XML 24 R9.htm IDEA: XBRL DOCUMENT
v3.20.4

Investments | 12 Months Ended
--- | ---
Dec. 31, 2020
Investments Debt And Equity Securities [Abstract] |
Investments |
2. | Investments
Short-term investments held at December 31, 2020 include $30.7 million of U.S. Treasury securities and obligations of U.S. government agencies, $9.1 million of obligations of states and political subdivisions and $6.1 million of corporate bonds. Short-term investments held at December 31, 2019 include $54.6 million of U.S. Treasury securities and obligations of U.S. government agencies and $1.9 million of obligations of states and political subdivisions. The gross unrecognized gains and losses on, and the amortized cost, allowance for credit losses, carrying amount, and fair value of, those investments classified as held-to-maturity at December 31, 2020 are summarized as follows:
|  | Amortized Cost |  |  | Allowance for Credit Losses |  |  | Carrying Amount |  |  | Gross Unrecognized Gains |  |  | Gross Unrecognized Losses |  |  | Fair Value |
|  | (in thousands) |
States and political subdivisions |  | $ | 494,374 |  |  | $ | (42 | ) |  | $ | 494,332 |  |  | $ | 32,489 |  |  | $ | — |  |  | $ | 526,821 |
Corporate bonds |  |  | 69,981 |  |  |  | (225 | ) |  |  | 69,756 |  |  |  | 3,144 |  |  |  | — |  |  |  | 72,900 |
U.S. agency-based mortgage-backed securities |  |  | 7,261 |  |  |  | — |  |  |  | 7,261 |  |  |  | 645 |  |  |  | — |  |  |  | 7,906 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 13,626 |  |  |  | — |  |  |  | 13,626 |  |  |  | 239 |  |  |  | — |  |  |  | 13,865 |
Asset-backed securities |  |  | 162 |  |  |  | (7 | ) |  |  | 155 |  |  |  | 7 |  |  |  | — |  |  |  | 162 |
Totals |  | $ | 585,404 |  |  | $ | (274 | ) |  | $ | 585,130 |  |  | $ | 36,524 |  |  | $ | — |  |  | $ | 621,654 |
The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2020 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |  |  | Allowance for Credit Losses |
|  | (in thousands) |
States and political subdivisions |  | $ | 256,492 |  |  | $ | 20,050 |  |  | $ | — |  |  | $ | 276,542 |  |  | $ | — |
Corporate bonds |  |  | 83,646 |  |  |  | 5,256 |  |  |  | (3 | ) |  |  | 88,899 |  |  |  | — |
U.S. agency-based mortgage-backed securities |  |  | 18,654 |  |  |  | 400 |  |  |  | (2 | ) |  |  | 19,052 |  |  |  | — |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 28,873 |  |  |  | 913 |  |  |  | — |  |  |  | 29,786 |  |  |  | — |
Totals |  | $ | 387,665 |  |  | $ | 26,619 |  |  | $ | (5 | ) |  | $ | 414,279 |  |  | $ | — |
The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2020 are summarized as follows:
|  | Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic common stock |  | $ | 35,787 |  |  | $ | 7,650 |  |  | $ | — |  |  | $ | 43,437 |
Total equity securities |  | $ | 35,787 |  |  | $ | 7,650 |  |  | $ | — |  |  | $ | 43,437 |
The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2019 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
States and political subdivisions |  | $ | 466,270 |  |  | $ | 19,570 |  |  | $ | (193 | ) |  | $ | 485,647 |
Corporate bonds |  |  | 109,241 |  |  |  | 1,684 |  |  |  | — |  |  |  | 110,925 |
U.S. agency-based mortgage-backed securities |  |  | 10,967 |  |  |  | 544 |  |  |  | — |  |  |  | 11,511 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 12,723 |  |  |  | 330 |  |  |  | (12 | ) |  |  | 13,041 |
Asset-backed securities |  |  | 220 |  |  |  | — |  |  |  | (1 | ) |  |  | 219 |
Totals |  | $ | 599,421 |  |  | $ | 22,128 |  |  | $ | (206 | ) |  | $ | 621,343 |
The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2019 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
States and political subdivisions |  | $ | 225,895 |  |  | $ | 11,906 |  |  | $ | (26 | ) |  | $ | 237,775 |
Corporate bonds |  |  | 130,453 |  |  |  | 3,326 |  |  |  | (1 | ) |  |  | 133,778 |
U.S. agency-based mortgage-backed securities |  |  | 29,499 |  |  |  | 64 |  |  |  | (96 | ) |  |  | 29,467 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 39,851 |  |  |  | 317 |  |  |  | (42 | ) |  |  | 40,126 |
Totals |  | $ | 425,698 |  |  | $ | 15,613 |  |  | $ | (165 | ) |  | $ | 441,146 |
The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2019 are summarized as follows:
|  | Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic common stock |  | $ | 24,457 |  |  | $ | 3,446 |  |  | $ | — |  |  | $ | 27,903 |
Total equity securities |  | $ | 24,457 |  |  | $ | 3,446 |  |  | $ | — |  |  | $ | 27,903 |
A summary of the carrying amounts and fair value of investments in fixed maturity securities classified as held-to-maturity by contractual maturity is as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Carrying Amount |  |  | Fair Value |  |  | Carrying Amount |  |  | Fair Value |
|  | (in thousands) |
Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Within one year |  | $ | 54,316 |  |  | $ | 54,794 |  |  | $ | 49,967 |  |  | $ | 50,348 |
After one year through five years |  |  | 195,706 |  |  |  | 204,289 |  |  |  | 198,025 |  |  |  | 202,109 |
After five years through ten years |  |  | 107,347 |  |  |  | 113,643 |  |  |  | 110,460 |  |  |  | 113,877 |
After ten years |  |  | 220,345 |  |  |  | 240,860 |  |  |  | 229,782 |  |  |  | 243,279 |
U.S. agency-based mortgage-backed securities |  |  | 7,261 |  |  |  | 7,906 |  |  |  | 10,967 |  |  |  | 11,511 |
Asset-backed securities |  |  | 155 |  |  |  | 162 |  |  |  | 220 |  |  |  | 219 |
Totals |  | $ | 585,130 |  |  | $ | 621,654 |  |  | $ | 599,421 |  |  | $ | 621,343 |
A summary of the amortized cost and fair value of investments in fixed maturity securities classified as available-for-sale by contractual maturity is as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Amortized Cost |  |  | Fair Value |  |  | Amortized Cost |  |  | Fair Value |
|  | (in thousands) |
Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Within one year |  | $ | 69,177 |  |  | $ | 69,938 |  |  | $ | 27,160 |  |  | $ | 27,194 |
After one year through five years |  |  | 80,593 |  |  |  | 85,829 |  |  |  | 144,142 |  |  |  | 146,469 |
After five years through ten years |  |  | 53,835 |  |  |  | 57,829 |  |  |  | 47,175 |  |  |  | 49,419 |
After ten years |  |  | 165,406 |  |  |  | 181,631 |  |  |  | 177,722 |  |  |  | 188,597 |
U.S. agency-based mortgage-backed securities |  |  | 18,654 |  |  |  | 19,052 |  |  |  | 29,499 |  |  |  | 29,467 |
Totals |  | $ | 387,665 |  |  | $ | 414,279 |  |  | $ | 425,698 |  |  | $ | 441,146 |
Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties. At December 31, 2020, there were $19.9 million of held-to-maturity investments on deposit with regulatory agencies of states in which the Company does business. A summary of the Company’s realized gains and losses on sales, calls or redemptions of investments for 2020, 2019 and 2018 is as follows:
|  | Fixed Maturity Securities Available-for-Sale |  |  | Equity Securities |  |  | Other |  |  | Total |
|  | (in thousands) |
Year ended December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sales |  | $ | 25,436 |  |  | $ | — |  |  | $ | 46,959 |  |  | $ | 72,395 |
Gross realized investment gains |  | $ | 711 |  |  | $ | — |  |  | $ | 306 |  |  | $ | 1,017 |
Gross realized investment losses |  |  | (14 | ) |  |  | — |  |  |  | (4 | ) |  |  | (18 | )
Net realized investment gains |  |  | 697 |  |  |  | — |  |  |  | 302 |  |  |  | 999 |
Other, including gains (losses) on calls and redemptions |  |  | (43 | ) |  |  | — |  |  |  | 176 |  |  |  | 133 |
Net realized gains on investments |  | $ | 654 |  |  | $ | — |  |  | $ | 478 |  |  | $ | 1,132 |
Year ended December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sales |  | $ | 33,113 |  |  | $ | — |  |  | $ | 21,977 |  |  | $ | 55,090 |
Gross realized investment gains |  | $ | 140 |  |  | $ | — |  |  | $ | 36 |  |  | $ | 176 |
Gross realized investment losses |  |  | (68 | ) |  |  | — |  |  |  | — |  |  |  | (68 | )
Net realized investment gains |  |  | 72 |  |  |  | — |  |  |  | 36 |  |  |  | 108 |
Other, including gains (losses) on calls and redemptions |  |  | (196 | ) |  |  | — |  |  |  | 8 |  |  |  | (188 | )
Net realized gains (losses) on investments |  | $ | (124 | ) |  | $ | — |  |  | $ | 44 |  |  | $ | (80 | )
Year ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sales |  | $ | 15,025 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 15,028 |
Gross realized investment gains |  | $ | 238 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 239 |
Gross realized investment losses |  |  | (1,354 | ) |  |  | — |  |  |  | — |  |  |  | (1,354 | )
Net realized investment gains (losses) |  |  | (1,116 | ) |  |  | 1 |  |  |  | — |  |  |  | (1,115 | )
Other, including losses on calls and redemptions |  |  | (144 | ) |  |  | — |  |  |  | (277 | ) |  |  | (421 | )
Net realized gains (losses) on investments |  | $ | (1,260 | ) |  | $ | 1 |  |  | $ | (277 | ) |  | $ | (1,536 | )
Major categories of the Company’s net investment income are summarized as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Gross investment income: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  | $ | 28,414 |  |  | $ | 30,343 |  |  | $ | 28,762 |
Equity securities |  |  | 1,006 |  |  |  | 628 |  |  |  | 448 |
Short-term investments and cash and cash equivalents |  |  | 897 |  |  |  | 2,478 |  |  |  | 2,208 |
Total gross investment income |  |  | 30,317 |  |  |  | 33,449 |  |  |  | 31,418 |
Investment expenses |  |  | (953 | ) |  |  | (966 | ) |  |  | (966 | )
Net investment income |  | $ | 29,364 |  |  | $ | 32,483 |  |  | $ | 30,452 |
The following table summarizes the fair value and gross unrealized losses on fixed maturity securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:
|  | Less Than 12 Months |  |  | 12 Months or Greater |  |  | Total |
|  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |
|  | (in thousands) |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 2,515 |  |  | $ | 3 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,515 |  |  | $ | 3 |
U.S. agency-based mortgage-backed securities |  |  | 2,133 |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2,133 |  |  |  | 2 |
Total available-for-sale securities |  | $ | 4,648 |  |  | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,648 |  |  | $ | 5 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held-to-Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 21,074 |  |  | $ | 193 |  |  | $ | — |  |  | $ | — |  |  | $ | 21,074 |  |  | $ | 193 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | — |  |  |  | — |  |  |  | 3,243 |  |  |  | 12 |  |  |  | 3,243 |  |  |  | 12 |
Asset-backed securities |  |  | — |  |  |  | — |  |  |  | 68 |  |  |  | 1 |  |  |  | 68 |  |  |  | 1 |
Total held-to-maturity securities |  |  | 21,074 |  |  |  | 193 |  |  |  | 3,311 |  |  |  | 13 |  |  |  | 24,385 |  |  |  | 206 |
Available-for-Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 4,140 |  |  | $ | 26 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,140 |  |  | $ | 26 |
Corporate bonds |  |  | 6,426 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 6,426 |  |  |  | 1 |
U.S. agency-based mortgage-backed securities |  |  | 13,007 |  |  |  | 95 |  |  |  | 1,152 |  |  |  | 1 |  |  |  | 14,159 |  |  |  | 96 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | — |  |  |  | — |  |  |  | 17,068 |  |  |  | 42 |  |  |  | 17,068 |  |  |  | 42 |
Total available-for-sale securities |  |  | 23,573 |  |  |  | 122 |  |  |  | 18,220 |  |  |  | 43 |  |  |  | 41,793 |  |  |  | 165 |
Total |  | $ | 44,647 |  |  | $ | 315 |  |  | $ | 21,531 |  |  | $ | 56 |  |  | $ | 66,178 |  |  | $ | 371 |
At December 31, 2020, the Company held 2 individual fixed maturity securities that were in an unrealized loss position, of which none were in a continuous unrealized loss position for longer than 12 months. The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the year ended December 31, 2020.
|  | States and Political Subdivisions |  |  | Corporate Bonds |  |  | U.S. Agency-Based Mortgage-Backed Securities |  |  | U.S. Treasury Securities and Obligations of U.S. Government Agencies |  |  | Asset-Backed Securities |  |  | Totals |
|  | (in thousands) |
Balance at January 1, 2020 |  | $ | 45 |  |  | $ | 245 |  |  | $ | — |  |  | $ | — |  |  | $ | 11 |  |  | $ | 301 |
Provision for credit loss benefit |  |  | (3 | ) |  |  | (20 | ) |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | (27 | )
Balance at December 31, 2020 |  | $ | 42 |  |  | $ | 225 |  |  | $ | — |  |  | $ | — |  |  | $ | 7 |  |  | $ | 274 |
The Company has established an allowance for credit losses on 424 held-to-maturity securities totaling $0.3 million as of December 31, 2020. The majority of those securities were states and political subdivisions and corporate bonds at 393 and 28, respectively. The Company has no allowance for credit losses on investments classified as available-for-sale as of December 31, 2020. During 2019, the Company had no impairment losses recognized for other-than-temporary declines in the fair value of our investments. The credit rating used for held-to-maturity fixed income securities is the rating for each security as published by Moody’s, S&P, and Fitch to determine the probability of default. If there are two ratings, the lower rating is used. If there are three ratings, the median rating is used. If there is one rating, that rating is used. For corporate fixed income securities the probability of default (given a rating) comes from Moody’s annual study of corporate bond defaults published each February. The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). For municipal fixed income securities the probability of default (given a rating) comes from Moody’s annual study of municipal bond defaults published each July/August. The calculation of the credit loss allowance takes the amortized cost of the fixed income security and assumes default and recovery based on the average recovery rates from the Moody’s default studies. The amortized cost of the security, minus the amount recovered, is the estimated full amount the Company could lose in a default scenario. Then this amount is multiplied by the probability of default to determine the allowance for credit loss. The lower the security is rated, the higher likelihood of default, and therefore a higher allowance for credit loss. The longer to the maturity date of a security, the higher the default risk. The table below presents the amortized cost of held-to-maturity securities aggregated by credit quality indicator as of December 31, 2020.
|  | States and Political Subdivisions |  |  | Corporate Bonds |  |  | U.S. Agency-Based Mortgage-Backed Securities |  |  | U.S. Treasury Securities and Obligations of U.S. Government Agencies |  |  | Asset-Backed Securities |  |  | Totals |
|  | Amortized cost |
|  | (in thousands) |
AAA/AA/A ratings |  | $ | 490,311 |  |  | $ | 29,890 |  |  | $ | 7,261 |  |  | $ | 13,626 |  |  | $ | 111 |  |  | $ | 541,199 |
Baa/BBB ratings |  |  | 4,063 |  |  |  | 40,091 |  |  |  | — |  |  |  | — |  |  |  | 18 |  |  |  | 44,172 |
B ratings |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | 33 |
Total |  | $ | 494,374 |  |  | $ | 69,981 |  |  | $ | 7,261 |  |  | $ | 13,626 |  |  | $ | 162 |  |  | $ | 585,404 |

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://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 http://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 http://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 http://asc.fasb.org/subtopic&trid=2176304 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration