Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q


[ X]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 2016
OR
[ ]	Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from:________to________

Commission File Number: 001-05270

AMERICAN INDEPENDENCE CORP.

(Exact name of registrant as specified in its charter)


Delaware	11-1817252
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

485 Madison Avenue, New York, NY	10022
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (212) 355-4141

Not Applicable

Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ X ] Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class	Outstanding at August 1, 2016
Common stock, $0.01 par value	8,118,551 shares



American Independence Corp. and Subsidiaries Index
	Page

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets (Unaudited)	4

Condensed Consolidated Statements of Income (Unaudited)	5

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	6

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)	7

Condensed Consolidated Statements of Cash Flows (Unaudited)	8

Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Quantitative and Qualitative Disclosures About Market Risk	31

Item 4. Controls and Procedures	31

PART II – OTHER INFORMATION

Item 1. Legal Proceedings	32

Item 1A. Risk Factors	32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3. Defaults Upon Senior Securities	32

Item 4. Mine Safety Disclosures	32

Item 5. Other Information	32

Item 6. Exhibits	33

Signatures	34

Copies of the Company’s SEC filings can be found on its website at www.americanindependencecorp.com.

Forward-Looking Statements

This report on Form 10−Q contains certain “forward−looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward−looking statements on our current expectations and projections about future events. Our forward−looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward−looking statements. Also, when we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probably” or similar expressions, we are making forward−looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward−looking statements, any of which could negatively and materially affect our future financial results and performance. We describe some of these risks and uncertainties in greater detail in Item 1A, Risk Factors, of AMIC’s annual report on Form 10-K as filed with Securities and Exchange Commission.

Although we believe that the assumptions underlying our forward−looking statements are reasonable, any of these assumptions, and, therefore, also the forward−looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward−looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. Our forward−looking statements speak only as of the date made, and we will not update these forward−looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, any forward−looking event discussed in this report may not occur.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

American Independence Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share data)


						March 31,
						2016		December 31,
ASSETS:						(Unaudited)		2015
	Investments:
	Securities purchased under agreements to resell				$	1,629	$	4,595
	Fixed maturities available-for-sale, at fair value					181,158		84,933
	Equity securities available-for-sale, at fair value					2,603		2,594

	Total investments					185,390		92,122

	Cash and cash equivalents					134,415		4,861
	Restricted cash					966		1,377
	Accrued investment income					769		727
	Premiums receivable ($15,033 and $14,009, respectively, due from related parties)					16,005		16,654
	Net deferred tax asset					15,848		13,944
	Due from reinsurers ($2,025 and $3,330, respectively, due from related parties)					19,987		4,950
	Goodwill					5,703		5,703
	Intangible assets					13,086		13,327
	Due from securities brokers					111		1,051
	Other assets					18,037		10,540
	Assets attributable to discontinued operations (Note 3)					-		31,718

		TOTAL ASSETS			$	410,317	$	196,974

LIABILITIES AND STOCKHOLDERS’ EQUITY:
	LIABILITIES:
	Policy benefits and claims ($26,340 and $27,110, respectively, due to related parties)				$	47,386	$	43,764
	Premium and claim funds payable					966		1,377
	Commission payable ($4,341 and $5,221, respectively, due to related parties)					8,444		5,817
	Accounts payable, accruals and other liabilities ($3,329 and $2,435, respectively,
			due to related parties)			13,346		11,192
	Debt					2,250		3,189
	State income taxes payable					5,882		-
	Due to securities brokers					99,777		-
	Due to reinsurers					8,896		100
	Liabilities attributable to discontinued operations (Note 3)					953		24,337

	Total liabilities					187,900		89,776

STOCKHOLDERS’ EQUITY:
	American Independence Corp. stockholders’ equity:
			Preferred stock, $0.10 par value, 1,000 shares designated; no shares issued
			and outstanding			-		-
			Common stock, $0.01 par value, 15,000,000 shares authorized; 9,181,793 shares
			issued, respectively; 8,101,883 and 8,088,105 shares outstanding, respectively			92		92
			Additional paid-in capital			88,648		88,637
			Accumulated other comprehensive gain (loss)			484		(197)
			Treasury stock, at cost, 1,079,910 and 1,093,688 shares, respectively			(10,033)		(10,161)
			Retained earnings			139,749		25,549
				Total American Independence Corp. stockholders’ equity		218,940		103,920
	Non-controlling interest in subsidiaries					3,477		3,278
			Total equity			222,417		107,198
			TOTAL LIABILITIES AND EQUITY		$	410,317	$	196,974

See the accompanying Notes to Condensed Consolidated Financial Statements.

American Independence Corp. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)


						Three Months
						Ended March 31,
						2016		2015
REVENUES:
	Premiums earned ($8,057 and $19,783, respectively, from related parties)				$	21,096	$	36,217
	Agency income ($0 and $10 respectively, from related parties)					5,500		2,477
	Net investment income					1,470		599
	Net realized investment gains (losses)					214		141
	Other income					1,122		1
						29,402		39,435


EXPENSES
	Insurance benefits, claims and reserves ($2,867 and $12,677,
				respectively, from related parties)		14,966		23,970
	Selling, general and administrative expenses ($3,241 and $5,805,
				respectively, from related parties)		13,506		14,952
	Amortization and depreciation					280		115
						28,752		39,037

Income from continuing operations before income taxes						650		398
Provision for income taxes						234		140

Income from continuing operations						416		258

Discontinued operations: (Note 3)
			Income from discontinued operations, before income taxes			122,034		837
			Income taxes on discontinued operations			8,069		324
			Income from discontinued operations			113,965		513

Net income						114,381		771
	Less: Net (income) loss attributable to the non-controlling interest					178		49

Net income attributable to American Independence Corp.					$	114,203	$	722

Basic income per common share:
	Income from continuing operations				$	.03	$	.03
	Income from discontinued operations					14.07		.06
		Basic income per common share			$	14.10	$	.09

Weighted-average shares outstanding						8,101		8,079

Diluted income per common share:					$		$
	Income from continuing operations					.03		.03
	Income from discontinued operations					14.04		.06
		Basic income per common share			$	14.07	$	.09

Weighted-average diluted shares outstanding						8,119		8,094

See the accompanying Notes to Condensed Consolidated Financial Statements.

American Independence Corp. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


				Three Months
				Ended March 31,
				2016		2015

Net Income			$	114,381	$	771
Other comprehensive income (loss):
	Unrealized holding gains (losses) arising during the period, net of tax
		expense of $442 and $192, respectively		820		510
	Less: reclassification adjustment for gains included in net income, net of
		tax expense of $75 and $43, respectively		(139)		(80)
Other comprehensive income (loss)				681		430
Comprehensive income (loss)				115,062		1,201
	Less: comprehensive (income) loss attributable to non-controlling interests			(178)		(49)
Comprehensive income (loss) attributable to American Independence Corp.			$	114,884	$	1,152

_______________________________________________________________________________________________

See the accompanying Notes to Condensed Consolidated Financial Statements.

American Independence Corp. and Subsidiaries

Condensed Consolidated Statement of Changes In Stockholders’ Equity

(In thousands)

(Unaudited)


						ACCUMULATED								NON-
				ADDITIONAL		OTHER		TREASURY				TOTAL AMIC		CONTROLLING
		COMMON		PAID-IN		COMPREHENSIVE		STOCK,		RETAINED		STOCKHOLDERS’		INTERESTS IN		TOTAL
		STOCK		CAPITAL		INCOME (LOSS)		AT COST		EARNINGS		EQUITY		SUBSIDIARIES		EQUITY

BALANCE AT DECEMBER 31, 2015	$	92	$	88,637	$	(197)	$	(10,161)	$	25,549	$	103,920	$	3,278	$	107,198

Net income										114,203		114,203		178		114,381
Other comprehensive income, net of tax						681						681				681
Exercise of stock options								128		17		145				145
Share-based compensation expense				11								11				11
Other										(20)		(20)		21		1

BALANCE AT MARCH 31, 2016	$	92	$	88,648	$	484	$	(10,033)	$	139,749	$	218,940	$	3,477	$	222,417

See the accompanying Notes to Condensed Consolidated Financial Statements.

American Independence Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


			Three Months Ended
			March 31,
			2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income	$	114,381	$	771
	Adjustments to reconcile net income to net change in
	cash from operating activities:
	Net realized investment gains		(214)		(141)
	Amortization and depreciation		280		115
	Gain on disposal of discontinued operations, net of tax		(113,499)		-
	Deferred tax expense		(75)		463
	Non-cash stock compensation expense		11		11
	Amortization of bond premiums and discounts		145		149
	Change in operating assets and liabilities:
	Change in trading securities		-		(47)
	Change in policy benefits and claims		3,622		2,057
	Change in net amounts due from and to reinsurers		(6,241)		(1,545)
	Change in claims fund		(7,681)		(292)
	Change in commissions payable		2,627		1,137
	Change in premiums receivable		649		(3,849)
	Change in income taxes		(312)		(271)
	Distribution from interest in partnerships		120		-
	Change in other assets and other liabilities		7		2,212

Net change in cash from operating activities			(6,180)		770

CASH FLOWS FROM INVESTING ACTIVITIES:
	Change in securities under resale and repurchase agreements		2,966		(3,676)
	Sales of and principal repayments on fixed maturities		4,554		10,041
	Maturities and other repayments of fixed maturities		3,952		1,310
	Purchases of fixed maturities		(2,906)		(9,320)
	Change in loans receivable		17		(61)
	Proceeds from sales of subsidiaries, net of cash divested		127,961		-
	Other investing activities		(16)		(6)

Net change in cash from investing activities			136,528		(1,712)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			145		-
Repayment of debt			(939)		-

Net change in cash from financing activities			(794)		-

Increase (decrease) in cash and cash equivalents			129,554		(942)
Cash and cash equivalents, beginning of period			4,861		3,706
Cash and cash equivalents, end of period		$	134,415	$	2,764

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	76	$	-
Cash paid for income taxes		$	266	$	8

See the accompanying Notes to Condensed Consolidated Financial Statements.

American Independence Corp. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Significant Accounting Policies and Practices

(A)

Business and Organization

American Independence Corp. is a Delaware corporation (NASDAQ: AMIC). We are a holding company principally engaged in the insurance and reinsurance business through: a) our wholly owned insurance company, Independence American Insurance Company ("Independence American"); b) our 51% ownership in HealthInsurance.org, LLC (“HIO”), a lead generation agency; c) our wholly owned sales and marketing company, IHC Specialty Benefits, Inc. (“Specialty Benefits”); d) our 80% ownership in Global Accident Facilities, LLC (“GAF”), a holding company for agencies that primarily produce occupational accident and injured on duty business; e) our wholly owned career sales agency, IPA Family, LLC (“IPA Family”); and f) our 92% ownership in IPA Direct, LLC (“IPAD”), a consumer direct sales call center. On March 31, 2016, the Company sold IHC Risk Solutions, LLC (“Risk Solutions”), its wholly owned managing general underwriter of medical stop-loss insurance, and its 23% investment in Majestic Underwriters LLC. In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is 100% co-insured as of January 1, 2016.

As used in this report, unless otherwise required by the context, AMIC and its subsidiaries are sometimes collectively referred to as the "Company" or "AMIC", or are implicit in the terms "we", "us" and "our". Specialty Benefits, HIO, GAF, IPAD and IPA Family are collectively referred to as “our Agencies”.

Since November 2002, AMIC has been affiliated with Independence Holding Company ("IHC"). Through various transactions subsequently, IHC and its subsidiaries further increased its ownership of AMIC to approximately 92%. In June 2016, IHC started the necessary proceedings to take AMIC private. The senior management of IHC provides direction to the Company through a service agreement between the Company and IHC. IHC has also entered into reinsurance treaties through its wholly owned subsidiaries, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. (“Madison National Life”), whereby the Company assumes reinsurance premiums from the following lines of business: medical stop-loss, New York State Disability Benefits Law ("DBL"), short-term medical, long-term disability (“LTD”) and group major medical.

(B)

Consolidation

(i)

IPA Family

During the second quarter of 2015, AMIC purchased all remaining ownership shares of IPA Family from non-controlling interests for cash consideration of approximately $126,000, thereby increasing its ownership interest in IPA Family from 90% to 100% as of June 30, 2015.

(ii)

GAF

During the second quarter of 2015, the Company increased its ownership in GAF to 80%. See Note 2 for information regarding the acquisition of GAF.

(C)

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of AMIC and its consolidated subsidiaries. All intercompany transactions have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect: (i) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements; and (ii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. AMIC’s annual report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission, should be read in conjunction with the accompanying unaudited condensed consolidated financial statements.

On March 31, 2016, the Company sold Risk Solutions, its managing general underwriter of stop-loss insurance for self-insured employer groups that desire to manage the risk of large medical claims (“Medical Stop-Loss”). In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is 100% co-insured as of January 1, 2016. AMIC’s block of medical stop-loss business is in run-off. The sale of Risk Solutions and exit from the medical stop-loss business represents a strategic shift that will have a major effect on the Company’s operations and financial results. The disposal transaction qualified for reporting as a discontinued operation in the first quarter of 2016 as a result of the Board of Directors commitment to a plan for its disposal in January 2016. Certain items have been reclassified in the prior year to reflect the assets, liabilities, and related income and expenses associated with the disposal group as discontinued operations in the accompanying unaudited condensed consolidated financial statements and Notes thereto. See Note 3 for more information.

AMIC acquired a controlling interest in GAF on April 30, 2015. Prior to obtaining control, AMIC recorded its investment in GAF using the equity method. AMIC recorded changes in its investment in GAF in the “Other income” line in the Condensed Consolidated Statements of Income. Upon achieving control, on April 30, 2015, GAF’s income and expense amounts became consolidated with AMIC’s results. The Condensed Consolidated Balance Sheet at March 31, 2016 and December 31, 2015 includes the consolidated balance sheet of GAF.

In the opinion of management, all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the condensed consolidated financial position and results of operations for the interim periods have been included. The Condensed Consolidated Statements of Income for the three months ended March 31, 2016 is not necessarily indicative of the results to be anticipated for the entire year.

(D)

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In September 2015, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for adjustments made to provisional amounts recognized in a business combination and eliminate the requirement to retrospectively account for those adjustments. The adoption of this guidance is did not have a material effect on the Company’s consolidated financial statements.

In February 2015, the FASB issued guidance that modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities for the purpose of consolidation. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

In June 2014, the FASB issued explicit guidance for entities that grant their employees share-based payments in which the terms of the award include a performance target that affects vesting and could be achieved after the requisite service period. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued guidance requiring financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. An allowance for credit losses will be deducted from the amortized cost basis to present the net carrying value at the amount expected to be collected with changes in the allowance recorded in earnings. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than a write-down, which would be limited to the amount by which fair value is below the amortized cost. Certain existing requirements used to evaluate credit losses have been removed. For public entities that are SEC filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted for fiscal years beginning after December 15, 2018. The amendments in this Update should be applied through a cumulative effect adjustment to retained earnings upon adoption as of the beginning of the first reporting period in which the guidance is effective. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In March 2016, the FASB issued guidance that simplify several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. The amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In March 2016, the FASB issued guidance that eliminates the requirement for retroactive adjustments on the date that a previously held investment qualifies for the equity method of accounting as a result of an increase in ownership interest or degree of influence. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 and should be applied prospectively upon their effective date. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In February 2016, the FASB issued guidance that requires lessees to recognize the assets and liabilities that arise from leases, including operating leases, on the statement of financial position. The amendments in this Update are effective for fiscal years beginning after December 31, 2018, including interim periods within those fiscal years, using a modified retrospective approach. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2016, the FASB issued guidance that eliminates the requirement to classify equity securities with readily determinable fair values as trading or available-for-sale. The guidance requires equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income, simplifies the impairment assessment of equity securities without readily determinable fair values and requires changes in disclosure requirements. For public entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted in certain circumstances. The amendments in this Update should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption of the Update. The adoption of this guidance is not expected to have a material effect on the Company’s Consolidated Balance Sheet or AMIC’s stockholders’ equity.

In May 2015, the FASB issued guidance requiring additional disclosures for short-duration contracts regarding the liability for unpaid claims and claim adjustment expenses. For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance is not expected to have a significant effect on the Company’s consolidated financial statements.

In May 2014, the FASB issued revenue recognition guidance for entities that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards such as insurance contracts or lease contracts. The amendment provides specific steps that an entity should apply in order to achieve its main objective which is recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In 2016, additional guidance was issued to clarify certain aspects of the implementation guidance and to clarify the identification of performance obligations. In August 2015, the effective date of this guidance has been deferred. For public entities, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and requires one of two specified retrospective methods of application. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Management has not yet determined the impact that the adoption of this guidance will have on the Company’s consolidated financial statements.

(E)

Segment Reporting

The Company manages and reports the business as a single segment in accordance with FASB guidance, which views certain qualitative and quantitative criteria for determining whether different lines of business should be aggregated for financial reporting purposes. FASB guidance requires the use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company.

The Company is managed with a focus on its overall insurance and reinsurance capabilities as opposed to any one line of business. Our Chief Executive Officer, who is our chief decision maker, evaluates financial information for our business as a single segment in allocating resources and assessing performance. The integrated nature of our insurance lines of business with our Agencies is sufficiently commingled to permit their aggregation as a single reporting segment.

Global Accident Facilities, LLC

On April 30, 2015 (the "Acquisition Date"), through a settlement with a former owner, AMIC increased its ownership in Global Accident Facilities, LLC (“GAF) from 40% to 80%, in order to obtain control of the business it produces for Independence American. GAF and its subsidiaries are principally engaged in the marketing, underwriting and administration of specialty risk insurance, primarily Occupational Accident and Injured on Duty for Independence American, which are offered exclusively in Texas and Massachusetts, respectively. The consideration transferred in exchange for the additional 40% ownership interest consisted of: (i) $325,000 in cash; and (ii) non-monetary consideration, primarily consisting of the settlement of a pre-existing relationship with the former owner, with a fair value of $1,195,000 at the Acquisition Date. The fair value of the settlement of the pre-exiting relationship was based on projected future underwriting results discounted for collectability. The acquisition resulted in AMIC’s obtaining control of GAF. Immediately preceding the transaction, AMIC’s carrying value of its investment in GAF was $1,908,000.

As a result of AMIC obtaining control, the Company has included GAF’s consolidated assets and liabilities and results of operations, subsequent to the Acquisition Date, in its consolidated financial results as of and for the periods ended December 31, 2015. Accordingly, the individual line items on the unaudited Condensed Consolidated Statements of Income for 2016 reflect three months of the operations of GAF with no corresponding amounts for 2015. We recorded $2,058,000 of revenues and $2,293,000 of expenses from GAF for the three months ended March 31, 2016.

On the Acquisition Date, the Company recognized a net pre-tax gain of $503,000 as follows: (i) a loss of $692,000 was recognized by AMIC as a result of re-measuring its equity interest in GAF to its fair value of $1,216,000 immediately before the acquisition; and (ii) a gain of $1,195,000 was recognized by AMIC as a result of settling the pre-existing relationship with the former owner.

Discontinued Operations

On March 31, 2016, AMIC sold the stock of Risk Solutions to Swiss Re Corporate Solutions, a division of Swiss Re (“Swiss Re”). In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is co-insured by Westport Insurance Corporation (“Westport”), Swiss Re’s largest US carrier, as of January 1, 2016. The aggregate purchase price was $152,500,000 in cash, subject to adjustments and settlements. Approximately 89% of the purchase price was allocated to AMIC, with the balance being paid to Standard Security Life and other IHC subsidiaries. The Company recorded a gain of $113,499,000, net of taxes, as a result of the transaction. The aforementioned transaction, which includes the sale of Risk Solutions and the corresponding coinsurance agreement, is collectively referred to as the “Risk Solutions Sale and Coinsurance Transaction”. AMIC’s block of medical stop-loss business is in run-off. The sale of Risk Solutions and exit from the medical stop-loss business represents a strategic shift that will have a major effect on the Company’s operations and financial results. The disposal transaction qualified for reporting as a discontinued operation in the first quarter of 2016 as a result of the Board of Directors commitment to a plan for its disposal in January 2016. Aside from reinsurance and marketing of Westport small group stop-loss, there will be no further involvement with the discontinued operation.

The following is a reconciliation of the major line items constituting the pretax profit of discontinued operations for the periods indicated (in thousands):


		Three Months Ended
		March 31,
		2016		2015

Revenue	$	6,406	$	4,122
Selling, general and administrative expenses		(5,564)		(3,113)
Amortization and depreciation		(125)		(172)

Pretax profit of discontinued operations		717		837
Gain on disposal of discontinued operations, pretax		121,317		-

Income from discontinued operations, before income taxes		122,034		837
Income taxes on discontinued operations		8,069		324

Income from discontinued operations	$	113,965	$	513

Total operating cash flows from discontinued operations for the three months ended March 31, 2016 and 2015 amounted to $1,106,000 and $136,000, respectively. The Company elected to classify the proceeds received from the sale of discontinued operations in the investing activities section of the Condensed Consolidated Statement of Cash Flows.

In connection with the Risk Solutions Sale and Coinsurance Transaction in March 2016, AMIC utilized a significant amount of its Federal NOL carryforwards and made a corresponding adjustment to its valuation allowance (see Note 11) The Company recorded income taxes on discontinued operations of $8,069,000 for the three months ended March 31, 2016, consisting of $5,799,000 of state taxes and $2,270,000 of federal taxes, net of a $38,565,000 decrease in AMIC’s valuation allowance.

The following is a reconciliation of the carrying amounts of major classes of assets and liabilities for discontinued operations for the periods indicated (in thousands):


		March 31, 2016		December 31, 2015

Major classes of assets included in discontinued operations:
Cash	$	-	$	904
Restricted Cash		-		20,358
Intangible assets		-		786
Other assets		-		9,670

Assets attributable to discontinued operations	$	-	$	31,718

Major classes of liabilities included in discontinued operations:
Premium and claim funds payable	$	-	$	20,358
Accounts payable and accrued liabilities		953		3,979

Liabilities attributable to discontinued operations	$	953	$	24,337

Income Per Common Share

Income per common share calculations are based on the weighted-average of common shares and common share equivalents outstanding during the year. Common stock options are considered to be common share equivalents and are used to calculate income per common share except when they are anti-dilutive. Included in the diluted earnings per share calculation for the three months ended March 31, 2016 are approximately 18,000 shares from the assumed exercise of options using the treasury stock method. Included in the diluted earnings per share calculation for three months ended March 31, 2015 are approximately 15,000 shares from the assumed exercise of options using the treasury stock method. Net income does not change as a result of the assumed dilution of options.

Investments

The cost (amortized cost with respect to certain fixed maturities), gross unrealized gains, gross unrealized losses and fair value of long-term investment securities are as follows (in thousands):


		MARCH 31, 2016
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
*AVAILABLE-FOR-SALE:*

Corporate securities	$	37,115	$	233	$	(436)	$	36,912
Foreign government		1,078		29		-		1,107
Collateralized mortgage obligations (CMO) – residential		168		2		-		170
States, municipalities and political subdivisions		35,358		722		(156)		35,924
U.S. Government		106,392		243		(6)		106,629
Government sponsored enterprise (GSE)		23		2		-		25
Agency mortgage backed pass through securities (MBS)		32		1		-		33
Redeemable preferred stocks		273		85		-		358
Total fixed maturities	$	180,439	$	1,317	$	(598)	$	181,158


*EQUITY SECURITIES*
*AVAILABLE-FOR-SALE:*

Nonredeemable preferred stocks		2,577		51		(25)		2,603
Total available-for-sale equity securities	$	2,577	$	51	$	(25)	$	2,603


		DECEMBER 31, 2015
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
AVAILABLE-FOR-SALE:

Corporate securities	$	37,044	$	25	$	(683)	$	36,386
Foreign government		1,088		7		(6)		1,089
CMO – residential		187		2		-		189
CMO – commercial		359		119		-		478
States, municipalities and political subdivisions		37,590		237		(178)		37,649
U.S. Government		7,679		59		(4)		7,734
GSE		998		2		(1)		999
MBS		34		1		-		35
Redeemable preferred stocks		273		101		-		374
Total fixed maturities	$	85,252	$	553	$	(872)	$	84,933


*EQUITY SECURITIES*
AVAILABLE-FOR-SALE

Nonredeemable preferred stocks		2,578		19		(3)		2,594
Total available-for-sale equity securities	$	2,578	$	19	$	(3)	$	2,594

Government-sponsored enterprises (“GSEs”) are private enterprises established and chartered by the Federal Government, or its various insurance and lease programs that carry the full faith and credit obligation of the US Government.

The amortized cost and fair value of fixed maturities at March 31, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. CMOs and MBSs are shown separately, as they are not due at a single maturity.



		AMORTIZED		FAIR
		COST		VALUE
		(In thousands)

Due in one year or less	$	6,316	$	6,205
Due after one year through five years		121,831		122,135
Due after five years through ten years		24,438		24,885
Due after ten years		27,632		27,705
CMOs and MBSs		222		228

	$	180,439	$	181,158

The following tables summarize, for all securities in an unrealized loss position at March 31, 2016 and December 31, 2015, the aggregate fair value and gross unrealized loss by length of time, those securities that have continuously been in an unrealized loss position (in thousands):


		March 31, 2016
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	12,208	$	90	$	7,933	$	346	$	20,141	$	436
U.S. government		25,002		6		-		-		25,002		6
States, municipalities and political subdivisions		1,896		79		1,408		77		3,304		156
Nonredeemable preferred stocks		1,301		25		-		-		1,301		25
Total temporarily impaired securities	$	40,407	$	200	$	9,341	$	423	$	49,748	$	623

Number of securities in an unrealized loss position		14				9				23


		December 31, 2015
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	24,627	$	387	$	6,760	$	296	$	31,387	$	683
Foreign government		484		6		-		-		484		6
U.S. government		995		4		-		-		995		4
GSE		973		1		-		-		973		1
States, municipalities and political subdivisions		13,013		98		1,408		80		14,421		178
Nonredeemable preferred stocks		1,324		3		-		-		1,324		3
Total temporarily impaired securities	$	41,416	$	499	$	8,168	$	376	$	49,584	$	875

Number of securities in an unrealized loss position		36				7				43

Substantially all of the unrealized losses on fixed maturities at March 31, 2016 and December 31, 2015 were attributable to changes in market interest rates. Because the Company does not intend to sell, nor is it more likely than not that the Company will have to sell, such investments before recovery of their amortized cost bases, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2016.

The following table summarizes the Company’s net investment income for three months ended March 31, 2016 and 2015 (in thousands):


		Three Months Ended
		March 31,
		2016		2015

Fixed maturities	$	628	$	541
Equity securities		51		32
Short-term investments		4		-
Interest relating to the Risk Solutions Sale and Coinsurance Transaction		887		-
Other		(100)		26

Net investment income	$	1,470	$	599

Net realized investment gains for the three months ended March 31, 2016 and 2015 are as follows (in thousands):


		Three Months Ended
		March 31,
		2016		2015

Available-for-sale securities:
Fixed maturities	$	214	$	123
Total available-for-sale securities		214		123

Trading securities		-		1
Change in unrealized gain on trading securities		-		17

Net realized investment gains (losses)	$	214	$	141

For the three months ended March 31, 2016 and 2015, proceeds from sales of available-for-sale securities were $3,953,000 and $10,041,000, respectively. For the three months ended March 31, 2016 and 2015, the Company recorded realized gross gains of $239,000 and $157,000, respectively, and gross losses of $25,000 and $34,000, respectively, on available-for-sale securities.

Other-Than-Temporary Impairment Evaluations

We recognize an other-than-temporary impairment loss in earnings in the period that we determine: 1) we intend to sell the security; 2) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or 3) the security has a credit loss. Any non-credit portion of the other-than-temporary impairment loss is recognized in other comprehensive income (loss). See Note 1I(v) to the Consolidated Financial Statements in the 2015 Annual Report for further discussion of the factors considered by management in its regular review to identify and recognize other-than-temporary impairments on available-for-sale securities. The Company did not recognize any other-than-temporary impairments on available-for-sale securities in the first three months of 2016 or 2015.

Credit losses were recognized on certain fixed maturities for which each security also had an impairment loss recognized in other comprehensive income (loss). The rollforward of these credit losses were as follows for the periods indicated (in thousands):


		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	288	$	288
Securities sold		(288)		-

Balance, end of period	$	-	$	288

Fair Value Measurements

For all financial and non-financial instruments accounted for at fair value on a recurring basis, the Company utilizes valuation techniques based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market expectations. These two types of inputs create the following fair value hierarchy:


Level 1 –	Quoted prices for identical instruments in active markets.

Level 2 –	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 –	Instruments where significant value drivers are unobservable.

The following section describes the valuation methodologies we use to measure different financial instruments at fair value.

Investments in fixed maturities and equity securities

Available-for-sale securities included in Level 1 are equity securities with quoted market prices. Level 2 is primarily comprised of our portfolio of corporate fixed income securities, government agency mortgage-backed securities, government sponsored enterprises, certain CMO securities, municipals and certain preferred stocks that were priced with observable market inputs. Level 3 securities consist of CMO securities backed by Alt-A mortgages. For these securities, we use industry-standard pricing methodologies, including discounted cash flow models, whose inputs are based on management’s assumptions and available market information. Significant unobservable inputs used in the fair value measurement of CMO’s are prepayment rates, probability of default, and loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for loss severity and a directionally opposite change in the assumption used for prepayment rates. Further we retain independent pricing vendors to assist in valuing certain instruments.

The following tables present our financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015 (in thousands):


		March 31, 2016
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,912	$	-	$	36,912
Foreign government		-		1,107		-		1,107
CMO – residential		-		170		-		170
States, municipalities and political
subdivisions		-		35,924		-		35,924
U.S. government		-		106,629		-		106,629
GSE		-		25		-		25
MBS – residential		-		33		-		33
Redeemable preferred stocks		358		-		-		358
Total fixed maturities		358		180,800		-		181,158

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,603		-		-		2,603
Total equity securities		2,603		-		-		2,603

Total Financial Assets	$	2,961	$	180,800	$	-	$	183,761


FINANCIAL LIABILITIES:
Contingent liability	$	-	$	-	$	885	$	885


		December 31, 2015
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,386	$	-	$	36,386
Foreign government		-		1,089		-		1,089
CMO – residential		-		189		-		189
CMO – commercial		-		-		478		478
States, municipalities and political
subdivisions		-		37,649		-		37,649
U.S. government		-		7,734		-		7,734
GSE		-		999		-		999
MBS – residential		-		35		-		35
Redeemable preferred stocks		374		-		-		374
Total fixed maturities		374		84,081		478		84,933

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,594		-		-		2,594
Total equity securities		2,594		-		-		2,594

Total Financial Assets	$	2,968	$	84,081	$	478	$	87,527


FINANCIAL LIABILITIES:
Contingent liability	$	-	$	-	$	885	$	885

The following table provides carrying values, fair values and classification in the fair value hierarchy of the Company’s financial instruments, for the periods indicated, that are not carried at fair value but are subject to fair value disclosure requirements, for the periods indicated (in thousands):


		March 31, 2016				December 31, 2015
		Level 2				Level 2
		Fair		Carrying		Fair		Carrying
		Value		Value		Value		Value

FINANCIAL LIABILITIES:
Debt	$	2,198	$	2,250	$	3,137	$	3,189

The following methods and assumptions were used to estimate the fair value of the financial instruments that are not carried at fair value in the Consolidated Financial Statements:

Debt

The fair value of debt with fixed interest rates approximates its carrying amount and is included in Level 2 of the fair value hierarchy.

It is the Company’s policy to recognize transfers of assets and liabilities between levels of the fair value hierarchy at the end of a reporting period. For the three months ending March 31, 2016, there were no transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy. No securities were transferred out of the Level 2 and into the Level 3 category during the three months ended March 31, 2016 or 2015. The Company does not transfer out of Level 3 and into Level 2 until such time as observable inputs become available and reliable or the range of available independent prices narrow. No securities were transferred out of the Level 3 category during the three months ended March 31, 2016 or 2015. The changes in the carrying value of Level 3 assets and liabilities for the three months ended March 31, 2016 and 2015 are summarized as follows (in thousands):


		Three Months Ended March 31, 2016
		Financial Assets				Financial Liabilities
				Total				Total
		CMOs		Level 3		Contingent		Level 3
		Commercial		Assets		Liability		Liabilities

Balance, beginning of period	$	478	$	478	$	885	$	885

Gains (losses) included in earnings:
Net realized investment gains (losses)		141		141		-		-

Sales of securities		(471)		(471)		-		-
Repayments and amortization of fixed maturities		(30)		(30)		-		-

Net unrealized gain included in accumulated other
comprehensive income (loss)		(118)		(118)		-		-

Balance, end of period	$	-	$	-	$	885	$	885


		Three Months Ended
		March 31, 2015
		Financial Assets
				Total
		CMOs		Level 3
		Commercial		Assets

Balance, beginning of period	$	381	$	381

Net unrealized gain included
in accumulated other
comprehensive income (loss)		25		25

Balance, end of period	$	406	$	406

Goodwill and Other Intangible Assets

The carrying amount of goodwill was $5,703,000 at both March 31, 2016 and December 31, 2015.

The change in the carrying amount of other intangible assets for the three months ended March 31, 2016 and 2015 are as follows (in thousands):


		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	13,327	$	8,637
Amortization expense		(241)		(88)

Balance, end of period	$	13,086	$	8,549

Related-Party Transactions

AMIC and its subsidiaries incurred expense of $391,000 and $172,000 for the three months ended March 31, 2016 and 2015, respectively, from service agreements with IHC and its subsidiaries which is recorded in Selling, General and Administrative Expenses in the Condensed Consolidated Statements of Income. These payments reimburse IHC and its subsidiaries, at agreed upon rates including an overhead factor, for certain services provided to AMIC and its subsidiaries, including general management, corporate strategy, accounting, legal, compliance, underwriting, and claims.

Independence American assumes premiums from IHC subsidiaries, and records related insurance income, expenses, assets and liabilities. Independence American pays administrative fees and commissions to subsidiaries of IHC in connection with fully insured health business written and assumed by Independence American. The Company also contracts for several types of insurance coverage (e.g. directors and officers and professional liability coverage) jointly with IHC. The cost of this coverage is split proportionally between the Company and IHC according to the type of risk and the Company’s portion is recorded in Selling, General and Administrative Expenses.

Reinsurance

Effective January 1, 2016, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions was co-insured in connection with the Risk Solutions Sale and Coinsurance Transaction (see Note 3). As a result of this transaction, the Company recorded $18,674,000 of estimated amounts due from reinsurers. Stop-loss business produced by Risk Solutions was 100% co-insured, accordingly the Condensed Consolidated Statements of Income reflect the co-insurance effective January 31, 2016.

The Company is contingently liable with respect to reinsurance in the unlikely event that the assuming reinsurers are unable to meet their obligations. The ceding of reinsurance does not discharge the primary liability of the original insurer to the insured.

10.

Share-Based Compensation

Total share-based compensation expense was $11,000 for both the three months ended March 31, 2016 and 2015. Related tax benefits of $4,000 were recognized for both the three months ended March 31, 2016 and 2015.

Under the terms of the Company’s stock-based compensation plan, option exercise prices are equal to the quoted market price of the shares at the date of grant; option terms are ten years; and vesting periods range from three to four years. The Company may also grant shares of restricted stock, stock appreciation rights and share-based performance awards. Restricted shares are valued at the quoted market price of the shares at the date of grant, and have a three year vesting period.

Stock Options

The following table summarizes information regarding outstanding and exercisable options as of March 31, 2016:


		Outstanding		Exercisable

Number of options		57,780		48,891
Weighted average exercise price per share	$	8.49	$	8.24
Aggregate intrinsic value of options	$	490,000	$	403,000
Weighted average contractual term remaining		4.50 years		3.88 years

The Company’s stock option activity for the three months ended March 31, 2016 is as follows:


	No. of	Weighted
	Shares	Average
	Under	Exercise
	Option	Price

Balance, December 31, 2015	71,558	$	8.88

Exercised	(13,778)		10.52

Balance, March 31, 2016	57,780	$	8.49

No options were granted in 2016.

Compensation expense of $11,000 was recognized for both the three months ended March 31, 2016 and 2015 for the portion of the fair value of stock options vesting during that period.

As of March 31, 2016, there was approximately $29,000 of total unrecognized compensation expense related to non-vested options that will be recognized over the remaining requisite service periods.

11.

Income Taxes

The provision for income taxes shown in the Condensed Consolidated Statements of Income was computed based on the Company's actual results, which approximate the effective tax rate expected to be applicable for the balance of the current fiscal year. As a result of the Risk Solutions Sale and Coinsurance Transaction (see Note 3), AMIC utilized approximately $110,185,000 of its operating loss carryforwards and made a corresponding adjustment to its valuation allowance. At March 31, 2016, AMIC had remaining net operating loss carryforwards of approximately $148,294,000 for federal income tax purposes, which expire in varying amounts through the year 2028, with a significant portion expiring in 2020.

The net deferred tax assets shown in the Condensed Consolidated Balance Sheets for the periods ending March 31, 2016 and December 31, 2015 are $15,848,000 and $15,153,000, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Internal Revenue Service ("IRS") has previously audited the Company’s 2003, 2004 and 2009 consolidated income tax returns and made no changes to the reported tax for those periods. The IRS has not audited any of AMIC's tax returns for any of the years in which the losses giving rise to the NOL carryforward were reported. Management believes that it is more likely than not that the Company will realize the benefits of these net deferred tax assets recorded at March 31, 2016.

12.

Subsequent Event

In June 2016, IHC announced a “going private” transaction by way of a statutory “short-form" merger of AMIC with and into AMIC Holdings, Inc. (“Holdings”), a newly formed subsidiary into which IHC and one of its subsidiaries will contribute their shares of AMIC common stock, with Holdings continuing as the surviving corporation. Subject to review by the Securities and Exchange Commission and consummation of the transaction, Holdings will own all of the outstanding shares of common stock of AMIC. IHC is under no obligation to consummate the merger and could decide to withdraw from the transaction at any time before it becomes effective.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of American Independence Corp. ("AMIC") and its subsidiaries (collectively, the "Company") should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial statements of the Company and the related Notes thereto appearing in our annual report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission, and our unaudited condensed consolidated financial statements and related Notes thereto appearing elsewhere in this quarterly report.

Overview

We are an insurance holding company engaged in the insurance and reinsurance business through our wholly owned insurance company, Independence American Insurance Company ("Independence American"), our wholly owned sales and marketing company, IHC Specialty Benefits, Inc. (“Specialty Benefits”), our wholly owned full service direct writer of medical-stop insurance for self-insured employer groups, IPA Family LLC (“IPA Family”), our 92% owned consumer direct sales call center, IPA Direct, LLC (“IPAD”), our 80% owned agency, Global Accident Facilities, LLC (“GAF”), and our 51% owned lead generation agency, HealthInsurance.org (“HIO”). On March 31, 2016, the Company sold IHC Risk Solutions, LLC (“Risk Solutions”), its wholly owned managing general underwriter of medical stop-loss insurance, and its 23% investment in Majestic Underwriters LLC. In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is 100% co-insured as of January 1, 2016. Specialty Benefits, HIO, GAF, IPAD and IPA Family are collectively referred to as “our Agencies”. Since November 2002, AMIC has been affiliated with Independence Holding Company ("IHC"), which owned approximately 92% of AMIC's stock as of March 31, 2016. In June 2016, IHC started the necessary proceedings to take AMIC private. The senior management of IHC provides direction to the Company through a service agreement between the Company and IHC. As of March 31, 2016, a significant amount of Independence American’s revenue was from reinsurance premiums. The majority of these premiums are ceded to Independence American from IHC under reinsurance treaties to cede its gross medical stop-loss premiums written to Independence American. In addition, Independence American assumes specialty health, New York State Disability Benefits Law ("DBL") and long-term disability (“LTD”) premiums from IHC, and assumes medical stop-loss premiums from unaffiliated carriers. Independence American writes pet insurance, short-term medical, occupational accident, dental and other ancillary products. Given its broad licensing, A- (Excellent) rating from A.M. Best Company, Inc. ("A.M. Best"), and that it is the only property and casualty (P&C) company in IHC, Independence American seeks opportunities to expand the distribution of P&C and specialty health products.

While management considers a wide range of factors in its strategic planning, the overriding consideration is underwriting profitability. Management's assessment of trends in health, pet and occupational accident insurance play a significant role in determining whether to expand Independence American's insurance premiums. Independence American emphasizes underwriting profitability. In addition, management focuses on controlling operating costs. By sharing employees with IHC and sharing resources among our subsidiaries, we strive to maximize our earnings.

Independence American Insurance Company

Independence American, which is domiciled in Delaware, is licensed to write property and/or casualty insurance in all 50 states and the District of Columbia, and has an A- (Excellent) rating from A.M. Best. We have been informed by A.M. Best that an A.M. Best rating is assigned after an extensive quantitative and qualitative evaluation of a company's financial condition and operating performance, and is also based upon factors relevant to policyholders, agents, and intermediaries, and is not directed towards protection of investors. A.M. Best ratings are not recommendations to buy, sell or hold securities of the Company. Independence American's unaudited statutory capital and surplus as of March 31, 2016 was $63,201,000.

Agencies

The Company has a 51% interest in HIO, which is headquartered in Minneapolis, MN. HIO is a lead generation agency through its well-established internet domain address: www.healthinsurance.org. The Company owns Specialty Benefits, which is also headquartered in Minneapolis, MN. Specialty Benefits is a sales and marketing company. AspiraAMas.com and Healthedeals.com are divisions of Specialty Benefits. The Company owns IPA Family, which is headquartered in Tampa, FL. IPA Family is a consumer direct sales agency. The Company has a 92% interest in IPAD, which is headquartered in Lake Mary, FL. IPAD is a consumer direct sales call center. The Company has an 80% ownership in GAF, a holding company for agencies that primarily produce occupational accident and injured on duty business. GAF has offices in Marshfield, MA and Dallas, TX.

The following is a summary of key performance information and events:

The results of operations for the three months ended March 31, 2016 and 2015 are summarized as follows (in thousands):


			Three Months Ended
			March 31,
			2016		2015

Revenues		$	29,402	$	39,435
Expenses			28,752		39,037

	Income from continuing operations before income taxes		650		398
	Income taxes		234		140

	Income from continuing operations		416		258

	Income from discontinued operations, net of tax		113,965		513

Net income			114,381		771

	Less: Net (income) loss attributable to the non-controlling interest		178		49

Net income attributable to American Independence Corp.		$	114,203	$	722

The book value of the Company increased to $27.02 per share at March 31, 2016 compared to $12.85 per share at December 31, 2015 as a result of the sale of Risk Solutions in the first quarter of 2016.

Income from continuing operations of $.03 per share, diluted, for the three months ended March 31, 2016 compared to $.03 per share, diluted, for the same period in 2015.

At March 31, 2016, 100% of the Company's fixed maturities were investment grade.

Consolidated investment yields were 2.7% and 3.0% for the three months ended March 31, 2016 and 2015, respectively.

Premiums earned decreased 42% to $21.1 million for the three months ended March 31, 2016 compared to $36.2 million for the three months ended March 31, 2015, primarily due to a decrease in medical stop-loss premiums resulting from the sale of Risk Solutions and the exit from the medical stop-loss business, slightly offset by higher fully insured health premiums.

For the three months ended March 31, 2016, our Agencies generated revenues of $5.5 million compared to $2.5 million for the three months ended March 31, 2015. Excluding revenue related to the consolidation of GAF totaling $2.1 million, total revenues increased $0.9 million due to higher revenues generated at HIO, IPAD, IPA Family and Specialty Benefits.

Agency net loss decreased $1.3 million from a loss of $1.6 million for the three months ended March 31, 2015 to a loss of $0.3 million for the three months ended March 31, 2016 due to lower losses at IPA Family and Specialty Benefits, and higher income at HIO.

Underwriting experience as indicated by GAAP Combined Ratios, on our three lines of business for the three months ended March 31, 2016 and 2015, are as follows (in thousands):


§ Medical Stop-Loss		Three Months Ended
		March 31,
		2016		2015

Premiums Earned	$	858	$	17,010
Insurance Benefits Claims and Reserves		308		12,908
Profit Commission Expense		20		370
Expenses		(4)		3,401

Loss Ratio^(A)		35.9%		75.9%
Profit Commission Expense Ratio ^(B)		2.3%		2.2%
Expense Ratio ^(C)		-0.5%		20.0%
Combined Ratio ^(D)		37.7%		98.1%


§ Fully Insured Health		Three Months Ended
		March 31,
		2016		2015

Premiums Earned	$	18,741	$	17,728
Insurance Benefits Claims and Reserves		14,055		10,093
Profit Commission Expense (Recovery)		11		27
Expenses		6,594		6,479

Loss Ratio^(A)		75.0%		56.9%
Profit Commission Expense Ratio ^(B)		0.1%		0.2%
Expense Ratio ^(C)		35.2%		36.5%
Combined Ratio ^(D)		110.3%		93.6%


§ Group Disability		Three Months Ended
		March 31,
		2016		2015

Premiums Earned	$	1,497	$	1,479
Insurance Benefits Claims and Reserves		603		969
Expenses		472		416

Loss Ratio^(A)		40.3%		65.5%
Expense Ratio ^(C)		31.5%		28.1%
Combined Ratio ^(D)		71.8%		93.6%

(A)

Loss ratio represents insurance benefits, claims and reserves divided by premiums earned.

(B)

Profit commission expense ratio represents profit commissions divided by premiums earned.

(C)

Expense ratio represents commissions, administrative fees, premium taxes and other underwriting expenses divided by premiums earned.

(D)

The combined ratio is equal to the sum of the loss ratio, profit commission expense ratio and the expense ratio.

The Company recorded a lower loss ratio for medical stop-loss as the Company exits this line of business and the remaining reserves are in runoff.

The Company recorded an increase in the loss ratio in the fully insured health line of business for the three months ended March 31, 2016 primarily due to a substantial increase in losses for the occupational accident business, partially offset by improved results in pet and international health business.

The Company experienced a decrease in the loss ratio for group disability for the three months ended March 31, 2016 as a result of lower losses for both the DBL and international line of LTD business.

Critical Accounting Policies

The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. A summary of the Company's significant accounting policies and practices is provided in Note 1 of the Notes to the Consolidated Financial Statements included in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2015. Management has identified the accounting policies related to Policy Benefits and Claims, Premium and Fee income Revenue Recognition, Reinsurance, Income Taxes, Investments and Other Intangibles as those that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's condensed consolidated financial statements and this Management's Discussion and Analysis. A full discussion of these policies is included under Critical Accounting Policies in Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2015.

Results of Operations for the Three Months Ended March 31, 2016, Compared to the Three Months Ended March 31, 2015.


							Insurance
							Benefits,			Selling,
			Fees and		Net		Claims			General			Amortization
March 31,	Premiums		Other		Investment		and			and			and
2016	Earned		Income		Income		Reserves			Admin			Depreciation			Total
(In thousands)

Independence
American:
Medical stop-loss	$	858	1,049		193		308			16			-			$	1,776
Fully Insured Health	18,741		-		263		14,055			6,605			-			(1,656)
Group Disability	1,497		-		23		603			472			-			445
Total Independence
American	21,096		1,049		479		14,966			7,093			-			565

Agencies	-		5,524		(29)		-			5,548			280			(333)
Corporate	-		49		1,020		-			865			-			204
Subtotal	$	21,096		6,622		1,470		14,966			13,506			280			436

Net realized investment gains																	214
Income from continuing operations before income taxes																	650
Income taxes																	(234)
Income from continuing operations																$	416

							Insurance
							Benefits,			Selling,
			Fees and		Net		Claims			General			Amortization
March 31,	Premiums		Other		Investment		and			and			and
2015	Earned		Income		Income		Reserves			Admin			Depreciation			Total
(In thousands)

Independence
American:
Medical stop-loss	$	17,010	-		285		12,908			3,771			-			$	616
Fully Insured Health	17,728		-		251		10,093			6,506			-			1,380
Group Disability	1,479		-		33		969			416			-			127
Total Independence
American	36,217		-		569		23,970			10,693			-			2,123

Agencies	-		2,478		9		-			3,931			115			(1,559)
Corporate	-		-		21		-			328			-			(307)
Subtotal	$	36,217		2,478		599			23,970			14,952			115		257

Net realized investment gains																	141
Income from continuing operations before income taxes																	398
Income taxes																	(140)
Income from continuing operations																$	258

Acquisition of GAF

On April 30, 2015 (the "Acquisition Date"), through a settlement with a former owner, AMIC increased its ownership in Global Accident Facilities, LLC (“GAF) from 40% to 80%. GAF and its subsidiaries are principally engaged in the marketing, underwriting and administration of specialty risk insurance, referred to as Occupational Accident and Injured on Duty for Independence American, which are offered exclusively in Texas and Massachusetts, respectively.

Prior to obtaining control, AMIC recorded its investment in GAF using the equity method. AMIC recorded changes in its investment in GAF in the “Other income” line in the Condensed Consolidated Statements of Income. Upon achieving control on April 30, 2015, GAF’s income and expense amounts became consolidated with AMIC’s results. Accordingly, the individual line items on the Condensed Consolidated Statements of Income for March 2016 reflect three months of the operations of GAF with no corresponding amounts for March 2015.

Premiums Earned. Premiums earned decreased 42%, or $15,121,000 from 2015 to 2016. The Company currently has three lines of business. Premiums relating to medical stop-loss business decreased $16,152,000 due to the sale of Risk Solutions and the exit from the medical stop-loss business. Premiums relating to fully insured health (consisting of run-off major medical, short-term medical, dental, vision, gap, occupational accident, pet insurance, and international medical) increased $1,013,000. The increase is primarily due to an increase in international medical and pet insurance premiums, offset by a decrease in major medical premiums. Premiums relating to group disability increased $18,000. For the three months ended March 31, 2016, Independence American assumed 10% of IHC’s short-term medical business, 20% of IHC’s DBL business, 8% of certain of IHC’s LTD business, approximately 28% of IHC’s medical stop-loss business, and 10% of certain of IHC’s group major medical business. There were no significant changes to these percentages from the prior year.

Agency Income. Agency income increased $3,023,000 from 2015 to 2016. Excluding income related to the consolidation of GAF, totaling $2,067,000, total agency income increased $956,000. In 2016, agency income consisted of commission income and other fees of $686,000, $532,000 and $2,067,000 from IPA Family, IPAD and GAF, respectively, and revenue of $406,000 and $1,809,000 from HIO and Specialty Benefits, respectively. In 2015, agency income consisted of commission income and other fees of $358,000 and $500,000 from IPA Family and IPAD, respectively, and revenue of $322,000 and $1,297,000 from HIO and Specialty Benefits, respectively.

Net Investment Income. Net investment income increased $871,000 from 2015 to 2016 due to an increase in investable assets due to the sale of Risk Solutions, offset by a lower yield on those assets. The consolidated investment yields were 2.7% and 3.0% for the three months ended March 31, 2016 and 2015, respectively.

Net Realized Investment Gains (Losses). The Company recorded a net realized investment gain of $214,000 for the three months ended March 31, 2016, compared to a gain of $141,000 for the three months ended March 31, 2015. The Company's decision as to whether to sell securities is based on management’s ongoing evaluation of investment opportunities and economic market conditions, thus creating fluctuations in realized gains or losses from period to period.

Other Income. Other income increased $1,121,000 from 2015 to 2016 primarily due the amortization of a ceding commission paid to Independence American in connection with the Risk Solutions Sale and Coinsurance Transaction (see Note 3).

Insurance Benefits, Claims and Reserves. Insurance benefits claims and reserves decreased 38%, or $9,004,000 from 2015 to 2016. The decrease is primarily due to a decrease in medical stop-loss of $12,600,000 due to the sale of Risk Solutions and the exit from the medical stop-loss business, and a decrease in assumed major medical of $971,000 due to lower premiums, offset by an increase in direct occupational accident of $4,806,000 due to higher claims and reserves on the line.

Selling, General and Administrative. Selling, general and administrative expenses decreased $1,446,000 from 2015 to 2016. Excluding expenses related to the consolidation of GAF, totaling $1,885,000, total selling, general and administrative expenses decreased $3,331,000. The decrease is primarily due to lower commission expense of $4,266,000 at Independence American relating to the exit from the medical stop-loss business, offset by higher underwriting expense of $1,075,000 at Independence American due to a change in the mix of business.

Amortization and Depreciation. Amortization and depreciation expense increased $165,000 from 2015 to 2016 primarily due to the amortization of intangible assets recorded in connection with the consolidation of GAF.

Income Taxes. The provision for income taxes increased $94,000 to $234,000, an effective rate of 36.0%, for the three months ended March 31, 2016, compared to $140,000, an effective rate of 35.2%, for the three months ended March 31, 2015. Net income for the three months ended March 31, 2016 and 2015 includes a non-cash provision for federal income taxes of $(75,000) and $167,000, respectively. The state tax effective rate increased to 7.19% for the three months ended March 31, 2016, compared to (10.1)% for the three months ended March 31, 2015 due to the mix of business by company and their respective state tax rates. For as long as AMIC utilizes its NOL carryforwards, it will not pay any income taxes, except for federal alternative minimum taxes and state income taxes.

Net Income (loss) attributable to the non-controlling interest. Net income (loss) attributable to the non-controlling interest increased $129,000 from 2015 to 2016. The net income for the three months ended March 31, 2016 relates to the 49% non-controlling interest in HIO, the 20% non-controlling interest in GAF, and the 8% non-controlling interest in IPAD. The net income for the three months ended March 31, 2015 relates to the 49% non-controlling interest in HIO, the 8% non-controlling interest in IPAD, and the 10% non-controlling interest in IPA Family.

Income from continuing operations. Income from continuing operations increased to $416,000, or $.03 per share, diluted, for the three months ended March 31, 2016, compared to $258,000, or $.03 per share, diluted, for the three months ended March 31, 2015.

LIQUIDITY

Independence American

Independence American principally derives cash flow from: (i) operations; (ii) the receipt of scheduled principal payments on its portfolio of fixed income securities; and (iii) earnings on investments and other investing activities. Such cash flow is partially used to finance liabilities for insurance policy benefits and reinsurance obligations.

Corporate

Corporate derives cash flow funds principally from: dividends and tax payments from its subsidiaries and investment income from corporate liquidity. The ability of Independence American to pay dividends to its parent company is governed by Delaware insurance laws and regulations; otherwise, there are no regulatory constraints on the ability of any of our subsidiaries to pay dividends to its parent company. For the three months ended March 31, 2016, our Agencies did not pay any dividends to Corporate.

Cash Flows

The Company had $134.4 million and $4.9 million of cash and cash equivalents as of March 31, 2016 and December 31, 2015, respectively.

For the three months ended March 31, 2016, $6.6 million of cash was utilized by operating activities, whereas investing activities provided the Company with $137.0 million of cash primarily due to the sale of Risk Solutions. Financing activities utilized $0.8 million for the period primarily due to payments made on debt.

At March 31, 2016, the Company had $47.4 million of policy benefits and claims that it expects to pay out of current assets and cash flows from future business. If necessary, the Company could utilize the cash received from maturities and repayments of its fixed maturity investments if the timing of claim payments associated with the Company's policy benefits and claims does not coincide with future cash flows.

The Company believes it has sufficient cash to meet its currently anticipated business requirements over the next twelve months including working capital requirements and capital investments.

BALANCE SHEET

Total investments, net of amounts due to/from brokers, decreased $7,449,000 to $85,724,000 during the three months ended March 31, 2016 from $93,173,000 at December 31, 2015, primarily due to an increase in sales and maturities of fixed maturities and lower net purchases of securities under resale and repurchase agreements. Cash increased $129,554,000 due to the sale of Risk Solutions.

The Company had receivables from reinsurers of $19,987,000 at March 31, 2016. Substantially all of the business ceded to such reinsurers is of short duration. All of such receivables are either due from related parties, highly rated companies or are adequately secured. No allowance for doubtful accounts was deemed necessary at March 31, 2016.

The Company's future policy benefits and claims liabilities by line of business are as follows (in thousands):


		Total Future Policy Benefits
		and Claims Liabilities
		March 31,		December 31,
		2016		2015

Medical Stop-Loss	$	21,397	$	23,257
Fully Insured Health		24,199		18,495
Group Disability		1,790		2,012

	$	47,386	$	43,764

The increase in total policy benefits and claims of $3,622,000 is primarily attributable to an increase in claims for occupational accident, offset by a decrease in medical stop-loss.

Generally, during the first twelve months of an underwriting year, reserves for medical stop-loss are first set at the projected net loss ratio, which is determined using assumptions developed using completed prior experience trended forward. The projected net loss ratio is the Company’s best estimate of future performance until such time as developing losses provide a better indication of ultimate results.

Major factors that affect the projected net loss ratio assumption in reserving for medical stop-loss relate to: (i) frequency and severity of claims; (ii) changes in medical trend resulting from the influences of underlying cost inflation, changes in utilization and demand for medical services, the impact of new medical technology and changes in medical treatment protocols; and (iii) the adherence to the Company's underwriting guidelines. Changes in these underlying factors are what determine the reasonably likely changes in the projected net loss ratio.

The primary assumption in the determination of fully insured reserves is that historical claim development patterns tend to be representative of future claim development patterns. Factors which may affect this assumption include changes in claim payment processing times and procedures, changes in product design, changes in time delay in submission of claims, and the incidence of unusually large claims. The reserving analysis includes a review of claim processing statistical measures and large claim early notifications; the potential impacts of any changes in these factors are minimal. The time delay in submission of claims tends to be stable over time and not subject to significant volatility. Since our analysis considered a variety of outcomes related to these factors, the Company does not believe that any reasonably likely change in these factors will have a material effect on the Company’s financial condition, results of operations, or liquidity.

The $115,020,000 increase in AMIC’s stockholders' equity in the first three months of 2016 is primarily due to income from discontinued operations of $113,965,000 resulting from the sale of Risk Solutions, income from continuing operations of $416,000, and an increase in net unrealized gains on investments, net of taxes of $681,000. The increase in net unrealized gains on investments is due to a decrease in interest rates, which increased the value of the Company’s bond portfolio.

Asset Quality and Investment Impairments

The nature and quality of insurance company investments must comply with all applicable statutes and regulations, which have been promulgated primarily for the protection of policyholders. The Company's gross unrealized losses on available-for-sale securities totaled $623,000 at March 31, 2016. Additionally, 100% of the Company’s fixed maturities were investment grade. The Company marks all of its available-for-sale securities to fair value through accumulated other comprehensive income or loss. Higher grade investments tend to carry less default risk and, therefore, lower interest rates than other types of fixed maturity investments. The Company does not have any non-performing fixed maturity investments at March 31, 2016.

The Company reviews its investments regularly and monitors its investments continually for impairments. There were no realized losses for other-than-temporary impairments recorded for the three months ended March 31, 2016 and 2015. The following table summarizes the carrying value of securities with fair values less than 80% of their amortized cost at March 31, 2016 by the length of time the fair values of those securities were below 80% of their amortized cost (in thousands):


				Greater than		Greater than
				3 months,		6 months,
		Less than		less than		less than		Greater than
		3 months		6 months		12 months		12 months		Total

Fixed maturities	$	171	$	-	$	-	$	-	$	171

The unrealized losses on all available-for-sale securities have been evaluated in accordance with the Company's impairment policy and were determined to be temporary in nature at March 31, 2016. In 2016, the Company recorded $745,000 of net unrealized gains on available-for-sale securities, pre-tax, in other comprehensive income (loss). From time to time, as warranted, the Company may employ investment strategies to mitigate interest rate and other market exposures. Further deterioration in credit quality of the companies backing the securities, further deterioration in the condition of the financial services industry, a continuation of the current imbalances in liquidity that exist in the marketplace, a continuation or worsening of the current economic recession, or additional declines in real estate values may further affect the fair value of these securities and increase the potential that certain unrealized losses be designated as other-than-temporary in future periods and the Company may incur additional write-downs.

CAPITAL RESOURCES

As Independence American’s total adjusted capital was significantly in excess of the authorized control level risk-based capital, the Company remains well positioned to increase or diversify its current activities. It is anticipated that future acquisitions or other expansion of operations will be funded internally from existing capital and surplus and parent company liquidity. In the event additional funds are required, it is expected that they would be borrowed or raised in the public or private capital markets to the extent determined to be necessary or desirable.

OUTLOOK

For 2016, we anticipate:

A significant decrease in premiums and earnings due to exiting the medical stop-loss business as a result of the closing of the Risk Solutions Sale and Coinsurance Transaction.

Continued significant increase in specialty health premiums (including short-term and supplemental health products, such as dental, short-term medical, critical illness and occupational accident products), and continued decrease in major medical premiums, which is in run-off. Increasing emphasis on direct-to-consumer and career advisor distribution initiatives as we believe this will be a growing means for selling health insurance in the coming years, and accompanying start-up costs of expanding our sales through our call center, career model (including our newly launched Aspira A Mas outreach to the Hispanic community) and transactional websites.

Increasing retention in our group disability lines of business. In 2016, we expect a continuation of the increase in group long-term and short-term disability products driven by higher retention amounts and a full year of premiums generated by a relatively new distribution partnership.

Continued evaluation of strategic transactions. As a result of the sale of Risk Solutions, we have significant cash. We plan to redeploy some of this cash in making investments and acquisitions to bolster existing or new lines of business. Subsequent to March 31, 2016, Specialty Benefits made a $0.6 million investment in a call center, which will begin writing substantially all of its specialty health business with carriers affiliated with IHC. We are currently negotiating several similar transactions.

Continued focus on administrative efficiencies.

IHC initiating the process to take AMIC private.

On March 31, 2016, IHC and its subsidiary Independence American Holdings Corp. sold the stock of Risk Solutions. In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Standard Security Life and Independence American produced by Risk Solutions was co-insured by Westport as of January 1, 2016. The aggregate purchase price was $152,500,000 in cash, subject to adjustments and settlements. This transaction resulted in a gain on the sale estimated at approximately $114 million. As a result of the transaction, AMIC is highly liquid and has excess capital, however, its Medical Stop-Loss line of business will be in run-off, which will have a negative impact on future earnings.

IHC has announced a “going private” transaction by way of a statutory “short-form" merger of AMIC with and into AMIC Holdings, Inc. (“Holdings”), a newly formed subsidiary into which IHC and one of its subsidiaries will contribute their shares of AMIC common stock, with Holdings continuing as the surviving corporation. Subject to review by the Securities and Exchange Commission and consummation of the transaction, Holdings will own all of the outstanding shares of common stock of AMIC. IHC is under no obligation to consummate the merger and could decide to withdraw from the transaction at any time before it becomes effective.

Our results depend on the adequacy of our product pricing, our underwriting, the accuracy of our reserving methodology, returns on our invested assets, and our ability to manage expenses. We will also need to be diligent with the increased rate review scrutiny to effect timely rate changes and will need to stay focused on the management of medical cost drivers as medical trend levels cause margin pressures. Therefore, factors affecting these items, as well as unemployment and global financial markets, may have a material adverse effect on our results of operations and financial condition.

IHC Treaties

Independence American derives a significant amount of its premiums from pro rata quota share reinsurance treaties (“IHC Treaties”) with Standard Security Life and Madison National Life Insurance Company, Inc. ("Madison National Life"), which are wholly owned subsidiaries of IHC. These treaties, which were to terminate on December 31, 2014, have been amended to extend the termination date to December 31, 2019. With respect to the IHC Treaties, the Company’s operating results are affected by the following factors: (i) the percentage of business ceded to Independence American pursuant to the IHC Treaties; (ii) the amount of gross premium written by Standard Security Life or Madison National Life that is ceded to the IHC Treaties; and (iii) the amount of gross premium written by carriers other than Standard Security Life or Madison National Life that is ceded to Independence American. The profitability of the business ceded will also impact our operating results. Independence American assumes specialty health, DBL and LTD premiums from IHC under the IHC Treaties.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

The Company manages interest rate risk by seeking to maintain an investment portfolio with a duration and average life that falls within the band of the duration and average life of the applicable liabilities. Options and other derivatives may be utilized to modify the duration and average life of such assets.

The Company monitors its investment portfolio on a continuous basis and believes that the liquidity of the Company will not be adversely affected by its current investments. This monitoring includes the maintenance of an asset-liability model that matches current insurance liability cash flows with current investment cash flows. This is accomplished by first creating an insurance model of the Company's in-force policies using current assumptions on mortality, lapses and expenses. Then, current investments are assigned to specific insurance blocks in the model using appropriate prepayment schedules and future reinvestment patterns.

The results of the model specify whether the investments and their related cash flows can support the related current insurance cash flows. Additionally, various scenarios are developed changing interest rates and other related assumptions. These scenarios help evaluate the market risk due to changing interest rates in relation to the business.

The expected change in fair value as a percentage of the Company's fixed income portfolio at March 31, 2016 given a 100 to 200 basis point rise or decline in interest rates is not materially different than the expected change at December 31, 2015 included in Item 7A of the Company's Annual Report on Form 10-K.

In the Company's analysis of the asset-liability model, a 100 to 200 basis point change in interest rates on the Company's liabilities would not be expected to have a material adverse effect on the Company. With respect to its investments, the Company employs (from time to time as warranted) investment strategies to mitigate interest rate and other market exposures.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and procedures

AMIC’s Chief Executive Officer and Chief Financial Officer supervised and participated in AMIC’s evaluation of its disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in AMIC’s periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

As previously disclosed in Item 9A of our Form 10-K for the year ended December 31, 2015, management concluded that there was a material weakness in internal control over financial reporting for income taxes. Management determined that we did not maintain effective controls over the accounting for and disclosures of technical accounting matters as they relate to income taxes. Specifically, we did not have (i) sufficient tax accounting resources with adequate knowledge of the Company’s process and controls over financial reporting related to income taxes to effectively design, operate, and document controls over accounting for income taxes, (ii) an adequate risk assessment process related to income tax accounting to identify and appropriately account for income taxes associated with significant, non-routine transactions and (iii) effective process level controls over completeness, existence, accuracy and disclosure of deferred tax balances.

Plan for Remediation of Material Weakness

The Company is actively engaged in evaluating and determining implementation steps to remediate the material weaknesses in internal control over financial reporting identified related to accounting for income taxes. The Company has begun and will continue to (i) augment existing tax staff with additional skilled tax accounting resources and providing additional training to existing staff on the design and operation of tax related financial reporting and corresponding internal controls, (ii) enhance risk assessment processes that operate over accounting for income taxes, with a particular focus on the tax accounting and disclosure for unusual and complex transactions, and (iii) review the processes and controls in place to measure and record transactions related to tax accounting to enhance the effectiveness of the design and operation of those controls. Though the Company has begun to address the remediation efforts described above, until the remediation actions are fully implemented and the operational effectiveness of related internal controls validated through testing, the material weaknesses described above will continue to exist.

Changes in Internal Control Over Financial Reporting

There has been no change in AMIC’s internal control over financial reporting during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, AMIC's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

The Company is involved in legal proceedings and claims that arise in the ordinary course of its businesses. The Company has established reserves that it believes are sufficient given information presently available related to its outstanding legal proceedings and claims. The Company believes the results of pending legal proceedings and claims are not expected to have a material adverse effect on its financial condition or cash flows, although there could be a material effect on its results of operations for a particular period.

Item 1A. Risk Factors

There were no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 in response to Item 1A. to Part 1 of Form 10-K.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchase Program

In November 2012, the Board of Directors of AMIC authorized the repurchase of up to 962,886 shares of AMIC’s common stock. The repurchase program may be discontinued or suspended at any time. As of March 31, 2016, 500,000 shares were still authorized to be repurchased under the program. There were no share repurchases during the quarter ended March 31, 2016.

Item 3.

Defaults Upon Senior Securities

Not Applicable

Item 4.

Mine Safety Disclosures

Not Applicable

Item 5.

Other Information

Not Applicable

Item 6.

Exhibits


Exhibit No.	Description of Document

2.1	Stock Purchase Agreement, dated as of July 30, 2002, between Registrant, SSH Corporation and Independence Holding Company. Incorporated by reference to exhibit 10.1 of the Registrant's Current Report on Form 8-K dated July 31, 2002
3.1	Second Amended and restated Certificate of Incorporation of the Registrant. Incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on form 10K for the fiscal year ended September 30, 2002.
3.2	Amended By-Laws of the Registrant. Incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on form 10K for the fiscal year ended September 30, 2002, as amended by Amendment to By-laws of American Independence Corp. Incorporated by reference to Exhibit 3.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.
10.1	Services Agreement, dated as of November 15, 2002, by and between American Independence Corp. and Independence Holding Company. Incorporated by reference to exhibit 10.2 of the Registrant's Current Report on Form 8-K dated November 14, 2002.
10.2	Agency Agreement, dated February 22, 2006, between the Registrant and First Integrated Health, Inc. Incorporated by reference to exhibit 10.2 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
10.3	Registrant’s 1998 Stock Incentive Plan Incorporated by reference to exhibit 99.1 of the Registrant's Registration Statement on Form S-8 dated May 10, 1999.
10.4	Registrant’s 1999 Supplemental Stock Incentive Plan. Incorporated by reference to exhibit 99.1 of the Registrant's Registration Statement on Form S-8 dated June 8, 1999.
10.5	Contribution Agreement dated April 15, 2008 by and among IPA Family, LLC, a wholly owned subsidiary of the Registrant, Insurance Producers Group of America, Inc., Insurance Producers of America Agency, Inc. and Independent Producers of America Agency, Inc. Incorporated by reference to exhibit 10.1 of the Registrant’s Current Report on Form 8-K dated April 22, 2008.
10.6	Registrant’s 2009 Stock Incentive Plan (the “2009 Plan”), form of Restricted Share Award Agreement under the 2009 Plan and form of Stock Option Award Agreement under the 2009 Plan. (The 2009 Plan was filed as Appendix A to the Proxy Statement for the Registrant’s Annual Meeting of Stockholders held on June 19, 2009 and is incorporated herein by reference; the form of restricted share award agreement was filed as Exhibit 4.4 to the Registrant’s Form S-8 filed with the SEC on July 31, 2009 and is incorporated herein by reference; and the form of stock option award agreement was filed as Exhibit 4.5 to the Registrant’s Form S-8 filed with the SEC on July 31, 2009 and is incorporated herein by reference.)
10.7	Quota Share Reinsurance Agreement between Madison National Life Insurance, Inc. and Independence American Insurance Company, as amended. Incorporated by reference to Exhibit 10.7 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (as amended).
10.8	Quota Share Reinsurance Agreement between Standard Security Life Insurance Company of New York and Independence American Insurance Company, as amended. Incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (as amended).
10.9	Purchase and Sale Agreement, dated as of January 5, 2016, by and among Independence Holding Company, Independence American Holdings Corp., and SR Corporate Solutions America Holding Corporation.
18	Preferability Letter of KPMG LLP dated August 8, 2014. Incorporated by reference to exhibit 18 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
23.1	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN INDEPENDENCE CORP.

(Registrant)

/s/ Roy T.K. Thung

Roy T.K. Thung

Chief Executive Officer

Date:

August 1, 2016

/s/ Teresa A. Herbert

Teresa A. Herbert

Chief Financial Officer and Senior Vice President

Date:

August 1, 2016

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Teresa A. Herbert, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Independence Corp;

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: August 1, 2016

/s/ Teresa A. Herbert

Chief Financial Officer and Senior Vice President

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Roy T.K. Thung, certify that:

1. I have reviewed this quarterly report on Form 10-Q of American Independence Corp;

(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: August 1, 2016

/s/ Roy T. K. Thung

Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Independence Corp. (the "Company") on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Teresa A. Herbert, Chief Financial Officer and Senior Vice President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Teresa A. Herbert

Chief Financial Officer and Senior Vice President

Date: August 1, 2016

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Independence Corp. (the "Company") on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Roy T. K. Thung, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Roy T. K. Thung

Chief Executive Officer

Date: August 1, 2016

Document and Entity Information - USD ($)	3 Months Ended
Document and Entity Information - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Document and Entity Information
Entity Registrant Name	American Independence Corp.
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Entity Central Index Key	0000097196
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding	8,101,883
Entity Public Float		$ 6,418,387
Trading Symbol	amic

American Independence Corp. and Subsidiaries - Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Mar. 31, 2016

Dec. 31, 2015

Investments:

Securities purchased under agreements to resell

$ 1,629

$ 4,595

Fixed maturities available-for-sale, at fair value

181,158

84,933

Equity securities available-for-sale, at fair value

2,603

2,594

Total investments

185,390

92,122

Cash and cash equivalents

134,415

4,861

Restricted cash

966

1,377

Accrued investment income

769

727

Premiums receivable

16,005

^[1]

16,654

^[2]

Net deferred tax asset

15,848

13,944

Assets attributable to discontinued operations

31,718

Due from reinsurers

19,987

^[3]

4,950

^[4]

Goodwill

5,703

Intangible assets

13,086

13,327

Due from securities brokers

111

1,051

Other assets

18,037

10,540

TOTAL ASSETS

410,317

196,974

LIABILITIES:

Policy benefits and claims

47,386

^[5]

43,764

^[6]

Premium and claim funds payable

966

1,377

Commission payable

8,444

^[7]

5,817

^[8]

Accounts payable, accruals and other liabilities

19,228

^[9]

11,192

^[10]

Liabilities attributable to discontinued operations

953

24,337

Due to securities brokers

99,777

Due to reinsurers

8,896

100

Debt

2,250

3,189

TOTAL LIABILITIES

187,900

89,776

AMIC STOCKHOLDERS' EQUITY:

Common stock

Additional paid-in capital

88,648

88,637

Accumulated other comprehensive gain (loss)

484

(197)

Treasury stock, at cost

(10,033)

(10,161)

Accumulated deficit

139,749

25,549

TOTAL AMIC STOCKHOLDERS' EQUITY

218,940

103,920

NON-CONTROLLING INTERESTS IN SUBSIDIARIES

3,477

3,278

TOTAL EQUITY

222,417

107,198

TOTAL LIABILITIES AND EQUITY

$ 410,317

$ 196,974

[1]	$15,033 restricted by related parties
[2]	$14,009 restricted by related parties
[3]	$2,025 due from related parties
[4]	$3,330 due from related parties
[5]	$26,340 due from related parties
[6]	$27,110 due from related parties
[7]	$4,341 due from related parties
[8]	$5,221 due from related parties
[9]	$3,329 due from related parties
[10]	$2,435 due from related parties

American Independence Corp. and Subsidiaries - Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Stockholders' Equity, Number of Shares, and Par Value Disclosures
Preferred Stock, Par Value	$ 0.10	$ 0.10
Preferred Stock, Shares Authorized	1,000	1,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	15,000,000	15,000,000
Common Stock, Shares Issued	9,181,793	9,181,793
Common Stock, Shares Outstanding	8,101,883	8,088,105
Treasury Stock, Shares	1,079,910	1,093,688

American Independence Corp. and Subsidiaries - Condensed Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

REVENUES:

Premiums earned

$ 21,096

^[1]

$ 36,217

^[2]

Fee and agency income

5,500

^[3]

2,477

^[4]

Net investment income

1,470

599

Net realized investment gains (losses)

214

141

Other income

1,122

TOTAL REVENUES

29,402

39,435

EXPENSES

Insurance benefits, claims and reserves

14,966

^[5]

23,970

^[6]

Selling, general and administrative expenses

13,506

^[7]

14,952

^[8]

Amortization and depreciation

280

115

TOTAL EXPENSES

28,752

39,037

Income from continuing operations before income taxes

650

398

Provision for income taxes

234

140

Income from continuing operations

416

258

Income from discontinued operations, before income taxes

122,034

837

Income taxes on discontinued operations

8,069

324

Income from discontinued operations

113,965

513

Net income

114,381

771

Less: Net income attributable to the non-controlling interest

(178)

(49)

Net income attributable to American Independence Corp.

$ 114,203

$ 722

Basic income per common share:

Basic income per share attributable to American Independence Corp. common stockholders from continuing operations

$ 0.03

Basic income per share attributable to American Independence Corp. common stockholders from discontinued operations

$ 14.07

$ 0.06

Weighted-average basic shares outstanding

8,101

8,079

Diluted income per common share:

Diluted income per share attributable to American Independence Corp. common stockholders from continuing operations

$ 0.03

Diluted income per share attributable to American Independence Corp. common stockholders from discontinued operations

$ 14.04

$ 0.06

Weighted-average diluted shares outstanding

8,119

8,094

[1]	$8,057 from related parties
[2]	$19,783 from related parties
[3]	$0 from related parties
[4]	$10 from related parties
[5]	$2,867 from related parties
[6]	$12,677 from related parties
[7]	$3,241 from related parties
[8]	$5,805 from related parties

American Independence Corp. and Subsidiaries - Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Statement of Comprehensive Income

Net income

$ 114,381

$ 771

Other comprehensive income (loss):

Unrealized holding losses arising during the period, net of tax

820

^[1]

510

^[2]

Reclassification adjustment for (gains) losses included in net income, net of tax

(139)

^[3]

(80)

^[4]

Other comprehensive income (loss)

681

430

Comprehensive income

115,062

1,201

Comprehensive income attributable to non-controlling interests

(178)

(49)

Comprehensive income attributable to American Independence Corp.

$ 114,884

$ 1,152

[1]	Net of taxes of $442
[2]	Net of taxes of $192
[3]	Net of taxes of $75
[4]	Net of taxes of $43

American Independence Corp. and Subsidiaries - Condensed Consolidated Statements of Changes In Stockholders' Equity - USD ($) $ in Thousands	Total	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	TREASURY STOCK, AT COST	ACCUMULATED DEFICIT	TOTAL AMIC STOCKHOLDERS' EQUITY	NON-CONTROLLING INTERESTS	TOTAL EQUITY
STARTING BALANCE at Dec. 31, 2014		$ 92	$ 88,637	$ (197)	$ (10,161)	$ 25,549	$ 103,920	$ 3,278	$ 107,198
Net income						114,203	114,203	178	114,381
Other comprehensive income (loss)				681			681		681
Exercise of stock options					128	18	146		146
Share-based compensation expense			11				11		11
Other			0			(21)	(21)	21	0
ENDING BALANCE at Mar. 31, 2016	$ 222,417	92	88,648	484	(10,033)	139,749	218,940	3,477	222,417
STARTING BALANCE at Dec. 31, 2015	107,198
Net income	114,381
Other comprehensive income (loss)	681
Share-based compensation expense	(11)
ENDING BALANCE at Mar. 31, 2016	$ 222,417	$ 92	$ 88,648	$ 484	$ (10,033)	$ 139,749	$ 218,940	$ 3,477	$ 222,417

American Independence Corp. and Subsidiaries - Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 114,381	$ 771
Adjustments to reconcile net income to net change in cash from operating activities:
Net realized investment gains	(214)	(141)
(Gain) loss on disposal of discontinued operations (net of tax)	(113,499)	0
Amortization and depreciation	280	115
Deferred tax expense	(75)	463
Non-cash stock compensation expense	11	11
Amortization of bond premiums and discounts	145	149
Change in operating assets and liabilities:
Change in trading securities	0	(47)
Change in policy benefits and claims	3,622	2,057
Change in net amounts due from and to reinsurers	(6,241)	(1,545)
Change in accrued fee income	0	(1)
Change in claims fund	(7,681)	(292)
Change in commissions payable	2,627	1,137
Change in premiums receivable	649	(3,849)
Change in income taxes	(312)	(271)
Dividends received	120	0
Change in other assets and other liabilities	7	2,213
Net cash provided by operating activities	(6,180)	770
CASH FLOWS FROM INVESTING ACTIVITIES:
Net sales of securities under resale and repurchase agreements	2,966	(3,676)
Sales of and principal repayments on fixed maturities	4,554	10,041
Maturities and other repayments of fixed maturities	3,952	1,310
Purchases of fixed maturities	(2,906)	(9,320)
Change in loan receivable	17	(61)
Proceeds from sales of subsidiaries, net of cash divested	127,961	0
Other investing activities	(16)	(6)
Net cash provided by (used by) investing activities	136,528	(1,712)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	145	0
Repayment of debt	(939)	0
Net cash provided (used) by financing activities	(794)	0
Increase (decrease) in cash and cash equivalents	129,554	(942)
Cash and cash equivalents, beginning of period	4,861	3,706
Cash and cash equivalents, end of period	134,415	2,764
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes	266	8
Cash paid for interest	$ 76	$ 0

Note 1. Significant Accounting Policies and Practices

3 Months Ended

Mar. 31, 2016

Notes

Note 1. Significant Accounting Policies and Practices

1. Significant Accounting Policies and Practices

(A) Business and Organization

(B) Consolidation

(i) IPA Family

(ii) GAF

During the second quarter of 2015, the Company increased its ownership in GAF to 80%. See Note 2 for information regarding the acquisition of GAF.

(C) Basis of Presentation

(D) Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Recently Issued Accounting Standards Not Yet Adopted

(E) Segment Reporting

Note 2. Global Accident Facilities, Llc

3 Months Ended

Mar. 31, 2016

Notes

Note 2. Global Accident Facilities, Llc

2. Global Accident Facilities, LLC

Note 3. Discontinued Operations

3 Months Ended

Mar. 31, 2016

Notes

Note 3. Discontinued Operations

3. Discontinued Operations

The following is a reconciliation of the major line items constituting the pretax profit of discontinued operations for the periods indicated (in thousands):

		Three Months Ended
		March 31,
		2016		2015

Revenue	$	6,406	$	4,122
Selling, general and administrative expenses		(5,564)		(3,113)
Amortization and depreciation		(125)		(172)

Pretax profit of discontinued operations		717		837
Gain on disposal of discontinued operations, pretax		121,317		-

Income from discontinued operations, before income taxes		122,034		837
Income taxes on discontinued operations		8,069		324

Income from discontinued operations	$	113,965	$	513

The following is a reconciliation of the carrying amounts of major classes of assets and liabilities for discontinued operations for the periods indicated (in thousands):

		March 31, 2016		December 31, 2015

Major classes of assets included in discontinued operations:
Cash	$	-	$	904
Restricted Cash		-		20,358
Intangible assets		-		786
Other assets		-		9,670

Assets attributable to discontinued operations	$	-	$	31,718

Major classes of liabilities included in discontinued operations:
Premium and claim funds payable	$	-	$	20,358
Accounts payable and accrued liabilities		953		3,979

Liabilities attributable to discontinued operations	$	953	$	24,337

Note 4. Income Per Common Share

3 Months Ended

Mar. 31, 2016

Notes

Note 4. Income Per Common Share

4. Income Per Common Share

Note 5. Investments

3 Months Ended

Mar. 31, 2016

Notes

Note 5. Investments

5. Investments

The cost (amortized cost with respect to certain fixed maturities), gross unrealized gains, gross unrealized losses and fair value of long-term investment securities are as follows (in thousands):

		MARCH 31, 2016
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
*AVAILABLE-FOR-SALE:*

Corporate securities	$	37,115	$	233	$	(436)	$	36,912
Foreign government		1,078		29		-		1,107
Collateralized mortgage obligations (CMO) – residential		168		2		-		170
States, municipalities and political subdivisions		35,358		722		(156)		35,924
U.S. Government		106,392		243		(6)		106,629
Government sponsored enterprise (GSE)		23		2		-		25
Agency mortgage backed pass through securities (MBS)		32		1		-		33
Redeemable preferred stocks		273		85		-		358
Total fixed maturities	$	180,439	$	1,317	$	(598)	$	181,158

*EQUITY SECURITIES*
*AVAILABLE-FOR-SALE:*

Nonredeemable preferred stocks		2,577		51		(25)		2,603
Total available-for-sale equity securities	$	2,577	$	51	$	(25)	$	2,603

		DECEMBER 31, 2015
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
AVAILABLE-FOR-SALE:

Corporate securities	$	37,044	$	25	$	(683)	$	36,386
Foreign government		1,088		7		(6)		1,089
CMO – residential		187		2		-		189
CMO – commercial		359		119		-		478
States, municipalities and political subdivisions		37,590		237		(178)		37,649
U.S. Government		7,679		59		(4)		7,734
GSE		998		2		(1)		999
MBS		34		1		-		35
Redeemable preferred stocks		273		101		-		374
Total fixed maturities	$	85,252	$	553	$	(872)	$	84,933

*EQUITY SECURITIES*
AVAILABLE-FOR-SALE

Nonredeemable preferred stocks		2,578		19		(3)		2,594
Total available-for-sale equity securities	$	2,578	$	19	$	(3)	$	2,594


		AMORTIZED		FAIR
		COST		VALUE
		(In thousands)

Due in one year or less	$	6,316	$	6,205
Due after one year through five years		121,831		122,135
Due after five years through ten years		24,438		24,885
Due after ten years		27,632		27,705
CMOs and MBSs		222		228

	$	180,439	$	181,158

		March 31, 2016
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	12,208	$	90	$	7,933	$	346	$	20,141	$	436
U.S. government		25,002		6		-		-		25,002		6
States, municipalities and political subdivisions		1,896		79		1,408		77		3,304		156
Nonredeemable preferred stocks		1,301		25		-		-		1,301		25
Total temporarily impaired securities	$	40,407	$	200	$	9,341	$	423	$	49,748	$	623

Number of securities in an unrealized loss position		14				9				23

		December 31, 2015
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	24,627	$	387	$	6,760	$	296	$	31,387	$	683
Foreign government		484		6		-		-		484		6
U.S. government		995		4		-		-		995		4
GSE		973		1		-		-		973		1
States, municipalities and political subdivisions		13,013		98		1,408		80		14,421		178
Nonredeemable preferred stocks		1,324		3		-		-		1,324		3
Total temporarily impaired securities	$	41,416	$	499	$	8,168	$	376	$	49,584	$	875

Number of securities in an unrealized loss position		36				7				43

The following table summarizes the Company’s net investment income for three months ended March 31, 2016 and 2015 (in thousands):

		Three Months Ended
		March 31,
		2016		2015

Fixed maturities	$	628	$	541
Equity securities		51		32
Short-term investments		4		-
Interest relating to the Risk Solutions Sale and Coinsurance Transaction		887		-
Other		(100)		26

Net investment income	$	1,470	$	599

Net realized investment gains for the three months ended March 31, 2016 and 2015 are as follows (in thousands):

		Three Months Ended
		March 31,
		2016		2015

Available-for-sale securities:
Fixed maturities	$	214	$	123
Total available-for-sale securities		214		123

Trading securities		-		1
Change in unrealized gain on trading securities		-		17

Net realized investment gains (losses)	$	214	$	141

Other-Than-Temporary Impairment Evaluations

		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	288	$	288
Securities sold		(288)		-

Balance, end of period	$	-	$	288

Note 6. Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Notes

Note 6. Fair Value Measurements

6. Fair Value Measurements

Level 1 –	Quoted prices for identical instruments in active markets.

Level 2 –	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 –	Instruments where significant value drivers are unobservable.

The following section describes the valuation methodologies we use to measure different financial instruments at fair value.

Investments in fixed maturities and equity securities

The following tables present our financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015 (in thousands):

		March 31, 2016
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,912	$	-	$	36,912
Foreign government		-		1,107		-		1,107
CMO – residential		-		170		-		170
States, municipalities and political
subdivisions		-		35,924		-		35,924
U.S. government		-		106,629		-		106,629
GSE		-		25		-		25
MBS – residential		-		33		-		33
Redeemable preferred stocks		358		-		-		358
Total fixed maturities		358		180,800		-		181,158

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,603		-		-		2,603
Total equity securities		2,603		-		-		2,603

Total Financial Assets	$	2,961	$	180,800	$	-	$	183,761

FINANCIAL LIABILITIES:
Contingent liability	$	-		$	-		$	885		$	885

		December 31, 2015
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,386	$	-	$	36,386
Foreign government		-		1,089		-		1,089
CMO – residential		-		189		-		189
CMO – commercial		-		-		478		478
States, municipalities and political
subdivisions		-		37,649		-		37,649
U.S. government		-		7,734		-		7,734
GSE		-		999		-		999
MBS – residential		-		35		-		35
Redeemable preferred stocks		374		-		-		374
Total fixed maturities		374		84,081		478		84,933

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,594		-		-		2,594
Total equity securities		2,594		-		-		2,594

Total Financial Assets	$	2,968	$	84,081	$	478	$	87,527

FINANCIAL LIABILITIES:
Contingent liability	$	-		$	-		$	885		$	885

		March 31, 2016				December 31, 2015
		Level 2				Level 2
		Fair		Carrying		Fair		Carrying
		Value		Value		Value		Value

FINANCIAL LIABILITIES:
Debt	$	2,198	$	2,250	$	3,137	$	3,189

The following methods and assumptions were used to estimate the fair value of the financial instruments that are not carried at fair value in the Consolidated Financial Statements:

Debt

The fair value of debt with fixed interest rates approximates its carrying amount and is included in Level 2 of the fair value hierarchy.

It is the Company’s policy to recognize transfers of assets and liabilities between levels of the fair value hierarchy at the end of a reporting period.

For the three months ending March 31, 2016, there were no transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy. No securities were transferred out of the Level 2 and into the Level 3 category during the three months ended March 31, 2016 or 2015. The Company does not transfer out of Level 3 and into Level 2 until such time as observable inputs become available and reliable or the range of available independent prices narrow. No securities were transferred out of the Level 3 category during the three months ended March 31, 2016 or 2015. The changes in the carrying value of Level 3 assets and liabilities for the three months ended March 31, 2016 and 2015 are summarized as follows (in thousands):

		Three Months Ended March 31, 2016
		Financial Assets				Financial Liabilities
				Total				Total
		CMOs		Level 3		Contingent		Level 3
		Commercial		Assets		Liability		Liabilities

Balance, beginning of period	$	478	$	478	$	885	$	885

Gains (losses) included in earnings:
Net realized investment gains (losses)		141		141		-		-

Sales of securities		(471)		(471)		-		-
Repayments and amortization of fixed maturities		(30)		(30)		-		-

Net unrealized gain included in accumulated other
comprehensive income (loss)		(118)		(118)		-		-

Balance, end of period	$	-	$	-	$	885	$	885

		Three Months Ended
		March 31, 2015
		Financial Assets
				Total
		CMOs		Level 3
		Commercial		Assets

Balance, beginning of period	$	381	$	381

Net unrealized gain included
in accumulated other
comprehensive income (loss)		25		25

Balance, end of period	$	406	$	406

Note 7. Other Intangible Assets

3 Months Ended

Mar. 31, 2016

Notes

Note 7. Other Intangible Assets

7. Goodwill and Other Intangible Assets

The carrying amount of goodwill was $5,703,000 at both March 31, 2016 and December 31, 2015.

The change in the carrying amount of other intangible assets for the three months ended March 31, 2016 and 2015 are as follows (in thousands):

		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	13,327	$	8,637
Amortization expense		(241)		(88)

Balance, end of period	$	13,086	$	8,549

Note 8. Related-party Transactions

3 Months Ended

Mar. 31, 2016

Notes

Note 8. Related-party Transactions

8. Related-Party Transactions

Note 9. Reinsurance

3 Months Ended

Mar. 31, 2016

Notes

Note 9. Reinsurance

9. Reinsurance

Note 10. Share-based Compensation

3 Months Ended

Mar. 31, 2016

Notes

Note 10. Share-based Compensation

10. Share-Based Compensation

Stock Options

The following table summarizes information regarding outstanding and exercisable options as of March 31, 2016:

		Outstanding		Exercisable

Number of options		57,780		48,891
Weighted average exercise price per share	$	8.49	$	8.24
Aggregate intrinsic value of options	$	490,000	$	403,000
Weighted average contractual term remaining		4.50 years		3.88 years

The Company’s stock option activity for the three months ended March 31, 2016 is as follows:

	No. of	Weighted
	Shares	Average
	Under	Exercise
	Option	Price

Balance, December 31, 2015	71,558	$	8.88

Exercised	(13,778)		10.52

Balance, March 31, 2016	57,780	$	8.49

No options were granted in 2016.

Compensation expense of $11,000 was recognized for both the three months ended March 31, 2016 and 2015 for the portion of the fair value of stock options vesting during that period.

As of March 31, 2016, there was approximately $29,000 of total unrecognized compensation expense related to non-vested options that will be recognized over the remaining requisite service periods.

Note 11. Income Taxes

3 Months Ended

Mar. 31, 2016

Notes

Note 11. Income Taxes

11. Income Taxes

12. Subsequent Event

3 Months Ended

Mar. 31, 2016

Notes

12. Subsequent Event

12. Subsequent Event

Note 1. Significant Accounting Policies and Practices: Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Basis of Presentation

(C) Basis of Presentation

Note 1. Significant Accounting Policies and Practices: Recent Accounting Pronouncements (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Recent Accounting Pronouncements

(D) Recent Accounting Pronouncements

Recently Adopted Accounting Standards

Recently Issued Accounting Standards Not Yet Adopted

Note 1. Significant Accounting Policies and Practices: Segment Reporting, Policy (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Segment Reporting, Policy

(E) Segment Reporting

Note 6. Fair Value Measurements: Fair Value of Financial Instruments Policy (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Fair Value of Financial Instruments Policy

Level 1 –	Quoted prices for identical instruments in active markets.

Level 2 –	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 –	Instruments where significant value drivers are unobservable.

The following section describes the valuation methodologies we use to measure different financial instruments at fair value.

Investments in fixed maturities and equity securities

Note 6. Fair Value Measurements: Fair Value Transfer, Policy (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Fair Value Transfer, Policy	It is the Company’s policy to recognize transfers of assets and liabilities between levels of the fair value hierarchy at the end of a reporting period.

Note 10. Share-based Compensation: Share Based Compensation Option And Incentive Plans Policy (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Share Based Compensation Option And Incentive Plans Policy	Under the terms of the Company’s stock-based compensation plan, option exercise prices are equal to the quoted market price of the shares at the date of grant; option terms are ten years; and vesting periods range from three to four years. The Company may also grant shares of restricted stock, stock appreciation rights and share-based performance awards. Restricted shares are valued at the quoted market price of the shares at the date of grant, and have a three year vesting period.

Note 3. Discontinued Operations: Disposal Groups, Including Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Disposal Groups, Including Discontinued Operations

The following is a reconciliation of the major line items constituting the pretax profit of discontinued operations for the periods indicated (in thousands):

		Three Months Ended
		March 31,
		2016		2015

Revenue	$	6,406	$	4,122
Selling, general and administrative expenses		(5,564)		(3,113)
Amortization and depreciation		(125)		(172)

Pretax profit of discontinued operations		717		837
Gain on disposal of discontinued operations, pretax		121,317		-

Income from discontinued operations, before income taxes		122,034		837
Income taxes on discontinued operations		8,069		324

Income from discontinued operations	$	113,965	$	513

The following is a reconciliation of the carrying amounts of major classes of assets and liabilities for discontinued operations for the periods indicated (in thousands):

		March 31, 2016		December 31, 2015

Major classes of assets included in discontinued operations:
Cash	$	-	$	904
Restricted Cash		-		20,358
Intangible assets		-		786
Other assets		-		9,670

Assets attributable to discontinued operations	$	-	$	31,718

Major classes of liabilities included in discontinued operations:
Premium and claim funds payable	$	-	$	20,358
Accounts payable and accrued liabilities		953		3,979

Liabilities attributable to discontinued operations	$	953	$	24,337

Note 5. Investments: Schedule of Available-for-sale Securities (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Available-for-sale Securities

		MARCH 31, 2016
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
*AVAILABLE-FOR-SALE:*

Corporate securities	$	37,115	$	233	$	(436)	$	36,912
Foreign government		1,078		29		-		1,107
Collateralized mortgage obligations (CMO) – residential		168		2		-		170
States, municipalities and political subdivisions		35,358		722		(156)		35,924
U.S. Government		106,392		243		(6)		106,629
Government sponsored enterprise (GSE)		23		2		-		25
Agency mortgage backed pass through securities (MBS)		32		1		-		33
Redeemable preferred stocks		273		85		-		358
Total fixed maturities	$	180,439	$	1,317	$	(598)	$	181,158

*EQUITY SECURITIES*
*AVAILABLE-FOR-SALE:*

Nonredeemable preferred stocks		2,577		51		(25)		2,603
Total available-for-sale equity securities	$	2,577	$	51	$	(25)	$	2,603

		DECEMBER 31, 2015
				GROSS		GROSS
		AMORTIZED		UNREALIZED		UNREALIZED		FAIR
		COST		GAINS		LOSSES		VALUE

*FIXED MATURITIES*
AVAILABLE-FOR-SALE:

Corporate securities	$	37,044	$	25	$	(683)	$	36,386
Foreign government		1,088		7		(6)		1,089
CMO – residential		187		2		-		189
CMO – commercial		359		119		-		478
States, municipalities and political subdivisions		37,590		237		(178)		37,649
U.S. Government		7,679		59		(4)		7,734
GSE		998		2		(1)		999
MBS		34		1		-		35
Redeemable preferred stocks		273		101		-		374
Total fixed maturities	$	85,252	$	553	$	(872)	$	84,933

*EQUITY SECURITIES*
AVAILABLE-FOR-SALE

Nonredeemable preferred stocks		2,578		19		(3)		2,594
Total available-for-sale equity securities	$	2,578	$	19	$	(3)	$	2,594

Note 5. Investments: Investments Classified by Contractual Maturity Date (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Investments Classified by Contractual Maturity Date


		AMORTIZED		FAIR
		COST		VALUE
		(In thousands)

Due in one year or less	$	6,316	$	6,205
Due after one year through five years		121,831		122,135
Due after five years through ten years		24,438		24,885
Due after ten years		27,632		27,705
CMOs and MBSs		222		228

	$	180,439	$	181,158

Note 5. Investments: Schedule of Unrealized Loss on Investments (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Unrealized Loss on Investments

		March 31, 2016
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	12,208	$	90	$	7,933	$	346	$	20,141	$	436
U.S. government		25,002		6		-		-		25,002		6
States, municipalities and political subdivisions		1,896		79		1,408		77		3,304		156
Nonredeemable preferred stocks		1,301		25		-		-		1,301		25
Total temporarily impaired securities	$	40,407	$	200	$	9,341	$	423	$	49,748	$	623

Number of securities in an unrealized loss position		14				9				23

		December 31, 2015
		Less than 12 Months				12 Months or Longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Loss		Value		Losses		Value		Losses
FIXED MATURITIES:

Corporate securities	$	24,627	$	387	$	6,760	$	296	$	31,387	$	683
Foreign government		484		6		-		-		484		6
U.S. government		995		4		-		-		995		4
GSE		973		1		-		-		973		1
States, municipalities and political subdivisions		13,013		98		1,408		80		14,421		178
Nonredeemable preferred stocks		1,324		3		-		-		1,324		3
Total temporarily impaired securities	$	41,416	$	499	$	8,168	$	376	$	49,584	$	875

Number of securities in an unrealized loss position		36				7				43

Note 5. Investments: Investment Income (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Investment Income

		Three Months Ended
		March 31,
		2016		2015

Fixed maturities	$	628	$	541
Equity securities		51		32
Short-term investments		4		-
Interest relating to the Risk Solutions Sale and Coinsurance Transaction		887		-
Other		(100)		26

Net investment income	$	1,470	$	599

Note 5. Investments: Realized Gain (Loss) on Investments (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Realized Gain (Loss) on Investments

		Three Months Ended
		March 31,
		2016		2015

Available-for-sale securities:
Fixed maturities	$	214	$	123
Total available-for-sale securities		214		123

Trading securities		-		1
Change in unrealized gain on trading securities		-		17

Net realized investment gains (losses)	$	214	$	141

Note 5. Investments: Other than Temporary Impairment, Credit Losses Recognized in Earnings (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Other than Temporary Impairment, Credit Losses Recognized in Earnings

		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	288	$	288
Securities sold		(288)		-

Balance, end of period	$	-	$	288

Note 6. Fair Value Measurements: Fair Value, Assets Measured on Recurring Basis (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Fair Value, Assets Measured on Recurring Basis

		March 31, 2016
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,912	$	-	$	36,912
Foreign government		-		1,107		-		1,107
CMO – residential		-		170		-		170
States, municipalities and political
subdivisions		-		35,924		-		35,924
U.S. government		-		106,629		-		106,629
GSE		-		25		-		25
MBS – residential		-		33		-		33
Redeemable preferred stocks		358		-		-		358
Total fixed maturities		358		180,800		-		181,158

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,603		-		-		2,603
Total equity securities		2,603		-		-		2,603

Total Financial Assets	$	2,961	$	180,800	$	-	$	183,761

FINANCIAL LIABILITIES:
Contingent liability	$	-		$	-		$	885		$	885

		December 31, 2015
		Level 1		Level 2		Level 3		Total

FINANCIAL ASSETS:
Fixed maturities available-for-sale:
Corporate securities	$	-	$	36,386	$	-	$	36,386
Foreign government		-		1,089		-		1,089
CMO – residential		-		189		-		189
CMO – commercial		-		-		478		478
States, municipalities and political
subdivisions		-		37,649		-		37,649
U.S. government		-		7,734		-		7,734
GSE		-		999		-		999
MBS – residential		-		35		-		35
Redeemable preferred stocks		374		-		-		374
Total fixed maturities		374		84,081		478		84,933

Equity securities available-for-sale:
Nonredeemable preferred stocks		2,594		-		-		2,594
Total equity securities		2,594		-		-		2,594

Total Financial Assets	$	2,968	$	84,081	$	478	$	87,527

FINANCIAL LIABILITIES:
Contingent liability	$	-		$	-		$	885		$	885

Note 6. Fair Value Measurements: Fair Value, by Balance Sheet Grouping (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Fair Value, by Balance Sheet Grouping

		March 31, 2016				December 31, 2015
		Level 2				Level 2
		Fair		Carrying		Fair		Carrying
		Value		Value		Value		Value

FINANCIAL LIABILITIES:
Debt	$	2,198	$	2,250	$	3,137	$	3,189

Note 6. Fair Value Measurements: Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

		Three Months Ended March 31, 2016
		Financial Assets				Financial Liabilities
				Total				Total
		CMOs		Level 3		Contingent		Level 3
		Commercial		Assets		Liability		Liabilities

Balance, beginning of period	$	478	$	478	$	885	$	885

Gains (losses) included in earnings:
Net realized investment gains (losses)		141		141		-		-

Sales of securities		(471)		(471)		-		-
Repayments and amortization of fixed maturities		(30)		(30)		-		-

Net unrealized gain included in accumulated other
comprehensive income (loss)		(118)		(118)		-		-

Balance, end of period	$	-	$	-	$	885	$	885

		Three Months Ended
		March 31, 2015
		Financial Assets
				Total
		CMOs		Level 3
		Commercial		Assets

Balance, beginning of period	$	381	$	381

Net unrealized gain included
in accumulated other
comprehensive income (loss)		25		25

Balance, end of period	$	406	$	406

Note 7. Other Intangible Assets: Schedule of Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Intangible Assets

		Three Months Ended
		March 31,
		2016		2015

Balance, beginning of period	$	13,327	$	8,637
Amortization expense		(241)		(88)

Balance, end of period	$	13,086	$	8,549

Note 10. Share-based Compensation: Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable

		Outstanding		Exercisable

Number of options		57,780		48,891
Weighted average exercise price per share	$	8.49	$	8.24
Aggregate intrinsic value of options	$	490,000	$	403,000
Weighted average contractual term remaining		4.50 years		3.88 years

Note 10. Share-based Compensation: Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value

	No. of	Weighted
	Shares	Average
	Under	Exercise
	Option	Price

Balance, December 31, 2015	71,558	$	8.88

Exercised	(13,778)		10.52

Balance, March 31, 2016	57,780	$	8.49

Note 1. Significant Accounting Policies and Practices (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2015	Mar. 31, 2016	Mar. 30, 2016	Dec. 31, 2014
Minority Interest Ownership Percentage By Parent	100.00%
Payments to Noncontrolling Interests	$ 126
Majestic Underwriters Member
Equity Method Investment, Ownership Percentage			23.00%
HIOSubsidiaryMember
Minority Interest Ownership Percentage By Parent		51.00%
GAFSubsidiaryMember
Minority Interest Ownership Percentage By Parent		80.00%
Business Combination, Step Acquisition, Equity Interest in Acquiree, Including Subsequent Acquisition, Percentage		80.00%
IPADSubsidiaryMember
Minority Interest Ownership Percentage By Parent		92.00%
IHCAffiliatedEntityMember
Minority Interest Ownership Percentage By Parent		92.00%
IPASubsidiaryMember
Minority Interest Ownership Percentage By Parent				90.00%

Note 2. Global Accident Facilities, Llc (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2015	Mar. 31, 2016	Mar. 31, 2015
TOTAL REVENUES		$ 29,402	$ 39,435
Nonmonetary Transaction, Gain (Loss) Recognized on Transfer	$ 1,195
GAF Acquiree Member
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage	40.00%
Business Combination, Step Acquisition, Equity Interest in Acquiree, Including Subsequent Acquisition, Percentage	80.00%
Payments to Acquire Businesses, Gross	$ 325
Business Combination, Consideration Transferred, Other	1,195
Equity Method Investments	1,908
TOTAL REVENUES		2,058
Operating Expenses		$ 2,293
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Loss	692
Business Combunations Step Acquisition Equity Interest in Acquiree Fair Value 2	1,216
GAF Acquiree Member \| Other Income
Business Combination Step Acquisition Total Gain (loss)	$ 503

Note 3. Discontinued Operations (Details) - RiskSolutionsSaleAndCoinsuranceTransactionMember - Discontinued Operations, Disposed of by Sale $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Disposal Group, Including Discontinued Operation, Consideration	$ 152,500
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax, Portion Attributable to Parent	$ 113,499

Note 3. Discontinued Operations: Disposal Groups, Including Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income from discontinued operations, before income taxes	$ 122,034	$ 837
Income taxes on discontinued operations	8,069	324
Income from discontinued operations	113,965	513
Cash Provided by (Used in) Operating Activities, Discontinued Operations	1,106	136
Assets attributable to discontinued operations	0		$ 31,718
Liabilities attributable to discontinued operations	953		24,337
RiskSolutionsSaleAndCoinsuranceTransactionMember \| Discontinued Operations, Disposed of by Sale
Disposal Group, Including Discontinued Operation, Revenue	6,406	4,122
Disposal Group, Including Discontinued Operation, General and Administrative Expense	5,564	3,113
Disposal Group, Including Discontinued Operation, Depreciation and Amortization	125	172
Discontinued Operation, Income (Loss) from Discontinued Operation During Phase-out Period, before Income Tax	717	837
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax	121,317
Income from discontinued operations, before income taxes	122,034	837
Income taxes on discontinued operations	8,069	324
Income from discontinued operations	113,965	$ 513
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	(38,565)
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents			904
Disposal Group Including Discontinued Operation Restricted Cash			20,358
Disposal Group, Including Discontinued Operation, Intangible Assets			786
Disposal Group, Including Discontinued Operation, Other Assets			9,670
Assets attributable to discontinued operations			31,718
Disposal Group Including Discontinued Operation Premium and Claim Funds Payable			20,358
Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities	953		3,979
Liabilities attributable to discontinued operations	953		$ 24,337
RiskSolutionsSaleAndCoinsuranceTransactionMember \| Discontinued Operations, Disposed of by Sale \| State and Local Jurisdiction
Income taxes on discontinued operations	5,799
RiskSolutionsSaleAndCoinsuranceTransactionMember \| Discontinued Operations, Disposed of by Sale \| Domestic Tax Authority
Income taxes on discontinued operations	$ 2,270

Note 4. Income Per Common Share (Details) - shares	3 Months Ended
Note 4. Income Per Common Share (Details) - shares	Mar. 31, 2016	Mar. 31, 2015
Details
Incremental Common Shares Attributable to Share-based Payment Arrangements	18,000	15,000

Note 5. Investments: Schedule of Available-for-sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Available For Sale Debt Securities Amortized Cost Basis	$ 180,439	$ 85,252
Available-for-sale Debt Securities Gross Unrealized Gain	1,317	553
Available-for-sale Debt Securities, Gross Unrealized Loss	(598)	(872)
Fixed maturities available-for-sale, at fair value	181,158	84,933
Available-for-sale Equity Securities, Amortized Cost Basis	2,577	2,578
Available-for-sale Equity Securities, Gross Unrealized Gain	51	19
Available-for-sale Equity Securities, Gross Unrealized Loss	(25)	(3)
Equity securities available-for-sale, at fair value	2,603	2,594
Corporate Debt Securities
Available For Sale Debt Securities Amortized Cost Basis	37,115	37,044
Available-for-sale Debt Securities Gross Unrealized Gain	233	25
Available-for-sale Debt Securities, Gross Unrealized Loss	(436)	(683)
Fixed maturities available-for-sale, at fair value	36,912	36,386
Foreign Government Debt Securities
Available For Sale Debt Securities Amortized Cost Basis	1,078	1,088
Available-for-sale Debt Securities Gross Unrealized Gain	29	7
Available-for-sale Debt Securities, Gross Unrealized Loss		(6)
Fixed maturities available-for-sale, at fair value	1,107	1,089
Residential Mortgage Backed Securities
Available For Sale Debt Securities Amortized Cost Basis	168	187
Available-for-sale Debt Securities Gross Unrealized Gain	2	2
Fixed maturities available-for-sale, at fair value	170	189
US States and Political Subdivisions Debt Securities
Available For Sale Debt Securities Amortized Cost Basis	35,358	37,590
Available-for-sale Debt Securities Gross Unrealized Gain	722	237
Available-for-sale Debt Securities, Gross Unrealized Loss	(156)	(178)
Fixed maturities available-for-sale, at fair value	35,924	37,649
US Treasury Securities
Available For Sale Debt Securities Amortized Cost Basis	106,392	7,679
Available-for-sale Debt Securities Gross Unrealized Gain	243	59
Available-for-sale Debt Securities, Gross Unrealized Loss	(6)	(4)
Fixed maturities available-for-sale, at fair value	106,629	7,734
US Government-sponsored Enterprises Debt Securities
Available For Sale Debt Securities Amortized Cost Basis	23	998
Available-for-sale Debt Securities Gross Unrealized Gain	2	2
Available-for-sale Debt Securities, Gross Unrealized Loss		(1)
Fixed maturities available-for-sale, at fair value	25	999
US Government Agencies Debt Securities
Available For Sale Debt Securities Amortized Cost Basis	32	34
Available-for-sale Debt Securities Gross Unrealized Gain	1	1
Fixed maturities available-for-sale, at fair value	33	35
Redeemable Preferred Stock
Available For Sale Debt Securities Amortized Cost Basis	273	273
Available-for-sale Debt Securities Gross Unrealized Gain	85	101
Fixed maturities available-for-sale, at fair value	358	374
Nonredeemable Preferred Stock
Available-for-sale Equity Securities, Amortized Cost Basis	2,577	2,578
Available-for-sale Equity Securities, Gross Unrealized Gain	51	19
Available-for-sale Equity Securities, Gross Unrealized Loss	(25)	(3)
Equity securities available-for-sale, at fair value	$ 2,603	2,594
Commercial Mortgage Backed Securities
Available For Sale Debt Securities Amortized Cost Basis		359
Available-for-sale Debt Securities Gross Unrealized Gain		119
Fixed maturities available-for-sale, at fair value		$ 478

Note 5. Investments: Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Details
Available-for-sale Securities, Debt Maturities, Next Rolling Twelve Months, Amortized Cost Basis	$ 6,316
Available-for-sale Securities, Debt Maturities, Next Rolling Twelve Months, Fair Value	6,205
Available-for-sale Securities, Debt Maturities, Rolling Year Two Through Five, Amortized Cost Basis	121,831
Available-for-sale Securities, Debt Maturities, Rolling Year Two Through Five, Fair Value	122,135
Available-for-sale Securities, Debt Maturities, Rolling Year Six Through Ten, Amortized Cost Basis	24,438
Available-for-sale Securities, Debt Maturities, Rolling Year Six Through Ten, Fair Value	24,885
Available-for-sale Securities, Debt Maturities, Rolling after Year Ten, Amortized Cost Basis	27,632
Available-for-sale Securities, Debt Maturities, Rolling after Year Ten, Fair Value	27,705
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	222
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value	228
Available For Sale Debt Securities Amortized Cost Basis	180,439	$ 85,252
Fixed maturities available-for-sale, at fair value	$ 181,158	$ 84,933

Note 5. Investments: Schedule of Unrealized Loss on Investments (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 40,407	$ 41,416
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	200	499
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	9,341	8,168
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss	423	376
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	49,748	49,584
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 623	$ 875
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions Less Than 12 Months	14	36
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions More Than 12 Months	9	7
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	23	43
Corporate Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 12,208	$ 24,627
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	90	387
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	7,933	6,760
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss	346	296
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	20,141	31,387
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	436	683
US Treasury Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	25,002	995
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	6	4
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	25,002	995
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	6	4
US States and Political Subdivisions Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	1,896	13,013
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	79	98
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,408	1,408
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss	77	80
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	3,304	14,421
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	156	178
Nonredeemable Preferred Stock
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	1,301	1,324
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss	25	3
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	1,301	1,324
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 25	3
Foreign Government Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value		484
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss		6
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		484
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss		6
US Government-sponsored Enterprises Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value		973
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss		1
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		973
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss		$ 1

Note 5. Investments: Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net Investment Income	$ 1,470	$ 599
RiskSolutionsSaleAndCoinsuranceTransactionMember
Net Investment Income	887
Fixed Maturities
Net Investment Income	628	541
Equity Securities
Net Investment Income	51	32
Short-term Investments
Net Investment Income	4
Other Investments
Net Investment Income	$ (100)	$ 26

Note 5. Investments: Realized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Available for sale Securities Gross Realized Gain Loss Excluding Other Than Temporary Impairments	$ 214	$ 123
Trading Securities, Realized Gain (Loss)		1
Trading Securities, Change in Unrealized Holding Gain (Loss)		17
Net realized investment gains (losses)	214	141
Debt Securities
Available-for-sale Securities, Realized Losses, Excluding Other than Temporary Impairments	$ 214	$ 123

Note 5. Investments (Details) - USD ($) $ in Thousands	3 Months Ended
Note 5. Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Mar. 31, 2015
Details
Proceeds from Sale of Available-for-sale Securities	$ 3,953	$ 10,041
Available-for-sale Securities, Gross Realized Gains	239	157
Available-for-sale Securities, Gross Realized Losses	25	34
Net impairment losses recognized in earnings	$ 0	$ 0

Note 5. Investments: Other than Temporary Impairment, Credit Losses Recognized in Earnings (Details) - Available-for-sale Securities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held		$ 288	$ 288
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Reductions, Securities Sold	$ 288

Note 6. Fair Value Measurements: Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fixed maturities available-for-sale, at fair value	$ 181,158	$ 84,933
Equity securities available-for-sale, at fair value	2,603	2,594
Assets, Fair Value Disclosure	183,761	87,527
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability	885	885
Corporate Debt Securities
Fixed maturities available-for-sale, at fair value	36,912	36,386
Foreign Government Debt Securities
Fixed maturities available-for-sale, at fair value	1,107	1,089
Residential Mortgage Backed Securities
Fixed maturities available-for-sale, at fair value	170	189
US States and Political Subdivisions Debt Securities
Fixed maturities available-for-sale, at fair value	35,924	37,649
US Treasury Securities
Fixed maturities available-for-sale, at fair value	106,629	7,734
US Government-sponsored Enterprises Debt Securities
Fixed maturities available-for-sale, at fair value	25	999
US Government Agencies Debt Securities
Fixed maturities available-for-sale, at fair value	33	35
Redeemable Preferred Stock
Fixed maturities available-for-sale, at fair value	358	374
Nonredeemable Preferred Stock
Equity securities available-for-sale, at fair value	2,603	2,594
Commercial Mortgage Backed Securities
Fixed maturities available-for-sale, at fair value		478
Fair Value, Inputs, Level 1
Fixed maturities available-for-sale, at fair value	358	374
Equity securities available-for-sale, at fair value	2,603	2,594
Assets, Fair Value Disclosure	2,961	2,968
Fair Value, Inputs, Level 1 \| Redeemable Preferred Stock
Fixed maturities available-for-sale, at fair value	358	374
Fair Value, Inputs, Level 1 \| Nonredeemable Preferred Stock
Equity securities available-for-sale, at fair value	2,603	2,594
Fair Value, Inputs, Level 2
Fixed maturities available-for-sale, at fair value	180,800	84,081
Assets, Fair Value Disclosure	180,800	84,081
Fair Value, Inputs, Level 2 \| Corporate Debt Securities
Fixed maturities available-for-sale, at fair value	36,912	36,386
Fair Value, Inputs, Level 2 \| Foreign Government Debt Securities
Fixed maturities available-for-sale, at fair value	1,107	1,089
Fair Value, Inputs, Level 2 \| Residential Mortgage Backed Securities
Fixed maturities available-for-sale, at fair value	170	189
Fair Value, Inputs, Level 2 \| US States and Political Subdivisions Debt Securities
Fixed maturities available-for-sale, at fair value	35,924	37,649
Fair Value, Inputs, Level 2 \| US Treasury Securities
Fixed maturities available-for-sale, at fair value	106,629	7,734
Fair Value, Inputs, Level 2 \| US Government-sponsored Enterprises Debt Securities
Fixed maturities available-for-sale, at fair value	25	999
Fair Value, Inputs, Level 2 \| US Government Agencies Debt Securities
Fixed maturities available-for-sale, at fair value	33	35
Fair Value, Inputs, Level 3
Fixed maturities available-for-sale, at fair value		478
Assets, Fair Value Disclosure		478
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability	$ 885	885
Fair Value, Inputs, Level 3 \| Commercial Mortgage Backed Securities
Fixed maturities available-for-sale, at fair value		$ 478

Note 6. Fair Value Measurements: Fair Value, by Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt	$ 2,250	$ 3,189
Fair Value, Inputs, Level 2 \| Estimate of Fair Value Measurement
Debt	2,198	3,137
Fair Value, Inputs, Level 2 \| Reported Value Measurement
Debt	$ 2,250	$ 3,189

Note 6. Fair Value Measurements: Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	$ 885
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	885
Contingent Liability
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	885
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	885
Fair Value, Inputs, Level 3
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	478	$ 381
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	141
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales	(471)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements	(30)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	(118)	25
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value		406
Commercial Mortgage Backed Securities
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	478	381
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	141
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales	(471)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements	(30)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	$ (118)	25
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value		$ 406

Note 7. Other Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Details
Goodwill	$ 5,703	$ 5,703

Note 7. Other Intangible Assets: Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Details
Intangible assets	$ 13,086	$ 8,549	$ 13,327	$ 8,637
Amortization of Intangible Assets	$ (241)	$ (88)

Note 8. Related-party Transactions (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Selling, general and administrative expenses

$ 13,506

^[1]

$ 14,952

^[2]

IHCAffiliatedEntityMember

Selling, general and administrative expenses

$ 391

$ 172

[1]	$3,241 from related parties
[2]	$5,805 from related parties

Note 9. Reinsurance (Details) - Stop Loss Coinsurance Transaction With Westport Insurance Company $ in Thousands	1 Months Ended
	Jan. 31, 2016 USD ($)
Material Nonrecurring Reinsurance Transactions	Effective January 1, 2016, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions was co-insured in connection with the Risk Solutions Sale and Coinsurance Transaction (see Note 3). As a result of this transaction, the Company recorded $18,674,000 of estimated amounts due from reinsurers. Stop-loss business produced by Risk Solutions was 100% co-insured, accordingly the Condensed Consolidated Statements of Income reflect the co-insurance effective January 31, 2016.
Due from reinsurers	$ 18,674

Note 10. Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Details
Share-based compensation expense	$ 11	$ 11
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	4	$ 4
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options	$ 29

Note 10. Share-based Compensation: Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	57,780	71,558
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	48,891
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 8.49	$ 8.88
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 8.24
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 490
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 403
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	4 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 10 months 17 days

Note 10. Share-based Compensation: Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (Details) - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	57,780	71,558
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 8.49	$ 8.88
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(13,778)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 10.52

Note 11. Income Taxes (Details) - USD ($)
$ in Thousands

1 Months Ended

Mar. 31, 2016

Dec. 31, 2015

Operating Loss Carryforwards

^[1]

$ 148,294

Net deferred tax asset

15,848

$ 15,153

Domestic Tax Authority

Operating Loss Carryforwards, Utilization, Amount

$ 110,185

[1]	Expires in varying amounts through the year 2028 with a significant portion expiring in 2020.

This regulatory filing also includes additional resources:
exh312.pdf
exh311.pdf
exh322.pdf
exh321.pdf
amic10q.pdf

American Independence Corp. (NASDAQ:AMIC)
Historical Stock Chart
From May 2024 to Jun 2024

Click Here for more American Independence Corp. Charts.

American Independence Corp. (NASDAQ:AMIC)
Historical Stock Chart
From Jun 2023 to Jun 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

AMIC American Independence Corp.

American Independence Corp News

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

AMIC American Independence Corp.

American Independence Corp News

Your Recent History

Company

Business

Popular

Get The App