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  • SECURITIES & EXCHANGE COMMISSION EDGAR FILING

    KINGSTONE COMPANIES, INC.

    Form: 10-K

    Date Filed: 2016-03-24

    Corporate Issuer CIK: 33992

    © Copyright 2016, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to the terms of use.

  • United States Securities and Exchange Commission Washington, D.C. 20549

    FORM 10-K (Mark One) (x) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

    ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

    Commission File Number 0-1665

    KINGSTONE COMPANIES, INC. (Exact name of registrant as specified in its charter)

    Delaware 36-2476480 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

    15 Joys Lane, Kingston, New York 12401 (Address of principal executive offices) (Zip Code)

    (845) 802-7900 (Registrant’s telephone number, including area code)

    Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock NASDAQ

    Securities registered pursuant to Section 12(g) of the Act: None

    Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __ No X

    Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes __ No X

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

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

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

    Large accelerated filer __ Accelerated filer __ Non-accelerated __ (Do not check if a smaller reporting company) Smaller reporting company X

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

    As of June 30, 2015, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $42,754,324 based on the closing sale price as reported on the NASDAQ Capital Market. As of March 22, 2016, there were 7,321,637 shares of common stock outstanding.

    DOCUMENTS INCORPORATED BY REFERENCE None

    EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

  • INDEX

    Page No. Forward-Looking Statements 2 PART I Item 1. Business. 3 Item 1A. Risk Factors. 21 Item 1B. Unresolved Staff Comments. 22 Item 2. Properties. 22 Item 3. Legal Proceedings. 22 Item 4. Mine Safety Disclosures. 22 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 23 Item 6. Selected Financial Data. 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 61 Item 8. Financial Statements and Supplementary Data. 61 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 61 Item 9A. Controls and Procedures. 61 Item 9B. Other Information. 62 PART III Item 10. Directors, Executive Officers and Corporate Governance. 63 Item 11. Executive Compensation. 67 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 70 Item 13. Certain Relationships and Related Transactions, and Director Independence. 73 Item 14. Principal Accountant Fees and Services. 73 PART IV Item 15. Exhibits and Financial Statement Schedules. 75 Signatures 78

    EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

  • PART I

    Forward-Looking Statements

    This Annual Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Annual Report

    may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors which may affect our results include, but are not limited to, the risks and uncertainties discussed in Item 7 of this Annual Report under “Factors That May Affect Future Results and Financial Condition”.

    Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

    2

    EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

  • ITEM 1. BUSINESS. (a) Business Development General

    As used in this Annual Report on Form 10-K (the “Annual Report”), references to the “Company”, “we”, “us”, or “our” refer to Kingstone Companies, Inc. (“Kingstone”) and its subsidiaries.

    We offer property and casualty insurance products to small businesses and individuals in New York State through our wholly owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a licensed property and casualty insurance company in New York, New Jersey, Connecticut, Pennsylvania and Texas; however, KICO writes substantially all of its business in New York. Payments, Inc., our wholly owned subsidiary, is a licensed premium finance company in the State of New York and through March 31, 2015, received fees for placing contracts with a third party licensed premium finance company. Recent Developments

    Developments During 2015

    • Reduced Reliance on Quota Share Reinsurance

    Effective July 1, 2015, KICO reduced the ceding percentage for its personal lines quota share reinsurance treaty from 55% gross quota share to 40% net quota share. The reduction of the ceding percentage allows KICO to retain a higher portion of its premiums.

    · Implemented Electronic Content Management and Workflow System

    In July 2015, KICO implemented Vertafore’s ImageRight® software, an insurance industry leading electronic content management and workflow system. The new software enhancement has streamlined underwriting and claims processes, allowing for greater efficiency and increased production to support KICO’s continued growth.

    · Expanded Licensing to Additional States

    In 2015, KICO expanded its ability to write property and casualty insurance by obtaining licenses to write insurance policies in New Jersey, Connecticut and Texas.

    · A.M. Best Rating

    In 2015, the A.M. Best rating for KICO was upgraded from B+ (Good) to B++ (Good).

    · Increased Rate of Dividends Declared

    In November 2015, we increased the quarterly dividends on our common stock from $.05 per share to $.0625 per share.

    Dividends of $.05 per share were declared on each of February 6, 2015, May 12, 2015 and August 11, 2015 and were paid on March 13, 2015 and June 15, 2015 and September 14, 2015,

    respectively. A dividend of $.0625 per share was declared on November 10, 2015 and was paid on December 14, 2015.

    3

    EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

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