What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-07 compared with 2024-03-15 · 1258 added, 825 removed, 1177 unchanged (64% of the section changed)

Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Shareholders of NI Holdings, Inc.

Opinions on the Consolidated Financial Statements

and Internal Control over Financial Reporting

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

NI Holdings, Inc.

Opinions on the Consolidated Financial Statements and Internal

Control over Financial Reporting

We have audited the accompanying consolidated

balance sheets of NI Holdings, Inc.

and Subsidiaries (collectively, the “Company”) as of December 31, 2023, and 2022, and

the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows

for each of the years in the three-year period ended December 31, 2023, and the related notes and the schedule listed in Item 15(a)(2)

(collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control

over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013)

balance sheet of NI Holdings, Inc.

and Subsidiaries (the “Company”) as of December 31, 2024, and the consolidated statements

of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year ended December 31, 2024,

and the schedule listed in Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal

Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements

referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and

the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity

with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material

respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated

Framework (2013) issued by COSO.

Basis for Opinions

In our opinion, the consolidated financial

statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024,

and the results of its operations and its cash flows for the year ended, in conformity with accounting principles generally accepted in

the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial

reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued

We also have audited the adjustments to the Company’s

2023 and 2022 consolidated financial statements to retrospectively apply the change in accounting for (a) discontinued operations described

in Note 3 and Note 20, and (b) the adoption of ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures

described in Note 21.

In our opinion, such adjustments are appropriate and have been properly applied.

We were not engaged to audit, review,

or apply any procedures to the 2023 or 2022 consolidated financial statements of the Company other than with respect to the adjustments,

and, accordingly, we do not express an opinion or any other form of assurance on the 2023 or 2022 consolidated financial statements taken

Basis for Opinion

The Company’s management is responsible

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Control over Financial Reporting .

Our responsibility is to express an opinion on the Company’s consolidated financial statements

and an opinion on the Company’s internal control over financial reporting based on our audits.

Our responsibility is to express an opinion on the Company’s

consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered

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Commission and the PCAOB.

We conducted our audits in accordance with the

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial

reporting was maintained in all material respects.

Our audits of the consolidated financial statements

included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,

assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control

based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control

over Financial Reporting

A company’s internal control over financial

reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of

consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

Our audit of the consolidated financial statements

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts

and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal

control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk

that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit

provides a reasonable basis for our opinions.

Definitions and Limitations of Internal

Control over Financial Reporting

A company’s internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable consolidated

financial statements for external purposes in accordance with generally

accepted accounting principles.

internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,

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(2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally

accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations

of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted

accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management

and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal

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with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current-period audit of the consolidated financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in

any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter

below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of Losses and Loss Adjustment Expenses

(1) relate to accounts or disclosures that are material to the consolidated financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not

alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical

audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of Losses and Loss Adjustment

Expenses Reserves

Critical Audit Matter Description

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by the Company using actuarial methods, models, assumptions, and judgment to estimate the reserves required to pay for and settle all

outstanding insured claims as of the financial statement date.

outstanding insured claims as of the consolidated financial statement date.

There is significant uncertainty inherent in determining management’s

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the basis for the actuarial analysis, including historical claims data, to test the reasonableness of key inputs to the actuarial estimate.

● We compared the Company’s prior years estimates

of expected incurred losses to actual experience during the current year to identify potential bias in the determination of losses and

loss expenses reserves.

/s/ Mazars USA LLP

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2024.

New York, New York

March 7, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors

Shareholders of NI Holdings, Inc.

Opinion on the Consolidated Financial Statements

We have audited,

before the effects of the adjustments to retrospectively apply the change in accounting for (a) discontinued operations described in Note

3 and Note 20, and (b) the adoption of ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures

described in Note 21, the accompanying consolidated balance sheet of NI Holdings, Inc.

and Subsidiaries (collectively, the “Company”)

as of December 31, 2023, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’

equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes and the schedule listed

in Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

The consolidated financial statements,

before the effects of the adjustments to retrospectively apply the change in accounting for (a) discontinued operations described in Note

3 and Note 20, and (b) the adoption of ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures

described in Note 21, are not presented herein.

In our opinion,

the consolidated financial statements referred to above, before the effects of the adjustments to retrospectively apply the change in

accounting for (a) discontinued operations described in Note 3 and Note 20, and (b) the adoption of ASU 2023-07, Segment Reporting (Topic

280) – Improvements to Reportable Segment Disclosures described in Note 21, present fairly, in all material respects, the financial

position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting for (a) discontinued

operations described in Note 3 and Note 20, and (b) the adoption of ASU 2023-07, Segment Reporting (Topic 280) – Improvements to

Reportable Segment Disclosures described in Note 21, and, accordingly, we do not express an opinion or any other form of assurance about

whether such adjustments are appropriate and have been properly applied.

Those adjustments were audited by Forvis Mazars, LLP.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect

to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

/s/ Mazars USA

We have served as the

Company’s auditor from 2016 to 2024.

Fort Washington, Pennsylvania

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Deferred policy acquisition costs

Reinsurance premiums receivable

Reinsurance premiums receivable (payable)

Reinsurance recoverables on losses (net of allowance for expected credit losses of $ 0 at December 31, 2024 and 2023)

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Goodwill and other intangibles

Assets of discontinued operations

Unpaid losses and loss adjustment expenses

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Accrued expenses and other liabilities

Liabilities of discontinued operations

Total liabilities

Shareholders’ equity:

Common stock, $ 0.01 par value, authorized 25,000,000 shares, issued:

Common stock, $ 0.01 par value, authorized 25,000,000 shares,

23,000,000 shares;

and outstanding:

2024 – 20,673,268 shares, 2023 – 20,599,908 shares

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Retained earnings

Accumulated other comprehensive income (loss), net of income taxes

Accumulated other comprehensive loss, net of income taxes

Treasury stock, at cost, 2024 – 2,281,252 shares, 2023 – 2,330,297 shares

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Total expenses

Income (loss) before income taxes

Income (loss) from continuing operations before income taxes

Income tax expense (benefit)

Net income (loss)

Net income (loss) from continuing operations

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to NI Holdings, Inc.

Net income (loss) from continuing operations attributable to NI Holdings, Inc.

Loss from discontinued operations, net of income taxes

Loss on sale of discontinued operations, net of income taxes

Earnings (loss) per common share from continuing operations:

Earnings (loss) per common share:

Weighted average common shares outstanding used in basic per common share calculations

Weighted average common share outstanding used in basic per common share calculations

Dilutive securities

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Net of Income

Treasury Stock

Shareholders’

January 1, 2022

Battle Creek demutualization

Net income (loss)

Impact of Westminster unrealized investment gains/losses

Other comprehensive income (loss), net of income taxes

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December 31, 2022

Battle Creek demutualization

Net income (loss)

Impact of Westminster unrealized investment gains/losses

Other comprehensive income (loss), net of income taxes

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December 31, 2023

Battle Creek demutualization

Net income (loss)

Impact of Westminster unrealized investment gains/losses

Other comprehensive income (loss), net of income taxes

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December 31, 2024

The accompanying notes are an integral part of these consolidated

financial statements.

The accompanying notes are an integral part of these consolidated financial

NI Holdings, Inc.

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Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

Net investment losses (gains)

Less net loss from discontinued operations, net of income taxes

Adjustments to reconcile net loss to net cash flows from operating activities:

Net investment gains

Deferred income tax expense (benefit)

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Net amortization of premiums and discounts on investments

Loss (gain) on sale of property and equipment

Gain on sale of property and equipment

Changes in operating assets and liabilities:

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Reinsurance recoverables on losses

Income tax recoverable / payable

Accrued investment income

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Unearned premiums

Income tax recoverable / payable

Accrued expenses and other liabilities

Net cash flows from operating activities – continuing operations

Net cash flows from operating activities – discontinued operations

Net cash flows from operating activities – loss on sale of discontinued operations

Total adjustments

Net cash flows from operating activities

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Proceeds from sales of property and equipment

Proceeds from sale of other investments and other

Proceeds from disposition of Westminster

Net cash flows from investing activities – continuing operations

Net cash flows from investing activities – discontinued operations

Net cash flows from investing activities

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Purchases of treasury stock

Pooling (payments) receipts

Installment payment on Westminster consideration payable

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Issuance of vested award shares

Net cash flows from financing activities – continuing operations

Net cash flows from financing activities – discontinued operations

Net cash flows from financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Net change in cash and cash equivalents

(Increase) decrease in cash and cash equivalents – discontinued operations

Net increase (decrease) in cash and cash equivalents – continuing operations

Cash and cash equivalents at beginning of period – continuing operations

Cash and cash equivalents at end of period – continuing operations

Federal and state income taxes paid (net of refunds received)

The accompanying notes are an integral part of these consolidated financial

The accompanying notes are an integral part of

these consolidated financial statements.

NI Holdings, Inc.

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NI Holdings is a North Dakota business corporation

that is the stock holding company of Nodak Insurance and became such in connection with the conversion of Nodak Mutual from a mutual to

stock form of organization and the creation of a mutual holding company.

The conversion was consummated on March 13, 2017.

following the conversion, all of the outstanding shares of common stock of Nodak Insurance were issued to Nodak Mutual Group, which then

contributed the shares to NI Holdings in exchange for 55 % of the outstanding shares of common stock of NI Holdings.

Nodak Insurance then

became a wholly-owned stock subsidiary of NI Holdings.

Prior to completion of the conversion, NI Holdings conducted no business and had

no assets or liabilities.

As a result of the conversion, NI Holdings became the holding company for Nodak Insurance and its existing subsidiaries.

These consolidated financial statements include the

financial position and results of operations of NI Holdings and the following other entities:

that is the stock holding company of Nodak Insurance and became such in connection with the Nodak conversion, whereby Nodak Mutual converted

from a mutual to stock form of organization and the creation of a mutual holding company.

The Nodak conversion was consummated on March

Immediately following the Nodak conversion, all of the outstanding shares of common stock of Nodak Insurance were issued to

Nodak Mutual Group, which then contributed the shares to NI Holdings in exchange for 55 % of the outstanding shares of common stock of

Nodak Insurance then became a wholly-owned stock subsidiary of NI Holdings.

Prior to completion of the Nodak conversion,

NI Holdings conducted no business and had no assets or liabilities.

As a result of the Nodak conversion, NI Holdings became the holding

company for Nodak Insurance and its existing subsidiaries.

These consolidated financial statements include the financial

position and results of operations of NI Holdings and the following other entities:

Nodak Insurance Company

Nodak Insurance is the largest domestic property and casualty insurance

company in North Dakota, offering private passenger auto, homeowners, farmowners, commercial multi-peril, crop hail, and Federal multi-peril

crop insurance coverages through its captive agents in the state.

Nodak Insurance is the largest domestic property and

casualty insurance company in North Dakota, offering private passenger auto, homeowners, farmowners, commercial multi-peril, crop hail,

and Federal multi-peril crop insurance coverages through its captive agents in the state.

Nodak Agency, Inc.

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American West Insurance Company

American West is a property and casualty insurance

company licensed in eight states in the Midwest and Western regions of the U.S.

American West began writing policies in 2002 and primarily

writes private passenger auto, homeowners, and farm coverages in South Dakota.

American West also writes private passenger auto coverage

in North Dakota, as well as crop hail and Federal multi-peril crop insurance coverages in Minnesota and South Dakota.

American West is a property and casualty insurance company

licensed in eight states in the Midwest and Western regions of the U.S.

American West began writing policies in 2002 and primarily writes

private passenger auto, homeowners, and farm coverages in South Dakota.

American West also writes private passenger auto coverage in North

Dakota, as well as crop hail and Federal multi-peril crop insurance coverages in Minnesota and South Dakota.

Primero Insurance Company

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Primero is a property and casualty insurance company

writing non-standard automobile coverage in the states of Nevada, Arizona, North Dakota, and South Dakota.

Primero was acquired by Nodak

Insurance in 2014.

Battle Creek Mutual Insurance Company

Battle Creek is a property and casualty insurance

company writing private passenger auto, homeowners, and farm coverages solely in the state of Nebraska.

Battle Creek became affiliated

with Nodak Insurance in 2011, and Nodak Insurance provides underwriting, claims management, policy administration, and other administrative

services to Battle Creek.

Because we have concluded that we control Battle Creek, we consolidate the financial statements of Battle Creek,

and Battle Creek’s policyholders’ interest in Battle Creek is reflected as a non-controlling interest in shareholders’

equity in our Consolidated Balance Sheets for NI Holdings (“Consolidated Balance Sheets”) and its net income or loss is excluded

from net income or loss attributed to NI Holdings in our Consolidated Statements of Operations for NI Holdings (“Consolidated Statements

of Operations”).

writing non-standard auto coverage in the states of Nevada, Arizona, North Dakota, and South Dakota during 2024.

As of December 31, 2024,

Primero no longer writes coverage in the state of Nevada.

Primero was acquired by Nodak Insurance in 2014.

Battle Creek Insurance Company

Battle Creek is a property and casualty insurance company

writing private passenger auto, homeowners, and farm coverages solely in the state of Nebraska.

Battle Creek became affiliated with Nodak

Insurance in 2011 and, prior to January 2, 2024, was controlled by Nodak Insurance via a surplus note.

On January 2, 2024, Battle Creek

issued 300,000 shares of its common stock to Nodak Insurance at a $ 10.00 per share par value and became a wholly-owned subsidiary of Nodak

Because we concluded that we controlled Battle Creek prior to January 2, 2024, we consolidated the financial statements of

Battle Creek, and Battle Creek’s policyholders’ interest in Battle Creek was reflected as a non-controlling interest in shareholders’

equity in our Consolidated Balance Sheets and its net income or loss was excluded from net income or loss attributed to NI Holdings in

our Consolidated Statements of Operations.

Subsequent to January 2, 2024, Battle Creek is fully consolidated in our Consolidated Balance

Sheets and Consolidated Statements of Operations and, as such, no longer reflected as a non-controlling interest.

Direct Auto Insurance Company

Direct Auto is a property and casualty insurance

company licensed in Illinois.

Direct Auto began writing non-standard automobile coverage in 2007, and was acquired by NI Holdings on August

Direct Auto is a property and casualty insurance company

licensed in Illinois.

Direct Auto began writing non-standard auto coverage in 2007, and was acquired by NI Holdings on August 31, 2018,

via a stock purchase agreement.

Westminster American Insurance Company

Westminster is a property and casualty insurance

company licensed in 18 states and the District of Columbia.

Westminster is a property and casualty insurance company

licensed in 18 states and the District of Columbia.

Westminster is headquartered in Owings Mills, Maryland and underwrites commercial

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Tennessee, Virginia, West Virginia, and the District of Columbia.

Westminster was acquired by NI Holdings on January 1, 2020, via a stock

purchase agreement.

Nodak Insurance markets and distributes its policies through

its captive agents, while all other companies utilize the independent agent distribution channel.

Westminster was sold to Scott Insurance Holdings on June 30, 2024.

to the date of sale, Westminster is reflected as discontinued operations within our Consolidated Balance Sheets and Consolidated Statements

of Operations.

For additional information see Part II, Item 8, Note 20 “Discontinued Operations” of this 2024 Annual Report.

Organizational Structure and Credit Ratings

Nodak Insurance markets and distributes its policies

through its captive agents, while all other companies utilize the independent agent distribution channel.

Additionally, all of the Company’s

insurance subsidiary and affiliate companies are rated “A” Excellent by AM Best, a global credit rating agency specializing

in the insurance industry.

insurance subsidiary and affiliate companies as of December 31, 2024, are rated “A” Excellent by AM Best.

The same executive management team provides oversight

and strategic direction for the entire organization.

Nodak Insurance provides common product oversight, pricing practices, and underwriting

standards, as well as underwriting and claims administration, to itself, American West, and Battle Creek.

Primero, Direct Auto, and Westminster

personnel manage the day-to-day operations of their respective companies.

Recent Accounting Pronouncements

Prior to December 31, 2022, we were classified as an EGC and elected

to use the extended transition period for complying with certain new or revised financial accounting standards from the Financial Accounting

Standards Board (“FASB”) pursuant to Section 13(a) of the Exchange Act.

However, beginning on December 31, 2022, we are

no longer an EGC and are now unable to delay adoption of these new or revised accounting standards or take advantage of reduced corporate

governance disclosures.

Effective for the year ended December 31, 2022, the Company

adopted the updated guidance for leases and elected to utilize a cumulative-effect adjustment to the opening balance of retained earnings

for the year of adoption, if necessary.

Accordingly, the Company’s reporting for the comparative periods prior to adoption continue

to be presented in the consolidated financial statements in accordance with previous lease accounting guidance.

The Company also elected

to apply all practical expedients applicable to the Company in the updated guidance for transition for leases in effect at adoption, including

using hindsight to determine the lease term of existing leases, the option to not reassess whether an existing contract is a lease or

contains a lease, and whether the lease is an operating or finance lease.

The adoption of the updated guidance resulted in the Company

recognizing a right-of-use asset of $ 1,637 as part of other assets, a lease liability of $ 1,837 as part of accrued expenses and other

liabilities, and an elimination of the $ 200 deferred rent liability in the Consolidated Balance Sheet.

The cumulative effect adjustment

to the opening balance of retained earnings was zero .

The adoption of the updated guidance did not affect the Company’s results

of operations or cash flows.

Nodak Insurance personnel provide common product oversight, pricing practices, and

underwriting standards, as well as underwriting and claims administration, to Nodak Insurance, American West, and Battle Creek.

and Direct Auto personnel manage the day-to-day operations of their respective companies.

Westminster personnel managed the day-to-day

operations of their company prior to the date of sale.

Accounting Pronouncements

Improvements to Reportable Segment Disclosures

In the fourth quarter of 2024, the Company adopted the annual

and interim disclosure requirements of ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”

issued by the FASB in November 2023.

The amendments expand a public business entity's segment disclosures by requiring disclosure of significant

segment expenses that are regularly provided to the chief operating decision maker (“CODM”), clarifying when an entity may

report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure

requirements for entities with a single reportable segment, and requiring other new disclosures.

See Item II, Part 8, Note 21 “Segment

Information” section of this Annual Report for applicable disclosures required by this guidance.

Measurement of Credit Losses on Financial Instruments

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on the Consolidated Balance Sheet at the amount expected to be collected.

The updated guidance also amends the previous other-than-temporary

The updated guidance also amended the previous other-than-temporary

impairment model for available-for-sale fixed income securities by requiring the recognition of impairments relating to credit losses

through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and

its fair value.

In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination

through an allowance account and limiting the amount of credit loss to the difference between a security’s amortized cost basis

and its fair value.

In addition, the length of time a security has been in an unrealized loss position no longer impacts the determination

of whether a credit loss exists.

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The adoption of this guidance resulted in an allowance for expected credit losses of $ 425 for premiums and agents'

balances receivable.

Based on the results of the receivable analyses and management’s review of our available-for-sale fixed income

securities, it was determined that no allowance was required for reinsurance recoverables or available-for-sale fixed income securities

at this time.

Income Taxes – Simplifying the Accounting for Income Taxes

balances receivable in the Consolidated Balance Sheet as of December 31, 2022.

Based on the results of the receivable analyses and management’s

review of our available-for-sale fixed income securities, it was determined that no allowance was required for reinsurance recoverables

or available-for-sale fixed income

securities in the Consolidated Balance Sheet as of December 31, 2022.

See Item II, Part 8, Note 4 “Investments”

section of this Annual Report for applicable disclosures required by this guidance.

Effective for the year ended December 31, 2022, the Company

adopted the updated guidance for leases and elected to utilize a cumulative-effect adjustment to the opening balance of retained earnings

for the year of adoption, if necessary.

Accordingly, the Company’s reporting for the comparative periods prior to adoption continue

to be presented in the consolidated financial statements in accordance with previous lease accounting guidance.

The Company also elected

to apply all practical expedients applicable to the Company in the updated guidance for transition for leases in effect at adoption, including

using hindsight to determine the lease term of existing leases, the option to not reassess whether an existing contract is a lease or

contains a lease, and whether the lease is an operating or finance lease.

The adoption of the updated guidance resulted in the Company

recognizing a right-of-use asset of $ 1,637 as part of other assets, a lease liability of $ 1,837 as part of accrued expenses and other

liabilities, and an elimination of the $ 200 deferred rent liability in the Consolidated Balance Sheet as of December 31, 2022.

The cumulative

effect adjustment to the opening balance of retained earnings was zero .

The adoption of the updated guidance did not affect the Company’s

results of operations or cash flows.

See Item II, Part 8, Note 15 “Leases” section of this Annual Report for applicable disclosures

required by this guidance.

Income Taxes – Simplifying the Accounting for Income

In December 2022, the Company adopted amended guidance

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Not Yet Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued guidance related to improving disclosures

for reportable segments primarily through enhanced disclosures about significant segment expenses that

are provided to the chief operating decision maker (“CODM”).

This guidance also requires disclosure of the title and position

of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and

deciding how to allocate resources .

The amendments in this update are effective for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December 15, 2024.

We are currently evaluating the impact of the new standard

on our consolidated financial statements, which is expected to result in enhanced disclosures.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance related to improving income

tax disclosures.

This guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related

to the rate reconciliation and income taxes paid.

The guidance is intended to enhance the transparency and decision usefulness of income

tax disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024.

We are currently evaluating

the impact of the new standard on our consolidated financial statements, which is expected to result in enhanced disclosures.

Summary of Significant Accounting Policies

In December 2023, the FASB issued ASU 2023-09, “Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This guidance requires that an entity, on an annual basis, disclose

additional income tax information, primarily related to the rate reconciliation and income taxes paid.

The guidance is intended to enhance

the transparency and decision usefulness of income tax disclosures.

The amendments in this update are effective for annual periods beginning

after December 15, 2024.

We are currently evaluating the impact of the new standard on our consolidated financial statements, which is

expected to result in enhanced disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, “Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.”

This guidance is intended to improve disclosures about a public business entity's expenses and address requests from investors for more

detailed information about the types of expenses in commonly presented expense captions.

Such information should allow investors to better

understand an entity's performance, assess future cash flows, and compare performance over time and with other entities.

The amendments

will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period,

specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible

asset amortization included in each expense caption presented on the face of the statement of operations, and the total amount of an entity's

selling expenses.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods

beginning after December 15, 2027, and may be applied either prospectively or retrospectively.

Early adoption is permitted.

is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

of Significant Accounting Policies and Basis of Presentation

Basis of Consolidation

Our consolidated financial statements, which we have

prepared in accordance with GAAP, include our accounts and those of our wholly-owned subsidiaries, as well as Battle Creek, an entity

we control via a surplus note agreement.

Our consolidated financial statements, which we

have prepared in accordance with GAAP, include our accounts and those of our wholly-owned subsidiaries, including Battle Creek, which

was consolidated as a variable interest entity (“VIE”) with an associated non-controlling interest prior to January 2, 2024.

We have eliminated all significant intercompany accounts and transactions in consolidation.

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Actual results could differ significantly from those estimates.

We make estimates and assumptions that can have a

significant effect on amounts and disclosures we report in our consolidated financial statements.

We make estimates and assumptions that can have

a significant effect on amounts and disclosures we report in our consolidated financial statements.

The most significant estimates relate

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Variable-Interest Entities

Any company deemed to be a variable interest entity

(“VIE”) is required to be consolidated by the primary beneficiary of the VIE.

We assess our investments in other entities at inception

to determine if any meet the qualifications of a VIE.

Any company deemed to be a VIE is required to

be consolidated by the primary beneficiary of the VIE.

We assess our investments in other entities at

inception to determine if any meet the qualifications of a VIE.

We consider an investment in another company to be a VIE if:

(a) the total equity

investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support,

(a) the total

equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support,

(b) the characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other

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We consider the contractual agreements that

define the ownership structure, distribution of profits and losses, risks,

responsibilities, indebtedness, voting rights, and board representation

define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights, and board representation

of the respective parties in determining whether we qualify as the primary beneficiary.

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of a VIE is performed at least annually.

We control Battle Creek via a surplus note which

provides us with the ability to appoint two-thirds of the Board of Directors of Battle Creek.

Under the quota share reinsurance agreement

that existed through December 31, 2019, Battle Creek’s operating results included only net investment income, bad debt expense,

and income taxes.

Effective January 1, 2020, the Company implemented an intercompany pooling reinsurance agreement, and Battle Creek’s

operating results now include its participation in the underwriting results of the pool ( 2 % during 2023, 2022, and 2021).

For more information,

see Part II, Item 8, Note 11 “Royalties, Dividends, and Affiliations”.

Because we have concluded that we control Battle Creek,

we consolidate the financial statements of Battle Creek, and Battle Creek’s policyholders’ interest in Battle Creek is reflected

as a non-controlling interest in shareholders’ equity in our Consolidated Balance Sheet and its net income or loss is excluded from

net income or loss attributed to NI Holdings in our Consolidated Statement of Operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash, money market

accounts, and certain investments in highly liquid debt instruments.

Cash and cash equivalents include cash, money

market accounts, and certain investments in highly liquid debt instruments.

Cost approximates fair value for these short-term investments.

The Company’s fixed income securities and equity securities are

classified as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or a

recognized independent pricing service at the reporting date for those or similar investments.

The Company’s fixed income securities and equity securities

are classified as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or

a recognized independent pricing service at the reporting date for those or similar investments.

Changes in unrealized investment gains

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with our investment advisors, frequently review our investment portfolio for declines in fair value that could be indicative of credit

The available-for-sale impairment model requires an estimate of expected credit losses only when the fair value of the available-for-sale

The available-for-sale impairment model requires an

estimate of expected credit losses only when the fair value of the available-for-sale

fixed income security is below its amortized cost basis.

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adjustment to earnings.

For fixed income securities that the Company does not intend to sell

or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company

separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss component

in net realized investment gains (losses).

The impairment related to all other factors (non-credit factors) is reported in other comprehensive

For fixed income securities that the Company does not intend to

sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the

Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss

component in net realized investment gains (losses).

The impairment related to all other factors (non-credit factors) is reported in other

comprehensive income.

The allowance is adjusted for any additional credit losses and subsequent recoveries.

Upon recognizing a credit loss, the cost

basis is not adjusted.

For fixed income securities the Company intends to sell or for which

it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount of the impairment

is included in net investment gains (losses).

The new cost basis of the investment is the previous amortized cost basis less the impairment

recognized in net investment gains (losses).

The new cost basis is not adjusted for any subsequent recoveries in fair value.

Upon recognizing a credit

loss, the cost basis is not adjusted.

For fixed income securities that the Company intends to sell or

for which it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount

of the impairment is included in net investment gains (losses).

The new cost basis of the investment is the previous amortized cost basis

less the impairment recognized in net investment gains (losses).

The new cost basis is not adjusted for any subsequent recoveries in fair

The Company reports investment income accrued separately from fixed

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Revenue Recognition

We record premiums written at policy inception and recognize them as

revenue on a pro rata basis over the policy term or, in the case of crop insurance, over the period of risk.

The portion of premiums that

could be earned in the future is deferred and reported as unearned premiums.

When policies lapse, the Company reverses the unearned portion

of the written premium and removes the applicable unearned premium.

We record premiums written at policy inception and recognize them

as revenue on a pro rata basis over the policy term or, in the case of crop insurance, over the period of risk.

The portion of premiums

that could be earned in the future is deferred and reported as unearned premiums.

When policies lapse, the Company reverses the unearned

portion of the written premium and removes the applicable unearned premium.

Policy-related fee income is recognized when collected.

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December 15 (last date claims can be made for the most recent planting season).

Premiums and Agents’ Balances Receivable

Premiums and Agents’ Balances

Premiums and agents’ balances receivable include both direct

and agent billed premiums as well as crop notes receivable related to the multi-peril crop and crop hail insurance.

Accounts billed directly to the policyholder are provided grace payment

and cancellation notice periods per state insurance regulations.

Accounts billed directly to the policyholder are provided grace

payment and cancellation notice periods per state insurance regulations.

Direct Auto also provides for agency billing for a portion of their

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Property and Equipment

We report property and equipment at cost less accumulated

depreciation.

We report property and equipment at cost less

accumulated depreciation.

Depreciation is typically computed using the straight-line method based upon estimated useful lives of the assets.

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We reflect any adjustments to our liabilities for unpaid losses and loss adjustment expenses in our operating results in

the period in which we determine the need for a

change in the estimates.

the period in which we determine the need for a change in the estimates.

We maintain liabilities for unpaid losses and loss adjustment expenses

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adjustment expenses will likely differ from the amount recorded.

With the exception of Battle Creek, which files a stand-alone federal

income tax return, we file a consolidated federal income tax return which includes NI Holdings and its wholly-owned subsidiaries.

Insurance companies typically pay state premium taxes rather than state

income taxes.

Insurance companies typically pay state premium taxes rather than

state income taxes.

However, Direct Auto is subject to state income taxes in the state of Illinois, in addition to state premium taxes.

Additionally,

NI Holdings, on a stand-alone basis, pays state income taxes to the state of North Dakota for income or losses generated as a separate

financial entity.

Additionally, NI Holdings, on a stand-alone basis, pays state income taxes to the state of North Dakota for income or losses generated

as a separate financial entity.

State premium taxes are included as a part of amortization of deferred policy acquisition costs.

State income taxes

are reported along with federal income taxes as income tax expense (benefit).

The Company did not have any material uncertain tax positions as of

December 31, 2023 and 2022.

income taxes are reported along with federal income taxes as income tax expense (benefit).

The Company did not have any material uncertain tax positions as

of December 31, 2024 and 2023.

The Company’s policy is to recognize tax-related interest and penalties accrued related to unrecognized

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The objective of the asset and liability method is to establish deferred income tax assets and liabilities for the temporary differences

between the financial reporting basis and the income tax basis of our assets and liabilities at enacted tax rates expected to be in effect

between the financial reporting basis and the income

tax basis of our assets and liabilities at enacted tax rates expected to be in effect

when we realize or settle such amounts.

We re-measure existing deferred income tax assets (including loss carryforwards)

and liabilities when a change in tax rate occurs and record an offset for the net amount of the change as a component of income tax expense

from continuing operations in the period of enactment.

We also record any change to a previously recorded valuation allowance as a result

of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from continuing operations.

The Company has elected to reclassify any tax effects stranded in accumulated

other comprehensive income as a result of a change in income tax rates to retained earnings.

We re-measure existing deferred income tax assets (including loss

carryforwards) and liabilities when a change in tax rate occurs and record an offset for the net amount of the change as a component of

income tax expense from continuing operations in the period of enactment.

We also record any change to a previously recorded valuation

allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from

continuing operations.

The Company has elected to reclassify any tax effects stranded in

accumulated other comprehensive income as a result of a change in income tax rates to retained earnings.

Earnings Per Share

Earnings per share are computed by dividing net income available to

common shareholders for the period by the weighted average number of common shares outstanding for the same period.

Unearned shares related

to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants.

Earnings per share are computed by dividing net income available

to common shareholders for the period by the weighted average number of common shares outstanding for the same period.

Unearned shares

related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are not considered

outstanding until they are earned by award participants.

See Part II, Item 8, Note 12 “Benefit Plans” and Note 18 “Share-Based

Compensation”.

related to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants.

shares related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are

not considered outstanding until they are earned by award participants.

See Part II, Item 8, Note 12 “Benefit Plans” and Note

18 “Share-Based Compensation.”

Our primary investment objective is to earn competitive

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we invest in any one security.

Property and liability insurance coverages are marketed

through captive agents in North Dakota and through independent insurance agencies located throughout all other operating areas.

All business,

except for the majority of Direct Auto’s business, is billed directly to the policyholders.

Property and liability insurance coverages are

marketed through captive agents in North Dakota and through independent insurance agencies located throughout all other operating areas.

All business, except for the majority of Direct Auto’s business, is billed directly to the policyholders.

We maintain cash balances primarily at one bank,

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Goodwill and Other Intangibles

Goodwill assets arise from business combinations and consist of the

excess of the fair value of consideration paid over the tangible and intangible assets acquired and liabilities assumed.

We evaluate goodwill

and other intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate that it

is more likely than not that the carrying amount of goodwill and other intangible assets may exceed their fair value.

Goodwill assets arise from business combinations and consist of

the excess of the fair value of consideration paid over the tangible and intangible assets acquired and liabilities assumed.

goodwill and other intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate

that it is more likely than not that the carrying amount of goodwill and other intangible assets may exceed their fair value.

When performing our goodwill impairment analyses, we typically first

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proceed directly to performing the quantitative assessment.

If our qualitative assessment indicates it is more likely than not

that the fair value of a reporting unit is less than its carrying amount or we choose to bypass the qualitative assessment, we will perform

If our qualitative assessment indicates it is more likely than not that

the fair value of a reporting unit is less than its carrying amount or we choose to bypass the qualitative assessment, we will perform

a quantitative assessment that compares the reporting unit’s carrying value with its estimated fair value.

The determination of

the fair value of our reporting units is based on a combination of a market approach that considers benchmark company market multiples,

and an income approach that utilizes discounted cash flows.

The cash flows used to determine fair value are dependent on a number of significant

management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based

upon our historical experience.

Our estimates are subject to change given the inherent uncertainty in predicting future results.

we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts.

the carrying value exceed the estimated fair value, a goodwill impairment charge will be recognized in the amount by which the reporting

unit’s carrying amount exceeds its fair value, not to exceed the total goodwill assigned to the reporting unit.

For the goodwill arising from the acquisition of Primero in 2014, we

performed the annual qualitative assessment as of the beginning of the fourth quarter of 2023 and concluded there was no impairment of

the goodwill.

We also did not record any impairments of goodwill for this reporting unit during the years ended December 31, 2022 or 2021.

the fair value of our reporting units is based a market approach that considers benchmark company market multiples, an income approach

that utilizes discounted cash flows, or another generally accepted method.

The cash flows used to determine fair value are dependent on

a number of significant management assumptions such as our expectations of future performance and the expected future economic environment,

which are partly based upon our historical experience.

Our estimates are subject to change given the inherent uncertainty in predicting

future results.

While we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected

Should the carrying value exceed the estimated fair value, a goodwill impairment charge will be recognized in the amount by which

the reporting unit’s carrying amount exceeds its fair value, not to exceed the total goodwill assigned to the reporting unit.

For the goodwill arising from the acquisition of Primero in 2014,

we determined that it was appropriate to perform a quantitative assessment during the fourth quarter of 2024.

Based on our quantitative

assessment as described above, we concluded that the goodwill related to Primero was fully impaired as of December 31, 2024, primarily

due to Primero’s expected future performance being well below initial projections and expectations as a result of strategic initiatives.

We did not record any impairments of goodwill for this reporting unit during the years ended December 31, 2023 or 2022.

For the goodwill arising from the acquisition of Westminster in

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We did not record

any impairments of goodwill for this reporting unit during the years ended December 31, 2022 or 2021.

any impairments of goodwill for this reporting unit during the year ended December 31, 2022.

Intangible assets arising from the acquisition of Direct Auto in

represent the estimated fair values of certain intangible assets, including a favorable lease contract, a state insurance license, the

value of the Direct Auto trade name, and the value of business acquired (“VOBA”).

The state insurance license asset has an

indefinite life, while the Direct Auto trade name was amortized over five years from the August 31, 2018 acquisition/valuation date.

favorable lease contract and VOBA assets have been fully amortized.

We did not record any impairments of the intangible assets for this

reporting unit during the years ended December 31, 2023, 2022 or 2021.

2018 represent the estimated fair values of certain intangible assets, including a favorable lease contract, a state insurance license,

the value of the Direct Auto trade name, and the value of business acquired (“VOBA”).

The state insurance license asset has

an indefinite life, while the Direct Auto trade name was amortized over five years from the August 31, 2018 acquisition/valuation date.

The favorable lease contract and VOBA assets have been fully amortized.

We did not record any impairments of the intangible assets for

this reporting unit during the years ended December 31, 2024, 2023 or 2022.

Other intangible assets arising from the acquisition of Westminster

represent the estimated fair values of certain intangible assets, including state insurance licenses, the value of Westminster’s

represented the estimated fair values of certain intangible assets, including state insurance licenses, the value of Westminster’s

distribution network, the value of the Westminster trade name, and the VOBA.

The state insurance license asset has an indefinite life,

while the distribution networks asset and Westminster trade name are being amortized over twenty years and ten years , respectively, from

the January 1, 2020 acquisition/valuation date.

The VOBA asset has been fully amortized.

We did not record any impairments of the other

intangible assets for this reporting unit during the years ended December 31, 2023, 2022 or 2021.

The amortized cost and estimated fair value of fixed

income securities as of December 31, 2023 and 2022, were as follows:

The state insurance license asset had an indefinite life,

while the distribution networks asset and Westminster trade name were being amortized over twenty years and ten years , respectively, from

the January 1, 2020 acquisition/valuation date until the date of sale on June 30, 2024.

The VOBA asset had been fully amortized at the

date of the sale of Westminster.

We did not record any impairments of the other intangible assets for this reporting unit during the years

ended December 31, 2023 or 2022.

Discontinued Operations

On May 7, 2024, NI Holdings entered into a Stock

Purchase Agreement (“Purchase Agreement”) to sell its subsidiary, Westminster, to Scott Insurance Holdings, a privately owned

Maryland limited liability company.

Scott Insurance Holdings is affiliated with John Scott, Sr., the father of the president of Westminster,

John Scott, Jr.

The sale closed on June 30, 2024.

The Purchase Agreement included a cash purchase price of $ 10,500 , subject to certain

post-closing adjustments, including a post-closing payment to NI Holdings for the amount by which the ending statutory surplus balance

for Westminster exceeded $ 20,000 .

The post-closing payment received from Scott Insurance Holdings during the third quarter of 2024 was

$ 1,772 and has been included as an adjustment to the purchase price for the calculation of the loss on the sale of Westminster.

of Westminster, which represented the majority of our Commercial segment in prior periods, was a strategic shift that has had a major

effect on our operations and financial results.

Therefore, Westminster has been reported as discontinued operations in the Consolidated

Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows for all periods presented in this 2024

Annual Report.

All current and prior periods reflected in this 2024 Annual Report have been presented as continuing and discontinued operations,

unless otherwise noted.

For additional information see Part II, Item 8, Note 20 “Discontinued Operations” of this 2024 Annual

NI Holdings filed Amendment No.

1 to our Quarterly Report on Form

10-Q/A to amend certain information included in the Company's Quarterly Report on Form 10-Q for the three- and six-month periods ended

June 30, 2024, which was filed with the SEC on August 8, 2024, due to errors resulting from the incorrect accounting for, and presentation

of, the previously announced sale of Westminster.

Specifically, the Company failed to record certain receivables on Westminster’s

closing balance sheet as well as the corresponding payable for Nodak Insurance for amounts owed to Westminster related to the final settlement

of the intercompany reinsurance pooling agreement after the date of sale.

Failure to include this receivable in Westminster’s closing

net assets and liabilities also caused an understatement of the loss on sale of discontinued operations, which also understated the Company’s

total net loss.

The impact of the corrections related to this error on the consolidated financial statements as of and for the three-

and six-month periods ended June 30, 2024, are as follows:

Consolidated Balance Sheets (Unaudited)

As of June 30, 2024

Accrued expenses and other liabilities

Total liabilities

Retained earnings

Total shareholders’ equity

Consolidated Statements of Operations (Unaudited)

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Loss on sale of discontinued operations, net of taxes

Loss per common share:

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Comprehensive loss

Consolidated Statements of Changes in Shareholders’ Equity

As of and for the Three Months Ended

June 30, 2024

As of and for the Six Months

Ended June 30, 2024

Retained earnings

Total shareholders’ equity

Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30, 2024

Net income (loss)

Net cash flows from operating activities – loss on sale of discontinued operations

Total adjustments

The notes to the consolidated financial statements as well as Management’s

Discussion and Analysis of Financial Condition and Results of Operations were also amended as necessary as a result of the restatements

outlined above.

The amortized cost and estimated fair value of fixed income

securities, presented on a consolidated basis, including both continuing and discontinued operations, as of December 31, 2024, and December

31, 2023, were as follows:

December 31, 2024

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Total fixed income securities

The amortized cost and estimated fair value of fixed

income securities by contractual maturity are shown below.

Actual maturities could differ from contractual maturities because issuers

may have the right to call or prepay these securities.

The reconciliation of the amortized cost and estimated fair value

of fixed income securities for continuing and discontinued operations as of December 31, 2024, and December 31, 2023, were as follows:

December 31, 2024

Allowance for

Credit Losses

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

December 31, 2023

Allowance for

Credit Losses

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

The amortized cost and estimated fair value of fixed income

securities by contractual maturity, presented on a consolidated basis, including both continuing and discontinued operations, are shown

Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay these securities.

December 31, 2024

Amortized Cost

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any assets to secure any obligations.

The investment category and duration of the Company’s gross

unrealized losses on fixed income securities are shown below.

Investments with unrealized losses are categorized with a duration of greater

than 12 months when all positions of a security have continually been in a loss position for at least 12 months.

The investment category and duration of the Company’s

gross unrealized losses on fixed income securities, presented on a consolidated basis, including both continuing and discontinued operations,

are shown below.

Investments with unrealized losses are categorized with a duration of greater than 12 months when all positions of a

security have continually been in a loss position for at least 12 months.

December 31, 2024

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Total fixed income securities

We, along with our investment advisors, frequently

The reconciliation for continuing and discontinued operations

by duration of the Company’s gross unrealized losses on fixed income securities are shown below.

December 31, 2024

Less than 12 Months

Greater than 12 months

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

December 31, 2023

Less than 12 Months

Greater than 12 months

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

We, along with our investment advisor, frequently

review our investment portfolio for declines in fair value that could be indicative of credit losses.

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losses is necessary, including payment and default history, credit spreads, credit ratings and rating actions, and probability of default.

We determine the credit loss component of fixed income securities by utilizing discounted cash flow modeling to determine the present

We determine the credit loss component of fixed income investments by utilizing discounted cash flow modeling to determine the present

value of the security and comparing the present value with the amortized cost of the security.

We did not recognize any credit losses

for fixed income securities at the time of adoption of the new credit loss accounting standard or during the year ended December 31,

Therefore, there was no beginning or ending balance of credit losses for the years ended December 31, 2022 and 2023.

Part 8, Note 3 “Summary of Significant Accounting Policies” for additional information.

Net investment income consisted of the following:

for fixed income securities at the time of adoption of the new credit loss accounting standard and have not recognized any credit losses

for fixed income securities since adoption of the credit loss standard.

Therefore, there were no beginning or ending balances of credit

losses during the years ended December 31, 2024 or 2023.

See Item II, Part 8, Note 3 “Summary of Significant Accounting Policies

and Basis of Presentation” section for additional information.

Net investment income for continuing and discontinued operations

consisted of the following:

Year Ended December 31,

Continuing operations:

Fixed income securities

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Investment expenses

Net investment income – continuing operations

Net investment income – discontinued operations

Net investment income

Net investment gains (losses) consisted of the following:

Net investment gains (losses) for continuing and discontinued operations

consisted of the following:

Year Ended December 31,

Continuing Operations:

Gross realized gains:

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Net realized gains

Change in net unrealized gain on equity securities

Change in net unrealized gains on equity securities

Net investment gains (losses) – continuing operations

Net investment gains (losses) – discontinued operations

Net investment gains (losses)

Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments

to certain assets to determine fair value disclosures.

Investment securities available for sale are recorded at fair value on a recurring

Additionally, from time to time, we may be required to record other assets or liabilities at fair value on a nonrecurring basis.

These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual

Accounting guidance on fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs

to valuation methods used to measure fair value.

Value Measurements

The Company uses fair value measurements to record fair value

adjustments to certain assets to determine fair value disclosures.

Investment securities available for sale are recorded at fair value

on a recurring basis.

Additionally, from time to time, we may be required to record other assets or liabilities at fair value on a nonrecurring

These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of

individual assets.

Accounting guidance on fair value measurements and disclosures establishes a fair value hierarchy that prioritizes

the inputs to valuation methods used to measure fair value.

The three levels of the fair value hierarchy are as follows:

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Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

The Company bases its fair values on the price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements,

The Company bases its fair values on the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements,

in accordance with the fair value hierarchy.

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Management uses its best judgment in estimating the fair

value of the Company’s

financial instruments;

however, there are inherent weaknesses in any estimation technique.

value of the Company’s financial instruments;

however, there are inherent limitations in any estimation technique.

Therefore, for

substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which we could

have realized in a sale transaction on the dates indicated.

substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which could have

been realized in a sale transaction on the dates indicated.

The estimated fair value amounts have been measured as of their respective

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of future cash flows, could significantly affect the results of current or future valuations.

The Company uses quoted values and other data provided by an independent

pricing service in its process for determining fair values of its investments.

The evaluations of such pricing services represent an exit

price and a good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale.

This pricing service

provides us with one quote per instrument.

For fixed income securities that have quoted prices in active markets, market quotations are

For fixed income securities that do not trade on a daily basis, the independent pricing service prepares estimates of fair value

using a wide array of observable inputs including relevant market information, benchmark curves, benchmarking of like securities, sector

groupings, and matrix pricing.

The Company uses quoted values and other data provided by an

independent pricing service in its process for determining fair values of its investments.

The evaluations of such pricing services represent

an exit price and a good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale.

service provides us with one quote per instrument.

For fixed income securities that have quoted prices in active markets, market quotations

are provided.

For fixed income securities that do not trade on a daily basis, the independent pricing service prepares estimates of fair

value using a wide array of observable inputs including relevant market information, benchmark curves, benchmarking of like securities,

sector groupings, and matrix pricing.

The observable market inputs that the Company’s independent pricing service utilizes may include

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spread model to develop prepayment and interest rate scenarios.

Should the independent pricing service be unable to provide a fair

value estimate, we would first attempt to obtain a fair value estimate from our third-party investment advisors who utilize different

Should the independent pricing service be unable to provide

a fair value estimate, we would first attempt to obtain a fair value estimate from our third-party investment advisor who utilizes different

independent pricing services.

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Accordingly, the Company classifies such a security as a Level 3 investment.

The fair value estimates of our investments provided by the independent

pricing service at each period-end were utilized, among other resources, in reaching a conclusion as to the fair value of its investments.

Management reviews the reasonableness of the pricing

provided by the independent pricing service by employing various analytical procedures.

The fair value estimates of our investments provided by the

independent pricing service at each period-end were utilized, among other resources, in reaching a conclusion as to the fair value of

its investments.

Management reviews the reasonableness of the pricing provided

by the independent pricing service by employing various analytical procedures.

We also use information from our third-party investment

advisors who utilize different independent pricing services to further validate the reasonableness of the valuation of our fixed income

advisor who utilizes different independent pricing services to further validate the reasonableness of the valuation of our fixed income

If, after this review, management does not believe the pricing for any security is a reasonable estimate of fair value, then

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pricing review.

The valuation of money market accounts and equity

securities are generally based on Level 1 inputs, which use the market-approach valuation technique.

The valuation of certain cash equivalents

and our fixed income securities generally incorporates significant Level 2 inputs using the market and income approach techniques.

may assign a lower level to inputs typically considered to be Level 2 based on our assessment of liquidity and relative level of uncertainty

The valuation of money market accounts and equity securities

are generally based on Level 1 inputs, which use the market-approach valuation technique.

The valuation of certain cash equivalents and

our fixed income securities generally incorporates significant Level 2 inputs using the market and income approach techniques.

assign a lower level to inputs typically considered to be Level 2 based on our assessment of liquidity and relative level of uncertainty

surrounding inputs.

There were no assets or liabilities classified at Level 3 at December 31, 2024, or 2023.

The following tables set forth our assets which are

measured on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall:

The following tables set forth our assets which

are measured on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall:

December 31, 2024

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Total assets at fair value

The following tables are a reconciliation for both continuing

and discontinued operations of the presentation of our assets which are measured on a recurring basis by the level within the fair value

hierarchy in which fair value measurements fall:

December 31, 2024

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

Equity securities:

Continuing operations

Discontinued operations

Total equity securities

Money market accounts and cash equivalents

Continuing operations

Discontinued operations

Total money market accounts and cash equivalents

Total assets at fair value

December 31, 2023

Fixed income securities:

Continuing operations

Discontinued operations

Total fixed income securities

Equity securities:

Continuing operations

Discontinued operations

Total equity securities

Money market accounts and cash equivalents

Continuing operations

Discontinued operations

Total money market accounts and cash equivalents

Total assets at fair value

There were no liabilities measured

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External Reinsurance

The Company’s consolidated financial statements

reflect the effects of assumed and ceded reinsurance transactions.

Assumed reinsurance refers to the acceptance of certain insurance risks

that other insurance companies have underwritten.

Ceded reinsurance involves transferring certain insurance risks (along with the related

written and earned premiums) the Company has underwritten to other insurance companies who agree to share these risks.

The primary purpose

of these agreements is to protect the Company, at a cost, from losses in excess of the amount it is prepared to accept and to protect

the Company’s capital.

Our ceded reinsurance is placed either on an automatic basis under general reinsurance contracts known as

treaties or through facultative contracts placed on substantial individual risks.

These contracts do not relieve the Company from its

obligations to policyholders.

The Company’s consolidated financial statements reflect

the effects of assumed and ceded reinsurance transactions.

Assumed reinsurance refers to the acceptance of certain insurance risks that

other insurance companies have underwritten.

Ceded reinsurance involves transferring certain insurance risks (along with the related written

and earned premiums) the Company has underwritten to other insurance companies who agree to share these risks.

The Company reinsures a

portion of the risks it underwrites, through these ceded reinsurance agreements, in order to control its exposure to losses.

reinsurance is placed either on an automatic basis under general reinsurance contracts known as treaties or through facultative contracts

placed on substantial individual risks.

These contracts do not relieve the Company from its obligations to policyholders.

Treaty reinsurance

contracts are typically effective from January 1 through December 31 each year.

During the year ended December 31, 2024, the Company

maintained property catastrophe reinsurance protection covering $ 133,000 in excess of a $ 20,000 retention.

Additionally, per risk excess

of loss treaties provided coverage of $ 4,000 in excess of $ 1,000 for property risks and $ 11,000 in excess of $ 1,000 for casualty risks,

with facultative contracts in place to provide coverage up to $ 20,000 in excess of $ 5,000 per property.

Aggregate stop loss reinsurance

agreements were placed for both crop hail and multi-peril crop coverage.

The crop hail aggregate attached at a 100 % net loss ratio providing

50 points of cover.

The multi-peril crop aggregate attached at a 105 % net loss ratio providing 45 points of cover.

In addition to the

aggregate covers, underlying multi-peril crop reinsurance was provided through the FCIC.

With the exception of Westminster,

a per risk excess of loss treaty provides coverage of $ 4,000 in excess of $ 1,000 for property risks and $ 11,000 in excess of $ 1,000 for

casualty risks.

For Westminster, a per risk excess of loss treaty provided coverage of $ 3,000 in excess of $ 2,000 for property risks and

$ 10,000 in excess of $ 2,000 for casualty risks until July 1, 2024.

Additionally, a property per-risk facultative contract is in place

to provide coverage up to $ 20,000 in excess of $ 5,000 per property.

Aggregate stop loss reinsurance agreements are also in place for both

crop hail and multi-peril crop coverage.

The crop hail aggregate attaches at a 100 % net loss ratio providing 50 points of cover.

The multi-peril

crop aggregate attaches at a 105 % net loss ratio providing 45 points of cover.

In addition to the aggregate covers, underlying multi-peril

crop reinsurance is provided through the FCIC.

Effective July 1, 2024, the Company’s reinsurance contracts

were modified to exclude any Westminster losses occurring on or after that date, while maintaining all other existing limits, retentions,

and attachment points.

For the year ended December 31, 2023, the Company’s

catastrophe retention and retention limit were consistent with those for the year ended December 31, 2024.

In addition, limits, retentions,

and attachment points in our other reinsurance contracts were also consistent with those for the year ended December 31, 2024 (with the

exception of Westminster for which per risk excess of loss treaties provided coverage of $ 4,000 in excess of $ 1,000 for property risks

and $ 11,000 in excess of $ 1,000 for casualty risks).

During the year ended December 31, 2022, the Company

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aggregate covers, underlying multi-peril crop reinsurance was provided through the FCIC.

During the year ended December 31, 2021, the Company

maintained property catastrophe reinsurance protection covering $ 117,000 in excess of a $ 10,000 retention.

Additionally, per risk excess

of loss treaties provided coverage of $ 4,300 in excess of $ 700 for property risks and $ 11,300 in excess of $ 700 for casualty risks, with

facultative contracts in place to provide coverage up to $ 20,000 in excess of $ 5,000 per property.

Aggregate stop loss reinsurance agreements

were placed for both crop hail and multi-peril crop coverage.

The crop hail aggregate attached at a 100 % net loss ratio providing 50 points

The multi-peril crop aggregate attached at a 105 % net loss ratio providing 45 points of cover.

In addition to the aggregate

covers, underlying multi-peril crop reinsurance was provided through the FCIC.

The Company experienced multiple catastrophe events

during 2022 which resulted in reinsurance recoveries of $ 5,362 as of December 31, 2023.

The Company experienced one catastrophe event

during 2021 which resulted in a reinsurance recovery of $ 5,764 as of December 31, 2023.

during 2022 which resulted in reinsurance recoveries of $ 5,648 through December 31, 2024.

For 2025, the Company’s catastrophe retention

and retention limit will remain consistent with the prior year, and there were no changes made to limits, retentions, or attachment points

in our other reinsurance contracts.

will remain consistent with 2024 at $ 20,000 and the reinsurance protection will cover $ 117,000 .

The lower limit for 2025 was primarily

due to the sale of Westminster, which drove the top end of the catastrophe modeling results.

There were no changes made to limits, retentions,

or attachment points in our other reinsurance contracts.

The Company actively monitors and evaluates the financial

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Beginning on December 31, 2022, credit

losses are recognized through an allowance account developed using the CECL model.

See Part II, Item 8, Note 2 “Recent Accounting

losses are recognized through an allowance account developed using a new CECL model.

See the Part II, Item 8, Note 2 “Recent Accounting

Pronouncements” for additional information.

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underlying reinsured business, historical experience, current economic conditions, and the state of reinsurer relations in general.

risk is mitigated by entering into reinsurance arrangements only with reinsurers that have strong financial strength ratings.

31, 2023, and December 31, 2022, management has concluded that it is not necessary to record an allowance for expected credit losses related

to reinsurance recoverables.

All of our significant reinsurance partners are rated “A-” (Excellent) or better by AM Best,

and there is no history of write-offs.

A reconciliation of direct to net premiums on both

a written and an earned basis is as follows:

risk is mitigated by entering into reinsurance arrangements only with reinsurers that have strong credit ratings and statutory surplus

above certain levels.

At December 31, 2024 and 2023, management has concluded that it is not necessary to record an allowance for expected

credit losses related to reinsurance recoverables.

All of our significant reinsurance partners are rated “A-” (Excellent)

or better by AM Best, and there is no history of write-offs.

A reconciliation of direct to net premiums on both a written

and an earned basis, presented on a consolidated basis, including both continuing and discontinued operations, is as follows:

Year Ended December 31,

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Ceded premium

A reconciliation of direct to net losses and loss

adjustment expenses is as follows:

The reconciliations of the Company’s direct to net

premiums on both a written and an earned basis for the current year-to-date and comparable prior year-to-date amounts, segregated between

continuing and discontinued operations, are shown below.

Year Ended December 31,

Continuing operations:

Direct premium

Assumed premium

Ceded premium

Year Ended December 31,

Discontinued operations:

Direct premium

Assumed premium

Ceded premium

A reconciliation of direct to net losses and loss adjustment

expenses, presented on a consolidated basis, including both continuing and discontinued operations, is as follows:

Year Ended December 31,

Direct losses and loss adjustment expenses

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Net losses and loss adjustment expenses

If 100 % of our ceded reinsurance was cancelled as

of December 31, 2023, no ceded commissions would need to be returned to the reinsurers.

Reinsurance contracts are typically effective

from January 1 through December 31 each year.

The reconciliations for current and prior year continuing and discontinued

operations of direct to net losses and loss adjustment expenses is as follows:

Year Ended December 31,

Continuing Operations:

Direct losses and loss adjustment expenses

Assumed losses and loss adjustment expenses

Ceded losses and loss adjustment expenses

Net losses and loss adjustment expenses

Year Ended December 31,

Discontinued Operations:

Direct losses and loss adjustment expenses

Assumed losses and loss adjustment expenses

Ceded losses and loss adjustment expenses

Net losses and loss adjustment expenses

Intercompany Reinsurance Pooling Arrangement

Effective January 1, 2020, all of our insurance subsidiary

and affiliate companies entered into an intercompany reinsurance pooling agreement.

This agreement was finalized, approved, and implemented

during the fourth quarter of 2020, retroactive to the January 1 effective date.

Nodak Insurance is the lead company of the pool, and assumes

the net premiums, net losses, and underwriting expenses from each of the other five companies.

Nodak Insurance then retrocedes balances

back to each company, while retaining its own share of the pool’s net underwriting results, based on individual pool percentages

established in the respective pooling agreement.

This arrangement allows each insurance company to rely upon the capacity of the pool’s

total statutory capital and surplus.

As a result, they are evaluated by AM Best on a group basis and hold a single combined financial

strength rating, long-term issuer credit rating, and financial size category.

For the years ended December 31, 2023, 2022, and 2021, the

pooling share percentages by insurance company were:

Pool Percentage

Nodak Insurance Company

American West Insurance Company

Primero Insurance Company

Battle Creek Mutual Insurance Company

Direct Auto Insurance Company

Westminster American Insurance Company

Deferred Policy Acquisition Costs

Expenses directly related to successfully acquired

insurance policies, primarily commissions, premium taxes and underwriting costs, are deferred and amortized over the terms of the policies.

We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability.

table below shows the deferred policy acquisition costs and asset reconciliation:

Effective January 1, 2020, all of our insurance subsidiary and affiliate

companies entered into an intercompany reinsurance pooling agreement.

Nodak Insurance is the lead company of the pool, and assumes the

net premiums, net losses, and underwriting expenses from each of the other five companies.

Nodak Insurance then retrocedes balances back

to each company, while retaining its own share of the pool’s net underwriting results, based on individual pool percentages established

in the respective pooling agreement.

This arrangement allows each insurance company to rely upon the capacity of the pool’s total

statutory capital and surplus.

As a result, they are evaluated by AM Best on a group basis and hold a single combined financial strength

rating, long-term issuer credit rating, and financial size category.

Subsequent to the June 30, 2024, date of sale, Westminster is no

longer a member of the pool, and the pooling percentages for the remaining insurance subsidiaries were updated based on their respective

surplus as a percentage of the pool as of December 31, 2023.

Policy Acquisition Costs

Expenses directly related to successfully acquired insurance

policies, primarily commissions, premium taxes and underwriting costs, are deferred and amortized over the terms of the policies.

our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability.

The table below,

presented on a consolidated basis, including both continuing and discontinued operations, shows the deferred policy acquisition costs

and asset reconciliation:

Year Ended December 31,

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Amortization of deferred policy acquisition costs

Westminster balance disposed in sale

Balance, end of year

Unpaid Losses and Loss Adjustment Expenses

Activity in the liability for unpaid losses and loss

adjustment expenses is summarized as follows:

The tables for current and prior year continuing and discontinued

operations showing the deferred policy acquisition costs and assets reconciliation are shown below:

Year Ended December 31,

Continuing operations:

Balance, beginning of year

Deferral of policy acquisition costs

Amortization of deferred policy acquisition costs

Balance, end of year

Year Ended December 31,

Discontinued operations:

Balance, beginning of period

Deferral of policy acquisition costs

Amortization of deferred policy acquisition costs

Westminster balance disposed in sale

Balance, end of year

Losses and Loss Adjustment Expenses

Activity in the liability for unpaid losses and

loss adjustment expenses is summarized as follows for both continuing and discontinued operations:

Year Ended December 31,

Balance, beginning of year:

Liability for unpaid losses and loss adjustment expenses

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Paid related to:

Westminster balances disposed in sale:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, date of sale

Balance, end of year:

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During the year ended December 31, 2024, the Company’s

incurred reported losses and loss adjustment expenses included $ 20,452 of net unfavorable development on prior accident years, primarily

attributable to unfavorable development for the Westminster commercial and Direct Auto non-standard auto businesses partially offset by

favorable development for Battle Creek, American West, and Nodak Insurance.

During the year ended December 31, 2022, the Company’s

incurred reported losses and loss adjustment expenses included $ 1,149 of net unfavorable development on prior accident years, primarily

attributable to unfavorable development for the Westminster commercial business partially offset by favorable development for Battle Creek

and Nodak Insurance.

During the year ended December 31, 2021, incurred reported losses and loss adjustment expenses included $ 4,138 of

net favorable development on prior accident years, primarily attributable to the Direct Auto non-standard auto business.

incurred reported losses and loss adjustment expense included $ 12,908 of net unfavorable development on prior accident years.

primarily attributable to unfavorable development for the Direct Auto non-standard auto business, partially offset by favorable development

in Battle Creek, American West, Primero, and Nodak Insurance.

During the year ended December 31, 2023, the Company’s incurred reported

losses and loss adjustment expenses included $ 20,452 of net unfavorable development on prior accident years, primarily attributable to

unfavorable development for the Westminster commercial and Direct Auto non-standard auto businesses partially offset by favorable development

for Battle Creek, American West, and Nodak Insurance.

During the year ended December 31, 2022, the Company’s incurred reported losses

and loss adjustment expenses included $ 1,149 of net unfavorable development on prior accident years, primarily attributable to unfavorable

development for the Westminster commercial business partially offset by favorable development for Battle Creek and Nodak Insurance.

2024, Westminster was sold and all associated liabilities were included in the sale.

Changes in unpaid losses and loss adjustment expense

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individual claims, original estimates are increased or decreased accordingly.

The tables for current and prior year continuing and discontinued

operations showing the liability for unpaid losses and loss adjustment expense are shown below:

Year Ended December 31,

Continuing operations:

Balance, beginning of year:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, beginning of year

Incurred related to:

Total incurred

Paid related to:

Balance, end of year:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, end of year

Year Ended December 31,

Discontinued operations:

Balance, beginning of year:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, beginning of year

Incurred related to:

Total incurred

Paid related to:

Westminster balances disposed in sale:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, date of sale

Balance, end of year:

Liability for unpaid losses and loss adjustment expenses

Reinsurance recoverables on losses

Net balance, end of year

The tables on the following pages present information,

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is prior to the effects of the intercompany reinsurance pooling arrangement.

The tables include unaudited information about incurred

and paid claims development for the years ended December 31, 2014 (a) through 2015 for the Private Passenger Auto, Primero Non-Standard

Auto, Home and Farm, and Crop segments, (b) through 2017 for the Direct Auto Non-Standard Auto information, and (c) through 2019 for the

Westminster Commercial information, which we present as supplementary information.

The tables include unaudited information about

incurred and paid claims development for the year ended December 31, 2015 for the Private Passenger Auto, Home and Farm, and Crop segments

and from the year ended December 31, 2015 through 2017 for the Non-Standard Auto information, which we present as supplementary information.

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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Plus Expected

(in thousands, except claim

(1) Prior years

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

All outstanding liabilities prior to 2014, net of reinsurance

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(1) Prior years

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

At December 31, 2023

(in thousands, except claim

years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

All outstanding liabilities prior to 2014, net of reinsurance

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

At December 31, 2023

(in thousands, except claim

years unaudited

(Direct Auto)

(in thousands, except claim counts)

(1) Prior years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

years unaudited

(1) Prior years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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Plus Expected

(in thousands, except claim

(in thousands, except claim counts)

(1) Prior years unaudited

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Plus Expected

(in thousands, except claim

years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

All outstanding liabilities prior to 2014, net of reinsurance

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(in thousands, except claim counts)

(1) Prior years unaudited

(Westminster)

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

At December 31, 2023

(in thousands, except claim

years unaudited

(Westminster)

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

years unaudited

(1) Prior years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

1 unchanged sentence

At December 31, 2024

(in thousands, except claim

years unaudited

Plus Expected

(in thousands, except claim counts)

(1) Prior years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

3 unchanged sentences

(1) Prior years unaudited

The following table presents a reconciliation of

the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in our Consolidated

The following table presents a reconciliation

of the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in our Consolidated

Balance Sheet:

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Private passenger auto

Non-standard auto (Primero)

Non-standard auto (Direct Auto)

Non-Standard auto

Home and farm

Commercial (Westminster)

Commercial (non-Westminster)

Total liabilities for unpaid losses and loss adjustment expenses

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Private passenger auto

Non-standard auto (Primero)

Non-standard auto (Direct Auto)

Non-Standard auto

Home and farm

Commercial (Westminster)

Commercial (non-Westminster)

Total reinsurance recoverables on losses

Net liability for unpaid losses and loss adjustment expenses

The following table presents required supplementary information about

average historical claims duration as of December 31, 2023:

The following table presents required supplementary information

about average historical claims duration as of December 31, 2024:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

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Non-Standard Auto

(Direct Auto)

Home and Farm

Commercial (Westminster)

Commercial (non-Westminster)

Property and Equipment

Property and equipment consisted of the following:

and Equipment

Property and equipment, presented on a consolidated

basis, including both continuing and discontinued operations, consisted of the following:

Estimated Useful

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Total property and equipment, net

Depreciation expense was $ 826 , $ 708 , and $ 694 during

the years ended December 31, 2023, 2022, and 2021, respectively.

Goodwill and Other Intangibles

The following table presents the carrying

amount of the Company’s goodwill and related impairment by segment:

Depreciation expense was $ 770 , $ 826 , and $ 708

during the years ended December 31, 2024, 2023, and 2022, respectively.

Depreciation expense for continuing operations was $ 681 , $ 692 ,

and $ 604 during the years ended December 31, 2024, 2023, and 2022, respectively.

Property and equipment for current and prior year continuing

and discontinued operations consisted of the following:

December 31, 2024

Continuing operations

Discontinued operations

Accumulated depreciation

Continuing operations

Discontinued operations

Total accumulated depreciation

Total property and equipment, net

December 31, 2023

Continuing operations

Discontinued operations

Accumulated depreciation

Continuing operations

Discontinued operations

Total accumulated depreciation

Total property and equipment, net

and Other Intangibles

The following table presents, on a consolidated basis, including

both continuing and discontinued operations, the carrying amount of the Company’s goodwill and related impairment by segment:

Year Ended December 31,

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Goodwill, end of year

Based on the qualitative analysis performed

for the goodwill related to our non-standard auto segment as of the beginning of the fourth quarter of 2023, we concluded that goodwill

was not impaired.

We performed a quantitative assessment of the goodwill related to the Westminster acquisition during the fourth quarter

of 2023, which is allocated to our commercial segment, and concluded that the goodwill was fully impaired as of December 31, 2023, resulting

in a non-cash impairment charge of $ 6,756 in the current year.

The determination of the fair value of the reporting unit was based on

a combination of a market approach that considered benchmark company market multiples, and an income approach that utilized discounted

Under the income approach, we determined fair value based on the present value of the most recent cash flow projections for

the reporting unit as of the date of the analysis and calculated a terminal value utilizing a terminal growth rate.

We performed a quantitative assessment

of the goodwill related to the Primero acquisition during the fourth quarter of 2024, which is allocated to our Non-Standard Auto segment,

and concluded that the goodwill was fully impaired as of December 31, 2024, resulting in a non-cash impairment charge of $ 2,628 in the

current year.

The determination of the fair value of the reporting unit was based on an income approach that utilized discounted cash

Under the income approach, we determined fair value based on the present value of the most recent cash flow projections for the

reporting unit as of the date of the analysis and calculated a terminal value utilizing a terminal growth rate.

The significant assumptions

under this approach include, among others:

income projections, new product introductions, customer behavior, competitor pricing, operating

expenses, the discount rate, and the terminal growth rate.

The cash flows used to determine fair value are dependent on a number of significant

management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based

upon our historical experience.

Our estimates are subject to change given the inherent uncertainty in predicting future results.

income projections, operating expenses, the discount rate, and the terminal growth rate.

cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future

performance and the expected future economic environment, which are partly based upon our historical experience.

Our estimates are subject

to change given the inherent uncertainty in predicting future results.

Additionally, the discount rate and the terminal growth rate are

based on our judgment of the rates that would be utilized by a hypothetical market participant.

We performed a quantitative assessment

of the goodwill related to the Westminster acquisition during the fourth quarter of 2023, which was allocated to our former Commercial

segment, and concluded that the goodwill was fully impaired as of December 31, 2023, resulting in a non-cash impairment charge of $ 6,756

The determination of the fair value of the reporting unit was based on a combination of a market approach that considered benchmark

company market multiples, and an income approach that utilized discounted cash flows.

Under the income approach, we determined fair value

based on the present value of the most recent cash flow projections for the reporting unit as of the date of the analysis and calculated

a terminal value utilizing a terminal growth rate.

The significant assumptions under this approach included, among others:

income projections,

new product introductions, customer behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate.

The cash flows used to determine fair value were dependent on a number of significant management assumptions such as our expectations

of future performance and the expected future economic environment, which were partly based upon our historical experience.

Additionally,

the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market

We determined during our reviews that there

were no impairments of goodwill for any reporting units during the years ended December 31, 2022 and 2021.

the discount rate and the terminal growth rate were based on our judgment of the rates that would be utilized by a hypothetical market

Other Intangible Assets

The following table presents the carrying

amount of the Company’s other intangible assets:

The following table presents on a consolidated basis, including

both continuing and discontinued operations, the carrying amount of the Company’s other intangible assets:

December 31, 2024

3 unchanged sentences

Total subject to amortization

Not subject to amortization – state insurance licenses

Not subject to amortization:

State insurance licenses

December 31, 2023

3 unchanged sentences

Total subject to amortization

Not subject to amortization – state insurance licenses

We determined during our reviews that there were

no impairments of other indefinite-lived intangible assets or finite-lived intangible assets during the years ended December 31, 2023,

Not subject to amortization

State insurance licenses

The following table presents the current and

prior year continuing and discontinued carrying amounts of the Company’s other intangible assets:

December 31, 2024

Gross Carrying

Subject to amortization:

Continuing operations

Discontinued operations

Total subject to amortization

Not subject to amortization

Continuing operations

Discontinued operations

Total not subject to amortization

December 31, 2023

Gross Carrying

Subject to amortization:

Continuing operations

Discontinued operations

Total subject to amortization

Not subject to amortization

Continuing operations

Discontinued operations

Total not subject to amortization

We determined during our reviews that there

were no impairments of other indefinite-lived intangible assets or finite-lived intangible assets during the years ended December 31,

2024, 2023, and 2022.

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during the years ended December 31, 2024, 2023, and 2022, respectively.

Other intangible assets that have finite lives, including trade

names and distribution networks, are amortized over their useful lives.

As of December 31, 2023, the estimated amortization of other intangible

assets with finite lives for the next five years in the period ending December 31, 2028, and thereafter is as follows:

Year ending December 31,

Total other intangible assets with finite lives

Royalties, Dividends, and Affiliations

Amortization expense for continuing operations was $ 0 , $ 33 , and

$ 50 during the years ended December 31, 2024, 2023, and 2022, respectively.

Dividends, and Affiliations

North Dakota Farm Bureau

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Our insurance subsidiaries are also subject to risk-based capital requirements that may further affect their ability to pay

Our insurance subsidiaries statutory capital and surplus at

December 31, 2023, exceeded the amount of statutory capital and

surplus necessary to satisfy risk-based capital requirements by a significant margin.

There is no amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department.

Prior to its payment of any dividend,

Nodak Insurance will be required to provide notice of the dividend to the North Dakota Insurance Department.

This notice must be provided

to the North Dakota Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of

an ordinary dividend.

The North Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company

is in violation of any law or regulation.

These restrictions or any subsequently imposed restrictions may affect our future liquidity.

The Nodak Insurance Board of Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

dividends were declared or paid by Nodak Insurance during the years ended December 31, 2023 and 2021.

Direct Auto re-domesticated from Illinois to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

The amount available for payment of dividends from Direct

Auto to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 90 as of December

No dividends were declared or paid by Direct Auto during the years ended December 31, 2023, 2022, or 2021.

Westminster re-domesticated from Maryland to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

The amount available for payment of dividends from Westminster

Our insurance subsidiaries statutory capital and surplus at December 31, 2024, exceeded

the amount of statutory capital and surplus necessary to satisfy risk-based capital requirements by a significant margin.

The amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $ 8,273 as of December

No dividends were declared or paid by Westminster during the years ended December 31, 2023, 2022 or 2021.

Battle Creek Mutual Insurance Company

The following tables disclose the standalone balance

sheets and statements of operations of Battle Creek, prior to intercompany eliminations, to illustrate the impact of including Battle

Creek in our Consolidated Balance Sheets and Consolidated Statements of Operations:

No dividends were declared or paid by Nodak Insurance during the years ended December 31, 2024 and 2023.

The Nodak Insurance

Board of Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

The amount available for payment of dividends from Direct Auto to

NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $ 3,146 as of December 31,

No dividends were declared or paid by Direct Auto during the years ended December 31, 2024, 2023, or 2022.

Prior to its payment of any dividend, Nodak Insurance will be required

to provide notice of the dividend to the North Dakota Insurance Department.

This notice must be provided to the North Dakota Insurance

Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend.

Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company is in violation of any law or

These restrictions or any subsequently imposed restrictions may affect our future liquidity.

Westminster was sold on June 30, 2024, and

therefore no dividends are available to be paid to NI Holdings subsequent to that date.

No dividends were declared or paid by Westminster

during the years ended December 31, 2024, 2023 or 2022.

See Part II, Item 8, Note 20 “Discontinued Operations” for additional

Prior to January 2, 2024, we consolidated the financial statements

of Battle Creek, and Battle Creek’s policyholders’ interest in Battle Creek was reflected as a non-controlling interest in

shareholders’ equity in our Consolidated Balance Sheets.

Subsequent to January 2, 2024, Battle Creek is fully consolidated in our

Consolidated Balance Sheets.

The following table discloses the standalone balance sheet of Battle Creek, prior to intercompany eliminations,

to illustrate the impact of including Battle Creek in our December 31, 2023, Consolidated Balance Sheet prior to demutualization:

December 31, 2023

Cash and cash equivalents

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Amount partly eliminated in consolidation.

Year Ended December 31,

Net premiums earned

Fee and other income (expense)

Net investment income

Net investment gains (losses)

Total revenues

Losses and loss adjustment expenses

Amortization of deferred policy acquisition costs

Other underwriting and general expenses

Total expenses

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Benefit Plans

Nodak Insurance sponsors a 401(k) plan with

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an additional elective amount of employee compensation as a profit-sharing contribution for eligible employees.

Westminster also sponsors

a separate 401(k) plan.

Westminster also sponsored

a separate 401(k) plan until the company was sold on June 30, 2024.

American West and Battle Creek have no employees.

The Company reported expenses related to these plans totaling

$ 806 , $ 693 , and $ 1,365 during the years ended December 31, 2023, 2022, and 2021, respectively.

The Company reported

expenses related to these plans totaling $ 782 , $ 806 , and $ 693 during the years ended December 31, 2024, 2023, and 2022, respectively.

All fees associated with the plans are deducted

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31, 2024, 2023, and 2022, respectively.

In connection with our IPO in March 2017, the

Company established its ESOP, which is intended to be an employee stock ownership plan within the meaning of Internal Revenue Code Section

4975(e)(7) and invests solely in common stock of the Company.

In connection with our IPO in March 2017, the Company established

its ESOP within the meaning of Internal Revenue Code Section 4975(e)(7) and invests solely in common stock of the Company.

Upon establishment of the ESOP, Nodak Insurance

loaned $ 2,400 to the ESOP’s related trust (the “ESOP Trust”).

The ESOP loan was for a period of ten years , bearing interest

at the long-term Applicable Federal Rate effective on the closing date of the offering ( 2.79 % annually).

The ESOP Trust used the proceeds

of the loan to purchase shares in our IPO, which resulted in the ESOP Trust owning approximately 1.0 % of the Company’s authorized

The ESOP loan was for a period of ten years, bearing

interest at the long-term Applicable Federal Rate effective on the closing date of the offering ( 2.79 % annually).

The ESOP Trust used

the proceeds of the loan to purchase shares in our IPO, which resulted in the ESOP Trust owning approximately 1.0 % of the Company’s

authorized shares.

The ESOP has purchased the shares for investment and not for resale.

The shares purchased by the ESOP Trust in the

offering are held in a suspense account as collateral for the ESOP loan.

Nodak Insurance makes semi-annual cash contributions to the ESOP

in amounts no smaller than the amounts required for the ESOP Trust to make its loan payments to Nodak Insurance.

While the ESOP makes

two loan payments per year, a pre-determined portion of the shares are released from the suspense account and allocated to participant

accounts at the end of the calendar year.

The shares purchased by the ESOP Trust in the offering are held

in a suspense account as collateral for the ESOP loan.

Nodak Insurance makes semi-annual cash contributions to the ESOP in amounts no

smaller than the amounts required for the ESOP Trust to make its loan payments to Nodak Insurance.

While the ESOP makes two loan payments

per year, a pre-determined portion of the shares are released from the suspense account and allocated to participant accounts at the end

of the calendar year.

This release and allocation occurs on an annual basis over the ten-year term of the ESOP loan.

Nodak Insurance has a lien on the shares of common stock of the Company held by the ESOP to secure repayment of the loan from the ESOP

to Nodak Insurance.

If the ESOP is terminated as a result of a change in control of the Company, the ESOP may be required to pay the costs

of terminating the plan.

It is anticipated that the only assets held by

the ESOP will be shares of the Company’s common stock.

Participants in the ESOP cannot direct the investment of any assets allocated

to their accounts.

Nodak Insurance has

a lien on the shares of common stock of the Company held by the ESOP to secure repayment of the loan from the ESOP to Nodak Insurance.

If the ESOP is terminated as a result of a change in control of the Company, the ESOP may be required to pay the costs of terminating

It is anticipated that the only assets held by the ESOP will be

shares of the Company’s common stock.

Participants in the ESOP cannot direct the investment of any assets allocated to their accounts.

The ESOP participants are employees of Nodak Insurance.

The employees of Primero, Direct Auto, and Westminster do not

participate in the ESOP.

Each employee of Nodak Insurance automatically

becomes a participant in the ESOP if such employee is at least 21 years old, has completed a minimum of one thousand hours of service

with Nodak Insurance, and has completed an Eligibility Computation Period.

Employees are not permitted to make any contributions to the

Participants in the ESOP receive annual reports from the

Company showing the number of shares of common stock of the Company allocated

to the participants’ accounts and the market value of those shares.

The shares are allocated to participants based on compensation

as provided for in the ESOP.

In connection with the establishment of the ESOP,

the Company created a contra-equity account on the Consolidated Balance Sheet equal to the ESOP’s basis in the shares.

of those shares was set at $ 10.00 per share as part of the IPO.

As shares are released from the ESOP suspense account, the contra-equity

account is credited, which reduces the impact of the contra-equity account on the Company’s Consolidated Balance Sheet over time.

The Company records compensation expense related to the shares released, equal to the number of shares released from the suspense account

multiplied by the average market value of the Company’s stock during the period.

The Company recognized compensation expense related

to the ESOP of $ 322 , $ 380 , and $ 460 during the years ended December 31, 2023, 2022, and 2021, respectively.

Through December 31, 2023, the Company had released

and allocated 170,205 ESOP shares to participants, with a remainder of 69,795 ESOP shares in suspense at December 31, 2023.

Company’s year-end market price of $ 12.99 per share, the fair value of the unearned ESOP shares was $ 907 at December 31, 2023.

Line of Credit

The employees of Primero, Direct Auto, and Westminster do not participate in the

Each employee of Nodak Insurance automatically becomes a participant

in the ESOP if such employee is at least 21 years old, has completed a minimum of one thousand hours of service with Nodak Insurance,

and has completed an Eligibility Computation Period.

Employees are not permitted to make any contributions to the ESOP.

Participants in

the ESOP receive annual reports from the Company showing the number of shares of common stock of the Company allocated to the participants’

accounts and the market value of those shares.

The shares are allocated to participants based on compensation as provided for in the ESOP.

In connection with the establishment of the ESOP, the Company created

a contra-equity account on the Consolidated Balance Sheet equal to the ESOP’s basis in the shares.

The basis of those shares was

set at $ 10.00 per share as part of the IPO.

As shares are released from the ESOP suspense account, the contra-equity account is credited,

which reduces the impact of the contra-equity account on the Company’s Consolidated Balance Sheets over time.

The Company records

compensation expense related to the shares released, equal to the number of shares released from the suspense account multiplied by the

average market value of the Company’s stock during the period.

The Company recognized compensation expense

related to the ESOP of $ 365 , $ 322 , and $ 380 during the years ended December 31, 2024, 2023, and 2022, respectively.

Through December 31, 2024, the Company had

released and allocated 194,520 ESOP shares to participants, with a remainder of 45,480 ESOP shares in suspense at December 31, 2024.

the Company’s year-end market price of $ 15.70 per share, the fair value of the unearned ESOP shares was $ 714 at December 31, 2024.

NI Holdings has a $ 3,000 line of credit with Wells

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on December 13, 2025 .

The components of our provision for income tax expense

(benefit) were as follows:

The components of our provision for income tax

expense (benefit) were as follows:

Year Ended December 31,

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Total income tax expense (benefit)

The provision for income tax expense (benefit) differs

from the amount that would be computed by applying the statutory federal rate to income (loss) before income taxes as a result of the

The provision for income tax expense (benefit)

differs from the amount that would be computed by applying the statutory federal rate to income (loss) before income taxes as a result

of the following, including both continuing and discontinued operations:

Year Ended December 31,

Income (loss) before income taxes

Loss before income taxes

Expected provision for federal income taxes at 21%

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Compensation-related expenses

Goodwill impairment

Westminster sale/goodwill impairment

Demutualization of Battle Creek

Research and development credit

Change in valuation allowance

State carryovers

Total income tax expense (benefit)

Reconciliation of consolidated federal income tax expense (benefit) from:

Continuing operations

Discontinued operations

Loss on sale of discontinued operations

Consolidated federal income tax expense (benefit)

We re-measure existing deferred income tax assets

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$ 694 at December 31, 2024, 2023, and 2022, respectively.

The income tax effects of temporary differences that

give rise to significant portions of our deferred income tax assets and deferred income tax liabilities at December 31, 2023 and 2022,

were as follows:

The income tax effects of temporary differences

that give rise to significant portions of our deferred income tax assets and deferred income tax liabilities at December 31, 2024 and

2023, including both continuing and discontinued operations, were as follows:

Deferred income tax assets:

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Net unrealized losses on investments

Net operating loss carryovers

Loss carryovers

Deferred compensation

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during the years ended December 31, 2024, 2023, or 2022.

At December 31, 2023 and 2022, the Company, other

than Battle Creek and Westminster, had no income tax related carryforwards for net operating losses, alternative minimum tax credits,

or capital losses.

Battle Creek, which files its federal income tax

returns on a stand-alone basis, had net operating loss carryforwards of $ 3,756 and $ 3,963 at December 31, 2023 and 2022, respectively.

The net operating loss carryforwards expire through 2032.

At December 31, 2024 and 2023, the Company had no

income tax related carryforwards for alternative minimum tax credits or capital losses.

At December 31, 2024, the Company had $ 2.5 million

in state net operating loss deferred tax assets, all of which are offset by a valuation allowance due to the Company’s judgment

that it is more likely than not that it will be unable to realize the benefits.

Battle Creek, which was required to file its federal

income tax returns on a stand-alone basis until the demutualization on January 2, 2024, had net operating loss carryforwards of $ 3,756

and $ 3,963 at December 31, 2023 and 2022, respectively.

Subsequent to the demutualization, Battle Creek will be included in the NI Holdings

consolidated tax return.

As a result of the demutualization, the Battle Creek net operating loss carryforwards were written off in 2024

as they will not be available to offset income within the NI Holdings consolidated tax return, and the $ 505 associated valuation allowance

was no longer necessary.

Westminster, which became part of the Company’s

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Primero leases a facility in Spearfish, South Dakota under

a non-cancellable operating lease expiring in 2028, and leases a facility in Las Vegas, Nevada on a month-to-month basis.

leases a facility in Chicago, Illinois under a non-cancellable operating lease expiring in 2029.

Nodak Insurance leases a facility in

Fargo, North Dakota under a non-cancellable operating lease expiring in 2024.

In addition, Nodak Insurance leases server equipment under

a non-cancellable finance lease expiring in 2026.

Effective for the year ended December 31, 2022, the

Company adopted the updated guidance for leases.

a non-cancellable operating lease expiring in 2028 .

Direct Auto leases a facility in Chicago, Illinois under a non-cancellable operating

lease expiring in 2029 .

Nodak Insurance leases a facility in Fargo, North Dakota under a non-cancellable operating lease expiring in 2029 .

In addition, Nodak Insurance leases server equipment under a non-cancellable finance lease expiring in 2026.

Effective for the year ended December 31, 2022,

the Company adopted the updated guidance for leases.

See Part II, Item 8, Note 2 “Recent Accounting Pronouncements” for additional

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Lease liabilities are included in accrued expenses and other liabilities and right-of-use assets

are included in other assets in the Consolidated Balance Sheet.

are included in other assets in our Consolidated Balance Sheets.

There were expenses of $ 484 , $ 407 , and $ 391 related

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As of and For the Year Ended December 31,

2024 2023 2022

Operating lease cost $ 383 $ 389 $ 391

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Weighted average discount rate – finance leases 8.50 % 8.50 % —

Weighted average remaining lease term in years – operating leases

Weighted average remaining lease term in years – finance leases

Weighted average remaining lease term in years – operating leases 4.5 years 5.3 years 6.3 years

Weighted average remaining lease term in years – finance leases 1.8 years 2.8 years —

The following table presents the contractual maturities of the Company’s

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Contingencies

We have been named as a defendant in various lawsuits

relating to our insurance operations.

Contingent liabilities arising from litigation, income taxes, and other matters are not considered

to be material to our financial position.

Common and Preferred Stock

We are, from time to time, party to routine litigation incidental

to the normal course of our business.

Based upon information presently available to us, we do not consider any litigation to be material.

However, given the uncertainties attendant to litigation, we cannot assure you that our results of operations and financial condition

will not be materially adversely affected by any litigation.

Contingent liabilities arising from litigation, income taxes, and other matters

are not considered to be material to our financial position.

and Preferred Stock

Changes in the number of common stock shares outstanding

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Year Ended December 31,

Shares outstanding, beginning

Shares outstanding, beginning of period

Treasury shares repurchased through stock repurchase authorization

Issuance of treasury shares for vesting of stock awards

Issuance of treasury shares for vesting of restricted stock units

Issuance of shares related to employee stock ownership plan

Shares outstanding, ending

Shares outstanding, end of period

The changes in the number of common shares outstanding

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average effects of 120,626 shares of stock awards since the impacts of these potential shares of common stock were anti-dilutive.

loss per diluted common share for the year ended December 31, 2022, excluded the weighted average effects of 155,463 shares of stock awards

since the impacts of these potential shares of common stock were anti-dilutive.

On May 4, 2020, our Board of Directors approved an

authorization for the repurchase of up to approximately $ 10,000 of the Company’s outstanding common stock.

During the year ended

December 31, 2020, we completed the repurchase of 454,443 shares of our common stock for $ 7,238 under this authorization.

During the nine

months ended September 30, 2021, we repurchased an additional 144,110 shares of our common stock for $ 2,762 to close out this authorization.

net loss per diluted common share for the year ended December 31, 2023, excluded the weighted average effects of 76,532 shares of stock

awards since the impacts of these potential shares of common stock were anti-dilutive.

The net loss per diluted common share for the year

ended December 31, 2022, excluded the weighted average effects of 155,463 shares of stock awards since the impacts of these potential

shares of common stock were anti-dilutive.

On August 11, 2021, our Board of Directors approved

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ended December 31, 2022, we completed the repurchase of 214,937 shares of our common stock for $ 3,446 to close out this authorization.

On May 9, 2022, our Board of Directors approved an

authorization for the repurchase of up to approximately $ 10,000 of the Company’s outstanding common stock.

On May 9, 2022, our Board of Directors approved

an authorization for the repurchase of up to approximately $ 10,000 of the Company’s outstanding common stock.

During the year ended

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tax discussed below.

At December 31, 2023, $ 2,052 remains available under this authorization.

The cost of this treasury stock is a reduction of

shareholders’ equity within our Consolidated Balance Sheets.

During the year ended

December 31, 2024, we did not repurchase any shares of our common stock.

At December 31, 2024,

$ 2,052 remains available under this authorization.

The cost of this treasury stock is a reduction

of shareholders’ equity within our Consolidated Balance Sheets.

On August 16, 2022, the U.S.

government enacted the

Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”)

government enacted

the Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”)

based on adjusted financial statement income and imposes a 1 % excise tax on corporate stock repurchases, subject to certain adjustments.

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Preferred Stock

The Company’s Articles of Incorporation provide

authority to issue up to five million shares of preferred stock.

The Company’s Articles of Incorporation

provide authority to issue up to five million shares of preferred stock.

No preferred shares are issued or outstanding.

Share-Based Compensation

The NI Holdings, Inc.

2020 Stock and Incentive Plan

(the “Plan”) is designed to promote the interests of the Company and its shareholders by aiding the Company in attracting

2020 Stock and Incentive

Plan (the “Plan”) is designed to promote the interests of the Company and its shareholders by aiding the Company in attracting

and retaining employees, officers, consultants, independent contractors, advisors, and non-employee directors capable of assuring the

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with the Company’s shareholders.

The Plan provides for the grant of nonqualified stock

options, incentive stock options, restricted stock units (“RSUs”), stock appreciation rights, dividend equivalents, and performance

share units (“PSUs”) to employees, officers, consultants, advisors, non-employee directors, and independent contractors designated

by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

Awards made under the Plan are based

upon, among other things, a participant’s level of responsibility and performance within the Company.

The total aggregate number of shares of common stock

that may be issued under the Plan shall not exceed 1,000,000 shares, subject to adjustments as provided in the Plan.

No eligible participant

may be granted any awards for more than 100,000 shares in the aggregate in any calendar year, subject to adjustment in accordance with

The aggregate amount payable pursuant to all performance awards denominated in cash to any eligible person in any calendar year

is limited to $ 1,000 in value.

Directors who are not also employees of the Company may not be granted awards denominated in shares that

exceed $ 150 in any calendar year.

The Plan provides for the grant of nonqualified

stock options, incentive stock options, restricted stock units (“RSUs”), stock appreciation rights, dividend equivalents,

and performance share units (“PSUs”) to employees, officers, consultants, advisors, non-employee directors, and independent

contractors designated by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

under the Plan are based upon, among other things, a participant’s level of responsibility and performance within the Company.

The total aggregate number of shares of common

stock that may be issued under the Plan shall not exceed 1,000,000 shares, subject to adjustments as provided in the Plan.

participant may be granted any awards for more than 100,000 shares in the aggregate in any calendar year, subject to adjustment in accordance

with the Plan.

The aggregate amount payable pursuant to all performance awards denominated in cash to any eligible person in any calendar

year is limited to $ 1,000 in value.

Directors who are not also employees of the Company may not be granted awards denominated in shares

that exceed $ 150 in any calendar year.

Restricted Stock Units

The Compensation Committee has awarded RSUs to non-employee

directors and select executives.

The Compensation Committee has awarded RSUs to

non-employee directors and select executives.

RSUs are promises to issue actual shares of common stock at the end of a vesting period.

The RSUs granted

to executives under the Plan were based on salary and vest 20 % per year over a five-year period, while RSUs granted to non-employee directors

vest 100 % on the date of the next annual meeting of shareholders following the grant date.

Dividend equivalents on RSUs are accrued during

the vesting period and paid in cash at the end of the vesting period but are subject to forfeiture until the underlying shares become

Participants do not have voting rights with respect to RSUs.

The Company recognizes stock-based compensation costs

for RSUs based on the grant date fair value.

The compensation costs are normally expensed over the vesting periods to each vesting date;

however, the cost of RSUs granted to executives are expensed immediately if the executive has met certain retirement criteria and the

RSUs become non-forfeitable.

The RSUs granted to executives under the Plan are based on salary.

RSUs granted prior to 2024 vest equally over a five-year period.

for executive grants in 2024, the RSUs vest equally over a three-year period.

The RSUs granted to non-employee directors vest 100 % on

the date of the next annual meeting of shareholders following the grant date.

Dividend equivalents on RSUs are accrued during the vesting

period and paid in cash at the end of the vesting period but are subject to forfeiture until the underlying shares become vested.

do not have voting rights with respect to RSUs.

The Company recognizes stock-based compensation

costs for RSUs based on the grant date fair value.

The compensation costs are normally expensed over the vesting periods to each vesting

however, the cost of RSUs granted to executives are expensed immediately if the executive has met certain retirement criteria and

the RSUs become non-forfeitable.

Estimated forfeitures are included in the determination of compensation costs.

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RSUs earned during 2024

Forfeitures (1)

Units outstanding and unearned at December 31, 2024

The following table shows the impact of RSU activity

to the Company’s financial results:

(1) Represents RSU forfeitures primarily related to the execution of the separation agreements with the former Chief Executive Officer and former Senior Vice President of Operations.

The following table shows the impact of RSU activity to the Company’s

financial results:

Year Ended December 31,

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Performance Share Units

The Compensation Committee has awarded PSUs to select

The Compensation Committee has awarded PSUs to

select executives.

PSUs are promises to issue actual shares of common stock at the end of a vesting period, if certain performance conditions

The PSUs granted to employees under the Plan were based on salary and include a three-year adjusted book value cumulative growth

target with threshold and stretch goals.

They will vest on the third anniversary of the grant date, subject to the participant’s

continuous employment through the vesting date and the level of performance achieved.

Dividend equivalents on PSUs are accrued and paid

in cash at the end of the performance period in accordance with the level of performance achieved but are subject to forfeiture until

the underlying shares become vested.

The PSUs granted to employees under the Plan are based on salary and, prior to 2024, include a three-year adjusted book value

cumulative growth target with threshold and stretch goals.

Effective for grants made in 2024, the performance metric is calculated based

on an adjusted return on equity over a three-year period, with annual resets.

They will vest on the third anniversary of the grant date,

subject to the participant’s continuous employment through the vesting date and the level of performance achieved.

Dividend equivalents

on PSUs are accrued and paid in cash at the end of the performance period in accordance with the level of performance achieved but are

subject to forfeiture until the underlying shares become vested.

Participants do not have voting rights with respect to PSUs.

The Company recognizes stock-based compensation costs

for PSUs based on the grant date fair value over the performance period of the awards.

Estimated forfeitures are included in the determination

of compensation costs.

The current cost estimates represent the Company’s forecasted performance against cumulative growth targets.

The Company recognizes stock-based compensation

costs for PSUs based on the grant date fair value over the performance period of the awards.

Estimated forfeitures are included in the

determination of compensation costs.

The current cost estimates represent the Company’s forecasted performance against cumulative

growth targets.

A summary of the Company’s outstanding PSUs

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Performance adjustment (1)

Forfeitures (2)

Units outstanding at December 31, 2024

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the change in PSUs issued based upon the attainment of performance goals established by the Company.

The following table shows the impact of PSU activity

to the Company’s financial results:

(2) Represents

PSU forfeitures primarily related to the execution of the separation agreements with the former Chief Executive Officer and former Senior

Vice President of Operations.

The following table shows the impact of PSU activity to the Company’s

financial results:

Year Ended December 31,

PSU compensation expense (benefit)

Income tax expense (benefit)

Income tax benefit (expense)

PSU compensation expense (benefit), net of income taxes

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target awards until we can reasonably forecast the financial performance of each PSU award grant.

As of December 31, 2023, the previously

recognized compensation expense related to the PSU awards granted during 2022 was eliminated due to the Company's expectation that the

threshold performance goal will not be met.

The compensation expense related to the PSU awards granted during 2021 was previously eliminated.

The actual number of shares to be issued at the end of each performance period will range from 0 % to 150 % of the initial target awards.

At the end of the performance period,

we will reflect a performance adjustment, which may be either an increase or decrease from the initial target awards.

The actual number

of shares to be issued at the end of the performance period will range from 0 % to 200 % of the initial target awards.

During the year ended

December 31, 2024, the previously recognized compensation expense related to the PSU awards granted during 2024 was reduced as a result

of a performance adjustment, and the compensation expense related to the PSU awards granted during 2023 was eliminated due to the Company's

expectation that the threshold performance goal will not be met.

During the year ended December 31, 2023, the previously recognized compensation

expense related to the PSU awards granted during 2022 was eliminated due to the Company's expectation that the threshold performance goal

will not be met.

During the year ended December 31, 2022, the previously recognized compensation expense related to the PSU awards granted

during 2020 and 2021 was eliminated due to the Company’s expectation that the threshold performance goal will not be met, and the

compensation expense related to the PSU awards granted during 2022 was decreased to the threshold level due to Company’s expectations

that the target goal will likely not be achieved.

At December 31, 2024, there was $ 255 of unrecognized

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Premiums Receivable

Beginning on December 31, 2022, credit losses are

recognized through an allowance account developed using the new CECL model.

Beginning on December 31, 2022, credit losses

are recognized through an allowance account developed using the CECL model.

The adoption of this guidance resulted in an allowance for

12 unchanged sentences

Expected Credit

Continuing operations

Balance, beginning of period

2 unchanged sentences

Balance, end of period

Segment Information

We have six reportable operating segments, which

consist of private passenger auto insurance, non-standard auto insurance, home and farm insurance, crop insurance, commercial insurance,

and all other (which primarily consists of assumed reinsurance and our excess liability business).

We operate only in the U.S., and no

single customer or agent provides 10 percent or more of our revenues.

The following tables provide available information of these segments

for the years ended December 31, 2023, 2022, and 2021.

For purposes of evaluating profitability of the non-standard

auto segment, we combine the policy fees paid by the insured with the underwriting gain or loss as its primary measure.

December 31, 2024

Agents’ Balances

Receivable, Net of

Allowance for

Expected Credit

Allowance for

Expected Credit

Discontinued operations

Balance, beginning of period

Current period charge for expected credit losses

Write-offs of uncollectible premiums receivable

Westminster balances disposed in sale

Balance, end of period

The following table presents the balances of premiums

and agents’ receivable balances, net of the allowance for expected credit losses as of December 31, 2023, and the changes in the

allowance for expected credit losses for the year ended December 31, 2023.

December 31, 2023

Agents’ Balances

Receivable, Net of

Allowance for

Expected Credit

Allowance for

Expected Credit

Continuing operations

Balance, beginning of period

Current period charge for expected credit losses

Write-offs of uncollectible premiums receivable

Balance, end of period

December 31, 2023

Agents’ Balances

Receivable, Net of

Allowance for

Expected Credit

Allowance for

Expected Credit

Discontinued operations

Balance, beginning of period

Current period charge for expected credit losses

Write-offs of uncollectible premiums receivable

Balance, end of period

Discontinued Operations

On May 7, 2024, we entered into a definitive agreement

to sell our subsidiary, Westminster, to Scott Insurance Holdings, for a cash purchase price of $ 10,500 , as well as a $ 1,772 post-closing

adjustment pursuant to the purchase agreement, for a net amount of $ 12,272 .

The sale closed on June 30, 2024, and we reported an after-tax

loss on the sale of discontinued operations of $ 11,148 .

For additional information see Part II, Item 8, Note 3 “Summary of Significant

Accounting Policies and Basis of Presentation.”

The assets and liabilities associated with discontinued

operations prior to the closing of the sale have been presented separately in our Consolidated Balance Sheets.

The Company’s Consolidated

Statements of Cash Flows presents operating, investing, and financing cash flows of the discontinued operations separately.

assets and liability categories were as follows as of the dates indicated:

December 31, 2024

December 31, 2023

Cash and cash equivalents

Fixed income securities, at fair value

Equity securities, at fair value

Total cash and investments

Premiums and agents’ balances receivable

Deferred policy acquisition costs

Reinsurance premiums receivable

Reinsurance recoverables on losses

Accrued investment income

Property and equipment, net

Deferred income taxes

Goodwill and other intangibles

Total assets of discontinued operations

Unpaid losses and loss adjustment expenses

Unearned premiums

Income tax payable (receivable)

Accrued expenses and other liabilities

Total liabilities of discontinued operations

Summary operating results of discontinued operations

were as follows for the periods indicated:

Year Ended December 31,

Net premiums earned

Fee and other income

Net investment income

Net investment gains (losses)

Total revenues

Losses and loss adjustment expenses

Amortization of deferred policy acquisition costs

Other underwriting and general expenses

Goodwill impairment charge

Total expenses

Loss before income taxes

Income tax benefit

Loss per common share from discontinued operations:

We have five reportable operating segments of

our continuing operations, which consist of Private Passenger Auto, Non-Standard Auto, Home and Farm, Crop, and All Other (which primarily

consists of commercial, assumed reinsurance, and our excess liability business).

Prior to the sale of Westminster on June 30, 2024, we

also reported a Commercial segment that consisted primarily of Westminster’s balances and results.

Subsequent to the sale, Westminster

is reported as part of discontinued operations, which is not included in our segment information.

The commercial business that remains

a part of our continuing operations has been included in the All Other segment for the current and prior periods presented.

only in the U.S., and no single customer or agent provides 10 percent or more of our revenues.

The following tables provide available

information of these segments for the years ended December 31, 2024, 2023, and 2022.

Our CODM is currently our President and Chief

Executive Officer (CEO).

The primary profitability measurement used by the CEO to review segment operating results is underwriting gain

The CEO uses segment underwriting gain (loss) to allocate resources (including employees, financial and capital resources) for

each segment predominantly in the annual planning process.

Segment underwriting gain (loss) is used to monitor segment results compared

to prior period, forecasted results, and the annual plan.

For purposes of evaluating profitability of the Non-Standard Auto segment, we

combine the policy fees paid by the insured with the underwriting gain or loss as its primary profitability measure.

As a result, these

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income amounts are not allocated to any segment.

We do not assign or allocate all line items in our

Consolidated Statement of Operations or Consolidated Balance Sheet to our operating segments.

Those line items include investment income,

net investment gains (losses), fee and other income excluding non-standard auto, and income tax expense (benefit) within the Consolidated

Statement of Operations.

For the Consolidated Balance Sheet, those items include cash and investments, property and equipment, other

assets, accrued expenses and other liabilities, income taxes recoverable or payable, and shareholders’ equit y.

We do not assign or allocate all line items in

our Consolidated Statement of Operations or Consolidated Balance Sheets to our operating segments.

Those line items include net investment

income, net investment gains (losses), fee and other income excluding Non-Standard Auto, and income tax expense (benefit) within the Unaudited

Consolidated Statement of Operations.

For the Consolidated Balance Sheets, those items include cash and investments, property and equipment,

other assets, accrued expenses and other liabilities, income taxes recoverable or payable, and shareholders’ equity.

Year Ended December 31, 2024

Passenger Auto

Direct premiums earned

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Net losses and loss adjustment expenses

Amortization of deferred policy acquisition costs

Other underwriting and general expenses (1)

Underwriting and general expenses

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Operating Ratios:

Loss and loss adjustment expenses ratio

Loss and loss adjustment expense ratio

Expense ratio

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Deferred policy acquisition costs

Reinsurance recoverables on losses

Reinsurance recoverables on

Receivable from Federal Crop Insurance Corporation

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Unearned premiums

(1) Other underwriting and general

expenses for each segment include expenses related to compensation, vendor services, and other administrative items.

Year Ended December 31, 2023

Passenger Auto

Direct premiums earned

6 unchanged sentences

Net losses and loss adjustment expenses

Amortization of deferred policy acquisition costs

Other underwriting and general expenses (1)

Underwriting and general expenses

1 unchanged sentence

Fee and other income

Goodwill impairment charge

Net investment income

6 unchanged sentences

Operating Ratios:

Loss and loss adjustment expenses ratio

Loss and loss adjustment expense ratio

Expense ratio

3 unchanged sentences

Deferred policy acquisition costs

Reinsurance recoverables on losses

Reinsurance recoverables on

Receivable from Federal Crop Insurance Corporation

2 unchanged sentences

Unearned premiums

(1) Other underwriting and general expenses for each segment include

expenses related to compensation, vendor services, and other administrative items.

Year Ended December 31, 2022

Passenger Auto

Direct premiums earned

6 unchanged sentences

Net losses and loss adjustment expenses

Amortization of deferred policy acquisition costs

Other underwriting and general expenses (1)

Underwriting and general expenses

1 unchanged sentence

Fee and other income

Goodwill impairment charge

Net investment income

6 unchanged sentences

Operating Ratios:

Loss and loss adjustment expenses ratio

Loss and loss adjustment expense ratio

Expense ratio

4 unchanged sentences

Reinsurance recoverables on losses

Receivable from Federal Crop Insurance Corporation

Goodwill and other intangibles

1 unchanged sentence

Unearned premiums

Payable to Federal Crop Insurance Corporation

Statutory Net Income (Loss), Capital and Surplus, and Dividend Restrictions

(1) Other underwriting and general expenses for each segment include

expenses related to compensation, vendor services, and other administrative items.

Net Income (Loss), Capital and Surplus, and Dividend Restrictions

The following table presents selected information,

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Our insurance subsidiaries are also subject to risk-based capital requirements that may further affect their ability to pay dividends.

Our insurance subsidiaries statutory capital and surplus at December 31, 2023 and 2022 exceeded the amount of statutory capital and surplus

necessary to satisfy risk-based capital requirements by a significant margin.

Amounts available for distribution in 2024 to Nodak

Insurance as dividends from its insurance subsidiaries without prior approval of insurance regulatory authorities are $ 134 from American

West and Primero.

No dividends were paid to Nodak Insurance from either entity during the years ended December 31, 2023, 2022, or 2021.

There is no amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department.

Prior to its payment of any dividend,

Nodak Insurance will be required to provide notice of the dividend to the North Dakota Insurance Department.

This notice must be provided

to the North Dakota Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of

an ordinary dividend.

The North Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company

is in violation of any law or regulation.

These restrictions or any subsequently imposed restrictions may affect our future liquidity.

No dividends were declared or paid by Nodak Insurance during the years ended December 31, 2023 and 2021.

The Nodak Insurance Board of

Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

Direct Auto re-domesticated from Illinois to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

The amount available for payment of dividends from Direct Auto

Our insurance subsidiaries statutory capital and surplus at December 31, 2024 and 2023 exceeded

the amount of statutory capital and surplus necessary to satisfy risk-based capital requirements by a significant margin .

Amounts available for distribution in 2025 to

Nodak Insurance as dividends from its insurance subsidiaries without prior approval of the North Dakota Insurance Department are $ 1,001

from American West, $ 324 from Primero, and $ 158 from Battle Creek.

No dividends were paid to Nodak Insurance from any of these entities

during the years ended December 31, 2024, 2023, or 2022.

The amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $ 8,273 as of December

No dividends were declared or paid by Nodak Insurance during the years ended December 31, 2024 and 2023.

The Nodak Insurance

Board of Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

The amount available for payment of dividends from Direct Auto to

NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $ 3,146 as of December 31,

No dividends were declared or paid by Direct Auto during the years ended December 31, 2024, 2023, or 2022.

Westminster re-domesticated from Maryland to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

The amount available for payment of dividends from Westminster

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 1,200 as of December

No dividends were declared or paid by Westminster during the years ended December 31, 2023, 2022 or 2021.

Subsequent Event

As of January 2, 2024, the North Dakota Secretary of State

approved the conversion of Battle Creek Mutual Insurance Company from a mutual insurance company to a stock insurance company.

In accordance

with the approved plan of conversion, the name of Battle Creek Mutual Insurance Company has become Battle Creek Insurance Company.

As of the conversion date, the outstanding principal of

the surplus note due from Battle Creek Mutual Insurance Company to Nodak Insurance Company was $ 3,000,000 .

There was no accrued interest

as of the conversion date.

Battle Creek Insurance Company has issued 300,000 shares of its common stock to Nodak Insurance Company at

a $ 10.00 per share par value and has become a 100 % wholly-owned subsidiary of Nodak Insurance Company.

The surplus note is considered

paid in full as of the conversion date.

We are currently in the process of finalizing the accounting

for this transaction, which will be reflected in the consolidated financial statements for the three months ended March 31, 2024, to be

included in the first quarter 2024 Form 10-Q.

Prior to its payment of any dividend, each insurance company will

be required to provide notice of the dividend to the North Dakota Insurance Department.

This notice must be provided to the North Dakota

Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend.

The North Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company is in violation of

any law or regulation.

These restrictions or any subsequently imposed restrictions may affect our future liquidity.

Westminster was sold on June 30, 2024, and therefore no dividends

are available to be paid to NI Holdings subsequent to that date.

No dividends were declared or paid by Westminster during the years ended

December 31, 2024, 2023 or 2022.

See Part II, Item 8, Note 20 “Discontinued Operations” for additional information.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data