XML 35 R25.htm IDEA: XBRL DOCUMENT v3.22.2.2
Investments (Tables)
 9 Months Ended
Sep. 30, 2022
Investments Debt And Equity Securities [Abstract]  
Schedule of Available-for-sale Securities The period-end amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities were as follows:

 

 

September 30, 2022

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

32,698

 

 

$

20

 

 

$

(980

)

 

$

31,738

 

Foreign government

 

 

150,507

 

 

 

474

 

 

 

(11,037

)

 

 

139,944

 

States and political subdivisions

 

 

142,852

 

 

 

59

 

 

 

(21,789

)

 

 

121,122

 

Corporates

 

 

1,668,098

 

 

 

1,985

 

 

 

(194,251

)

 

 

1,475,832

 

Residential mortgage-backed securities

 

 

477,103

 

 

 

251

 

 

 

(65,328

)

 

 

412,026

 

Commercial mortgage-backed securities

 

 

139,940

 

 

 

3

 

 

 

(14,204

)

 

 

125,739

 

Other asset-backed securities

 

 

167,817

 

 

 

-

 

 

 

(16,229

)

 

 

151,588

 

Total fixed-maturity securities

 

 

2,779,015

 

 

 

2,792

 

 

 

(323,818

)

 

 

2,457,989

 

 

 

 

December 31, 2021

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

32,292

 

 

$

187

 

 

$

(79

)

 

$

32,400

 

Foreign government

 

 

147,288

 

 

 

6,283

 

 

 

(595

)

 

 

152,976

 

States and political subdivisions

 

 

147,455

 

 

 

6,326

 

 

 

(254

)

 

 

153,527

 

Corporates

 

 

1,649,334

 

 

 

72,418

 

 

 

(8,068

)

 

 

1,713,684

 

Residential mortgage-backed securities

 

 

373,753

 

 

 

5,108

 

 

 

(3,230

)

 

 

375,631

 

Commercial mortgage-backed securities

 

 

142,631

 

 

 

3,314

 

 

 

(420

)

 

 

145,525

 

Other asset-backed securities

 

 

128,635

 

 

 

1,409

 

 

 

(1,220

)

 

 

128,824

 

Total fixed-maturity securities

 

 

2,621,388

 

 

 

95,045

 

 

 

(13,866

)

 

 

2,702,567

 

Short-term investments

 

 

85,246

 

 

 

1

 

 

 

(4

)

 

 

85,243

 

Total fixed-maturity and short-term investments

 

$

2,706,634

 

 

$

95,046

 

 

$

(13,870

)

 

$

2,787,810

 
Fixed-maturity Securities Classified by Contractual Maturity Date

The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio as of September 30, 2022 was as follows:

 

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

185,346

 

 

$

184,509

 

Due after one year through five years

 

 

768,889

 

 

 

724,190

 

Due after five years through 10 years

 

 

747,297

 

 

 

627,289

 

Due after 10 years

 

 

292,623

 

 

 

232,648

 

 

 

 

1,994,155

 

 

 

1,768,636

 

Mortgage- and asset-backed securities

 

 

784,860

 

 

 

689,353

 

  Total AFS fixed-maturity securities

 

$

2,779,015

 

 

$

2,457,989

 
Costs and Fair Value of Securities Classified as Trading Securities The cost and fair value of the securities classified as trading securities were as follows:

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

Cost

 

 

Fair value

 

 

Cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities

 

$

4,335

 

 

$

3,718

 

 

$

24,769

 

 

$

24,355

 
Net Investment Income

Investment Income. The components of net investment income were as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Fixed-maturity securities (available-for-sale)

 

$

23,067

 

 

$

19,860

 

 

$

66,370

 

 

$

60,035

 

Fixed-maturity security (held-to-maturity)

 

 

16,283

 

 

 

15,741

 

 

 

47,613

 

 

 

46,382

 

Equity securities

 

 

373

 

 

 

413

 

 

 

1,131

 

 

 

1,216

 

Policy loans and other invested assets

 

 

436

 

 

 

289

 

 

 

596

 

 

 

618

 

Cash and cash equivalents

 

 

1,714

 

 

 

96

 

 

 

2,338

 

 

 

371

 

Total return on deposit asset underlying 10% coinsurance agreement(1)

 

 

489

 

 

 

346

 

 

 

(1,790

)

 

 

1,989

 

  Gross investment income

 

 

42,362

 

 

 

36,745

 

 

 

116,258

 

 

 

110,611

 

Investment expenses

 

 

(1,733

)

 

 

(1,004

)

 

 

(4,110

)

 

 

(3,641

)

   Investment income net of investment expenses

 

 

40,629

 

 

 

35,741

 

 

 

112,148

 

 

 

106,970

 

Interest expense on surplus note

 

 

(16,283

)

 

 

(15,741

)

 

 

(47,613

)

 

 

(46,382

)

    Net investment income

 

$

24,346

 

 

$

20,000

 

 

$

64,535

 

 

$

60,588

 
(1)
For the three months ended September 30, 2022, includes less than ($0.1) million of net losses recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement. For the nine months ended September 30, 2022, includes $(3.4) million of net losses recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement. For the three and nine months ended September 30, 2021, includes $(0.6) million and $(1.6) million, respectively, of net losses recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement.
Schedule of Components of Investment Gains (Losses)

The components of investment gains (losses), as well as details on gross realized investment gains (losses) and other investment gains (losses) were as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Realized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Gross gains from sales of available-for-sale securities fixed maturity securities

 

$

491

 

 

$

1,801

 

 

$

1,512

 

 

$

5,780

 

Gross losses from sales of available-for-sale fixed maturity securities

 

 

(199

)

 

 

(71

)

 

 

(588

)

 

 

(2,018

)

Net realized investment gains (losses):

 

 

292

 

 

 

1,730

 

 

 

924

 

 

 

3,762

 

Other investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Credit losses impairment of available-for-sale securities

 

 

(138

)

 

 

149

 

 

 

(57

)

 

 

(710

)

Market gains (losses) recognized in net income during the period on equity securities

 

 

(2,858

)

 

 

(418

)

 

 

(4,692

)

 

 

1,117

 

Gains (losses) from bifurcated options

 

 

-

 

 

 

1

 

 

 

-

 

 

 

(48

)

Gains (losses) on trading securities

 

 

5

 

 

 

(52

)

 

 

(16

)

 

 

(245

)

Other investment gains (losses):

 

 

(2,991

)

 

 

(320

)

 

 

(4,765

)

 

 

114

 

Investment gains (losses)

 

$

(2,699

)

 

$

1,410

 

 

$

(3,841

)

 

$

3,876

 

 
Schedule of Proceeds from Sales or Other Redemptions of Available-for-Sale Securities

The proceeds from sales or other redemptions of available-for-sale securities were as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Proceeds from sales or other redemptions

 

$

117,909

 

 

$

135,393

 

 

$

419,985

 

 

$

449,564

 
Schedule of Securities in Unrealized Loss Position The following table summarizes all available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of September 30, 2022, aggregated by major security type and length of time such securities have continuously been in an unrealized loss position:

 

 

September 30, 2022

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

 

(Dollars in thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

27,735

 

 

$

(744

)

 

$

2,170

 

 

$

(236

)

Foreign government

 

 

114,843

 

 

 

(7,332

)

 

 

17,132

 

 

 

(3,705

)

States and political subdivisions

 

 

105,750

 

 

 

(18,900

)

 

 

11,798

 

 

 

(2,889

)

Corporates

 

 

1,202,033

 

 

 

(127,943

)

 

 

239,948

 

 

 

(66,308

)

Residential mortgage-backed securities

 

 

301,304

 

 

 

(41,127

)

 

 

103,895

 

 

 

(24,201

)

Commercial mortgage-backed securities

 

 

96,986

 

 

 

(10,949

)

 

 

28,352

 

 

 

(3,255

)

Other asset-backed securities

 

 

102,080

 

 

 

(8,368

)

 

 

49,508

 

 

 

(7,861

)

 Total fixed-maturity securities

 

 

1,950,731

 

 

 

(215,363

)

 

 

452,803

 

 

 

(108,455

)

 

 

 

December 31, 2021

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

 

(Dollars in thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

24,928

 

 

$

(45

)

 

$

1,557

 

 

$

(34

)

Foreign government

 

 

18,894

 

 

 

(384

)

 

 

3,335

 

 

 

(211

)

States and political subdivisions

 

 

15,909

 

 

 

(254

)

 

 

-

 

 

 

-

 

Corporates

 

 

341,963

 

 

 

(5,035

)

 

 

59,414

 

 

 

(3,033

)

Residential mortgage-backed securities

 

 

234,911

 

 

 

(3,131

)

 

 

2,707

 

 

 

(99

)

Commercial mortgage-backed securities

 

 

47,220

 

 

 

(419

)

 

 

117

 

 

 

(1

)

Other asset-backed securities

 

 

80,509

 

 

 

(1,037

)

 

 

3,779

 

 

 

(183

)

Total fixed-maturity securities

 

 

764,334

 

 

 

(10,305

)

 

 

70,909

 

 

 

(3,561

)

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

 

34,967

 

 

*

 

 

 

-

 

 

 

-

 

Foreign government

 

 

4,995

 

 

*

 

 

 

-

 

 

 

-

 

States and political subdivisions

 

 

11,394

 

 

 

(1

)

 

 

-

 

 

 

-

 

Corporates

 

 

23,891

 

 

 

(3

)

 

 

-

 

 

 

-

 

Total short-term investments

 

 

75,247

 

 

 

(4

)

 

 

-

 

 

 

-

 

Total fixed-maturity securities and short-term investments

 

$

839,581

 

 

$

(10,309

)

 

$

70,909

 

 

$

(3,561

)

* Less than $1 thousand.
Schedule of Securities in Allowance for Credit Losses

The rollforward of the allowance for credit losses on available-for-sale securities were as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Allowance for credit losses, beginning of period

 

$

-

 

 

$

858

 

 

$

816

 

 

$

-

 

Additions to the allowance for credit losses on securities for which credit losses were not previously recorded

 

 

-

 

 

 

6

 

 

 

-

 

 

 

160

 

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period

 

 

-

 

 

 

(154

)

 

 

(81

)

 

 

550

 

Write-offs charged against the allowance, if any

 

 

-

 

 

 

-

 

 

 

(735

)

 

 

-

 

Allowance for credit losses, end of period

 

$

-

 

 

$

710

 

 

$

-

 

 

$

710