Investments

3 Months Ended

Sep. 30, 2023

Investments Debt Equity Securities [Abstract]

3. Investments

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $21.2 million and $23.4 million as of September 30, 2023 and March 31, 2023, respectively.

Available-for-Sale Investments

Available-for-sale investments as of September 30, 2023 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Allowance for Expected Credit Losses		Fair Market Value
		(Unaudited)
		(In thousands)
U.S. treasury securities and government obligations	$	172,987	$	335	$	(2,315)	$	(116)	$	–	$	170,891
U.S. government agency mortgage-backed securities		99,230		1		(3,703)		(5,009)		–		90,519
Obligations of states and political subdivisions		154,547		441		(4,261)		(5,064)		–		145,663
Corporate securities		1,817,003		983		(154,177)		(47,305)		(1,697)		1,614,807
Mortgage-backed securities		514,679		206		(40,394)		(24,243)		–		450,248
	$	2,758,446	$	1,966	$	(204,850)	$	(81,737)	$	(1,697)	$	2,472,128

Available-for-sale investments as of March 31, 2023 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Allowance for Expected Credit Losses		Fair Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	353,189	$	3,061	$	(7,639)	$	(3,935)	$	–	$	344,676
U.S. government agency mortgage-backed securities		34,126		40		(6,707)		(228)		–		27,231
Obligations of states and political subdivisions		161,960		649		(4,014)		(8,090)		–		150,505
Corporate securities		2,086,432		1,491		(60,224)		(156,365)		(2,101)		1,869,233
Mortgage-backed securities		370,880		78		(40,359)		(13,207)		–		317,392
	$	3,006,587	$	5,319	$	(118,943)	$	(181,825)	$	(2,101)	$	2,709,037

We sold available-for-sale securities with a fair value of $165.4 million and $105.5 million during the first six months of fiscal 2024 and 2023, respectively. The gross realized gains on these sales totaled $1.5 million and $0.8 million during the first six months of fiscal 2024 and 2023, respectively. The gross realized losses on these sales totaled $1.1 million and $0.3 million during the first six months of fiscal 2024 and 2023, respectively. In the first six months of fiscal 2024, we received $225.0 million from the Moving and Storage Treasuries that matured.

For available-for-sale debt securities in an unrealized loss position, we first assess whether the security is below investment grade.  For securities that are below investment grade, we evaluate whether the decline in fair value has resulted from credit losses or other factors such as the interest rate environment. Declines in value due to credit are recognized as an allowance. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse market conditions specifically related to the security, among other factors.  If this assessment indicates that a credit loss exists, cumulative default rates based on ratings are used to determine the potential cost of default, by year.  The present value of these potential costs is then compared to the amortized cost of the security to determine the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through accumulated other comprehensive income, net of applicable taxes. If we intend to sell a security, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, the security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental

 impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. There was a ($0.4) million and $1.9 million net impairment charge recorded in the first six months ended September 30, 2023 and 2022, respectively.

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.

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

		September 30, 2023				March 31, 2023
		Amortized Cost		Fair Market Value		Amortized Cost		Fair Market Value
		(Unaudited)
		(In thousands)
Due in one year or less	$	251,106	$	249,366	$	354,875	$	354,184
Due after one year through five years		599,626		569,012		754,175		717,552
Due after five years through ten years		659,400		590,567		736,089		665,708
Due after ten years		733,486		612,788		790,568		654,201
		2,243,618		2,021,733		2,635,707		2,391,645
Mortgage-backed securities		514,828		450,395		370,880		317,392
	$	2,758,446	$	2,472,128	$	3,006,587	$	2,709,037

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

		September 30, 2023				March 31, 2023
		Amortized Cost		Fair Market Value		Amortized Cost		Fair Market Value
		(Unaudited)
		(In thousands)
Common stocks	$	29,602	$	42,045	$	29,577	$	39,375
Non-redeemable preferred stocks		25,144		19,991		26,054		21,982
	$	54,746	$	62,036	$	55,631	$	61,357

Investments, other

The carrying value of the other investments was as follows:

		September 30,		March 31,
		2023		2023
		(Unaudited)
		(In thousands)
Mortgage loans, net	$	550,913	$	466,531
Short-term investments		–		15,921
Real estate		72,036		72,178
Policy loans		10,986		10,921
Other equity investments		16,216		9,989
	$	650,151	$	575,540