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Fair Value Measurements
6 Months Ended
Jun. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
    The Company’s fixed maturity available for sale securities, equity securities and its arbitrage trading account securities are carried at fair value. Fair value is defined as “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.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable.
Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available.
    Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation.
    If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information.
    For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate.
    
    The following tables present the assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 by level:
(In thousands)TotalLevel 1Level 2Level 3
June 30, 2022
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency$720,914 $— $720,914 $— 
State and municipal3,017,263 — 3,017,263 — 
Mortgage-backed1,477,099 — 1,477,099 — 
Asset-backed4,292,488 — 4,292,488 — 
Corporate5,689,125 — 5,689,125 — 
Foreign government1,604,111 — 1,604,111 — 
Total fixed maturity securities available for sale16,801,000 — 16,801,000 — 
Equity securities:
Common stocks932,672 926,865 1,256 4,551 
Preferred stocks222,654 — 211,358 11,296 
Total equity securities1,155,326 926,865 212,614 15,847 
Arbitrage trading account1,142,003 1,121,579 20,424 — 
Total$19,098,329 $2,048,444 $17,034,038 $15,847 
Liabilities:
Trading account securities sold but not yet purchased$68 $68 $— $— 
December 31, 2021
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency$855,343 $— $855,343 $— 
State and municipal3,304,133 — 3,304,133 — 
Mortgage-backed1,068,075 — 1,068,075 — 
Asset-backed4,490,565 — 4,490,565 — 
Corporate5,595,675 — 5,595,675 — 
Foreign government1,214,901 — 1,214,901 — 
Total fixed maturity securities available for sale16,528,692 — 16,528,692 — 
Equity securities:
Common stocks695,403 684,470 1,639 9,294 
Preferred stocks245,840 — 234,544 11,296 
Total equity securities941,243 684,470 236,183 20,590 
Arbitrage trading account1,179,606 1,153,079 26,527 — 
Total$18,649,541 $1,837,549 $16,791,402 $20,590 
Liabilities:
Trading account securities sold but not yet purchased$1,169 $1,137 $32 $— 
    The following tables summarize changes in Level 3 assets and liabilities for the six months ended June 30, 2022 and for the year ended December 31, 2021:
Gains (Losses) Included In:
(In thousands)Beginning
Balance
Earnings (Losses)Other
Comprehensive
Income (Losses)
ImpairmentsPurchasesSalesPaydowns / MaturitiesTransfers In / (Out)Ending
Balance
Six Months Ended June 30, 2022
Assets:
Equity securities:
Common stocks$9,294 $(4,743)$— $— $— $— $— $— $4,551 
Preferred stocks11,296 — — — 925 (925)— — 11,296 
Total$20,590 $(4,743)$— $— $925 $(925)$— $— $15,847 
Liabilities:
Trading account securities sold but not yet purchased$— $— $— $— $— $— $— $— $— 
Year Ended
December 31, 2021
Assets:
Fixed maturities securities available for sale:
Corporate$1,000 $— $— $— $— $(1,000)$— $— $— 
Total1,000 — — — — (1,000)— — — 
Equity securities:
Common stocks9,215 640 — — — (561)— — 9,294 
Preferred stocks9,331 (35)— — 2,000 — — — 11,296 
Total18,546 605 — — 2,000 (561)— — 20,590 
Arbitrage trading account— — — — (8)— — — 
Total$19,546 $613 $— $— $2,000 $(1,569)$— $— $20,590 
Liabilities:
Trading account securities sold but not yet purchased$— $$— $— $(1)$— $— $— $— 
    For the six months ended June 30, 2022 and for the year ended December 31, 2021, there were no securities transferred into or out of Level 3.
Fair Value of Financial Instruments
    The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
  June 30, 2022December 31, 2021
(In thousands)Carrying ValueFair ValueCarrying ValueFair Value
Assets:
Fixed maturity securities$16,851,514 $16,857,031 $16,602,673 $16,614,118 
Equity securities1,155,326 1,155,326 941,243 941,243 
Arbitrage trading account1,142,003 1,142,003 1,179,606 1,179,606 
Loans receivable113,483 112,072 115,172 116,534 
Cash and cash equivalents1,316,603 1,316,603 1,568,843 1,568,843 
Trading account receivables from brokers and clearing organizations9,937 9,937 — — 
     Due from broker— — 20,448 20,448 
Liabilities:
Due to broker49,178 49,178 — — 
Trading account payable to brokers and clearing organizations— — 53,636 53,636 
Trading account securities sold but not yet purchased68 68 1,169 1,169 
Senior notes and other debt1,832,273 1,558,985 2,259,416 2,526,630 
Subordinated debentures1,008,011 810,028 1,007,652 1,095,600 
    The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 16. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.