The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount 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 using the exit price. Accordingly, when market observable data are not readily available, the Company’s own assumptions are set to reflect those that market participants would be presumed to use in pricing the asset or liability at the measurement date. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the level of judgment associated with inputs used to measure their fair value and the level of market price observability, as follows:


Level 2			Pricing inputs are other than quoted prices in active markets, which are based on the following:
			a. Quoted prices for similar assets or liabilities in active markets;
			b. Quoted prices for identical or similar assets or liabilities in non-active markets; or
			c. Either directly or indirectly observable inputs as of the reporting date.

In certain cases, inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability.

disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2, or from Level 2 to Level 3. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer.

The Company’s fair value measurements are based on the market approach, which utilizes market transaction data for the same or similar instruments. The Company obtained unadjusted fair values on 98.4% of its investment portfolio from an independent pricing service at December 31, 2023.

Level 1 measurements—Fair values of financial assets and financial liabilities are obtained from an independent pricing service, and are based on unadjusted quoted prices for identical assets or liabilities in active markets. Additional pricing services and closing exchange values are used as a comparison to ensure that reasonable fair values are used in pricing the investment portfolio.

Level 2 measurements—Fair values of financial assets and financial liabilities are obtained from an independent pricing service or outside brokers, and are based on prices for similar assets or liabilities in active markets or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Additional pricing services are used as a comparison to ensure reliable fair values are used in pricing the investment portfolio.

Mortgage-backed securities: Comprised of securities that are collateralized by residential and commercial mortgage loans and valued based on models or matrices using multiple observable inputs, such as benchmark yields, reported trades and broker/dealer quotes, for identical or similar assets in active markets. The Company had holdings of $33.0 million and $27.3 million in commercial mortgage-backed securities at December 31, 2023 and 2022, respectively.

Other asset-backed securities: Comprised of securities that are collateralized by non-mortgage assets, such as automobile loans, valued based on models or matrices using multiple observable inputs, such as benchmark yields, reported trades and broker/dealer quotes, for identical or similar assets in active markets.

Level 3 measurements—Fair values of financial assets are based on inputs that are both unobservable and significant to the overall fair value measurement, including any items in which the evaluated prices obtained elsewhere were deemed to be of a distressed trading level. At December 31, 2023 and 2022, the Company did not have any financial assets or financial liabilities based on Level 3 measurements.

Fair value measurement using NAV practical expedient - The fair values of the Company's investment in private equity funds measured at net asset value are determined using net asset value ("NAV") as advised by the external fund managers and the third party administrators. The NAV of the Company's limited partnership or limited liability company interest in such a fund is based on the manager's and the administrator's valuation of the underlying holdings in accordance with the fund's governing documents and GAAP. In accordance with applicable accounting guidance, private equity funds measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy. At December 31, 2023, the Company had capital

invested in three such funds: the strategy of two such funds with a combined fair value of approximately $79.2 million at December 31, 2023 is to provide current income to investors by investing mainly in secured loans, CLOs or CLO issuers, and equity interests in vehicles established to purchase and warehouse loans; and the strategy of the other such fund with a fair value of approximately $2.0 million at December 31, 2023 is to achieve long-term capital appreciation through privately-negotiated venture capital investments in seed- and early-stage portfolio companies with technology-enabled business models. The Company had approximately $8 million in unfunded commitments at December 31, 2023 with respect to the private equity funds measured at NAV. The underlying assets of the funds are expected to be liquidated over the period of approximately one year to nine years from December 31, 2023. In addition, the Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, pledge or transfer its investment, without the consent from the General Partner or Managers of each fund, but will receive distributions based on the liquidation of the underlying assets and the interest proceeds from the underlying assets.

The Company’s financial instruments at fair value are reflected in the consolidated balance sheets on a trade-date basis. Related unrealized gains or losses are recognized in net realized investment gains or losses in the consolidated statements of operations. Fair value measurements are not adjusted for transaction costs.

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:


	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(Amounts in thousands)
Assets
Fixed maturity securities:
U.S. government bonds and agencies	$	123,182	$	51,268	$	—	$	174,450
Municipal securities	—		2,777,258		—		2,777,258
Mortgage-backed securities	—		186,887		—		186,887
Corporate securities	—		599,630		—		599,630
Collateralized loan obligations	—		484,947		—		484,947
Other asset-backed securities	—		96,164		—		96,164
Total fixed maturity securities	123,182		4,196,154		—		4,319,336
Equity securities:
Common stock	597,888		—		—		597,888
Non-redeemable preferred stock	—		51,563		—		51,563
Private equity funds measured at net asset value (1)							81,242
Total equity securities	597,888		51,563		—		730,693
Short-term investments:
Short-term bonds	12,015		1,838		—		13,853
Money market instruments	164,595		—		—		164,595
Other	43		—		—		43
Total short-term investments	176,653		1,838		—		178,491
Other assets:
Note receivable	—		9,974		—		9,974
Total assets at fair value	$	897,723	$	4,259,529	$	—	$	5,238,494
Liabilities
Other liabilities:
Options sold	1,955		—		—		1,955
Total liabilities at fair value	$	1,955	$	—	$	—	$	1,955


	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(Amounts in thousands)
Assets
Fixed maturity securities:
U.S. government bonds	$	103,519	$	55,088	$	—	$	158,607
Municipal securities	—		2,737,183		—		2,737,183
Mortgage-backed securities	—		166,260		—		166,260
Corporate securities	—		569,553		—		569,553
Collateralized debt obligations	—		320,252		—		320,252
Other asset-backed securities	—		136,456		—		136,456
Total fixed maturity securities	103,519		3,984,792		—		4,088,311
Equity securities:
Common stock	558,169		—		—		558,169
Non-redeemable preferred stock	—		51,236		—		51,236
Private equity funds measured at net asset value (1)							90,147
Total equity securities	558,169		51,236		—		699,552
Short-term investments:
Short-term bonds	51,638		8,238		—		59,876
Money market instruments	63,021		—		—		63,021
Other	40		—		—		40
Total short-term investments	114,699		8,238		—		122,937
Total assets at fair value	$	776,387	$	4,044,266	$	—	$	4,910,800
Liabilities
Other liabilities:
Options sold	162		—		—		162
Total liabilities at fair value	$	162	$	—	$	—	$	162

(1) The fair value is measured using the NAV practical expedient; therefore, it is not categorized within the fair value hierarchy. The fair value amount is presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented in the Company's consolidated balance sheets.


	December 31, 2023
	Carrying Value		Fair Value		Level 1		Level 2		Level 3

	(Amounts in thousands)
Liabilities
Notes payable:
Unsecured notes	$	373,729	$	357,765	$	—	$	357,765	$	—
Unsecured credit facility	200,000		199,945		—		199,945		—
Total	$	573,729	$	557,710	$	—	$	557,710	$	—


	December 31, 2022
	Carrying Value		Fair Value		Level 1		Level 2		Level 3

	(Amounts in thousands)
Liabilities
Notes payable:
Unsecured notes	$	373,330	$	350,644	$	—	$	350,644	$	—
Unsecured credit facility	25,000		24,987		—		24,987		—
Total	$	398,330	$	375,631	$	—	$	375,631	$	—

The fair value of the Company’s publicly traded $375 million unsecured notes at December 31, 2023 and 2022 was based on the spreads above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. See Note 8. Notes Payable for additional information on unsecured notes.