Investments

3 Months Ended

Jun. 30, 2019

Investments Debt Equity Securities [Abstract]

3. Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $31.5 million and $30.8 million at June 30, 2019 and March 31, 2019, respectively.

Available-for-Sale Investments

Available-for-sale investments at June 30, 2019 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(Unaudited)
		(In thousands)
U.S. treasury securities and government obligations	$	135,055	$	3,709	$	(913)	$	(24)	$	137,827
U.S. government agency mortgage-backed securities		41,359		442		(95)		(35)		41,671
Obligations of states and political subdivisions		301,255		13,579		(198)		0		314,636
Corporate securities		1,639,004		36,966		(9,868)		(1,350)		1,664,752
Mortgage-backed securities		147,102		2,834		(127)		(6)		149,803
Redeemable preferred stocks		1,493		57		0		0		1,550
	$	2,265,268	$	57,587	$	(11,201)	$	(1,415)	$	2,310,239

Available-for-sale investments at March 31, 2019 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	136,010	$	2,409	$	(2,104)	$	(447)	$	135,868
U.S. government agency mortgage-backed securities		31,101		433		(146)		(19)		31,369
Obligations of states and political subdivisions		298,955		8,079		(233)		(905)		305,896
Corporate securities		1,613,199		14,777		(14,257)		(24,986)		1,588,733
Mortgage-backed securities		148,203		880		(285)		(903)		147,895
Redeemable preferred stocks		1,493		20		0		(45)		1,468
	$	2,228,961	$	26,598	$	(17,025)	$	(27,305)	$	2,211,229

The available-for-sale tables include gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

We sold available-for-sale securities with a fair value of $37.3 million during the first quarter of fiscal 2020. The gross realized gains on these sales totaled $1.2 million. The gross realized losses on these sales totaled $0.1 million.

The unrealized losses of more than twelve months in the available-for-sale tables are considered temporary declines. We track each investment with an unrealized loss and evaluate them on an individual basis for other-than-temporary impairments, including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management’s future plans. Certain of these investments may have declines determined by management to be other-than-temporary and we recognize these write-downs, if any, through earnings. There were no write-downs in the first quarter of fiscal 2020 or 2019.

The investment portfolio primarily consists of corporate securities and obligations of states and political subdivisions. We believe we monitor our investments as appropriate. Our methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management’s attention that would lead to the belief that any issuer would not have the ability to meet the remaining contractual obligations of the security, including payment at maturity. We have the ability and intent not to sell our fixed maturity and common stock investments for a period of time sufficient to allow us to recover our costs.

The portion of other-than-temporary impairment related to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of mortgage-backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

There were no credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income (loss) (“AOCI”) for the first quarter of fiscal 2020 and fiscal 2019, respectively.

The adjusted cost and estimated market value of available-for-sale investments by contractual maturity were as follows:

		June 30, 2019				March 31, 2019
		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
		(Unaudited)
		(In thousands)
Due in one year or less	$	80,244	$	80,481	$	71,987	$	71,954
Due after one year through five years		553,626		562,599		541,195		540,658
Due after five years through ten years		646,677		660,403		621,031		614,485
Due after ten years		836,126		855,403		845,052		834,769
		2,116,673		2,158,886		2,079,265		2,061,866
Mortgage-backed securities		147,102		149,803		148,203		147,895
Redeemable preferred stocks		1,493		1,550		1,493		1,468
	$	2,265,268	$	2,310,239	$	2,228,961	$	2,211,229

As of June 30, 2019 and March 31, 2019, our common stock and non-redeemable preferred stock that are included in Investments, fixed maturities and marketable equities on our balance sheet are stated in the table below. The changes in the fair value of these equity investments are recognized through Net investment and interest income.

Equity investments of common stock and non-redeemable preferred stock were as follows:

		June 30, 2019				March 31, 2019
		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
		(Unaudited)
		(In thousands)
Common stocks	$	10,123	$	19,035	$	10,123	$	17,379
Non-redeemable preferred stocks		7,451		7,311		7,451		6,789
	$	17,574	$	26,346	$	17,574	$	24,168