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Investments
 12 Months Ended
Dec. 31, 2018
Investments [Abstract]  
Investments
Note B - Investments

The following is a summary of available-for-sale securities at December 31:

  
Fair
Value
  
Cost or
Amortized Cost
  
Gross
Unrealized Gains
  
Gross
Unrealized Losses
  
Net Unrealized
Gains (Losses)
 
December 31, 2018 (1)
               
Fixed income securities
               
Agency collateralized mortgage obligations
 
$
10,687
  
$
10,636
  
$
145
  
$
(94
)
 
$
51
 
Agency mortgage-backed securities
  
37,385
   
37,168
   
371
   
(154
)
  
217
 
Asset-backed securities
  
64,422
   
66,241
   
14
   
(1,833
)
  
(1,819
)
Bank loans
  
9,750
   
10,208
   
27
   
(485
)
  
(458
)
Certificates of deposit
  
2,835
   
2,835
   
–
   
–
   
–
 
Collateralized mortgage obligations
  
5,423
   
5,095
   
376
   
(48
)
  
328
 
Corporate securities
  
190,450
   
196,925
   
127
   
(6,602
)
  
(6,475
)
Mortgage-backed securities
  
38,540
   
38,586
   
377
   
(423
)
  
(46
)
Municipal obligations
  
29,155
   
29,102
   
239
   
(186
)
  
53
 
Non-U.S. government obligations
  
25,180
   
25,339
   
6
   
(165
)
  
(159
)
U.S. government obligations
  
178,818
   
178,369
   
1,252
   
(803
)
  
449
 
Total fixed income securities
 
$
592,645
  
$
600,504
  
$
2,934
  
$
(10,793
)
 
$
(7,859
)

  
Fair
Value
  
Cost or
Amortized Cost
  
Gross
Unrealized Gains
  
Gross
Unrealized Losses
  
Net Unrealized
Gains (Losses)
 
December 31, 2017
               
Fixed income securities
               
Agency collateralized mortgage obligations
 
$
16,586
  
$
15,839
  
$
818
  
$
(71
)
 
$
747
 
Agency mortgage-backed securities
  
27,075
   
27,180
   
47
   
(152
)
  
(105
)
Asset-backed securities
  
43,469
   
42,861
   
749
   
(141
)
  
608
 
Bank loans
  
19,488
   
19,271
   
266
   
(49
)
  
217
 
Certificates of deposit
  
3,135
   
3,124
   
11
   
–
   
11
 
Collateralized mortgage obligations
  
6,492
   
6,079
   
451
   
(38
)
  
413
 
Corporate securities
  
198,349
   
198,419
   
1,602
   
(1,672
)
  
(70
)
Mortgage-backed securities
  
24,204
   
23,656
   
933
   
(385
)
  
548
 
Municipal obligations
  
96,650
   
97,059
   
322
   
(731
)
  
(409
)
Non-U.S. government obligations
  
37,394
   
37,971
   
475
   
(1,052
)
  
(577
)
U.S. government obligations
  
49,011
   
49,558
   
–
   
(547
)
  
(547
)
Total fixed income securities
  
521,853
   
521,017
   
5,674
   
(4,838
)
  
836
 
Equity securities:
                    
Consumer
  
46,578
   
23,565
   
24,031
   
(1,018
)
  
23,013
 
Energy
  
10,278
   
6,763
   
3,602
   
(87
)
  
3,515
 
Financial
  
45,470
   
31,859
   
13,937
   
(326
)
  
13,611
 
Industrial
  
25,402
   
8,949
   
16,793
   
(340
)
  
16,453
 
Technology
  
13,061
   
5,768
   
7,401
   
(108
)
  
7,293
 
Funds (e.g. mutual funds, closed end funds, ETFs)
  
50,291
   
46,177
   
4,153
   
(39
)
  
4,114
 
Other
  
10,683
   
7,670
   
3,313
   
(300
)
  
3,013
 
Total equity securities
  
201,763
   
130,751
   
73,230
   
(2,218
)
  
71,012
 
                     
Total
 
$
723,616
  
$
651,768
  
$
78,904
  
$
(7,056
)
 
$
71,848
 

(1)
Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale.  Prior periods have not been restated to conform to the current presentation. See Note A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion.


The following table summarizes, for available-for-sale fixed maturities in an unrealized loss position at December 31, 2018 and available-for-sale fixed maturities and equity securities in an unrealized loss position at December 31, 2017, respectively, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position.

  
2018
  
2017
 
  
Number of
Securities
  
Fair
Value
  
Gross
Unrealized Loss
  
Number of
Securities
  
Fair
Value
  
Gross
Unrealized Loss
 
Fixed income securities:
                  
12 months or less
  
275
  
$
282,646
  
$
(7,296
)
  
459
  
$
313,421
  
$
(2,683
)
Greater than 12 months
  
217
   
131,001
   
(3,497
)
  
112
   
75,638
   
(2,155
)
Total fixed income securities
  
492
   
413,647
   
(10,793
)
  
571
   
389,059
   
(4,838
)
Equity securities (1):
                        
12 months or less
  
–
   
–
   
–
   
65
   
46,654
   
(2,218
)
Greater than 12 months
  
–
   
–
   
–
   
–
   
–
   
–
 
Total equity securities
  
–
   
–
   
–
   
65
   
46,654
   
(2,218
)
Total
  
492
  
$
413,647
  
$
(10,793
)
  
636
  
$
435,713
  
$
(7,056
)

(1)
Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale.  Prior periods have not been restated to conform to the current presentation. See Note A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion.

Unrealized losses in the Company's fixed income portfolio are generally the result of interest rate or foreign currency fluctuations.  The Company does not intend to sell any fixed income securities in an unrealized loss position at December 31, 2018, and it is not more likely than not that the Company will have to sell any such fixed income security before recovery of its amortized cost basis.  Accordingly, the Company does not believe any unrealized losses represent other-than-temporary impairments as of December 31, 2018.

The fair value and the cost or amortized cost of fixed income investments at December 31, 2018, organized by contractual maturity, are shown below.  Actual maturities may differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties.  Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

  
Fair Value
  
Cost or Amortized Cost
 
One year or less
 
$
45,858
   
7.7
%
 
$
46,150
   
7.7
%
Excess of one year to five years
  
287,506
   
48.5
   
290,743
   
48.4
 
Excess of five years to ten years
  
101,605
   
17.1
   
104,571
   
17.4
 
Excess of ten years
  
6,641
   
1.2
   
6,410
   
1.1
 
Total contractual maturities
  
441,610
   
74.5
   
447,874
   
74.6
 
Asset-backed securities
  
151,035
   
25.5
   
152,630
   
25.4
 
 Total
 
$
592,645
   
100.0
%
 
$
600,504
   
100.0
 

Major categories of investment income for the years ended December 31, are summarized as follows:

  
2018
  
2017
  
2016
 
Interest on fixed income securities
 
$
19,092
  
$
15,340
  
$
13,254
 
Dividends on equity securities
  
4,380
   
4,611
   
3,598
 
Money market funds, Short-term and other
  
1,529
   
471
   
128
 
   
25,001
   
20,422
   
16,980
 
Investment expenses
  
(2,953
)
  
(2,327
)
  
(2,497
)
Net investment income
 
$
22,048
  
$
18,095
  
$
14,483
 


Gains and losses on investments, including equity method earnings from limited partnerships, for the years ended December 31 are summarized below:

  
2018
  
2017
  
2016
 
Gross gains on available-for-sale investments sold during the period:
         
Fixed income securities
 
$
10,807
  
$
9,135
  
$
11,628
 
Equity securities (1)
  
–
   
10,481
   
28,742
 
Total gains
  
10,807
   
19,616
   
40,370
 
             
Gross losses on available-for-sale investments sold during the period:
            
Fixed income securities
  
(14,367
)
  
(9,882
)
  
(10,940
)
Equity securities (1)
  
–
   
(2,368
)
  
(2,932
)
Total losses
  
(14,367
)
  
(12,250
)
  
(13,872
)
             
Other-than-temporary impairments
  
(19
)
  
(149
)
  
(5,743
)
             
Change in value of limited partnership investments
  
(9,343
)
  
12,469
   
2,473
 
             
Losses on equity securities:
            
Realized losses on equity securities sold during the period (2)
  
(3,072
)
  
–
   
–
 
   Unrealized losses on equity securities held at the end of the period
  
(9,697
)
  
–
   
–
 
Realized and unrealized losses on equity securities held at the end of the period
  
(12,769
)
  
–
   
–
 
             
Net realized and unrealized gains (losses) on investments
 
$
(25,691
)
 
$
19,686
  
$
23,228
 

(1)
Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale.  Prior periods have not been restated to conform to the current presentation. See Note A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion.

(2)
During 2018, the Company sold $149,195 in equity securities, resulting in a gain on sale of $51,900.  The majority of these gains were included in unrealized gains within other comprehensive income (loss) at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the consolidated statements of operations for the year ended December 31, 2018.

Gain and loss activity for fixed income and equity security investments, as shown in the previous table, includes adjustments for other-than-temporary impairment for the years ended December 31 summarized as follows:

  
2018
  
2017
  
2016
 
Cumulative charges to income at beginning of year
 
$
4,209
  
$
5,650
  
$
10,513
 
             
Writedowns based on objective and subjective criteria
  
19
   
149
   
5,743
 
Recovery of prior writedowns upon sale or disposal
  
(3,298
)
  
(1,590
)
  
(10,606
)
Net pre-tax realized gain
  
3,279
   
1,441
   
4,863
 
             
Cumulative charges to income at end of year
 
$
930
  
$
4,209
  
$
5,650
 

There is no primary market and only a limited secondary market for the Company's investments in limited partnerships and, in most cases, the Company is prohibited from disposing of its limited partnership interests for some period of time and generally must seek approval from the applicable general partner for any such disposal.  Distributions of earnings from these partnerships are largely at the sole discretion of the general partners and distributions are generally not received by the Company for many years after the earnings have been reported.  The Company has a commitment to contribute up to an additional $1,317 to a limited partnership as of December 31, 2018.

The Company's limited partnerships include one investment which primarily invests in public and private equity markets in India.  This limited partnership investment's value as of December 31, 2018 and 2017 was $26,344 and $29,817, respectively.  At December 31, 2018, the Company's estimated ownership interest in this limited partnership investment was approximately 6%.  The Company's share of income (losses), from both realized and unrealized appreciation (losses) from this limited partnership investment was ($3,473), $7,665 and ($1,117) in 2018, 2017 and 2016, respectively.  The summarized financial information of this limited partnership investment as of and for the years ended December 31 is as follows:

  
2018
  
2017
  
2016
 
Investment income (loss)
 
$
4,298
  
$
623
  
$
(5
)
Partnership expenses
  
6,874
   
2,206
   
2,426
 
Net investment loss
  
(2,576
)
  
(1,583
)
  
(2,431
)
             
Realized gain on investments
  
12,314
   
8,723
   
7,754
 
             
Unrealized appreciation (depreciation) on investments
  
(65,250
)
  
133,807
   
(21,002
)
             
Net increase (decrease) in partners' capital resulting from operations
 
$
(55,512
)
 
$
140,947
  
$
(15,679
)
             
Total assets
 
$
462,058
  
$
566,629
  
$
448,263
 
Total liabilities
  
45,483
   
30,976
   
39,988
 
Total partners' capital
  
416,575
   
535,653
   
408,275
 

The Company's limited partnerships include an additional investment which primarily invests in public equity and fixed income markets.  This limited partnership investment's value as of December 31, 2018 and 2017 was $14,975 and $19,380, respectively.  At December 31, 2018, the Company's estimated ownership interest in this limited partnership investment was approximately 5%.  The Company's share of income (losses) from both realized and unrealized appreciation (losses) from this limited partnership investment was ($4,404), $1,452 and $2,662 in 2018, 2017 and 2016, respectively.  The summarized financial information of this limited partnership investment as of and for the years ended December 31 is as follows:

  
2018
  
2017
  
2016
 
Investment income
 
$
19,507
  
$
14,524
  
$
13,534
 
Partnership expenses
  
9,132
   
12,861
   
10,628
 
Net investment income
  
10,375
   
1,663
   
2,906
 
             
Realized gain (loss) on investments
  
(37,143
)
  
(15,073
)
  
830
 
             
Unrealized appreciation (depreciation) on investments
  
(48,132
)
  
49,847
   
46,685
 
             
Net increase (decrease) in partners' capital resulting from operations
 
$
(74,900
)
 
$
36,437
  
$
50,421
 
             
Total assets
 
$
241,174
  
$
354,709
  
$
464,184
 
Total liabilities
  
20,020
   
2,000
   
14,555
 
Total partners' capital
  
221,154
   
352,709
   
449,629
 

The fair value of regulatory deposits with various insurance departments in the United States and Canada totaled $87,981 and $86,335 at December 31, 2018 and 2017, respectively.

Short-term investments at December 31, 2018 included $1,000 in certificates of deposit issued by a Bermuda bank.

The Company's fixed income securities are over 90% invested in investment grade fixed income investments.  The Company has no fixed income investments that were originally issued with guarantees by a third-party insurance company nor does the Company have any direct exposure to any guarantor at December 31, 2018.

Approximately $54,233 of fixed income investments (6.2% of the Company's consolidated investment portfolio, which includes money market instruments classified as cash equivalents) consists of non-rated bonds and bonds rated as less than investment grade at year-end.  These investments include a diversified portfolio of over 40 issuers and have a $5,202 aggregate net unrealized loss position at December 31, 2018.