Investments

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Investments

Note 3. Investments

The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of March 31, 2022 and December 31, 2021.

Fixed maturities were comprised of the following:

	March 31, 2022
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	47,852	$	172	$	2,098	$	49,778
Obligations of states and political subdivisions		11,058		228		63		10,893
Corporate securities:
Utilities and telecom		27,051		955		695		26,791
Financial services		65,895		1,868		1,250		65,277
Other business – diversified		36,107		1,255		823		35,675
Other consumer – diversified		51,832		1,701		714		50,845
Total corporate securities		180,885		5,779		3,482		178,588
Redeemable preferred stocks:
Other consumer – diversified		243		50		—		193
Total redeemable preferred stocks		243		50		—		193
Total fixed maturities	$	240,038	$	6,229	$	5,643	$	239,452

	December 31, 2021
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	50,298	$	763	$	416	$	49,951
Obligations of states and political subdivisions		11,644		749		—		10,895
Corporate securities:
Utilities and telecom		29,717		2,961		44		26,800
Financial services		70,921		6,759		48		64,210
Other business – diversified		40,216		4,631		106		35,691
Other consumer – diversified		57,940		7,185		103		50,858
Total corporate securities		198,794		21,536		301		177,559
Redeemable preferred stocks:
Other consumer – diversified		250		58		—		192
Total redeemable preferred stocks		250		58		—		192
Total fixed maturities	$	260,986	$	23,106	$	717	$	238,597

Bonds having an amortized cost of $10,879 and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2022 and December 31, 2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $4,762 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta (“FHLB”) at March 31, 2022 and December 31, 2021, respectively.

Equity securities were comprised of the following:

	March 31, 2022
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	878	$	605	$	—	$	273
Other business – diversified		20,438		15,805		—		4,633
Total equity securities	$	21,316	$	16,410	$	—	$	4,906

	December 31, 2021
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	799		525		—		274
Other business – diversified		18,325		13,692		—		4,633
Total equity securities	$	19,124	$	14,217	$	—	$	4,907

The carrying value and amortized cost of the Company’s investments in fixed maturities at March 31, 2022 and December 31, 2021 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

	March 31, 2022				December 31, 2021
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	1,407	$	1,403	$	1,734	$	1,730
Due after one year through five years		29,051		28,969		24,926		23,593
Due after five years through ten years		65,067		65,159		73,725		68,338
Due after ten years		107,568		105,175		122,045		106,181
Asset backed securities		36,945		38,746		38,556		38,755
Totals	$	240,038	$	239,452	$	260,986	$	238,597

The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of March 31, 2022 and December 31, 2021.

	March 31, 2022
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	33,399	$	1,555	$	5,041	$	543	$	38,440	$	2,098
Obligations of states and political subdivisions		3,394		63		—		—		3,394		63
Corporate securities		65,680		2,732		4,978		750		70,658		3,482
Total temporarily impaired securities	$	102,473	$	4,350	$	10,019	$	1,293	$	112,492	$	5,643

	December 31, 2021
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	30,141	$	416	$	—	$	—	$	30,141	$	416
Corporate securities		3,326		49		4,761		252		8,087		301
Total temporarily impaired securities	$	33,467	$	465	$	4,761	$	252	$	38,228	$	717

The evaluation for an other than temporary impairment (“OTTI”) is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management’s intent and ability to hold the securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer’s continued satisfaction of its obligations in accordance with their contractual terms, and management’s expectation as to the issuer’s ability and intent to continue to do so, as well as ratings actions that may affect the issuer’s credit status.

There were no OTTI charges recorded during the three month periods ended March 31, 2022 and 2021.

As of March 31, 2022 and December 31, 2021, there were 141 and 61 securities, respectively, in an unrealized loss position which primarily included certain of the Company’s investments in fixed maturities within the utilities and telecom, financial services, other diversified business and other diversified consumer sectors. The increase in the number of securities in an unrealized loss position during the three month period ended March 31, 2022, was primarily attributable to a decline in market values in certain of the Company’s fixed maturity securities as a result of a rising interest rate environment.  The Company does not currently intend to sell, nor does it expect to be required to sell, any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of March 31, 2022.

The following table is a summary of realized investment gains (losses) for the three month period ended March 31, 2022 and 2021.

	Three Months Ended March 31, 2022
	Fixed Maturities			Equity Securities		Other Invested Assets		Total
Gains	$	—		$	—	$	—	$	—
Losses		(10	)		—		—		(10	)
Realized investment losses, net	$	(10	)	$	—	$	—	$	(10	)

	Three Months Ended March 31, 2021
	Fixed Maturities		Equity Securities		Other Invested Assets		Total
Gains	$	121	$	—	$	—	$	121
Losses		—		—		—		—
Realized investment gains, net	$	121	$	—	$	—	$	121

The following table presents the portion of unrealized gains related to equity securities still held for the three month period ended March 31, 2022 and 2021.

	Three Months Ended March 31,
	2022		2021
Net realized and unrealized gains recognized during the period on equity securities	$	2,193	$	744
Less: Net realized gains recognized during the period on equity securities sold during the period		—		—
Unrealized gains recognized during the reporting period on equity securities, net	$	2,193	$	744

Variable Interest Entities

The Company holds passive interests in a number of entities that are considered to be variable interest entities (“VIEs”) under GAAP guidance. The Company’s VIE interests principally consist of interests in limited partnerships and limited liability companies formed for the purpose of achieving diversified equity returns. The Company’s VIE interests, carried as a part of other invested assets, totaled $420 and $198 as of March 31, 2022 and December 31, 2021, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 as of March 31, 2022 and December 31, 2021.

The Company does not have power over the activities that most significantly impact the economic performance of these VIEs and thus is not the primary beneficiary. Therefore, the Company has not consolidated these VIEs. The Company’s involvement with each VIE is limited to its direct ownership interest in the VIE. The Company has no arrangements with any of the VIEs to provide other financial support to or on behalf of the VIE. The Company’s maximum loss exposure relative to these investments was limited to the carrying value of the Company’s investment in the VIEs, which amount to $1,658 and $1,436, as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the Company had outstanding commitments totaling $12,777 and $1,997, respectively, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses.