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Investments (Tables)
 3 Months Ended
Mar. 31, 2021
Investments Debt And Equity Securities [Abstract]  
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:

 

 

March 31, 2021

 

 

 

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

 

$

9,756

 

 

$

325

 

 

$

(20

)

 

$

10,061

 

Foreign government

 

 

176,333

 

 

 

8,211

 

 

 

(2,267

)

 

 

182,277

 

States and political subdivisions

 

 

161,227

 

 

 

5,746

 

 

 

(777

)

 

 

166,196

 

Corporates

 

 

1,619,734

 

 

 

84,794

 

 

 

(12,329

)

 

 

1,692,199

 

Residential mortgage-backed securities

 

 

247,497

 

 

 

9,190

 

 

 

(361

)

 

 

256,326

 

Commercial mortgage-backed securities

 

 

140,293

 

 

 

4,616

 

 

 

(644

)

 

 

144,265

 

Other asset-backed securities

 

 

85,341

 

 

 

1,805

 

 

 

(273

)

 

 

86,873

 

Total fixed-maturity securities

 

 

2,440,181

 

 

 

114,687

 

 

 

(16,671

)

 

 

2,538,197

 

Short-term investments

 

 

50,759

 

 

 

-

 

 

 

(1

)

 

 

50,758

 

Total fixed-maturity securities and short-term investments

 

$

2,490,940

 

 

$

114,687

 

 

$

(16,672

)

 

$

2,588,955

 

 

 

 

 

December 31, 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

 

$

9,747

 

 

$

400

 

 

$

(3

)

 

$

10,144

 

Foreign government

 

 

169,967

 

 

 

13,324

 

 

 

(39

)

 

 

183,252

 

States and political subdivisions

 

 

161,058

 

 

 

9,632

 

 

 

(1

)

 

 

170,689

 

Corporates

 

 

1,506,549

 

 

 

124,164

 

 

 

(2,545

)

 

 

1,628,168

 

Residential mortgage-backed securities

 

 

261,376

 

 

 

11,419

 

 

 

(54

)

 

 

272,741

 

Commercial mortgage-backed securities

 

 

107,020

 

 

 

5,901

 

 

 

(56

)

 

 

112,865

 

Other asset-backed securities

 

 

85,521

 

 

 

1,816

 

 

 

(585

)

 

 

86,752

 

Total fixed-maturity securities

 

$

2,301,238

 

 

$

166,656

 

 

$

(3,283

)

 

$

2,464,611

 

 
Fixed-maturity Securities Classified by Contractual Maturity Date

The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio as of March 31, 2021 was as follows:

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

208,216

 

 

$

211,314

 

Due after one year through five years

 

 

827,129

 

 

 

881,535

 

Due after five years through 10 years

 

 

649,926

 

 

 

671,415

 

Due after 10 years

 

 

281,779

 

 

 

286,469

 

 

 

 

1,967,050

 

 

 

2,050,733

 

Mortgage- and asset-backed securities

 

 

473,131

 

 

 

487,464

 

  Total AFS fixed-maturity securities

 

$

2,440,181

 

 

$

2,538,197

 

 

 
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:

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

 

Cost

 

 

Fair value

 

 

Cost

 

 

Fair value

 

 

 

(In thousands)

 

Fixed-maturity securities

 

$

35,179

 

 

$

35,046

 

 

$

16,359

 

 

$

16,300

 

 
Net Investment Income

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

 

 

Three months ended March 31,

 

 

 

2021

 

 

2020

 

 

 

(In thousands)

 

Fixed-maturity securities (available-for-sale)

 

$

20,020

 

 

$

20,784

 

Fixed-maturity security (held-to-maturity)

 

 

15,146

 

 

 

13,472

 

Equity securities

 

 

391

 

 

 

451

 

Policy loans and other invested assets

 

 

231

 

 

 

189

 

Cash and cash equivalents

 

 

119

 

 

 

843

 

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

 

 

575

 

 

 

(4,549

)

  Gross investment income

 

 

36,482

 

 

 

31,190

 

Investment expenses

 

 

(1,284

)

 

 

(2,298

)

   Investment income net of investment expenses

 

 

35,198

 

 

 

28,892

 

Interest expense on surplus note

 

 

(15,146

)

 

 

(13,472

)

    Net investment income

 

$

20,052

 

 

$

15,420

 

(1)

Included $(0.8) million and $(6.4) million of net losses recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement for the three months ended March 31, 2021 and 2020, respectively.

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 March 31,

 

 

 

2021

 

 

2020

 

 

 

(In thousands)

 

Net realized investment gains (losses):

 

 

 

 

 

 

 

 

Gross gains from sales of available-for-sale securities

 

$

765

 

 

$

357

 

Gross losses from sales of available-for-sale securities

 

 

(143

)

 

 

(66

)

Credit losses on available-for-sale securities

 

 

(154

)

 

 

(3,701

)

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

 

 

1,424

 

 

 

(6,672

)

Gains (losses) from bifurcated options

 

 

(17

)

 

 

52

 

Gains (losses) on trading securities

 

 

(109

)

 

 

-

 

Net realized investment gains (losses)

 

$

1,766

 

 

$

(10,030

)
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 March 31,

 

 

 

2021

 

 

2020

 

 

 

(In thousands)

 

Proceeds from sales or other redemptions

 

$

105,386

 

 

$

141,917

 
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 March 31,

 

 

 

2021

 

 

2020

 

 

 

(In thousands)

 

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

 

$

1,424

 

 

$

(6,672

)

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

 

 

-

 

 

 

-

 

Net gains (losses) recognized in net income on equity

  securities still held as of period-end

 

$

1,424

 

 

$

(6,672

)
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 March 31, 2021, aggregated by major security type and length of time such securities have continuously been in an unrealized loss position:

 

 

March 31, 2021

 

 

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

 

$

1,594

 

 

$

(20

)

 

$

-

 

 

$

-

 

 

Foreign government

 

 

27,174

 

 

 

(2,267

)

 

 

-

 

 

 

-

 

 

States and political subdivisions

 

 

24,656

 

 

 

(777

)

 

 

-

 

 

 

-

 

 

Corporates

 

 

306,273

 

 

 

(11,344

)

 

 

28,946

 

 

 

(985

)

 

Residential mortgage-backed securities

 

 

22,400

 

 

 

(304

)

 

 

1,782

 

 

 

(57

)

 

Commercial mortgage-backed securities

 

 

41,870

 

 

 

(641

)

 

 

207

 

 

 

(3

)

 

Other asset-backed securities

 

 

12,634

 

 

 

(120

)

 

 

7,206

 

 

 

(153

)

 

Total fixed-maturity securities

 

 

436,601

 

 

 

(15,473

)

 

 

38,141

 

 

 

(1,198

)

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

 

50,758

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

Total short-term investments

 

 

50,758

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

Total fixed-maturity securities and short-term investments

 

$

487,359

 

 

$

(15,474

)

 

$

38,141

 

 

$

(1,198

)

 

 

 

 

December 31, 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

 

$

1,619

 

 

$

(3

)

 

$

-

 

 

$

-

 

Foreign government

 

 

4,034

 

 

 

(39

)

 

 

-

 

 

 

-

 

States and political subdivisions

 

 

449

 

 

 

(1

)

 

 

-

 

 

 

-

 

Corporates

 

 

68,057

 

 

 

(1,628

)

 

 

11,964

 

 

 

(917

)

Residential mortgage-backed securities

 

 

1,672

 

 

 

(35

)

 

 

862

 

 

 

(19

)

Commercial mortgage-backed securities

 

 

10,200

 

 

 

(50

)

 

 

2,168

 

 

 

(6

)

Other asset-backed securities

 

 

11,988

 

 

 

(536

)

 

 

3,150

 

 

 

(49

)

Total fixed-maturity securities

 

$

98,019

 

 

$

(2,292

)

 

$

18,144

 

 

$

(991

)
Schedule of Securities in Allowance for Credit Losses

The rollforward of the allowance for credit losses on available-for-sale securities were as follows:

 

 

Three months ended March 31,

 

 

 

2021

 

 

2020

 

 

 

(In thousands)

 

Allowance for credit losses, beginning of period

 

$

-

 

 

$

-

 

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

 

 

154

 

 

 

37

 

Allowance for credit losses, end of period

 

$

154

 

 

$

37