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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three and nine months ended September 30, 2018 and 2017, respectively (in thousands):

					Total realized/unrealized gains (losses) included in
	Balance at June 30, 2018					Net earnings (loss)			Other comp. income (loss)					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Assets
Fixed maturity securities
U.S. Government and government agencies		$	—			$	(11	)		$	(2	)		$	2,285			$	—			$	—			$	—			$	2,272
States, municipalities and political subdivisions		409				(1		)		(16		)		—				—				—				—				392
Residential mortgage-backed securities		12,267				42				(373		)		33,726				(1,375		)		2,562				—				46,849
Commercial mortgage-backed securities		22,051				(39		)		18				2,086				(63		)		1,795				—				25,848
Asset-backed securities		132,744				(39		)		(665		)		116,833				(9,265		)		—				—				239,608
Corporate and other		67,292				162				(832		)		65,019				(9,780		)		9,136				—				130,997
Total fixed maturity securities		234,763				114				(1,870		)		219,949				(20,483		)		13,493				—				445,966
Equity securities
Common stocks		483				1,784				—				100				—				4,339				—				6,706
Perpetual preferred stocks		24,365				(350		)		—				32,007				—				1,010				—				57,032
Total equity securities		24,848				1,434				—				32,107				—				5,349				—				63,738
Derivatives		280				10				—				—				—				—				—				290
Total financial assets		$	259,891			$	1,558			$	(1,870	)		$	252,056			$	(20,483	)		$	18,842			$	—			$	509,994

						Total realized/unrealized (gains) losses included in
	Balance at June 30, 2018					Net (earnings) loss			Other comp. (income) loss					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Liabilities
Warrant liability		$	3,316			$	(120	)		$	—			$	822			$	—			$	—			$	—			$	4,018
Contingent liability		—				—				—				1,763				—				—				—				1,763
Other		907				(169		)		—				—				—				—				—				738
Total financial liabilities		$	4,223			$	(289	)		$	—			$	2,585			$	—			$	—			$	—			$	6,519

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

September 30, 2018						Fair Value Measurement Using:
		Total				Level 1				Level 2				Level 3
Assets
Fixed maturity securities
U.S. Government and government agencies		$	28,558			$	9,155			$	17,131			$	2,272
States, municipalities and political subdivisions		416,390				—				415,998				392
Residential mortgage-backed securities		100,677				—				53,828				46,849
Commercial mortgage-backed securities		60,370				—				34,522				25,848
Asset-backed securities		285,799				—				46,191				239,608
Corporate and other		2,093,649				7,010				1,955,642				130,997
Total fixed maturity securities		2,985,443				16,165				2,523,312				445,966
Equity securities
Common stocks		63,298				56,592				—				6,706
Perpetual preferred stocks		153,855				7,402				89,421				57,032
Total equity securities		217,153				63,994				89,421				63,738
Derivatives		290				—				—				290
Total assets accounted for at fair value		$	3,202,886			$	80,159			$	2,612,733			$	509,994

Liabilities
Warrant liability		$	4,018			$	—			$	—			$	4,018
Contingent liability		1,763				—				—				1,763
Other		738				—				—				738
Total liabilities accounted for at fair value		$	6,519			$	—			$	—			$	6,519

December 31, 2017						Fair Value Measurement Using:
		Total				Level 1				Level 2				Level 3
Assets
Fixed maturity securities
U.S. Government and government agencies		$	15,722			$	5,094			$	10,628			$	—
States, municipalities and political subdivisions		395,450				—				389,439				6,011
Foreign government		5,998				—				5,998				—
Residential mortgage-backed securities		104,895				—				90,283				14,612
Commercial mortgage-backed securities		30,405				—				18,248				12,157
Asset-backed securities		147,926				—				14,184				133,742
Corporate and other		640,230				2,098				611,844				26,288
Total fixed maturity securities		1,340,626				7,192				1,140,624				192,810

Equity securities
Common stocks		4,928				4,771				—				157
Perpetual preferred stocks		42,572				7,665				28,470				6,437
Total equity securities		47,500				12,436				28,470				6,594
Derivatives		260				—				—				260
Total assets accounted for at fair value		$	1,388,386			$	19,628			$	1,169,094			$	199,664

Liabilities
Warrant liability		$	3,826			$	—			$	—			$	3,826
Other		944				—				—				944
Total liabilities accounted for at fair value		$	4,770			$	—			$	—			$	4,770

Schedule of Changes in Balances of Level 3 Financial Assets at Fair Value

The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three and nine months ended September 30, 2018 and 2017, respectively (in thousands):

					Total realized/unrealized gains (losses) included in
	Balance at June 30, 2018					Net earnings (loss)			Other comp. income (loss)					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Assets
Fixed maturity securities
U.S. Government and government agencies		$	—			$	(11	)		$	(2	)		$	2,285			$	—			$	—			$	—			$	2,272
States, municipalities and political subdivisions		409				(1		)		(16		)		—				—				—				—				392
Residential mortgage-backed securities		12,267				42				(373		)		33,726				(1,375		)		2,562				—				46,849
Commercial mortgage-backed securities		22,051				(39		)		18				2,086				(63		)		1,795				—				25,848
Asset-backed securities		132,744				(39		)		(665		)		116,833				(9,265		)		—				—				239,608
Corporate and other		67,292				162				(832		)		65,019				(9,780		)		9,136				—				130,997
Total fixed maturity securities		234,763				114				(1,870		)		219,949				(20,483		)		13,493				—				445,966
Equity securities
Common stocks		483				1,784				—				100				—				4,339				—				6,706
Perpetual preferred stocks		24,365				(350		)		—				32,007				—				1,010				—				57,032
Total equity securities		24,848				1,434				—				32,107				—				5,349				—				63,738
Derivatives		280				10				—				—				—				—				—				290
Total financial assets		$	259,891			$	1,558			$	(1,870	)		$	252,056			$	(20,483	)		$	18,842			$	—			$	509,994

						Total realized/unrealized (gains) losses included in
	Balance at June 30, 2018					Net (earnings) loss			Other comp. (income) loss					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Liabilities
Warrant liability		$	3,316			$	(120	)		$	—			$	822			$	—			$	—			$	—			$	4,018
Contingent liability		—				—				—				1,763				—				—				—				1,763
Other		907				(169		)		—				—				—				—				—				738
Total financial liabilities		$	4,223			$	(289	)		$	—			$	2,585			$	—			$	—			$	—			$	6,519

					Total realized/unrealized gains (losses) included in
	Balance at December 31, 2017					Net earnings (loss)			Other comp. income (loss)					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Assets
Fixed maturity securities
U.S. Government and government agencies		$	—			$	(11	)		$	(2	)		$	2,285			$	—			$	—			$	—			$	2,272
States, municipalities and political subdivisions		6,011				(1		)		(148		)		121				—				418				(6,009		)		392
Residential mortgage-backed securities		14,612				166				246				33,726				(6,642		)		8,092				(3,351		)		46,849
Commercial mortgage-backed securities		12,157				(118		)		(246		)		12,362				(102		)		1,795				—				25,848
Asset-backed securities		133,742				1,119				(3,941		)		184,833				(73,211		)		—				(2,934		)		239,608
Corporate and other		26,288				207				(1,702		)		94,033				(12,675		)		24,846				—				130,997
Total fixed maturity securities		192,810				1,362				(5,793		)		327,360				(92,630		)		35,151				(12,294		)		445,966
Equity securities
Common stocks		157				1,661				—				100				—				4,788				—				6,706
Perpetual preferred stocks		6,437				105				—				46,950				—				3,540				—				57,032
Total equity securities		6,594				1,766				—				47,050				—				8,328				—				63,738
Derivatives		260				30				—				—				—				—				—				290
Total financial assets		$	199,664			$	3,158			$	(5,793	)		$	374,410			$	(92,630	)		$	43,479			$	(12,294	)		$	509,994

						Total realized/unrealized (gains) losses included in
	Balance at December 31, 2017					Net (earnings) loss			Other comp. (income) loss					Purchases and issuances			Sales and settlements					Transfer to Level 3				Transfer out of Level 3				Balance at September 30, 2018
Liabilities
Warrant liability		$	3,826			$	(630	)		$	—			$	822			$	—			$	—			$	—			$	4,018
Contingent liability		—				—				—				1,763				—				—				—				1,763
Other		944				(206		)		—				—				—				—				—				738
Total financial liabilities		$	4,770			$	(836	)		$	—			$	2,585			$	—			$	—			$	—			$	6,519

						Total realized/unrealized gains (losses) included in
	Balance at June 30, 2017					Net earnings (loss)			Other comp. income (loss)					Purchases and issuances			Sales and settlements				Transfer to Level 3					Transfer out of Level 3			Balance at September 30, 2017
Assets
Fixed maturity securities
States, municipalities and political subdivisions		$	7,511			$	(3	)		$	(100	)		$	116			$	—			$	—			$	(1,632	)		$	5,892
Residential mortgage-backed securities		18,486				21				22				—				(921		)		1,041				(868		)		17,781
Commercial mortgage-backed securities		3,754				(4		)		1				—				(69		)		8,620				—				12,302
Asset-backed securities		119,598				97				572				15,780				(23,947		)		1,065				—				113,165
Corporate and other		20,539				(5		)		(1,202		)		4,310				(15		)		9,294				(1,423		)		31,498
Total fixed maturity securities		169,888				106				(707		)		20,206				(24,952		)		20,020				(3,923		)		180,638
Equity securities
Common stocks		2,090				—				—				—				—				280				—				2,370
Perpetual preferred stocks		—								—				—				—				6,101				—				6,101
Total equity securities		2,090				—				—				—				—				6,381				—				8,471
Derivatives		2,155				9				—				—				—				—				—				2,164
Total financial assets		$	174,133			$	115			$	(707	)		$	20,206			$	(24,952	)		$	26,401			$	(3,923	)		$	191,273

						Total realized/unrealized (gains) losses included in
	Balance at June 30, 2017					Net (earnings) loss			Other comp. (income) loss					Purchases and issuances			Sales and settlements				Transfer to Level 3					Transfer out of Level 3			Balance at September 30, 2017
Liabilities
Warrant liability		$	4,091			$	(1,000	)		$	—			$	—			$	—			$	—			$	—			$	3,091
Contingent liability		11,730				(6,321		)		—				—				—				—				—				5,409
Other		1,042				284				—				—				—				—				—				1,326
Total financial liabilities		$	16,863			$	(7,037	)		$	—			$	—			$	—			$	—			$	—			$	9,826

						Total realized/unrealized gains (losses) included in
	Balance at December 31, 2016					Net earnings (loss)			Other comp. income (loss)					Purchases and issuances			Sales and settlements				Transfer to Level 3					Transfer out of Level 3			Balance at September 30, 2017
Assets
Fixed maturity securities
U.S. Government and government agencies		$	32			$	—			$	—			$	—			$	(17	)		$	—			$	(15	)		$	—
States, municipalities and political subdivisions		5,690				(2		)		(144		)		344				—				1,636				(1,632		)		5,892
Residential mortgage-backed securities		55,954				(720		)		901				3,465				(7,283		)		3,203				(37,739		)		17,781
Commercial mortgage-backed securities		43,018				111				76				—				(10,083		)		8,620				(29,440		)		12,302
Asset-backed securities		73,217				1,147				880				97,051				(48,461		)		1,065				(11,734		)		113,165
Corporate and other		20,366				(3,329		)		3,670				12,244				(4,133		)		10,606				(7,926		)		31,498
Total fixed maturity securities		198,277				(2,793		)		5,383				113,104				(69,977		)		25,130				(88,486		)		180,638
Equity securities
Common stocks		4,576				(2,842		)		356				—				—				280				—				2,370
Perpetual preferred stocks		—				—				—				—				—				6,101				—				6,101
Total equity securities		4,576				(2,842		)		356				—				—				6,381				—				8,471
Derivatives		3,813				(1,649		)		—				—				—				—				—				2,164
Total financial assets		$	206,666			$	(7,284	)		$	5,739			$	113,104			$	(69,977	)		$	31,511			$	(88,486	)		$	191,273

						Total realized/unrealized (gains) losses included in
	Balance at December 31, 2016					Net (earnings) loss			Other comp. (income) loss					Purchases and issuances			Sales and settlements				Transfer to Level 3					Transfer out of Level 3			Balance at September 30, 2017
Liabilities
Warrant liability		$	4,058			$	(967	)		$	—			$	—			$	—			$	—			$	—			$	3,091
Contingent liability		11,411				(6,002		)		—				—				—				—				—				5,409
Other		816				510				—				—				—				—				—				1,326
Total financial liabilities		$	16,285			$	(6,459	)		$	—			$	—			$	—			$	—			$	—			$	9,826

Schedule of Financial Instruments Measured at Fair Value on Nonrecurring Basis

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments, which were not measured at fair value on a recurring basis. The table excludes carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and other current liabilities, and other assets and liabilities approximate fair value due to relatively short periods to maturity (in thousands):

September 30, 2018										Fair Value Measurement Using:
		Carrying Value				Estimated Fair Value				Level 1				Level 2				Level 3
Assets
Mortgage loans		$	87,308			$	—			$	—			$	—			$	—
Policy loans		20,324				20,324				—				20,324				—
Other invested assets		1,600				1,600				—				—				1,600
Total assets not accounted for at fair value		$	109,232			$	21,924			$	—			$	20,324			$	1,600
Liabilities
Annuity benefits accumulated (1)		$	244,021			$	241,688			$	—			$	—			$	241,688
Debt obligations (2)		660,041				663,383				—				663,383				—
Total liabilities not accounted for at fair value		$	904,062			$	905,071			$	—			$	663,383			$	241,688

December 31, 2017										Fair Value Measurement Using:
		Carrying Value				Estimated Fair Value				Level 1				Level 2				Level 3
Assets
Mortgage loans		$	52,109			$	52,110			$	—			$	—			$	52,110
Policy loans		17,944				17,944				—				17,944				—
Other invested assets		2,906				3,757				—				—				3,757
Total assets not accounted for at fair value		$	72,959			$	73,811			$	—			$	17,944			$	55,867
Liabilities
Annuity benefits accumulated (1)		$	243,156			$	240,361			$	—			$	—			$	240,361
Debt obligations (2)		544,211				552,413				—				552,413				—
Total liabilities not accounted for at fair value		$	787,367			$	792,774			$	—			$	552,413			$	240,361

⁽¹⁾ Excludes life contingent annuities in the payout phase.

⁽²⁾ Excludes certain lease obligations accounted for under ASC 840, Leases.

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- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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