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Investments | 3 Months Ended
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Jun. 30, 2022
Investments Debt Equity Securities [Abstract] |
3. Investments | 2. 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 $ 23.8 million and $ 27.1 million as of March 31, 2022 and December 31, 2021, respectively. Available-for-Sale Investments Available-for-sale investments as of June 30, 2022 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 (Unaudited) (In thousands) U.S. treasury securities and government obligations $ 127,940 $ 2,947 $ (1,578) $ (2,493) $ – $ 126,816 U.S. government agency mortgage-backed securities 37,806 149 (380) (4,126) – 33,449 Obligations of states and political subdivisions 166,572 5,830 (1,275) (2,009) – 169,118 Corporate securities 1,970,857 38,302 (11,259) (51,863) (77) 1,945,960 Mortgage-backed securities 337,023 2,206 (1) (16,372) – 322,856 $ 2,640,198 $ 49,434 $ ( 14,493 ) $ ( 76,863 ) $ ( 77 ) $ 2,598,199 Available-for-sale investments as of March 31, 2022 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 $ 128,078 $ 7,984 $ – $ (969) $ – $ 135,093 U.S. government agency mortgage-backed securities 44,678 280 (42) (3,111) – 41,805 Obligations of states and political subdivisions 178,040 15,450 – (508) – 192,982 Corporate securities 1,989,212 138,909 (402) (6,604) (60) 2,121,055 Mortgage-backed securities 324,029 7,671 (1) (1,542) – 330,157 $ 2,664,037 $ 170,294 $ ( 445 ) $ ( 12,734 ) $ ( 60 ) $ 2,821,092 We sold available-for-sale securities with a fair value of $ 54.1 million during the first quarter of fiscal 2023 and $ 352.3 million for the full year of fiscal 2022. The gross realized gains on these sales totaled $ 0.3 million during the first quarter of fiscal 2023 and $ 9.5 million for the full year of fiscal 2022. The gross realized losses on these sales totaled $ 0.1 million during the first quarter of fiscal 2023 and $ 1.4 million for the full year of fiscal 2022. 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 was a $ 17 thousand net impairment charge recorded in the first quarter ended June 30, 2022. The adjusted cost and estimated market value of available-for-sale investments by contractual maturity were as follows: June 30, 2022 March 31, 2022 Cost Amortized Market Value Estimated Cost Amortized Market Value Estimated (Unaudited) (In thousands) Due in one year or less $ 104,389 $ 105,325 $ 97,969 $ 99,432 Due after one year through five years 554,348 557,915 541,840 570,135 Due after five years through ten years 713,435 717,393 704,295 765,073 Due after ten years 931,003 894,710 995,904 1,056,295 2,303,175 2,275,343 2,340,008 2,490,935 Mortgage-backed securities 337,023 322,856 324,029 330,157 $ 2,640,198 $ 2,598,199 $ 2,664,037 $ 2,821,092 As of June 30, 2022 and March 31, 2022, 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, 2022 March 31, 2022 Cost Amortized Market Value Estimated Cost Amortized Market Value Estimated (Unaudited) (In thousands) Common stocks $ 28,707 $ 45,837 $ 27,674 $ 46,212 Non-redeemable preferred stocks 26,054 25,950 26,054 26,095 $ 54,761 $ 71,787 $ 53,728 $ 72,307 Investments, other The carrying value of the other investments was as follows: June 30, March 31, 2022 2022 (Unaudited) (In thousands) Mortgage loans, net $ 433,385 $ 423,163 Short-term investments 34,809 30,916 Real estate 67,539 67,824 Policy loans 10,360 10,309 Other equity investments 11,031 11,543 $ 557,124 $ 543,755

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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 https://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 https://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 https://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 https://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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