INVESTMENTS

As further discussed in Note 4, "Recently Issued Accounting Standards," effective January 1, 2018, the Company adopted ASU 2016-01. As a result of the adoption, equity investments are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation.

The amortized cost, gross unrealized gains and losses, and estimated fair value of the Company's available-for-sale investments at December 31, 2018 and December 31, 2017 are summarized in the tables shown below:



(in thousands)	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities:
U.S. government, government agencies and authorities	$	5,594	$	1	$	48	$	5,547
States, municipalities and political subdivisions	621		—		14		607
Mortgage-backed	3,256		—		70		3,186
Corporate	2,961		—		41		2,920
Total fixed maturities	12,432		1		173		12,260



(in thousands)	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities:
U.S. government, government agencies and authorities	$	5,671	$	—	$	59	$	5,612
States, municipalities and political subdivisions	639		—		13		626
Mortgage-backed	2,933		—		57		2,876
Corporate	5,464		—		37		5,427
Total fixed maturities	14,707		—		166		14,541
Equity investments:
Common stock	3,883		—		313		3,570
Warrants - publicly traded	25		146		—		171
Warrants - not publicly traded	960		173		285		848
Total equity investments	4,868		319		598		4,589
Total fixed maturities and equity investments	$	19,575	$	319	$	764	$	19,130

Net unrealized gains and losses in the tables above are reported as other comprehensive income (loss) with the exception of net unrealized losses of $0.1 million, at December 31, 2017, related to warrants - not publicly traded, which are reported in the consolidated statements of operations.

The table below summarizes the Company's fixed maturities at December 31, 2018 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of these obligations.



(in thousands)	December 31, 2018
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	5,462	$	5,445
Due after one year through five years	5,342		5,233
Due after five years through ten years	217		210
Due after ten years	1,411		1,372
Total	$	12,432	$	12,260

The following tables highlight the aggregate unrealized loss position, by security type, of available-for-sale investments in unrealized loss positions as of December 31, 2018 and December 31, 2017. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions.



(in thousands)									December 31, 2018
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Fixed maturities:
U.S. government, government agencies and authorities	$	1,497	$	1	$	2,609	$	47	$	4,106	$	48
States, municipalities and political subdivisions	—		—		606		14		606		14
Mortgage-backed	800		1		2,134		69		2,934		70
Corporate	595		1		2,151		40		2,746		41
Total fixed maturities	2,892		3		7,500		170		10,392		173



(in thousands)									December 31, 2017
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Fixed maturities:
U.S. government, government agencies and authorities	$	4,067	$	50	$	1,545	$	9	$	5,612	$	59
States, municipalities and political subdivisions	626		13		—		—		626		13
Mortgage-backed	2,876		57		—		—		2,876		57
Corporate	2,427		37		—		—		2,427		37
Total fixed maturities	9,996		157		1,545		9		11,541		166
Equity investments:
Common stock	3,570		313		—		—		3,570		313
Warrants	675		285		—		—		675		285
Total equity investments	4,245		598		—		—		4,245		598
Total	$	14,241	$	755	$	1,545	$	9	$	15,786	$	764

There are approximately 64 and 68 individual available-for-sale investments that were in unrealized loss positions as of December 31, 2018 and December 31, 2017, respectively.

The establishment of an other-than-temporary impairment on an available-for-sale investment or limited liability investment requires a number of judgments and estimates. The Company performs a quarterly analysis of the individual investments to determine if declines in market value are other-than-temporary. The analysis includes some or all of the following procedures as deemed appropriate by the Company:


•	identifying all unrealized loss positions that have existed for at least six months;


•	identifying other circumstances management believes may affect the recoverability of the unrealized loss positions;


•	obtaining a valuation analysis from third-party investment managers regarding the intrinsic value of these investments based on their knowledge and experience together with market-based valuation techniques;


•	reviewing the trading range of certain investments over the preceding calendar period;


•	assessing if declines in market value are other-than-temporary for debt instruments based on the investment grade credit ratings from third-party rating agencies;


•	assessing if declines in market value are other-than-temporary for any debt instrument with a non-investment grade credit rating based on the continuity of its debt service record;


•	determining the necessary provision for declines in market value that are considered other-than-temporary based on the analyses performed; and


•	assessing the Company's ability and intent to hold these investments at least until the investment impairment is recovered.

The risks and uncertainties inherent in the assessment methodology used to determine declines in market value that are other-than-temporary include, but may not be limited to, the following:


•	the opinions of professional investment managers could be incorrect;


•	the past trading patterns of individual investments may not reflect future valuation trends;


•	the credit ratings assigned by independent credit rating agencies may be incorrect due to unforeseen or unknown facts related to a company's financial situation; and


•	the debt service pattern of non-investment grade instruments may not reflect future debt service capabilities and may not reflect a company's unknown underlying financial problems.

As a result of the analysis performed by the Company to determine declines in market value that are other-than-temporary, there were no write-downs for other-than-temporary impairment related to available-for-sale investments recorded for the years ended December 31, 2018 and December 31, 2017.

The Company has reviewed currently available information regarding investments with estimated fair values less than their carrying amounts and believes these unrealized losses are not other-than-temporary and are primarily due to temporary market and sector-related factors rather than to issuer-specific factors. The Company does not intend to sell those investments, and it is not likely it will be required to sell those investments before recovery of its amortized cost.

The Company does not have any exposure to subprime mortgage-backed investments.

Limited liability investments include investments in limited liability companies and limited partnerships. The Company's interests in these investments are not deemed minor and, therefore, are accounted for under the equity method of accounting. The most recently available financial statements are used in applying the equity method. The difference between the end of the reporting period of the limited liability entities and that of the Company is no more than three months. As of December 31, 2018 and December 31, 2017, the carrying value of limited liability investments totaled $4.8 million and $9.1 million, respectively. At December 31, 2018, the Company has no unfunded commitments related to limited liability investments.

Limited liability investments, at fair value represent the Company's investment in 1347 Investors as well as the underlying investments of Net Lease and Argo Holdings. As of December 31, 2018 and December 31, 2017, the carrying value of the Company's limited liability investments, at fair value was $26.0 million and $32.2 million, respectively. The Company recorded impairments related to limited liability investments, at fair value of $0.1 million and $0.1 million for the years ended December 31, 2018 and December 31, 2017, respectively, which are included in loss on change in fair value of limited liability investments, at fair value in the consolidated statements of operations. At December 31, 2018, the Company has unfunded commitments totaling $0.6 million to fund limited liability investments, at fair value.

Investments in private companies consist of common stock, preferred stock, notes receivable and derivative contracts in privately owned companies and investments in limited liability companies in which the Company’s interests are deemed minor. The Company's investments in private companies do not have readily determinable fair values. As further discussed in Note 4, "Recently Issued Accounting Standards," effective January 1, 2018, the Company adopted ASU 2016-01. As a result of the adoption, the Company has elected to record investments in private companies at cost, adjusted for observable price changes and impairments. For the year ended December 31, 2018, the Company recorded adjustments of $0.6 million to decrease the fair value of certain investments in private companies for observable price changes, which are included in net change in unrealized loss on private company investments in the consolidated statements of operations.

The Company performs a quarterly impairment analysis of its investments in private companies. The analysis includes some or all of the following procedures as deemed appropriate by the Company:


•	the opinions of external investment and portfolio managers;


•	the financial condition and prospects of the investee;


•	recent operating trends and forecasted performance of the investee;


•	current market conditions in the geographic area or industry in which the investee operates;


•	changes in credit ratings; and


•	changes in the regulatory environment.

As a result of the analysis performed, the Company recorded impairments related to investments in private companies of $1.0 million and $2.0 million for the years ended December 31, 2018 and December 31, 2017, respectively, which are included in net change in unrealized loss on private company investments in the consolidated statements of operations.

As of December 31, 2018 and December 31, 2017, the carrying value of the Company's investments in private companies totaled $3.1 million and $4.9 million, respectively.

Real estate investments are reported at fair value. As of December 31, 2018 and December 31, 2017, the carrying value of the Company's real estate investments totaled $10.7 million and $10.7 million, respectively.

Other investments include collateral loans and are reported at their unpaid principal balance. As of December 31, 2018 and December 31, 2017, the carrying value of other investments totaled $2.1 million and $3.7 million, respectively.

The Company had previously entered into two separate performance share grant agreements with 1347 Property Insurance Holdings, Inc. ("PIH"), whereby the Company will be entitled to receive up to an aggregate of 475,000 shares of PIH common stock upon achievement of certain milestones for PIH’s stock price. Pursuant to the performance share grant agreements, if at any time the last sales price of PIH’s common stock equals or exceeds: (i) $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period, the Company will receive 100,000 shares of PIH common stock; (ii) $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period, the Company will receive 125,000 shares of PIH common stock (in addition to the 100,000 shares of common stock earned pursuant to clause (i) herein); (iii) $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period, the Company will receive 125,000 shares of PIH common stock (in addition to the 225,000 shares of common stock earned pursuant to clauses (i) and (ii) herein); and (iv) $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period, the Company will receive 125,000 shares of PIH common stock (in addition to the 350,000 shares of common stock earned pursuant to clauses (i), (ii) and (iii) herein). To the extent shares of PIH common stock are granted to the Company under either of the performance share grant agreements, they will be recorded at the time the shares are granted and will have a valuation equal to the last sales price of PIH common stock on the day prior to such grant.

On January 2, 2018, the Company entered into an agreement with PIH to cancel the $10.00 per share performance shares grant agreement in exchange for cash consideration of $0.3 million. On July 24, 2018, the Company entered into an agreement with PIH to cancel the $12.00 per share, $15.00 per share and $18.00 per share performance share grant agreement in exchange for cash consideration of $1.0 million. For the year ended December 31, 2018, the Company recorded gains, included in gain on change in fair value of equity investments in the consolidated statements of operations, of $1.3 million related to these transactions. No shares were received by the Company under either of the performance share grant agreements as of December 31, 2018.

Net investment income for the years ended December 31, 2018 and December 31, 2017, respectively, is comprised as follows:



(in thousands)	Years ended December 31,
	2018			2017
				(restated)
Investment income
Interest from fixed maturities	$	236		$	190
Dividends	359			501
Income from limited liability investments	241			1,551
Income from limited liability investments, at fair value	1,174			3,973
Loss on change in fair value of warrants - not publicly traded	—			(292		)
Income from real estate investments	800			800
Other	230			386
Gross investment income	3,040			7,109
Investment expenses	(83		)	(22		)
Net investment income	$	2,957		$	7,087

Gross realized gains and losses on available-for-sale investments, limited liability investments and limited liability investments, at fair value for the years ended December 31, 2018 and December 31, 2017 is comprised as follows:



(in thousands)	Years ended December 31,
	2018			2017
				(restated)
Gross realized gains	$	398		$	309
Gross realized losses	(415		)	(3		)
Net realized (losses) gains	$	(17	)	$	306

Gain on change in fair value of equity investments for the years ended December 31, 2018 and December 31, 2017 is comprised as follows:



(in thousands)	Years ended December 31,
	2018			2017
Net gains recognized on equity investments sold during the period	$	1,464		$	—
Change in unrealized losses on equity investments held at end of the period	(1,083		)	—
Gain on change in fair value of equity investments	$	381		$	—