| Statement [Line Items] | Period [Axis] |
|---|
2016-01-01 - 2016-12-31 |
|---|
Schedule of Amortized Cost and Estimated Fair Value of Investments |
The amortized cost and
estimated fair value of investments were as follows as of
December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in
thousands) |
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Estimated
Fair Value
|
|
|
Other than
temporary
impairments
recognized
in AOCI (1)
|
|
|
As of December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency
obligations
|
|
$ |
71,517 |
|
|
$ |
763 |
|
|
$ |
(233 |
) |
|
$ |
72,047 |
|
|
$ |
— |
|
|
Obligations of states and
political subdivisions
|
|
|
155,402 |
|
|
|
1,423 |
|
|
|
(379 |
) |
|
|
156,446 |
|
|
|
— |
|
|
Mortgage-backed
securities
|
|
|
88,131 |
|
|
|
895 |
|
|
|
(558 |
) |
|
|
88,468 |
|
|
|
— |
|
|
Asset-backed
securities
|
|
|
233,890 |
|
|
|
684 |
|
|
|
(583 |
) |
|
|
233,991 |
|
|
|
(4 |
) |
|
Commercial mortgage-backed
securities
|
|
|
184,821 |
|
|
|
118 |
|
|
|
(1,747 |
) |
|
|
183,192 |
|
|
|
— |
|
|
Corporate bonds
|
|
|
381,209 |
|
|
|
1,666 |
|
|
|
(2,848 |
) |
|
|
380,027 |
|
|
|
— |
|
|
Foreign corporate
bonds
|
|
|
126,369 |
|
|
|
164 |
|
|
|
(673 |
) |
|
|
125,860 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed
maturities
|
|
|
1,241,339 |
|
|
|
5,713 |
|
|
|
(7,021 |
) |
|
|
1,240,031 |
|
|
|
(4 |
) |
|
Common stock
|
|
|
119,515 |
|
|
|
3,445 |
|
|
|
(2,403 |
) |
|
|
120,557 |
|
|
|
— |
|
|
Other invested
assets
|
|
|
66,121 |
|
|
|
— |
|
|
|
— |
|
|
|
66,121 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,426,975 |
|
|
$ |
9,158 |
|
|
$ |
(9,424 |
) |
|
$ |
1,426,709 |
|
|
$ |
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Represents the total amount
of other than temporary impairment losses relating to factors other
than credit losses recognized in accumulated other comprehensive
income (“AOCI”). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in
thousands) |
|
Amortized
Cost |
|
|
Gross
Unrealized
Gains |
|
|
Gross
Unrealized
Losses |
|
|
Estimated
Fair Value |
|
|
Other than
temporary
impairments
recognized
in AOCI (1) |
|
|
As of December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency
obligations
|
|
$ |
106,303 |
|
|
$ |
1,140 |
|
|
$ |
(321 |
) |
|
$ |
107,122 |
|
|
$ |
— |
|
|
Obligations of states and
political subdivisions
|
|
|
203,121 |
|
|
|
2,576 |
|
|
|
(457 |
) |
|
|
205,240 |
|
|
|
— |
|
|
Mortgage-backed
securities
|
|
|
157,753 |
|
|
|
2,113 |
|
|
|
(743 |
) |
|
|
159,123 |
|
|
|
— |
|
|
Asset-backed
securities
|
|
|
261,008 |
|
|
|
435 |
|
|
|
(1,421 |
) |
|
|
260,022 |
|
|
|
(9 |
) |
|
Commercial mortgage-backed
securities
|
|
|
142,742 |
|
|
|
— |
|
|
|
(2,352 |
) |
|
|
140,390 |
|
|
|
— |
|
|
Corporate bonds
|
|
|
334,720 |
|
|
|
685 |
|
|
|
(3,294 |
) |
|
|
332,111 |
|
|
|
— |
|
|
Foreign corporate
bonds
|
|
|
102,686 |
|
|
|
194 |
|
|
|
(739 |
) |
|
|
102,141 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed
maturities
|
|
|
1,308,333 |
|
|
|
7,143 |
|
|
|
(9,327 |
) |
|
|
1,306,149 |
|
|
|
(9 |
) |
|
Common stock
|
|
|
100,157 |
|
|
|
16,118 |
|
|
|
(5,960 |
) |
|
|
110,315 |
|
|
|
— |
|
|
Other invested
assets
|
|
|
32,592 |
|
|
|
— |
|
|
|
— |
|
|
|
32,592 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,441,082 |
|
|
$ |
23,261 |
|
|
$ |
(15,287 |
) |
|
$ |
1,449,056 |
|
|
$ |
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Represents the total amount
of other than temporary impairment losses relating to factors other
than credit losses recognized in accumulated other comprehensive
income (“AOCI”). |
|
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities |
The amortized cost and
estimated fair value of the Company’s fixed maturities
portfolio classified as available for sale at December 31,
2016, by contractual maturity, are shown below. Actual maturities
may differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or
prepayment penalties.
|
|
|
|
|
|
|
|
|
| (Dollars in
thousands) |
|
Amortized
Cost
|
|
|
Estimated
Fair Value
|
|
|
Due in one year or
less
|
|
$ |
80,840 |
|
|
$ |
80,982 |
|
|
Due in one year through
five years
|
|
|
623,678 |
|
|
|
622,926 |
|
|
Due in five years through
ten years
|
|
|
20,356 |
|
|
|
20,770 |
|
|
Due in ten years through
fifteen years
|
|
|
3,245 |
|
|
|
3,252 |
|
|
Due after fifteen
years
|
|
|
6,378 |
|
|
|
6,450 |
|
|
Mortgage-backed
securities
|
|
|
88,131 |
|
|
|
88,468 |
|
|
Asset-backed
securities
|
|
|
233,890 |
|
|
|
233,991 |
|
|
Commercial mortgage-backed
securities
|
|
|
184,821 |
|
|
|
183,192 |
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,241,339 |
|
|
$ |
1,240,031 |
|
|
|
|
|
|
|
|
|
|
|
Summary of Securities With Gross Unrealized Losses |
The following table
contains an analysis of the Company’s securities with gross
unrealized losses, categorized by the period that the securities
were in a continuous loss position as of December 31,
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Less than 12
months |
|
|
12 months or longer
(1) |
|
|
Total |
|
| (Dollars in
thousands) |
|
Fair Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency
obligations
|
|
$ |
39,570 |
|
|
$ |
(233 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
39,570 |
|
|
$ |
(233 |
) |
|
Obligations of states and
political subdivisions
|
|
|
46,861 |
|
|
|
(369 |
) |
|
|
670 |
|
|
|
(10 |
) |
|
|
47,531 |
|
|
|
(379 |
) |
|
Mortgage-backed
securities
|
|
|
52,780 |
|
|
|
(541 |
) |
|
|
298 |
|
|
|
(17 |
) |
|
|
53,078 |
|
|
|
(558 |
) |
|
Asset-backed
securities
|
|
|
62,737 |
|
|
|
(493 |
) |
|
|
23,937 |
|
|
|
(90 |
) |
|
|
86,674 |
|
|
|
(583 |
) |
|
Commercial mortgage-backed
securities
|
|
|
94,366 |
|
|
|
(1,090 |
) |
|
|
69,747 |
|
|
|
(657 |
) |
|
|
164,113 |
|
|
|
(1,747 |
) |
|
Corporate bonds
|
|
|
171,621 |
|
|
|
(2,731 |
) |
|
|
9,218 |
|
|
|
(117 |
) |
|
|
180,839 |
|
|
|
(2,848 |
) |
|
Foreign corporate
bonds
|
|
|
76,036 |
|
|
|
(673 |
) |
|
|
— |
|
|
|
— |
|
|
|
76,036 |
|
|
|
(673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed
maturities
|
|
|
543,971 |
|
|
|
(6,130 |
) |
|
|
103,870 |
|
|
|
(891 |
) |
|
|
647,841 |
|
|
|
(7,021 |
) |
|
Common stock
|
|
|
57,439 |
|
|
|
(2,403 |
) |
|
|
— |
|
|
|
— |
|
|
|
57,439 |
|
|
|
(2,403 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
601,410 |
|
|
$ |
(8,533 |
) |
|
$ |
103,870 |
|
|
$ |
(891 |
) |
|
$ |
705,280 |
|
|
$ |
(9,424 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fixed maturities in a gross
unrealized loss position for twelve months or longer are primarily
comprised of non-credit losses on investment grade securities where
management does not intend to sell, and it is more likely than not
that the Company will not be forced to sell the security before
recovery. The Company has analyzed these securities and has
determined that they are not other than temporarily
impaired. |
The following table
contains an analysis of the Company’s securities with gross
unrealized losses, categorized by the period that the securities
were in a continuous loss position as of December 31,
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Less than 12
months |
|
|
12 months or longer (1) |
|
|
Total |
|
| (Dollars in
thousands) |
|
Fair Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency
obligations
|
|
$ |
79,496 |
|
|
$ |
(321 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
79,496 |
|
|
$ |
(321 |
) |
|
Obligations of states and
political subdivisions
|
|
|
49,708 |
|
|
|
(373 |
) |
|
|
7,732 |
|
|
|
(84 |
) |
|
|
57,440 |
|
|
|
(457 |
) |
|
Mortgage-backed
securities
|
|
|
63,759 |
|
|
|
(743 |
) |
|
|
— |
|
|
|
— |
|
|
|
63,759 |
|
|
|
(743 |
) |
|
Asset-backed
securities
|
|
|
203,381 |
|
|
|
(1,404 |
) |
|
|
4,843 |
|
|
|
(17 |
) |
|
|
208,224 |
|
|
|
(1,421 |
) |
|
Commercial mortgage-backed
securities
|
|
|
118,813 |
|
|
|
(2,005 |
) |
|
|
21,577 |
|
|
|
(347 |
) |
|
|
140,390 |
|
|
|
(2,352 |
) |
|
Corporate bonds
|
|
|
211,364 |
|
|
|
(3,269 |
) |
|
|
2,120 |
|
|
|
(25 |
) |
|
|
213,484 |
|
|
|
(3,294 |
) |
|
Foreign corporate
bonds
|
|
|
63,860 |
|
|
|
(697 |
) |
|
|
5,129 |
|
|
|
(42 |
) |
|
|
68,989 |
|
|
|
(739 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed
maturities
|
|
|
790,381 |
|
|
|
(8,812 |
) |
|
|
41,401 |
|
|
|
(515 |
) |
|
|
831,782 |
|
|
|
(9,327 |
) |
|
Common stock
|
|
|
36,798 |
|
|
|
(5,960 |
) |
|
|
— |
|
|
|
— |
|
|
|
36,798 |
|
|
|
(5,960 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
827,179 |
|
|
$ |
(14,772 |
) |
|
$ |
41,401 |
|
|
$ |
(515 |
) |
|
$ |
868,580 |
|
|
$ |
(15,287 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fixed maturities in a gross
unrealized loss position for twelve months or longer are primarily
comprised of non-credit losses on investment grade securities where
management does not intend to sell, and it is more likely than not
that the Company will not be forced to sell the security before
recovery. The Company has analyzed these securities and has
determined that they are not other than temporarily
impaired. |
|
Schedule of Other Than Temporary Impairments on Investments |
The Company recorded the
following other than temporary impairments (“OTTI”) on
its investment portfolio for the years ended December 31,
2016, 2015, and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTTI losses,
gross
|
|
$ |
(259 |
) |
|
$ |
(24 |
) |
|
$ |
(31 |
) |
|
Portion of loss recognized
in other comprehensive income (pre-tax)
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impairment losses on
fixed maturities recognized in earnings
|
|
|
(259 |
) |
|
|
(24 |
) |
|
|
(31 |
) |
|
Equity
securities
|
|
|
(6,474 |
) |
|
|
(7,311 |
) |
|
|
(470 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
(6,733 |
) |
|
$ |
(7,335 |
) |
|
$ |
(501 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule of Credit Losses Recognized in Earnings |
The following table is an
analysis of the credit losses recognized in earnings on fixed
maturities held by the Company as of December 31, 2016, 2015,
and 2014 for which a portion of the OTTI loss was recognized in
other comprehensive income.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Balance at beginning of
period
|
|
$ |
31 |
|
|
$ |
50 |
|
|
$ |
54 |
|
|
Additions where no OTTI was
previously recorded
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Additions where an OTTI was
previously recorded
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Reductions for securities
for which the company intends to sell or more likely than not will
be required to sell before recovery
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Reductions reflecting
increases in expected cash flows to be collected
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Reductions for securities
sold during the period
|
|
|
— |
|
|
|
(19 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of
period
|
|
$ |
31 |
|
|
$ |
31 |
|
|
$ |
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule of Accumulated Other Comprehensive Income, Net of Tax |
Accumulated other
comprehensive income, net of tax, as of December 31, 2016 and
2015 was as follows:
|
|
|
|
|
|
|
|
|
| (Dollars in
thousands) |
|
December 31, |
|
| |
2016 |
|
|
2015 |
|
|
Net unrealized gains
(losses) from:
|
|
|
|
|
|
|
|
|
|
Fixed maturities
|
|
$ |
(1,308 |
) |
|
$ |
(2,184 |
) |
|
Common stock
|
|
|
1,042 |
|
|
|
10,158 |
|
|
Deferred taxes
|
|
|
(352 |
) |
|
|
(3,896 |
) |
|
|
|
|
|
|
|
|
|
|
Accumulated other
comprehensive income (loss), net of tax
|
|
$ |
(618 |
) |
|
$ |
4,078 |
|
|
|
|
|
|
|
|
|
|
|
Changes in Accumulated Other Comprehensive Income |
The following tables
present the changes in accumulated other comprehensive income, net
of tax, by component for the years ended December 31, 2016 and
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2016
(Dollars in
thousands)
|
|
Unrealized Gains
and Losses on
Available for Sale
Securities, Net of
Tax |
|
|
Foreign Currency
Items, Net of Tax |
|
|
Accumulated Other
Comprehensive
Income, Net of Tax |
|
|
Beginning
balance
|
|
$ |
4,200 |
|
|
$ |
(122 |
) |
|
$ |
4,078 |
|
|
Other comprehensive income
(loss) before reclassification
|
|
|
10,374 |
|
|
|
(261 |
) |
|
|
10,113 |
|
|
Amounts reclassified from
accumulated other comprehensive income (loss)
|
|
|
(15,128 |
) |
|
|
319 |
|
|
|
(14,809 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss)
|
|
|
(4,754 |
) |
|
|
58 |
|
|
|
(4,696 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$ |
(554) |
|
|
$ |
(64 |
) |
|
$ |
(618) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2015
(Dollars in
thousands)
|
|
Unrealized Gains
and Losses on
Available for Sale
Securities, Net of
Tax |
|
|
Foreign Currency
Items, Net of Tax |
|
|
Accumulated Other
Comprehensive
Income, Net of Tax |
|
|
Beginning
balance
|
|
$ |
23,647 |
|
|
$ |
(263 |
) |
|
$ |
23,384 |
|
|
Other comprehensive income
(loss) before reclassification
|
|
|
(17,065 |
) |
|
|
(256 |
) |
|
|
(17,321 |
) |
|
Amounts reclassified from
accumulated other comprehensive income (loss)
|
|
|
(2,382 |
) |
|
|
397 |
|
|
|
(1,985 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss)
|
|
|
(19,447 |
) |
|
|
141 |
|
|
|
(19,306 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$ |
4,200 |
|
|
$ |
(122 |
) |
|
$ |
4,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassifications Out of Accumulated Other Comprehensive Income |
The reclassifications out
of accumulated other comprehensive income for the years ended
December 31, 2016 and 2015 were as follows:
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Amounts Reclassified from
Accumulated Other
Comprehensive Income
Years Ended
December 31, |
|
|
(Dollars in
thousands)
Details about
Accumulated Other
Comprehensive Income
Components
|
|
Affected
Line Item in the
Consolidated Statements of Operations
|
|
2016 |
|
|
2015 |
|
|
Unrealized gains and losses
on available for sale securities
|
|
Other net realized investment (gains) |
|
$ |
(30,055 |
) |
|
$ |
(11,559 |
) |
|
|
Other than temporary impairment losses on
investments |
|
|
6,733 |
|
|
|
7,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total before tax |
|
|
(23,322 |
) |
|
|
(4,224 |
) |
|
|
Income tax expense |
|
|
8,194 |
|
|
|
1,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains and losses on available for sale
securities, net of tax |
|
$ |
(15,128 |
) |
|
$ |
(2,382 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
items
|
|
Other net realized investment losses |
|
$ |
491 |
|
|
$ |
610 |
|
|
|
Income tax (benefit) |
|
|
(172 |
) |
|
|
(213 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency items, net of tax |
|
$ |
319 |
|
|
$ |
397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
reclassifications
|
|
Total reclassifications, net of tax |
|
$ |
(14,809 |
) |
|
$ |
(1,985 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net Realized Investment Gains (Losses) |
The components of net
realized investment gains (losses) for the years ended
December 31, 2016, 2015, and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Fixed
maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized
gains
|
|
$ |
2,947 |
|
|
$ |
3,565 |
|
|
$ |
2,843 |
|
|
Gross realized
losses
|
|
|
(691 |
) |
|
|
(2,180 |
) |
|
|
(703 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
gains
|
|
|
2,256 |
|
|
|
1,385 |
|
|
|
2,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized
gains
|
|
|
28,785 |
|
|
|
10,379 |
|
|
|
55,907 |
|
|
Gross realized
losses
|
|
|
(8,210 |
) |
|
|
(8,246 |
) |
|
|
(1,351 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
gains
|
|
|
20,575 |
|
|
|
2,133 |
|
|
|
54,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized
gains
|
|
|
— |
|
|
|
96 |
|
|
|
— |
|
|
Gross realized
losses
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
gains
|
|
|
— |
|
|
|
96 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized
gains
|
|
|
3,733 |
|
|
|
— |
|
|
|
— |
|
|
Gross realized
losses
|
|
|
(4,843 |
) |
|
|
(6,988 |
) |
|
|
(20,836 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses)
(1)
|
|
|
(1,110 |
) |
|
|
(6,988 |
) |
|
|
(20,836 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net realized
investment gains (losses)
|
|
$ |
21,721 |
|
|
$ |
(3,374 |
) |
|
$ |
35,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Includes $4.8 million, $5.4
million, and $5.5 million of periodic net interest settlements
related to the derivatives for the years ended December 31,
2016, 2015, and 2014, respectively. |
|
Proceeds from Sales of Available-for-Sale Securities |
The proceeds from sales of
available for sale securities resulting in net realized investment
gains (losses) for the years ended December 31, 2016, 2015,
and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Fixed maturities
|
|
$ |
381,389 |
|
|
$ |
647,404 |
|
|
$ |
415,739 |
|
|
Equity
securities
|
|
|
111,156 |
|
|
|
39,723 |
|
|
|
191,765 |
|
|
Preferred stock
|
|
|
— |
|
|
|
1,540 |
|
|
|
— |
|
|
Schedule of Investment Income |
The sources of net
investment income for the years ended December 31, 2016, 2015,
and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Fixed maturities
|
|
$ |
30,337 |
|
|
$ |
32,091 |
|
|
$ |
26,788 |
|
|
Equity
securities
|
|
|
3,302 |
|
|
|
3,125 |
|
|
|
5,484 |
|
|
Cash and cash
equivalents
|
|
|
217 |
|
|
|
82 |
|
|
|
61 |
|
|
Other invested
assets
|
|
|
5,295 |
|
|
|
2,620 |
|
|
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
income
|
|
|
39,151 |
|
|
|
37,918 |
|
|
|
32,420 |
|
|
Investment expense
(1)
|
|
|
(5,168 |
) |
|
|
(3,309 |
) |
|
|
(3,599 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
$ |
33,983 |
|
|
$ |
34,609 |
|
|
$ |
28,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Investment expense for the
year ended December 31, 2016 includes $1.5 million in upfront
fees necessary to enter into a new investment. See Note 9 for
additional information on the Company’s $40 million
commitment related to this new investment. |
|
Schedule of Total Investment Return |
The Company’s total
investment return on a pre-tax basis for the years ended
December 31, 2016, 2015, and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Years Ended
December 31, |
|
| (Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2014 |
|
|
Net investment
income
|
|
$ |
33,983 |
|
|
$ |
34,609 |
|
|
$ |
28,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment
gains(losses)
|
|
|
21,721 |
|
|
|
(3,374 |
) |
|
|
35,860 |
|
|
Change in unrealized
holding gains and losses
|
|
|
(8,240 |
) |
|
|
(25,673 |
) |
|
|
(45,861 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized
investment returns
|
|
|
13,481 |
|
|
|
(29,047 |
) |
|
|
(10,001 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
return
|
|
$ |
47,464 |
|
|
$ |
5,562 |
|
|
$ |
18,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return
%
|
|
|
3.1 |
% |
|
|
0.3 |
% |
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average investment
portfolio
|
|
$ |
1,507,184 |
|
|
$ |
1,752,785 |
|
|
$ |
1,533,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors |
A summary of the
Company’s insurance enhanced municipal bonds that are backed
by financial guarantors, including the pre-refunded bonds that are
escrowed in U.S. government obligations, as of December 31,
2016, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
Financial
Guarantor
|
|
Total |
|
|
Pre-refunded
Securities |
|
|
Government
Guaranteed
Securities |
|
|
Exposure Net
of Pre-refunded
& Government
Guaranteed
Securities |
|
|
Ambac Financial
Group
|
|
$ |
1,494 |
|
|
$ |
450 |
|
|
$ |
|
|
|
$ |
1,044 |
|
|
Municipal Bond Insurance
Association
|
|
|
2,657 |
|
|
|
— |
|
|
|
— |
|
|
|
2,657 |
|
|
Gov’t National
Housing Association
|
|
|
495 |
|
|
|
— |
|
|
|
495 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total backed by financial
guarantors
|
|
|
4,646 |
|
|
|
450 |
|
|
|
495 |
|
|
|
3,701 |
|
|
Other credit enhanced
municipal bonds
|
|
|
5,164 |
|
|
|
5,164 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
9,810 |
|
|
$ |
5,614 |
|
|
$ |
495 |
|
|
$ |
3,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Estimated Fair Values of Bonds Held on Deposit |
The fair values were as
follows as of December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
| |
|
Estimated Fair
Value |
|
| (Dollars in
thousands) |
|
December 31,
2016 |
|
|
December 31,
2015 |
|
|
On deposit with
governmental authorities
|
|
$ |
29,079 |
|
|
$ |
38,815 |
|
|
Intercompany trusts held
for the benefit of U.S. policyholders
|
|
|
351,002 |
|
|
|
375,827 |
|
|
Held in trust pursuant to
third party requirements
|
|
|
88,178 |
|
|
|
66,544 |
|
|
Letter of credit held for
third party requirements
|
|
|
4,871 |
|
|
|
5,598 |
|
|
Securities held as
collateral for borrowing arrangements (1)
|
|
|
85,939 |
|
|
|
95,647 |
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
559,069 |
|
|
$ |
582,431 |
|
|
|
|
|
|
|
|
|
|
| (1) |
Amount required to
collateralize margin borrowing facilities. |
|