Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 6 -- Fair Value Measurements

The Company records and discloses certain financial assets at their estimated fair values. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

Level 1	–	Unadjusted quoted prices in active markets for identical assets.
Level 2	–	Other inputs that are observable for the asset, either directly or indirectly such as quoted prices for identical assets that are not observable throughout the full term of the asset.
Level 3	–	Inputs that are unobservable.

Valuation Methodology

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of money-market funds and certificates of deposit maturing within 90 days. Their carrying value approximates fair value due to the short maturity and high liquidity of these funds.

Restricted Cash

Restricted cash represents cash held by state authorities and the carrying value approximates fair value.

Fixed-Maturity and Equity Securities

Estimated fair values of the Company’s fixed-maturity and equity securities are determined in accordance with U.S. GAAP, using valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair values are generally measured using quoted prices in active markets for identical securities or other inputs that are observable either directly or indirectly, such as quoted prices for similar securities. In those instances where observable inputs are not available, fair values are measured using unobservable inputs. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the security and are developed based on the best information available in the circumstances. Fair value estimates derived from unobservable inputs are significantly affected by the assumptions used, including the discount rates and the estimated amounts and timing of future cash flows. The derived fair value estimates cannot be substantiated by comparison to independent markets and are not necessarily indicative of the amounts that would be realized in a current market exchange.

The estimated fair values for securities that do not trade on a daily basis are determined by management, utilizing prices obtained from an independent pricing service and information provided by brokers, which are level 2 inputs. Management reviews the assumptions and methods utilized by the pricing service and then compares the relevant data and pricing to broker-provided data. The Company gains assurance of the overall reasonableness and consistent application of the assumptions and methodologies, and compliance with accounting standards for fair value determination through ongoing monitoring of the reported fair values.

Revolving Credit Facility

From time to time, the Company has an amount outstanding under a revolving credit facility. The interest rate is variable and is periodically adjusted based on the Secured Overnight Financing Rate (“SOFR”) plus a ten basis points adjustment plus a margin based on the debt-to-capital ratio. As a result, carrying value, when outstanding, approximates fair value.

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
4.75% Convertible Senior Notes	2042	Quoted price
4.25% Convertible Senior Notes	*	Quoted price
4.55% Promissory Note	2036	Discounted cash flow method/Level 3 inputs
5.50% Promissory Note	2033	Discounted cash flow method/Level 3 inputs

* Debt derecognized in March 2024. See Note 10 -- “Long-Term Debt” for additional information.

Assets Measured at Estimated Fair Value on a Recurring Basis

The following tables present information about the Company’s financial assets measured at estimated fair value on a recurring basis. The tables indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of June 30, 2024 and December 31, 2023:

	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of June 30, 2024
Financial Assets:
Cash and cash equivalents	$	445,829	$	—	$	—	$	445,829
Restricted cash	$	3,303	$	—	$	—	$	3,303
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	602,042	$	7,935	$	—	$	609,977
Corporate bonds		23,339		6,453		—		29,792
Exchange-traded debt		473		—		—		473
Total available-for-sale securities	$	625,854	$	14,388	$	—	$	640,242
Equity securities	$	53,886	$	—	$	—	$	53,886

	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of December 31, 2023
Financial Assets:
Cash and cash equivalents	$	536,478	$	—	$	—	$	536,478
Restricted cash	$	3,287	$	—	$	—	$	3,287
Fixed-maturity securities:
U.S. Treasury and U.S. government agencies	$	348,145	$	7,909	$	—	$	356,054
Corporate bonds		20,267		6,437		—		26,704
Exchange-traded debt		480		—		—		480
Total available-for-sale securities	$	368,892	$	14,346	$	—	$	383,238
Equity securities	$	45,537	$	—	$	—	$	45,537

Liabilities Carried at Other Than Fair Value

The following tables present fair value information for financial liabilities that are carried on the consolidated balance sheets at amounts other than fair value as of June 30, 2024 and December 31, 2023:

	Carrying		Fair Value Measurements Using						Estimated
	Value		(Level 1)		(Level 2)		(Level 3)		Fair Value
As of June 30, 2024
Financial Liabilities:
Revolving credit facility	$	48,000	$	—	$	48,000	$	—	$	48,000
Long-term debt:
4.75% Convertible Senior Notes	$	168,806	$	—	$	224,909	$	—	$	224,909
5.50% Promissory Note		11,600		—		—		11,290		11,290
4.55% Promissory Note		4,504		—		—		4,180		4,180
Total long-term debt	$	184,910	$	—	$	224,909	$	15,470	$	240,379

	Carrying		Fair Value Measurements Using						Estimated
	Value		(Level 1)		(Level 2)		(Level 3)		Fair Value
As of December 31, 2023
Financial Liabilities:
Long-term debt:
4.75% Convertible Senior Notes	$	168,230	$	—	$	215,114	$	—	$	215,114
4.25% Convertible Senior Notes		23,916		—		34,545		—		34,545
5.50% Promissory Note		11,707		—		—		11,512		11,512
4.55% Promissory Note		4,640		—		—		4,349		4,349
Total long-term debt	$	208,493	$	—	$	249,659	$	15,861	$	265,520