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Investments | 3 Months Ended
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Jun. 30, 2021
Investments Debt Equity Securities [Abstract] |
3. Investments | 3. Investments Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $ 26.8 million and $ 27.7 million as of June 30, 2021 and March 31, 2021, respectively. Available-for-Sale Investments Available-for-sale investments as of June 30, 2021 were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses More than 12 Months Gross Unrealized Losses Less than 12 Months Allowance for Expected Credit Losses Estimated Market Value (Unaudited) (In thousands) U.S. treasury securities and government obligations $ 104,016 $ 9,087 $ – $ (818) $ – $ 112,285 U.S. government agency mortgage-backed securities 70,219 782 (7) (762) – 70,232 Obligations of states and political subdivisions 215,298 18,323 (106) (969) – 232,546 Corporate securities 1,998,177 129,442 (1,079) (18,456) (1,041) 2,107,043 Mortgage-backed securities 170,569 10,380 (1) (2) – 180,946 $ 2,558,279 $ 168,014 $ (1,193) $ (21,007) $ (1,041) $ 2,703,052 Available-for-sale investments as of March 31, 2021 were as follows: Cost Amortized Unrealized Gains Gross Unrealized Losses More than 12 Months Gross Unrealized Losses Less than 12 Months Gross Allowance for Expected Credit Losses Market Value Estimated (In thousands) U.S. treasury securities and government obligations $ 92,429 $ 12,941 $ – $ – $ – $ 105,370 U.S. government agency mortgage-backed securities 61,427 911 (1) (132) – 62,205 Obligations of states and political subdivisions 230,521 25,249 (59) (3) – 255,708 Corporate securities 1,846,507 199,447 (163) (641) (1,319) 2,043,831 Mortgage-backed securities 174,728 11,706 (1) (8) – 186,425 $ 2,405,612 $ 250,254 $ ( 224 ) $ ( 784 ) $ ( 1,319 ) $ 2,653,539 We sold available-for-sale securities with a fair value of $ 124.7 million during the first quarter of fiscal 2022. The gross realized gains on these sales totaled $ 2.1 million. The gross realized losses on these sales totaled $ 0.6 million. For available-for-sale debt securities in an unrealized loss position, we first assess whether the security is below investment grade. For securities that are below investment grade, we evaluate whether the decline in fair value has resulted from credit losses or other factors such as the interest rate environment. Declines in value due to credit are recognized as an allowance. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse market conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, cumulative default rates based on ratings are used to determine the potential cost of default, by year. The present value of these potential costs is then compared to the amortized cost of the security to determine the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through accumulated other comprehensive income, net of applicable taxes. If we intend to sell a security, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, the security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. There were no incremental impairment charges recorded during the quarter ended June 30, 2021. The adjusted cost and estimated market value of available-for-sale investments by contractual maturity were as follows: June 30, 2021 March 31, 2021 Cost Amortized Market Value Estimated Cost Amortized Market Value Estimated (Unaudited) (In thousands) Due in one year or less $ 57,753 $ 58,374 $ 90,142 $ 91,190 Due after one year through five years 590,448 627,370 562,442 601,818 Due after five years through ten years 641,992 694,439 672,733 754,536 Due after ten years 1,097,517 1,141,923 905,567 1,019,570 2,387,710 2,522,106 2,230,884 2,467,114 Mortgage-backed securities 170,569 180,946 174,728 186,425 Redeemable preferred stocks – – – – $ 2,558,279 $ 2,703,052 $ 2,405,612 $ 2,653,539 As of June 30, 2021 and March 31, 2021, our common stock and non-redeemable preferred stock that are included in Investments, fixed maturities and marketable equities on our balance sheet are stated in the table below. The changes in the fair value of these equity investments are recognized through Net investment and interest income. Equity investments of common stock and non-redeemable preferred stock were as follows: June 30, 2021 March 31, 2021 Amortized Estimated Amortized Estimated (Unaudited) (In thousands) Common stocks $ 9,775 $ 22,673 $ 9,775 $ 20,440 Non-redeemable preferred stocks 28,034 29,408 20,034 21,677 $ 37,809 $ 52,081 $ 29,809 $ 42,117

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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