XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value, by Balance Sheet Grouping
Assets measured at fair value on a recurring basis are as follows:

September 30, 2020
Level 1Level 2Level 3Total
Debt securities, available-for-sale:
U.S. Treasury$59,181 $— $— $59,181 
Federal agencies263 — — 263 
States and political subdivision bonds— 325,133 2,520 327,653 
Foreign government— 1,862 — 1,862 
Corporate bonds— 2,162,525 5,369 2,167,894 
Residential mortgage-backed securities— 1,125,999 — 1,125,999 
Commercial mortgage-backed securities— 629,848 — 629,848 
Asset-backed securities— 33,156 — 33,156 
Structured securities— 203,277 — 203,277 
Total debt securities, available-for-sale59,444 4,481,800 7,889 4,549,133 
Short-term investments490,800 20,000 — 510,800 
Other investments2,638 — 3,349 5,987 
Total$552,882 $4,501,800 $11,238 $5,065,920 
NGHC$507,135 $4,216,471 $11,238 $4,734,844 
Reciprocal Exchanges45,747 285,329 — 331,076 
Total$552,882 $4,501,800 $11,238 $5,065,920 
December 31, 2019
Level 1Level 2Level 3Total
Debt securities, available-for-sale:
U.S. Treasury$67,006 $— $— $67,006 
Federal agencies3,915 — — 3,915 
States and political subdivision bonds— 298,582 3,100 301,682 
Foreign government— 1,802 — 1,802 
Corporate bonds— 1,908,235 8,328 1,916,563 
Residential mortgage-backed securities— 1,277,460 — 1,277,460 
Commercial mortgage-backed securities— 612,193 — 612,193 
Asset-backed securities— 75,611 — 75,611 
Structured securities— 220,126 — 220,126 
Total debt securities, available-for-sale70,921 4,394,009 11,428 4,476,358 
Short-term investments59,953 7,400 — 67,353 
Other investments4,881 — 4,484 9,365 
Total$135,755 $4,401,409 $15,912 $4,553,076 
NGHC$116,602 $4,091,068 $15,912 $4,223,582 
Reciprocal Exchanges19,153 310,341 — 329,494 
Total$135,755 $4,401,409 $15,912 $4,553,076 
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation
The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets:
States and
political
subdivision
bonds		Corporate
bonds		Other
investments		Total
Balance as of January 1, 2020$3,100 $8,328 $4,484 $15,912 
Total gains (losses) for the period:
Included in net income— — (417)(417)
Included in other comprehensive income(580)(2,959)— (3,539)
Sales— — (718)(718)
Balance as of September 30, 2020$2,520 $5,369 $3,349 $11,238 
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period$(417)$(417)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period$(580)$(2,959)$(3,539)
States and
political
subdivision
bonds		Corporate
bonds		Other
investments		Total
Balance as of January 1, 2019$3,596 $11,767 $7,593 $22,956 
Total gains (losses) for the period:
Included in net income— — (3,012)(3,012)
Included in other comprehensive income(496)(1,987)— (2,483)
Balance as of September 30, 2019$3,100 $9,780 $4,581 $17,461 
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period$(3,012)$(3,012)
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period$(496)$(1,987)$(2,483)
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value:

September 30, 2020December 31, 2019
Input LevelCarrying amountFair valueCarrying amountFair value
7.625% Notes
Level 2$96,993 $101,520 $96,928 $103,560 
6.75% Notes
Level 3347,579 388,866 347,091 371,366 
Subordinated DebenturesLevel 372,168 72,147 72,168 72,103 
2019 Credit AgreementLevel 3140,000 144,267 140,000 148,272