XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Investments (Tables)
 6 Months Ended
Jun. 30, 2020
Schedule of Investments Debt and Equity Securities [Line Items]  
Schedule of Available-for-sale Securities The period-end amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities were as follows:

 

 

June 30, 2020

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

9,635

 

 

$

516

 

 

$

-

 

 

$

10,151

 

Foreign government

 

 

157,685

 

 

 

12,402

 

 

 

(19

)

 

 

170,068

 

States and political subdivisions

 

 

119,584

 

 

 

7,251

 

 

 

(81

)

 

 

126,754

 

Corporates

 

 

1,432,856

 

 

 

92,812

 

 

 

(9,781

)

 

 

1,515,887

 

Residential mortgage-backed securities

 

 

305,131

 

 

 

12,561

 

 

 

(335

)

 

 

317,357

 

Commercial mortgage-backed securities

 

 

117,355

 

 

 

5,516

 

 

 

(827

)

 

 

122,044

 

Other asset-backed securities

 

 

95,228

 

 

 

1,237

 

 

 

(1,572

)

 

 

94,893

 

Total fixed-maturity securities

 

 

2,237,474

 

 

 

132,295

 

 

 

(12,615

)

 

 

2,357,154

 

 

 

 

December 31, 2019

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

10,197

 

 

$

287

 

 

$

-

 

 

$

10,484

 

Foreign government

 

 

154,945

 

 

 

6,362

 

 

 

(235

)

 

 

161,072

 

States and political subdivisions

 

 

120,000

 

 

 

3,288

 

 

 

(695

)

 

 

122,593

 

Corporates

 

 

1,436,877

 

 

 

63,892

 

 

 

(1,118

)

 

 

1,499,651

 

Residential mortgage-backed securities

 

 

305,897

 

 

 

6,848

 

 

 

(222

)

 

 

312,523

 

Commercial mortgage-backed securities

 

 

128,913

 

 

 

3,191

 

 

 

(99

)

 

 

132,005

 

Other asset-backed securities

 

 

117,941

 

 

 

970

 

 

 

(243

)

 

 

118,668

 

Total fixed-maturity securities

 

 

2,274,770

 

 

 

84,838

 

 

 

(2,612

)

 

 

2,356,996

 

 
Fixed-maturity Securities Classified by Contractual Maturity Date

The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio as of June 30, 2020 was as follows:

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

161,768

 

 

$

163,796

 

Due after one year through five years

 

 

853,995

 

 

 

901,122

 

Due after five years through 10 years

 

 

498,631

 

 

 

535,477

 

Due after 10 years

 

 

205,366

 

 

 

222,465

 

 

 

 

1,719,760

 

 

 

1,822,860

 

Mortgage- and asset-backed securities

 

 

517,714

 

 

 

534,294

 

  Total AFS fixed-maturity securities

 

$

2,237,474

 

 

$

2,357,154

 

 
Costs and Fair Value of Securities Classified as Trading Securities The cost and fair value of the securities classified as trading securities were as follows:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Cost

 

 

Fair value

 

 

Cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities

 

$

22,436

 

 

$

22,399

 

 

$

43,257

 

 

$

43,233

 

 
Net Investment Income

Investment Income. The components of net investment income were as follows:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(In thousands)

 

Fixed-maturity securities (available-for-sale)

 

$

20,213

 

 

$

20,345

 

 

$

40,997

 

 

$

40,679

 

Fixed-maturity security (held-to-maturity)

 

 

14,074

 

 

 

11,769

 

 

 

27,546

 

 

 

22,444

 

Equity securities

 

 

461

 

 

 

446

 

 

 

912

 

 

 

933

 

Policy loans and other invested assets

 

 

541

 

 

 

300

 

 

 

730

 

 

 

618

 

Cash and cash equivalents

 

 

143

 

 

 

1,414

 

 

 

986

 

 

 

2,617

 

Total return on deposit asset underlying 10% coinsurance agreement(1)

 

 

3,653

 

 

 

4,588

 

 

 

(896

)

 

 

8,491

 

  Gross investment income

 

 

39,085

 

 

 

38,862

 

 

 

70,275

 

 

 

75,782

 

Investment expenses

 

 

(2,301

)

 

 

(2,225

)

 

 

(4,599

)

 

 

(4,358

)

   Investment income net of investment expenses

 

 

36,784

 

 

 

36,637

 

 

 

65,676

 

 

 

71,424

 

Interest expense on surplus note

 

 

(14,074

)

 

 

(11,769

)

 

 

(27,546

)

 

 

(22,444

)

    Net investment income

 

$

22,710

 

 

$

24,868

 

 

$

38,130

 

 

$

48,980

 

 

(1)

For the three and six months ended June 30, 2020, included $2.3 million and $(4.1) million, respectively, of net gains (losses) recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement.  For the three and six months ended June 30, 2019, included $2.5 million and $4.6 million, respectively, of net gains recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement.

Schedule of Net Realized Investment Gains and Losses Recognized in Net Income

The components of net realized investment gains (losses) recognized in net income as well as details on gross realized investment gains and losses were as follows:

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2020

 

 

2019

 

2020

 

 

2019

 

 

 

(In thousands)

 

Net realized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross gains from sales of available-for-sale securities

 

$

827

 

 

$

293

 

$

1,183

 

 

$

471

 

Gross losses from sales of available-for-sale securities

 

 

(51

)

 

 

(42

)

 

(116

)

 

 

(285

)

Credit losses on available-for-sale securities

 

 

(545

)

 

 

(161

)

 

(4,246

)

 

 

(161

)

Net gains (losses) recognized in net income during the period on equity securities

 

 

1,547

 

 

 

977

 

 

(5,125

)

 

 

3,878

 

Gains (losses) from bifurcated options

 

 

(36

)

 

 

-

 

 

16

 

 

 

-

 

Gains (losses) on trading securities

 

 

-

 

 

 

-

 

 

-

 

 

 

11

 

Net realized investment gains (losses)

 

$

1,742

 

 

$

1,067

 

$

(8,288

)

 

$

3,914

 
Schedule of Proceeds from Sales or Other Redemptions of Available-for-Sale Securities

The proceeds from sales or other redemptions of available-for-sale securities were as follows:

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2020

 

 

2019

 

2020

 

 

2019

 

 

 

(In thousands)

 

Proceeds from sales or other redemptions

 

$

133,913

 

 

$

125,455

 

$

275,830

 

 

$

240,894

 
Schedule of Unrealized Net Gains (Losses) Recognized in NI on Equity Securities Still Held at Period-End

The components of net gains (losses) recognized in net income on equity securities still held as of period-end were as follows:

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2020

 

 

2019

 

2020

 

 

2019

 

 

 

(In thousands)

 

Net gains (losses) recognized in net income during the period on equity securities

 

$

1,547

 

 

$

977

 

$

(5,125

)

 

$

3,878

 

Less: Net gains (losses) recognized on equity securities sold

 

 

(191

)

 

 

-

 

 

(191

)

 

 

(254

)

Net gains (losses) recognized in net income on equity

  securities still held as of period-end

 

$

1,738

 

 

$

977

 

$

(4,934

)

 

$

4,132

 
Schedule of Securities in Unrealized Loss Position

The following table summarize all AFS securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of June 30, 2020, aggregated by major security type and length of time such securities have continuously been in an unrealized loss position:

 

 

June 30, 2020

 

 

 

Less than 12 months

 

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

 

(Dollars in thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Foreign government

 

 

2,078

 

 

 

(19

)

 

 

-

 

 

 

-

 

States and political subdivisions

 

 

4,635

 

 

 

(81

)

 

 

-

 

 

 

-

 

Corporates

 

 

144,453

 

 

 

(7,563

)

 

 

9,770

 

 

 

(2,218

)

Residential mortgage-backed securities

 

 

34,080

 

 

 

(305

)

 

 

988

 

 

 

(30

)

Commercial mortgage-backed securities

 

 

19,231

 

 

 

(773

)

 

 

2,256

 

 

 

(54

)

Other asset-backed securities

 

 

33,707

 

 

 

(1,422

)

 

 

3,702

 

 

 

(150

)

Total fixed-maturity securities

 

$

238,184

 

 

$

(10,163

)

 

$

16,716

 

 

$

(2,452

)

The following table summarizes all available-for-sale securities as of December 31, 2019 (prior to adoption of ASC 326), in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

 

 

 

December 31, 2019

 

 

Less than 12 months

 

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

Number of securities

 

 

Fair value

 

 

Unrealized losses

 

 

Number of securities

 

 

 

(Dollars in thousands)

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

-

 

 

$

-

 

 

-

 

 

$

-

 

 

$

-

 

 

 

-

 

Foreign government

 

 

11,824

 

 

 

(144

)

 

14

 

 

 

8,578

 

 

 

(91

)

 

 

7

 

States and political subdivisions

 

 

39,379

 

 

 

(690

)

 

21

 

 

 

4,000

 

 

 

(5

)

 

 

4

 

Corporates

 

 

52,474

 

 

 

(453

)

 

40

 

 

 

21,739

 

 

 

(665

)

 

 

19

 

Residential mortgage-backed securities

 

 

40,690

 

 

 

(207

)

 

20

 

 

 

2,071

 

 

 

(15

)

 

 

3

 

Commercial mortgage-backed securities

 

 

11,526

 

 

 

(28

)

 

13

 

 

 

12,835

 

 

 

(71

)

 

 

16

 

Other asset-backed securities

 

 

22,501

 

 

 

(190

)

 

17

 

 

 

4,613

 

 

 

(53

)

 

 

20

 

Total fixed-maturity securities

 

$

178,394

 

 

$

(1,712

)

 

 

 

 

$

53,836

 

 

$

(900

)

 

 

 

 
Schedule of Securities in Allowance for Credit Losses

The rollforward of the allowance for credit losses on available-for-sale securities for the three and six months ended June 30, 2020 was as follows:

 

 

Three months ended June 30, 2020

 

 

Six months ended June 30, 2020

 

 

 

(In thousands)

 

Allowance for credit losses, beginning of period

 

$

37

 

 

$

-

 

Additions to the allowance for credit losses on securities for which credit losses were not previously recorded

 

 

465

 

 

 

502

 

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period

 

 

(37

)

 

 

(37

)

Allowance for credit losses, end of period

 

$

465

 

 

$

465

 
OTTI in Earnings on Available-for-sale Securities

OTTI recognized in earnings for available-for-sale securities for the three and six months ended June 30, 2019 were as follows:

 

 

Three months ended June 30, 2019

 

 

Six months ended June 30, 2019

 

 

 

(In thousands)

 

OTTI on fixed-maturity securities not in default

 

$

158

 

 

$

158

 

OTTI on fixed-maturity securities in default

 

 

3

 

 

 

3

 

Total OTTI recognized in earnings

 

$

161

 

 

$

161

 

 
Schedule of OTTI Recognized in Earnings for Available-for-sale Securities

The rollforward of the OTTI recognized in net income for all fixed-maturity securities still held for the three and six months ended June 30, 2019 was as follows:

 

 

Three months ended June 30, 2019

 

 

Six months ended June 30, 2019

 

 

 

(In thousands)

 

Cumulative OTTI recognized in net income for securities still held,

   beginning of period

 

$

2,467

 

 

$

2,511

 

Additions for securities where no OTTI were recognized prior to the

   beginning of the period

 

 

158

 

 

 

158

 

Additions for securities where OTTI have been recognized prior to the

   beginning of the period

 

 

3

 

 

 

3

 

Reductions due to sales, maturities, calls, amortization or increases in

   cash flows expected to be collected over the remaining life of

   credit-impaired securities

 

 

(221

)

 

 

(265

)

Reductions for exchanges of securities previously impaired

 

 

-

 

 

 

-

 

  Cumulative OTTI recognized in net income for securities still held,

      end of period

 

$

2,407

 

 

$

2,407

 

 
Available-for-Sale [Member]  
Schedule of Investments Debt and Equity Securities [Line Items]  
Schedule of OTTI Recognized in Earnings for Available-for-sale Securities

OTTI recognized in earnings for available-for-sale securities for the three and six months ended June 30, 2019 were as follows:

 

 

Three months ended June 30, 2019

 

 

Six months ended June 30, 2019

 

 

 

(In thousands)

 

Total OTTI related to securities which the Company does not intend to

   sell or more-likely-than-not will not be required to sell:

 

 

 

 

 

 

 

 

Total OTTI losses recognized

 

$

3

 

 

$

3

 

Less portion of OTTI recognized in accumulated other

   comprehensive income (loss)

 

 

-

 

 

 

-

 

OTTI recognized in earnings for securities which the Company does

   not intend to sell or more-likely than-not will not be required to sell

   before recovery

 

 

3

 

 

 

3

 

OTTI recognized in earnings for securities which the Company intends to

   sell or more-likely-than-not will be required to sell before recovery

 

 

158

 

 

 

158

 

OTTI recognized in earnings

 

$

161

 

 

$

161