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Investments
 12 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments INVESTMENTS
The following table details fixed maturity available-for-sale securities, by major investment category, at December 31, 2020 and 2019:
Cost or Adjusted/Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
December 31, 2020
U.S. government and agency securities$129,417 $1,147 $139 $130,425 
Foreign government1,374 142 — 1,516 
States, municipalities and political subdivisions132,336 2,318 272 134,382 
Public utilities29,526 482 28 29,980 
Corporate securities285,814 6,633 118 292,329 
Mortgage-backed securities285,639 3,039 466 288,212 
Asset-backed securities56,351 525 219 56,657 
Redeemable preferred stocks6,257 266 13 6,510 
Total fixed maturities$926,714 $14,552 $1,255 $940,011 
December 31, 2019
U.S. government and agency securities$120,260 $749 $193 $120,816 
Foreign government3,975 97 1 4,071 
States, municipalities and political subdivisions131,203 2,611 63 133,751 
Public utilities24,660 700 26 25,334 
Corporate securities281,892 7,123 143 288,872 
Mortgage-backed securities248,206 4,174 477 251,903 
Asset-backed securities56,487 683 41 57,129 
Redeemable preferred stocks2,915 72 2 2,985 
Total fixed maturities$869,598 $16,209 $946 $884,861 

Equity securities are summarized as follows at:
December 31, 2020December 31, 2019
Estimated Fair ValuePercent of TotalEstimated Fair ValuePercent of Total
Mutual funds$152 2.0 %$65,453 56.1 %
Public utilities— — 3,663 3.1 
Other common stocks— — 44,492 38.2 
Non-redeemable preferred stocks7,293 98.0 3,002 2.6 
Total equity securities$7,445 100.0 %$116,610 100.0 %








    
    When we sell investments, we calculate the gain or loss realized on the sale by comparing the sales price (fair value) to the cost or adjusted/amortized cost of the security sold. We determine the cost or adjusted/amortized cost of the security sold using the specific-identification method. The following table details our realized gains (losses) by major investment category for the years ended December 31, 2020, 2019, and 2018:
202020192018
Gains
(Losses)		Fair Value at SaleGains
(Losses)		Fair Value at SaleGains (Losses)Fair Value at Sale
Fixed maturities$32,460 $678,736 $1,678 $209,302 $373 $41,776 
Equity securities38,325 131,178 94 814 2,828 6,073 
 Short-term investments
— 1,346 — 3,863 — — 
Total realized gains70,785 811,260 1,772 213,979 3,201 47,849 
Fixed maturities(478)16,552 (324)43,573 (1,376)135,944 
Equity securities(3,602)13,805 (219)1,387 (170)995 
 Short-term investments
(14)1,258 (1)1,035 — — 
Total realized losses(4,094)31,615 (544)45,995 (1,546)136,939 
Net realized investment gains$66,691 $842,875 $1,228 $259,974 $1,655 $184,788 

The table below summarizes our fixed maturities at December 31, 2020 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturities of those obligations.
December 31, 2020
Cost or Amortized CostPercent of TotalFair ValuePercent of Total
Due in one year or less$66,420 7.2 %$66,921 7.1 %
Due after one year through five years209,129 22.6 %214,742 22.8 %
Due after five years through ten years295,036 31.8 %299,230 31.9 %
Due after ten years14,139 1.5 %14,249 1.5 %
Asset and mortgage-backed securities341,990 36.9 %344,869 36.7 %
Total$926,714 100.0 %$940,011 100.0 %

The following table summarizes our net investment income by major investment category:
Year Ended December 31,
202020192018
Fixed maturities$21,789 $23,267 $22,043 
Equity securities2,155 2,474 2,206 
Cash and cash equivalents1,329 4,118 1,953 
Other investments38 1,253 942 
Other assets178 117 57 
Investment income25,489 31,229 27,201 
Investment expenses(1,364)(1,084)(1,031)
Net investment income$24,125 $30,145 $26,170 
Portfolio monitoring

We have a quarterly portfolio monitoring process to identify and evaluate each fixed-income security whose carrying value
may be impaired as the result of a credit loss. For each fixed-income security in an unrealized loss position, if we determine that
we intend to sell the security or that it is more likely than not that we will be required to sell the security before recovery of the
cost or amortized cost basis for reasons such as liquidity needs, contractual or regulatory requirements, the security's entire
decline in fair value is recorded in earnings.

If our management decides not to sell the fixed-income security and it is more likely than not that we will not be required to sell the fixed-income security before recovery of its amortized cost basis, we evaluate whether the decline in fair value has resulted from credit losses or other factors. This is typically indicated by a change in the rating of the security assigned by a rating agency, and any adverse conditions specifically related to the security or industry, among other factors. If the assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded in earnings. Credit loss is limited to the difference between a security's amortized cost basis and its fair value. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income.

During the year-ended December 31, 2020, we determined that none of our fixed-income securities shown in the table below that are in an unrealized loss position have declines in fair value that are reflected as a result of credit losses. Therefore, no credit loss allowance was recorded at December 31, 2020. The issuers of our debt security investments continue to make interest payments on a timely basis. We do not intend to sell, nor is it likely that we would be required to sell the debt securities before we recover our amortized cost basis. Equity securities are reported at fair value with changes in fair value recognized in the valuation of equity investments.
The following table presents an aging of our unrealized investment losses by investment class:
Less Than Twelve MonthsTwelve Months or More
Number of Securities(1)
Gross Unrealized LossesFair Value
Number of Securities(1)
Gross Unrealized LossesFair Value
December 31, 2020 
U.S. government and agency securities44 $129 $40,341 18 $10 $10,482 
Foreign governments— — — — — — 
States, municipalities and political subdivisions22 272 30,538 — — — 
Public utilities8 28 9,472 — — — 
Corporate securities40 116 25,052 3 2 753 
Mortgage-backed securities87 397 100,171 8 69 3,479 
Asset backed securities21 207 17,682 1 12 988 
Redeemable preferred stocks5 13 358 — — — 
Total fixed maturities227 $1,162 $223,614 30 $93 $15,702 
December 31, 2019
U.S. government and agency securities37 $89 $26,372 39 $104 $31,364 
Foreign governments— — — 2 1 600 
States, municipalities and political subdivisions31 61 14,508 2 2 1,262 
Public utilities9 25 4,626 2 1 250 
Corporate securities42 124 22,435 27 19 9,605 
Mortgage-backed securities89 322 59,101 50 155 12,738 
Asset-backed securities15 34 8,447 5 7 1,259 
Redeemable preferred stocks— — — 1 2 97 
Total fixed maturities223 $655 $135,489 128 $291 $57,175 
(1) This amount represents the actual number of discrete securities, not the number of shares or units of those securities. The numbers are not presented in thousands.

Fair value measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on our Consolidated Balance Sheets at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we can access.

Level 2: Assets and liabilities whose values are based on the following:
    (a) Quoted prices for similar assets or liabilities in active markets;
    (b) Quoted prices for identical or similar assets or liabilities in markets that are not active; or
(c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect our estimates of the assumptions that market participants would use in valuing the assets and liabilities.
We estimate the fair value of our investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the NYSE, Nasdaq and NYSE American. For securities for which quoted prices in active markets are unavailable, we use a third-party pricing service that utilizes quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs to estimate the fair value of those securities for which quoted prices are unavailable. Our estimates of fair value reflect the interest rate environment that existed as of the close of business on December 31, 2020 and 2019. Changes in interest rates subsequent to December 31, 2020 may affect the fair value of our investments.

The fair value of our fixed maturities is initially calculated by a third-party pricing service. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of proprietary models, produce valuation information in the form of a single fair value for individual fixed income and other securities for which a fair value has been requested. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, liquidity spreads, currency rates and other information, as applicable. Credit and liquidity spreads are typically implied from completed transactions and transactions of comparable securities. Valuation service providers also use proprietary discounted cash flow models that are widely accepted in the financial services industry and similar to those used by other market participants to value the same financial information. The valuation models take into account, among other things, market observable information as of the measurement date, as described above, as well as the specific attributes of the security being valued, including its term, interest rate, credit rating, industry sector and, where applicable, collateral quality and other issue or issuer specific information. Executing valuation models effectively requires seasoned professional judgment and experience.

Any change in the estimated fair value of our fixed-income securities would impact the amount of unrealized gain or loss we have recorded, which could change the amount we have recorded for our investments and other comprehensive income (loss) on our Consolidated Balance Sheet as of December 31, 2020.
The following table presents the fair value of our financial instruments measured on a recurring basis by level at December 31, 2020 and 2019:
TotalLevel 1Level 2Level 3
December 31, 2020
U.S. government and agency securities$130,425 $— $130,425 $— 
Foreign government1,516 — 1,516 — 
States, municipalities and political subdivisions134,382 — 134,382 — 
Public utilities29,980 — 29,980 — 
Corporate securities292,329 — 292,329 — 
Mortgage-backed securities288,212 — 288,212 — 
Asset-backed securities56,657 — 56,657 — 
Redeemable preferred stocks6,510 1,554 4,956 — 
Total fixed maturities940,011 1,554 938,457 — 
Mutual funds152 152 — — 
Public utilities— — — — 
Other common stocks— — — — 
Non-redeemable preferred stocks7,293 7,293 — — 
Total equity securities7,445 7,445 — — 
Other investments (1)
38,002 300 37,702 — 
Total investments$985,458 $9,299 $976,159 $— 
December 31, 2019
U.S. government and agency securities$120,816 $— $120,816 $— 
Foreign government4,071 — 4,071 — 
States, municipalities and political subdivisions133,751 — 133,751 — 
Public utilities25,334 — 25,334 — 
Corporate securities288,872 — 288,872 — 
Mortgage-backed securities251,903 — 251,903 — 
Asset-backed securities57,129 — 57,129 — 
Redeemable preferred stocks2,985 747 2,238 — 
Total fixed maturities884,861 747 884,114 — 
Mutual Funds65,453 65,453 — — 
Public utilities3,663 3,663 — — 
Other common stocks44,492 44,492 — — 
Non-redeemable preferred stocks3,002 3,002 — — 
Total equity securities116,610 116,610 — — 
Other investments (1)
499 300 199 — 
Total investments$1,001,970 $117,657 $884,313 $— 
(1) Other long-term investments included in the fair value hierarchy exclude these other limited partnership interests that are measured at estimated fair value using the net asset value per share (or its equivalent) practical expedient.

    Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; this is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). There were no financial instruments measured on a non-recurring basis at December 31, 2020 and 2019.

    The carrying amounts for the following financial instrument categories approximate their fair values at December 31, 2020 and 2019, because of their short-term nature: cash and cash equivalents, accrued investment income, premiums receivable, reinsurance recoverable, reinsurance payable, other assets, and other liabilities. The carrying amount of the notes payable to the
Florida State Board of Administration, Truist Financial Corporation (Truist) (formerly known as Branch Banking & Trust Corporation or BB&T), and our senior notes approximate fair value as the interest rates and terms are variable.

We are responsible for the determination of fair value and the supporting assumptions and methodologies. We have implemented a system of processes and controls designed to provide assurance that our assets and liabilities are appropriately valued. For fair values received from third parties, our processes are designed to provide assurance that the valuation methodologies and inputs are appropriate and consistently applied, the assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded.

At the end of each quarter, we determine whether we need to transfer the fair values of any securities between levels of the fair value hierarchy and, if so, we report the transfer as of the end of the quarter. During 2020, we transferred no investments between levels.

For our investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, we obtain the fair values from our investment custodians, which use a third-party valuation service. The valuation service calculates prices for our investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, and adds final spreads to the U.S. Treasury curve at 3 p.m. (ET) as of quarter end. Since the inputs the valuation service uses in its calculations are not quoted prices in active markets, but are observable inputs, they represent Level 2 inputs.

Other investments

We acquired investments in limited partnerships, recorded in the other investments line of our Consolidated Balance Sheets and these investments are currently being accounted for at fair value utilizing a net asset value per share equivalent methodology.

The information presented in the table below is as of December 31, 2020 and 2019:
Book ValueUnrealized GainUnrealized LossFair Value
December 31, 2020
Limited partnership investments (1)
$9,532 $225 $164 $9,593 
Certificates of deposit300 — — 300 
Short-term investments37,703 — 1 37,702 
Total other investments
$47,535 $225 $165 $47,595 
December 31, 2019
Limited partnership investments (1)
$7,568 $2,236 $51 $9,753 
Certificates of deposit300 — — 300 
Short-term investments199 — — 199 
Total other investments$8,067 $2,236 $51 $10,252 
(1) Distributions will be generated from investment gains, from operating income, from underlying investments of the funds, and from liquidation of the underlying assets of the funds. We estimate that the underlying assets of the funds will be liquidated over the next few months to seven years.

During 2020, we decreased the size of our equity portfolio in order to mitigate potential surplus declines from market volatility for each of our insurance subsidiaries. As a result, we invested a portion of the proceeds into short-term investments, driving the increase year-over-year.
Restricted Cash

We are required to maintain assets on deposit with various regulatory authorities to support our insurance operations. The cash on deposit with state regulators is available to settle insurance liabilities. We also use trust funds in certain reinsurance transactions.

The following table presents the components of restricted assets:
December 31,
20202019
Trust funds$61,142 $70,668 
Cash on deposit (regulatory deposits)936 920 
     Total restricted cash$62,078 $71,588 

In addition to the cash held on deposit described above, we also have securities on deposit with regulators, which are presented within our Fixed Maturities or Other Investments lines on the Consolidated Balance Sheets, dependent upon if they are short-term or long-term in nature. The table below shows the carrying value of those securities held on deposit with regulators.

December 31,
20202019
Invested assets on deposit (regulatory deposits)$4,023 $4,599