Note 4 - Investments

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Investment [Text Block]

4. Investments

The following table details investments by major investment category, at March 31, 2023 (in thousands):

	Cost or Adjusted/ Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Total
U.S. government and agency securities, held-to-maturity	$	4,116	$	-	$	-	$	4,116
Investments in limited partnership		1,000						1,000
Common stock		250		-		-		250
Total investments	$	5,366	$	-	$	-	$	5,366

The table below summarizes our fixed maturities at March 31, 2023 (dollars in thousands) by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturities of those obligations.

	Cost or Amortized Cost		Percent of Total			Fair Value		Percent of Total
Due in one year or less	$	-		-	%	$	-		-	%
Due after one year through five years		4,116		100.0			4,116		100.0
Due after five years through ten years		-		-			-		-
Due after ten years		-		-			-		-
Total	$	4,116		100.0	%	$	4,116		100.0	%

Fair value measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on our Unaudited Consolidated Balance Sheets at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we can access.

Level 2: Assets and liabilities whose values are based on the following:

a.	Quoted prices for similar assets or liabilities in active markets;
b.	Quoted prices for identical or similar assets or liabilities in markets that are not active; or
c.	Valuation models whose inputs are observable, directly, or indirectly, for substantially the full term of the asset or liability.

Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect our estimates of the assumptions that market participants would use in valuing the assets and liabilities.

We estimate the fair value of our investments using the closing prices on the last business day of the reporting period, obtained from active markets such as the New York Stock Exchange, Nasdaq and NYSE American. For securities for which quoted prices in active markets are unavailable, we use a third-party pricing service that utilizes quoted prices in active markets for similar instruments, benchmark interest rates, broker quotes and other relevant inputs to estimate the fair value of those securities for which quoted prices are unavailable. Our estimates of fair value reflect the interest rate environment that existed as of the close of business on March 31, 2023. Changes in interest rates subsequent to March 31, 2023 may affect the fair value of our investments.

The fair value of our fixed maturities is initially calculated by a third-party pricing service. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of proprietary models, produce valuation information in the form of a single fair value for individual fixed-income and other securities for which a fair value has been requested. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, liquidity spreads, currency rates and other information, as applicable. Credit and liquidity spreads are typically implied from completed transactions and transactions of comparable securities. Valuation service providers also use proprietary discounted cash flow models that are widely accepted in the financial services industry and similar to those used by other market participants to value the same financial information. The valuation models take into account, among other things, market observable information as of the measurement date, as described above, as well as the specific attributes of the security being valued, including its term, interest rate, credit rating, industry sector and, where applicable, collateral quality and other issue or issuer specific information. Executing valuation models effectively requires seasoned professional judgment and experience.

All fixed-income securities are classified as held-to-maturity and are reported at amortized cost as of March 31, 2023. The Company performs ongoing impairment evaluations, and we did not record any other then temporary impairments during the three months ended March 31, 2023.

The Company’s other investments include investments in limited partnerships whose purpose is to invest capital in various growth-oriented enterprises. The Company does not have significant influence over any investee and the Company’s investment typically represents less than 5% of the investee’s ownership. These investments do not meet the criteria of accounting under the equity method.

The following table presents the fair value of our financial instruments measured on a recurring basis by level at March 31, 2023 (in thousands):

	Total		Level 1		Level 2		Level 3
Common stock	$	250	$	-	$	-	$	250
Investments, at fair value		250		-		-		250
Investment in limited partnership		1,000		-		-		-
U.S. government and agency securities, held-to-maturity		4,116		-		-		-
Total investments	$	5,366	$	-	$	-	$	250