v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We hold AFS fixed maturity securities, which are carried at fair value with changes in fair value reported through other comprehensive income (loss). We also report our equity securities and certain other long-term investments at fair value with changes in fair value reported through the consolidated statements of operations and comprehensive income (loss).

Fair value measurements are generally based upon observable and unobservable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories.

•Level 1 - Quoted prices for identical instruments in active markets.
•Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable.
•Level 3 - Instruments whose significant value drivers are unobservable.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as U.S. Treasury securities and actively traded mutual fund and stock investments.

Level 2 includes those financial instruments that are valued by independent pricing services or broker quotes.  These pricing models are primarily industry-standard models that consider various inputs, such as interest rates, credit spreads and foreign exchange rates for the underlying financial instruments.  All significant inputs are observable or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace.  Financial instruments in this category primarily include corporate securities, U.S. Government-sponsored enterprise securities, securities issued by states and political subdivisions and certain mortgage and asset-backed securities.

Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker prices utilizing significant inputs not based on or corroborated by readily available market information. We have no investments in this category.
The following tables set forth our assets measured at fair value on a recurring basis as of the dates indicated.

June 30, 2026Level 1Level 2Level 3Total
Fair Value
(In thousands)
Financial assets:
Fixed maturity securities:
U.S. Treasury and U.S. Government-sponsored enterprises$5,572 1,314 — 6,886 
States and political subdivisions— 258,385 — 258,385 
Corporate40 877,405 — 877,445 
Commercial mortgage-backed— 10,270 — 10,270 
Residential mortgage-backed— 96,919 — 96,919 
Asset-backed— 32,155 — 32,155 
Total fixed maturity securities
5,612 1,276,448 — 1,282,060 
Equity securities:
Bond mutual funds217 — — 217 
Common stocks
1,009 — — 1,009 
Non-redeemable preferred stock7 — — 7 
Total equity securities1,233 — — 1,233 
Other long-term investments (1)
— — — 82,979 
Total financial assets$6,845 1,276,448 — 1,366,272 
(1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.
December 31, 2025Level 1Level 2Level 3Total
Fair Value
(In thousands)
Financial assets:
Fixed maturity securities:
U.S. Treasury and U.S. Government-sponsored enterprises$5,654 1,354 — 7,008 
States and political subdivisions— 268,792 — 268,792 
Corporate42 866,828 — 866,870 
Commercial mortgage-backed— 8,894 — 8,894 
Residential mortgage-backed— 103,088 — 103,088 
Asset-backed— 33,209 — 33,209 
Total fixed maturity securities
5,696 1,282,165 — 1,287,861 
Equity securities:
Bond mutual funds219 — — 219 
Common stocks
1,130 — — 1,130 
Non-redeemable preferred stock7 — — 7 
Total equity securities1,356 — — 1,356 
Other long-term investments (1)
— — — 85,157 
Total financial assets$7,052 1,282,165 — 1,374,374 
(1) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.
 
FINANCIAL INSTRUMENTS VALUATION

FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE

Fixed maturity securities, available-for-sale.  At June 30, 2026, fixed maturity securities, valued using a third-party pricing source, totaled $1.3 billion for Level 2 assets and comprised 93.4% of total reported fair value of our total financial assets.  The Level 1 and Level 2 valuations are reviewed and updated quarterly through testing by comparisons to separate pricing models, other third-party pricing services, and back tested to recent trades.  In addition, we obtain information annually relative to the third-party pricing models and review model parameters for reasonableness.  There were no Level 3 assets as of June 30, 2026.  For the three and six months ended June 30, 2026, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third-party prices were changed from the values received.

Equity securities.  Our equity securities are classified as Level 1 assets as their fair values are based upon quoted market prices.

Structured note. At June 30, 2026, the Company held an investment in a structured note, which includes components classified as fixed maturity securities and other long-term investments on the consolidated balance sheets. The partner interest is included in other long-term investments and is measured at its net asset value ("NAV") of $2.6 million as a practical expedient, which approximates fair value. The Company recognized investment related losses of $0.3 million and $0.4 million for the three and six months ended June 30, 2026, respectively, related to changes in fair value. These investments are included in other long-term investments on the consolidated balance sheets. As of June 30, 2026, we are committed to funding this structured note investment up to $4.1 million over the next nine years.
Limited partnerships. The Company considers the NAV to represent the value of the investment fund and is measured by the total value of assets minus the total value of liabilities. The following table includes information related to our investments in limited partnerships that calculate NAV per share. For these investments, which are measured at fair value on a recurring basis, we use the NAV per share to measure fair value. The Company recognized net investment related losses of $2.4 million and $0.6 million and gains of $2.9 million and $1.4 million on limited partnerships held for the three and six months ended June 30, 2026 and 2025, respectively, related to changes in fair value. These investments are included in other long-term investments on the consolidated balance sheets.

June 30, 2026December 31, 2025
(In thousands, except for years)
Fair Value
 Using NAV Per Share		Unfunded Commit-
ments
Range
(In years)
Fair Value
 Using NAV Per Share		Unfunded Commit-
ments
Range
(In years)
Description
Limited partnerships:
Middle marketInvestments in privately-originated, performing senior secured debt primarily in North America-based companies$29,369 — 2$30,956 — 2
Late-stage growthInvestments in private late-stage, established companies seeking capital to accelerate growth prior to an IPO or sale35,969 1,316 
2 to 4
36,623 2,232 
2 to 4
InfrastructureInvestments in environmental infrastructure and related technology, focusing on renewable power generation and distribution15,081 2,383 715,013 4,052 8
Total limited partnerships$80,419 3,699 $82,592 6,284 

The majority of our limited partnership investments are not redeemable because distributions from the funds will be received when the underlying investments of the funds are liquidated. The life spans indicated above may be shortened or extended at the fund manager's discretion, typically in one or two-year increments.

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE

Estimates of fair values are made at a specific point in time, based on relevant market prices and information about the financial instruments.  The estimated fair values of financial instruments presented below are not necessarily indicative of the amounts the Company might realize in actual market transactions.

The carrying value and fair value for the financial assets and liabilities on the consolidated financial statements not otherwise disclosed for the periods indicated were as follows:

June 30, 2026December 31, 2025
(In thousands)Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Financial assets:
Policy loans$66,146 66,146 67,455 67,455 
Residential mortgage loan20 19 24 24 
Cash and cash equivalents16,960 16,960 22,976 22,976 
Financial liabilities:
Annuity - investment contracts70,547 64,415 68,975 64,066 
Policy loans. Policy loans had a weighted average annual interest rate of 7.7% at both June 30, 2026 and December 31, 2025 and no specified maturity dates. Policy loans are an integral part of the life insurance policies we have in force, cannot be valued separately and are not marketable. Therefore, the fair value of policy loans approximates the carrying value reflected on the consolidated balance sheets and is considered a Level 3 asset in the fair value hierarchy.

Residential mortgage loan. The mortgage loan is secured by a residential property. The interest rate for this loan was 7.0% at both June 30, 2026 and December 31, 2025. At June 30, 2026, the remaining loan matures in two years.  Management estimated the fair value using an annual interest rate of 6.25% at both June 30, 2026 and December 31, 2025. Our mortgage loan is considered a Level 3 asset in the fair value hierarchy and is included in other long-term investments on the consolidated balance sheets.

Cash and cash equivalents. The fair value of cash and cash equivalents approximates carrying value and these assets are characterized as Level 1 assets in the fair value hierarchy.

Annuity liabilities. The fair value of the Company's liabilities under annuity contracts, which are considered Level 3 liabilities, was estimated at June 30, 2026 and December 31, 2025 using discounted cash flows based upon spot rates adjusted for various risk adjustments ranging from 3.73% to 5.01% and 3.31% to 4.98%, respectively. The fair value of liabilities under all insurance contracts are taken into consideration in the overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

Other long-term investments. Financial instruments included in other long-term investments are classified in various levels of the fair value hierarchy. The following table summarizes the carrying values of these investments.

Carrying Value
(In thousands)
June 30, 2026December 31, 2025
Other long-term investments:
Limited partnerships$80,419 82,592 
Structured note
2,560 2,565 
FHLB common stock226 222 
All other investments
55 60 
Total other long-term investments$83,260 85,439 
We are a member of the Federal Home Loan Bank ("FHLB") of Dallas, and such membership requires members to own stock in the FHLB. Our FHLB stock is carried at amortized cost, which approximates fair value.