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v3.19.3.a.u2

Investments | 12 Months Ended
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Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract] |
Investments | 4 - Investments The amortized cost and estimated fair values of our fixed maturities at December 31, 2019 and 2018 are as follows:
|  | 2019 |
Held to Maturity |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 82,916,052 |  |  | $ | 1,803,230 |  |  | $ | 68,560 |  |  | $ | 84,650,722 |
Obligations of states and political subdivisions |  |  | 204,634,486 |  |  |  | 14,236,736 |  |  |  | 288,174 |  |  |  | 218,583,048 |
Corporate securities |  |  | 156,398,001 |  |  |  | 8,274,912 |  |  |  | 333,166 |  |  |  | 164,339,747 |
Mortgage-backed securities |  |  | 32,145,243 |  |  |  | 611,641 |  |  |  | 16,057 |  |  |  | 32,740,827 |
Totals |  | $ | 476,093,782 |  |  | $ | 24,926,519 |  |  | $ | 705,957 |  |  | $ | 500,314,344 |
|  | 2019 |
Available for Sale |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 19,302,056 |  |  | $ | 81,773 |  |  | $ | 19,370 |  |  | $ | 19,364,459 |
Obligations of states and political subdivisions |  |  | 55,162,046 |  |  |  | 1,641,171 |  |  |  | 6,929 |  |  |  | 56,796,288 |
Corporate securities |  |  | 154,946,586 |  |  |  | 4,477,035 |  |  |  | 180,312 |  |  |  | 159,243,309 |
Mortgage-backed securities |  |  | 327,428,590 |  |  |  | 2,856,820 |  |  |  | 737,663 |  |  |  | 329,547,747 |
Totals |  | $ | 556,839,278 |  |  | $ | 9,056,799 |  |  | $ | 944,274 |  |  | $ | 564,951,803 |
|  | 2018 |
Held to Maturity |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 76,222,306 |  |  | $ | 174,904 |  |  | $ | 1,086,613 |  |  | $ | 75,310,597 |
Obligations of states and political subdivisions |  |  | 159,292,158 |  |  |  | 8,236,804 |  |  |  | 704,104 |  |  |  | 166,824,858 |
Corporate securities |  |  | 127,010,071 |  |  |  | 396,197 |  |  |  | 4,391,451 |  |  |  | 123,014,817 |
Mortgage-backed securities |  |  | 40,273,983 |  |  |  | 64,318 |  |  |  | 450,277 |  |  |  | 39,888,024 |
Totals |  | $ | 402,798,518 |  |  | $ | 8,872,223 |  |  | $ | 6,632,445 |  |  | $ | 405,038,296 |
|  | 2018 |
Available for Sale |  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 45,188,053 |  |  | $ | 25,241 |  |  | $ | 1,003,365 |  |  | $ | 44,209,929 |
Obligations of states and political subdivisions |  |  | 73,760,836 |  |  |  | 1,762,127 |  |  |  | 306,994 |  |  |  | 75,215,969 |
Corporate securities |  |  | 140,688,937 |  |  |  | 203,393 |  |  |  | 3,059,185 |  |  |  | 137,833,145 |
Mortgage-backed securities |  |  | 275,474,625 |  |  |  | 148,967 |  |  |  | 6,324,331 |  |  |  | 269,299,261 |
Totals |  | $ | 535,112,451 |  |  | $ | 2,139,728 |  |  | $ | 10,693,875 |  |  | $ | 526,558,304 |
At December 31, 2019, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $182.0 million and an amortized cost of $172.3 million. Our holdings also included special revenue bonds with an aggregate fair value of $93.4 million and an amortized cost of $87.5 million. With respect to both categories of bonds, we held no securities of any issuer that comprised more than 10% of that category at December 31, 201 9 . Education bonds and water and sewer utility bonds represented 44% and 35%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 201 9 . Many of the issuers of the special revenue bonds we held at December 31, 2019 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held are similar to general obligation bonds. At December 31, 2018, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $157.7 million and an amortized cost of $152.2 million. Our holdings also included special revenue bonds with an aggregate fair value of $84.3 million and an amortized cost of $80.9 million. With respect to both categories of bonds, we held no securities of any issuer that comprised more than 10% of that category at December 31, 2018. Education bonds and water and sewer utility bonds represented 49% and 29%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 2018. Many of the issuers of the special revenue bonds we held at December 31, 2018 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held are similar to general obligation bonds. We have segregated within accumulated other comprehensive income the net unrealized losses of $15.1 million arising prior to the November 30, 2013 reclassification date for fixed maturities reclassified from available for sale to held to maturity. We will amortize this balance over the remaining life of the related securities as an adjustment of yield in a manner consistent with the accretion of discount on the same fixed maturities. During 2019, we recorded amortization of $1.2 million in other comprehensive income . At December 31, 2019 and 2018, net unrealized losses of $7.5 million and $8.6 million, respectively, remained within accumulated other comprehensive loss. We set forth below the amortized cost and estimated fair value of fixed maturities at December 31, 2019 by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Amortized Cost |  |  | Estimated Fair Value |
Held to maturity |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 16,132,891 |  |  | $ | 16,205,362 |
Due after one year through five years |  |  | 73,727,277 |  |  |  | 76,542,800 |
Due after five years through ten years |  |  | 182,428,771 |  |  |  | 191,642,042 |
Due after ten years |  |  | 171,659,600 |  |  |  | 183,183,313 |
Mortgage-backed securities |  |  | 32,145,243 |  |  |  | 32,740,827 |
Total held to maturity |  | $ | 476,093,782 |  |  | $ | 500,314,344 |
Available for sale |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 12,943,726 |  |  | $ | 13,075,792 |
Due after one year through five years |  |  | 89,684,400 |  |  |  | 91,992,458 |
Due after five years through ten years |  |  | 112,308,452 |  |  |  | 115,407,525 |
Due after ten years |  |  | 14,474,110 |  |  |  | 14,928,281 |
Mortgage-backed securities |  |  | 327,428,590 |  |  |  | 329,547,747 |
Total available for sale |  | $ | 556,839,278 |  |  | $ | 564,951,803 |
The cost and estimated fair values of our equity securities at December 31, 2019 were as follows:
|  | Cost |  |  | Gross Gains |  |  | Gross Losses |  |  | Estimated Fair Value |
Equity securities |  | $ | 43,419,136 |  |  | $ | 12,179,912 |  |  | $ | 121,492 |  |  | $ | 55,477,556 |
The cost and estimated fair values of our equity securities at December 31, 2018 were as follows:
|  | Cost |  |  | Gross Gains |  |  | Gross Losses |  |  | Estimated Fair Value |
Equity securities |  | $ | 40,942,716 |  |  | $ | 4,817,917 |  |  | $ | 2,093,624 |  |  | $ | 43,667,009 |
The amortized cost of fixed maturities on deposit with various regulatory authorities at December 31, 2019 and 2018 amounted to $8,330,651 and $8,795,334, respectively. We derive d net investment income, consisting primarily of interest and dividends, from the following sources:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Fixed maturities |  | $ | 29,969,774 |  |  | $ | 27,733,555 |  |  | $ | 26,143,924 |
Equity securities |  |  | 1,268,056 |  |  |  | 1,264,120 |  |  |  | 999,335 |
Short-term investments |  |  | 1,243,104 |  |  |  | 795,522 |  |  |  | 407,580 |
Other |  |  | 29,251 |  |  |  | 29,450 |  |  |  | 33,316 |
Investment income |  |  | 32,510,185 |  |  |  | 29,822,647 |  |  |  | 27,584,155 |
Investment expenses |  |  | (2,995,230 | ) |  |  | (2,914,991 | ) |  |  | (4,056,851 | )
Net investment income |  | $ | 29,514,955 |  |  | $ | 26,907,656 |  |  | $ | 23,527,304 |
We present below gross gains and losses from investments, including those we classified as held to maturity, and the change in the difference between fair value and cost of investments:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Gross gains: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities |  | $ | 470,983 |  |  | $ | 131,660 |  |  | $ | 168,855 |
Equity securities |  |  | 10,471,285 |  |  |  | 1,890,762 |  |  |  | 6,197,253 |
Investment in affiliate |  |  | 12,662,147 |  |  |  |  |  |  |  |  |
|  |  | 23,604,415 |  |  |  | 2,022,422 |  |  |  | 6,366,108 |
Gross losses: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities |  |  | 323,746 |  |  |  | 630,904 |  |  |  | 98,723 |
Equity securities |  |  | 1,296,052 |  |  |  | 6,193,027 |  |  |  | 562,130 |
|  |  | 1,619,798 |  |  |  | 6,823,931 |  |  |  | 660,853 |
Net investment gains (losses) |  | $ | 21,984,617 |  |  | $ | (4,801,509 | ) |  | $ | 5,705,255 |
Change in difference between fair value and cost of investments: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities |  | $ | 38,647,456 |  |  | $ | (20,641,433 | ) |  | $ | 2,335,578 |
Equity securities |  |  | 9,334,127 |  |  |  | (3,501,853 | ) |  |  | 1,569,999 |
Totals |  | $ | 47,981,583 |  |  | $ | (24,143,286 | ) |  | $ | 3,905,577 |
We recognized $8.9 million of unrealized gains and $25,751 of unrealized losses on equity securities held at December 31, 2019 in net investment gains for 2019. We recognized $1.2 million of unrealized gains and $4.4 million of unrealized losses on equity securities held at December 31, 201 8 in net investment losses for 201 8 . We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2019 as follows:
|  | Less than 12 months |  |  | 12 months or longer |
|  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 7,461,245 |  |  | $ | 45,688 |  |  | $ | 5,394,735 |  |  | $ | 42,242 |
Obligations of states and political subdivisions |  |  | 23,339,340 |  |  |  | 293,516 |  |  |  | 2,326,813 |  |  |  | 1,587 |
Corporate securities |  |  | 19,362,346 |  |  |  | 263,280 |  |  |  | 18,803,546 |  |  |  | 250,198 |
Mortgage-backed securities |  |  | 28,507,123 |  |  |  | 55,729 |  |  |  | 74,088,769 |  |  |  | 697,991 |
Totals |  | $ | 78,670,054 |  |  | $ | 658,213 |  |  | $ | 100,613,863 |  |  | $ | 992,018 |
We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2018 as follows:
|  | Less than 12 months |  |  | 12 months or longer |
|  | Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 26,342,398 |  |  | $ | 165,774 |  |  | $ | 54,900,027 |  |  | $ | 1,924,204 |
Obligations of states and political subdivisions |  |  | 28,321,962 |  |  |  | 477,357 |  |  |  | 21,559,520 |  |  |  | 533,741 |
Corporate securities |  |  | 149,269,854 |  |  |  | 4,482,870 |  |  |  | 59,396,885 |  |  |  | 2,967,766 |
Mortgage-backed securities |  |  | 82,593,454 |  |  |  | 912,616 |  |  |  | 181,379,875 |  |  |  | 5,861,992 |
Totals |  | $ | 286,527,668 |  |  | $ | 6,038,617 |  |  | $ | 317,236,307 |  |  | $ | 11,287,703 |
We make estimates concerning the valuation of our investments and the recognition of other-than-temporary declines in the value of our investments. For equity securities, we measure investments at fair value and, beginning January 1, 2018, we recognize changes in fair value in our results of operations. With respect to a debt security that is in an unrealized loss position, we first assess if we intend to sell the debt security. If we determine we intend to sell the debt security, we recognize the impairment loss in our results of operations. If we do not intend to sell the debt security, we determine whether it is more likely than not that we will be required to sell the debt security prior to recovery. If we determine it is more likely than not that we will be required to sell the debt security prior to recovery, we recognize an impairment loss in our results of operations. If we determine it is more likely than not that we will not be required to sell the debt security prior to recovery, we then evaluate whether a credit loss has occurred. We determine whether a credit loss has occurred by comparing the amortized cost of the debt security to the present value of the cash flows we expect to collect. If we expect a cash flow shortfall, we consider that a credit loss has occurred. If we determine that a credit loss has occurred, we consider the impairment to be other than temporary. We then recognize the amount of the impairment loss related to the credit loss in our results of operations, and we recognize the remaining portion of the impairment loss in our other comprehensive income, net of applicable taxes. In addition, we may write down securities in an unrealized loss position based on a number of other factors, including when the fair value of an investment is significantly below its cost, when the financial condition of the issuer of a security has deteriorated, the occurrence of industry, company or geographic events that have negatively impacted the value of a security and rating agency downgrades. We held 136 debt securities that were in an unrealized loss position at December 31, 2019. Based upon our analysis of general market conditions and underlying factors impacting these debt securities, we considered these declines in value to be temporary. We did not recognize any impairment losses in 2019, 2018 or 2017. We had no sales or transfers from our held to maturity portfolio in 2019, 2018 or 2017. We had no derivative instruments or hedging activities during 2019, 2018 or 2017.

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