Investments

Fixed income securities

The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed income securities classified as available-for-sale at March 31, 2019 and December 31, 2018 are shown in tables 7.1a and 7.1b below.



Details of fixed income securities by category as of March 31, 2019
Table	7.1a
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses) ⁽¹⁾			Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	167,821	$	910	$	(589	)	$	168,142
Obligations of U.S. states and political subdivisions		1,611,092		58,372		(2,226		)	1,667,238
Corporate debt securities		2,442,354		23,363		(9,648		)	2,456,069
Asset backed securities (“ABS”)		217,469		1,045		(33		)	218,481
Residential mortgage backed securities (“RMBS”)		188,201		143		(7,859		)	180,485
Commercial mortgage backed securities (“CMBS”)		272,074		1,808		(4,599		)	269,283
Collateralized loan obligations (“CLO”)		330,524		—		(2,862		)	327,662
Total fixed income securities		$	5,229,535	$	85,641	$	(27,816	)	$	5,287,360



Details of fixed income securities by category as of December 31, 2018
Table	7.1b
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses) ⁽¹⁾			Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	167,655	$	597	$	(1,076	)	$	167,176
Obligations of U.S. states and political subdivisions		1,701,826		29,259		(10,985		)	1,720,100
Corporate debt securities		2,439,173		2,103		(40,514		)	2,400,762
ABS		111,953		226		(146		)	112,033
RMBS		189,238		32		(10,309		)	178,961
CMBS		276,352		888		(9,580		)	267,660
CLOs		310,587		2		(5,294		)	305,295
Total fixed income securities		$	5,196,784	$	33,107	$	(77,904	)	$	5,151,987


⁽¹⁾	At March 31, 2019 and December 31, 2018, there were no other-than-temporary impairment losses recorded in other comprehensive income.

We had $13.6 million and $13.5 million of investments at fair value on deposit with various states as of March 31, 2019 and December 31, 2018, respectively, due to regulatory requirements of those state insurance departments.

The amortized cost and fair values of fixed income securities at March 31, 2019, by contractual maturity, are shown in table 7.2 below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most ABS, RMBS, CMBS, and CLOs provide for periodic payments throughout their lives, they are listed in separate categories.



Fixed income securities maturity schedule
Table	7.2
		March 31, 2019
(In thousands)		Amortized cost		Fair Value
Due in one year or less		$	375,772	$	375,241
Due after one year through five years		1,748,834		1,753,881
Due after five years through ten years		948,568		966,862
Due after ten years		1,148,093		1,195,465
		4,221,267		4,291,449

ABS		217,469		218,481
RMBS		188,201		180,485
CMBS		272,074		269,283
CLOs		330,524		327,662
Total as of March 31, 2019		$	5,229,535	$	5,287,360

Proceeds from sales of fixed income securities classified as available-for-sale were $106.0 million and $10.8 million during the three months ended March 31, 2019 and 2018, respectively. Gross gains of $0.7 million and $0.1 million and gross losses of $1.3 million and $0.3 million were realized on those sales during the three months ended March 31, 2019 and 2018, respectively. During the three months ended March 31, 2019, we recorded other-than-temporary impairment (“OTTI”) losses of $0.1 million. During the three months ended March 31, 2018, there were no OTTI losses recognized.

Equity securities

The cost and fair value of investments in equity securities at March 31, 2019 and December 31, 2018 are shown in tables 7.3a and 7.3b below.



Details of equity security investments as of March 31, 2019
Table	7.3a
(In thousands)		Cost		Gross Gains		Gross Losses			Fair Value
Equity securities		$	4,016	$	60	$	(19	)	$	4,057



Details of equity security investments as of December 31, 2018
Table	7.3b
(In thousands)		Cost		Gross Gains		Gross Losses			Fair Value
Equity securities		$	3,993	$	11	$	(72	)	$	3,932

For the three months ended March 31, 2019, we recognized $0.1 million of net gains on equity securities still held as of March 31, 2019. For the three months ended March 31, 2018, we recognized $0.1 million of net losses on equity securities still held as of March 31, 2018.

Other invested assets

Other invested assets include an investment in Federal Home Loan Bank (“FHLB”) stock that is carried at cost, which due to its nature approximates fair value. Ownership of FHLB stock provides access to a secured lending facility, and our current FHLB Advance amount is secured by eligible collateral whose fair value is maintained at a minimum of 102% of the outstanding principal balance. As of March 31, 2019, that collateral consisted of fixed income securities included in our total investment portfolio, and cash and cash equivalents, with a total fair value of $171.6 million.

Unrealized investment losses

Tables 7.4a and 7.4b below summarize, for all available-for-sale investments in an unrealized loss position at March 31, 2019 and December 31, 2018, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in tables 7.4a and 7.4b are estimated using the process described in Note 8 - “Fair Value Measurements” to these consolidated financial statements and in Note 3 - “Significant Accounting Policies” of the notes to the consolidated financial statements in our 2018 Annual Report on Form 10-K.



Unrealized loss aging for securities by type and length of time as of March 31, 2019
Table	7.4a
		Less Than 12 Months					12 Months or Greater					Total
(In thousands)		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	—	$	—		$	68,951	$	(589	)	$	68,951	$	(589	)
Obligations of U.S. states and political subdivisions		17,518		(444		)	213,567		(1,782		)	231,085		(2,226		)
Corporate debt securities		149,625		(1,315		)	852,102		(8,333		)	1,001,727		(9,648		)
ABS		18,444		(33		)	—		—			18,444		(33		)
RMBS		—		—			175,437		(7,859		)	175,437		(7,859		)
CMBS		9,757		(94		)	189,785		(4,505		)	199,542		(4,599		)
CLOs		317,663		(2,862		)	—		—			317,663		(2,862		)
Total		$	513,007	$	(4,748	)	$	1,499,842	$	(23,068	)	$	2,012,849	$	(27,816	)



Unrealized loss aging for securities by type and length of time as of December 31, 2018
Table	7.4b
		Less Than 12 Months					12 Months or Greater					Total
(In thousands)		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	23,710	$	(15	)	$	69,146	$	(1,061	)	$	92,856	$	(1,076	)
Obligations of U.S. states and political subdivisions		316,655		(3,875		)	358,086		(7,110		)	674,741		(10,985		)
Corporate debt securities		1,272,279		(18,130		)	785,627		(22,384		)	2,057,906		(40,514		)
ABS		51,324		(146		)	—		—			51,324		(146		)
RMBS		24		—			178,573		(10,309		)	178,597		(10,309		)
CMBS		65,704		(1,060		)	163,272		(8,520		)	228,976		(9,580		)
CLOs		296,497		(5,294		)	—		—			296,497		(5,294		)
Total		$	2,026,193	$	(28,520	)	$	1,554,704	$	(49,384	)	$	3,580,897	$	(77,904	)

The unrealized losses in all categories of our investments at March 31, 2019 and December 31, 2018 were primarily caused by changes in interest rates between the time of purchase and the respective fair value measurement date. There were 420 and 721 securities in an unrealized loss position at March 31, 2019 and December 31, 2018, respectively.