ceding commission revenue less other income to net premiums earned.
Net underwriting expense ratio excluding the effect of catastrophes: The net underwriting expense ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net underwriting expense ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the underwriting expense ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net underwriting expense ratio. The net underwriting expense ratio excluding the effect of catastrophes should not be considered a substitute for the net underwriting expense ratio and does not reflect our net underwriting expense ratio.
Net combined ratio: The net combined ratio is a measure of an insurance company’s overall underwriting profit. This is the sum of the net loss and net underwriting expense ratios. If the net combined ratio is at or above 100 percent, an
insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient.
Net combined ratio excluding the effect of catastrophes: The net combined ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP combined ratio and the effect of catastrophes on the net combined ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net combined ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net combined ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net combined ratio. The net combined ratio excluding the effect of catastrophes should not be considered a substitute for the net combined ratio and does not reflect our net combined ratio.
Underwriting income: Underwriting income is net pre-tax income attributable to our insurance underwriting business before investment activity. It excludes net investment income, net realized gains from investments, and depreciation and amortization (net premiums earned less expenses included in combined ratio). Underwriting income is a measure of an insurance company’s overall operating profitability before items such as investment income, depreciation and amortization, interest expense and income taxes.
Net income (loss) from insurance underwriting business on a standalone basis: Net income (loss) from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income (loss) without the effect of holding company operations on GAAP net income (loss). Management believes that this measure is useful to investors, and it is used by management to reveal the trends in our insurance underwriting business that may be obscured by holding company operations. Holding company operations cause our GAAP net income (loss) to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net income (loss). Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is GAAP net income (loss). Net income (loss) from insurance underwriting business on a standalone basis should not be considered a substitute for GAAP net income (loss) and does not reflect our GAAP net income (loss).
Critical Accounting Estimates
Our consolidated financial statements include the accounts of Kingstone Companies, Inc. and all majority-owned and controlled subsidiaries. The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related notes. In preparing these consolidated financial statements, our management has utilized information including our past history, industry standards, and the current economic environment, and other factors, in forming its estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by our management in formulating its estimates in these financial statements may not materialize.
Application of the critical accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In addition, other companies may utilize different estimates, which may impact comparability of our results of operations to those of similar companies.
See below a description of these critical accounting estimates. Also, see Note 2 to the consolidated financial statements following Item 16 of this Annual Report.
Loss and Loss Adjustment Expense Reserves
Property and casualty loss and loss adjustment expense (“LAE”) reserves are established to provide for the estimated cost of settling both reported (“case”) and incurred but not reported (“IBNR”) claims and claims adjusting expenses. The liability for these reserves is estimated on an undiscounted basis, using individual case-basis valuations and paid claims, pending claims, statistical analyses and various actuarial reserving methodologies. Due to the inherent uncertainty of the reserve process, actual loss costs could vary significantly compared to estimated loss costs. The below table provides detail of our reserves as of December 31, 2024 and 2023:
As of
December 31, 2024 As of
December 31, 2023
($ in thousands) Gross Ceded Net Gross Ceded Net
Case loss $ 64,087 $ 17,721 $ 46,366 $ 67,108 $ 19,538 $ 47,570
Case LAE 6,563 1,426 5,137 5,726 1,121 4,605
IBNR loss 38,681 10,661 28,020 37,262 10,665 26,597
IBNR LAE 16,879 2,514 14,365 11,722 1,965 9,757
Total $ 126,210 $ 32,322 $ 93,888 $ 121,818 $ 33,289 $ 88,529
(Components may not sum due to rounding)
Case Reserves - Reserves for reported losses are based on an estimate of ultimate loss costs of an individual claim derived from individual case-basis valuations, actual claims paid, pending claims, statistical analyses and various actuarial reserving methodologies.
IBNR Reserves - IBNR reserves are estimates of claims that have occurred but as to which we have not yet been notified to establish the case reserve. IBNR is determined using historical information aggregated by line of insurance and adjusted to current conditions.
Reinsurance
We purchase reinsurance to manage our underwriting risk on certain policies. Reinsurance receivables represent management’s best estimate of loss and LAE recoverable from reinsurers. Reinsurance receivables are estimated using the same methodologies as loss and LAE reserves. Changes in the methods and assumptions used could result in significant variances between actual and estimated losses.
Deferred Income Taxes
Our effective tax rate is based on GAAP income at statutory tax rates, adjusted for non-taxable and non-deductible items, and tax credits. Changes in estimates used in preparing the consolidated statements of operations and comprehensive income (loss) could result in significant changes to our deferred tax asset or liability.
Deferred tax assets or liabilities are recognized for estimated future tax consequences which result in differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. These assets and liabilities are carried at the enacted tax rates expected to apply when the asset or liability is expected to be recovered or settled. Changes in estimates and assumptions in the consolidated statements of operations and comprehensive income (loss), or changes in the enacted tax rate, could result in significant variances between our carried deferred tax and tax recognized on the recovery or settlement of the asset or liability.
Investments
Bonds are classified as held-to-maturity (“HTM”) or available-for-sale (“AFS”), and stocks are generally classified as AFS. Investments classified as HTM are carried at amortized cost, which requires very little judgement. Investments classified as AFS are generally carried at fair value with an unrealized gain/loss recorded in income. Actual results could vary significantly from the fair values recognized in the consolidated statements of operations and comprehensive income (loss).
Kingstone 2.0 (completed), Kingstone 3.0 (underway), and Change in Market Dynamics (underway)
Beginning in the fourth quarter of 2019, a series of strategic initiatives, coined “Kingstone 2.0”, were commenced to modernize our company. The pillars of the new strategy were as follows:
1.Strengthen the management team by adding highly qualified professionals with deep domain experience and diverse backgrounds;
2.Reduce expenses and increase efficiency by embracing technology, including converting to a new policy management system, retiring multiple legacy systems and starting up a new claims system, among other technology initiatives;
3.Develop and implement a new, more highly segmented product suite (Kingstone Select) which better matches rate to risk using advanced analytics and an abundance of data; and
4.Better manage our catastrophe exposure in order to reduce the growth rate of our probable maximum loss (“PML”) in order to mitigate the impact of the then emerging “hard market” in catastrophe reinsurance.
We announced the substantive completion of Kingstone 2.0 in late 2022 and embarked on a new strategy to optimize our in-force business, which we coined as “Kingstone 3.0”. The four pillars of this new strategy entail:
1.Aggressively reduced the non-Core book of business, which has had a disproportionately negative impact on underwriting results, by stopping new business, culling the agent base, reducing commissions, or other means, subject to regulatory constraints, and have aggressively reduced policy count. Our request to withdraw from the state of New Jersey was acknowledged in October 2023 and all remaining policies were non-renewed over a two year period starting January 1, 2024. As of December 31, 2024, our non-Core policy count was down by 65% compared to December 31, 2023;
2.Adjusted pricing to stay ahead of loss trends, including inflation, by filing the maximum annual rate change that can be supported in each state and product and ensured all policyholders were insured to value. Inflation has been a dominant headwind that is showing signs of stabilizing. We have been cognizant that inflation’s impact on loss costs places added pressure on premiums and, as such, we have been more frequent and aggressive with our rate change requests. Similarly, home replacement values reflect that same inflationary pressure. In September 2023, we completed our first cycle of valuation adjustments, making sure that all homes were insured to value. As a result, we have seen a rise in premiums attributable to the heightened replacement costs. All policies are renewed at the most current replacement cost. Overall average written premium for our Core renewal policies for the last 12 months, reflecting both rate and replacement cost changes, increased by 17.4%;
3.Tightly managed reinsurance requirements and costs, using risk selection and other underwriting capabilities to manage the growth rate of our PML. We needed to contain our exposure to spiking reinsurance pricing. We did so and were able to reduce the required limit to be purchased while maintaining our same risk tolerance. We used all the tools available to us to limit new business that was deemed to be too expensive and at the same time re-underwrote the book to cull those risks which presented the greatest risk; and
4.Continuing expense reduction focus with a goal of reducing the net expense ratio to 33% by year-end 2024. For the year ended December 31, 2023, we achieved our goal of 33%, with a net underwriting expense ratio of 32.9%. For the year ended December 31, 2024, we achieved our goal, with a net underwriting expense ratio of 31.3%, a reduction of 1.6 points compared to the year ended December 31, 2023.
We believe that the above actions taken resulted in our return to profitability for the year ended December 31, 2024, will continue to have the intended effect and will continue through the year ended December 31, 2025 and beyond.
On August 2, 2024, two large competitors announced a plan to wind down their personal lines operations in New York State and to non-renew or mid-term cancel their entire book of business before year end 2024. The policyholders of such competitors will need to find alternative coverage. Beginning in the quarter ended September 30, 2024, we began seeing a sizable increase in our policies in force and direct written premiums from these non-renewed and cancelled policies. We refer to this new business as a Change in Market Dynamics.
See the tables below for our Core and non-Core business for policies in force as of December 31, 2024 and 2023 and direct written premiums for the years ended December 31, 2024 and 2023. For the year ended December 31, 2024, our Core direct written premiums increased by 31.4% compared to the year ended December 31, 2023, while Core policies in force increased by 9.3% as of December 31, 2024 as compared to December 31, 2023. For the same periods, our non-Core policies in force decreased by 64.9% and non-Core direct written premiums decreased by 58.5%.
As of December 31,
2024 2023 Change
Percent
Policies In Force, as of end of Period
Core 73,857 67,575 6,282 9.3 %
Non-Core 3,799 10,823 (7,024) (64.9) %
Total policies in force 77,656 78,398 (742) (0.9) %
Years ended December 31,
(000’s except percentages) 2024 2023 Change
Percent
Direct written premiums
Core $ 232,227 $ 176,692 $ 55,535 31.4 %
Non-Core 9,754 23,482 (13,728) (58.5) %
Total direct written premiums $ 241,980 $ 200,175 $ 41,805 20.9 %
(Columns in the table above may not sum to totals due to rounding)
Consolidated Results of Operations
The following table summarizes the changes in the results of our operations for the periods indicated:
Years ended December 31,
($ in thousands) 2024 2023 Change
Percent
Revenues
Direct written premiums $ 241,980 $ 200,175 $ 41,805 20.9 %
Assumed written premiums - - - na
241,980 200,175 41,805 20.9 %
Ceded written premiums
Ceded to quota share treaties (1) 50,539 51,125 (586) (1.1 %)
Ceded to excess of loss treaties 6,417 7,122 (705) (9.9 %)
Ceded to catastrophe treaties 30,794 33,271 (2,477) (7.4 %)
Total ceded written premiums 87,750 91,518 (3,768) (4.1 %)
Net written premiums 154,230 108,657 45,573 41.9 %
Change in unearned premiums
Direct and assumed (29,080) 1,871 (30,951) na
Ceded to quota share treaties (1) 3,348 3,856 (508) (13.2 %)
Change in net unearned premiums (25,732) 5,727 (31,459) (549.3 %)
Premiums earned
Direct and assumed 212,900 202,046 10,854 5.4 %
Ceded to reinsurance treaties (84,402) (87,661) 3,259 (13.6) %
Net premiums earned 128,498 114,384 14,114 12.3 %
Ceding commission revenue (1) 18,838 21,053 (2,215) (10.5 %)
Net investment income 6,824 6,009 815 13.6 %
Net gains on investments 415 2,135 (1,720) (80.6) %
Other income 568 610 (42) (6.9) %
Total revenues 155,142 144,191 10,951 7.6 %
Expenses
Loss and loss adjustment expenses
Direct and assumed:
Loss and loss adjustment expenses excluding the effect of catastrophes 79,472 111,997 (32,525) (29.0) %
Losses from catastrophes (2) 3,389 11,944 (8,555) (71.6) %
Total direct and assumed loss and loss adjustment expenses 82,861 123,940 (41,079) (33.1) %
Ceded loss and loss adjustment expenses:
Loss and loss adjustment expenses excluding the effect of catastrophes 19,292 37,302 (18,010) (48.3 %)
Losses from catastrophes (2) 935 3,789 (2,854) (75.3) %
Total ceded loss and loss adjustment expenses 20,226 41,091 (20,865) (50.8 %)
Net loss and loss adjustment expenses:
Loss and loss adjustment expenses excluding the effect of catastrophes 60,181 74,694 (14,513) (19.4) %
Losses from catastrophes (2) 2,454 8,155 (5,701) (69.9 %)
Net loss and loss adjustment expenses 62,635 82,849 (20,214) (24.4) %
Commission expense 33,929 33,365 564 1.7 %
Other underwriting expenses 25,693 25,910 (217) (0.8) %
Other operating expenses 3,635 2,456 1,179 48.0 %
Depreciation and amortization 2,449 2,973 (524) (17.6) %
Interest expense 3,514 4,003 (489) (12.2 %)
Total expenses 131,854 151,556 (19,702) (13.0) %
Income (loss) before taxes 23,288 (7,365) 30,653 na
Income tax expense (benefit) 4,930 (1,197) 6,127 na
Net income (loss) $ 18,358 $ (6,168) $ 24,526 na
(Columns in the table above may not sum to totals due to rounding)
(1)For the year ended December 31, 2023 , our personal lines business was subject to a 30% quota share treaty, expiring on January 1, 2024, which included a runoff of an 5.5% portion through the remainder of 2023. Effective January 1, 2024, we entered into a 27% personal lines quota share treaty, which includes a runoff of a 3.0% portion through the end of 2024.
(2)For the years ended December 31, 2024 and 2023 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers
Years Ended December 31,
2024 2023 Percentage Point Difference
Percent Change
Key ratios:
Net loss ratio 48.7 % 72.4 % (23.7) (32.7) %
Net underwriting expense ratio 31.3 % 32.9 % (1.6) (4.9) %
Net combined ratio 80.0 % 105.3 % (25.3) (24.0) %
Direct Written Premiums
Direct written premiums during the year ended December 31, 2024 (“Year Ended 2024”) were $241,980,000 compared to $200,175,000 during the year ended December 31, 2023 (“Year Ended 2023”). The increase of $41,805,000, or 20.9%, was primarily due to an increase in premiums from our personal lines business.
Direct written premiums from our personal lines business for Year Ended 2024 were $227,643,000, an increase of $42,217,000 or 22.8%, from $185,426,000 in Year Ended 2023. The 22.8% increase in premiums from our personal lines business was primarily due to the increase in premiums associated with our Core business of 31.4% offsetting a 58.5% decrease in our non-Core business. The increase in our Core business premiums and the decrease in our non-Core business premiums is in accordance with both our Kingstone 2.0 and Kingstone 3.0 strategic plans. Beginning in the third quarter, 2024, the Change in Market Dynamics became a major factor to the increase in direct written premiums from our personal line business.
Direct written premiums from our livery physical damage business for Year Ended 2024 were $14,248,000, a decrease of $400,000, or 2.7%, from $14,648,000 in Year Ended 2023. The decrease in livery physical damage direct written premiums was due to an underwriting restriction in place to exclude certain electric vehicles until the approval of adequate rate for the risk was received, which happened in July 2024. The decrease was offset by an increase in the values of the autos insured.
Direct written premiums from our Core business were $232,227,000 in Year Ended 2024 compared to $176,692,000 in Year Ended 2023, an increase of $55,535,000, or 31.4%. The increase in direct written premiums from our Core business was due to rate increases and an increase in policies in force. Policies in force from our Core business increased by 9.3% in Year Ended 2024 compared to Year Ended 2023. Direct written premiums from our non-Core business were $9,753,000 in Year Ended 2024, as compared to $23,482,000 in Year Ended 2023, a decrease of $13,729,000, or 58.5%. The decrease in direct written premiums from our non-Core business is a result of our decision to aggressively reduce the book of business in these states. Policies in force from our non-Core business decreased by 64.9% in Year Ended 2024 compared to Year Ended 2023. The increase in our Core business and the decrease in our non-Core business is consistent with a key pillar of our Kingstone 3.0 strategy to reduce our non-Core business due to profitability concerns.
Net Written Premiums and Net Premiums Earned
Net written premiums increased $45,573,000, or 41.9%, to $154,230,000 in Year Ended 2024 from $108,657,000 in Year Ended 2023. Net written premiums include direct premiums, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in Year Ended 2024 is primarily due to an increase in direct written premiums and a decrease in catastrophe premium rates.
Quota share reinsurance treaties
Effective January 1, 2023, we entered into a 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”). Upon expiration of the 2023/2024 Treaty on January 1, 2024 we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 ("2024/2025 Treaty"). Our personal lines business was subject to the 2024/2025 Treaty in the Year Ended 2024 and the 2023/2024 Treaty in the Year Ended 2023. Our premiums ceded under the quota share treaties decreased by $586,000 in comparison to premiums attributable to the increase in direct written premiums subject to the 2024/2025 Treaty compared to direct written premiums subject to the 2023/2024 Treaty. The decrease in ceded premiums related to the increase in direct written premiums was offset by the decrease in quota share ceding percentage rates.
Excess of loss reinsurance treaties
In Year Ended 2024, our ceded excess of loss reinsurance premiums decreased $705,000 compared to the ceded excess of loss premiums for Year Ended 2023. Effective January 1, 2023, we entered into an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 2023 through January 1, 2024. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective January 1, 2024, the Underlying XOL Treaty was renewed covering the period from January 1, 2024 through January 1, 2025.
Catastrophe reinsurance treaties
Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase if reinsurance rates are stable or are increasing. Under Kingstone 2.0 and 3.0 we had a decrease in policies in force, and better catastrophe management, resulting in a decrease in catastrophe exposure, and a decrease in catastrophe premiums. On July 1, 2024 and 2023, we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter. Our catastrophe premiums were $30,794,000 in Year Ended 2024, compared to $33,271,000 in Year Ended 2023, a decrease of $2,477,000, or 7.4%.
Net premiums earned
Net premiums earned increased $14,114,000 or 12.3% to $128,498,000 in Year Ended 2024 compared to $114,384,000 in Year Ended 2023. The increase was due to the three percentage point reduction in quota share rates discussed above, the run-off of a portion of the 2023/2024 Treaty, which increased the premiums ceded and reduced the net premiums earned in Year Ended 2023, the increase in premiums from the Change in Market Dynamics in Year Ended 2024, and a decrease in catastrophe premium rates, reflected in ceded catastrophe premiums earned, which increased the amount of growth in net premiums earned.
Ceding Commission Revenue
The following table summarizes the changes in the components of ceding commission revenue (in thousands) for the periods indicated:
Years ended December 31,
($ in thousands) 2024 2023 Change Percent
Provisional ceding commissions earned $ 18,829 $ 20,397 $ (1,568) (7.7 %)
Contingent ceding commissions earned 9 656 (647) (98.6 %)
Total ceding commission revenue $ 18,838 $ 21,053 $ (2,215) (10.5 %)
(Columns in the table above may not sum to totals due to rounding)
Ceding commission revenue was $18,838,000 in Year Ended 2024 compared to $21,053,000 in Year Ended 2023. The decrease of $2,215,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.
Provisional Ceding Commissions Earned
In Year Ended 2024, we earned provisional ceding commissions of $18,829,000 from personal lines earned premiums ceded under the 2024/2025 Treaty, and in Year Ended 2023, we earned provisional ceding commissions of $20,397,000 from personal lines earned premiums ceded under the 2023/2024 Treaty. The decrease of $1,568,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during Year Ended 2024 compared to Year Ended 2023, offset by an increase in ceding commission rates under the 2024/2025 Treaty.
Contingent Ceding Commissions Earned
The structure of the 2024/2025 Treaty and the 2023/2024 Treaty calls for a fixed provisional ceding commission with no opportunity to earn additional contingent ceding commissions. Under our prior years’ quota share treaties, we received a contingent ceding commission based on a sliding scale in relation to the losses incurred under our quota share treaties. The lower the ceded loss ratio, the more contingent commission we received.
Net Investment Income
Net investment income was $6,824,000 in Year Ended 2024 compared to $6,009,000 in Year Ended 2023, an increase of $815,000, or 13.6%. The average yield on non-cash invested assets was 3.80% as of December 31, 2024 compared to 3.75% as of December 31, 2023
Cash and invested assets were $221,847,000 as of December 31, 2024 compared to $172,095,000 as of December 31, 2023, an increase of $49,752,000.
Net Gains on Investments
Net gains on investments were $415,000 in Year Ended 2024 compared to net gains of $2,135,000 in Year Ended 2023. Unrealized gains on our equity securities and other investments in Year Ended 2024 were $477,000, compared to unrealized gains of $2,153,000 in Year Ended 2023. Net realized losses on sales of investments were $62,000 in Year Ended 2024 compared to net realized losses of $19,000 in Year Ended 2023.
Other Income
Other income was $568,000 in Year Ended 2024 compared to $610,000 in Year Ended 2023, a decrease of $47,000, or 6.9%.
Net Loss and LAE
Net loss and LAE was $62,635,000 for Year Ended 2024 compared to $82,849,000 for Year Ended 2023. The net loss ratio was 48.7% in Year Ended 2024 compared to 72.4% in Year Ended 2023, a decrease of 23.7 percentage points.
The following graph summarizes the changes in the components of net loss ratio for the periods indicated, along with the comparable components excluding commercial lines business(1):
(Percent components may not sum to totals due to rounding)
The net loss ratio for Year Ended 2024 improved significantly compared to Year Ended 2023. For Year Ended 2024, the catastrophe impact, prior year development, and underlying loss ratio(1) (loss ratio excluding the impact of catastrophes and prior year development) were all lower than Year Ended 2023.
There were sixteen newly designated catastrophe events for Year Ended 2024, none of which was a major event for the Company’s covered areas. The estimated total net catastrophe impact for Year Ended 2024 was $2,454,000, which contributed 1.9 points to the loss ratio. By comparison, the catastrophe impact for Year Ended 2023 was 7.1 points. Losses from winter-related catastrophe claims were minimal for Year Ended 2024, whereas the previous year was impacted by a major winter event in February 2023.
The underlying loss ratio(1) was 48.2% for Year Ended 2024, a decrease of 17.1 points from the 65.3% underlying loss ratio recorded for Year Ended 2023. Overall personal lines non-catastrophe frequency for Year Ended 2024 was lower than Year Ended 2023, which is believed to be the result of better risk selection in the Company’s Select product rollout as well as the Company’s active efforts to manage less profitable segments. Overall personal lines non-catastrophe severity for Year Ended 2024 was also improved compared to Year Ended 2023, primarily driven by water claims and a reduced impact from large losses.
There was favorable prior year development of $1,780,000 for Year Ended 2024, which translates to a 1.4-point decrease to the net loss ratio. By comparison, the impact of favorable prior year development for Year Ended 2023 was a decrease of less than 0.1 points.
(1) Underlying loss ratio is a non-GAAP ratio, which is computed the GAAP net loss ratio excluding the effect of prior year loss reserve development and catastrophe losses.Net loss ratio excluding commercial lines business is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of commercial lines business. See "Non-GAAP Financial Measures" for the reconciliation of underlying loss ratio and net loss ratio excluding commercial lines business to the GAAP measure of net loss ratio.
See table below under “Additional Financial Information” summarizing net loss ratios by line of business.
Commission Expense
Commission expense was $33,929,000 in Year Ended 2024 or 15.9% of direct earned premiums. Commission expense was $33,365,000 in Year Ended 2023 or 16.5% of direct earned premiums. The increase of $564,000 was primarily due to $2,788,000 of contingent commission in Year Ended 2024 based on the profitability of the business, and an increase in direct earned premiums of $10,854,000. The increase was offset by a reduction in commission rates on our legacy policies in accordance with our Kingstone 3.0 strategy as well as the lower commission rate paid on Select products as compared to legacy products.
Other Underwriting Expenses
Other underwriting expenses were $25,693,000, or 12.1% of direct earned premiums, in Year Ended 2024 compared to $25,910,000, or 12.8% of direct earned premiums, in Year Ended 2023. The decrease of $217,000, or 0.8%, was primarily due to a $365,000 gain on the commutations of prior years’ quota share reinsurance treaties from a group of reinsurers, decreases in base salaries and employment costs as described below, and a decrease in policy management system fees. The decreases were partially offset by the impact of high inflation.
Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $13,143,000 in Year Ended 2024 compared to $11,335,000 in Year Ended 2023. The increase of $1,808,000, or 34.2%, is compared unfavorably to the 20.9% increase in direct written premiums. The increase in salaries and employment costs was due to $1,614,000 accrued under our employee bonus plans due to the profitable underwriting insurance operations in Year Ended 2024 compared to a loss in Year Ended 2023, and $446,000 accrued under our executive bonus plan pursuant to the employment agreement of our Chief Executive Officer. The increases related to bonuses were offset by a reduction in our staff in June and July of 2023 as we have been reducing our non-Core business. The decrease from the reduction in staff was partially offset in the periods following Year Ended 2023, as we began to strengthen our professional team by investing in the hiring of higher-level and higher compensated managers and staff needed to manage the business consistent with our Kingstone 2.0 and Kingstone 3.0 strategies. In addition, we are now hiring additional staff to handle the new business from the Change in Market Dynamics.
Our net underwriting expense ratio in Year Ended 2024 was 31.3% compared to 32.9% in Year Ended 2023. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:
Years ended
December 31, Percentage
Point Change
2024 2023
Other underwriting expenses
Employment costs 10.2 % 9.9 % 0.3
Underwriting fees (inspections/surveys) 1.4 1.6 (0.2)
IT expenses 2.2 2.9 (0.7)
Professional fees 0.8 1.1 (0.3)
Other expenses 5.4 7.1 (1.7)
Total other underwriting expenses 20.0 22.6 (2.6)
Commission expense 26.4 29.2 (2.8)
Ceding commission revenue
Provisional (14.7) (17.8) 3.1
Contingent - (0.6) 0.6
Total ceding commission revenue (14.7) (18.4) 3.7
Other income (0.4) (0.5) 0.1
Net underwriting expense ratio 31.3 % 32.9 % (1.6)
(Components may not sum to totals due to rounding)
Other Operating Expenses
Other operating expenses, related to the expenses of our holding company and Cosi, were $3,635,000 for Year Ended 2024 compared to $2,456,000 for Year Ended 2023. The following table shows a breakdown of the significant components of other operating expenses for the periods indicated:
Years ended
December 31,
($ in thousands) 2024 2023 Change
Percent
Other operating expenses
Employment costs $ 325 $ 376 $ (51) (13.6) %
Executive bonus 50 - 50 na
Equity compensation 1,383 833 550 66.0
Professional 381 276 105 38.0
Directors fees 376 275 101 36.7
Insurance 196 194 2 1.0
Loss on extinguishment of debt 297 - 297 na
Other expenses 627 502 125 24.9
Total other operating expenses $ 3,635 $ 2,456 $ 1,179 48.0 %
(Components may not sum to totals due to rounding)
The increase in Year Ended 2024 of $1,179,000, or 48.0%, as compared to Year Ended 2023 was primarily due to an increase in equity compensation and loss on extinguishment of debt. The increase in equity compensation is due to accelerated vesting in September 2024 as a result of the retirement of our executive chairman, and an equity compensation accrual for our senior leadership team pursuant to our employee bonus plan. The executive bonus of $50,000 allocated to other operating expenses in Year Ended 2024 is accrued pursuant to the employment agreement of our Chief Executive Officer and is a result of the profitable operations before taxes in Year Ended 2024 compared to a loss in Year Ended 2023. The $297,000 loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs from the 2022 Notes at the time of the 2024 Exchange Agreement as disclosed in Note 9 to the consolidated financial statements.
Depreciation and Amortization
Depreciation and amortization was $2,449,000 in Year Ended 2024 compared to $2,973,000 in Year Ended 2023. The decrease of $524,000, or 17.6%, in depreciation and amortization was primarily due to the completion and deployment of our customized policy management software as planned for in Kingstone 2.0, which allowed us to consolidate multiple legacy systems into one efficient system and retire those older more costly and less reliable systems. Depreciation on older assets that were retired, which had a shorter useful life, is greater than the depreciation on newly acquired assets which have a longer useful life.
Interest Expense
Interest expense in Year Ended 2024 was $3,514,000 compared to $4,003,000 in Year Ended 2023, a decrease of $489,000 or 12.2%. In Year Ended 2024 and Year Ended 2023, as disclosed in Note 9 to the consolidated financial statements, we incurred interest expense in connection with the 2022 Notes and 2024 Notes. The 2022 Notes provided for interest at the rate of 12% per annum. In September 2024, in accordance with the 2024 Exchange Agreement, we paid $5,000,000 of principal on the 2022 Notes, reducing the principal balance to $14,950,000 from $19,950,000. Under the 2024 Exchange Agreement, the principal balances of the 2022 Notes were exchanged for the 2024 Notes, which provided for interest at the rate of 13.75% per annum. We made optional prepayments of $3,000,000 on September 30, 2024, $2,000,000 on November 13, 2024, $4,000,000 on December 30, 2024, $3,500,000 on January 28, 2025, and $2,450,000 on February 24, 2025 (see Note 20 - Subsequent Events, Debt), and, accordingly, we have fully satisfied the entire principal balance under the 2024 Notes. In addition to interest on 2022 Notes and 2024 Notes, we also incur interest expense on the 2022 equipment financing.
Income Tax Expense (Benefit)
Income tax expense in Year Ended 2024 was $4,930,000, which resulted in an effective tax rate of 21.2%. Income tax (benefit) in Year Ended 2023 was $(1,197,000), which resulted in an effective tax rate of (16.3)%. Income before taxes was $23,288,000 in Year Ended 2024 compared to a loss before taxes of $(7,365,000) in Year Ended 2023. The difference in effective tax rate is due to the effect of permanent differences in Year Ended 2024 compared to Year Ended 2023.
Net Income (Loss)
Net income was $18,358,000 in Year Ended 2024 compared to net loss of $(6,168,000) in Year Ended 2023. The change from net loss to net income of $24,526,000 was due to the circumstances described above.
Additional Financial Information
We operate our business as one segment, property and casualty insurance. Within this segment, we offer an array of property and casualty policies to our producers. The following table summarizes gross and net premiums written, net premiums earned, and loss and loss adjustment expenses by major product type, which were determined based primarily on similar economic characteristics and risks of loss.
Years Ended
December 31,
2024 2023
Gross premiums written:
Personal lines $ 227,642,802 $ 185,425,960
Livery physical damage 14,248,462 14,648,333
Other(1) 88,673 100,209
Total gross premiums written $ 241,979,937 $ 200,174,502
Net premiums written:
Personal lines $ 139,914,970 $ 93,941,418
Livery physical damage 14,248,462 14,648,333
Other(1) 66,433 67,058
Total net premiums written $ 154,229,865 $ 108,656,809
Net premiums earned:
Personal lines $ 113,876,043 $ 100,391,726
Livery physical damage 14,550,160 13,905,368
Other(1) 71,717 87,169
Total net premiums earned $ 128,497,920 $ 114,384,263
Net loss and loss adjustment expenses(3):
Personal lines $ 49,268,714 $ 72,580,057
Livery physical damage 6,158,197 5,388,954
Other(1) (34,237) 146,286
Unallocated loss adjustment expenses 4,926,243 3,008,419
Total without commercial lines 60,318,917 81,123,716
Commercial lines (in run-off effective July 2019)(2) 2,315,799 1,725,494
Total net loss and loss adjustment expenses $ 62,634,716 $ 82,849,210
Net loss ratio(3):
Personal lines 43.3 % 72.3 %
Livery physical damage 42.3 % 38.8 %
Other(1) (47.7 %) 167.8 %
Total without commercial lines 46.9 % 70.9 %
Commercial lines (in run-off effective July 2019)(2) na na
Total 48.7 % 72.4 %
(1)“Other” includes, among other things, premiums and loss and loss adjustment expenses from our participation in a mandatory state joint underwriting association and loss and loss adjustment expenses from commercial auto.
(2)In July 2019, we decided that we will no longer underwrite Commercial Liability risks. See discussions above regarding the discontinuation of this line of business.
(3)See discussions above with regard to “Net Loss and LAE”, as to catastrophe losses in the years ended December 31, 2024 and 2023.
Insurance Underwriting Business on a Standalone Basis(1)
Our insurance underwriting business reported on a standalone basis(1) for the years ended December 31, 2024 and 2023 follows:
Years ended
December 31,
2024 2023
Revenues
Net premiums earned $ 128,497,920 $ 114,384,263
Ceding commission revenue 18,837,946 21,053,494
Net investment income 6,823,590 6,008,682
Net gains on investments 359,490 1,978,373
Other income 549,967 600,993
Total revenues 155,068,913 144,025,805
Expenses
Loss and loss adjustment expenses 62,634,716 82,849,210
Commission expense 33,929,333 33,364,629
Other underwriting expenses 25,692,727 25,909,962
Depreciation and amortization 2,448,932 2,973,440
Interest expense 368,664 434,155
Total expenses 125,074,372 145,531,396
Income (loss) from operations 29,994,541 (1,505,591)
Income tax expense (benefit) 6,412,686 (17,681)
Net income (loss) from insurance underwriting business on a standalone basis(1) $ 23,581,855 $ (1,487,910)
Key Measures:
Net loss ratio 48.7 % 72.4 %
Net underwriting expense ratio 31.3 % 32.9 %
Net combined ratio 80.0 % 105.3 %
Reconciliation of net underwriting expense ratio:
Acquisition costs and other
underwriting expenses $ 59,622,060 $ 59,274,591
Less: Ceding commission revenue (18,837,946) (21,053,494)
Less: Other income (549,967) (600,993)
Net underwriting expenses $ 40,234,147 $ 37,620,104
Net premiums earned $ 128,497,920 $ 114,384,263
Net Underwriting Expense Ratio 31.3 % 32.9 %
(1) Net income (loss) from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income (loss) without the effect of holding company operations on GAAP net income (loss). See "Non-GAAP Financial Measures" for the reconciliation of net income (loss) from insurance underwriting business on a standalone basis to the GAAP measure of net income (loss).
An analysis of our direct, assumed and ceded earned premiums, loss and loss adjustment expenses, and loss ratios is shown below:
Direct Assumed Ceded Net
Year ended December 31, 2024
Written premiums $ 241,979,937 $ - $ (87,750,072) $ 154,229,865
Change in unearned premiums (29,080,195) - 3,348,250 (25,731,945)
Earned premiums $ 212,899,742 $ - $ (84,401,822) $ 128,497,920
Loss and loss adjustment expenses excluding
the effect of catastrophes $ 79,477,309 $ - $ (19,296,752) $ 60,180,557
Catastrophe loss 3,388,937 - (934,778) 2,454,159
Loss and loss adjustment expenses $ 82,866,246 $ - $ (20,231,530) $ 62,634,716
Loss ratio excluding the effect of catastrophes(2) 37.3 % 0.0 % 22.9 % 46.8 %
Catastrophe loss 1.0 % 0.0 % 1.1 % 1.9 %
Loss ratio 38.3 % 0.0 % 24.0 % 48.7 %
Year ended December 31, 2023
Written premiums $ 200,174,502 $ - $ (91,517,693) $ 108,656,809
Change in unearned premiums 1,871,239 - 3,856,215 5,727,454
Earned premiums $ 202,045,741 $ - $ (87,661,478) $ 114,384,263
Loss and loss adjustment expenses excluding
the effect of catastrophes $ 111,996,791 $ - $ (37,302,450) $ 74,694,341
Catastrophe loss 11,943,624 - (3,788,755) 8,154,869
Loss and loss adjustment expenses $ 123,940,415 $ - $ (41,091,205) $ 82,849,210
Loss ratio excluding the effect of catastrophes(2) 55.4 % 0.0 % 42.6 % 65.3 %
Catastrophe loss 5.9 % 0.0 % 4.3 % 7.1 %
Loss ratio 66.9 % 0.0 % 47.0 % 72.4 %
(Percentage components may not sum to totals due to rounding)
The key measures for our insurance underwriting business for the years ended December 31, 2024 and 2023 are as follows:
Years ended
December 31,
2024 2023
Net premiums earned $ 128,497,920 $ 114,384,263
Ceding commission revenue 18,837,946 21,053,494
Other income 549,967 600,993
Loss and loss adjustment expenses (1) 62,634,716 82,849,210
Acquisition costs and other underwriting expenses:
Commission expense 33,929,333 33,364,629
Other underwriting expenses 25,692,727 25,909,962
Total acquisition costs and other
underwriting expenses 59,622,060 59,274,591
Underwriting loss $ 25,629,057 $ (6,085,051)
Key Measures:
Net loss ratio excluding the effect of catastrophes(2) 46.8 % 65.3 %
Effect of catastrophe loss on net loss ratio (1)(2) 1.9 % 7.1 %
Net loss ratio 48.7 % 72.4 %
Net underwriting expense ratio excluding the
effect of catastrophes(2) 31.3 % 32.9 %
Effect of catastrophe loss on net underwriting
expense ratio(2) 0.0 % 0.0 %
Net underwriting expense ratio 31.3 % 32.9 %
Net combined ratio excluding the effect
of catastrophes(2) 78.1 % 98.2 %
Effect of catastrophe loss on net combined
ratio (1)(2) 1.9 % 7.1 %
Net combined ratio 80.0 % 105.3 %
Reconciliation of net underwriting expense ratio:
Acquisition costs and other
underwriting expenses $ 59,622,060 $ 59,274,591
Less: Ceding commission revenue (18,837,946) (21,053,494)
Less: Other income (549,967) (600,993)
$ 40,234,147 $ 37,620,104
Net earned premium $ 128,497,920 $ 114,384,263
Net Underwriting Expense Ratio 31.3 % 32.9 %
(1)For the years ended December 31, 2024 and 2023, includes the sum of net catastrophe losses and loss adjustment expenses of $2,454,159 and $8,154,869, respectively.
(2)Net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of catastrophes on the net loss ratio. See "Non-GAAP Financial Measures" for the reconciliation of net loss ratio excluding the effect of catastrophes to the GAAP measure of net loss ratio. Net underwriting expense ratio excluding the effect of catastrophes is also a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio. See "Non-GAAP Financial Measures" for the reconciliation of net underwriting expense ratio excluding the effect of catastrophes to the GAAP measure of net underwriting expense ratio. Net combined ratio excluding the effect of catastrophes is also a non-GAAP ratio, which is computed as the difference between the GAAP net combined ratio and the effect of catastrophes on the net combined ratio. See "Non-GAAP Financial Measures" for the reconciliation of net combined ratio excluding the effect of catastrophes to the GAAP measure of net combined ratio.
Investments
Portfolio Summary
The following table presents a breakdown of the amortized cost, estimated fair value, and unrealized gains and losses of our investments in fixed-maturity securities classified as available-for-sale as of December 31, 2024 and 2023:
Available-for-Sale Securities
December 31, 2024
Cost or
Amortized
Cost Gross
Unrealized
Gains Gross Unrealized Losses Estimated
Fair
Value % of
Estimated
Fair Value
Category Less than
12 Months More than
12 Months
U.S. Treasury securities and obligations of U.S. government corporations and agencies (1) $ - $ - $ - $ - $ - - %
Political subdivisions of States, Territories and Possessions 24,271,177 - (73,589) (3,324,491) 20,873,097 11.2 %
Corporate and other bonds Industrial and miscellaneous 112,507,436 - (1,024,461) (4,690,597) 106,792,378 57.1 %
Residential mortgage and other asset backed securities (2) 65,529,545 119,647 (209,890) (6,211,339) 59,227,963 31.7 %
Total fixed-maturity securities $ 202,308,158 $ 119,647 $ (1,307,940) $ (14,226,427) $ 186,893,438 100.0 %
December 31, 2023
Cost or
Amortized
Cost Gross
Unrealized
Gains Gross Unrealized Losses
Estimated
Fair
Value % of
Estimated
Fair Value
Category Less than
12 Months More than
12 Months
U.S. Treasury securities and obligations of U.S. government corporations and agencies (1) $ 20,954,764 $ 1,799 $ (17,373) $ - $ 20,939,190 14.1 %
Political subdivisions of States, Territories and Possessions 16,607,713 - - (3,209,161) 13,398,552 9.0 %
Corporate and other bonds Industrial and miscellaneous 75,993,042 - - (5,885,296) 70,107,746 47.1 %
Residential mortgage and other asset backed securities (2) 50,905,423 113,761 (2,144) (6,541,731) 44,475,309 29.9 %
Total fixed-maturity securities $ 164,460,942 $ 115,560 $ (19,517) $ (15,636,188) $ 148,920,797 100.0 %
(1)In October 2022, KICO placed certain U.S. Treasury securities to fulfill the required collateral for a sale leaseback transaction in a designated custodian account (see Note 9 - Debt - “Equipment Financing”). As of December 31, 2024 KICO had sold its U.S. Treasury securities and replaced a portion of its other fixed-maturity securities in the designated custodian account, As of December 31, 2024 and 2023, the amount of required collateral was approximately $5,308,000 and $6,999,000, respectively. As of December 31, 2024 and 2023, the estimated fair value of the eligible collateral was approximately $5,308,000 and $6,999,000, respectively.
(2)KICO has placed certain residential mortgage backed securities as eligible collateral in a designated custodian account related to its membership in the Federal Home Loan Bank of New York ("FHLBNY") (see Note 9 - Debt - “Federal Home Loan Bank”). The eligible collateral would be pledged to FHLBNY if KICO draws an advance from the FHLBNY credit line. As of December 31, 2024, the estimated fair value of the eligible investments was approximately $10,130,000. KICO will retain all rights regarding all securities if pledged as collateral. As of December 31, 2024 and 2023 there was no outstanding balance on the FHLBNY credit line.
Equity Securities
The following table presents a breakdown of the cost and estimated fair value of, and gross gains and losses on, investments in equity securities as of December 31, 2024 and 2023:
December 31, 2024
Category Cost Gross
Gains Gross
Losses Estimated
Fair Value % of
Estimated
Fair Value
Equity Securities:
Preferred stocks $ 9,750,322 $ - $ (2,422,617) $ 7,327,705 71.2 %
Fixed income exchange traded funds 3,711,232 (808,432) 2,902,800 28.2 %
FHLBNY common stock 66,000 - - 66,000 0.6 %
Total $ 13,527,554 $ - $ (3,231,049) $ 10,296,505 100.0 %
December 31, 2023
Category Cost Gross
Gains Gross
Losses Estimated
Fair Value % of
Estimated
Fair Value
Equity Securities:
Preferred stocks $ 13,583,942 $ - $ (2,870,027) $ 10,713,915 72.6 %
Fixed income exchange traded funds 3,711,232 (669,232) 3,042,000 20.6 %
Mutual funds 622,209 314,816 - 937,025 6.3 %
FHLBNY common stock 69,400 - - 69,400 0.5 %
Total $ 17,986,783 $ 314,816 $ (3,539,259) $ 14,762,340 100.0 %
Other Investments
The following table presents a breakdown of the cost and estimated fair value of, and gross gains on, our other investments as of December 31, 2024 and 2023:
December 31, 2024 December 31, 2023
Category Cost Gross
Gains Estimated
Fair Value Cost Gross
Gains Estimated
Fair Value
Other Investments:
Hedge fund $ 1,987,040 $ 2,393,616 $ 4,380,656 $ 1,987,040 $ 1,910,110 $ 3,897,150
Held-to-Maturity Securities
The following table presents a breakdown of the amortized cost and estimated fair value of, and gross unrealized gains and losses on, investments in held-to-maturity securities as of December 31, 2024 and 2023:
December 31, 2024
Cost or
Amortized
Cost Gross
Unrealized
Gains Gross Unrealized Losses Estimated
Fair
Value % of
Estimated
Fair Value
Category Less than
12 Months More than
12 Months
Held-to-Maturity Securities:
U.S. Treasury securities $ 1,229,170 $ - $ (39,630) $ (15,990) $ 1,173,550 19.7 %
Political subdivisions of States,
Territories and Possessions 499,719 - (654) - 499,065 8.4 %
Exchange traded debt 304,111 - - (55,611) 248,500 4.2 %
Corporate and other bonds
Industrial and miscellaneous 5,014,342 - - (976,192) 4,038,150 67.8 %
Total $ 7,047,342 $ - $ (40,284) $ (1,047,793) $ 5,959,265 100.0 %
December 31, 2023
Cost or
Amortized
Cost Gross
Unrealized
Gains Gross Unrealized Losses Estimated
Fair
Value % of
Estimated
Fair Value
Category Less than
12 Months More than
12 Months
Held-to-Maturity Securities:
U.S. Treasury securities $ 1,228,860 $ 15,045 $ (6,914) $ (18,163) $ 1,218,828 20.0 %
Political subdivisions of States,
Territories and Possessions 499,170 890 - - 500,060 8.2 %
Exchange traded debt 304,111 - - (70,111) 234,000 3.8 %
Corporate and other bonds
Industrial and miscellaneous 5,020,400 - - (867,140) 4,153,260 68.0 %
Total $ 7,052,541 $ 15,935 $ (6,914) $ (955,414) $ 6,106,148 100.0 %
Held-to-maturity U.S. Treasury securities are held in trust pursuant to various states’ minimum fund requirements.
A summary of the amortized cost and estimated fair value of our investments in held-to-maturity securities by contractual maturity as of December 31, 2024 and 2023 is shown below:
December 31, 2024 December 31, 2023
Remaining Time to Maturity Amortized
Cost Estimated
Fair Value Amortized
Cost Estimated
Fair Value
Less than one year $ 499,719 $ 499,065 $ - $ -
One to five years 622,375 600,288 1,121,288 1,097,101
Five to ten years 1,427,579 1,323,600 1,414,911 1,270,770
More than 10 years 4,497,669 3,536,312 4,516,342 3,738,277
Total $ 7,047,342 $ 5,959,265 $ 7,052,541 $ 6,106,148
Credit Rating of Fixed-Maturity Securities
The table below summarizes the credit quality of our available-for-sale fixed-maturity securities as of December 31, 2024 and 2023 as rated by Standard and Poor’s (or, if unavailable from Standard and Poor’s, then Moody’s, Fitch, or Kroll):
December 31, 2024 December 31, 2023
Estimated
Fair
Value Percentage of
Estimated
Fair Value Estimated
Fair
Value Percentage of
Estimated
Fair Value
Rating
U.S. Treasury securities $ - 0.0 % $ 20,939,190 14.1 %
Corporate and municipal bonds
AAA 3,232,352 1.7 % 1,836,736 1.2 %
AA 22,844,557 12.2 % 9,872,346 6.6 %
A 61,528,377 32.9 % 33,228,327 22.3 %
BBB+ 20,827,660 11.1 % 15,042,200 10.1 %
BBB 13,933,733 7.5 % 21,826,125 14.7 %
BBB- 1,953,596 1.0 % - 0.0 %
BB 991,550 0.5 % - - %
Total corporate and municipal bonds 125,311,825 66.9 % 81,805,734 54.9 %
Residential mortgage backed, asset backed, and other collateralized obligations
AAA 15,961,257 8.5 % 12,766,471 8.6 %
AA 34,893,057 18.7 % 22,102,169 14.8 %
A 9,927,371 5.3 % 6,390,752 4.3 %
BBB+ - 0.0 % 15,168 0.0 %
CCC 372,787 0.2 % 413,601 0.3 %
CC 82,696 0.0 % 91,390 0.1 %
Non rated 344,445 0.2 % 4,396,322 3.0 %
Total residential mortgage backed, asset backed,
and other collateralized obligations 61,581,613 32.9 % 46,175,873 31.1 %
Total $ 186,893,438 100.0 % $ 148,920,797 100.0 %
The table below details the average yield by type of fixed-maturity security as of December 31, 2024 and 2023:
Category December 31, 2024 December 31, 2023
U.S. Treasury securities and obligations of U.S. government corporations and agencies 3.62 % 4.95 %
Political subdivisions of States, Territories and Possessions 3.85 % 3.35 %
Corporate and other bonds Industrial and miscellaneous 3.86 % 3.62 %
Residential mortgage backed securities 3.31 % 2.90 %
Total 3.68 % 3.58 %
The table below lists the weighted average maturity and effective duration in years on our fixed-maturity securities as of December 31, 2024 and 2023:
December 31, 2024 December 31, 2023
Weighted average effective maturity 7.6 7.8
Weighted average final maturity 11.0 11.9
Effective duration 3.9 4.1
Fair Value Consideration
As disclosed in Note 4 to the consolidated financial statements, with respect to “Fair Value Measurements,” we define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction involving identical or comparable assets or liabilities between market participants (an “exit price”). The fair value hierarchy distinguishes between inputs based on market data from independent sources (“observable inputs”) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (“unobservable inputs”). The fair value hierarchy prioritizes fair value measurements into three levels based on the nature of the inputs. Quoted prices in active markets for identical assets have the highest priority (“Level 1”), followed by observable inputs other than quoted prices including prices for similar but not identical assets or liabilities (“Level 2”), and unobservable inputs, including the reporting entity’s estimates of the assumption that market participants would use, having the lowest priority (“Level 3”). As of December 31, 2024 and 2023, 59% and 65%, respectively, of the investment portfolio recorded at fair value was priced based upon quoted market prices.
The table below summarizes the gross unrealized losses of our fixed-maturity securities available-for-sale and equity securities by length of time the security has continuously been in an unrealized loss position as of December 31, 2024 and 2023:
December 31, 2024
Less than 12 months 12 months or more Total
Category Estimated
Fair
Value Unrealized
Losses No. of
Positions
Held Estimated
Fair
Value Unrealized
Losses No. of
Positions
Held Estimated
Fair
Value Unrealized
Losses
Fixed-Maturity Securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies $ - $ - - $ - $ - - $ - $ -
Political subdivisions of States, Territories and Possessions 7,705,370.00 (73,589.00) 6 13,167,726 (3,324,491) 12 20,873,096 (3,398,080)
Corporate and other bonds industrial and miscellaneous 51,411,296.00 (1,024,461.00) 60 55,381,083 (4,690,597) 68 106,792,379 (5,715,058)
Residential mortgage and other asset backed securities 19,315,521 (209,890) 22 35,206,442 (6,211,339) 36 54,521,963 (6,421,229)
Total fixed-maturity securities $ 78,432,187 $ (1,307,940) 88 $ 103,755,251 $ (14,226,427) 116 $ 182,187,438 $ (15,534,367)
December 31, 2023
Less than 12 months 12 months or more Total
Category Estimated
Fair
Value Unrealized
Losses No. of
Positions
Held Estimated
Fair
Value Unrealized
Losses No. of
Positions
Held Estimated
Fair
Value Unrealized
Losses
Fixed-Maturity Securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 5,974,440 $ (17,373) 1 $ - $ - - $ 5,974,440 $ (17,373)
Political subdivisions of States, Territories and Possessions - - - 13,398,552 (3,209,161) 13 13,398,552 (3,209,161)
Corporate and other bonds industrial and miscellaneous - - - 70,107,746 (5,885,296) 85 70,107,746 (5,885,296)
Residential mortgage and other asset backed securities 88,988 (2,144) 4 38,675,604 (6,541,731) 37 38,764,592 (6,543,875)
Total fixed-maturity securities $ 6,063,428 $ (19,517) 5 $ 122,181,902 $ (15,636,188) 135 $ 128,245,330 $ (15,655,705)
There were 204 securities at December 31, 2024 that accounted for the gross unrealized loss of our fixed-maturity securities available-for-sale, none of which were deemed to be credit losses by us. There were 140 securities at December 31, 2023 that accounted for the gross unrealized loss of our fixed-maturity securities available-for-sale, none of which were deemed to be credit losses by us. Significant factors influencing our determination that unrealized losses were temporary included credit quality considerations, the magnitude of the unrealized losses in relation to each security’s cost, the nature of the investment and interest rate environment factors, management’s intent not to sell these securities and it being not more likely than not that we will be required to sell these investments before anticipated recovery of fair value to our cost basis.
Liquidity and Capital Resources
Cash Flows
The primary sources of cash flow are from our insurance underwriting subsidiary, KICO, and include direct premiums written, ceding commissions from our quota share reinsurers, loss recovery payments from our reinsurers, investment income and proceeds from the sale or maturity of investments. Funds are used by KICO for ceded premium payments to reinsurers, which are paid on a net basis after subtracting losses paid on reinsured claims and reinsurance commissions. KICO also uses funds for loss payments and loss adjustment expenses on our net business, commissions to producers, salaries and other underwriting expenses as well as to purchase investments and fixed assets.
The primary source of cash flow for our holding company are dividends and distributions received from KICO, which are subject to statutory restrictions. For the year ended December 31, 2024, KICO did not pay any dividends to us. Through June 30, 2024, KICO had a negative adjusted unassigned surplus. Based on that, KICO was not be able to pay any distributions to us without prior regulatory approval. In December 2023, KICO received regulatory approval to pay us a $2,300,000 distribution from paid in capital. KICO paid us the $2,300,000 distribution in the second quarter of 2024. In August 2024, KICO received regulatory approval to pay us a $5,000,000 distribution from paid in capital. KICO paid us the $5,000,000 distribution in the third quarter of 2024. As of December 31, 2024, KICO has eligible unassigned surplus of $12,017,831 and is able to pay dividends; however, KICO has an agreement with DFS pursuant to which KICO may only pay dividends to us for purposes of paying operating expenses and debt obligations.
KICO is a member of the FHLBNY, which provides additional access to liquidity. Members have access to a variety of flexible, low-cost funding through FHLBNY’s credit products, enabling members to customize advances. Advances are to be fully collateralized; eligible collateral to pledge to FHLBNY includes residential and commercial mortgage-backed securities, along with U.S. Treasury and agency securities. See Note 9 - Investments to our consolidated financial statements for eligible collateral held in a designated custodian account available for future advances. Advances are limited to 5% of KICO’s net admitted assets as of the end of the previous quarter, which is September 30, 2024. On July 6, 2023, A.M. Best withdrew KICO’s ratings as KICO requested to no longer participate in A.M. Best’s interactive rating process. As a result of the withdrawal of A.M. Best ratings, KICO is currently only able to borrow on an overnight basis. The maximum allowable advance as of December 31, 2024, based on the net admitted assets as of September 30, 2024, was approximately $13,637,000. Available collateral as of December 31, 2024 was approximately $10,130,000. Advances are limited to 85% of the amount of available collateral. There were no borrowings under this facility during Year Ended 2024.
On April 5, 2024, we filed a shelf registration (the “Shelf Registration”) statement on Form S-3 with the SEC under the Securities Act of 1933, as amended, with regard to the registration of $50,000,000 of our equity and debt securities (the “Shelf Registration Statement”). The Shelf Registration Statement was declared effective by the SEC on April 22, 2024. Any offering made pursuant to the Shelf Registration Statement may only be made by means of a prospectus, including a prospectus supplement, forming a part of the effective Shelf Registration Statement, relating to the offering.
In May 2024, we entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which we initially had the ability to issue and sell shares of our Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an “at-the-market” (“ATM”) program. During the year ended December 31, 2024, we sold 1,437,287 shares of our Common Stock at a weighted average price of $9.79 per share and raised $13,610,807 in net proceeds under the ATM program. As of December 31, 2024, we had remaining capacity to sell up to an additional $2,325,087 of our Common Stock under the ATM program. On January 7, 2025, we filed a prospectus supplement with the SEC increasing the aggregate offering price under the ATM program to $25,000,000 from approximately $16,400,000.
On September 12, 2024, we issued the 2024 Notes in the aggregate principal amount of $14,950,000 pursuant to the 2024 Exchange Agreement. Interest was payable semi-annually in arrears on June 30 and December 30 of each year at the rate of 13.75% per annum. The maturity date of the 2024 Notes was June 30, 2026. As of December 31, 2024, the
balance of the 2024 Notes was $5,950,000. On February 24, 2025, we paid the balance of the 2024 Notes in full reducing the outstanding balance to $0.
If the aforementioned sources of cash flow currently available are insufficient to cover our holding company debt service and other cash requirements, we will seek to obtain additional financing.
Our reconciliation of net income (loss) to net cash provided by (used in) by operations is generally influenced by the collection of premiums in advance of paid losses, the timing of reinsurance, issuing company settlements and loss payments.
Cash flow and liquidity are categorized into three sources: (1) operating activities; (2) investing activities; and (3) financing activities, which are shown in the following table:
Years ended December 31, 2024 2023
Cash flows provided by (used in):
Operating activities $ 57,947,771 $ (11,326,850)
Investing activities (35,261,441) 9,461,700
Financing activities (2,993,887) (1,116,080)
Net increase (decrease) in cash and cash equivalents 19,692,443 (2,981,230)
Cash and cash equivalents, beginning of period 8,976,998 11,958,228
Cash and cash equivalents, end of period $ 28,669,441 $ 8,976,998
Net cash provided by operating activities was $57,948,000 in the Year Ended 2024 as compared to $11,327,000 used in operating activities in Year Ended 2023. The $69,275,000 increase in cash flows provided by operating activities in Year Ended 2024 as compared to Year Ended 2023 was primarily the result of the change to net income from net loss (adjusted for non-cash items) of $69,275,000 and cash provided arising from net fluctuations in operating assets and liabilities. The net fluctuations in assets and liabilities are related to operating activities of KICO as affected by growth or declines in its operations, payments on claims and other changes, which are described above.
Net cash used in investing activities was $35,261,000 in Year Ended 2024 compared to $9,462,000 provided by investing activities in Year Ended 2023 resulting in a $44,723,000 increase in net cash used in investing activities. In Year Ended 2024, we had net cash used by our investment portfolio of $32,924,000, compared to $11,289,000 provided in Year Ended 2023.
Net cash used in financing activities was $2,994,000 in Year Ended 2024 compared to $1,116,000 used in Year Ended 2023. Net cash used in financing activities were primarily principal payments of $5,000,000 on our 2022 Notes, $9,000,000 on our 2024 Notes, and $1,154,000 on our equipment financing debt in connection with KICO’s sale-leaseback transaction. In addition, we paid $1,311,000 for withholding taxes on vested restricted stock awards. The principal payments on the 2024 Notes were made by using a portion of the $13,611,000 net proceeds from our ATM offering.
Reinsurance
The following table provides summary information with respect to each reinsurer that accounted for more than 10% of our reinsurance recoverables on paid and unpaid losses and loss adjustment expenses as of December 31, 2024:
($ in thousands) A.M.
Best Rating Amount
Recoverable
as of
December 31, 2024 %
Swiss Reinsurance America Corporation A+ $ 14,911,000 39.7 %
Hanover Rueck SE A+ 7,754,000 20.6 %
22,665,000 60.3 %
Others (1) 14,912,000 39.7 %
Total $ 37,577,000 100.0 %
(1)Of $8,731,000 reinsurance recoverables included in Others at December 31, 2024, $393,000 was guaranteed by irrevocable letters of credit.
Effective December 31, 2021, we entered into a quota share reinsurance treaty for our personal lines business, which primarily consisted of homeowners’ and dwelling fire policies, covering the period from December 31, 2021 through January 1, 2023 (“2021/2023 Treaty”). Upon the expiration of the 2021/2023 Treaty on January 1, 2023, we entered into a new 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”). Upon the expiration of the 2023/2024 Treaty on January 1, 2024, we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”). Upon the expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”).
Our excess of loss and catastrophe reinsurance treaties expired on June 30, 2024 and we entered into new excess of loss and catastrophe reinsurance treaties effective July 1, 2024 (as discussed below). Effective January 1, 2022, we entered into an underlying excess of loss reinsurance treaty (“Underlying XOL Treaty”) covering the period from January 1, 2022 through January 1, 2023. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms are excluded from the Underlying XOL Treaty. Effective January 1, 2023, the Underlying XOL Treaty was renewed covering the period from January 1, 2023 through January 1, 2024. Effective January 1, 2024, the Underlying XOL Treaty was renewed covering the period from January 1, 2024 through January 1, 2025. Effective July 1, 2024, we purchased $275,000,000 of catastrophe reinsurance in excess of $5,000,000, compared to $315,000,000 of catastrophe reinsurance in excess of $10,000,000 in the expiring treaty. Our ability to reduce the top limit of our catastrophe reinsurance was due to our tightened underwriting as discussed above and curtailing new business growth through June 30, 2024, which reduced our probable maximum loss. For the period October 1, 2024 through April 30, 2025, we purchased catastrophe reinsurance which will provide coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2025. Material terms for our reinsurance treaties in effect for the treaty years shown below are as follows:
Treaty Period
2025/2026 Treaty 2024/2025 Treaty 2023/2024 Treaty
Line of Business July 1,
to
January 1,
2026 January 2,
to
June 30,
2025 July 1,
to
January 1,
2025 January 1,
to
June 30,
2024 July 1,
to
January 1,
2024 January 1,
to
June 30,
Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded (7) 16 % 16 % 27 % 27 % 30 % 30 %
Risk retained on initial
$1,000,000 of losses (5) (6) (7) $ 840,000 $ 840,000 $ 730,000 $ 730,000 $ 700,000 $ 700,000
Losses per occurrence
subject to quota share
reinsurance coverage $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
Expiration date January 1, 2026 January 1, 2026 January 1, 2025 January 1, 2025 January 1, 2024 January 1, 2024
Excess of loss coverage and
facultative facility
coverage (1) (5) (6) $ 400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000
in excess of in excess of in excess of in excess of in excess of in excess of
$ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
Total reinsurance coverage
per occurrence (5) (6) $ 360,000 $ 8,360,000 $ 8,470,000 $ 8,470,000 $ 8,500,000 $ 8,500,000
Losses per occurrence
subject to reinsurance
coverage (6) $ 1,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000
Expiration date (6) June 30, 2025 June 30, 2025 June 30, 2024 June 30, 2024 June 30, 2023
Catastrophe Reinsurance:
Initial loss subject to personal
lines quota share treaty (6) $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000
Risk retained per catastrophe
occurrence (6) (7) (8) (9) (6) $ 4,250,000 $ 4,750,000 $ 9,500,000 $ 8,750,000 $ 8,750,000
Catastrophe loss coverage
in excess of quota share
coverage (2) (6) (6) $ 275,000,000 $ 275,000,000 $ 315,000,000 $ 315,000,000 $ 335,000,000
Reinstatement premium
protection (3) (4) (6) Yes Yes Yes Yes Yes
(1)For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2025.
(2)Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts. Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone.
(3)For the period July 1, 2022 through June 30, 2023, reinstatement premium protection for $12,500,000 of catastrophe coverage in excess of $10,0000,000. For the period July 1, 2023 through June 30, 2024, reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000.
(4)For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of 10,000,000.
(5)For the period January 1, 2022 through June 30, 2025, underlying excess of loss treaty provides 50% reinsurance coverage for losses of 400,000 in excess of 600,000. Excludes losses from named storms. Reduces retention to $500,000 from $700,000 under the 2023/2024 Treaty. Reduces retention to $530,000 from $730,000 under the 2024/2025 Treaty. Retention increases to $640,000 from $530,000 under the 2025/2026 Treaty.
(6)Excess of loss coverage and facultative facility and catastrophe reinsurance treaties will expire on June 30,2025, with none of these coverages to be in effect during the period from July 1 2025 through January 1, 2026. If and when these treaties are renewed on July 1, 2025, the excess of loss and facultative facility, and the catastrophe reinsurance treaty, will be as provided for therein. Reinsurance coverage in effect from July 1, 2025 through January 1, 2026 is currently only covered under the 2025/2026 Treaty and (underlying excess of loss reinsurance treaty through June 30, 2025). The 2025/2026 Treaty will expire on January 1, 2026.
(7)For the 2023/2024 Treaty, 17.5% of the 30% total of losses ceded under this treaty are excluded from a named catastrophe event. For the 2024/2025 Treaty, 22% of the 27% total of losses ceded under this treaty are excluded from a named catastrophe event.For the 2025/2026 Treaty, 6% of the 16% total of losses ceded under this treaty are excluded from a catastrophe event.
(8)Plus losses in excess of catastrophe coverage.
(9)For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty will provide coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. Retention for winter storms under this treaty is $4,800,000 under the 2024/2025 Treaty and $5,200,000 under the 2025/2026 Treaty.
Treaty Year
Line of Business July 1, 2024
to
June 30, 2025 July 1, 2023
to
June 30, 2024 July 1, 2022
to
June 30, 2023
Personal Lines:
Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage
90 % 90 % 90 %
Percent ceded - excess of $1,000,000 dollars of coverage
95 % 95 % 95 %
Risk retained $ 300,000 $ 300,000 $ 300,000
Total reinsurance coverage per occurrence $ 4,700,000 $ 4,700,000 $ 4,700,000
Losses per occurrence subject to quota share reinsurance coverage $ 5,000,000 $ 5,000,000 $ 5,000,000
Expiration date June 30, 2025 June 30, 2024 June 30, 2023
Commercial Lines (1)
(1)Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss.
Inflation
Premiums are established before we know the amount of losses and loss adjustment expenses or the extent to which inflation may affect such amounts. We attempt to anticipate the potential impact of inflation in establishing our reserves, especially as it relates to medical and hospital rates where historical inflation rates have exceeded the general level of inflation. Inflation in excess of the levels we have assumed could cause loss and loss adjustment expenses to be higher than we anticipated, which would require us to increase reserves and reduce earnings.
Fluctuations in rates of inflation also influence interest rates, which in turn impact the market value of our investment portfolio and yields on new investments. Operating expenses, including salaries and benefits, generally are impacted by inflation.
The Year Ended 2024 included continuing economic inflation, albeit tempered compared to 2023, which resulted in a sustained increase in interest rates, a widening of credit spreads, lower public equity valuations, and significant financial market volatility. The higher interest rates and widening of credit spreads reduced the value of our fixed income securities. For Year Ended 2024, the continuing economic inflation impacted our loss and loss adjustment expenses as well; should these trends continue in the near-term, it would in all likelihood negatively impact our results of operations.
Non-GAAP Financial Measures
Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP.
The following table reconciles the underlying loss ratio and the net loss ratio excluding the effect of catastrophes to the net loss ratio for the periods presented:
Years ended December 31,
2024 2023
Underlying Loss Ratio 48.2 % 65.3 %
Effect of prior year reserve development (1.4 %) 0.0 %
Net loss ratio excluding the effect of catastrophes 46.8 % 65.3 %
Effect of catastrophes 1.9 % 7.1 %
GAAP net loss ratio 48.7 % 72.4 %
The following table reconciles the net loss ratio excluding commercial lines business to the net loss ratio for the periods presented:
Years ended December 31,
2024 2023
Net loss ratio excluding the effect of commercial lines business 46.9 % 70.9 %
Effect of commercial lines business 1.8 % 1.5 %
GAAP net loss ratio 48.7 % 72.4 %
The following table reconciles net income (loss) from insurance underwriting business on a standalone basis to GAAP net income (loss) for the periods presented:
Years ended December 31,
2024 2023
Net income (loss) from insurance underwriting business on a standalone basis $ 23,581,855 $ (1,487,910)
Holding company operations (5,223,419) (4,680,436)
GAAP net income (loss) $ 18,358,436 $ (6,168,346)
The following table reconciles the net loss ratio excluding the effect of catastrophes, net underwriting expense ratio excluding the effect of catastrophes, and net combined ratio excluding the effect of catastrophes to GAAP net loss ratio, GAAP net underwriting expense ratio, and GAAP net combined ratio, respectively, for the periods presented:
Years ended December 31,
2024 2023
Net loss ratio excluding the effect of catastrophes 46.8 % 65.3 %
Effect of catastrophes 1.9 % 7.1 %
GAAP net loss ratio 48.7 % 72.4 %
Net underwriting expense ratio excluding the effect of catastrophes 31.3 % 32.9 %
Effect of catastrophes 0.0 % 0.0 %
GAAP net underwriting expense ratio 31.3 % 32.9 %
Net combined ratio excluding the effect of catastrophes 78.1 % 98.2 %
Effect of catastrophes 1.9 % 7.1 %
GAAP net combined ratio 80.0 % 105.3 %
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Outlook
Our net premiums earned may be impacted by a number of factors. Net premiums earned are a function of net written premium volume. Net written premiums comprise both renewal business and new business and are recognized as earned premium over the term of the underlying policies. Net written premiums from both renewal and new business are impacted by competitive market conditions as well as general economic conditions. We have made underwriting changes to emphasize profitability over growth and have culled out the type of risks that do not generate an acceptable level of return.
On August 2, 2024, two large competitors announced a plan to wind down their personal lines operations in New York State and to non-renew or mid-term cancel their entire book of business by December 31, 2024. Our producers placed a sizable number of these policies with KICO. As such, we anticipate the sizeable increase in our direct earned premium to continue into 2025. See “Forward-Looking Statements” before Part I, Item 1.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
This item is not applicable to smaller reporting companies.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this Item 8 are included in this Annual Report following Item 16 hereof. As a smaller reporting company, we are not required to provide supplementary financial information.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate disclosure controls and procedures. Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2024.
We previously disclosed that on November 12, 2024, we issued a press release announcing our financial results for the period ended September 30, 2024 (the “Press Release”). In the Press Release, we indicated that our book value per share - diluted and book value per share - diluted excluding accumulated other comprehensive income (“AOCI”) as of September 30, 2024 were $4.58 and $5.28, respectively. On November 15, 2024, we determined that such figures were calculated based upon an incorrect number of shares of common stock outstanding on a fully diluted basis as of September 30, 2024. Based upon the correct number of shares of common stock outstanding on a fully diluted basis, the book value per share - diluted and book value per share - diluted excluding AOCI as of September 30, 2024 were $4.32 and $4.97, respectively.
We continually review our disclosure controls and procedures and make changes, as necessary, to ensure the quality of our financial reporting. In particular, we have recently implemented a new financial reporting system which we believe has remediated the disclosure control deficiency. It will require time to demonstrate the effectiveness of the remediation, and as such we conclude that the disclosure controls and procedures were not effective as of December 31, 2024.
Changes in Internal Control over Financial Reporting
Except as noted above, there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The ineffectiveness in our disclosure controls and procedures discussed above under “Evaluation of Disclosure Controls and Procedures” did not relate to our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Inherent Limitation on Effectiveness of Controls
Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by the board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION.
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Executive Officers and Directors
The following table sets forth the positions and offices presently held by each of our current directors and executive officers and their ages:
Name: Age: Positions and Offices Held:
Meryl S. Golden 65 Chief Executive Officer, President and Director
Thomas Newgarden 57 Non-Executive Chairman of the Board and Director
Jennifer L. Gravelle 53 Vice President, Chief Financial Officer and Treasurer
Sarah (Minlei) Chen 42 Senior Vice President, Chief Actuary and Head of Product Management, Kingstone Insurance Company
Floyd R. Tupper 70 Secretary and Director
Timothy P. McFadden 62 Director (Lead Independent Director)
William L. Yankus 65 Director
Carla A. D’Andre 69 Director
Manmohan Singh 52 Director
Meryl S. Golden
Ms. Golden has served as our Chief Executive Officer and President since October 2023 and as one of our directors since March 2020. She has also served as a director and a member of the Executive Committee of Kingstone Insurance Company, our wholly-owned New York property and casualty insurer (“KICO”), since September 2019 and as its President since October 2021. Ms. Golden served as our and KICO’s Chief Operating Officer from September 2019 to September 2023. Ms. Golden has over 25 years of experience in the insurance industry. She served as Northeast General Manager of Progressive Insurance from 2000 to 2004 (having served as Connecticut General Manager at Progressive from 1996 to 2000). Ms. Golden was Senior Vice President/General Manager at Liberty Mutual from 2005 to 2007. From 2007 to 2009, she was a Management Committee advisor to Bridgewater Associates, a hedge fund. Ms. Golden served as General Manager of North America for Earnix, a banking and insurance software company, from 2010 to 2018 and was Sales Manager, Insurance Solutions for Arity, a mobility and data analytics company founded by Allstate, from 2018 until September 2019. Ms. Golden received her B.S. degree in Accounting from the Wharton School of the University of Pennsylvania and her M.B.A. in Marketing and Finance from the University of Chicago. We believe that Ms. Golden’s executive level experience in the insurance industry gives her the qualifications and skills to serve as one of our directors.
Thomas Newgarden
Mr. Newgarden is an analytics driven insurance executive with over 30 years’ experience in the property and casualty personal lines insurance industry. He played an instrumental role in the acquisition and rehabilitation of National General Insurance (formerly GMAC Insurance). This included serving from 2010 to 2022 as Executive Vice President, Chief Underwriting Officer, Chief Product and Analytics Officer and Chief Business Development Officer, and President of National General Preferred, culminating in the successful sale of the company to Allstate Insurance. Prior to National General, Mr. Newgarden was Vice President and Chief Underwriting Officer at Plymouth Rock Insurance from 2009 to 2011 and Senior Vice President of Personal Lines at Safeco Insurance from 2008 to 2009. He also was a key partner in the development of AIG Private Client Group, last serving from 2006 to 2008 as its Senior Vice President, Chief Underwriting Officer. Since leaving Allstate in 2022, Mr. Newgarden has primarily worked as a consultant and advisor to insurance carriers and other insurance entities. He received his B.A. degree in Economics from Binghamton University. We believe that Mr. Newgarden’s extensive executive level experience in the insurance industry gives him the qualifications and skills to serve as one of our directors.
Jennifer L. Gravelle
Ms. Gravelle has served as our Vice President, Chief Financial Officer and Treasurer since January 2023. Ms. Gravelle has over 20 years of leadership experience in the property and casualty insurance industry. From October 2021 to January 2023, she served as Chief Financial Officer at Slide Insurance Holdings, Inc., a full-stack insurtech organization. From June 2019 to October 2021, Ms. Gravelle was Chief Financial Officer at Allied Trust Insurance Company, a personal
property insurance organization. She served as Chief Financial Officer at Olympus Insurance Company, also a personal property insurance organization, from July 2013 to June 2019. Ms. Gravelle received a B.A. degree in Accounting from Champlain College.
Sarah (Minlei) Chen
Ms. Chen has served as KICO’s Chief Actuary since November 2020 and as its Senior Vice President and Head of Product Management since August 2022. From January 2018 to October 2020, she was Actuarial Manager/Senior Pricing Manager and Actuary for Homesite Insurance, a property and casualty insurance company. Ms. Chen served as Actuarial Manager of Plymouth Rock Assurance, an auto and home insurer, from November 2013 to January 2018. Ms. Chen received a B.S. degree in Mathematics from Tsinghua University and an M.S. degree in Applied Mathematics from Brown University.
Floyd R. Tupper
Mr. Tupper is a certified public accountant in New York City. For over 40 years, Mr. Tupper has counseled high-net worth individuals by creating tax planning strategies to achieve their goals as well as those of their families. He has also helped small businesses by developing business strategies to meet their current and future needs. He began his career in public accounting with Ernst & Young LLP prior to becoming self-employed. Mr. Tupper holds an M.B.A. in Taxation from the New York University Stern School of Business and a B.S. degree from New York University. Mr. Tupper served as a director of KICO from 2006 to 2018 and has served as Chairman of its Audit Committee since 2006. From 1990 until 2010, Mr. Tupper served as a Trustee of The Acorn School in New York City. He was also a member of the school’s Executive Committee and served as its Treasurer from 1990 to 2010. Mr. Tupper is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants. He has served as one of our directors and Chair of our Audit Committee since June 2014 and as our Secretary since June 2015. We believe that Mr. Tupper’s accounting experience, as well as his service on the Board of KICO (including his service as Chair of its Audit Committee), give him the qualifications and skills to serve as one of our directors.
Timothy P. McFadden
Mr. McFadden has more than 30 years of experience in the insurance industry. From 2012 to July 2018, Mr. McFadden served as CEO and President of State Farm Indemnity Auto Insurance Company and Senior Vice President of State Farm Insurance, Eastern Market Area. From 2015 to July 2018, he also served as CEO and President of State Farm Florida Fire Company. Mr. McFadden served as Senior Vice President of State Farm Insurance Companies, Southern Zone from 2008 to 2011 and Senior Vice President of State Farm Insurance Companies, Southern & Mid Atlantic Zones from 2011 to 2013. Prior to joining the insurance industry, he was a Captain in the United States Army. Mr. McFadden is a member of Stetson University’s College of Law Board of Overseers. He formerly served as a member of the Board of State Farm Indemnity Auto Insurance Company, Local Initiatives Support Corporation, American College Ethics Board, State Farm Florida Fire Company, Top Layer Reinsurance and Florida Council of 100. Mr. McFadden received his B.S. degree from the United States Military Academy at West Point and his J.D. from Stetson College of Law. He also completed the General Management Program at Harvard Business School and received his Chartered Life Underwriter Designation from The American College of Financial Services. Mr. McFadden has served as one of our directors since August 2018, served as Chair of our Nominating and Corporate Governance Committee from August 2018 to March 2023 and has served as Lead Independent Director and Chair of our Corporate Sustainability and Risk Management Committee since March 2023. We believe that Mr. McFadden’s executive level experience in the insurance industry gives him the qualifications and skills to serve as one of our directors.
William L. Yankus
Mr. Yankus brings to the Board over 30 years’ experience in the insurance industry. Since September 2015, Mr. Yankus has provided insurance-related consulting services through Pheasant Hill Advisors, LLC. From 2011 to 2015, he was Managing Director - Investment Banking at Stern Agee where he focused on small and mid-sized insurers. Mr. Yankus served as Managing Director-Insurance Research at Fox-Pitt, Kelton from 1993 to 2009 and then as Head of Insurance Research at its successor, Macquerie, from 2009 to 2010. Mr. Yankus served as Vice President, Insurance Research at Conning & Company from 1985 to 1993. He completed the CFA program in 1989 and passed the CT uniform CPA exam in 1984. Mr. Yankus serves as a member of the Board of Directors of Jet.AI, Inc. (Nasdaq: JTAI), an innovative private aviation and artificial intelligence company. He has served as one of our directors since March 2016, served as Chair of our Compensation Committee from April 2017 to March 2023, has served as Chair of our Compensation and Finance Committee since March 2023 and served as Chair of our Investment Committee from February 2020 to August 2021. Mr. Yankus received his B.A. degree in Economics and Accounting from The College of the Holy Cross. We believe
that Mr. Yankus’ executive level experience in the insurance industry gives him the qualifications and skills to serve as one of our directors.
Carla A. D’Andre
Ms. D’Andre has more than 45 years of experience in the insurance industry. Since 2009, Ms. D’Andre has been Chairman, CEO and President of D’Andre Insurance Group, Inc., which she co-founded. D’Andre Insurance Group, Inc. is the parent of two independent insurance agencies. She also serves as a consulting and testifying expert on insurance matters. Prior to co-founding D’Andre Insurance Group, Ms. D’Andre held executive-level roles at several companies in the insurance industry, including Executive Vice President, Head - Global Corporate Practice and Member - Partner’s Council at Willis Group Holdings plc, a multinational risk advisor, insurance brokerage and reinsurance brokerage company; Managing Director and Strategic Account Manager at AON Risk Services, a global provider of risk management solutions; Chief Operating Officer at XL Capital’s insurance and technology start-up firm, Inquis Logic Inc.; Member of Senior Management and Managing Director of Swiss Re New Markets and Director of Alternative Markets at Swiss Re America, a subsidiary of Swiss Reinsurance Company Ltd, a global reinsurance company; Senior Vice President of Sedgwick North America, an insurance brokerage firm; and Vice President of Johnson & Higgins, an insurance brokerage firm. Ms. D’Andre serves in senior capacities in several insurance industry groups. In January 2019 she was elected by her peers to a three-year term as a member of The Institutes’ CPCU Society Leadership Council. She also serves as a member of the Executive Advisory Council of St. John’s University Greenberg School of Risk Management, Insurance and Actuarial Science and the Risk Management & Insurance Council sponsored by Temple University, Fox School of Business. She is a licensed insurance broker in property and casualty and life and health coverages. Ms. D’Andre holds the Chartered Property and Casualty Underwriter, Chartered Life Underwriter, and Associate in Reinsurance ARe designations; a Certificate in Captive Insurance, CCI, and the U.S. Department of Justice, Federal Bureau of Investigation Miami Division Certificate for completing the FBI Citizen’s Academy program. Ms. D’Andre is a Chartered Property and Casualty Underwriter, a Chartered Life Underwriter and an Associate in Reinsurance ARe. She has served as one of our directors since May 2017, served as Chair of our Finance Committee from August 2017 to March 2023 and has served as Chair of our Nominating and Corporate Governance Committee since March 2023. Ms. D’Andre has an M.B.A. from Pace University’s Lubin School of Business, with a concentration in Financial Management, and a B.B.A. degree from St. John’s University’s School of Risk Management, Insurance and Actuarial Science. We believe that Ms. D’Andre’s extensive experience in multiple capacities in the insurance industry gives her the qualifications and skills to serve as one of our directors.
Manmohan Singh
Mr. Singh is the Group Chief Financial Officer and Head of Corporate Development for Angel Oak Companies, overseeing financial operations, including accounting and treasury, for all of Angel Oak’s subsidiaries. He is also a member of the Angel Oak Enterprise Risk Management Committee. Previously, Mr. Singh was a Director in the Insurance Investment Banking team at New York-based Sandler O’Neill & Partners, which was an investment bank specializing in financial institutions that merged with Piper Jaffray Companies to form Piper Sandler Companies. During his 12 years with Sandler O’Neill, Mr. Singh worked extensively in the insurance sector, advising them on capital raising and merger and acquisition related matters. Mr. Singh has been involved with several key merger and acquisition transactions, including those involving private equity buyers and alternative asset managers making forays into the life and annuity sector. Mr. Singh holds a Master of Business Administration degree from the Indiana University Kelley School of Business, a Master of Science degree in Finance from the Department of Financial Studies at the University of Delhi, and a Bachelor of Engineering degree from Deenbandhu Chhotu Ram University of Science and Technology in India. Mr. Singh has served as one of our directors since April 2024. He was appointed pursuant to the provisions of the Note and Warrant Exchange Agreement, dated as of December 9, 2022, between the Company and the purchaser signatories thereto (the “Exchange Agreement”), whereby the holders of a majority of the aggregate principal amount of the promissory notes issued pursuant to the Exchange Agreement (the “Notes”) were granted the right to nominate one person to serve as a member of our Board of Directors. Such nomination right has ceased as the Notes are no longer outstanding. We believe that Mr. Singh’s extensive experience in insurance, financial operations and risk management gives him the qualifications and skills to serve as one of our directors.
Family Relationships
There are no family relationships among any of our executive officers and directors.
Term of Office
Each director will hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Each executive officer will hold office until the initial
meeting of the Board of Directors following the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal.
Audit Committee
The Audit Committee of the Board of Directors is responsible for overseeing our accounting and financial reporting processes and the audits of our financial statements. The members of the Audit Committee are Messrs. Tupper, (Chair), Newgarden, Yankus and McFadden.
Audit Committee Financial Expert
Our Board of Directors has determined that Mr. Tupper qualifies as an “audit committee financial expert,” as that term is defined in Item 407(d)(5) of Regulation S-K. Mr. Tupper is an “independent director” based on the definition of independence in Listing Rule 5605(a)(2) of The Nasdaq Stock Market.
Delinquent Section 16(a) Reports
Section 16 of the Exchange Act requires that reports of beneficial ownership of common stock and changes in such ownership be filed with the SEC by Section 16 “reporting persons,” including directors, certain officers, holders of more than 10% of the outstanding common stock and certain trusts of which reporting persons are trustees. We are required to disclose in this Annual Report each reporting person whom we know to have failed to file any required reports under Section 16 on a timely basis during the fiscal year ended December 31, 2024. To our knowledge, based solely on a review of copies of Forms 3, 4 and 5 filed with the SEC and written representations that no other reports were required, during the fiscal year ended December 31, 2024, our officers, directors and 10% stockholders complied with all Section 16(a) filing requirements applicable to them, except that Ms. Golden filed one Form 4 late (reporting one transaction), Ms. Gravelle filed one Form 4 late (reporting one transaction) and Ms. Chen filed one Form 4 late (reporting one transaction).
Code of Ethics; Officer and Director Trading Restrictions Policy
Our Board of Directors has adopted a Code of Ethics for our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our Board of Directors has also adopted an Officer and Director Trading Restrictions Policy for our officers and directors as well as the officers and directors of KICO. Copies of the Code of Ethics and Officer and Director Trading Restrictions Policy are posted on our website, www.kingstonecompanies.com. We intend to satisfy the disclosure requirement under Item 5.05(c) of Form 8-K regarding an amendment to, or a waiver from, our Code of Ethics or Officer and Director Trading Restrictions Policy by posting such information on our website, www.kingstonecompanies.com.
Insider Trading Policy
We have adopted an insider trading policy governing the purchase, sale and/or other disposition of our company’s securities by directors, officers and certain designated employees that is designed to promote compliance with insider trading laws, rules and regulations, as well as procedures designed to further the foregoing purposes. A copy of our insider trading policy is filed as an exhibit to this Annual Report on Form 10-K. In addition, from time to time, we may engage in transactions in our company's securities. It is our intent to comply with applicable laws and regulations relating to insider trading.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth certain information concerning the compensation for the fiscal years ended December 31, 2024 and 2023 for certain executive officers, including our Chief Executive Officer (collectively, the “Named Executive Officers”):
Name and Principal Position Year Salary Bonus Stock
Awards(1)
Option
Awards(1) Non-Equity
Incentive Plan
Compensation All Other
Compensation Total
Meryl S. Golden 2024 $ 500,000 $496,358 $ 136,500 (2) $ - $ - $ 25,800 (9) $ 1,158,658
Chief Executive Officer and President 2023 $ 500,000 $ - $ 136,500 (3) $ - $ - $ 25,200 (10) $ 661,700
Sarah (Minlei) Chen 2024 $ 355,138 $ 166,609 $ 166,109 (4) $ 12,400 (7) $ - $ 7,838 (11) $ 708,094
Chief Actuary; Senior Vice President, Kingstone Insurance Company 2023 $ 347,750 $ - $ - $ - $ - $ 7,588 (11) $ 355,338
Jennifer L. Gravelle 2024 $ 337,422 $ 133,979 $ 133,479 (5) $ 12,400 (8) $ - $ 13,800 (11) $ 631,080
Vice President, Chief Financial Officer and Treasurer 2023 $ 309,863 $ - $ 25,000 (6) $ - $ - $ 10,592 (11) $ 345,455
(1)Amounts reflect the aggregate grant date fair value of grants made in each respective fiscal year computed in accordance with stock-based accounting rules (FASB ASC Topic 718-Stock Compensation), excluding the effect of estimated forfeitures. Assumptions used in the calculations of these amounts are included in Note 12 to our consolidated financial statements included in this Annual Report.
(2)In January 2024, Ms. Golden was granted 64,085 shares of restricted common stock under our Amended and Restated 2014 Equity Participation Plan (the "2014 Plan"). Such grant vested on the first anniversary of the date of grant.
(3)In January 2023, Ms. Golden was granted 101,111 shares of restricted common stock under 2014 Plan. Such grant vested to the extent of 50,556 shares on the first anniversary of the date of grant and 50,555 shares on the second anniversary of the date of grant.
(4)In March 2025, Ms. Chen was granted 10,935 shares of restricted stock under our 2024 Equity Participation Plan (the "2024 Plan") in consideration of services rendered during 2024. Such grant vested to the extent of one-third on the date of grant and will vest to the extent of one-third on each of the first and second anniversaries of the date of grant.
(5)In March 2025, Ms. Gravelle was granted 8,787 shares of restricted stock under our 2024 Plan in consideration of services rendered during 2024. Such grant vested to the extent of one-third on the date of grant and will vest to the extent of one-third on each of the first and second anniversaries of the date of grant.
(6)In January 2023, Ms. Gravelle was granted 14,535 shares of restricted common stock under the 2014 Plan. Such grant vested to the extent of one-third on each of the first and second anniversaries of the date of grant and will vest to the extent of one-third on the third anniversary of the date of grant.
(7)In January 2024, Ms. Chen was granted an option for the purchase of 10,000 shares of common stock under the Plan. Such option vested to the extent of one-third on each of the first, second and third anniversaries of the date of grant.
(8)In January 2024, Ms. Gravelle was granted an option for the purchase of 10,000 shares of common stock under the Plan. Such option vested to the extent of one-third on each of the first, second and third anniversaries of the date of grant.
(9)Represents employer matching contributions under our defined contribution plan of $13,800 and a car allowance of $12,000.
(10)Represents employer matching contributions under our defined contribution plan of $13,200 and a car allowance of $12,000.
(11)Represents employer matching contributions under our defined contribution plan.
Employment Contracts
Meryl S. Golden
Employment Agreement effective as of January 1, 2023
On June 27, 2022, we and Ms. Golden entered into a second amended and restated employment agreement which took effect as of January 1, 2023, and expired on December 31, 2024 (the “Second Amended Golden Employment Agreement”).
Pursuant to the Second Amended Golden Employment Agreement, Ms. Golden was entitled to receive an annual base salary of $500,000 and an annual bonus equal to 3% of our consolidated income from operations before taxes, exclusive of our consolidated net investment income (loss), net unrealized gains (losses) on equity securities and net realized gains (losses) on investments, up to a maximum of 1.25 times her base salary. In addition, pursuant to the Second Amended Golden Employment Agreement, Ms. Golden received, under the terms of the 2014 Plan, a grant in each of January 2023 and January 2024 of a number of shares of restricted stock determined by dividing $136,500 by the fair market value of our common stock on the date of grant. The 2023 grant vested with respect to one-half of the award on the first anniversary of the grant date and one-half of the award on December 31, 2024. The 2024 grant vested on January 2, 2025.
Employment Agreement effective as of January 1, 2025
On April 15, 2024, we entered into a third amended and restated employment agreement with Ms. Golden, which took effect as of January 1, 2025 and expires on December 31, 2026 (the “Third Amended Golden Employment Agreement”).
Pursuant to the Third Amended Golden Employment Agreement, Ms. Golden is entitled to receive an annual base salary of $550,000 (increased from $500,000 previously in effect) and an annual bonus equal to 3% of our consolidated income from operations before taxes, exclusive of our consolidated net investment income (loss), net unrealized gains (losses) on equity securities and net realized gains (losses) on investments, up to a maximum of 1.25 times her base annual salary (the same as previously in effect). Pursuant to the Third Amended Golden Employment Agreement (and as was provided for in the Second Amended Golden Employment Agreement), in the event that Ms. Golden’s employment is terminated by us without cause or she resigns for good reason (each as defined in the Third Amended Golden Employment Agreement), Ms. Golden would be entitled to receive her base salary and the 3% bonus for the remainder of the term. Ms. Golden would be entitled, under certain circumstances, to a payment equal to 1.5 times her then annual salary and her accrued 3% bonus in the event of the termination of her employment following a change of control of our company (also as was provided for in the Second Amended Golden Employment Agreement). Pursuant to the Third Amended Golden Employment Agreement, Ms. Golden received a grant during January 2025 of 40,000 shares of restricted stock and will be entitled to receive, under certain circumstances, a grant, during January 2026, of 40,000 shares of restricted stock. The 2025 grant will become vested with respect to one-half of the award on the first anniversary of the grant date and one-half on December 31, 2026. The 2026 grant will become vested on the first anniversary of the grant date. The above grants are generally consistent with the grants provided for in the Second Amended Golden Employment Agreement. In the event that we are precluded from making a grant to Ms. Golden in 2026, she would instead be entitled to a cash bonus of $136,500 for such year.
See “Termination of Employment and Change-in-Control Arrangements - Meryl S. Golden” below for a discussion of the provisions of the Third Amended Golden Employment Agreement with regard to payments due and the acceleration of stock awards in the event of the termination of Ms. Golden’s employment under certain circumstances and/or in the event of a change in control.
Employee Bonus Plan
Sara (Minlei) Chen
Pursuant to our Employee Bonus Plan, Ms. Chen, as a member of our senior leadership team ("SLT"), is eligible to receive a cash bonus and shares of restricted stock based upon the growth and underwriting profitability of our company.
Jennifer L. Gravelle
Pursuant to our Employee Bonus Plan, Ms. Gravelle, as a member of our SLT, is eligible to receive a cash bonus and shares of restricted stock based upon the growth and underwriting profitability of our company.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth certain information concerning exercisable and unexercisable stock options and unvested stock grants held by the above Named Executive Officers as of December 31, 2024:
Option Awards Stock Awards
Name Number of Securities
Underlying
Unexercised
Options
Exercisable Number of Securities
Underlying
Unexercised Options
Unexercisable Option
Exercise Price Option Expiration
Date Number of Shares of
Stock
That Have Not Vested Market
Value of Shares of
Stock That Have
Not Vested Equity Incentive Plan
Awards: Number of
Unearned Shares That
Have Not Vested Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares That
Have Not Vested
Meryl S. Golden - - $ - 74,085 (1) $ 1,125,351 $ - $ -
Sarah (Minlei) Chen - 10,000 $ 2.25 1/5/29 - (2) $ - $ - $ -
Jennifer L. Gravelle - 10,000 $ 2.25 1/5/29 9,690 (3) $ 147,191 $ - $ -
________________________
(1)Such shares vested to the extent of 64,085 shares on January 2, 2025 and 10,000 shares on January 3, 2025.
(2)Excludes 10,935 shares of restricted stock granted on March 3, 2025 to Ms Chen under our 2024 Plan in consideration of services rendered during 2024. Such grant vested to the extent of one-third on March 3, 2025 and will vest to the extent of one-third on each of the first and second anniversaries of the date of grant.
(3)Such shares vested to the extent of 4,845 shares on January 17, 2025, 4,845 shares on January 17, 2026. Excludes 8,787 shares of restricted stock granted on March 3, 2025 to Ms Gravelle under our 2024 Plan in consideration of services rendered during 2024. Such grant vested to the extent of one-third on March 3, 2025 and will vest to the extent of one-third on each of the first and second anniversaries of the date of grant.
Termination of Employment and Change-in-Control Arrangements
Meryl S. Golden
Pursuant to the Third Amended Golden Employment Agreement, in the event that Ms. Golden’s employment is terminated by us without cause, or she resigns for good reason (each as defined in the Third Amended Golden Employment Agreement), Ms. Golden would be entitled to receive her annual base salary for the remainder of the term or for twelve months, whichever is later. In addition, pursuant to the 2014 Plan and the 2024 Plan, in the event of a termination of employment due to the death or disability of Ms. Golden, the stock grants scheduled to vest on the next vesting date following such event shall vest under certain circumstances notwithstanding such event. Further, in the event that Ms. Golden’s employment is terminated by us without cause, or she resigns for good reason, Ms. Golden’s granted but unvested restricted stock awards will vest.
Ms. Golden would be entitled to receive, under certain circumstances, a payment equal to 1.5 times her then annual base salary and her accrued bonus in the event of the termination of her employment within eighteen months following a change in control of our company. In addition, pursuant to the 2014 Plan and the 2024 Plan, Ms. Golden’s outstanding restricted stock awards will vest in the event of a change of control of our company.
Sarah (Minlei) Chen
Pursuant to the 2014 Plan and the 2024 Plan, in the event of a termination of employment due to the death or disability of Ms. Chen, the stock grants scheduled to vest on the next vesting date following such event shall vest under certain circumstances notwithstanding such event. In addition, pursuant to the 2014 Plan and the 2024 Plan, Ms. Chen’s outstanding restricted stock awards will vest in the event of a change of control of our company.
Jennifer L. Gravelle
Pursuant to the 2014 Plan and the 2024 Plan, in the event of a termination of employment due to the death or disability of Ms. Gravelle, the stock grants scheduled to vest on the next vesting date following such event shall vest under certain circumstances notwithstanding such event. In addition, pursuant to the 2014 Plan and the 2024 Plan, Ms. Gravelle’s outstanding restricted stock awards will vest in the event of a change of control of our company.
Compensation of Directors
The following table sets forth certain information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2024:
DIRECTOR COMPENSATION
Name Fees Earned or
Paid in Cash Stock Awards(1) Option Awards Total
Thomas Newgarden $ 65,000 $ 29,042 $ - $ 94,042
Timothy P. McFadden $ 65,000 $ 53,000 $ - $ 118,000
Floyd R. Tupper $ 75,000 $ 53,000 $ - $ 128,000
William L. Yankus $ 80,000 $ 53,000 $ - $ 133,000
Carla A. D’Andre $ 65,000 $ 53,000 $ - $ 118,000
Manmohan Singh $ 36,389 $ 38,665 $ - $ 75,054
(1)Amounts reflect the aggregate grant date fair value of grants made in the fiscal year computed in accordance with stock-based accounting rules (FASB ASC Topic 718-Stock Compensation), excluding the effect of estimated forfeitures. Assumptions used in the calculations of these amounts are included in Note 12 to our consolidated financial statements included in this Annual Report.
The aggregate number of unvested restricted stock awards outstanding as of fiscal year end for each non-employee director is as follows:
Name Unvested Restricted
Stock Awards (#)
Thomas Newgarden 6,114
Timothy P. McFadden 24,883
Floyd R. Tupper 24,883
William L. Yankus 24,883
Carla A. D’Andre 24,883
Manmohan Singh 8,728
Our non-employee directors are entitled to receive annual compensation for their services as directors as follows:
•$50,000;
•an additional $125,000 for service as Non-Executive Chairman of the Board, an additional $25,000 for service as Audit Committee chair, an additional $20,000 for service as Compensation and Finance Committee chair, an additional $10,000 for service as Investment Committee chair, and an additional $15,000 for service as chair of other committees; and
•$53,000 of our common stock determined by the closing stock price on the first business day of the year, which vest on the first anniversary of the grant date.
Equity Award Grant Practices
The equity awards for Ms. Golden are set out in the Third Amended Golden Employment Agreement. Equity awards for the other Named Executive Officers are discretionary and are generally granted to them in February or March each year pursuant to our Employee Bonus Plan which provides for the grant of restricted common stock based upon our growth and underwriting profitability in the prior fiscal year. In certain circumstances, including the hiring or promotion of an officer, the Compensation and Finance Committee may approve grants to be effective at other times. The Compensation and Finance Committee did not take material nonpublic information into account when determining the timing and terms of equity awards in 2024, and we do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Ownership
The following table sets forth certain information as of March 12, 2025, regarding the beneficial ownership of our shares of common stock by (i) each person who we believe to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each present director, (iii) each Named Executive Officer and (iv) all of our present executive officers and directors as a group.
Name and Address
of Beneficial Owner Number of Shares
Beneficially Owned Approximate
Percent of Class
Meryl S. Golden 207,747 (1) 1.5 %
Floyd R. Tupper 151,718 (2) 1.1 %
Timothy P. McFadden 103,382 *
Carla A. D'Andre 94,237 (3) *
William L. Yankus 91,834 *
Thomas Newgarden 24,726 *
Manmohan Singh 8,728 *
Sarah (Minlei) Chen 15,384 (4) *
Jennifer L. Gravelle 11,912 (4) *
Barry B. Goldstein
PO Box 450 Hewlett, NY 11557
918,780 (5) 6.7 %
All executive officers
and directors as a group
(9 persons)
709,668 (1)(2)(3) 5.2 %
*Less than 1%.
(1)Includes 20,000 shares held in a retirement trust for the benefit of Ms. Golden. The inclusion of the shares owned by the retirement trust shall not be construed as an admission that Ms. Golden is, for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of such shares.
(2)Includes (i) 32,395 shares owned by Mr. Tupper’s wife, (ii) 6,675 shares held in a retirement trust for the benefit of Mr. Tupper and (iii) 810 shares held in a retirement trust for the benefit of Mr. Tupper’s wife. Mr. Tupper has sole voting and dispositive power over 118,513 shares of common stock and shared voting and dispositive power over 33,205 shares of common stock. The inclusion of the shares owned by Mr. Tupper’s wife and the retirement trusts for the benefit of Mr. Tupper and his wife shall not be construed as an admission that Mr. Tupper is,
for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of such shares.
(3)Represents (i) 88,837 shares owned by a limited liability company controlled by Ms. D’Andre, (ii) 1,400 shares held in a retirement trust for the benefit of Ms. D’Andre and (iii) 4,000 shares owned by a limited liability company controlled by Ms. D'Andre's husband. The inclusion of the shares owned by the limited liability companies and the retirement trust shall not be construed as an admission that Ms. D’Andre is, for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of such shares.
(4)Includes 3,334 shares issuable upon the exercise of currently exercisable options.
(5)The information regarding Mr. Goldstein is based solely on publicly available information filed with the SEC. Includes (i) 73,168 shares of common stock owned by Mr. Goldstein’s wife and (ii) 15,000 shares held in a retirement trust for the benefit of Mr. Goldstein. Mr. Goldstein has sole voting and dispositive power over 845,612 shares of common stock and shared voting and dispositive power over 73,168 shares of common stock. The inclusion of the shares owned by Mr. Goldstein’s wife and the retirement trust shall not be construed as an admission that Mr. Goldstein is, for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of such shares.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information as of December 31, 2024, with respect to compensation plans (including individual compensation arrangements) under which our common stock is authorized for issuance, aggregated as follows:
•All compensation plans previously approved by security holders; and
•All compensation plans not previously approved by security holders.
EQUITY COMPENSATION PLAN INFORMATION
Number of securities to be issued
upon exercise of outstanding
options, warrants and rights Weighted average exercise price
of outstanding options, warrants
and rights Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected in
column (a))
(a) (b) (c)
Equity compensation plans approved by security holders 281,913 $ 2.71 1,490,744 (1)
Equity compensation plans not approved by security holders - $ - -
Total 281,913 $ 2.71 1,490,744 (1)
(1)Includes 267,586 shares reserved for issuance pursuant to unvested restricted stock grants.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Director Independence
Board of Directors
Our Board of Directors is currently comprised of Meryl S. Golden, Thomas Newgarden, Floyd R. Tupper, William L. Yankus, Carla A. D’Andre, Timothy P. McFadden and Manmohan Singh. Our board of directors has determined that each of Messrs. Newgarden, Tupper, Yankus, McFadden and Singh and Ms. D’Andre is independent under applicable Nasdaq listing standards and federal securities rules and regulations.
Audit Committee
The members of our Board’s Audit Committee currently are Messrs. Tupper (Chair), Newgarden, Yankus and McFadden, each of whom is independent under applicable Nasdaq listing standards and federal securities rules and regulations on independence of Audit Committee members.
Nominating and Corporate Governance Committee
The members of our Board’s Nominating and Corporate Governance Committee currently are Ms. D’Andre (Chair) and Messrs. McFadden, Tupper and Singh, each of whom is independent under applicable Nasdaq listing standards and federal securities rules and regulations on independence.
Compensation and Finance Committee
The members of our Board’s Compensation and Finance Committee currently are Messrs. Yankus (Chair), Newgarden, Tupper and Singh and Ms. D’Andre, each of whom is independent under applicable Nasdaq listing standards and federal securities rules and regulations on independence.
Related Party Transactions
Due to the infrequency of related party transactions, we have not formally adopted procedures for the review of, or standards for approval of, such transactions; however, our Board of Directors (or a designated committee thereof) will review related party transactions on a case-by-case basis.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following is a summary of the fees billed to us by Marcum LLP, our independent auditors, for professional services rendered for the fiscal years ended December 31, 2024 and 2023.
Fee Category Fiscal 2024 Fees Fiscal 2023 Fees
Audit Fees(1) $ 428,995 $ 326,035
Tax Fees(2) $ - $ -
Audit-Related Fees(3) $ - $ -
All Other Fees(4) $ - $ -
$ 428,995 $ 326,035
(1)Audit Fees consist of fees and expenses billed for services rendered for the audit of our consolidated financial statements and review of our condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q. Fees in 2024 also include services rendered in connection with the filing of Forms S-3 and S-8, comfort letter, and billings for services rendered with statutory audit filing of KICO. Fees in 2023 also include services rendered in connection with the filing of Form S-8, and responses in connection with a DFS examination of KICO and services rendered with statutory audit filing of KICO.
(2)Marcum did not provide any tax services during the fiscal year.
(3)Marcum did not provide any “Audit-Related” services during the fiscal year.
(4)Marcum did not provide any other services during the fiscal year.
The Audit Committee is responsible for the appointment, compensation and oversight of the work of the independent auditors and approves in advance any services to be performed by the independent auditors, whether audit-related or not. The Audit Committee reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent auditors. Substantially all of the fees shown above were pre-approved by the Audit Committee.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Description of Exhibit
3(a)
Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2014, filed on May 15, 2014).
3(b)
By-laws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 9, 2009).
4(a)
Note Exchange Agreement, dated as of August 30, 2024, between Kingstone Companies, Inc. and the several holders of Existing Notes party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 3, 2024).
4(b)
Form of 13.75% Note due 2026 issued by the Company representing $14,950,000 aggregate principal amount of notes (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 3, 2024 (included as Exhibit 1 to the Note Exchange Agreement filed as Exhibit 10.1 thereto)).
4(c)
Form of Warrant Certificate issued by the Company for the purchase of an aggregate of 969,525 shares of common stock (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 12, 2022 (included as Exhibit 2 to the Note and Warrant Exchange Agreement filed as Exhibit 10.1 thereto)).
4(d) Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934.*
10(a)
Amended and Restated 2014 Equity Participation Plan (incorporated by reference to Exhibit 10(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed on April 1, 2024).
10(b)
2024 Equity Participation Plan.*
10(h)
Third Amended and Restated Employment Agreement, dated as of April 15, 2024, by and between Kingstone Companies, Inc. and Meryl S. Golden (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 17, 2024).
10(i)
Sales Agreement, dated as of May 24, 2024, by and between Kingstone Companies, Inc. and Janney Montgomery Scott LLC (incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed on May 24, 2024).
10(j) Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Floyd R. Tupper.*
10(k) Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Carla D’Andre.*
10(l) Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and William L. Yankus.*
10(m) Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Timothy P. McFadden.*
10(n) Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Meryl S. Golden.*
10(o)
Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Thomas Newgarden.*
10(p)
Stock Grant Agreement, dated as of January 2, 2025, between Kingstone Companies, Inc. and Manmohan Singh.*
10(q)
Stock Grant Agreement, dated as of March 3, 2025, between Kingstone Companies, Inc. and Sarah (Minlei) Chen.*
10(r) Stock Grant Agreement, dated as of March 3, 2025, between Kingstone Companies, Inc. and Jennifer L. Gravelle.*
10(s) 2025 Employee Bonus Plan #
10(t) Contract of Sale, dated February 5, 2025, between 15 Joys Lane, LLC and The County of Ulster (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 7, 2025).
19 Kingstone Companies, Inc. Insider Trading Policy.*
21 Subsidiaries (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 16, 2017).
23 Consent of Marcum LLP.*
31(a) Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31(b) Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32 Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
97 Clawback Policy (incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed on April 1, 2024).
101.INS XBRL Instance Document.*
101.SCH 101.SCH XBRL Taxonomy Extension Schema.*
101.CAL 101.CAL XBRL Taxonomy Extension Calculation Linkbase.*
101.DEF 101.DEF XBRL Taxonomy Extension Definition Linkbase.*
101.LAB 101.LAB XBRL Taxonomy Extension Label Linkbase.*
101.PRE 101.PRE XBRL Taxonomy Extension Presentation Linkbase.*
*Filed herewith
**Furnished herewith
# Portions of the exhibit (indicated by asterisks) have been omitted pursuant to Item 601 (b)(10)(iv) of Regulation S-K.