Investments

12 Months Ended

Dec. 31, 2023

Investments [Abstract]

Investments

Note 2. Investments

The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses, allowance for credit losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of December 31, 2023 and December 31, 2022.

Fixed maturities were comprised of the following:

	2023
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	50,059	$	63	$	4,944	$	—	$	54,940
Obligations of states and political subdivisions		8,106		15		1,424		—		9,515
Corporate securities:
Utilities and telecom		21,309		143		2,582		—		23,748
Financial services		59,584		560		4,931		—		63,955
Other business – diversified		34,386		403		2,940		—		36,923
Other consumer – diversified		44,570		87		4,870		—		49,353
Total corporate securities		159,849		1,193		15,323		—		173,979
Redeemable preferred stocks:
Other consumer – diversified		205		13		—		—		192
Total redeemable preferred stocks		205		13		—		—		192
Total fixed maturities	$	218,219	$	1,284	$	21,691	$	—	$	238,626

	2022
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	44,412	$	5	$	5,926	$	50,333
Obligations of states and political subdivisions		9,187		4		1,702		10,885
Corporate securities:
Utilities and telecom		22,090		120		3,299		25,269
Financial services		59,054		397		7,085		65,742
Other business – diversified		31,058		161		4,689		35,586
Other consumer – diversified		42,705		35		6,089		48,759
Total corporate securities		154,907		713		21,162		175,356
Redeemable preferred stocks:
Other consumer – diversified		223		31		—		192
Total redeemable preferred stocks		223		31		—		192
Total fixed maturities	$	208,729	$	753	$	28,790	$	236,766

Bonds having an amortized cost of $14,647 and $12,333 and included in the tables above were on deposit with insurance regulatory authorities at December 31, 2023 and 2022, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $9,584 and $7,221 and included in the tables above were pledged as collateral to FHLB at December 31, 2023 and 2022, respectively.

	2023
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services		924		621		—		303
Communications		8,489		3,856		—		4,633
Total equity securities	$	9,413	$	4,477	$	—	$	4,936

	2022
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services		790		516		—		274
Communications		10,772		6,139		—		4,633
Total equity securities	$	11,562	$	6,655	$	—	$	4,907

The carrying value and amortized cost of the Company’s investments in fixed maturities at December 31, 2023 and 2022 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.

	2023				2022
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	1,715	$	1,750	$	3,776	$	3,797
Due after one year through five years		60,423		62,423		40,150		42,174
Due after five years through ten years		33,596		36,752		44,044		49,711
Due after ten years		86,857		97,984		87,719		103,095
Asset backed securities		35,628		39,717		33,040		37,989
Totals	$	218,219	$	238,626	$	208,729	$	236,766

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 December 31, 2023 and 2022.

	2023
	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	$	5,194	$	37	$	39,476	$	4,907	$	44,670	$	4,944
Obligations of states and political subdivisions		1,145		3		5,936		1,421		7,081		1,424
Corporate securities		539		13		138,283		15,310		138,822		15,323
Total temporarily impaired securities	$	6,878	$	53	$	183,695	$	21,638	$	190,573	$	21,691

	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	$	23,763	$	2,410	$	19,259	$	3,516	$	43,022	$	5,926
Obligations of states and political subdivisions		8,183		1,702		—		—		8,183		1,702
Corporate securities		127,928		16,214		14,514		4,948		142,442		21,162
Total temporarily impaired securities	$	159,874	$	20,326	$	33,773	$	8,464	$	193,647	$	28,790

Analysis of Securities in Unrealized Loss Positions

As of December 31, 2023 and 2022, there were 311 and 237 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 unrealized losses on the Company’s fixed maturity securities investments have been primarily related to general market changes in interest rates and/or the levels of credit spreads rather than specific concerns with the issuer’s ability to pay interest and repay principal.

For any of its fixed maturity securities with significant declines in fair value, the Company performs detailed analyses to identify whether the drivers of the declines are due to general market drivers, such as the recent increases in interest rates, or due to credit-related factors. Identifying the drivers of the declines in fair value helps to align and allocate the Company‘s resources to securities with real credit-related concerns that could impact the ultimate collection of principal and interest. For any significant declines in fair value determined to be non-interest rate or market related, the Company performs a more focused review of the related issuers’ specific credit profile.

For corporate issuers, the Company evaluates their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, the Company analyzes all reasonably available sources of credit support, including issuer-specific factors. The Company utilizes information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. The Company also considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer’s capital structure, covenant protections, or other relevant features. From these reviews, the Company evaluates the issuers’ continued ability to service the Company’s investment through payment of interest and principal.

Assuming no credit-related factors develop, unrealized gains and losses on fixed maturity securities are expected to diminish as investments near maturity. Based on its credit analysis, the Company believes that the issuers of its fixed maturity investments in the sectors shown in the table above have the ability to service their obligations to the Company. In addition, the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

However, from time to time the Company identifies certain available-for-sale fixed maturity securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit related factors and as a result, a credit allowance will be estimated.  The Company had no ACL on its available-for-sale fixed maturities as of December 31, 2023. The Company did not record any other than temporary impairments as of December 31, 2022.

Investment income was earned from the following sources:

	2023		2022
Fixed maturities	$	9,333	$	9,141
Equity securities		332		327
Other		646		729
		10,311		10,197
Investment expenses		253		265
Net investment income	$	10,058	$	9,932

A summary of realized investment gains (losses) follows:

	2023
	Fixed Maturities		Equity Securities		Other Invested Assets		Total
Gains	$	70	$	—	$	—	$	70
Losses		—		—		—		—
Realized investment gains, net	$	70	$	—	$	—	$	70

	2022
	Fixed Maturities			Equity Securities		Other Invested Assets			Total
Gains	$	101		$	—	$	1		$	102
Losses		(52	)		—		(20	)		(72	)
Realized investment gains (losses), net	$	49		$	—	$	(19	)	$	30

Proceeds from the sales of available-for-sale fixed maturities were as follows:

	2023		2022
Sales proceeds	$	5,035	$	3,649
Gross gains		70		101
Gross losses		—		—

Proceeds from the sales of equity securities were as follows:

	2023		2022
Sales proceeds	$	2	$	1
Gross gains		—		—
Gross losses		—		—

Proceeds from the sales of other invested assets were as follows:

	2023		2022
Sales proceeds	$	—	$	161
Gross gains		—		1
Gross losses		—		(20	)

Sales of available-for-sale securities in 2023 and 2022 were primarily a result of improving the overall risk versus return profile of the portfolio. In addition, the Company sold its interest in a certain limited liability company held as other invested assets to a third-party in 2022.

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the years ended December 31, 2023 and 2022.

	2023			2022
Net realized and unrealized gains (losses) recognized during the period on equity securities	$	(2,177	)	$	(7,562	)
Less: Net realized gains recognized during the period on equity securities sold during the period		—			—
Unrealized gains (losses) on equity securities, net	$	(2,177	)	$	(7,562	)

The Company’s bond portfolio included 99% investment grade securities, as defined by the NAIC, at December 31, 2023 and 2022.

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 $6,381 and $5,386 at December 31, 2023 and 2022, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 at December 31, 2023 and 2022.

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 $7,619 and $6,624, at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the Company had outstanding commitments totaling $4,518 and $5,872, 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. The reduction in the Company’s outstanding commitments was a result of an additional investment of $1,354 in the partnership.