Investments

12 Months Ended

Dec. 31, 2023

Investments [Abstract]

Investments

Note 3. Investments

The following table summarizes investment income and realized gains and losses on investments during the periods presented.

	Year Ended December 31,
	2023		2022		2021
Investment income, net of investment expenses	$	8,428	$	1,544	$	768
Realized gains on investments	113		22		62
Realized losses on investments	(256)		(392)		(129)
Investment income and realized gains, net of investment expenses	$	8,285	$	1,174	$	701

The following tables summarize the amortized cost, fair value, and unrealized gains and losses of investment securities:

	December 31, 2023
	Amortized Cost		Gross Unrealized				Fair Value
			Gains		Losses
U.S. Treasuries	$	43,931	$	95	$	(330)	$	43,696
Obligations of states, municipalities and political subdivisions	18,281		100		(961)		17,420
Corporate bonds	51,678		430		(2,067)		50,041
Residential and commercial mortgage-backed securities	25,452		153		(1,004)		24,601
Other loan-backed and structured securities	3,694		13		(289)		3,418
Total investment securities	$	143,036	$	791	$	(4,651)	$	139,176

	December 31, 2022
	Amortized Cost		Gross Unrealized				Fair Value
			Gains		Losses
U.S. Treasuries	$	35,637	$	5	$	(320)	$	35,322
Obligations of states, municipalities and political subdivisions	11,549		2		(1,326)		10,225
Corporate bonds	31,032		32		(2,837)		28,227
Residential and commercial mortgage-backed securities	12,790		11		(1,268)		11,533
Other loan-backed and structured securities	6,804		6		(476)		6,334
Total investment securities	$	97,812	$	56	$	(6,227)	$	91,641

The amortized cost and fair value of securities at December 31, 2023, by contractual maturity, are shown in the following table. 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.

	December 31, 2023
Remaining Time to Maturity	Amortized Cost		Fair Value
Due in one year or less	$	34,620	$	34,542
Due after one year through five years	45,411		44,607
Due after five years through ten years	25,397		23,951
Due after ten years	8,462		8,057
Residential and commercial mortgage-backed securities	25,452		24,601
Other loan-backed and structured securities	3,694		3,418
Total	$	143,036	$	139,176

Investments as of December 31, 2023, include $36.4 million of investments held by our captive reinsurance businesses as collateral for the benefit of HOA. Of this amount, $1.7 million is classified as short-term investments, and $34.7 million is classified as long-term investments.

The following table presents investments pledged to the Department of Insurance in certain states as a condition of the Certificate of Authority for the purpose of meeting obligations to policyholders and creditors.

	December 31,
	2023		2022
Certificates of deposit	$	1,266	$	1,463
U.S. Treasury notes	706		1,216
	1,972		2,679

Pledged certificates of deposit of $1.3 million and pledged U.S. Treasury notes of $0.7 million are included in long-term investments on the accompanying Consolidated Balance Sheets as of December 31, 2023. Pledged certificates of deposit of $0.2 million and pledged U.S. Treasury notes of $0.5 million are included in short-term investments, and pledged certificates of deposit of $1.2 million and pledged U.S. Treasury notes of $0.8 million are included in long-term investments on the accompanying Consolidated Balance Sheets as of December 31, 2022.

Expected Credit Losses

We regularly review our individual investment securities for factors that may indicate that a decline in fair value of an investment has resulted from an expected credit loss, including:

•the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

•the extent to which the market value of the security is below its cost or amortized cost;

•general market conditions and industry or sector specific factors;

•nonpayment by the issuer of its contractually obligated interest and principal payments; and

•our intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

	Less Than Twelve Months				Twelve Months or Greater				Total
As of December 31, 2023	Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value
U.S. Treasuries	$	(280)	$	12,345	$	(50)	$	515	$	(330)	$	12,860
Obligations of states, municipalities and political subdivisions	(813)		8,445		(148)		1,639		(961)		10,084
Corporate bonds	(1,698)		21,104		(369)		4,677		(2,067)		25,781
Residential and commercial mortgage-backed securities	(621)		8,673		(383)		3,072		(1,004)		11,745
Other loan-backed and structured securities	(281)		2,790		(8)		52		(289)		2,842
Total securities	$	(3,693)	$	53,357	$	(958)	$	9,955	$	(4,651)	$	63,312

	Less Than Twelve Months				Twelve Months or Greater				Total
As of December 31, 2022	Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value
U.S. Treasuries	$	(127)	$	10,748	$	(193)	$	9,824	$	(320)	$	20,572
Obligations of states, municipalities and political subdivisions	(929)		6,258		(397)		3,504		(1,326)		9,762
Corporate bonds	(1,623)		16,531		(1,214)		10,328		(2,837)		26,859
Residential and commercial mortgage-backed securities	(687)		6,565		(581)		4,952		(1,268)		11,517
Other loan-backed and structured securities	(359)		4,633		(117)		1,094		(476)		5,727
Total securities	$	(3,725)	$	44,735	$	(2,502)	$	29,702	$	(6,227)	$	74,437

At December 31, 2023 and 2022, there were 410 and 483 individual securities, respectively, in an unrealized loss position. Of these securities, 80 had been in an unrealized loss position for 12 months or longer as of December 31, 2023. At December 31, 2022, 218 individual securities were in an unrealized loss position for 12 months or longer.

We believe there were no fundamental issues such as credit losses or other factors with respect to any of our available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. We expect that the securities will not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because we have the ability and intent to hold our available-for-sale investments until a market price recovery or maturity, we do not consider any of our investments to have any decline in fair value due to expected credit losses at December 31, 2023 or 2022.