|
|
|
☑
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
|
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
|
|
Delaware(State or other jurisdiction of incorporation or
organization)
|
|
36-2476480(I.R.S. EmployerIdentification Number)
|
Title
of each class
|
Trading
Symbol(s)
|
Name of
each exchange on which registered
|
Common
Stock, $0.01 par value per share
|
KINS
|
Nasdaq Capital Market
|
None
|
Large accelerated filer
|
|
☐
|
Accelerated filer
|
|
☑
|
Non-accelerated filer
|
|
☐
|
Smaller reporting company
|
|
☑
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
Page No.
|
|
Forward-Looking
Statements
|
2
|
||
|
|
||
Business.
|
3
|
||
Risk
Factors.
|
17
|
||
Unresolved
Staff Comments.
|
23
|
||
Properties.
|
23
|
||
Legal
Proceedings.
|
23
|
||
Mine
Safety Disclosures.
|
23
|
||
|
|
||
Market
for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
|
24
|
||
Selected
Financial Data.
|
24
|
||
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
25
|
||
Quantitative
and Qualitative Disclosures About Market Risk.
|
48
|
||
Financial
Statements and Supplementary Data.
|
48
|
||
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
48
|
||
Controls
and Procedures.
|
48
|
||
Other
Information.
|
50
|
||
|
|
||
Directors,
Executive Officers and Corporate Governance.
|
51
|
||
Executive
Compensation.
|
54
|
||
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
59
|
||
Certain
Relationships and Related Transactions, and Director
Independence.
|
61
|
||
Principal
Accountant Fees and Services.
|
62
|
||
|
|
||
Exhibits
and Financial Statement Schedules.
|
63
|
||
Form
10-K Summary.
|
64
|
||
Signatures
|
|
|
(in thousands of $)
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
Reserve
for loss and loss adjustment expenses, net of reinsurance
recoverables
|
6,001
|
7,280
|
8,520
|
12,065
|
17,139
|
21,663
|
23,170
|
25,960
|
32,051
|
40,526
|
64,770
|
Net
reserve estimated as of One year later
|
6,235
|
7,483
|
9,261
|
13,886
|
18,903
|
21,200
|
23,107
|
25,899
|
33,203
|
51,664
|
|
Two
years later
|
6,393
|
8,289
|
11,022
|
16,875
|
18,332
|
21,501
|
24,413
|
26,970
|
42,723
|
|
|
Three
years later
|
6,486
|
9,170
|
12,968
|
16,624
|
18,687
|
22,576
|
25,509
|
33,298
|
|
|
|
Four
years later
|
7,182
|
10,128
|
12,552
|
16,767
|
19,386
|
23,243
|
28,638
|
|
|
|
|
Five
years later
|
7,766
|
9,925
|
12,440
|
16,985
|
19,449
|
25,442
|
|
|
|
|
|
Six
years later
|
7,602
|
9,932
|
12,367
|
16,959
|
20,265
|
|
|
|
|
|
|
Seven
years later
|
7,615
|
9,779
|
12,307
|
17,198
|
|
|
|
|
|
|
|
Eight
years later
|
7,455
|
9,676
|
12,317
|
|
|
|
|
|
|
|
|
Nine
years later
|
7,406
|
9,736
|
|
|
|
|
|
|
|
|
|
Ten
years later
|
7,465
|
|
|
|
|
|
|
|
|
|
|
Net
cumulative redundancy (deficiency)
|
(1,464)
|
(2,456)
|
(3,797)
|
(5,133)
|
(3,126)
|
(3,779)
|
(5,468)
|
(7,338)
|
(10,672)
|
(11,138)
|
|
|
December
31, 2019
|
December
31, 2018
|
||
|
Carrying
|
%
of
|
Carrying
|
%
of
|
Category
|
Value
|
Portfolio
|
Value
|
Portfolio
|
|
|
|
|
|
Cash
and cash equivalents
|
$32,391,485
|
14.0%
|
$21,138,403
|
10.8%
|
|
|
|
|
|
Held
to maturity
|
|
|
|
|
U.S.
Treasury securities and
|
|
|
|
|
obligations
of U.S. government
|
|
|
|
|
corporations
and agencies
|
729,550
|
0.3%
|
729,507
|
0.4%
|
|
|
|
|
|
Political
subdivisions of states,
|
|
|
|
|
territories
and possessions
|
998,619
|
0.4%
|
998,803
|
0.5%
|
|
|
|
|
|
Corporate
and other bonds
|
|
|
|
|
Industrial
and miscellaneous
|
2,097,783
|
0.9%
|
2,494,545
|
1.3%
|
|
|
|
|
|
Available
for sale
|
|
|
|
|
U.S.
Treasury securities and
|
|
|
|
|
obligations
of U.S. government
|
|
|
|
|
corporations
and agencies
|
7,061,100
|
3.0%
|
8,220,381
|
4.2%
|
|
|
|
|
|
Political
subdivisions of states,
|
|
|
|
|
territories
and possessions
|
9,321,812
|
4.0%
|
6,341,608
|
3.2%
|
|
|
|
|
|
Corporate
and other bonds
|
|
|
|
|
Industrial
and miscellaneous
|
125,622,039
|
54.2%
|
115,750,293
|
59.2%
|
|
|
|
|
|
Residential
mortgage backed securities
|
26,231,230
|
11.3%
|
21,465,234
|
11.0%
|
|
|
|
|
|
Other
|
|
|
|
|
Preferred
stocks
|
8,701,887
|
3.8%
|
6,152,956
|
3.1%
|
|
|
|
|
|
Common
stocks, mutual funds, and
|
|
|
|
|
exchange
traded funds
|
15,959,495
|
6.9%
|
10,419,660
|
5.3%
|
|
|
|
|
|
Other
investments
|
2,584,913
|
1.1%
|
1,855,225
|
0.9%
|
Total
|
$231,699,913
|
100.0%
|
$195,566,615
|
100.0%
|
|
December 31, 2019
|
December 31, 2018
|
||
|
Estimated
|
Percentage of
|
Estimated
|
Percentage of
|
|
Fair Market
|
Fair Market
|
Fair Market
|
Fair Market
|
|
Value
|
Value
|
Value
|
Value
|
Rating
|
|
|
|
|
U.S.
Treasury securities
|
$7,061,100
|
4.2%
|
$8,220,381
|
5.4%
|
|
|
|
|
|
Corporate and municipal bonds
|
|
|
|
|
AAA
|
1,996,676
|
1.2%
|
979,123
|
0.6%
|
AA
|
8,809,480
|
5.2%
|
8,350,910
|
5.5%
|
A
|
34,636,236
|
20.6%
|
27,665,961
|
18.2%
|
BBB
|
89,501,460
|
53.2%
|
85,095,907
|
56.1%
|
Total
corporate and municipal bonds
|
134,943,852
|
80.2%
|
122,091,901
|
80.4%
|
|
|
|
|
|
Residential mortgage backed securities
|
|
|
|
|
AAA
|
2,976,306
|
1.8%
|
999,640
|
0.7%
|
AA
|
18,440,382
|
10.9%
|
12,743,906
|
8.5%
|
A
|
2,471,761
|
1.5%
|
4,777,356
|
3.1%
|
CCC
|
1,174,273
|
0.7%
|
1,440,825
|
0.9%
|
CC
|
86,461
|
0.1%
|
109,648
|
0.1%
|
C
|
17,813
|
0.0%
|
24,050
|
0.0%
|
D
|
215,015
|
0.1%
|
390,542
|
0.3%
|
Non
rated
|
849,218
|
0.5%
|
979,267
|
0.6%
|
Total
residential mortgage backed securities
|
26,231,229
|
15.6%
|
21,465,234
|
14.2%
|
|
|
|
|
|
Total
|
$168,236,181
|
100.0%
|
$151,777,516
|
100.0%
|
|
|
Kingstone
|
|
KICO
|
Companies
|
|
|
|
A.M. Best Long-Term issuer credit rating (ICR)
|
a- (negative outlook)
|
bbb- (stable outlook)
|
A.M. Best Long-Term issue credit rating (IR)
|
|
|
$30.0 million, 5.50% senior unsecured notes due Dec. 30,
2022
|
n/a
|
bbb- (stable outlook)
|
Kroll Bond Rating Agency insurance financial strength rating
(IFSR)
|
A- (stable outlook)
|
n/a
|
Kroll Bond Rating Agency issuer rating
|
n/a
|
BBB- (stable outlook)
|
$30.0 million, 5.50% senior unsecured notes due Dec. 30,
2022
|
n/a
|
BBB- (stable outlook)
|
|
|
|
|
|
Commission
expense
|
30,193
|
25,342
|
4,851
|
19.1%
|
Other
underwriting expenses
|
24,420
|
20,943
|
3,477
|
16.6%
|
Other
operating expenses
|
4,178
|
2,575
|
1,603
|
62.3%
|
Depreciation
and amortization
|
2,546
|
1,787
|
759
|
42.5%
|
Interest
expense
|
1,826
|
1,822
|
4
|
0.2%
|
Total
expenses
|
153,346
|
110,765
|
42,581
|
38.4%
|
|
|
|
|
|
(Loss)
income before taxes
|
(7,783)
|
3,006
|
(10,789)
|
(358.9)%
|
Income
tax benefit
|
(1,816)
|
(86)
|
(1,730)
|
2,011.6%
|
Net (loss) income
|
$(5,967)
|
$3,092
|
$(9,059)
|
(293.0)%
|
|
Year
ended December 31, 2019
|
Year
ended December 31, 2018
|
|||
|
January
1,
|
July
1,
|
December
15,
|
January
1,
|
July
1,
|
|
to
|
to
|
to
|
to
|
to
|
|
June
30,
|
December
14,
|
December
31,
|
June
30,
|
December
31,
|
|
("2018/2019 Treaty Year") |
("2019/2020
Run-off Year")
|
("2019/2020 Treaty") | ("2017/2018 Treaty Year") |
("2018/2019
Treaty Year")
|
|
|
|
|
|
|
Quota share reinsurance rates
|
|
|
|
|
|
Personal lines
|
10% (1)
|
0% (2)
|
25% (3)
|
20% (1)
|
10% (1)
|
|
Years ended December 31,
|
|||
($ in thousands)
|
2019
|
2018
|
Change
|
Percent
|
|
|
|
|
|
Provisional
ceding commissions earned
|
$5,446
|
$6,746
|
$(1,300)
|
(19.3)%
|
|
|
|
|
|
Contingent
ceding commissions earned
|
|
|
|
|
Contingent
ceding commissions earned excluding
|
|
|
|
|
the
effect of catastrophes
|
(795)
|
(954)
|
159
|
(16.7)%
|
Effect
of catastrophes on ceding commissions earned
|
-
|
(459)
|
459
|
n/a
|
Contingent
ceding commissions earned
|
(795)
|
(1,413)
|
618
|
(43.7)%
|
|
|
|
|
|
Total
ceding commission revenue
|
$4,651
|
$5,333
|
$(682)
|
(12.8)%
|
|
Direct
|
Assumed
|
Ceded
|
Net
|
|
|
|
|
|
Year ended December 31, 2019
|
|
|
|
|
Written
premiums
|
$171,214,091
|
$939
|
$(45,635,899)
|
$125,579,131
|
Change
in unearned premiums
|
(11,350,864)
|
(243)
|
13,395,418
|
2,044,311
|
Earned
premiums
|
$159,863,227
|
$696
|
$(32,240,481)
|
$127,623,442
|
|
|
|
|
|
Loss
and loss adjustment expenses exluding
|
|
|
|
|
the
effect of catastrophes
|
$94,776,624
|
$(1,813)
|
$(12,287,304)
|
$82,487,507
|
Catastrophe
loss
|
8,176,529
|
-
|
(481,712)
|
7,694,817
|
Loss
and loss adjustment expenses
|
$102,953,153
|
$(1,813)
|
$(12,769,016)
|
$90,182,324
|
|
|
|
|
|
Loss
ratio excluding the effect of catastrophes
|
59.3%
|
-260.5%
|
38.1%
|
64.7%
|
Catastrophe
loss
|
5.1%
|
0.0%
|
1.5%
|
6.0%
|
Loss
ratio
|
64.3%
|
-260.5%
|
39.6%
|
70.7%
|
|
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
Written
premiums
|
$146,716,468
|
$1,004
|
$(26,923,679)
|
$119,793,793
|
Change
in unearned premiums
|
(13,388,535)
|
4,067
|
(2,994,610)
|
(16,379,078)
|
Earned
premiums
|
$133,327,933
|
$5,071
|
$(29,918,289)
|
$103,414,715
|
|
|
|
|
|
Loss
and loss adjustment expenses exluding
|
|
|
|
|
the
effect of catastrophes
|
$61,921,559
|
$28,237
|
$(9,882,474)
|
$52,067,322
|
Catastrophe
loss
|
10,828,121
|
-
|
(4,600,238)
|
6,227,883
|
Loss
and loss adjustment expenses
|
$72,749,680
|
$28,237
|
$(14,482,712)
|
$58,295,205
|
|
|
|
|
|
Loss
ratio excluding the effect of catastrophes
|
46.4%
|
556.8%
|
33.0%
|
50.3%
|
Catastrophe
loss
|
8.1%
|
0.0%
|
15.4%
|
6.0%
|
Loss
ratio
|
54.6%
|
556.8%
|
48.4%
|
56.4%
|
|
December
31, 2019
|
|||||
|
|
|
Gross
Unrealized Losses
|
|
|
|
Category
|
Cost
orAmortized
Cost
|
GrossUnrealized
Gains
|
Less
than 12 Months
|
More
than 12 Months
|
EstimatedFair
Value
|
%
of Estimated
Fair
Value
|
|
|
|
|
|
|
|
U.S.
Treasury securities
|
$729,550
|
$151,002
|
$-
|
$-
|
$880,552
|
21.3%
|
|
|
|
|
|
|
|
Political
subdivisions of States,
|
|
|
|
|
|
|
Territories
and Possessions
|
998,619
|
51,021
|
-
|
-
|
1,049,640
|
25.4%
|
|
|
|
|
|
|
|
Corporate
and other bonds
|
|
|
|
|
|
|
Industrial
and miscellaneous
|
2,097,783
|
97,627
|
(835)
|
-
|
2,194,575
|
53.3%
|
|
|
|
|
|
|
|
Total
|
$3,825,952
|
$299,650
|
$(835)
|
$-
|
$4,124,767
|
100.0%
|
|
December
31, 2019
|
December
31, 2018
|
||
|
Amortized
|
Estimated
|
Amortized
|
Estimated
|
Remaining Time to
Maturity
|
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|
|
|
|
|
Less
than one year
|
$500,000
|
$499,165
|
$-
|
$-
|
One
to five years
|
2,099,268
|
2,215,640
|
2,996,685
|
3,036,531
|
Five
to ten years
|
620,134
|
655,923
|
619,663
|
635,846
|
More
than 10 years
|
606,550
|
754,039
|
606,507
|
754,039
|
Total
|
$3,825,952
|
$4,124,767
|
$4,222,855
|
$4,426,416
|
|
December
31, 2019
|
December
31, 2018
|
||
|
Estimated
|
Percentage
of
|
Estimated
|
Percentage
of
|
|
Fair
Market
|
Fair
Market
|
Fair
Market
|
Fair
Market
|
|
Value
|
Value
|
Value
|
Value
|
Rating
|
|
|
|
|
U.S.
Treasury securities
|
$7,061,100
|
4.2%
|
$8,220,381
|
5.4%
|
|
|
|
|
|
Corporate
and municipal bonds
|
|
|
|
|
AAA
|
1,996,676
|
1.2%
|
979,123
|
0.6%
|
AA
|
8,809,480
|
5.2%
|
8,350,910
|
5.5%
|
A
|
34,636,236
|
20.6%
|
27,665,961
|
18.2%
|
BBB
|
89,501,460
|
53.2%
|
85,095,907
|
56.1%
|
Total
corporate and municipal bonds
|
134,943,852
|
80.2%
|
122,091,901
|
80.4%
|
|
|
|
|
|
Residential
mortgage backed securities
|
|
|
|
|
AAA
|
2,976,306
|
1.8%
|
999,640
|
0.7%
|
AA
|
18,440,382
|
10.9%
|
12,743,906
|
8.5%
|
A
|
2,471,761
|
1.5%
|
4,777,356
|
3.1%
|
CCC
|
1,174,273
|
0.7%
|
1,440,825
|
0.9%
|
CC
|
86,461
|
0.1%
|
109,648
|
0.1%
|
C
|
17,813
|
0.0%
|
24,050
|
0.0%
|
D
|
215,015
|
0.1%
|
390,542
|
0.3%
|
Non
rated
|
849,218
|
0.5%
|
979,267
|
0.6%
|
Total
residential mortgage backed securities
|
26,231,229
|
15.6%
|
21,465,234
|
14.2%
|
|
|
|
|
|
Total
|
$168,236,181
|
100.0%
|
$151,777,516
|
100.0%
|
Category
|
December
31,
2019
|
December
31,
2018
|
U.S.
Treasury securities and
|
|
|
obligations
of U.S. government
|
|
|
corporations
and agencies
|
2.18%
|
2.20%
|
|
|
|
Political
subdivisions of States,
|
|
|
Territories
and Possessions
|
3.26%
|
3.62%
|
|
|
|
Corporate
and other bonds
|
|
|
Industrial
and miscellaneous
|
3.73%
|
4.11%
|
|
|
|
Residential
mortgage backed securities
|
2.01%
|
1.94%
|
|
|
|
Total
|
3.37%
|
3.68%
|
|
December
31,
2019
|
December
31,
2018
|
Weighted
average effective maturity
|
4.8
|
5.6
|
|
|
|
Weighted
average final maturity
|
6.3
|
6.9
|
|
|
|
Effective
duration
|
4.3
|
4.6
|
|
|
Amount
|
|
|
|
Recoverable
|
|
|
A.M.
|
as
of
|
|
($ in thousands)
|
Best
Rating
|
December
31, 2019
|
%
|
Cavello
Bay Reinsurance Limited
|
A-
|
$6,463
|
30.6%
|
Swiss
Reinsurance America Corporation
|
A+
|
5,754
|
27.3%
|
Hannover
Rueck SE
|
A+
|
3,678
|
17.4%
|
|
|
15,895
|
75.3%
|
Others
|
|
5,218
|
24.7%
|
Total
|
|
$21,113
|
100.0%
|
Name
|
Age
|
Positions and Offices Held
|
|
|
|
Barry B. Goldstein
|
66
|
Chief Executive Officer, President, Executive Chairman of the Board
and Director
|
Meryl
S. Golden
|
60
|
Chief Operating Officer and Director
|
Victor J. Brodsky
|
62
|
Chief Financial Officer and Treasurer
|
Benjamin Walden
|
52
|
Executive Vice President and Chief Actuary,
Kingstone Insurance Company
|
Floyd R. Tupper
|
65
|
Secretary and Director
|
Timothy P. McFadden
|
57
|
Assistant Secretary and Director
|
Jay M. Haft
|
84
|
Director
|
William L. Yankus
|
60
|
Director
|
Carla A. D’Andre
|
64
|
Director
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock Awards(3)
|
Option Awards
|
Non-Equity
Incentive Plan
Compensation
|
All
Other
Compensation
|
Total
|
Barry
B. Goldstein (1)
|
2019
|
$636,500
|
$-
|
$-
|
$-
|
$-
|
$37,520(5)
|
$674,020
|
Chief
Executive Officer;
Executive Chairman of the
Board
|
2018
|
$630,000
|
$-
|
$-
|
$-
|
$21,887(4)
|
$43,784(6)
|
$695,671
|
Dale A.
Thatcher (2)
|
2019
|
$625,000
|
$-
|
$750,000
|
$-
|
$5,000(4)
|
$38,200(7)
|
$1,418,200
|
Chief
Executive Officer;
Chief
Operating Officer
|
2018
|
$398,630
|
$-
|
$750,000
|
$-
|
$59,795(4)
|
$79,157(8)
|
$1,287,582
|
Victor J.
Brodsky
|
2019
|
$369,666
|
$-
|
$150,000
|
$-
|
$34,508(4)
|
$22,042(9)
|
$576,217
|
Chief
Financial Officer
|
2018
|
$350,000
|
$-
|
$140,009
|
$-
|
$17,573(4)
|
$27,759(10)
|
$535,341
|
Benjamin
Walden
|
2019
|
$339,025
|
$-
|
$135,000
|
$-
|
$31,601(4)
|
$11,200(11)
|
$516,825
|
Executive Vice
President and Chief Actuary, Kingstone Insurance
Company
|
2018
|
$315,000
|
$-
|
$110,856
|
$-
|
$15,760(4)
|
$16,000(12)
|
$457,616
|
|
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
|
Dale
A. Thatcher
|
-
|
-
|
|
-
|
42,230(1)
|
$327,283
|
-
|
$-
|
|
|
|
|
|
23,810(2)
|
$184,528
|
-
|
$-
|
Victor
J. Brodsky
|
-
|
-
|
|
-
|
555(3)
|
$4,304
|
-
|
$-
|
|
|
|
|
|
4,655(4)
|
$36,076
|
-
|
$-
|
|
|
|
|
|
10,933(5)
|
$84,731
|
-
|
$-
|
Benjamin
Walden
|
7,000
|
-
|
$7.85
|
3/11/21
|
333(3)
|
$2,583
|
-
|
$-
|
|
|
|
|
|
3,686(6)
|
$28,567
|
-
|
$-
|
|
|
|
|
|
9,840(7)
|
$76,260
|
-
|
$-
|
Name
|
Fees
Earned or
Paid in
Cash
|
Stock
Awards(1)
|
Option
Awards
|
Total
|
|
|
|
|
|
Jay
M. Haft
|
$75,000
|
$40,000
|
$-
|
$115,000
|
Floyd
R. Tupper
|
$85,000
|
$40,000
|
$-
|
$125,000
|
William
L. Yankus
|
$80,000
|
$40,000
|
$-
|
$120,000
|
Carla
A. D’Andre
|
$75,000
|
$40,000
|
$-
|
$115,000
|
Timothy
P. McFadden
|
$75,000
|
$40,000
|
$-
|
$115,000
|
Name
|
Unvested
Restricted Stock Awards (#)
|
|
|
Jay
M. Haft
|
1,999
|
Floyd
R. Tupper
|
1,999
|
William
L. Yankus
|
1,999
|
Carla
A. D’Andre
|
1,749
|
Timothy
P. McFadden
|
530
|
Name and Address
of Beneficial Owner
|
Number of Shares
Beneficially Owned
|
Approximate
Percent of Class
|
|
|
|
Barry B. Goldstein
15 Joys Lane
Kingston, New York
|
707,158(1)
|
6.5 %
|
|
|
|
Jay M. Haft
69 Beaver Dam Road
Salisbury, Connecticut
|
98,010
|
*
|
|
|
|
Floyd R. Tupper
220 East 57th Street
New York, New York
|
67,388(2)
|
*
|
|
|
|
Dale A. Thatcher
212 Third Street
Milford, Pennsylvania
|
59,882(3)
|
*
|
|
|
|
Victor J. Brodsky
15 Joys Lane
Kingston, New York
|
36,457(4)
|
*
|
|
|
|
Benjamin Walden
15 Joys Lane
Kingston, New York
|
32,966(5)
|
*
|
|
|
|
Carla A. D’Andre
3561 Avocado Avenue
Miami, Florida
|
15,821(6)
|
*
|
|
|
|
William L. Yankus
10 Pheasant Hill Road
Farmington, Connecticut
|
13,086
|
*
|
|
|
|
Meryl S. Golden
15 Joys Lane
Kingston, New York
|
12,500(7)
|
*
|
|
|
|
Timothy P. McFadden
310 8th Avenue N.
Saint Petersburg, Florida
|
7,518
|
*
|
|
|
|
The TCW Group, Inc.
on behalf of the TCW Business
Unit
865 South Figueroa Street
Los Angeles, California
|
673,170(8)
|
6.2%
|
|
|
|
RenaissanceRe Ventures Ltd.
Renaissance Other Investments
Holding II Ltd.
RenaissanceRe Holdings Ltd.
Renaissance House
12 Crow Lane
Pembrooke HM19
Bermuda
|
595,238(9)
|
5.5%
|
|
|
|
All executive officers
and directors as a group
(9 persons)
|
990,904(1)(2)(4)(5)(6)(7)
|
9.1%
|
|
|
(1)
|
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) 2,000
shares held in a retirement trust for the benefit of Mr. Goldstein.
Mr. Goldstein has sole voting and dispositive power over 638,890
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.
|
|
|
(2)
|
Includes
(i) 32,065 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 34,513 shares of common
stock and shared voting and dispositive power over 32,875 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)
|
Includes
11,905 shares issuable upon the vesting of restricted stock within
60 days.
|
|
|
(4)
|
Includes
3,644 shares issuable upon the vesting of restricted stock within
60 days.
|
|
|
(5)
|
Includes
7,000 shares issuable upon the exercise of options that are
exercisable currently and 3,280 shares issuable upon the vesting of
restricted stock within 60 days.
|
|
|
(6)
|
Includes
10,000 shares held in a retirement trust for the benefit of Ms.
D’Andre’s husband. Ms. D’Andre has sole voting
and dispositive power over 5,821 shares of common stock and shared
voting and dispositive power over 10,000 shares of common stock.
The inclusion of the shares owned by
the retirement trust for the benefit of Ms. D'Andre’s husband
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.
|
|
|
(7)
|
Represents
shares issuable upon the exercise of options that are exercisable
currently.
|
|
|
(8)
|
The
information regarding The TCW Group, Inc. on behalf of the TCW
Business Unit is based solely on a Schedule 13G filed by such
reporting person with the SEC on February 7, 2020 (the “TCW
13G”). According to the TCW 13G, such reporting person has
shared voting and dispositive power over the 673,170 shares of
common stock.
|
|
|
(9)
|
The
information regarding RenaissanceRe Ventures Ltd.
(“RenaissanceRe Ventures”), Renaissance Other
Investments Holding II Ltd. (“ROIHL II”) and
RenaissanceRe Holdings Ltd. (“RenaissanceRe Holdings”)
is based solely on a Schedule 13G/A filed by such reporting persons
with the SEC on February 14, 2019 (the “Renaissance
13G/A”). According to the Renaissance 13G/A, RenaissanceRe
Ventures, ROIHL II and RenaissanceRe Holdings each has shared
voting and dispositive power over the 595,238 shares of common
stock.
|
|
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
|
82,000
|
$8.61
|
327,900
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
|
|
|
|
Total
|
82,000
|
$8.61
|
327,900
|
Fee
Category
|
Fiscal
2019
Fees
|
Fiscal
2018
Fees
|
Audit
Fees(1)
|
$306,940
|
$309,684
|
Tax
Fees(2)
|
$-
|
$-
|
Audit-Related
Fees(3)
|
$-
|
$-
|
All
Other Fees(4)
|
$-
|
$-
|
|
$306,940
|
$309,684
|
Exhibit
Number
|
Description of Exhibit
|
|
|
|
|
|
|
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).
|
|
||
|
|
|
|
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).
|
|
||
|
|
|
|
Indenture, dated as of December 19, 2017, between Kingstone
Companies, Inc. and Wilmington Trust, National Association
(incorporated by reference to Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on December 20,
2017).
|
|
||
|
|
|
|
First Supplemental Indenture, dated as of December 19, 2017,
between Kingstone Companies, Inc. and Wilmington Trust, National
Association (incorporated by reference to Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed on December 20,
2017).
|
|
||
|
|
|
|
Form of Global Note representing $30,000,000 aggregate principal
amount of 5.50% Senior Unsecured Notes due 2022 (incorporated by
reference to Exhibit 4.3 to the Company’s Current Report on
Form 8-K filed on December 20, 2017).
|
|
||
|
|
|
|
2014 Equity Participation Plan (incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed on August 14, 2014).
|
|
||
|
|
|
|
Second Amended and Restated Employment Agreement, dated October 14,
2019, by and between Kingstone Companies, Inc. and Barry B.
Goldstein (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on October 18,
2019).
|
|
||
|
|
|
|
Stock Grant Agreement, dated as of January 3, 2020, between
Kingstone Companies, Inc. and Barry B. Goldstein (157,431
shares).
|
|
||
|
|
|
|
Stock Grant Agreement, dated as of January 3, 2020, between
Kingstone Companies, Inc. and Barry B. Goldstein (17,191
shares).
|
|
||
|
|
|
|
10(e)
|
Stock Grant Agreement, dated as of March 14, 2018, between
Kingstone Companies, Inc. and Dale A. Thatcher (incorporated by
reference to Exhibit 10(k) to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2017 filed on March 15,
2018).
|
|
|
|
|
|
|
Stock Grant
Agreement, dated as of January 1, 2019, between Kingstone
Companies, Inc. and Dale A. Thatcher.
|
|
||
|
|
|
|
10(g)
|
Agreement and
General Release, dated as of July 19, 2019, by and among Kingstone
Companies, Inc., Kingstone Insurance Company and Dale A. Thatcher
(incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on July 19,
2019).
|
|
|
|
|
|
|
10(h)
|
Employment
Agreement, dated as of August 27, 2019, by and between Kingstone
Companies, Inc. and Meryl S. Golden (incorporated by reference to
Exhibit 99.1 to the Company’s Current Report on Form 8-K
filed on September 17, 2019).
|
|
|
|
|
|
|
10(i)
|
Deferred Compensation Plan, dated as of June 18, 2018 (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K filed on June 20, 2018).
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
Consent of Marcum LLP.
|
|
||
|
|
|
|
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.
|
|
||
|
|
|
|
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.
|
|
||
|
|
|
|
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.
|
|
|
|
|
|
KINGSTONE COMPANIES, INC. |
|
|
|
|
|
|
Date:
March 16, 2020
|
By:
|
/s/
Barry
B. Goldstein
|
|
|
|
Barry B.
Goldstein
|
|
|
|
Chief Executive Officer |
|
Signature
|
Capacity
|
Date
|
|
|
|
/s/ Barry B.
Goldstein
|
|
|
Barry B.
Goldstein
|
Chief Executive
Officer, President and Executive Chairman of the Board
|
March 16,
2020
|
|
|
|
/s/ Victor J.
Brodsky
|
|
|
Victor J.
Brodsky
|
Chief Financial
Officer and Treasurer
(Principal
Financial and Accounting Officer)
|
March 16,
2020
|
|
|
|
/s/ Meryl S.
Golden
|
|
|
Meryl S.
Golden
|
Chief Operating
Officer and Director
|
March 16,
2020
|
|
|
|
/s/ Floyd R.
Tupper
|
|
|
Floyd R.
Tupper
|
Director
|
March 16,
2020
|
|
|
|
/s/ William L.
Yankus
|
|
|
William L.
Yankus
|
Director
|
March 16,
2020
|
|
|
|
/s/ Carla A.
D’Andre
|
|
|
Carla A.
D’Andre
|
Director
|
March 16,
2020
|
|
|
|
/s/ Jay M.
Haft
|
|
|
Jay M.
Haft
|
Director
|
March 16,
2020
|
|
|
|
/s/ Timothy P.
McFadden
|
|
|
Timothy P.
McFadden
|
Director
|
March 16,
2020
|
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of December 31, 2019 and 2018
|
F-3
|
Consolidated
Statements of Operations and Comprehensive Income (Loss) for the
years
|
F-4
|
ended
December 31, 2019 and 2018
|
|
Consolidated
Statements of Stockholders’ Equity for the years ended
December 31, 2019
|
F-5
|
and
2018
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2019
and 2018
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7
|
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
|
||
Consolidated
Balance Sheets
|
|
|
|
December
31,
|
December
31,
|
|
2019
|
2018
|
Assets
|
|
|
Fixed-maturity
securities, held-to-maturity, at amortized cost (fair value
of
|
|
|
$4,124,767
at December 31, 2019 and $4,426,416 at December 31,
2018)
|
$3,825,952
|
$4,222,855
|
Fixed-maturity
securities, available-for-sale, at fair value (amortized cost
of
|
|
|
$162,202,355
at December 31, 2019 and $155,431,261 at December 31,
2018)
|
168,236,181
|
151,777,516
|
Equity
securities, at fair value (cost of $22,624,668 at December 31, 2019
and
|
|
|
$18,305,986
at December 31, 2018)
|
24,661,382
|
16,572,616
|
Other
investments
|
2,584,913
|
1,855,225
|
Total
investments
|
199,308,428
|
174,428,212
|
Cash
and cash equivalents
|
32,391,485
|
21,138,403
|
Premiums
receivable, net
|
12,706,411
|
13,961,599
|
Reinsurance
receivables, net
|
40,750,538
|
26,367,115
|
Deferred
policy acquisition costs
|
20,634,378
|
17,907,737
|
Intangible
assets, net
|
500,000
|
670,000
|
Property
and equipment, net
|
7,620,636
|
6,056,929
|
Deferred
income taxes, net
|
311,052
|
354,233
|
Other
assets
|
6,979,884
|
5,867,850
|
Total assets
|
$321,202,812
|
$266,752,078
|
|
|
|
Liabilities
|
|
|
Loss
and loss adjustment expense reserves
|
$80,498,611
|
$56,197,106
|
Unearned
premiums
|
90,383,238
|
79,032,131
|
Advance
premiums
|
3,191,512
|
2,107,629
|
Reinsurance
balances payable
|
11,714,724
|
1,933,376
|
Deferred
ceding commission revenue
|
7,735,398
|
2,686,677
|
Accounts
payable, accrued expenses and other liabilities
|
9,986,317
|
6,819,231
|
Income
taxes payable
|
-
|
15,035
|
Long-term
debt, net
|
29,471,431
|
29,295,251
|
Total liabilities
|
232,981,231
|
178,086,436
|
|
|
|
Commitments and Contingencies (Note 17)
|
|
|
|
|
|
Stockholders' Equity
|
|
|
Preferred
stock, $.01 par value; authorized 2,500,000 shares
|
-
|
-
|
Common
stock, $.01 par value, authorized 20,000,000 shares; issued
11,824,889 shares
|
|
|
at
December 31, 2019 and 11,775,148 shares at December 31, 2018;
outstanding
|
|
|
10,797,450
shares at December 31, 2019 and 10,747,709 shares at December 31,
2018
|
118,248
|
117,751
|
Capital
in excess of par
|
69,133,918
|
67,763,940
|
Accumulated
other comprehensive income (loss)
|
4,768,870
|
(2,884,313)
|
Retained
earnings
|
16,913,097
|
26,380,816
|
|
90,934,133
|
91,378,194
|
Treasury
stock, at cost, 1,027,439 shares at December 31, 2019
|
|
|
and
at December 31, 2018
|
(2,712,552)
|
(2,712,552)
|
Total stockholders' equity
|
88,221,581
|
88,665,642
|
|
|
|
Total liabilities and stockholders' equity
|
$321,202,812
|
$266,752,078
|
|
December
31,
|
December
31,
|
|
2019
|
2018
|
|
|
|
Collateralized
bank repurchase agreement (1)
|
$941,792
|
$568,123
|
Money market
funds
|
12,583,957
|
15,012,559
|
Total
|
$13,525,749
|
$15,580,682
|
|
December 31, 2019
|
December 31, 2018
|
||
|
Amortized
|
Estimated
|
Amortized
|
Estimated
|
Remaining Time to
Maturity
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|
|
|
|
|
Less
than one year
|
$11,986,401
|
$12,025,804
|
$6,742,519
|
$6,738,014
|
One
to five years
|
49,715,422
|
51,000,025
|
47,038,838
|
46,640,012
|
Five
to ten years
|
69,850,104
|
74,410,275
|
76,884,505
|
74,290,076
|
More
than 10 years
|
4,511,795
|
4,568,847
|
2,974,426
|
2,644,180
|
Residential
mortgage and other asset backed securities
|
26,138,633
|
26,231,230
|
21,790,973
|
21,465,234
|
Total
|
$162,202,355
|
$168,236,181
|
$155,431,261
|
$151,777,516
|
|
December
31, 2019
|
December
31, 2018
|
||
|
Amortized
|
Estimated
|
Amortized
|
Estimated
|
Remaining
Time to Maturity
|
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|
|
|
||
Less
than one year
|
$500,000
|
$499,165
|
$-
|
$-
|
One
to five years
|
2,099,268
|
2,215,640
|
2,996,685
|
3,036,531
|
Five
to ten years
|
620,134
|
655,923
|
619,663
|
635,846
|
More
than 10 years
|
606,550
|
754,039
|
606,507
|
754,039
|
Total
|
$3,825,952
|
$4,124,767
|
$4,222,855
|
$4,426,416
|
Category
|
December
31, 2019
|
December
31, 2018
|
|
|
|
Other Investments:
|
|
|
Hedge
fund
|
$2,584,913
|
$1,855,225
|
Total
|
$2,584,913
|
$1,855,225
|
|
December 31,
2019
|
|||
|
Level
1
|
Level
2
|
Level
3
|
Total
|
Long-term
debt
|
|
|||
|
|
|
|
|
Senior Notes
due 2022
|
$-
|
$27,313,994
|
$-
|
$27,313,994
|
|
December 31,
2018
|
|||
|
Level
1
|
Level
2
|
Level
3
|
Total
|
Long-term
debt
|
|
|||
|
|
|
|
|
Senior Notes
due 2022
|
$-
|
$28,521,734
|
$-
|
$28,521,734
|
|
|
December 31,
2019
|
|
December 31,
2018
|
||||
|
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
|
3,400,000
|
-
|
|
3,400,000
|
3,230,000
|
170,000
|
Other
identifiable
|
|
|
|
|
|
|
|
|
intangibles
|
7
|
950,000
|
950,000
|
-
|
|
950,000
|
950,000
|
-
|
Total
|
|
$4,850,000
|
$4,350,000
|
$500,000
|
|
$4,850,000
|
$4,180,000
|
$670,000
|
|
Treaty
Year
|
||||||
|
December 15,
2019
|
|
July 1,
2019
|
|
July 1,
2018
|
|
July 1,
2017
|
|
to
|
|
to
|
|
to
|
|
to
|
Line of Business
|
December 31,
2020
|
|
December 14,
2019
|
|
June 30,
2019
|
|
June 30,
2018
|
|
|
|
|
|
|
|
|
Personal
Lines:
|
|
|
|
|
|
|
|
Homeowners, dwelling fire and
|
|
|
|
|
|
|
|
and
canine legal liability
|
|
|
|
|
|
|
|
Quota share
treaty:
|
|
|
|
|
|
|
|
Percent
ceded
|
25%
|
|
None
|
|
10%
|
|
20%
|
|
Unpaid
|
Paid
|
|
|
|
($ in
thousands)
|
Losses
|
Losses
|
Total
|
Security
|
|
December
31, 2019
|
|
|
|
|
|
Cavello
Bay Reinsurance Limited (1)
|
$4,036
|
$2,427
|
$6,463
|
$5,995
|
(2)
|
Swiss
Reinsurance America Corporation
|
4,418
|
1,336
|
5,754
|
-
|
|
Hanover
Rueck SE
|
3,156
|
522
|
3,678
|
-
|
|
SCOR
Reinsurance Company
|
394
|
458
|
852
|
-
|
|
Allied
World Assurance Company
|
760
|
170
|
930
|
-
|
|
Others
|
2,964
|
471
|
3,435
|
-
|
|
Total
|
$15,728
|
$5,384
|
$21,113
|
$5,995
|
|
|
|
|
|
|
|
December
31, 2018
|
|
|
|
|
|
Cavello
Bay Reinsurance Limited (1)
|
$5,319
|
$1,277
|
$6,596
|
$7,548
|
(2)
|
Swiss
Reinsurance America Corporation
|
4,499
|
1,251
|
5,750
|
-
|
|
Hanover
Rueck SE
|
2,728
|
1,181
|
3,909
|
-
|
|
SCOR
Reinsurance Company
|
528
|
89
|
617
|
-
|
|
Allied
World Assurance Company
|
306
|
373
|
679
|
-
|
|
Others
|
2,291
|
282
|
2,573
|
58
|
(3)
|
Total
|
$15,671
|
$4,453
|
$20,125
|
$7,606
|
|
|
Years
ended
|
|
|
December
31,
|
|
|
2019
|
2018
|
|
|
|
Provisional
ceding commissions earned
|
$5,446,370
|
$6,745,928
|
Contingent
ceding commissions earned
|
(795,519)
|
(1,413,298)
|
|
$4,650,851
|
$5,332,630
|
|
December
31,
|
|
|
2019
|
2018
|
|
|
|
Deferred
policy acquisition costs
|
$20,634,378
|
$17,907,737
|
Deferred
ceding commission revenue
|
(7,735,398)
|
(2,686,677)
|
Balance at
end of period
|
$12,898,980
|
$15,221,060
|
|
December
31,
|
December
31,
|
|
2019
|
2018
|
|
|
|
5.50%
Senior Unsecured Notes
|
$30,000,000
|
$30,000,000
|
Discount
|
(97,325)
|
(129,796)
|
Issuance
costs
|
(431,244)
|
(574,953)
|
Long-term
debt, net
|
$29,471,431
|
$29,295,251
|
|
|
Accumulated
|
|
|
Cost
|
Depreciation
|
Net
|
|
|
|
|
December 31, 2019
|
|
|
|
Building
|
$2,344,188
|
$(663,200)
|
$1,680,988
|
Land
|
652,437
|
-
|
652,437
|
Furniture
office equipment
|
802,325
|
(656,204)
|
146,121
|
Leasehold
improvements
|
18,996
|
(226)
|
18,770
|
Computer
equipment and software
|
10,861,385
|
(5,813,308)
|
5,048,077
|
Automobile
|
99,352
|
(25,109)
|
74,243
|
Total
|
$14,778,683
|
$(7,158,047)
|
$7,620,636
|
|
|
|
|
December 31, 2018
|
|
|
|
Building
|
$2,231,967
|
$(554,077)
|
$1,677,890
|
Land
|
622,937
|
-
|
622,937
|
Furniture
office equipment
|
723,217
|
(586,010)
|
137,207
|
Computer
equipment and software
|
7,240,613
|
(3,621,718)
|
3,618,895
|
Total
|
$10,818,734
|
$(4,761,805)
|
$6,056,929
|
|
Direct
|
Assumed
|
Ceded
|
Net
|
|
|
|
|
|
Year
ended December 31, 2019
|
|
|
|
|
Premiums
written
|
$171,214,091
|
$939
|
$(45,635,899)
|
$125,579,131
|
Change in
unearned premiums
|
(11,350,864)
|
(243)
|
13,395,418
|
2,044,311
|
Premiums
earned
|
$159,863,227
|
$696
|
$(32,240,481)
|
$127,623,442
|
|
|
|
|
|
Year
ended December 31, 2018
|
|
|
|
|
Premiums
written
|
$146,716,468
|
$1,004
|
$(26,923,679)
|
$119,793,793
|
Change in
unearned premiums
|
(13,388,535)
|
4,067
|
(2,994,610)
|
(16,379,078)
|
Premiums
earned
|
$133,327,933
|
$5,071
|
$(29,918,289)
|
$103,414,715
|
|
Gross
|
Reinsurance
|
|
Liability
|
Receivables
|
December
31, 2019
|
|
|
Case-basis
reserves
|
$48,688,643
|
$12,894,469
|
Loss
adjustment expenses
|
12,606,236
|
1,416,686
|
IBNR
reserves
|
19,203,732
|
1,417,070
|
Recoverable
on unpaid losses
|
|
15,728,225
|
Recoverable
on paid losses
|
-
|
5,384,325
|
Total loss
and loss adjustment expenses
|
$80,498,611
|
21,112,550
|
Unearned
premiums
|
|
19,637,988
|
Total
reinsurance receivables
|
|
$40,750,538
|
|
|
|
December
31, 2018
|
|
|
Case-basis
reserves
|
$35,812,037
|
$12,283,616
|
Loss
adjustment expenses
|
9,102,862
|
1,433,170
|
IBNR
reserves
|
11,282,207
|
1,954,461
|
Recoverable
on unpaid losses
|
|
15,671,247
|
Recoverable
on paid losses
|
-
|
4,453,298
|
Total loss
and loss adjustment expenses
|
$56,197,106
|
20,124,545
|
Unearned
premiums
|
|
6,242,570
|
Total
reinsurance receivables
|
|
$26,367,115
|
All
Lines of Business
|
||||||||||||||
(in thousands, except reported claims data)
|
|
|
As
of
|
||||||||||
|
Incurred
Loss and Allocated Loss Adjustment Expenses, Net of
Reinsurance
|
December
31, 2019
|
||||||||||
|
For
the Years Ended December 31,
|
|
||||||||||
Accident
Year
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
IBNR
|
Cumulative Number
of Reported Claims by Accident Year
|
|
(Unaudited 2010 -
2018)
|
|
|
|
||||||||
2010
|
$5,598
|
$5,707
|
$6,429
|
$6,623
|
$6,912
|
$6,853
|
$6,838
|
$6,840
|
$6,787
|
$6,788
|
$(4)
|
1,617
|
2011
|
|
7,603
|
7,678
|
8,618
|
9,440
|
9,198
|
9,066
|
9,144
|
9,171
|
9,127
|
(2)
|
1,914
|
2012
|
|
|
9,539
|
9,344
|
10,278
|
10,382
|
10,582
|
10,790
|
10,791
|
11,015
|
77
|
4,704(1)
|
2013
|
|
|
|
10,728
|
9,745
|
9,424
|
9,621
|
10,061
|
10,089
|
10,607
|
98
|
1,561
|
2014
|
|
|
|
|
14,193
|
14,260
|
14,218
|
14,564
|
15,023
|
16,381
|
249
|
2,134
|
2015
|
|
|
|
|
|
22,340
|
21,994
|
22,148
|
22,491
|
23,386
|
228
|
2,555
|
2016
|
|
|
|
|
|
|
26,062
|
24,941
|
24,789
|
27,887
|
414
|
2,875
|
2017
|
|
|
|
|
|
|
|
31,605
|
32,169
|
35,304
|
847
|
3,375
|
2018
|
|
|
|
|
|
|
|
|
54,455
|
56,351
|
2,771
|
4,178
|
2019
|
|
|
|
|
|
|
|
|
|
75,092
|
19,458
|
4,225
|
|
|
|
|
|
|
|
|
|
Total
|
$271,938
|
|
|
(1) Reported claims
for accident year 2012 includes 3,406 claims from Superstorm
Sandy.
|
All
Lines of Business
|
||||||||||
(in thousands)
|
|
Cumulative Paid
Loss and Allocated Loss Adjustment Expenses, Net of
Reinsurance
|
|
|
|||||||||
|
For the Years Ended
December 31,
|
|
|
|||||||||
Accident
Year
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
|
|
(Unaudited 2010 -
2018)
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
$2,566
|
$3,947
|
$4,972
|
$5,602
|
$6,323
|
$6,576
|
$6,720
|
$6,772
|
$6,780
|
$6,785
|
|
|
2011
|
|
3,740
|
5,117
|
6,228
|
7,170
|
8,139
|
8,540
|
8,702
|
8,727
|
8,789
|
|
|
2012
|
|
|
3,950
|
5,770
|
7,127
|
8,196
|
9,187
|
10,236
|
10,323
|
10,428
|
|
|
2013
|
|
|
|
3,405
|
5,303
|
6,633
|
7,591
|
8,407
|
9,056
|
9,717
|
|
|
2014
|
|
|
|
|
5,710
|
9,429
|
10,738
|
11,770
|
13,819
|
14,901
|
|
|
2015
|
|
|
|
|
|
12,295
|
16,181
|
18,266
|
19,984
|
21,067
|
|
|
2016
|
|
|
|
|
|
|
15,364
|
19,001
|
21,106
|
23,974
|
|
|
2017
|
|
|
|
|
|
|
|
16,704
|
24,820
|
28,693
|
|
|
2018
|
|
|
|
|
|
|
|
|
32,383
|
44,516
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
40,933
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$209,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
liability for unpaid loss and allocated loss adjustment expenses
for the accident years presented
|
$62,135
|
|
|
|||||||||
|
98
|
|
|
|||||||||
Liabilities
for loss and allocted loss adjustment expenses, net of
reinsurance
|
$62,233
|
|
|
Average Annual Percentage Payout of
Incurred Loss and Allocated Loss Adjustment Expenses by Age, Net of
Reinsurance (unaudited)
|
||||||||||
Years
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
|
|
|
|
|
|
|
|
|
|
|
All Lines of
Business
|
44.9%
|
18.5%
|
10.9%
|
8.9%
|
9.2%
|
6.1%
|
2.7%
|
0.7%
|
0.4%
|
0.1%
|
|
Years
ended
|
|
|
December
31,
|
|
|
2019
|
2018
|
|
|
|
Dividend
Yield
|
2.87%
|
n/a
|
Volatility
|
36.11%
|
n/a
|
Risk-Free Interest
Rate
|
1.61%
|
n/a
|
Expected
Life
|
3.25 years
|
n/a
|
Restricted
Stock Awards
|
Shares
|
Weighted
Average Grant Date Fair Value per Share
|
Aggregate
Fair Value
|
|
|
|
|
Balance
at January 1, 2019
|
120,499
|
$17.66
|
$2,129,175
|
|
|
|
|
Granted
|
120,586
|
$15.51
|
$1,870,487
|
Vested
|
(15,440)
|
$17.04
|
$(263,071)
|
Forfeited
|
(11,716)
|
$15.57
|
$(182,417)
|
|
|
|
|
Balance at December
31, 2019
|
213,929
|
$16.51
|
$3,554,174
|
|
|
●
|
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,
|
2019
|
2018
|
||
Computed
expected tax (benefit) expense
|
$(1,634,334)
|
21.0%
|
$631,483
|
21.0%
|
State taxes,
net of federal benefit
|
(247,909)
|
3.2
|
(377,884)
|
(12.6)
|
State
valuation allowance
|
261,573
|
(3.4)
|
390,976
|
13.0
|
Permanent
differences
|
|
|
|
|
Dividends
received deduction
|
(97,631)
|
1.3
|
(85,703)
|
(2.9)
|
Non-taxable
investment income
|
(39,901)
|
0.5
|
(40,861)
|
(1.4)
|
Excess
benefit from stock-based compensation
|
184
|
-
|
(569,459)
|
(18.9)
|
Stock-based
compensation
|
80,453
|
(1.0)
|
(16,960)
|
(0.5)
|
Other
permanent differences
|
(15,961)
|
0.2
|
42,496
|
1.4
|
Prior year
tax matters
|
(91,748)
|
1.2
|
(61,415)
|
(2.0)
|
Other
|
(30,917)
|
0.3
|
1,144
|
-
|
Income tax
benefit, as reported
|
$(1,816,191)
|
23.3%
|
$(86,183)
|
(2.9)%
|
|
December
31,
|
December
31,
|
|
Type
of NOL
|
2019
|
2018
|
Expiration
|
|
|
|
|
Federal
only, current year
|
$1,517,866
|
$-
|
None
|
Amount
subject to Annual Limitation, federal only
|
-
|
2,100
|
December
31, 2019
|
Total
federal only
|
1,517,866
|
2,100
|
|
|
|
|
|
State
only (A)
|
1,616,568
|
1,305,365
|
December
31, 2039
|
Valuation
allowance
|
(1,548,187)
|
(1,217,027)
|
|
State
only, net of valuation allowance
|
68,381
|
88,338
|
|
|
|
|
|
Total
deferred tax asset from net operating loss carryovers
|
$1,586,247
|
$90,438
|
|
Change
in net deferred income tax assets
|
$43,181
|
Deferred
tax expense allocated to other comprehensive (loss)
income
|
(2,034,389)
|
Deferred
income tax benefit
|
$(1,991,208)
|
For
the Year
|
|
Ending
|
|
December
31,
|
Total
|
2020
|
255,624
|
2021
|
264,571
|
2022
|
273,831
|
2023
|
283,415
|
2024
|
140,738
|
Thereafter
|
192,916
|
Total
undiscounted lease payments
|
1,411,095
|
Less:
present value adjustment
|
230,154
|
Operating
lease liability
|
$1,180,941
|
|
2019
|
||||
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Total
|
|
|
|
|
|
|
Net
premiums earned
|
$29,595,889
|
$31,201,279
|
$34,220,010
|
$32,606,264
|
$127,623,442
|
Ceding
commission revenue
|
1,277,683
|
675,695
|
1,029,582
|
1,667,891
|
4,650,851
|
Net
investment income
|
1,623,712
|
1,719,769
|
1,856,553
|
1,669,312
|
6,869,346
|
Net
gains on investments
|
2,035,363
|
678,655
|
998,162
|
878,839
|
4,591,019
|
Total
revenues
|
34,898,548
|
34,605,370
|
38,600,003
|
37,459,099
|
145,563,020
|
Loss
and loss adjustment expenses
|
29,134,224
|
17,672,308
|
24,781,318
|
18,594,474
|
90,182,324
|
Commission
expense and
|
|
|
|
|
|
other
underwriting expenses
|
12,989,407
|
12,715,622
|
14,210,078
|
14,698,276
|
54,613,383
|
Net
income (loss)
|
(7,335,190)
|
1,639,380
|
(1,725,162)
|
1,454,619
|
(5,966,353)
|
Basic
earnings (loss) per share
|
$(0.68)
|
$0.15
|
$(0.16)
|
$0.13
|
$(0.55)
|
Diluted
earnings (loss) per share
|
$(0.68)
|
$0.15
|
$(0.16)
|
$0.13
|
$(0.55)
|
|
KINGSTONE COMPANIES, INC. |
|
|
|
|
|
|
|
By:
|
/s/ Victor
Brodsky
|
|
|
|
Victor
Brodsky
|
|
|
|
Chief Financial
Officer
|
|
|
|
|
|
|
|
/s/
Barry B. Goldstein
|
|
|
|
Signature of
Grantee
|
|
|
|
|
|
|
|
Barry
B. Goldstein
|
|
|
|
Name of
Grantee
|
|
|
|
|
|
|
|
|
|
|
|
Address
of Grantee
|
|
|
KINGSTONE COMPANIES, INC. |
|
|
|
|
|
|
|
By:
|
/s/ Victor
Brodsky
|
|
|
|
Victor
Brodsky
|
|
|
|
Chief Financial
Officer
|
|
|
|
|
|
|
|
/s/
Barry B. Goldstein
|
|
|
|
Signature of
Grantee
|
|
|
|
|
|
|
|
Barry
B. Goldstein
|
|
|
|
Name of
Grantee
|
|
|
|
|
|
|
|
|
|
|
|
Address
of Grantee
|
|
|
KINGSTONE COMPANIES, INC. |
|
|
|
|
|
|
|
By:
|
/s/ Barry B.
Goldstein
|
|
|
|
Barry B. Goldstein |
|
|
|
|
|
|
|
|
|
|
|
/s/ Dale A. Thatcher |
|
|
|
Signature of
Grantee
|
|
|
|
|
|
|
|
Dale A.
Thatcher
|
|
|
|
Name of
Grantee
|
|
|
|
|
|
|
|
212 Third
Street Milford, PA
18337
|
|
|
|
Address
of Grantee
|
|
I,
Barry B. Goldstein, certify that:
|
||
|
|
|
1.
|
I have
reviewed this Annual Report on Form 10-K of Kingstone Companies,
Inc.;
|
|
|
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the
period covered by this report;
|
|
|
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
|
|
|
|
|
4.
|
The
registrant’s other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
|
|
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this report is being prepared;
|
|
|
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
|
|
|
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
|
|
|
5.
|
The
registrant’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
|
|
|
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
|
Date:
March 16, 2020
|
|
|
/s/
Barry B. Goldstein
|
|
Barry
B. Goldstein
Chief
Executive Officer
|
I,
Victor Brodsky, certify that:
|
||
|
|
|
1.
|
I have
reviewed this Annual Report on Form 10-K of Kingstone Companies,
Inc.;
|
|
|
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the
period covered by this report;
|
|
|
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
|
|
|
|
|
4.
|
The
registrant’s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
|
|
|
|
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this report is being prepared;
|
|
|
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
|
|
|
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
|
|
|
5.
|
The
registrant’s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
|
|
|
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
|
Date:
March 16, 2020
|
|
|
/s/
Victor Brodsky
|
|
Victor
Brodsky
Chief
Financial Officer
|
Dated: March 16,
2020
|
/s/ Barry B.
Goldstein
|
|
|
Barry B.
Goldstein
|
|
|
Chief Executive
Officer
|
|
|
|
|
|
/s/ Victor Brodsky
|
|
|
Victor
Brodsky
|
|
|
Chief Financial
Officer
|
|
|
|
|