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Commitments And Contingencies | 6 Months Ended
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Jun. 30, 2021
Commitments And Contingencies [Abstract] |
Commitments And Contingencies | 7. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses. Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration. The Company had one equity index put option contract at June 30, 2021, based on the Standard & Poor’s 500 (“S&P 500”) index. Based on historical index volatilities and trends and the June 30, 2021 S&P 500 index value, the Company estimates the probability that the equity index put option contract of the S&P 500 index falling below the strike price on the exercise date to be less than 0.1%. The theoretical maximum payout under this equity index put option contract would occur if on the exercise date the S&P 500 index value was zero. At June 30, 2021, the present value of the theoretical maximum payout using a 3% discount factor was $150,077 thousand. Conversely, if the contract had expired on June 30, 2021, with the S&P index at 4,297.50, there would have been no settlement amount. The Company has entered into separate annuity agreements with The Prudential Insurance of America (“The Prudential”) and an additional unaffiliated life insurance company in which the Company has either purchased annuity contracts or become the assignee of annuity proceeds that are meant to settle claim payment obligations in the future. In both instances, the Company would become contingently liable if either The Prudential or the unaffiliated life insurance company were unable to make payments related to the respective annuity contract. The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:
| At June 30, |  | At December 31,
(Dollars in thousands) | 2021 |  | 2020
The Prudential | $ | 139,236 |  | $ | 140,773
Unaffiliated life insurance company |  | 33,492 |  |  | 35,128

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