Investments

9 Months Ended

Sep. 30, 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 September 30, 2022 and December 31, 2021.

Fixed maturities were comprised of the following:

	September 30, 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	$	43,069	$	—	$	5,950	$	49,019
Obligations of states and political subdivisions		9,151		12		1,749		10,888
Corporate securities:
Utilities and telecom		21,557		69		3,789		25,277
Financial services		57,844		392		8,310		65,762
Other business – diversified		29,125		57		5,534		34,602
Other consumer – diversified		41,332		19		7,456		48,769
Total corporate securities		149,858		537		25,089		174,410
Redeemable preferred stocks:
Other consumer – diversified		225		32		—		193
Total redeemable preferred stocks		225		32		—		193
Total fixed maturities	$	202,303	$	581	$	32,788	$	234,510

	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 $11,002 and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of September 30, 2022 and December 31, 2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $7,253 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta ("FHLB") at September 30, 2022 and December 31, 2021, respectively.

Equity securities were comprised of the following:

	September 30, 2022
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	723	$	450	$	—	$	273
Other business – diversified		12,944		8,311		—		4,633
Total equity securities	$	13,667	$	8,761	$	—	$	4,906

	December 31, 2021
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		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 September 30, 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.

	September 30, 2022				December 31, 2021
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	3,878	$	3,902	$	1,734	$	1,730
Due after one year through five years		31,232		33,213		24,926		23,593
Due after five years through ten years		50,437		57,741		73,725		68,338
Due after ten years		84,146		102,116		122,045		106,181
Asset backed securities		32,610		37,538		38,556		38,755
Totals	$	202,303	$	234,510	$	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 September 30, 2022 and December 31, 2021.

	September 30, 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	$	28,463	$	3,153	$	14,606	$	2,797	$	43,069	$	5,950
Obligations of states and political subdivisions		7,124		1,749		—		—		7,124		1,749
Corporate securities		134,686		23,266		5,375		1,823		140,061		25,089
Total temporarily impaired securities	$	170,273	$	28,168	$	19,981	$	4,620	$	190,254	$	32,788

	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 and nine month periods ended September 30, 2022 and 2021.

As of September 30, 2022 and December 31, 2021, there were 235 and 61 securities, respectively, in an unrealized loss position, which primarily included certain of the Company’s investments in fixed maturities within the financial services, other diversified business and other diversified consumer sectors. The increase in the number of securities in an unrealized loss position during the nine month period ended September 30, 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 September 30, 2022.

The following tables summarize realized investment gains for the three month and nine month periods ended September 30, 2022 and 2021.

	Three Months Ended September 30, 2022
	Fixed Maturities		Equity Securities		Other Invested Assets		Total
Gains	$	101	$	—	$	—	$	101
Losses		—		—		—		—
Realized investment gains, net	$	101	$	—	$	—	$	101

	Three Months Ended September 30, 2021
	Fixed Maturities		Equity Securities		Other Invested Assets		Total
Gains	$	349	$	—	$	—	$	349
Losses		—		—		—		—
Realized investment gains, net	$	349	$	—	$	—	$	349

	Nine Months Ended September 30, 2022
	Fixed Maturities			Equity Securities		Other Invested Assets			Total
Gains	$	101		$	—	$	—		$	101
Losses		(53	)		—		(19	)		(72	)
Realized investment gains (losses), net	$	48		$	—	$	(19	)	$	29

	Nine Months Ended September 30, 2021
	Fixed Maturities		Equity Securities		Other Invested Assets		Total
Gains	$	520	$	—	$	—	$	520
Losses		—		—		—		—
Realized investment gains, net	$	520	$	—	$	—	$	520

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month and nine month periods ended September 30, 2022 and 2021.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Net realized and unrealized gains (losses) recognized during the period on equity securities	$	(2,783	)	$	711	$	(5,456	)	$	5,458
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period		—			—		—			—
Unrealized gains (losses) recognized during the reporting period on equity securities, net	$	(2,783	)	$	711	$	(5,456	)	$	5,458

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 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 $5,421 and $198 as of September 30, 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 September 30, 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 $6,659 and $1,436, as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021, the Company had outstanding commitments totaling $5,872 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.