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Fair Value of Financial Assets and Liabilities | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value of Financial Assets and Liabilities | 4. Fair Value of Financial Assets and Liabilities Valuation Hierarchy The FASB established a valuation hierarchy for disclosure of the inputs used to measure estimated fair value. This hierarchy categorizes the inputs into three broad levels as follows: • Level 1 inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 inputs to the valuation methodology are quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. • Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the entity’s assumptions about the assumptions that market participants would use in pricing the asset or liability. The following table presents by level the financial assets carried at estimated fair value measured on a recurring basis as of September 30, 2025 and December 31, 2024. The table does not include assets which are measured at historical cost or any basis other than estimated fair value.
|  | September 30, 2025 |
|  | Carrying Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Estimated Fair Value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 861,558 |  |  | $ | 861,558 |  |  | $ | — |  |  | $ | — |  |  | $ | 861,558 |
Restricted cash |  |  | 779 |  |  |  | 779 |  |  |  | — |  |  |  | — |  |  |  | 779 |
Restricted cash - variable interest entity |  |  | 539,855 |  |  |  | 539,855 |  |  |  | — |  |  |  | — |  |  |  | 539,855 |
Fixed-maturity securities |  |  | 465,454 |  |  |  | 277,789 |  |  |  | 196,814 |  |  |  | — |  |  |  | 474,603 |
|  | $ | 1,867,646 |  |  | $ | 1,679,981 |  |  | $ | 196,814 |  |  | $ | — |  |  | $ | 1,876,795 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  | $ | 91 |  |  | $ | — |  |  | $ | — |  |  | $ | 91 |  |  | $ | 91 |
|  | December 31, 2024 |
|  | Carrying Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Estimated Fair Value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 493,409 |  |  | $ | 493,409 |  |  | $ | — |  |  | $ | — |  |  | $ | 493,409 |
Restricted cash |  |  | 631 |  |  |  | 631 |  |  |  | — |  |  |  | — |  |  |  | 631 |
Restricted cash - variable interest entity |  |  | 295,802 |  |  |  | 295,802 |  |  |  | — |  |  |  | — |  |  |  | 295,802 |
Fixed-maturity securities |  |  | 464,585 |  |  |  | 323,749 |  |  |  | 141,217 |  |  |  | — |  |  |  | 464,966 |
|  | $ | 1,254,427 |  |  | $ | 1,113,591 |  |  | $ | 141,217 |  |  | $ | — |  |  | $ | 1,254,808 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  | $ | 117 |  |  | $ | — |  |  | $ | — |  |  | $ | 117 |  |  | $ | 117 |
A financial instrument’s classification within the valuation hierarchy is based upon the lowest level of input that is significant to the estimated fair value measurement; consequently, if there are multiple significant valuation inputs that are categorized in different levels of the hierarchy, the instrument’s hierarchy level is the lowest level within which any significant input falls. The Level 1 category includes cash and cash equivalents, restricted cash, money market securities, certificates of deposit, U.S. treasury bonds, and corporate bonds. The Level 2 category generally includes municipal bonds and asset-backed securities. The estimated fair value of fixed-maturity investments included in the Level 2 category was based on the market values obtained from pricing services. When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market, or which cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management’s judgment or estimation and cannot be supported by reference or market activity. Generally, these investments are classified as Level 3. Other Financial Instruments The Company uses various financial instruments in the normal course of its business. In the measurement of the estimated fair value of certain financial instruments, other valuation techniques were utilized if quoted market prices were not available. These derived fair value estimates are significantly affected by the assumptions used. Additionally, excluded from the scope of financial instruments are certain financial instruments, including those related to insurance contracts, pension and other postretirement benefits, and equity method investments. In estimating the fair value of the financial instruments presented, the Company used the following methods and assumptions: Cash and Cash equivalents The carrying amount is a reasonable estimate of fair value, due to the short-term maturity of these investments. These assets are considered to be Level 1 assets. Restricted cash Restricted cash represents cash held by state authorities and the carrying value approximates fair value. Restricted cash also includes cash held in trust by the VIE where the Company is the primary beneficiary and the carrying value approximates fair value. Fixed-Maturity Securities Fixed-Maturity securities represent investments held at fair value in U.S. government and agencies, municipalities and political subdivisions, corporate bonds, states, and asset-backed securities. U.S government and agencies bonds and corporate bonds are considered to be Level 1 assets due to readily available pricing. Municipalities and political subdivisions, corporate bonds, states, and asset-backed securities are considered to be Level 2 assets due to valuations based on observable inputs. Long-Term Debt The following table summarizes components of the Company’s long-term debt and methods used in estimating their fair values:
|  | Maturity Date |  | Valuation Methodology
Promissory Notes, 0.00% |  | 2027 |  | Discounted cash flow method, Level 3 inputs
Commercial Loan, variable rate of interest |  | 2029 |  | Discounted cash flow method, Level 3 inputs
The following tables present fair value information for liabilities that are carried on the consolidated balance sheets at amounts other than fair value as of September 30, 2025 and December 31, 2024:
|  | Fair Value Measurements Using |
As of September 30, 2025 |  | Carrying Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Estimated Fair Value |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-Term debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
0.00% Promissory notes |  | $ | 3,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,771 |  |  | $ | 2,771 |
Commercial Loan |  |  | 35,000 |  |  |  | — |  |  |  | — |  |  |  | 32,017 |  |  |  | 32,017 |
Less: unamortized issuance costs |  |  | (3,017 | ) |  |  | — |  |  |  | — |  |  |  | (3,017 | ) |  |  | (3,017 | )
|  | $ | 34,983 |  |  | $ | — |  |  | $ | — |  |  | $ | 31,771 |  |  | $ | 31,771 |
|  | Fair Value Measurements Using |
As of December 31, 2024 |  | Carrying Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Estimated Fair Value |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-Term debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
0.00% Promissory notes |  | $ | 4,500 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,992 |  |  | $ | 3,992 |
Commercial Loan |  |  | 38,000 |  |  |  | — |  |  |  | — |  |  |  | 37,192 |  |  |  | 37,192 |
Less: unamortized issuance costs |  |  | (3,310 | ) |  |  | — |  |  |  | — |  |  |  | (3,310 | ) |  |  | (3,310 | )
|  | $ | 39,190 |  |  | $ | — |  |  | $ | — |  |  | $ | 37,874 |  |  | $ | 37,874 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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