Investments

12 Months Ended

Dec. 31, 2019

Investments Debt And Equity Securities [Abstract]

2.	Investments

Short-term investments held at December 31, 2019 include $54.6 million of U.S. Treasury securities and obligations of U.S. government agencies and $1.9 million of obligations of states and political subdivisions. Short-term investments held at December 31, 2018 include $13.4 million of corporate bonds and $0.8 million of obligations of states and political subdivisions.

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	466,270	$	19,570	$	(193	)	$	485,647
Corporate bonds		109,241		1,684		—			110,925
U.S. agency-based mortgage-backed securities		10,967		544		—			11,511
U.S. Treasury securities and obligations of U.S. government agencies		12,723		330		(12	)		13,041
Asset-backed securities		220		—		(1	)		219
Totals	$	599,421	$	22,128	$	(206	)	$	621,343

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	225,895	$	11,906	$	(26	)	$	237,775
Corporate bonds		130,453		3,326		(1	)		133,778
U.S. agency-based mortgage-backed securities		29,499		64		(96	)		29,467
U.S. Treasury securities and obligations of U.S. government agencies		39,851		317		(42	)		40,126
Totals	$	425,698	$	15,613	$	(165	)	$	441,146

The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	24,457	$	3,446	$	—	$	27,903
Total equity securities	$	24,457	$	3,446	$	—	$	27,903

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	445,922	$	5,109	$	(2,084	)	$	448,947
Corporate bonds		91,762		62		(455	)		91,369
U.S. agency-based mortgage-backed securities		8,102		327		(80	)		8,349
U.S. Treasury securities and obligations of U.S. government agencies		67,042		340		(339	)		67,043
Asset-backed securities		1,050		22		(8	)		1,064
Totals	$	613,878	$	5,860	$	(2,966	)	$	616,772

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	231,848	$	3,515	$	(2,118	)	$	233,245
Corporate bonds		173,904		243		(933	)		173,214
U.S. agency-based mortgage-backed securities		12,835		—		(320	)		12,515
U.S. Treasury securities and obligations of U.S. government agencies		61,185		—		(1,429	)		59,756
Totals	$	479,772	$	3,758	$	(4,800	)	$	478,730

The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2018 are summarized as follows:

	Cost		Gross Gains		Gross Losses			Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	19,962	$	30	$	(1,341	)	$	18,651
Total equity securities	$	19,962	$	30	$	(1,341	)	$	18,651

A summary of the amortized cost and fair value of investments in fixed maturity securities classified as held-to-maturity by contractual maturity is as follows:

	December 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	49,967	$	50,348	$	76,875	$	76,861
After one year through five years		198,025		202,109		256,614		257,530
After five years through ten years		110,460		113,877		81,311		81,755
After ten years		229,782		243,279		189,926		191,213
U.S. agency-based mortgage-backed securities		10,967		11,511		8,102		8,349
Asset-backed securities		220		219		1,050		1,064
Totals	$	599,421	$	621,343	$	613,878	$	616,772

A summary of the amortized cost and fair value of investments in fixed maturity securities classified as available-for-sale by contractual maturity is as follows:

	December 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	27,160	$	27,194	$	61,650	$	61,435
After one year through five years		144,142		146,469		175,743		174,213
After five years through ten years		47,175		49,419		47,058		46,725
After ten years		177,722		188,597		182,486		183,842
U.S. agency-based mortgage-backed securities		29,499		29,467		12,835		12,515
Totals	$	425,698	$	441,146	$	479,772	$	478,730

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

At December 31, 2019, there were $15.9 million of held-to-maturity investments and $2.5 million of available-for-sale investments on deposit with regulatory agencies of states in which the Company does business.

A summary of the Company’s realized gains and losses on sales, calls or redemptions of investments for 2019, 2018 and 2017 is as follows:

	Fixed Maturity Securities Available for Sale			Equity Securities		Other			Total
	(in thousands)
Year ended December 31, 2019
Proceeds from sales	$	33,113		$	—	$	21,977		$	55,090
Gross realized investment gains	$	140		$	—	$	36		$	176
Gross realized investment losses		(68	)		—		—			(68	)
Net realized investment gains		72			—		36			108
Other, including gains (losses) on calls and redemptions		(196	)		—		8			(188	)
Net realized gains (losses) on investments	$	(124	)	$	—	$	44		$	(80	)
Year ended December 31, 2018
Proceeds from sales	$	15,025		$	3	$	—		$	15,028
Gross realized investment gains	$	238		$	1	$	—		$	239
Gross realized investment losses		(1,354	)		—		—			(1,354	)
Net realized investment gains (losses)		(1,116	)		1		—			(1,115	)
Other, including losses on calls and redemptions		(144	)		—		(277	)		(421	)
Net realized gains (losses) on investments	$	(1,260	)	$	1	$	(277	)	$	(1,536	)
Year ended December 31, 2017
Proceeds from sales	$	14,591		$	1	$	13,172		$	27,764
Gross realized investment gains	$	485		$	1	$	—		$	486
Gross realized investment losses		(5	)		—		—			(5	)
Net realized investment gains		480			1		—			481
Other, including losses on calls and redemptions		(520	)		—		(608	)		(1,128	)
Net realized gains (losses) on investments	$	(40	)	$	1	$	(608	)	$	(647	)

Major categories of the Company’s net investment income are summarized as follows:

	Year Ended December 31,
	2019			2018			2017
	(in thousands)
Gross investment income:
Fixed maturity securities	$	30,343		$	28,762		$	28,961
Equity securities		628			448			201
Short-term investments and cash and cash equivalents		2,478			2,208			1,117
Other investments		—			—			104
Total gross investment income		33,449			31,418			30,383
Investment expenses		(966	)		(966	)		(1,102	)
Net investment income	$	32,483		$	30,452		$	29,281

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	21,074	$	193	$	—	$	—	$	21,074	$	193
U.S. Treasury securities and obligations of U.S. government agencies		—		—		3,243		12		3,243		12
Asset-backed securities		—		—		68		1		68		1
Total held-to-maturity securities		21,074		193		3,311		13		24,385		206
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	4,140	$	26	$	—	$	—	$	4,140	$	26
Corporate bonds		6,426		1		—		—		6,426		1
U.S. agency-based mortgage-backed securities		13,007		95		1,152		1		14,159		96
U.S. Treasury securities and obligations of U.S. government agencies		—		—		17,068		42		17,068		42
Total available-for-sale securities		23,573		122		18,220		43		41,793		165
Total	$	44,647	$	315	$	21,531	$	56	$	66,178	$	371
December 31, 2018
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	28,369	$	59	$	180,550	$	2,025	$	208,919	$	2,084
Corporate bonds		17,448		36		48,315		419		65,763		455
U.S. agency-based mortgage-backed securities		—		—		2,287		80		2,287		80
U.S. Treasury securities and obligations of U.S. government agencies		2,865		4		46,486		335		49,351		339
Asset-backed securities		—		—		525		8		525		8
Total held-to-maturity securities		48,682		99		278,163		2,867		326,845		2,966
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	16,109	$	81	$	76,255	$	2,037	$	92,364	$	2,118
Corporate bonds		59,099		279		70,306		654		129,405		933
U.S. agency-based mortgage-backed securities		—		—		12,515		320		12,515		320
U.S. Treasury securities and obligations of U.S. government agencies		—		—		59,756		1,429		59,756		1,429
Total available-for-sale securities		75,208		360		218,832		4,440		294,040		4,800
Equity securities:
Domestic common stock	$	18,651	$	1,341	$	—	$	—	$	18,651	$	1,341
Total equity securities		18,651		1,341		—		—		18,651		1,341
Total	$	142,541	$	1,800	$	496,995	$	7,307	$	639,536	$	9,107

At December 31, 2019, the Company held 59 individual fixed maturity securities that were in an unrealized loss position, of which 11 were in a continuous unrealized loss position for longer than 12 months.

We regularly review our investment portfolio to evaluate the existence of other-than-temporary declines in the fair value of investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:

•

any reduction or elimination of preferred dividends, or nonpayment of scheduled principal or interest payments;

•

the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

•

how long and by how much the fair value of the security has been below its cost or amortized cost;

•

any downgrades of the security by a rating agency;

•

our intent not to sell the security for a sufficient time period for it to recover its value;

•

the likelihood of being forced to sell the security before the recovery of its value; and

•

an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. We determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the securities before the recovery of its amortized cost basis.

In 2019, 2018 and 2017, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.