Investments in and Advances to Affiliates, Schedule of Investments [Text Block]

12 Months Ended

Dec. 31, 2019

Notes

Investments in and Advances to Affiliates, Schedule of Investments

Note 6.Other Investments, Including Variable Interest Entities    Other investments consist of the following for the periods indicated (in thousands): 

		December 31,
		2019		2018
Equity method investments	$	10,171	$	12,308
Equity investments carried at cost less impairments		5,000		850
Other investments and securities, at cost		37		34
	$	15,208	$	13,192

Equity Method Investments

Equity income (loss) from equity method investments for the years ended December 31, 2019 and 2018 was $1,304,000 and $(2,111,000), respectively.

Included in equity method investments above is our investment in Ebix Health Exchange, an administration exchange for health insurance. Ebix Health Exchange administers various lines of health insurance for IHC’s insurance subsidiaries. In the fourth quarter of 2019, the Company determined that, due to recurring losses historically and uncertainty for future profitability, there was sufficient evidence to indicate that the carrying value of the Company’s investment in Ebix Health Exchange was no longer recoverable. As a result, the Company recorded an other-than-temporary impairment loss of $3,712,000 which is included in other income on the Consolidated Statement of Income for the year ended December 31, 2019. At December 31, 2019, the carrying value of the Company’s equity investment in Ebix Health Exchange is $0 compared to $6,425,000 at December 31, 2018. The Company recorded equity losses of $2,713,000 and $1,763,000, respectively, from its investment for the years ended December 31, 2019 and 2018.

In 2019, the Company also: (i) acquired substantially all of the assets and liabilities of a sales and customer service call center that was previously accounted for as an equity method investment (See Note 7 for more information); (ii) paid $3,000,000 for an equity interest in a lead generation company that will be accounted for as an equity method investment; and (iii) received an aggregate $1,772,000 of distributions from equity method investments.

Equity Investments Carried at Cost Less Impairments

In March 2019, the Company’s equity investment in Pets Best Insurance Services, LLC, carried at a cost of $500,000, was acquired by an unaffiliated entity and the Company realized a gain of $3,589,000 on the sale, which is included in Other Income in the Consolidated Statement of Income for the year ended December 31, 2019.

In the fourth quarter of 2019, the Company paid $5,000,000 for an equity interest in FIGO, a leading insuretech brand company in the pet insurance space focused on referral partners as well as direct-to-consumer and employer benefit channels.

In the fourth quarter of 2018, the Company recorded an impairment loss amounting to $2,275,000 related to an equity investment, previously carried at cost, as a result of a bona fide offer to purchase the investment for less than the carrying amount. The impairment loss is included in other income on the Consolidated Statements of Income for the year ended December 31, 2018. The subsequent sale was completed in 2019.

Variable Interest Entities

Other investments at December 31, 2019 and 2018, shown in the table above, include $5,075,000 and $2,874,000, respectively, of noncontrolling interests in certain limited partnerships that we have determined to be Variable Interest Entities (“VIEs”).  The aforementioned VIEs are not required to be consolidated in the Company’s consolidated financial statements as we are not the primary beneficiary since we do not have the power to direct the activities that most significantly impact the VIEs’ economic performance.

The Company will periodically reassess whether it is the primary beneficiary in any of these investments. The reassessment process will consider whether it has acquired the power to direct the most significant activities of the VIEs through changes in governing documents or other circumstances. The Company’s maximum loss exposure is limited to the combined $5,075,000 carrying value in these equity investments and the Company has no future funding obligations to them.

Related Party Transactions

At December 31, 2019 and 2018, the Company’s Consolidated Balance Sheets include $5,000 and $1,842,000, respectively, of notes and other amounts receivable from Ebix Health Exchange, and include $250,000 and $910,000, respectively, of administrative fees and other expenses payable to Ebix Health Exchange, which are included in other assets and accounts payable, accruals and other liabilities, respectively. Recurring losses reported by Ebix Health Exchange, and uncertainty regarding their future profitability, made the collectability of the outstanding notes receivable from Ebix Health Exchange doubtful and as a result, the Company recorded a provision for losses related to these notes in the amount of $1,773,000, which is included in selling, general and administrative expenses on the Consolidated Statement of Income for the year ended December 31, 2019. For the years ended December 31, 2019 and 2018, the Company’s Consolidated Statements of Income include administrative fee expenses to Ebix Health Exchange, which are included in fee income and selling, general and administrative expenses, of $2,180,000 and $7,779,000, respectively.

Selling, general and administrative expense for the year ended December 31, 2019 includes approximately $6,940,000 of expense related to the purchase of leads from an affiliated lead generation company.