Fair value is determined based on the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

We are required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:

The highest priority is assigned Level 1 inputs and the lowest priority to Level 3 inputs.

We did not hold any Level 3 assets or liabilities as of September 30, 2020 or December 31, 2019.

The carrying value of premium receivables and accounts payable, accrued expense, revolving loans and borrowings under our senior secured credit facility approximate their fair value. The rate at which revolving loans and borrowings under our senior secured credit facility bear interest resets periodically at market interest rates. All of these items are considered Level 1 assets and liabilities.

The Company has interests in LPs, REITs and LLCs. This investment categorization has the potential for higher returns but also the potential for higher degrees of risk, including less than stable rates of returns and may provide less liquidity. The Company maintains various interests in other markets of which are without a readily determinable fair value and are measured at amortized cost with adjustments for observable changes in price or impairments or at net asset value. The Company reviews these investments each reporting period to determine whether an impairment or observable price change for the investment has occurred. When such events or changes occur, the Company evaluates the fair value compared to its cost basis in the investment. Gains or losses from a change in fair value are included with other income (expense) in the Company’s condensed consolidated statement of income for the period.

The table below presents the balances of our invested assets measured at fair value on a recurring basis:

September 30, 2020	Total		Level 1		Level 2		Level 3
Invested Assets:	(in thousands)
Debt Securities Available-for-sale
U.S. government and agency securities	$	35,941	$	373	$	35,568	$	—
States, municipalities and political subdivisions		54,947		—		54,947		—
Special revenue		191,983		—		191,983		—
Hybrid securities		98		—		98		—
Industrial and miscellaneous		162,512		—		162,512		—
Total debt securities		445,481		373		445,108		—
Investments reported at NAV ⁽¹⁾		10,973		—		—		—
Other invested assets ⁽²⁾		17,400		—		—		—
Total investments	$	473,854	$	373	$	445,108	$	—

December 31, 2019	Total		Level 1		Level 2		Level 3
Invested Assets:	(in thousands)
Debt Securities Available-for-sale
U.S. government and agency securities	$	54,191	$	366	$	53,825	$	—
States, municipalities and political subdivisions		76,355		—		76,355		—
Special revenue		250,226		—		250,226		—
Hybrid securities		101		—		101		—
Industrial and miscellaneous		206,383		—		206,383		—
Total debt securities		587,256		366		586,890		—
Investments reported at NAV ⁽¹⁾		7,993		—		—		—
Total investments	$	595,249	$	366	$	586,890	$	—

Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets and goodwill which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for intangible assets acquired, were based on Level 3 unobservable inputs. For the quarters ended September 30, 2020 and 2019, these non-recurring fair value inputs consisted of brand, agent relationships, renewal rights, customer relations, trade names, non-compete and goodwill. To evaluate such assets for a potential impairment, we determine the fair value of the goodwill and intangible assets using a combination of a discounted cash flow approach and market approaches, which contain significant unobservable inputs and therefore are considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate.

There were no non-recurring fair value adjustments to intangible assets and goodwill during the first three quarters of 2020 and 2019. We record any measurement period adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill.