v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument, and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.
The fair values of fixed maturity securities, equity securities, and bank loan participations have been determined using fair value prices provided by the Company's investment accounting services provider or investment managers, who utilize internationally recognized independent pricing services. The prices provided by the independent pricing services are generally based on observable market data in active markets (e.g. broker quotes and prices observed for comparable securities). Values for U.S. Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique. The values for all other fixed maturity securities (including state and municipal securities and obligations of U.S. government corporations and agencies) and bank loan participations generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques. There have been no changes in the Company’s use of valuation techniques since December 31, 2024.
The Company reviews fair value prices provided by its outside investment accounting service provider or investment managers for reasonableness by comparing the fair values provided by the managers to those provided by its investment custodian. The Company also reviews and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for the investment manager that obtains fair values from independent pricing services.
Assets measured at fair value on a recurring basis as of March 31, 2026 are summarized below:
 Fair Value Measurements Using
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1		Significant
Other
Observable
Inputs
Level 2		Significant
Unobservable
Inputs
Level 3		Total
 (in thousands)
Fixed maturity securities, available-for-sale:    
State and municipal$— $224,455 $— $224,455 
Residential mortgage-backed— 466,820 — 466,820 
Corporate— 606,439 — 606,439 
Commercial mortgage and asset-backed— 121,745 — 121,745 
U.S. Treasury securities and obligations guaranteed by the U.S. government
14,916 — — 14,916 
Total fixed maturity securities, available-for-sale$14,916 $1,419,459 $— $1,434,375 
Equity securities:    
Preferred stock— 69,795 — 69,795 
Common stock— 2,513 9 2,522 
Total equity securities$— $72,308 $9 $72,317 
Bank loan participations$— $153,336 $— $153,336 
Short-term investments$— $597 $— $597 
  
Assets measured at fair value on a recurring basis as of December 31, 2025 are summarized below:
 Fair Value Measurements Using
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1		Significant
Other
Observable
Inputs
Level 2		Significant
Unobservable
Inputs
Level 3		Total
 (in thousands)
Fixed maturity securities, available-for-sale:    
State and municipal$— $219,477 $— $219,477 
Residential mortgage-backed— 472,718 — 472,718 
Corporate— 577,754 — 577,754 
Commercial mortgage and asset-backed— 120,535 — 120,535 
U.S. Treasury securities and obligations guaranteed by the U.S. government
14,290 — — 14,290 
Total fixed maturity securities, available-for-sale$14,290 $1,390,484 $— $1,404,774 
Equity securities:    
Preferred stock— 70,601 — 70,601 
Common stock— 2,487 4 2,491 
Total equity securities$— $73,088 $4 $73,092 
Bank loan participations$— $155,138 $— $155,138 
Short-term investments$— $— $— $— 
A reconciliation of the beginning and ending balances of available-for-sale fixed maturity securities, equity securities, and bank loan participations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is shown below:
Three Months Ended
March 31,
20262025
(in thousands)
Beginning balance$4 $5 
Transfers out of Level 3— — 
Transfers in to Level 3— — 
Purchases— — 
Sales— — 
Maturities, calls and paydowns— — 
Amortization of discount— — 
Total gains or losses (realized/unrealized):
Included in earnings5 (3)
Included in other comprehensive income— — 
Ending balance$9 $2 

The Company held one equity security at March 31, 2026, December 31, 2025 and December 31, 2024 for which the fair value was determined using significant unobservable inputs (Level 3). The fair values for the equity security (disclosed above) were obtained from our asset manager, who used an internal model to value the security.
Transfers out of Level 3 occur when the Company is able to obtain reliable prices from pricing vendors for securities for which the Company was previously unable to obtain reliable prices. Transfers in to Level 3 occur when the Company is unable to obtain reliable prices for securities from pricing vendors and instead must use broker price quotes to value the securities.
There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2026 or 2025. The Company recognizes transfers between levels at the beginning of the reporting period.
In the determination of the fair value for bank loan participations and certain high yield bonds, the Company’s investment manager endeavors to obtain data from multiple external pricing sources. External pricing sources may include brokers, dealers and price data vendors that provide a composite price based on prices from multiple dealers. Such external pricing sources typically provide valuations for normal institutional size trading units of such securities using methods based on market transactions for comparable securities, and various relationships between securities, as generally recognized by institutional dealers. For investments in which the investment manager determines that only one external pricing source is appropriate or if only one external price is available, the relevant investment is generally recorded at fair value based on such price.
Investments for which external sources are not available or are determined by the investment manager not to be representative of fair value are recorded at fair value as determined by the Company, with input from its investment managers and valuation specialists as considered necessary. In determining the fair value of such investments, the Company considers one or more of the following factors: type of security held, convertibility or exchangeability of the security, redeemability of the security (including the timing of redemptions), application of industry accepted valuation models, recent trading activity, liquidity, estimates of liquidation value, purchase cost, and prices received for securities with similar terms of the same issuer or similar issuers. At March 31, 2026 and December 31, 2025, there were no investments for which external sources were unavailable to determine fair value.
The carrying values and fair values of financial instruments are summarized below:
 March 31, 2026December 31, 2025
 Carrying
Value		Fair ValueCarrying
Value		Fair Value
 (in thousands)
Assets    
Fixed maturity securities, available-for-sale$1,434,375 $1,434,375 $1,404,774 $1,404,774 
Equity securities72,317 72,317 73,092 73,092 
Bank loan participations153,336 153,336 155,138 155,138 
Cash and cash equivalents227,607 227,607 260,941 260,941 
Restricted cash equivalents8,557 8,557 8,481 8,481 
Short-term investments597 597 — — 
Other invested assets – notes receivable45,193 45,653 43,401 44,639 
Liabilities    
Senior debt225,800 228,855 225,800 230,007 
Junior subordinated debt104,055 114,511 104,055 116,093 
 
The fair values of fixed maturity securities, equity securities, and bank loan participations have been determined using quoted market prices for securities traded in the public market or prices using bid or closing prices for securities not traded in the public marketplace. The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturity.
The fair values of other invested assets-notes receivable, senior debt, and junior subordinated debt at March 31, 2026 and December 31, 2025 were determined by calculating the present value of expected future cash flows under the terms of the note agreements or debt agreements, as applicable, discounted at an estimated market rate of interest at March 31, 2026 and December 31, 2025, respectively. The Company also utilized an internally developed valuation model based on the spread of a comparable market index to determine the fair value of certain other invested assets-notes receivable at March 31, 2026 and December 31, 2025.
The fair values of senior debt, junior subordinated debt, and invested assets-notes receivable, classified in other invested assets, at March 31, 2026 and December 31, 2025 were determined using inputs to the valuation methodology that are unobservable (Level 3).