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MERCHANDISE TRUSTS (Tables)

12 Months Ended

Dec. 31, 2021

A reconciliation of the Company’s merchandise trust activities for the years ended December 31, 2021 and 2020 is presented below (in thousands):


	Year ended December 31,
	2021			2020
Balance—beginning of period	$	516,284		$	523,865
Contributions		63,112			51,409
Distributions		(86,918	)		(82,059	)
Interest and dividends		44,629			34,232
Capital gain distributions		12,578			2,330
Realized gains and losses, net		28,004			(1,232	)
Other than temporary impairment		(136	)		(26,714	)
Taxes		(303	)		(408	)
Fees		(6,888	)		(7,077	)
Unrealized change in fair value		(2,509	)		21,938
Total		567,853			516,284
Less: Assets held for sale		—			(14,831	)
Balance—end of period	$	567,853		$	501,453

Cost and Market Value Associated with Assets Held in Trusts

The cost and market value associated with the assets held in the merchandise trusts as of December 31, 2021 and 2020 were as follows (in thousands):


December 31, 2021	Fair Value Hierarchy Level	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments	1	$	51,243	$	—	$	—		$	51,243
Fixed maturities:
U.S. governmental securities	2		1		—		—			1
Corporate debt securities	2		—		1		—			1
Other debt securities	2		—		—		—			—
Total fixed maturities			1		1		—			2
Mutual funds—debt securities	1		6,097		81		(15	)		6,163
Mutual funds—equity securities	1		1,021		245		—			1,266
Other investment funds(1)			457,447		26,008		(4,398	)		479,057
Equity securities	1		14,696		3,316		(2,051	)		15,961
Other invested assets	2		3,766		103		—			3,869
Total investments			534,271		29,754		(6,464	)		557,561
West Virginia Trust Receivable			9,992		300		—			10,292
Total		$	544,263	$	30,054	$	(6,464	)	$	567,853

(1)

Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Company’s consolidated balance sheet. This asset class includes fixed income funds and equity funds, which have redemption periods ranging from 1 to 30 days, and private credit funds, which have lockup periods of zero to fifteen years with three potential one year extensions at the discretion of the funds’ general partners. As of December 31, 2021, there were $112.4 million in unfunded investment commitments to the private credit funds, which are callable at any time. This asset class also includes $125.4 million of direct loans which are accounted for at amortized cost, net of unamortized origination fees, if any, and are categorized as Level 3 investments in the fair value hierarchy. The interest rates on these direct loans are consistent with market rates, and their amortized cost approximates fair value.


December 31, 2020	Fair Value Hierarchy Level	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments	1	$	41,039	$	12	$	—		$	41,051
Fixed maturities:
U.S. governmental securities	2		1		—		—			1
Corporate debt securities	2		2,818		638		—			3,456
Other debt securities	2		23,165		1,578		(1,332	)		23,411
Total fixed maturities			25,984		2,216		(1,332	)		26,868
Mutual funds—debt securities	1		6,097		306		—			6,403
Mutual funds—equity securities	1		26,356		43		(154	)		26,245
Other investment funds(1)			337,565		32,461		(8,812	)		361,214
Equity securities	1		35,055		5,544		(19	)		40,580
Other invested assets	2		3,875		79		—			3,954
Total investments			475,971		40,661		(10,317	)		506,315
West Virginia Trust Receivable			10,190		—		(221	)		9,969
Total		$	486,161	$	40,661	$	(10,538	)	$	516,284
Less: Assets held for sale										(14,831	)
Total		$	486,161	$	40,661	$	(10,538	)	$	501,453

(1)

Contractual Maturities of Debt Securities Held in Trusts

The contractual maturities of debt securities as of December 31, 2021 and 2020 were as follows (in thousands):


December 31, 2021	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
U.S. governmental securities	$	—	$	1	$	—	$	—
Corporate debt securities		—		1		—		—
Other debt securities		—		—		—		—
Total fixed maturities	$	—	$	2	$	—	$	—


December 31, 2020	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
U.S. governmental securities	$	—	$	1	$	—	$	—
Corporate debt securities		—		3,456		—		—
Other debt securities		18,392		5,019		—		—
Total fixed maturities	$	18,392	$	8,476	$	—	$	—

Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts

An aging of unrealized losses on the Company’s investments in debt and equity securities within the merchandise trusts as of December 31, 2021 and 2020 is presented below (in thousands):


	Less than 12 months				12 months or more				Total
December 31, 2021	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturities:
U.S. governmental securities	$	—	$	—	$	297	$	—	$	297	$	—
Corporate debt securities		—		—		620		—		620		—
Other debt securities		—		—		—		—		—		—
Total fixed maturities		—		—		917		—		917		—
Mutual funds—debt securities		890		15		—		—		890		15
Mutual funds—equity securities		—		—		—		—		—		—
Other investment funds		42,645		4,398		—		—		42,645		4,398
Equity securities		3,108		2,050		1		1		3,109		2,051
Total	$	46,643	$	6,463	$	918	$	1	$	47,561	$	6,464


	Less than 12 months				12 months or more				Total
December 31, 2020	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturities:
U.S. governmental securities	$	—	$	—	$	—	$	—	$	—	$	—
Corporate debt securities		—		—		—		—		—		—
Other debt securities		18,392		1,332		—		—		18,392		1,332
Total fixed maturities		18,392		1,332		—		—		18,392		1,332
Mutual funds—debt securities		—		—		—		—		—		—
Mutual funds—equity securities		128		154		—		—		128		154
Other investment funds		75,799		8,812		—		—		75,799		8,812
Equity securities		82		19		—		—		82		19
Total	$	94,401	$	10,317	$	—	$	—	$	94,401	$	10,317