Commission File
Number
0-1665
|
Delaware
|
36-2476480
|
(State or other
jurisdiction of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
15 Joys Lane, Kingston, New York
|
12401
|
(Address of
principal executive offices)
|
(Zip
Code)
|
(845)
802-7900
|
(Registrant’s
telephone number, including area code)
|
Title of each class
|
Name of each exchange on which registered
|
Common
Stock
|
NASDAQ
|
Large accelerated
filer ☐
|
Accelerated filer
☐
|
|
|
Non-accelerated
☐ (Do not check if a smaller reporting company)
|
Smaller reporting
company ☒
|
|
|
Page
No.
|
|
Forward-Looking
Statements
|
2
|
||
PART
I
|
|
|
|
Item
1.
|
Business.
|
3
|
|
Item
1A.
|
Risk
Factors.
|
21
|
|
Item
1B.
|
Unresolved Staff
Comments.
|
21
|
|
Item
2.
|
Properties.
|
21
|
|
Item
3.
|
Legal
Proceedings.
|
21
|
|
Item
4.
|
Mine Safety
Disclosures.
|
21
|
|
PART
II
|
|
|
|
Item
5.
|
Market for
Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
|
22
|
|
Item
6.
|
Selected Financial
Data.
|
23
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
23
|
|
Item
7A.
|
Quantitative and
Qualitative Disclosures About Market Risk.
|
63
|
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
63
|
|
Item
9.
|
Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure.
|
63
|
|
Item
9A.
|
Controls and
Procedures.
|
63
|
|
Item
9B.
|
Other
Information.
|
64
|
|
PART
III
|
|
|
|
Item
10.
|
Directors,
Executive Officers and Corporate Governance.
|
65
|
|
Item
11.
|
Executive
Compensation.
|
69
|
|
Item
12.
|
Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder
Matters.
|
72
|
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence.
|
75
|
|
Item
14.
|
Principal
Accountant Fees and Services.
|
75
|
|
PART
IV
|
|
|
|
Item
15.
|
Exhibits and
Financial Statement Schedules.
|
76
|
|
Item
16.
|
Form 10-K
Summary.
|
77
|
|
Signatures
|
|
78
|
(in thousands of $)
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Reserve
for loss and loss adjustment expenses, net of reinsurance
recoverables
|
4,370
|
4,799
|
5,823
|
6,001
|
7,280
|
8,520
|
12,065
|
17,139
|
21,663
|
23,170
|
25,960
|
Net
reserve estimated as of One year later
|
4,844
|
5,430
|
6,119
|
6,235
|
7,483
|
9,261
|
13,886
|
18,903
|
21,200
|
23,107
|
|
Two
years later
|
5,591
|
5,867
|
6,609
|
6,393
|
8,289
|
11,022
|
16,875
|
18,332
|
21,501
|
|
|
Three
years later
|
5,792
|
6,433
|
6,729
|
6,486
|
9,170
|
12,968
|
16,624
|
18,687
|
|
|
|
Four
years later
|
6,260
|
6,569
|
6,711
|
7,182
|
10,128
|
12,552
|
16,767
|
|
|
|
|
Five
years later
|
6,343
|
6,683
|
7,261
|
7,766
|
9,925
|
12,440
|
|
|
|
|
|
Six
years later
|
6,429
|
7,245
|
7,727
|
7,602
|
9,932
|
|
|
|
|
|
|
Seven
years later
|
6,886
|
7,721
|
7,554
|
7,615
|
|
|
|
|
|
|
|
Eight
years later
|
7,318
|
7,568
|
7,511
|
|
|
|
|
|
|
|
|
Nine
years later
|
7,160
|
7,527
|
|
|
|
|
|
|
|
|
|
Ten
years later
|
7,069
|
|
|
|
|
|
|
|
|
|
|
Net
cumulative redundancy (deficiency)
|
(2,699
)
|
(2,728
)
|
(1,688
)
|
(1,614
)
|
(2,652
)
|
(3,920
)
|
(4,702
)
|
(1,548
)
|
162
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of $)
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Cumulative
amount of reserve paid, net of reinsurance recoverable
through
|
|
|
|
|
|
||||||
One
year later
|
2,018
|
1,855
|
2,533
|
2,307
|
3,201
|
3,237
|
4,804
|
6,156
|
8,500
|
8,503
|
|
Two
years later
|
3,303
|
3,339
|
3,974
|
3,992
|
4,947
|
5,661
|
8,833
|
10,629
|
12,853
|
|
|
Three
years later
|
4,036
|
4,339
|
5,054
|
4,659
|
6,199
|
8,221
|
11,873
|
13,571
|
|
|
|
Four
years later
|
4,471
|
5,146
|
5,373
|
5,238
|
7,737
|
10,100
|
13,785
|
|
|
|
|
Five
years later
|
5,079
|
5,424
|
5,717
|
5,997
|
8,585
|
10,903
|
|
|
|
|
|
Six
years later
|
5,305
|
5,738
|
6,224
|
6,562
|
8,941
|
|
|
|
|
|
|
Seven
years later
|
5,594
|
6,247
|
6,718
|
6,749
|
|
|
|
|
|
|
|
Eight
years later
|
5,966
|
6,740
|
6,853
|
|
|
|
|
|
|
|
|
Nine
years later
|
6,377
|
6,875
|
|
|
|
|
|
|
|
|
|
Ten
years later
|
6,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
reserve -
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
4,370
|
4,799
|
5,823
|
6,001
|
7,280
|
8,520
|
12,065
|
17,139
|
21,663
|
23,170
|
25,960
|
*
Reinsurance Recoverable
|
6,523
|
6,693
|
9,766
|
10,512
|
10,432
|
9,960
|
18,420
|
17,364
|
18,250
|
16,707
|
15,777
|
*
Gross reserves -
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
10,893
|
11,492
|
15,589
|
16,513
|
17,712
|
18,480
|
30,485
|
34,503
|
39,913
|
39,877
|
41,737
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
re-estimated reserve
|
7,069
|
7,527
|
7,511
|
7,615
|
9,932
|
12,440
|
16,767
|
18,687
|
21,501
|
23,107
|
|
Re-estimated
reinsurance recoverable
|
11,183
|
11,151
|
12,849
|
12,833
|
13,486
|
13,884
|
27,970
|
20,218
|
19,450
|
16,674
|
|
Gross
re-estimated reserve
|
18,252
|
18,678
|
20,360
|
20,448
|
23,418
|
26,324
|
44,737
|
38,905
|
40,951
|
39,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
cumulative redundancy (deficiency)
|
(7,359
)
|
(7,186
)
|
(4,771
)
|
(3,935
)
|
(5,706
)
|
(7,844
)
|
(14,252
)
|
(4,402
)
|
(1,038
)
|
96
|
|
|
High
|
Low
|
2016
Calendar Year
|
|
|
First
Quarter
|
$
9.25
|
$
7.21
|
Second
Quarter
|
9.62
|
8.21
|
Third
Quarter
|
9.39
|
8.45
|
Fourth
Quarter
|
14.15
|
9.25
|
|
High
|
Low
|
2015
Calendar Year
|
|
|
First
Quarter
|
$
8.22
|
$
7.50
|
Second
Quarter
|
7.79
|
6.11
|
Third
Quarter
|
9.47
|
7.49
|
Fourth
Quarter
|
10.00
|
8.47
|
Payment
Date
|
|
|
|
September 2011
-
June
2012
|
$
.03
|
September 2012
-
June
2014
|
$
.04
|
September 2014
-
September
2015
|
$
.05
|
December 2015
-
December
2016
|
$
.0625
|
|
2016
|
2015
|
|
|
|
Common
stock dividends declared and paid
|
$
1,941,271
|
$
1,557,398
|
|
Year ended December 31, 2016
|
Year ended December 31, 2015
|
||
|
January 1,
|
July 1,
|
January 1,
|
July 1,
|
|
to
|
to
|
to
|
to
|
|
June 30,
|
December 31,
|
June 30,
|
December 31,
|
|
("2015/2016 Treaty")
|
("2016/2017 Treaty")
|
("2014/2015 Treaty")
|
("2015/2016 Treaty")
|
|
|
|
|
|
Quota share reinsurance rates
|
|
|
|
|
Personal
lines
|
40%
|
40%
|
55%
|
40%
|
|
Year ended December 31,
|
|||
($ in thousands)
|
2016
|
2015
|
Change
|
Percent
|
|
|
|
|
|
Net
written premiums
|
$
65,926
|
$
60,385
|
$
5,541
|
9.2
%
|
Return
of premiums previously ceded to prior quota share
treaties
|
-
|
5,866
|
(5,866
)
|
na
|
Net
written premiums without the effect of the July 1, 2015
Cut-off
|
$
65,926
|
$
54,519
|
$
11,407
|
20.9
%
|
|
Year ended December 31, 2016
|
Year
ended December 31, 2015
|
||
|
January 1,
to
June 30,
|
July 1,
to
December 31,
|
January 1,
to
June 30,
|
July 1,
to
December 31,
|
|
("2015/2016 Treaty")
|
("2016/2017 Treaty")
|
("2014/2015 Treaty")
|
("2015/2016 Treaty")
|
Quota share previsional ceding commission rate
|
|
|
|
|
Personal
lines
|
55%
|
52%
|
40%
|
55%
|
|
Commercial Auto
|
|
Commercial Auto as a
|
|
As of
|
Number of Open Claims
|
Loss and LAE Reserves
|
Total Loss and LAE Reserves
|
Percentage of Total Loss and LAE Reserves
|
(in
thousands except number of open claims)
|
|
|
|
|
|
|
|
|
|
December
31, 2013
|
170
|
$
9,185
|
$
34,503
|
26.6
%
|
December
31, 2014
|
114
|
$
8,126
|
$
39,613
|
20.5
%
|
December
31, 2015
|
68
|
$
4,971
|
$
39,877
|
12.5
%
|
December
31, 2016
|
34
|
$
2,434
|
$
41,737
|
5.8
%
|
|
Direct
|
Assumed
|
Ceded
|
Net
|
|
|
|
|
|
Year ended December 31, 2016
|
|
|
|
|
Written
premiums
|
$
103,191,995
|
$
28,522
|
$
(37,294,330
)
|
$
65,926,187
|
Change
in unearned premiums
|
(6,110,225
)
|
6,091
|
1,585,853
|
(4,518,281
)
|
Earned
premiums
|
$
97,081,770
|
$
34,613
|
$
(35,708,477
)
|
$
61,407,906
|
|
|
|
|
|
Loss
and loss adjustment expenses exluding
|
|
|
|
|
the
effect of catastrophes
|
$
37,193,657
|
$
55,257
|
$
(10,861,730
)
|
$
26,387,184
|
Catastrophe
loss
|
2,337,461
|
-
|
(934,984
)
|
1,402,477
|
Loss
and loss adjustment expenses
|
$
39,531,118
|
$
55,257
|
$
(11,796,714
)
|
$
27,789,661
|
|
|
|
|
|
Loss
ratio excluding the effect of catastrophes
|
38.3
%
|
159.6
%
|
30.4
%
|
43.0
%
|
Catastrophe
loss
|
2.4
%
|
0.0
%
|
2.5
%
|
2.3
%
|
Loss
ratio
|
40.7
%
|
159.6
%
|
32.9
%
|
45.3
%
|
|
|
|
|
|
Year ended December 31, 2015
|
|
|
|
|
Written
premiums
|
$
91,003,968
|
$
40,971
|
$
(30,660,161
)
|
$
60,384,778
|
Change
in unearned premiums
|
(8,436,456
)
|
4,255
|
(3,340,495
)
|
(11,772,696
)
|
Earned
premiums
|
$
82,567,512
|
$
45,226
|
$
(34,000,656
)
|
$
48,612,082
|
|
|
|
|
|
Loss
and loss adjustment expenses exluding
|
|
|
|
|
the
effect of catastrophes
|
$
32,850,817
|
$
111,618
|
$
(11,873,028
)
|
$
21,089,407
|
Catastrophe
loss
|
4,645,762
|
-
|
(2,555,169
)
|
2,090,593
|
Loss
and loss adjustment expenses
|
$
37,496,579
|
$
111,618
|
$
(14,428,197
)
|
$
23,180,000
|
|
|
|
|
|
Loss
ratio excluding the effect of catastrophes
|
39.8
%
|
246.8
%
|
34.9
%
|
43.4
%
|
Catastrophe
loss
|
5.6
%
|
0.0
%
|
7.5
%
|
4.3
%
|
Loss
ratio
|
45.4
%
|
246.8
%
|
42.4
%
|
47.7
%
|
|
December 31, 2016
|
December 31, 2015
|
||
|
Amortized
|
|
Amortized
|
|
Remaining Time to
Maturity
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|
|
|
|
|
Less
than one year
|
$
-
|
$
-
|
$
-
|
$
-
|
One
to five years
|
650,000
|
642,455
|
500,000
|
496,245
|
Five
to ten years
|
3,838,475
|
3,901,625
|
4,032,483
|
3,990,811
|
More
than 10 years
|
606,427
|
754,039
|
606,389
|
754,039
|
Total
|
$
5,094,902
|
$
5,298,119
|
$
5,138,872
|
$
5,241,095
|
Category
|
December 31, 2016
|
December 31, 2015
|
U.S.
Treasury securities and
|
|
|
obligations
of U.S. government
|
|
|
corporations
and agencies
|
3.44
%
|
3.44
%
|
|
|
|
Political
subdivisions of States,
|
|
|
Territories
and Possessions
|
3.87
%
|
3.55
%
|
|
|
|
Corporate
and other bonds
|
|
|
Industrial
and miscellaneous
|
3.86
%
|
4.28
%
|
|
|
|
Residential
mortgage backed securities
|
3.83
%
|
6.24
%
|
|
|
|
Total
|
3.85
%
|
4.26
%
|
|
December 31, 2016
|
December 31, 2015
|
Weighted
average effective maturity
|
5.0
|
5.5
|
|
|
|
Weighted
average final maturity
|
8.3
|
7.3
|
|
|
|
Effective
duration
|
4.4
|
4.9
|
|
|
Amount
|
|
|
|
Recoverable
|
|
|
A.M.
|
as of
|
|
($ in thousands)
|
Best Rating
|
December 31, 2016
|
%
|
Maiden
Reinsurace Company
|
A
|
$
8,625
|
47.7
%
|
Swiss
Reinsurance America Corporation
|
A+
|
4,981
|
27.5
%
|
|
13,606
|
75.2
%
|
|
Others
|
|
4,490
|
24.8
%
|
Total
|
|
$
18,096
|
100.0
%
|
|
|
July 1, 2016 - June 30, 2017
|
||
Treaty
|
|
Extent of Loss
|
|
Risk Retained
|
Personal Lines
|
|
Initial $833,333
|
|
$500,000
|
|
|
$833,333 - $4,500,000
|
|
None(1)
|
|
|
Over $4,500,000
|
|
100%
|
|
|
|
|
|
Personal Umbrella
|
|
Initial $1,000,000
|
|
$100,000
|
|
|
$1,000,000 - $5,000,000
|
|
None(1)
|
|
|
Over $5,000,000
|
|
100%
|
|
|
|
|
|
Commercial Lines
|
|
Initial $500,000
|
|
$500,000
|
|
|
$500,000 - $4,500,000
|
|
None(1)
|
|
|
Over $4,500,000
|
|
100%
|
|
|
|
|
|
Commercial Umbrella
|
|
Initial $1,000,000
|
|
$100,000
|
|
|
$1,000,000 - $5,000,000
|
|
None(1)
|
|
|
Over $5,000,000
|
|
100%
|
|
|
|
|
|
Catastrophe (2)
|
|
Initial $5,000,000
|
|
$3,000,000
|
|
|
$5,000,000 - $252,000,000
|
|
None
|
|
|
Over $252,000,000
|
|
100%
|
|
July 1, 2015 - June 30, 2016
|
July
1, 2014 - June 30, 2015
|
||
Treaty
|
Extent of Loss
|
Risk Retained
|
Extent of Loss
|
Risk Retained
|
Personal
Lines
|
Initial
$750,000
|
$
450,000
|
Initial
$800,000
|
$
360,000
|
|
$
750,000
- $4,500,000
|
None(1)
|
$
800,000
- $4,000,000
|
None(1)
|
|
Over
$4,500,000
|
100
%
|
Over
$4,000,000
|
100
%
|
|
|
|
|
|
Personal
Umbrella
|
Initial
$1,000,000
|
$
100,000
|
Initial
$1,000,000
|
$
100,000
|
|
$
1,000,000
- $3,000,000
|
None(1)
|
$
1,000,000
- $3,000,000
|
None(1)
|
|
Over
$3,000,000
|
100
%
|
Over
$3,000,000
|
100
%
|
|
|
|
|
|
Commercial
Lines
|
Initial
$425,000
|
$
425,000
|
Initial
$400,000
|
$
400,000
|
|
$
425,000
- $4,500,000
|
None(1)
|
$
400,000
- $4,000,000
|
None(1)
|
|
Over
$4,500,000
|
100
%
|
Over
$4,000,000
|
100
%
|
|
|
|
|
|
Commercial
Auto
|
Initial
$300,000
|
$
300,000
|
Initial
$300,000
|
$
300,000
|
|
$
300,000
- $2,000,000
|
None(1)
|
$
300,000
- $2,000,000
|
None(1)
|
|
Over
$2,000,000
|
100
%
|
Over
$2,000,000
|
100
%
|
|
|
|
|
|
Catastrophe
(2)
|
Initial
$4,000,000
|
$
2,400,000
|
Initial
$4,000,000
|
$
1,800,000
|
|
$
4,000,000
- $180,000,000
|
None
|
$
4,000,000
- $141,000,000
|
None
|
|
Over
$180,000,000
|
100
%
|
Over
$141,000,000
|
100
%
|
Name
|
Age
|
Positions and Offices Held
|
|
|
|
Barry
B. Goldstein
|
64
|
President,
Chairman of the Board, Chief Executive Officer and
Director
|
Victor
J. Brodsky
|
59
|
Chief
Financial Officer and Treasurer
|
Benjamin
Walden
|
49
|
Executive
Vice President and Chief Actuary, Kingstone Insurance
Company
|
Floyd
R. Tupper
|
62
|
Secretary
and Director
|
Jay
M. Haft
|
81
|
Director
|
Jack
D. Seibald
|
56
|
Director
|
William
L. Yankus
|
57
|
Director
|
|
|
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Option Awards (1)
|
Non-Equity
Incentive Plan
Compensation
|
All Other
Compensation
|
Total
|
Barry B.
Goldstein
|
2016
|
$
575,000
|
$
200,000
|
$
-
|
$
653,221
(4)
|
$
36,723
|
$
1,464,944
|
Chief
Executive Officer
|
2015
|
$
575,000
|
$
|
$
93,719
(2)
|
$
514,970
(5)
|
$
36,723
|
$
1,220,412
|
|
|
|
|
|
|
|
|
Victor J.
Brodsky
|
2016
|
$
294,420
|
$
34,553
|
$
-
|
$
36,295
(6)
|
$
20,592
|
$
385,860
|
Chief
Financial Officer
|
2015
|
$
280,400
|
$
14,377
|
$
-
|
$
33,521
(7)
|
$
20,041
|
$
348,339
|
|
|
|
|
|
|
|
|
Benjamin
Walden
|
2016
|
$
246,800
|
$
12,000
|
$
28,180
(3)
|
$
42,623
(6)
|
$
12,391
|
$
341,994
|
Senior Vice
President and Chief Actuary, Kingstone Insurance
Company
|
2015
|
$
235,000
|
$
-
|
$
-
|
$
40,044
(7)
|
$
13,282
|
$
288,326
|
|
Option Awards
|
|||
Name
|
Number of Securities Underlying
Unexercised Options
|
Number of Securities Underlying
Unexercised Options
|
Option Exercise
Price
|
Option Expiration
Date
|
|
Exercisable
|
Unexercisable
|
|
|
Barry
B. Goldstein
|
187,500
|
62,500
(1)
|
$
6.73
|
08/12/19
|
Victor
J. Brodsky
|
20,000
|
-
|
$
5.09
|
08/29/18
|
Benjamin
Walden
|
10,000
|
-
|
$
6.60
|
12/16/18
|
Benjamin
Walden
|
2,500
|
7,500
(2)
|
$
7.85
|
3/11/2021
|
Name
|
Fees Earned or
Paid in Cash
|
Stock Awards
|
Option Awards
|
Total
|
|
|
|
|
|
Jay
M. Haft
|
$
50,000
|
$
-
|
-
|
$
50,000
|
|
|
|
|
|
Jack
D. Seibald
|
$
51,500
|
$
-
|
-
|
$
51,500
|
|
|
|
|
|
Floyd
R. Tupper
|
$
52,750
|
$
-
|
-
|
$
52,750
|
|
|
|
|
|
William
L. Yankus
|
$
37,867
|
$
-
|
-
|
$
37,867
|
●
|
$44,000
(including $6,000 for services as a director of KICO)
|
●
|
an
additional $6,000 for services as committee chair (and $1,500 for
services as KICO committee chair)
|
●
|
2,000
shares of our common stock which vest in one-third increments over
a three year period. None of the shares were vested as of December
31, 2016.
|
Name and
Address
of Beneficial
Owner
|
Number of
Shares
Beneficially
Owned
|
Approximate
Percent of
Class
|
|
|
|
Barry
B. Goldstein
15
Joys Lane
Kingston,
New York
|
873,672
(1)
(2)
|
8.1%
|
|
|
|
Jack
D. Seibald
1336
Boxwood Drive West
Hewlett
Harbor, New York
|
207,821
(1)
(3)
|
2.0%
|
|
|
|
Jay
M. Haft
69
Beaver Dam Road
Salisbury,
Connecticut
|
87,090
(1)
|
*
|
|
|
|
Floyd
R. Tupper
220 East 57
th
Street
New
York, New York
|
50,278
(1)
(4)
|
*
|
|
|
|
Victor
J. Brodsky
15
Joys Lane
Kingston,
New York
|
31,964
(1)
(5)
|
*
|
|
|
|
Benjamin
Walden
15
Joys Lane
Kingston,
New York
|
15,334
(1)
(6)
|
*
|
|
|
|
William
L. Yankus
10
Pheasant Hill Road
Farmington,
Connecticut
|
500
(1)
(7)
|
*
|
|
|
|
RenaissanceRe
Ventures Ltd.
Renaissance
Other Investments
Holding
II Ltd.
RenaissanceRe
Holdings Ltd.
Renaissance
House
12
Crow Lane
Pembrooke
HM19
Bermuda
|
595,238
(8)
|
5.6%
|
|
|
|
All
executive officers
and
directors as a group
(7
persons)
|
1,266,659
(1)
(2) (3) (4) (5) (6) (7)
|
11.7%
|
(1)
|
Based upon Schedule
13D filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and/or other information that is
publicly available.
|
|
|
(2)
|
Includes (i)
187,500 shares issuable upon the exercise of options that are
exercisable currently or within 60 days and (ii) 73,168 shares
owned by Mr. Goldstein’s wife. The inclusion of
the shares owned by Mr. Goldstein’s wife 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.
|
|
|
(3)
|
Includes (i) 57,353
shares owned jointly by Mr. Seibald and his wife, Stephanie
Seibald; (ii) 88,731 shares held in a retirement trust for the
benefit of Mr. Seibald; and (iii) 50,755 shares owned by SDS
Partners I, Ltd. for which Mr. Seibald serves as a general
partner. Mr. Seibald has sole voting and dispositive
power over 99,713 shares and shared voting and dispositive power
over 108,108 shares. The inclusion of shares that Mr.
Seibald does not directly own shall not be deemed an admission that
Mr. Seibald is, for purposes of Section 13(d) or 13(g) of the
Exchange Act, the beneficial owner of such shares.
|
|
|
(4)
|
Includes 31,460
shares owned by Mr. Tupper’s wife. The inclusion of the
shares owned by Mr. Tupper’s 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.
|
|
|
(5)
|
Includes (i) 20,000
shares issuable upon the exercise of currently exercisable options
and (ii) 556 shares issuable upon the vesting of restricted stock
within 60 days.
|
|
|
(6)
|
Includes 10,000
shares issuable upon the exercise of options that are exercisable
currently or within 60 days and (ii) 334 shares issuable upon the
vesting of restricted stock within 60 days.
|
|
|
(7)
|
Represents shares
issuable upon the vesting of restricted stock within 60
days.
|
|
|
(8)
|
Pursuant to
Schedule 13G, as amended, RenaissanceRe Ventures Ltd.
(“RenaissanceRe Ventures”), a wholly owned subsidiary
of Renaissance Other Investments Holdings II Ltd. (“ROIHL
II”), a wholly owned subsidiary of RenaissanceRe Holdings
Ltd. (“RenaissanceRe Holdings”), have shared voting and
dispositive power over the 595,238 shares. RenaissanceRe Ventures,
ROIHL II and RenaissanceRe Holdings each may be deemed to
beneficially own the 595,238 shares.
|
|
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
|
362,750
|
$
6.62
|
602,500
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
-
|
$
-
|
-
|
|
|
|
|
Total
|
362,750
|
|
602,500
|
Fee
Category
|
Fiscal 2016
Fees
|
Fiscal 2015
Fees
|
Audit
Fees(1)
|
$
210,451
|
$
203,749
|
Audit-Related
Fees(2)
|
$
2,060
|
$
-
|
Tax
Fees(3)
|
$
-
|
$
5,379
|
All Other
Fees(4)
|
$
-
|
$
-
|
|
$
212,511
|
$
209,128
|
(1)
|
Audit Fees consist
of fees 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, services rendered in connection with the filing of
Forms S-3 and S-8 and services provided in connection with other
statutory or regulatory filings.
|
|
|
(2)
|
Audit-Related Fees
consist of aggregate fees billed for assurance and related services
that are reasonably related to the performance of the audit or
review of our financial statements and are not reported under
“Audit Fees.”
|
|
|
(3)
|
Tax Fees consist of
fees billed by our independent auditors for professional services
related to tax advice.
|
|
|
(4)
|
All Other Fees
consist of aggregate fees billed for products and services provided
by our independent auditors, other than those disclosed
above.
|
Exhibit
Number
|
Description of Exhibit
|
|
|
3(a)
|
Restated
Certificate of Incorporation, as amended (1)
|
|
|
3(b)
|
By-laws,
as amended (2)
|
|
|
10(a)
|
2005
Equity Participation Plan (3)
|
|
|
10(b)
|
2014
Equity Participation Plan (4)
|
|
|
10(c)
|
Employment
Agreement, dated as of January 20, 2017, between Kingstone
Companies, Inc. and Barry B. Goldstein (5)
|
|
|
10(d)
|
Employment
Agreement, dated as of May 10, 2011, between Kingstone Insurance
Company and Barry B. Goldstein (6)
|
|
|
10(e)
|
Amendment
No. 1, dated as of May 14, 2012, to Employment Agreement between
Kingstone Insurance Company and Barry B. Goldstein (7)
|
|
|
10(f)
|
Amendment
No. 2, dated January 1, 2015, between Kingstone Insurance Company
and Barry B. Goldstein
|
|
|
10(g)
|
Stock
Option Agreement, dated as of August 12, 2014, between Kingstone
Companies, Inc. and Barry B. Goldstein (2005 Equity Participation
Plan) (4)
|
|
|
10(h)
|
Stock
Option Agreement, dated as of August 12, 2014, between Kingstone
Companies, Inc. and Barry B. Goldstein (2014 Equity Participation
Plan) (4)
|
|
|
10(i)
|
Purchase
Agreement, dated April 18, 2016, by and between Kingstone
Companies, Inc. and RenaissanceRe Ventures Ltd. (8)
|
|
|
10(j)
|
Underwriting
Agreement, dated January 25, 2017, among Kingstone Companies, Inc.,
the selling stockholders named therein and Sandler O’Neill
& Partners, L.P., as representative of the underwriters named
therein (9)
|
|
|
14(a)
|
Code
of Ethics (3)
|
|
|
14(b)
|
Officer
and Director Trading Restrictions Policy (3)
|
|
|
21
|
Subsidiaries
|
|
|
23
|
Consent
of Marcum LLP
|
|
|
31(a)
|
Rule
13a-14(a)/15d-14(a) Certification of Principal 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 Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
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.
|
(1)
|
Denotes
document filed as an exhibit to our Quarterly Report on Form 10-Q
for the period ended March 31, 2014 and incorporated herein by
reference.
|
|
|
(2)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated November 5, 2009 and incorporated herein by
reference.
|
|
|
(3)
|
Denotes
document filed as an exhibit to our Annual Report on Form 10-K for
the fiscal year ended December 31, 2014 and incorporated herein by
reference.
|
|
|
(4)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated August 12, 2014 and incorporated herein by
reference.
|
|
|
(5)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated January 20, 2017 and incorporated herein by
reference.
|
|
|
(6)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated May 10, 2011 and incorporated herein by
reference.
|
|
|
(7)
|
Denotes
document filed as an exhibit to our Annual Report on Form 10-K for
the fiscal year ended December 31, 2012 and incorporated herein by
reference.
|
|
|
(8)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated April 18, 2016 and incorporated herein by
reference.
|
|
|
(9)
|
Denotes
document filed as an exhibit to our Current Report on Form 8-K for
an event dated January 25, 2017 and incorporated herein by
reference.
|
|
KINGSTONE
COMPANIES, INC.
|
|
|
|
|
|
|
Dated: March 16,
2017
|
By:
|
/s/
Barry
B. Goldstein
|
|
|
|
Barry B.
Goldstein
|
|
|
|
Chief Executive
Officer
|
|
Signature
|
Capacity
|
Date
|
|
|
|
/s/ Barry B.
Goldstein
|
President, Chairman
of the Board,
Chief Executive
Officer,
Treasurer and
Director (Principal Executive Officer)
|
March 16,
2017
|
Barry B.
Goldstein
|
|
|
|
|
|
/s/ Victor J.
Brodsky
|
Chief Financial
Officer and Treasurer
(Principal
Financial and Accounting Officer)
|
March 16,
2017
|
Victor J.
Brodsky
|
|
|
|
|
|
/s/ Jay M.
Haft
|
Director
|
March 16,
2017
|
J
ay M.
Haft
|
|
|
|
|
|
/s/ Floyd R.
Tupper
|
Director
|
March 16,
2017
|
Floyd R.
Tupper
|
|
|
|
|
|
/s/ Jack D.
Seibald
|
Director
|
March 16,
2017
|
Jack D.
Seibald
|
|
|
|
|
|
/s/ William L.
Yankus
|
Director
|
March 16,
2017
|
William L.
Yankus
|
|
|
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of December 31, 2016 and 2015
|
F-3
|
Consolidated
Statements of Income and Comprehensive Income for the years ended
December 31, 2016 and 2015
|
F-4
|
Consolidated
Statements of Stockholders’ Equity for the years ended
December 31, 2016 and 2015
|
F-5
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2016
and 2015
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7
|
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
|
||
Consolidated
Balance Sheets
|
|
|
|
December
31,
|
December
31,
|
|
2016
|
2015
|
|
|
|
Assets
|
|
|
Fixed-maturity
securities, held-to-maturity, at amortized cost (fair value
of
|
|
|
$5,298,119
at December 31, 2016 and $5,241,095 at December 31,
2015)
|
$
5,094,902
|
$
5,138,872
|
Fixed-maturity
securities, available-for-sale, at fair value (amortized cost
of
|
|
|
$80,596,628
at December 31, 2016 and $62,221,129 at December 31,
2015)
|
80,428,828
|
62,502,064
|
Equity
securities, available-for-sale, at fair value (cost of
$9,709,385
|
|
|
at
December 31, 2016 and $8,751,537 at December 31, 2015)
|
9,987,686
|
9,204,270
|
Total
investments
|
95,511,416
|
76,845,206
|
Cash
and cash equivalents
|
12,044,520
|
13,551,372
|
Premiums
receivable, net
|
11,649,398
|
10,621,655
|
Reinsurance
receivables, net
|
32,197,765
|
31,270,235
|
Deferred
policy acquisition costs
|
12,239,781
|
10,835,306
|
Intangible
assets, net
|
1,350,000
|
1,757,816
|
Property
and equipment, net
|
3,011,373
|
3,152,266
|
Other
assets
|
1,442,209
|
1,095,894
|
Total assets
|
$
169,446,462
|
$
149,129,750
|
|
|
|
Liabilities
|
|
|
Loss
and loss adjustment expense reserves
|
$
41,736,719
|
$
39,876,500
|
Unearned
premiums
|
54,994,375
|
48,890,241
|
Advance
premiums
|
1,421,560
|
1,199,376
|
Reinsurance
balances payable
|
2,146,017
|
1,688,922
|
Deferred
ceding commission revenue
|
6,851,841
|
6,435,068
|
Accounts
payable, accrued expenses and other liabilities
|
5,448,448
|
4,826,603
|
Income
taxes payable
|
-
|
263,622
|
Deferred
income taxes
|
166,949
|
672,190
|
Total liabilities
|
112,765,909
|
103,852,522
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Stockholders' Equity
|
|
|
Preferred
stock, $.01 par value; authorized 2,500,000 shares
|
-
|
-
|
Common
stock, $.01 par value; authorized 20,000,000 shares; issued
8,896,335 shares
|
|
|
at
December 31, 2016 and 8,289,606 at December 31, 2015;
outstanding
|
|
|
7,921,866
shares at December 31, 2016 and 7,328,637 shares at December 31,
2015
|
88,963
|
82,896
|
Capital
in excess of par
|
37,950,401
|
32,987,082
|
Accumulated
other comprehensive income
|
72,931
|
484,220
|
Retained
earnings
|
20,563,720
|
13,605,225
|
|
58,676,015
|
47,159,423
|
Treasury
stock, at cost, 974,469 shares at December 31, 2016 and 960,969
shares
|
|
|
at
December 31, 2015
|
(1,995,462
)
|
(1,882,195
)
|
Total stockholders' equity
|
56,680,553
|
45,277,228
|
|
|
|
Total liabilities and stockholders' equity
|
$
169,446,462
|
$
149,129,750
|
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
Consolidated Statements of Income and Comprehensive
Income
|
||
Years ended December 31,
|
2016
|
2015
|
|
|
|
Revenues
|
|
|
Net
premiums earned
|
$
61,407,906
|
$
48,612,082
|
Ceding
commission revenue
|
11,268,241
|
11,473,117
|
Net
investment income
|
3,115,583
|
2,563,890
|
Net
realized gains (losses) on sales of investments
|
529,448
|
(50,546
)
|
Other
income
|
1,115,486
|
1,577,191
|
Total
revenues
|
77,436,664
|
64,175,734
|
|
|
|
Expenses
|
|
|
Loss
and loss adjustment expenses
|
27,789,661
|
23,180,000
|
Commission
expense
|
18,327,190
|
15,317,140
|
Other
underwriting expenses
|
14,866,646
|
12,833,391
|
Other
operating expenses
|
1,909,779
|
1,504,121
|
Depreciation
and amortization
|
1,124,921
|
1,032,009
|
Total
expenses
|
64,018,197
|
53,866,661
|
|
|
|
Income
from operations before taxes
|
13,418,467
|
10,309,073
|
Income
tax expense
|
4,518,701
|
3,349,453
|
Net income
|
8,899,766
|
6,959,620
|
|
|
|
Other comprehensive loss, net of tax
|
|
|
Gross
change in unrealized gains (losses)
|
|
|
on
available-for-sale-securities
|
(93,718
)
|
(750,716
)
|
|
|
|
Reclassification
adjustment for (gains) losses
|
|
|
included
in net income
|
(529,448
)
|
50,546
|
Net
change in unrealized gains (losses)
|
(623,166
)
|
(700,170
)
|
Income
tax benefit related to items
|
|
|
of
other comprehensive income (loss)
|
211,877
|
238,058
|
Other comprehensive loss, net of tax
|
(411,289
)
|
(462,112
)
|
|
|
|
Comprehensive income
|
$
8,488,477
|
$
6,497,508
|
|
|
|
Earnings per common share:
|
|
|
Basic
|
$
1.15
|
$
0.95
|
Diluted
|
$
1.14
|
$
0.94
|
|
|
|
Weighted average common shares outstanding
|
|
|
Basic
|
7,736,594
|
7,331,114
|
Diluted
|
7,807,263
|
7,377,880
|
|
|
|
Dividends declared and paid per common share
|
$
0.2500
|
$
0.2125
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Capital
|
Other
|
|
|
|
|
|
Preferred Stock
|
Common Stock
|
in Excess
|
Comprehensive
|
Retained
|
Treasury Stock
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
of Par
|
Income
|
Earnings
|
Shares
|
Amount
|
Total
|
Balance,
January 1, 2015
|
-
|
$
-
|
8,235,095
|
$
82,351
|
$
32,873,383
|
$
946,332
|
$
8,203,003
|
926,338
|
$
(1,604,173
)
|
$
40,500,896
|
Stock-based
compensation
|
-
|
-
|
-
|
-
|
134,185
|
-
|
-
|
-
|
-
|
134,185
|
Shares
deducted from exercise of stock
|
|
|
|
|
|
|
|
|
|
|
options for
payment of withholding taxes
|
-
|
-
|
(30,755
)
|
(308
)
|
(243,354
)
|
-
|
-
|
-
|
-
|
(243,662
)
|
Excess tax
benefit from exercise
|
|
|
|
|
|
|
|
|
|
|
of stock
options
|
-
|
-
|
-
|
-
|
223,721
|
-
|
-
|
-
|
-
|
223,721
|
Exercise of
stock options
|
-
|
-
|
85,266
|
853
|
(853
)
|
-
|
-
|
-
|
-
|
-
|
Acquisition of
treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
34,631
|
(278,022
)
|
(278,022
)
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,557,398
)
|
-
|
-
|
(1,557,398
)
|
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
6,959,620
|
-
|
-
|
6,959,620
|
Change in
unrealized losses on available-
|
|
|
|
|
|
|
|
|
|
|
for-sale
securities, net of tax
|
-
|
-
|
-
|
-
|
-
|
(462,112
)
|
-
|
-
|
-
|
(462,112
)
|
Balance, December 31, 2015
|
-
|
-
|
8,289,606
|
82,896
|
32,987,082
|
484,220
|
13,605,225
|
960,969
|
(1,882,195
)
|
45,277,228
|
Proceeds from
private placement, net of
|
|
|
|
|
|
|
|
|
|
|
closing costs
of $192,369
|
-
|
-
|
595,238
|
5,952
|
4,801,679
|
-
|
-
|
-
|
-
|
4,807,631
|
Stock-based
compensation
|
-
|
-
|
-
|
-
|
106,882
|
-
|
-
|
-
|
-
|
106,882
|
Excess tax
benefit from exercise
|
|
|
|
|
|
|
|
|
|
|
of stock
options
|
-
|
-
|
-
|
-
|
563
|
-
|
-
|
-
|
-
|
563
|
Exercise of
stock options
|
-
|
-
|
11,491
|
115
|
54,195
|
-
|
-
|
-
|
-
|
54,310
|
Acquisition of
treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
13,500
|
(113,267
)
|
(113,267
)
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,941,271
)
|
-
|
-
|
(1,941,271
)
|
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
8,899,766
|
-
|
-
|
8,899,766
|
Change in
unrealized gains on available-
|
|
|
|
|
|
|
|
|
|
|
for-sale
securities, net of tax
|
-
|
-
|
-
|
-
|
-
|
(411,289
)
|
-
|
-
|
-
|
(411,289
)
|
Balance,
December 31, 2016
|
-
|
$
-
|
8,896,335
|
$
88,963
|
$
37,950,401
|
$
72,931
|
$
20,563,720
|
974,469
|
$
(1,995,462
)
|
$
56,680,553
|
|
December
31,
|
December
31,
|
|
2016
|
2015
|
|
|
|
Collateralized
bank repurchase agreement (1)
|
$
6,268,647
|
$
3,992,509
|
Money
market fund
|
3,121,155
|
7,505,531
|
Total
|
$
9,389,802
|
$
11,498,040
|
|
December 31, 2016
|
December 31, 2015
|
||
|
Amortized
|
|
Amortized
|
|
Remaining Time to Maturity
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|
|
|
||
Less
than one year
|
$
1,752,501
|
$
1,765,795
|
$
827,246
|
$
837,918
|
One
to five years
|
29,541,568
|
29,913,308
|
17,146,349
|
17,393,571
|
Five
to ten years
|
30,487,775
|
30,211,974
|
37,877,726
|
37,884,450
|
More
than 10 years
|
-
|
-
|
1,366,516
|
1,395,627
|
Residential
mortgage backed securities
|
18,814,784
|
18,537,751
|
5,003,292
|
4,990,498
|
Total
|
$
80,596,628
|
$
80,428,828
|
$
62,221,129
|
$
62,502,064
|
|
December 31, 2016
|
December 31, 2015
|
||
|
Amortized
|
|
Amortized
|
|
Remaining Time to Maturity
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|
|
|
||
Less
than one year
|
$
-
|
$
-
|
$
-
|
$
-
|
One
to five years
|
650,000
|
642,455
|
500,000
|
496,245
|
Five
to ten years
|
3,838,475
|
3,901,625
|
4,032,483
|
3,990,811
|
More
than 10 years
|
606,427
|
754,039
|
606,389
|
754,039
|
Total
|
$
5,094,902
|
$
5,298,119
|
$
5,138,872
|
$
5,241,095
|
|
December 31, 2016
|
|||
($ in
thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
|||
Fixed-maturity securities available-for-sale
|
|
|
|
|
Political
subdivisions of
|
|
|
|
|
States,
Territories and
|
|
|
|
|
Possessions
|
$
-
|
$
8,205,888
|
$
-
|
$
8,205,888
|
|
|
|
|
|
Corporate
and other
|
|
|
|
|
bonds
industrial and
|
|
|
|
|
miscellaneous
|
48,356,317
|
5,328,872
|
-
|
53,685,189
|
|
|
|
|
|
Residential
mortgage backed securities
|
-
|
18,537,751
|
-
|
18,537,751
|
Total
fixed maturities
|
48,356,317
|
32,072,511
|
-
|
80,428,828
|
Equity securities
|
9,987,686
|
-
|
-
|
9,987,686
|
Total
investments
|
$
58,344,003
|
$
32,072,511
|
$
-
|
$
90,416,514
|
|
December 31, 2016
|
December 31, 2015
|
||
|
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
|
|
|
|
|
Fixed-maturity
securities held-to-maturity
|
$
5,094,902
|
$
5,298,119
|
$
5,138,872
|
$
5,241,095
|
Cash
and cash equivalents
|
$
12,044,520
|
$
12,044,520
|
$
13,551,372
|
$
13,551,372
|
Premiums
receivable
|
$
11,649,398
|
$
11,649,398
|
$
10,621,655
|
$
10,621,655
|
Reinsurance
receivables
|
$
32,197,765
|
$
32,197,765
|
$
31,270,235
|
$
31,270,235
|
Real
estate, net of accumulated depreciation
|
$
1,659,405
|
$
1,925,000
|
$
1,727,068
|
$
1,925,000
|
Reinsurance
balances payable
|
$
2,146,017
|
$
2,146,017
|
$
1,688,922
|
$
1,688,922
|
|
|
December 31, 2016
|
December 31, 2015
|
||||
|
Useful
|
Gross
|
|
Net
|
Gross
|
|
Net
|
|
Life
|
Carrying
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
|
(in yrs)
|
Value
|
Amortization
|
Amount
|
Value
|
Amortization
|
Amount
|
Insurance
license
|
-
|
$
500,000
|
$
-
|
$
500,000
|
$
500,000
|
$
-
|
$
500,000
|
Customer
relationships
|
10
|
3,400,000
|
2,550,000
|
850,000
|
3,400,000
|
2,210,000
|
1,190,000
|
Other
identifiable
|
|
|
|
|
|
|
|
intangibles
|
7
|
950,000
|
950,000
|
-
|
950,000
|
882,184
|
67,816
|
Total
|
|
$
4,850,000
|
$
3,500,000
|
$
1,350,000
|
$
4,850,000
|
$
3,092,184
|
$
1,757,816
|
2017
|
$
340,000
|
2018
|
340,000
|
2019
|
170,000
|
|
$
850,000
|
|
|
July 1, 2016 - June 30, 2017
|
||
Treaty
|
|
Extent of Loss
|
|
Risk Retained
|
Personal
Lines
|
|
Initial
$833,333
|
|
$500,000
|
|
|
$833,333
- $4,500,000
|
|
None(1)
|
|
|
Over
$4,500,000
|
|
100%
|
|
|
|
|
|
Personal
Umbrella
|
|
Initial
$1,000,000
|
|
$100,000
|
|
|
$1,000,000
- $5,000,000
|
|
None(1)
|
|
|
Over
$5,000,000
|
|
100%
|
|
|
|
|
|
Commercial
Lines
|
|
Initial
$500,000
|
|
$500,000
|
|
|
$500,000
- $4,500,000
|
|
None(1)
|
|
|
Over
$4,500,000
|
|
100%
|
|
|
|
|
|
Commercial
Umbrella
|
|
Initial
$1,000,000
|
|
$100,000
|
|
|
$1,000,000
- $5,000,000
|
|
None(1)
|
|
|
Over
$5,000,000
|
|
100%
|
|
|
|
|
|
Catastrophe
(2)
|
|
Initial
$5,000,000
|
|
$3,000,000
|
|
|
$5,000,000
- $252,000,000
|
|
None
|
|
|
Over
$252,000,000
|
|
100%
|
|
|
July 1, 2015 - June 30, 2016
|
|
July 1, 2014 - June 30, 2015
|
|||||
Treaty
|
|
Extent of Loss
|
|
Risk Retained
|
|
Extent of Loss
|
|
Risk Retained
|
|
Personal
Lines
|
|
Initial
$750,000
|
|
$450,000
|
|
Initial
$800,000
|
|
$360,000
|
|
|
|
$750,000
- $4,500,000
|
|
None(1)
|
|
$800,000
- $4,000,000
|
|
None(1)
|
|
|
|
Over
$4,500,000
|
|
100%
|
|
Over
$4,000,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Umbrella
|
|
Initial
$1,000,000
|
|
$100,000
|
|
Initial
$1,000,000
|
|
$100,000
|
|
|
|
$1,000,000
- $3,000,000
|
|
None(1)
|
|
$1,000,000
- $3,000,000
|
|
None(1)
|
|
|
|
Over
$3,000,000
|
|
100%
|
|
Over
$3,000,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Lines
|
|
Initial
$425,000
|
|
$425,000
|
|
Initial
$400,000
|
|
$400,000
|
|
|
|
$425,000
- $4,500,000
|
|
None(1)
|
|
$400,000
- $4,000,000
|
|
None(1)
|
|
|
|
Over
$4,500,000
|
|
100%
|
|
Over
$4,000,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Auto
|
|
Initial
$300,000
|
|
$300,000
|
|
Initial
$300,000
|
|
$300,000
|
|
|
|
$300,000
- $2,000,000
|
|
None(1)
|
|
$300,000
- $2,000,000
|
|
None(1)
|
|
|
|
Over
$2,000,000
|
|
100%
|
|
Over
$2,000,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe
(2)
|
|
Initial
$4,000,000
|
|
$2,400,000
|
|
Initial
$4,000,000
|
|
$1,800,000
|
|
|
|
$4,000,000
- $180,000,000
|
|
None
|
|
$4,000,000
- $141,000,000
|
|
None
|
|
|
|
Over
$180,000,000
|
|
100%
|
|
Over
$141,000,000
|
|
100%
|
|
|
Unpaid
|
Paid
|
|
|
|
($ in thousands)
|
Losses
|
Losses
|
Total
|
Security
|
|
December 31, 2016
|
|
|
|
|
|
Maiden
Reinsurace Company
|
$
7,640
|
$
985
|
$
8,625
|
$
13,113
|
(1
)
|
Swiss
Reinsurance America Corporation
|
4,310
|
671
|
4,981
|
-
|
|
SCOR
Reinsurance Company
|
1,440
|
152
|
1,592
|
-
|
|
Allied
World Assurance Company
|
392
|
300
|
692
|
-
|
|
Others
|
1,995
|
211
|
2,206
|
164
|
(2
)
|
Total
|
$
15,777
|
$
2,319
|
$
18,096
|
$
13,277
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
Maiden
Reinsurace Company
|
$
7,979
|
$
631
|
$
8,610
|
$
12,201
|
(1
)
|
Swiss
Reinsurance America Corporation
|
3,662
|
377
|
4,039
|
-
|
|
SCOR
Reinsurance Company
|
1,982
|
114
|
2,096
|
-
|
|
Hannover
Rueck
|
853
|
524
|
1,377
|
-
|
|
Allied
World Assurance Company
|
940
|
285
|
1,225
|
-
|
|
Others
|
1,290
|
117
|
1,407
|
293
|
(3
)
|
Total
|
$
16,706
|
$
2,048
|
$
18,754
|
$
12,494
|
|
|
|
|
|
|
|
|
Years ended
|
|
|
December 31,
|
|
|
2016
|
2015
|
|
|
|
Provisional
ceding commissions earned
|
$
12,769,404
|
$
11,692,458
|
Contingent
ceding commissions earned
|
(1,501,163
)
|
(219,341
)
|
|
$
11,268,241
|
$
11,473,117
|
|
December 31,
|
|
|
2016
|
2015
|
|
|
|
Deferred
policy acquisition costs
|
$
12,239,781
|
$
10,835,306
|
Deferred
ceding commission revenue
|
(6,851,841
)
|
(6,435,068
)
|
Balance
at end of period
|
$
5,387,940
|
$
4,400,238
|
|
|
Accumulated
|
|
|
Cost
|
Depreciation
|
Net
|
|
|
|
|
December 31, 2016
|
|
|
|
Building
|
$
1,887,347
|
$
(381,039
)
|
$
1,506,308
|
Land
|
153,097
|
-
|
153,097
|
Furniture
office equipment
|
620,440
|
(388,853
)
|
231,587
|
Computer
equipment and software
|
2,602,330
|
(1,481,949
)
|
1,120,381
|
Automobile
|
81,394
|
(81,394
)
|
-
|
Total
|
$
5,344,608
|
$
(2,333,235
)
|
$
3,011,373
|
|
|
|
|
December 31, 2015
|
|
|
|
Building
|
$
1,887,347
|
$
(313,376
)
|
$
1,573,971
|
Land
|
153,097
|
-
|
153,097
|
Furniture
office equipment
|
518,495
|
(257,485
)
|
261,010
|
Computer
equipment and software
|
2,128,063
|
(963,875
)
|
1,164,188
|
Automobile
|
81,394
|
(81,394
)
|
-
|
Total
|
$
4,768,396
|
$
(1,616,130
)
|
$
3,152,266
|
|
Direct
|
Assumed
|
Ceded
|
Net
|
|
|
|
|
|
Year ended December 31, 2016
|
|
|
|
|
Premiums
written
|
$
103,191,995
|
$
28,522
|
$
(37,294,330
)
|
$
65,926,187
|
Change
in unearned premiums
|
(6,110,225
)
|
6,091
|
1,585,853
|
(4,518,281
)
|
Premiums
earned
|
$
97,081,770
|
$
34,613
|
$
(35,708,477
)
|
$
61,407,906
|
|
|
|
|
|
Year ended December 31, 2015
|
|
|
|
|
Premiums
written
|
$
91,003,968
|
$
40,971
|
$
(30,660,161
)
|
$
60,384,778
|
Change
in unearned premiums
|
(8,436,456
)
|
4,255
|
(3,340,495
)
|
(11,772,696
)
|
Premiums
earned
|
$
82,567,512
|
$
45,226
|
$
(34,000,656
)
|
$
48,612,082
|
|
Gross
|
Reinsurance
|
|
Liability
|
Receivables
|
December 31, 2016
|
|
|
Case-basis
reserves
|
$
25,000,733
|
$
10,804,341
|
Loss
adjustment expenses
|
7,752,617
|
1,893,094
|
IBNR
reserves
|
8,983,369
|
3,079,445
|
Recoverable
on unpaid losses
|
|
15,776,880
|
Recoverable
on paid losses
|
-
|
2,319,140
|
Total
loss and loss adjustment expenses
|
$
41,736,719
|
18,096,020
|
Unearned
premiums
|
|
14,101,745
|
Total
reinsurance receivables
|
|
$
32,197,765
|
|
|
|
December 31, 2015
|
|
|
Case-basis
reserves
|
$
24,730,463
|
$
11,264,279
|
Loss
adjustment expenses
|
5,429,221
|
1,720,522
|
IBNR
reserves
|
9,716,816
|
3,721,563
|
Recoverable
on unpaid losses
|
|
16,706,364
|
Recoverable
on paid losses
|
-
|
2,047,979
|
Total
loss and loss adjustment expenses
|
$
39,876,500
|
18,754,343
|
Unearned
premiums
|
|
12,515,892
|
Total
reinsurance receivables
|
|
$
31,270,235
|
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of
Reinsurance
|
|
As of
December 31, 2016
|
||||||||||
|
|
|
|
Cumulative
Number of
Reported Claims by
|
|||||||||
|
For the Years Ended December 31,
|
|
|
Accident
|
|||||||||
Accident Year
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
|
IBNR
|
Year
|
|
(Unaudited 2007 - 2015)
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
$
3,572
|
$
3,414
|
$
3,655
|
$
3,710
|
$
3,744
|
$
3,770
|
$
3,877
|
$
3,913
|
$
3,916
|
$
3,941
|
|
$
6
|
1,067
|
2008
|
|
4,505
|
4,329
|
4,223
|
4,189
|
4,068
|
4,055
|
4,056
|
4,040
|
4,038
|
|
3
|
1,133
|
2009
|
|
|
4,403
|
4,254
|
4,287
|
4,384
|
4,511
|
4,609
|
4,616
|
4,667
|
|
8
|
1,136
|
2010
|
|
|
|
5,598
|
5,707
|
6,429
|
6,623
|
6,912
|
6,853
|
6,838
|
|
20
|
1,616
|
2011
|
|
|
|
|
7,603
|
7,678
|
8,618
|
9,440
|
9,198
|
9,066
|
|
69
|
1,913
|
2012
|
|
|
|
|
|
9,539
|
9,344
|
10,278
|
10,382
|
10,582
|
|
168
|
4,701
(1)
|
2013
|
|
|
|
|
|
|
10,728
|
9,745
|
9,424
|
9,621
|
|
507
|
1,551
|
2014
|
|
|
|
|
|
|
|
14,193
|
14,260
|
14,218
|
|
1,009
|
2,117
|
2015
|
|
|
|
|
|
|
|
|
22,340
|
21,994
|
|
2,452
|
2,508
|
2016
|
|
|
|
|
|
|
|
|
|
26,062
|
|
5,593
|
2,688
|
|
|
|
|
|
|
|
|
|
Total
|
$
111,027
|
|
|
|
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net
of Reinsurance
|
|
|
|||||||||
|
For the Years Ended December
31,
|
|
|
|||||||||
Accident
Year
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
|
|
|
(Unaudited 2007 -
2015)
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
$
1,790
|
$
2,233
|
$
2,924
|
$
3,428
|
$
3,603
|
$
3,649
|
$
3,670
|
$
3,797
|
$
3,873
|
$
3,892
|
|
|
2008
|
|
2,406
|
3,346
|
3,730
|
3,969
|
4,003
|
4,029
|
4,028
|
4,031
|
4,031
|
|
|
2009
|
|
|
2,298
|
3,068
|
3,607
|
3,920
|
4,134
|
4,362
|
4,424
|
4,468
|
|
|
2010
|
|
|
|
2,566
|
3,947
|
4,972
|
5,602
|
6,323
|
6,576
|
6,720
|
|
|
2011
|
|
|
|
|
3,740
|
5,117
|
6,228
|
7,170
|
8,139
|
8,540
|
|
|
2012
|
|
|
|
|
|
3,950
|
5,770
|
7,127
|
8,196
|
9,187
|
|
|
2013
|
|
|
|
|
|
|
3,405
|
5,303
|
6,633
|
7,591
|
|
|
2014
|
|
|
|
|
|
|
|
5,710
|
9,429
|
10,738
|
|
|
2015
|
|
|
|
|
|
|
|
|
12,295
|
16,181
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
15,364
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
86,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
liability for unpaid claim and allocated claim adjustment expenses
for the accident years presented
|
$
24,315
|
|
|
|||||||||
All
outstanding liabilities before 2007, net of
reinsurance
|
602
|
|
|
|||||||||
Liabilities
for claims and claim adjustment expenses, net of
reinsurance
|
$
24,917
|
|
|
Average Annual Percentage Payout of
Incurred Claims by Age, Net of Reinsurance
|
||||||||||
Years
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
|
|
|
|
|
|
|
|
|
|
|
All
Lines of Business
|
46.1
%
|
18.6
%
|
12.7
%
|
9.3
%
|
6.7
%
|
3.0
%
|
1.0
%
|
1.4
%
|
1.0
%
|
0.5
%
|
|
Years ended
|
|
|
December 31,
|
|
|
2016
|
2015
|
Dividend Yield
|
2.74% - 3.18%
|
2.62%
|
Volatility
|
31.61% -
31.81%
|
34.54%
|
Risk-Free Interest Rate
|
1.01% -
1.11%
|
1.03%
|
Expected Life
|
3.25 years
|
3.0 years
|
Stock Options
|
Number of Shares
|
Weighted Average Exercise Price per Share
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value
|
|
|
|
|
|
Outstanding
at January 1, 2016
|
339,750
|
$
6.34
|
3.36
|
$
904,775
|
|
|
|
|
|
Granted
|
40,000
|
$
8.33
|
|
$
216,950
|
Exercised
|
(12,000
)
|
$
4.96
|
|
$
80,985
|
Forfeited
|
(5,000
)
|
$
5.09
|
|
$
17,600
|
|
|
|
|
|
Outstanding
at December 31, 2016
|
362,750
|
$
6.62
|
2.61
|
$
2,586,748
|
|
|
|
|
|
Vested
and Exercisable at December 31, 2016
|
270,250
|
$
6.40
|
2.39
|
$
1,985,285
|
|
|
●
|
Policy
acquisition costs are charged to operations in the year such costs
are incurred, rather than being deferred and amortized as premiums
are earned over the terms of the policies.
|
|
|
●
|
Ceding
commission revenues are earned when ceded premiums are written
except for ceding commission revenues in excess of anticipated
acquisition costs, which are deferred and amortized as ceded
premiums are earned. GAAP requires that all ceding commission
revenues be earned as the underlying ceded premiums are earned over
the term of the reinsurance agreements.
|
|
|
●
|
Certain
assets including certain receivables, a portion of the net deferred
tax asset, prepaid expenses and furniture and equipment are not
admitted.
|
|
|
●
|
Investments in
fixed-maturity securities are valued at NAIC value for statutory
financial purposes, which is primarily amortized cost. GAAP
requires certain investments in fixed-maturity securities
classified as available for sale, to be reported at fair
value.
|
|
|
●
|
Certain
amounts related to ceded reinsurance are reported on a net basis
within the statutory basis financial statements. GAAP requires
these amounts to be shown gross.
|
●
|
For SAP
purposes, changes in deferred income taxes relating to temporary
differences between net income for financial reporting purposes and
taxable income are recognized as a separate component of gains and
losses in surplus rather than included in income tax expense or
benefit as required under GAAP.
|
Years ended December 31,
|
2016
|
2015
|
||
Computed
expected tax expense
|
$
4,696,463
|
35.0
%
|
$
3,505,085
|
34.0
%
|
State
taxes, net of Federal benefit
|
(71,428
)
|
(0.5
)
|
(74,827
)
|
(0.7
)
|
State
valuation allowance
|
85,714
|
0.6
|
171,532
|
1.7
|
Benefit
of lower tax brackets
|
(100,000
)
|
(0.7
)
|
-
|
-
|
Permanent
differences
|
|
|
|
|
Dividends
received deduction
|
(136,690
)
|
(1.0
)
|
(121,960
)
|
(1.2
)
|
Non-taxable
investment income
|
(110,784
)
|
(0.8
)
|
(177,487
)
|
(1.7
)
|
Other
permanent differences
|
48,139
|
0.3
|
55,623
|
0.5
|
Prior
year tax matters
|
123,976
|
0.9
|
(49,139
)
|
(0.5
)
|
Other
|
(16,689
)
|
(0.1
)
|
40,626
|
0.4
|
Total
tax
|
$
4,518,701
|
33.7
%
|
$
3,349,453
|
32.5
%
|
Type of NOL
|
December 31,
2016
|
December 31,
2015
|
Expiration
|
State
only (A)
|
$
655,719
|
$
540,865
|
December
31, 2036
|
Valuation
allowance
|
(534,293
)
|
(403,973
)
|
|
State
only, net of valuation allowance
|
121,426
|
136,892
|
|
Amount
subject to Annual Limitation, federal only (B)
|
10,200
|
13,600
|
December
31, 2019
|
Total
deferred tax asset from net operating loss carryovers
|
$
131,626
|
$
150,492
|
|
Change
in net deferred income tax liabilities
|
$
(505,241
)
|
Deferred
tax expense (benefit) allocated to other comprehensive
income
|
(211,877
)
|
Deferred
income tax provision (benefit)
|
$
(293,364
)
|
|
For the Year
|
|
|
|
Ending
|
|
|
|
December 31,
|
Total
|
|
|
2017
|
$
146,008
|
|
|
2018
|
164,117
|
|
|
2019
|
169,861
|
|
|
2020
|
175,806
|
|
|
2021
|
181,959
|
|
|
Thereafter
|
432,392
|
|
|
Total
|
$
1,270,143
|
|
|
For the Year Ended
|
|
|
December 31,
|
|
|
2016
|
2015
|
|
|
|
Placement
fee revenue
|
$
-
|
$
54,343
|
Termination
fee
|
-
|
350,000
|
Direct
expenses
|
-
|
(12,989
)
|
Net
income before taxes from placement fees
|
$
-
|
$
391,354
|
|
2016
|
||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
Total
|
|
|
|
|
|
|
Net
premiums earned
|
$
14,531,675
|
$
15,010,875
|
$
15,646,181
|
$
16,219,175
|
$
61,407,906
|
Ceding
commission revenue
|
2,770,337
|
2,569,025
|
2,934,928
|
2,993,951
|
11,268,241
|
Net
investment income
|
813,057
|
764,070
|
709,072
|
829,384
|
3,115,583
|
Net
realized gain (loss) on sale of investments
|
80,436
|
283,432
|
241,035
|
(75,455
)
|
529,448
|
Total
revenues
|
18,444,852
|
18,911,910
|
19,828,397
|
20,251,505
|
77,436,664
|
Loss
and loss adjustment expenses
|
9,483,855
|
5,786,836
|
5,134,854
|
7,384,116
|
27,789,661
|
Commission
expense and
|
|
|
|
|
|
other
underwriting expenses
|
7,616,507
|
8,122,342
|
8,642,964
|
8,812,023
|
33,193,836
|
Net
income
|
541,032
|
2,842,261
|
3,460,626
|
2,055,847
|
8,899,766
|
Basic
earnings per share
|
$
0.07
|
$
0.36
|
$
0.44
|
$
0.26
|
$
1.15
|
Diluted
earnings per share
|
$
0.07
|
$
0.36
|
$
0.43
|
$
0.26
|
$
1.14
|
Name of Subsidiary
|
|
State of Incorporation
|
|
|
|
Cosi Agency, Inc.
|
|
New York
|
Payments Inc.
|
|
New York
|
Kingstone Insurance Company
|
|
New York
|
CMIC Properties, Inc. (1)
|
|
New York
|
15 Joys Lane, LLC (2)
|
|
New York
|
Comutual Services LLC (1)
|
|
New York
|
|
|
|
|
Date: March 16,
2017
|
|
/s/
Barry
B. Goldstein
|
|
|
|
Barry B.
Goldstein
|
|
|
|
Chief Executive
Officer
|
|
|
|
|
|
Date: March 16,
2017
|
|
/s/
Victor Brodsky
|
|
|
|
Victor
Brodsky
|
|
|
|
Chief Financial
Officer
|
|
|
|
|
|
Dated: March 16,
2017
|
|
/s/
Barry
B. Goldstein
|
|
|
|
Barry B.
Goldstein
|
|
|
|
Chief Executive
Officer
|
|
|
|
|
|
|
|
/s/
Victor
Brodsky
|
|
|
|
Victor
Brodsky
|
|
|
|
Chief Financial
Officer
|
|