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Investments (Tables)
 6 Months Ended
Jun. 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:

 

 

June 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

 

$

32,924

 

 

$

46

 

 

$

(718

)

 

$

32,252

 

Foreign government

 

 

159,464

 

 

 

623

 

 

 

(10,255

)

 

 

149,832

 

States and political subdivisions

 

 

143,750

 

 

 

247

 

 

 

(14,457

)

 

 

129,540

 

Corporates

 

 

1,650,504

 

 

 

3,338

 

 

 

(136,869

)

 

 

1,516,973

 

Residential mortgage-backed securities

 

 

484,034

 

 

 

701

 

 

 

(45,673

)

 

 

439,062

 

Commercial mortgage-backed securities

 

 

145,360

 

 

 

6

 

 

 

(9,861

)

 

 

135,505

 

Other asset-backed securities

 

 

161,784

 

 

 

182

 

 

 

(10,665

)

 

 

151,301

 

Total fixed-maturity securities

 

 

2,777,820

 

 

 

5,143

 

 

 

(228,498

)

 

 

2,554,465

 

Short-term investments

 

 

3,311

 

 

 

-

 

 

 

-

 

 

 

3,311

 

Total fixed-maturity securities and short-term investments

 

$

2,781,131

 

 

$

5,143

 

 

$

(228,498

)

 

$

2,557,776

 

 

 

 

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 June 30, 2022 was as follows:

 

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

210,474

 

 

$

210,206

 

Due after one year through five years

 

 

762,311

 

 

 

737,052

 

Due after five years through 10 years

 

 

737,704

 

 

 

649,755

 

Due after 10 years

 

 

276,153

 

 

 

231,584

 

 

 

 

1,986,642

 

 

 

1,828,597

 

Mortgage- and asset-backed securities

 

 

791,178

 

 

 

725,868

 

  Total AFS fixed-maturity securities

 

$

2,777,820

 

 

$

2,554,465

 

 

 
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:

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

Cost

 

 

Fair value

 

 

Cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities

 

$

9,470

 

 

$

8,976

 

 

$

24,769

 

 

$

24,355

 

 
Net Investment Income

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

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Fixed-maturity securities (available-for-sale)

 

$

22,414

 

 

$

20,155

 

 

$

43,303

 

 

$

40,175

 

Fixed-maturity security (held-to-maturity)

 

 

15,815

 

 

 

15,495

 

 

 

31,330

 

 

 

30,642

 

Equity securities

 

 

371

 

 

 

411

 

 

 

758

 

 

 

803

 

Policy loans and other invested assets

 

 

58

 

 

 

98

 

 

 

160

 

 

 

329

 

Cash and cash equivalents

 

 

498

 

 

 

156

 

 

 

623

 

 

 

275

 

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

 

 

(769

)

 

 

1,068

 

 

 

(2,279

)

 

 

1,643

 

  Gross investment income

 

 

38,387

 

 

 

37,383

 

 

 

73,895

 

 

 

73,867

 

Investment expenses

 

 

(1,288

)

 

 

(1,353

)

 

 

(2,376

)

 

 

(2,637

)

   Investment income net of investment expenses

 

 

37,099

 

 

 

36,030

 

 

 

71,519

 

 

 

71,230

 

Interest expense on surplus note

 

 

(15,815

)

 

 

(15,495

)

 

 

(31,330

)

 

 

(30,642

)

    Net investment income

 

$

21,284

 

 

$

20,535

 

 

$

40,189

 

 

$

40,588

 

(1)

For the three and six months ended June 30, 2022, includes $(1.3) million and $(3.4) million, respectively, of net losses recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement. For the three and six months ended June 30, 2021, includes $(0.2) million and $(1.0) 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 June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Realized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

420

 

 

$

3,213

 

 

$

1,022

 

 

$

3,978

 

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

 

 

(364

)

 

 

(1,804

)

 

 

(390

)

 

 

(1,947

)

Net realized investment gains (losses):

 

 

56

 

 

 

1,409

 

 

 

632

 

 

 

2,031

 

Other investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit losses impairment of available-for-sale securities

 

 

-

 

 

 

(704

)

 

 

81

 

 

 

(858

)

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

 

 

(1,949

)

 

 

112

 

 

 

(1,833

)

 

 

1,536

 

Gains (losses) from bifurcated options

 

 

-

 

 

 

(33

)

 

 

-

 

 

 

(50

)

Gains (losses) on trading securities

 

 

1

 

 

 

(83

)

 

 

(21

)

 

 

(192

)

Other investment gains (losses):

 

 

(1,948

)

 

 

(708

)

 

 

(1,773

)

 

 

436

 

Investment gains (losses)

 

$

(1,892

)

 

$

701

 

 

$

(1,141

)

 

$

2,467

 
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 June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Proceeds from sales or other redemptions

 

$

162,963

 

 

$

208,785

 

 

$

302,076

 

 

$

314,171

 
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 June 30, 2022, aggregated by major security type and length of time such securities have continuously been in an unrealized loss position:

 

 

June 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

 

$

28,438

 

 

$

(614

)

 

$

1,472

 

 

$

(104

)

Foreign government

 

 

122,160

 

 

 

(7,938

)

 

 

6,517

 

 

 

(2,317

)

States and political subdivisions

 

 

113,680

 

 

 

(14,386

)

 

 

969

 

 

 

(71

)

Corporates

 

 

1,192,279

 

 

 

(117,546

)

 

 

81,221

 

 

 

(19,323

)

Residential mortgage-backed securities

 

 

393,787

 

 

 

(42,970

)

 

 

22,195

 

 

 

(2,703

)

Commercial mortgage-backed securities

 

 

126,131

 

 

 

(9,235

)

 

 

8,004

 

 

 

(626

)

Other asset-backed securities

 

 

137,920

 

 

 

(10,154

)

 

 

4,317

 

 

 

(511

)

Total fixed-maturity securities

 

 

2,114,395

 

 

 

(202,843

)

 

 

124,695

 

 

 

(25,655

)

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

 

837

 

 

 

-

 

 

 

-

 

 

 

-

 

Total short-term investments

 

 

837

 

 

 

-

 

 

 

-

 

 

 

-

 

Total fixed-maturity securities and short-term investments

 

$

2,115,232

 

 

$

(202,843

)

 

$

124,695

 

 

$

(25,655

)

 

 

 

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 June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Allowance for credit losses, beginning of period

 

$

735

 

 

$

154

 

 

$

816

 

 

$

-

 

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

 

 

-

 

 

 

-

 

 

 

-

 

 

 

154

 

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

 

 

-

 

 

 

704

 

 

 

(81

)

 

 

704

 

Write-offs charged against the allowance, if any

 

 

(735

)

 

 

-

 

 

 

(735

)

 

 

-

 

Allowance for credit losses, end of period

 

$

-

 

 

$

858

 

 

$

-

 

 

$

858