Investments

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

INVESTMENTS

The Company invests primarily in fixed maturity securities, which totaled 86.9% of total cash and invested assets at September 30, 2022, as shown below.

Carrying Value (In thousands, except for %)	September 30, 2022				December 31, 2021
	Amount		%		Amount	%
Cash and invested assets:
Fixed maturity securities	$	1,161,048	86.9	%	1,470,617	89.0	%
Equity securities	11,789		0.9	%	14,844	0.9	%
Policy loans	78,085		5.8	%	80,307	4.9	%
Other long-term investments	62,717		4.7	%	57,399	3.5	%
Short-term investments	1,241		0.1	%	—	—	%
Cash and cash equivalents	21,007		1.6	%	27,294	1.7	%
Total cash and invested assets	$	1,335,887	100.0	%	1,650,461	100.0	%

The following tables represent the amortized cost, gross unrealized gains and losses and fair value of fixed maturity securities as of the dates indicated.

	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
September 30, 2022
(In thousands)
Fixed maturity securities:
Available-for-sale:
U.S. Treasury securities	$	9,448	190	10	9,628
U.S. Government-sponsored enterprises	3,441		272	—	3,713
States and political subdivisions	349,835		1,686	36,222	315,299
Corporate:
Financial	237,294		189	46,131	191,352
Consumer	249,551		562	50,401	199,712
Utilities	114,259		5	25,643	88,621
Energy	76,175		—	13,377	62,798
All other	184,197		669	32,737	152,129
Commercial mortgage-backed	50		—	—	50
Residential mortgage-backed	110,610		8	9,807	100,811
Asset-backed	39,817		—	2,984	36,833
Foreign governments	100		2	—	102
Total fixed maturity securities	$	1,374,777	3,583	217,312	1,161,048

	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
December 31, 2021
(In thousands)
Fixed maturity securities:
Available-for-sale:
U.S. Treasury securities	$	9,515	1,097	1	10,611
U.S. Government-sponsored enterprises	3,463		996	—	4,459
States and political subdivisions	356,594		28,056	692	383,958
Corporate:
Financial	213,652		22,477	172	235,957
Consumer	219,223		23,658	900	241,981
Utilities	105,738		7,358	801	112,295
Energy	76,989		7,334	68	84,255
All other	196,403		22,497	380	218,520
Residential mortgage-backed	117,755		16,046	6	133,795
Asset-backed	44,322		368	14	44,676
Foreign governments	101		9	—	110
Total fixed maturity securities	$	1,343,755	129,896	3,034	1,470,617

Most of the Company's equity securities are diversified stock and bond mutual funds.

 

Fair Value (In thousands)	September 30, 2022		December 31, 2021
Equity securities:
Stock mutual funds	$	2,865	3,571
Bond mutual funds	4,136		5,060
Common stock	769		990
Non-redeemable preferred stock	10		161
Non-redeemable preferred stock fund	4,009		5,062
Total equity securities	$	11,789	14,844

VALUATION OF INVESTMENTS

Available-for-sale ("AFS") fixed maturity securities are reported in the consolidated financial statements at fair value. Equity securities are measured at fair value with the change in fair value recorded through net income (loss). The Company recognized net investment related losses of $0.9 million and $2.9 million on equity securities held for the three and nine months ended September 30, 2022 and losses of $0.4 million and gains of $0.2 million for the same periods ended September 30, 2021, respectively.

The Company considers several factors in its review and evaluation of individual investments, using the process described in Part IV, Item 15, Note 2. Investments in the notes to the consolidated financial statements of our Form 10-K to determine whether a credit valuation loss exists. For the three and nine months ended September 30, 2022 and 2021, the Company recorded no credit valuation losses on fixed maturity securities.

The following tables present the fair values and gross unrealized losses of fixed maturity securities that are not deemed to have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position at September 30, 2022 and December 31, 2021.

September 30, 2022	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
Fixed maturity securities:
Available-for-sale securities:
U.S. Treasury securities	$	—	—	—	64	10	2	64	10	2
U.S. Government-sponsored enterprises	224		—	1	—	—	—	224	—	1
States and political subdivisions	202,975		35,836	255	627	386	2	203,602	36,222	257
Corporate:
Financial	185,874		45,602	253	778	529	1	186,652	46,131	254
Consumer	178,490		46,447	240	6,355	3,954	10	184,845	50,401	250
Utilities	84,016		22,774	162	4,557	2,869	6	88,573	25,643	168
Energy	62,798		13,377	83	—	—	—	62,798	13,377	83
All Other	142,448		31,285	183	2,799	1,452	2	145,247	32,737	185
Commercial mortgage-backed	49		—	1	—	—	—	49	—	1
Residential mortgage-backed	100,546		9,807	100	—	—	—	100,546	9,807	100
Asset-backed	34,177		2,732	41	2,655	252	6	36,832	2,984	47
Total fixed maturity securities	$	991,597	207,860	1,319	17,835	9,452	29	1,009,432	217,312	1,348

December 31, 2021	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
Fixed maturity securities:
Available-for-sale securities:
U.S. Treasury securities	$	72	1	2	—	—	—	72	1	2
States and political subdivisions	21,715		692	15	—	—	—	21,715	692	15
Corporate:
Financial	8,059		86	15	1,227	86	1	9,286	172	16
Consumer	29,494		777	28	2,419	123	1	31,913	900	29
Utilities	19,072		401	14	4,523	400	4	23,595	801	18
Energy	7,381		68	8	—	—	—	7,381	68	8
All Other	14,312		380	16	—	—	—	14,312	380	16
Residential mortgage-backed	1,084		6	6	—	—	—	1,084	6	6
Asset-backed	9,078		12	11	663	2	1	9,741	14	12
Total fixed maturity securities	$	110,267	2,423	115	8,832	611	7	119,099	3,034	122

In each category of our fixed maturity securities described above, we do not intend to sell our investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. These unrealized losses on fixed maturity securities are due to noncredit-related factors, including widening credit spreads and rising interest rates since purchase, which have little bearing on the recoverability of our investments, hence they are not recognized as credit losses. The fair value is expected to recover as the securities approach maturity or if market yields for such investments decline. As of September 30, 2022 and December 31, 2021, 98.6% and 98.0%, respectively, of the fair value of our fixed maturity securities portfolio was rated investment grade. While the losses are currently unrealized, we continue to monitor all fixed maturity securities on an ongoing basis as future information may become available which could result in an allowance being recorded.

The amortized cost and fair value of fixed maturity securities at September 30, 2022 by contractual maturity are shown in the table below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date have been reflected based upon final stated maturity.

September 30, 2022	Amortized Cost		Fair Value
(In thousands)
Fixed maturity securities:
Due in one year or less	$	22,156	22,244
Due after one year through five years	118,051		115,766
Due after five years through ten years	228,829		214,219
Due after ten years	1,005,741		808,819
Total fixed maturity securities	$	1,374,777	1,161,048

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.  

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
(In thousands)	2022		2021	2022	2021
Fixed maturity securities, available-for-sale:
Proceeds	$	1,520	984	30,348	8,238
Gross realized gains	$	19	89	120	189
Gross realized losses	$	1	—	103	1

The Company sold 2 and 19 AFS fixed maturity securities during the three and nine months ended September 30, 2022 and 10 and 28 during the three and nine months ended September 30, 2021, respectively.