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Investments (Tables)
9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Schedule of available-for-sale fixed maturities
Available-for-sale fixed maturities at September 30, 2019 and December 31, 2018 included the following:
 
September 30, 2019
(In thousands)
Amortized
Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
Fixed maturities, available for sale
 
 
 
 
 
 
 
U.S. Treasury obligations
$
118,938

 
$
2,095

 
$
113

 
$
120,920

U.S. Government-sponsored enterprise obligations
22,195

 
147

 
8

 
22,334

State and municipal bonds
282,398

 
11,093

 
94

 
293,397

Corporate debt
1,318,250

 
33,313

 
2,914

 
1,348,649

Residential mortgage-backed securities
199,386

 
2,980

 
523

 
201,843

Agency commercial mortgage-backed securities
9,926

 
274

 
18

 
10,182

Other commercial mortgage-backed securities
70,579

 
2,061

 
103

 
72,537

Other asset-backed securities
229,368

 
2,351

 
46

 
231,673

 
$
2,251,040

 
$
54,314

 
$
3,819

 
$
2,301,535

 
 
 
 
 
 
 
 
 
December 31, 2018
(In thousands)
Amortized
Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
Fixed maturities, available for sale
 
 
 
 
 
 
 
U.S. Treasury obligations
$
121,274

 
$
331

 
$
1,404

 
$
120,201

U.S. Government-sponsored enterprise obligations
35,758

 
25

 
429

 
35,354

State and municipal bonds
289,544

 
4,877

 
649

 
293,772

Corporate debt
1,244,577

 
3,328

 
24,430

 
1,223,475

Residential mortgage-backed securities
184,463

 
814

 
4,039

 
181,238

Agency commercial mortgage-backed securities
13,296

 
12

 
200

 
13,108

Other commercial mortgage-backed securities
31,330

 
38

 
375

 
30,993

Other asset-backed securities
196,583

 
254

 
1,180

 
195,657

 
$
2,116,825

 
$
9,679

 
$
32,706

 
$
2,093,798


Schedule of available-for-sale securities by contractual maturity
The recorded cost basis and estimated fair value of available-for-sale fixed maturities at September 30, 2019, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In thousands)
Amortized
Cost
 
Due in one
year or less
 
Due after
one year
through
five years
 
Due after
five years
through
ten years
 
Due after
ten years
 
Total Fair
Value
Fixed maturities, available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury obligations
$
118,938

 
$
20,157

 
$
79,402

 
$
20,928

 
$
433

 
$
120,920

U.S. Government-sponsored enterprise obligations
22,195

 
2,498

 
6,005

 
13,683

 
148

 
22,334

State and municipal bonds
282,398

 
12,027

 
119,996

 
128,137

 
33,237

 
293,397

Corporate debt
1,318,250

 
152,152

 
783,362

 
379,830

 
33,305

 
1,348,649

Residential mortgage-backed securities
199,386

 

 

 

 

 
201,843

Agency commercial mortgage-backed securities
9,926

 

 

 

 

 
10,182

Other commercial mortgage-backed securities
70,579

 

 

 

 

 
72,537

Other asset-backed securities
229,368

 

 

 

 

 
231,673

 
$
2,251,040

 
 
 
 
 
 
 
 
 
$
2,301,535


Schedule of investments held in an unrealized loss position
The following tables provide summarized information with respect to investments held in an unrealized loss position at September 30, 2019 and December 31, 2018, including the length of time the investment had been held in a continuous unrealized loss position.
 
September 30, 2019
 
Total
 
Less than 12 months
 
12 months or longer
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
(In thousands)
Value
 
Loss
 
Value
 
Loss
 
Value
 
Loss
Fixed maturities, available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury obligations
$
36,227

 
$
113

 
$
14,341

 
$
54

 
$
21,886

 
$
59

U.S. Government-sponsored enterprise obligations
5,492

 
8

 

 

 
5,492

 
8

State and municipal bonds
15,047

 
94

 
11,582

 
90

 
3,465

 
4

Corporate debt
171,938

 
2,914

 
87,163

 
1,530

 
84,775

 
1,384

Residential mortgage-backed securities
74,952

 
523

 
30,959

 
81

 
43,993

 
442

Agency commercial mortgage-backed securities
531

 
18

 
212

 

 
319

 
18

Other commercial mortgage-backed securities
8,950

 
103

 
5,081

 
87

 
3,869

 
16

Other asset-backed securities
37,152

 
46

 
16,362

 
13

 
20,790

 
33

 
$
350,289

 
$
3,819

 
$
165,700

 
$
1,855

 
$
184,589

 
$
1,964


 
December 31, 2018
 
Total
 
Less than 12 months
 
12 months or longer
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
(In thousands)
Value
 
Loss
 
Value
 
Loss
 
Value
 
Loss
Fixed maturities, available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury obligations
$
97,969

 
$
1,405

 
$
20,221

 
$
119

 
$
77,748

 
$
1,286

U.S. Government-sponsored enterprise obligations
33,677

 
429

 
20,479

 
126

 
13,198

 
303

State and municipal bonds
63,094

 
648

 
30,924

 
143

 
32,170

 
505

Corporate debt
938,651

 
24,429

 
447,891

 
8,804

 
490,760

 
15,625

Residential mortgage-backed securities
157,120

 
4,039

 
27,311

 
209

 
129,809

 
3,830

Agency commercial mortgage-backed securities
9,822

 
200

 
4,566

 
22

 
5,256

 
178

Other commercial mortgage-backed securities
22,924

 
375

 
13,348

 
164

 
9,576

 
211

Other asset-backed securities
142,470

 
1,181

 
70,218

 
236

 
72,252

 
945

 
$
1,465,727

 
$
32,706

 
$
634,958

 
$
9,823

 
$
830,769

 
$
22,883


Schedule of other information regarding available-for-sale securities
Other information regarding sales and purchases of fixed maturity available-for-sale securities is as follows:
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(In millions)
2019
 
2018
 
2019
 
2018
Proceeds from sales (exclusive of maturities and paydowns)
$
21.9

 
$
61.3

 
$
115.2

 
$
556.3

Purchases
$
202.3

 
$
164.6

 
$
553.2

 
$
717.1


Schedule of net investment income
Net investment income by investment category was as follows:
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(In thousands)
2019
 
2018
 
2019
 
2018
Fixed maturities
$
18,362

 
$
17,228

 
$
54,154

 
$
51,814

Equities
3,942

 
5,687

 
13,755

 
15,553

Short-term investments, including Other
2,012

 
1,330

 
5,466

 
3,968

BOLI
645

 
621

 
1,557

 
1,525

Investment fees and expenses
(1,280
)
 
(1,600
)
 
(4,894
)
 
(5,183
)
Net investment income
$
23,681

 
$
23,266

 
$
70,038

 
$
67,677


Schedule of investment in unconsolidated subsidiaries
ProAssurance's investment in unconsolidated subsidiaries were as follows:
 
September 30, 2019
 
Carrying Value
(In thousands)
Percentage
Ownership
 
September 30,
2019
 
December 31,
2018
Qualified affordable housing project tax credit partnerships
See below
 
$
50,989

 
$
65,677

Other tax credit partnerships
See below
 
2,570

 
3,757

All other investments, primarily investment fund LPs/LLCs
See below
 
313,047

 
298,323

 
 
 
$
366,606

 
$
367,757


Schedule of losses and tax credits related to tax credit partnership investments Losses recorded and tax credits recognized related to ProAssurance's tax credit partnership investments were as follows:
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(In thousands)
2019
 
2018
 
2019
 
2018
Qualified affordable housing project tax credit partnerships
 
 
 
 
 
 
 
Losses recorded
$
5,077

 
$
4,661

 
$
14,674

 
$
14,373

Tax credits recognized
$
4,531

 
$
4,618

 
$
13,594

 
$
13,855

 
 
 
 
 
 
 
 
Historic tax credit partnerships
 
 
 
 
 
 
 
Losses recorded
$
695

 
$
1,394

 
$
1,187

 
$
4,776

Tax credits recognized
$
103

 
$
570

 
$
309

 
$
1,925


Schedule of net realized investment gains (losses)
Realized investment gains and losses are recognized on the first-in, first-out basis. The following table provides detailed information regarding net realized investment gains (losses):
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(In thousands)
2019
 
2018
 
2019
 
2018
Total OTTI losses:
 
 
 
 
 
 
 
Corporate debt
$
(66
)
 
$
(86
)
 
$
(202
)
 
$
(490
)
Portion of OTTI losses recognized in other comprehensive income before taxes:
 
 
 
 
 
 
 
Corporate debt
36

 

 
124

 

Net impairment losses recognized in earnings
(30
)
 
(86
)
 
(78
)
 
(490
)
Gross realized gains, available-for-sale fixed maturities
654

 
690

 
2,028

 
5,592

Gross realized (losses), available-for-sale fixed maturities
(124
)
 
(1,400
)
 
(493
)
 
(5,172
)
Net realized gains (losses), trading fixed maturities
8

 
(28
)
 
(18
)
 
(100
)
Net realized gains (losses), equity investments
2,451

 
4,689

 
13,459

 
17,395

Net realized gains (losses), other investments
397

 
561

 
974

 
1,652

Change in unrealized holding gains (losses), trading fixed maturities
278

 
(42
)
 
753

 
(261
)
Change in unrealized holding gains (losses), equity investments
(2,157
)
 
7,996

 
27,775

 
(15,104
)
Change in unrealized holding gains (losses), convertible securities, carried at fair value
(408
)
 
(260
)
 
2,597

 
(1,126
)
Other
65

 
253

 
67

 
265

Net realized investment gains (losses)
$
1,134

 
$
12,373

 
$
47,064

 
$
2,651


Schedule of OTTI recorded in OCI
The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the OTTI was recorded in OCI.
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(In thousands)
2019
 
2018
 
2019
 
2018
Balance beginning of period
$
142

 
$
1,313

 
$
93

 
$
1,313

Additional credit losses recognized during the period, related to securities for which:
 
 
 
 
 
 
 
No OTTI has been previously recognized

 

 
49

 

OTTI has been previously recognized
30

 

 
30

 

Reductions due to:
 
 
 
 
 
 
 
Securities sold during the period (realized)

 
(1,220
)
 

 
(1,220
)
Balance September 30
$
172

 
$
93

 
$
172

 
$
93