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Note 6 - Investments Level 1 (Notes) | 12 Months Ended
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Dec. 31, 2020
Investments [Abstract] |
Investments | Investments Available for Sale Securities Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated.
|  | December 31, 2020
(In thousands) |  | Amortized Cost |  | Allowance for Credit Losses |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Fixed-maturities available for sale: |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities |  | $ | 176,033 |  |  | $ | — |  |  | $ | 1,677 |  |  | $ | (3,611) |  |  | $ | 174,099 |
State and municipal obligations |  | 149,258 |  |  | — |  |  | 16,113 |  |  | (100) |  |  | 165,271 |
Corporate bonds and notes |  | 2,832,350 |  |  | (948) |  |  | 250,771 |  |  | (3,758) |  |  | 3,078,415 |
RMBS |  | 799,814 |  |  | — |  |  | 34,439 |  |  | (314) |  |  | 833,939 |
CMBS |  | 645,071 |  |  | — |  |  | 39,495 |  |  | (3,301) |  |  | 681,265 |
CLO |  | 569,173 |  |  | — |  |  | 2,026 |  |  | (2,641) |  |  | 568,558 |
Other ABS |  | 249,988 |  |  | — |  |  | 2,901 |  |  | (432) |  |  | 252,457 |
Foreign government and agency securities |  | 5,100 |  |  | — |  |  | 338 |  |  | — |  |  | 5,438 |
Total securities available for sale, including loaned securities |  | 5,426,787 |  |  | $ | (948) |  |  | $ | 347,760 |  |  | $ | (14,157) |  |  | 5,759,442 |
Less: loaned securities (1) |  | 33,164 |  |  |  |  |  |  |  |  | 36,102 |
Total fixed-maturities available for sale |  | $ | 5,393,623 |  |  |  |  |  |  |  |  | $ | 5,723,340 |
(1)Included in Other assets in our consolidated balance sheet as further described below. See below for a discussion of our securities lending agreements.
|  | December 31, 2019
(In thousands) |  | Amortized Cost |  |  |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Fixed-maturities available for sale: |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities |  | $ | 198,613 |  |  |  |  | $ | 2,048 |  |  | $ | (733) |  |  | $ | 199,928 |
State and municipal obligations |  | 112,003 |  |  |  |  | 8,032 |  |  | (41) |  |  | 119,994 |
Corporate bonds and notes |  | 2,136,819 |  |  |  |  | 106,189 |  |  | (1,728) |  |  | 2,241,280 |
RMBS |  | 766,429 |  |  |  |  | 14,452 |  |  | (1,527) |  |  | 779,354 |
CMBS |  | 574,037 |  |  |  |  | 14,993 |  |  | (610) |  |  | 588,420 |
CLO |  | 465,449 |  |  |  |  | 229 |  |  | (3,117) |  |  | 462,561 |
Other ABS |  | 314,946 |  |  |  |  | 1,789 |  |  | (572) |  |  | 316,163 |
Foreign government and agency securities |  | 5,091 |  |  |  |  | 133 |  |  | — |  |  | 5,224 |
Total securities available for sale, including loaned securities |  | 4,573,387 |  |  |  |  | $ | 147,865 |  |  | $ | (8,328) |  |  | 4,712,924 |
Less: loaned securities (1) |  | 23,853 |  |  |  |  |  |  |  |  | 24,013 |
Total fixed-maturities available for sale |  | $ | 4,549,534 |  |  |  |  |  |  |  |  | $ | 4,688,911 |
(1)Included in Other assets in our consolidated balance sheet as further described below. See below for a discussion of our securities lending agreements. The following table provides a rollforward of the allowance for credit losses on fixed-maturities available for sale, which relates entirely to corporate bonds and notes for the periods indicated.
(In thousands) |  | Year Ended December 31, 2020 |  |
Beginning balance |  | $ | — |  |  |
Current provision for securities without prior allowance |  | 1,254 |  |  |
Net increases (decreases) in allowance on previously impaired securities |  | — |  |  |
Reduction for securities sold |  | (306) |  |  |
Ending balance |  | $ | 948 |  |  |
Gross Unrealized Losses and Related Fair Values of Available for Sale Securities For securities deemed “available for sale” that are in an unrealized loss position and for which an allowance for credit loss has not been established, the following tables show the gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of December 31, 2020 and 2019, are loaned securities under securities lending agreements that are classified as other assets in our consolidated balance sheets, as further described below.
|  | December 31, 2020
($ in thousands) |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
Description of Securities |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses
U.S. government and agency securities |  | 4 |  |  | $ | 90,591 |  |  | $ | (3,611) |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 4 |  |  | $ | 90,591 |  |  | $ | (3,611) |
State and municipal obligations |  | 4 |  |  | 9,626 |  |  | (100) |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 9,626 |  |  | (100) |
Corporate bonds and notes |  | 60 |  |  | 174,848 |  |  | (3,758) |  |  | — |  |  | — |  |  | — |  |  | 60 |  |  | 174,848 |  |  | (3,758) |
RMBS |  | 5 |  |  | 42,003 |  |  | (305) |  |  | 2 |  |  | 915 |  |  | (9) |  |  | 7 |  |  | 42,918 |  |  | (314) |
CMBS |  | 43 |  |  | 118,345 |  |  | (3,035) |  |  | 6 |  |  | 8,312 |  |  | (266) |  |  | 49 |  |  | 126,657 |  |  | (3,301) |
CLO |  | 52 |  |  | 173,459 |  |  | (970) |  |  | 25 |  |  | 137,506 |  |  | (1,671) |  |  | 77 |  |  | 310,965 |  |  | (2,641) |
Other ABS |  | 26 |  |  | 70,759 |  |  | (322) |  |  | 3 |  |  | 12,119 |  |  | (110) |  |  | 29 |  |  | 82,878 |  |  | (432) |
Total |  | 194 |  |  | $ | 679,631 |  |  | $ | (12,101) |  |  | 36 |  |  | $ | 158,852 |  |  | $ | (2,056) |  |  | 230 |  |  | $ | 838,483 |  |  | $ | (14,157) |
|  | December 31, 2019
($ in thousands) |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
Description of Securities |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses
U.S. government and agency securities |  | 2 |  |  | $ | 26,142 |  |  | $ | (731) |  |  | 2 |  |  | $ | 2,529 |  |  | $ | (2) |  |  | 4 |  |  | $ | 28,671 |  |  | $ | (733) |
State and municipal obligations |  | 1 |  |  | 3,959 |  |  | (41) |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 3,959 |  |  | (41) |
Corporate bonds and notes |  | 25 |  |  | 110,871 |  |  | (1,728) |  |  | — |  |  | — |  |  | — |  |  | 25 |  |  | 110,871 |  |  | (1,728) |
RMBS |  | 27 |  |  | 184,378 |  |  | (535) |  |  | 16 |  |  | 36,192 |  |  | (992) |  |  | 43 |  |  | 220,570 |  |  | (1,527) |
CMBS |  | 33 |  |  | 89,994 |  |  | (463) |  |  | 8 |  |  | 6,346 |  |  | (147) |  |  | 41 |  |  | 96,340 |  |  | (610) |
CLO |  | 34 |  |  | 170,806 |  |  | (327) |  |  | 36 |  |  | 184,483 |  |  | (2,790) |  |  | 70 |  |  | 355,289 |  |  | (3,117) |
Other ABS |  | 32 |  |  | 74,733 |  |  | (358) |  |  | 8 |  |  | 25,178 |  |  | (214) |  |  | 40 |  |  | 99,911 |  |  | (572) |
Total |  | 154 |  |  | $ | 660,883 |  |  | $ | (4,183) |  |  | 70 |  |  | $ | 254,728 |  |  | $ | (4,145) |  |  | 224 |  |  | $ | 915,611 |  |  | $ | (8,328) |
See below for additional details on our net gains (losses) on investments, including the changes in the allowance for credit losses on fixed-maturities available for sale and other impairments due to our intent to sell securities in an unrealized loss position. See Note 2 for a discussion of our accounting policy for impairments, including our adoption of ASU 2016-13 effective January 2020. Securities Lending Agreements We participate in a securities lending program whereby we loan certain securities in our investment portfolio to third parties, generally large banks, for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. However, pursuant to the terms of these agreements, we maintain effective control over all loaned securities. Although we report such securities at fair value within other assets in our consolidated balance sheets, rather than in investments, the detailed information provided in this Note includes these securities. See Note 9 for additional information. Under our securities lending agreements, the borrower is required to provide to us collateral, consisting of cash or securities, in amounts generally equal to or exceeding: (i) 102% of the value of the loaned securities (105% in the case of foreign securities) or (ii) another agreed-upon percentage not less than 100% of the market value of the loaned securities. Any cash collateral we receive may be invested in liquid assets. Cash collateral, which is reinvested for our benefit by the intermediary in accordance with the investment guidelines contained in the securities lending and collateral agreements, is reflected in short-term investments, with an offsetting liability recognized in other liabilities for the obligation to return the cash collateral. Securities collateral we receive is held on deposit for the borrower’s benefit and we may not transfer or loan such securities collateral unless the borrower is in default. Therefore, such securities collateral is not reflected in our consolidated financial statements given that the risks and rewards of ownership are not transferred to us from the borrowers. Fees received and paid in connection with securities lending agreements are recorded in net investment income and interest expense, respectively, on the consolidated statements of operations. All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $43.3 million and $42.4 million as of December 31, 2020 and December 31, 2019, respectively, may not be transferred or re-pledged unless the third-party borrower is in default, and is therefore not reflected in our consolidated financial statements. Net Investment Income Net investment income consisted of the following.
|  | Year Ended December 31,
(In thousands) |  | 2020 |  | 2019 |  | 2018
Investment income: |  |  |  |  |  |
Fixed-maturities |  | $ | 148,127 |  |  | $ | 155,104 |  |  | $ | 141,552 |
Equity securities |  | 6,378 |  |  | 7,028 |  |  | 7,157 |
Short-term investments |  | 5,774 |  |  | 17,255 |  |  | 10,270 |
Other |  | 354 |  |  | 545 |  |  | 976 |
Gross investment income |  | 160,633 |  |  | 179,932 |  |  | 159,955 |
Investment expenses |  | (6,596) |  |  | (8,136) |  |  | (7,480) |
Net investment income |  | $ | 154,037 |  |  | $ | 171,796 |  |  | $ | 152,475 |
Net Gains (Losses) on Investments Net gains (losses) on investments consisted of the following.
|  | Year Ended December 31, |
(In thousands) |  | 2020 |  | 2019 |  | 2018 |
Net realized gains (losses): |  |  |  |  |  |  |
Fixed-maturities available for sale (1) |  | $ | 34,869 |  |  | $ | 11,262 |  |  | $ | (11,256) |  |
Trading securities |  | 4 |  |  | (303) |  |  | (1,840) |  |
Equity securities |  | 353 |  |  | (719) |  |  | 532 |  |
Other investments |  | 600 |  |  | 603 |  |  | 470 |  |
Net realized gains (losses) on investments |  | 35,826 |  |  | 10,843 |  |  | (12,094) |  |
Impairment losses due to intent to sell |  | (1,401) |  |  | — |  |  | (1,744) |  |
Net decrease (increase) in expected credit losses |  | (1,254) |  |  | — |  |  | — |  |
Net unrealized gains (losses) on investments |  | 10,960 |  |  | 33,220 |  |  | (27,287) |  |
Total net gains (losses) on investments |  | $ | 44,131 |  |  | $ | 44,063 |  |  | $ | (41,125) |  |
(1)Components of net realized gains (losses) on fixed-maturities available for sale include:
|  | Year Ended December 31,
(In thousands) |  | 2020 |  | 2019 |  | 2018
Gross investment gains from sales and redemptions |  | $ | 37,431 |  |  | $ | 17,663 |  |  | $ | 1,986 |
Gross investment losses from sales and redemptions |  | (2,562) |  |  | (6,401) |  |  | (13,242) |
The net changes in unrealized gains (losses) recognized in earnings on investments that were still held at each period-end were as follows.
|  | Year Ended December 31,
(In thousands) |  | 2020 |  | 2019 |  | 2018
Net unrealized gains (losses) on investments still held: |  |  |  |  |  |
Trading securities |  | $ | 10,583 |  |  | $ | 16,346 |  |  | $ | (16,281) |
Equity securities |  | 1,759 |  |  | 11,906 |  |  | (8,886) |
Other investments |  | 248 |  |  | (174) |  |  | 447 |
Net unrealized gains (losses) on investments still held |  | $ | 12,590 |  |  | $ | 28,078 |  |  | $ | (24,720) |
Contractual Maturities The contractual maturities of fixed-maturities available for sale were as follows.
|  | December 31, 2020
(In thousands) |  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 125,361 |  |  | $ | 126,414 |
Due after one year through five years (1) |  | 1,002,786 |  |  | 1,062,579 |
Due after five years through 10 years (1) |  | 1,225,712 |  |  | 1,338,147 |
Due after 10 years (1) |  | 808,882 |  |  | 896,083 |
Asset-backed and mortgage-backed securities (2) |  | 2,264,046 |  |  | 2,336,219 |
Total |  | 5,426,787 |  |  | 5,759,442 |
Less: loaned securities |  | 33,164 |  |  | 36,102 |
Total fixed-maturities available for sale |  | $ | 5,393,623 |  |  | $ | 5,723,340 |
(1)Actual maturities may differ as a result of calls before scheduled maturity. (2)Includes RMBS, CMBS, CLO and Other ABS, which are not due at a single maturity date. Other For the years ended December 31, 2020, 2019 and 2018, we did not transfer any securities to or from the available for sale or trading categories. Our fixed-maturities available for sale include securities totaling $16.9 million and $16.8 million at December 31, 2020 and 2019, respectively, on deposit and serving as collateral with various state regulatory authorities. Our fixed-maturities available for sale also include securities serving as collateral for our FHLB advances. See Note 12 for additional information about our FHLB advances.

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