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v3.22.2

Investments | 6 Months Ended
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Jun. 30, 2022
Investments [Abstract] |
Investments | Investments Fixed income securities Our fixed income securities classified as available-for-sale at June 30, 2022 and December 31, 2021 are shown in tables 7.1a and 7.1b below.
Details of fixed income securities by category as of June 30, 2022
Table | 7.1a |  |  |  |  |  |  |  |  |  |
(In thousands) |  | Amortized Cost |  |  |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 123,595 |  |  |  |  | $ | 19 |  |  | $ | (6,295) |  |  | $ | 117,319 |
Obligations of U.S. states and political subdivisions |  | 2,455,698 |  |  |  |  | 11,529 |  |  | (174,093) |  |  | 2,293,134 |
Corporate debt securities |  | 2,532,263 |  |  |  |  | 945 |  |  | (158,155) |  |  | 2,375,053 |
ABS |  | 108,064 |  |  |  |  | 9 |  |  | (4,805) |  |  | 103,268 |
RMBS |  | 240,109 |  |  |  |  | 31 |  |  | (17,591) |  |  | 222,549 |
CMBS |  | 282,090 |  |  |  |  | 50 |  |  | (15,529) |  |  | 266,611 |
CLOs |  | 337,823 |  |  |  |  | 6 |  |  | (10,418) |  |  | 327,411 |
Foreign government debt |  | 4,486 |  |  |  |  | — |  |  | (740) |  |  | 3,746 |
Commercial paper |  | 3,729 |  |  |  |  | — |  |  | — |  |  | 3,729 |
Total fixed income securities |  | $ | 6,087,857 |  |  |  |  | $ | 12,589 |  |  | $ | (387,626) |  |  | $ | 5,712,820 |
Details of fixed income securities by category as of December 31, 2021
Table | 7.1b |  |  |  |  |  |  |  |  |  |
(In thousands) |  | Amortized Cost |  |  |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 133,990 |  |  |  |  | $ | 285 |  |  | $ | (868) |  |  | $ | 133,407 |
Obligations of U.S. states and political subdivisions |  | 2,408,688 |  |  |  |  | 133,361 |  |  | (7,396) |  |  | 2,534,653 |
Corporate debt securities |  | 2,704,586 |  |  |  |  | 75,172 |  |  | (13,776) |  |  | 2,765,982 |
ABS |  | 150,888 |  |  |  |  | 830 |  |  | (1,008) |  |  | 150,710 |
RMBS |  | 309,991 |  |  |  |  | 2,397 |  |  | (3,278) |  |  | 309,110 |
CMBS |  | 315,330 |  |  |  |  | 5,736 |  |  | (1,936) |  |  | 319,130 |
CLOs |  | 360,436 |  |  |  |  | 609 |  |  | (106) |  |  | 360,939 |
Foreign government debt |  | 13,749 |  |  |  |  | — |  |  | (99) |  |  | 13,650 |
Total fixed income securities |  | $ | 6,397,658 |  |  |  |  | $ | 218,390 |  |  | $ | (28,467) |  |  | $ | 6,587,581 |
We had $12.6 million and $13.4 million of investments at fair value on deposit with various states as of June 30, 2022 and December 31, 2021, respectively, due to regulatory requirements of those state insurance departments. In connection with our insurance and reinsurance activities within MAC and MIC, insurance subsidiaries of MGIC, we are required to maintain assets in trusts for the benefit of contractual counterparties, which had investments at fair value of $177.6 million and $189.8 million at June 30, 2022 and December 31, 2021, respectively. The amortized cost and fair values of fixed income securities at June 30, 2022, 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 |  |  |  |
|  | June 30, 2022
(In thousands) |  | Amortized cost |  | Fair Value
Due in one year or less |  | $ | 299,593 |  |  | $ | 297,963 |
Due after one year through five years |  | 1,536,218 |  |  | 1,489,620 |
Due after five years through ten years |  | 1,822,146 |  |  | 1,695,419 |
Due after ten years |  | 1,461,814 |  |  | 1,309,979 |
|  | 5,119,771 |  |  | 4,792,981 |
ABS |  | 108,064 |  |  | 103,268 |
RMBS |  | 240,109 |  |  | 222,549 |
CMBS |  | 282,090 |  |  | 266,611 |
CLOs |  | 337,823 |  |  | 327,411 |
Total as of June 30, 2022 |  | $ | 6,087,857 |  |  | $ | 5,712,820 |
The proceeds from the sale of fixed income securities classified as available-for-sale along with gross gains (losses) associated with such sales are shown in table 7.3 below.
Details of fixed income securities gains (losses) |  |  |  |
Table | 7.3 | Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Gains on sales | 987 |  |  | 2,275 |  |  | 5,121 |  |  | 5,291 |
Losses on sales | (1,093) |  |  | (353) |  |  | (5,750) |  |  | (745) |
Change in credit allowance | — |  |  | 31 |  |  | — |  |  | 49 |
Proceeds from sales of fixed income securities | 46,730 |  |  | 83,235 |  |  | 263,554 |  |  | 140,062 |
Equity securities The cost and fair value of investments in equity securities at June 30, 2022 and December 31, 2021 are shown in tables 7.4a and 7.4b below.
Details of equity security investments as of June 30, 2022
Table | 7.4a |  |  |  |  |  |  |  |
(In thousands) |  | Cost |  | Gross Gains |  | Gross Losses |  | Fair Value
Equity securities |  | $ | 15,986 |  |  | $ | — |  |  | $ | (1,505) |  |  | $ | 14,481 |
Details of equity security investments as of December 31, 2021
Table | 7.4b |  |  |  |  |  |  |  |
(In thousands) |  | Cost |  | Gross Gains |  | Gross Losses |  | Fair Value
Equity securities |  | $ | 15,838 |  |  | $ | 264 |  |  | $ | (34) |  |  | $ | 16,068 |
For the three and six months ended June 30, 2022, we recognized $0.7 million and $1.7 million of net losses on equity securities still held as of June 30, 2022. For the three and six months ended June 30, 2021, we recognized $0.2 million of net gains and $0.2 million of net losses, on equity securities still held as of June 30, 2021. Other invested assets At December 31, 2021, the FHLB Advance amount was secured by $167.2 million of eligible collateral. As a result of the prepayment of the outstanding principal balance on the FHLB Advance we are no longer required to maintain collateral. Our other invested assets balance includes an investment in 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. Unrealized investment losses Tables 7.5a and 7.5b below summarize, for all available-for-sale investments in an unrealized loss position at June 30, 2022 and December 31, 2021, 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 7.5a and 7.5b are estimated using the process described in Note 8 - “Fair Value Measurements” to these consolidated financial statements and in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2021 Annual Report on Form 10-K.
Unrealized loss aging for securities by type and length of time as of June 30, 2022
Table | 7.5a |  |  |  |  |  |  |  |  |  |  |  |
|  | 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 |  | $ | 106,464 |  |  | $ | (6,062) |  |  | $ | 2,561 |  |  | $ | (233) |  |  | $ | 109,025 |  |  | $ | (6,295) |
Obligations of U.S. states and political subdivisions |  | 1,471,282 |  |  | (168,115) |  |  | 34,851 |  |  | (5,978) |  |  | 1,506,133 |  |  | (174,093) |
Corporate debt securities |  | 2,043,621 |  |  | (130,168) |  |  | 172,444 |  |  | (27,987) |  |  | 2,216,065 |  |  | (158,155) |
ABS |  | 79,046 |  |  | (4,066) |  |  | 17,173 |  |  | (739) |  |  | 96,219 |  |  | (4,805) |
RMBS |  | 140,146 |  |  | (10,365) |  |  | 81,398 |  |  | (7,226) |  |  | 221,544 |  |  | (17,591) |
CMBS |  | 228,340 |  |  | (12,783) |  |  | 33,890 |  |  | (2,746) |  |  | 262,230 |  |  | (15,529) |
CLOs |  | 269,852 |  |  | (8,363) |  |  | 51,649 |  |  | (2,055) |  |  | 321,501 |  |  | (10,418) |
Foreign government debt |  | 3,746 |  |  | (740) |  |  | — |  |  | — |  |  | 3,746 |  |  | (740) |
Total |  | $ | 4,342,497 |  |  | $ | (340,662) |  |  | $ | 393,966 |  |  | $ | (46,964) |  |  | $ | 4,736,463 |  |  | $ | (387,626) |
Unrealized loss aging for securities by type and length of time as of December 31, 2021
Table | 7.5b |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 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 |  | $ | 91,154 |  |  | $ | (790) |  |  | $ | 2,616 |  |  | $ | (78) |  |  | $ | 93,770 |  |  | $ | (868) |
Obligations of U.S. states and political subdivisions |  | 452,021 |  |  | (7,189) |  |  | 15,540 |  |  | (207) |  |  | 467,561 |  |  | (7,396) |
Corporate debt securities |  | 865,085 |  |  | (13,260) |  |  | 10,997 |  |  | (516) |  |  | 876,082 |  |  | (13,776) |
ABS |  | 100,064 |  |  | (998) |  |  | 1,552 |  |  | (10) |  |  | 101,616 |  |  | (1,008) |
RMBS |  | 180,586 |  |  | (2,548) |  |  | 31,641 |  |  | (730) |  |  | 212,227 |  |  | (3,278) |
CMBS |  | 89,889 |  |  | (1,887) |  |  | 1,511 |  |  | (49) |  |  | 91,400 |  |  | (1,936) |
CLOs |  | 177,663 |  |  | (71) |  |  | 21,973 |  |  | (35) |  |  | 199,636 |  |  | (106) |
Foreign government debt |  | 13,649 |  |  | (99) |  |  | — |  |  | — |  |  | 13,649 |  |  | (99) |
Total |  | $ | 1,970,111 |  |  | $ | (26,842) |  |  | $ | 85,830 |  |  | $ | (1,625) |  |  | $ | 2,055,941 |  |  | $ | (28,467) |
Based on current facts and circumstances, we believe the unrealized losses as of June 30, 2022 presented in table 7.5a above are not indicative of the ultimate collectability of the current amortized cost of the securities. The unrealized losses in all categories of our investments at June 30, 2022 were primarily caused by an increase in prevailing interest rates. We also rely upon estimates of several credit and non-credit factors in our review and evaluation of individual investments to determine whether a credit impairment exists. All of the securities in an unrealized loss position are current with respect to their interest obligations. There were 1,164 and 610 securities in an unrealized loss position at June 30, 2022 and December 31, 2021, respectively.

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