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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________

Commission file number: 001-39392

TREAN INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-4512647
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
150 Lake Street West
Wayzata, MN 55391
(Address of principal executive offices and zip code)
 (952) 974-2200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareTIGThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," a "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes     No  
As of November 4, 2022, there were 51,220,485 shares of the registrant's common stock outstanding.


TREAN INSURANCE GROUP, INC.
TABLE OF CONTENTS
Page

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2022December 31, 2021
Assets(unaudited)
Fixed maturities, at fair value (amortized cost of $581,935 and $465,459, respectively)
$530,118 $471,061 
Equity securities, at fair value (cost $39,838 and $984, respectively)
35,296 969 
Total investments565,414 472,030 
Cash and cash equivalents81,489 129,577 
Restricted cash16,320 407 
Accrued investment income3,441 2,344 
Premiums and other receivables153,440 141,920 
Income taxes receivable1,584 460 
Reinsurance recoverable384,204 377,241 
Prepaid reinsurance premiums119,389 129,411 
Deferred policy acquisition cost, net15,011 13,344 
Property and equipment, net7,369 7,632 
Right of use asset3,292 4,530 
Deferred tax asset3,454  
Goodwill142,347 142,347 
Intangible assets, net68,616 73,114 
Other assets16,205 8,658 
Total assets$1,581,575 $1,503,015 
Liabilities
Unpaid loss and loss adjustment expenses$578,751 $544,320 
Unearned premiums220,891 219,940 
Funds held under reinsurance agreements204,828 199,410 
Reinsurance premiums payable49,512 45,130 
Accounts payable, accrued expenses and other liabilities43,449 29,448 
Lease liability3,629 4,976 
Deferred tax liability 7,520 
Debt77,459 30,362 
Total liabilities1,178,519 1,081,106 
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value per share (600,000,000 authorized; 51,220,485 and 51,176,887 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)
512 512 
Additional paid-in capital289,618 288,623 
Retained earnings153,795 128,390 
Accumulated other comprehensive income (loss)(40,869)4,384 
Total stockholders' equity403,056 421,909 
Total liabilities and stockholders' equity$1,581,575 $1,503,015 

See accompanying notes to the condensed consolidated financial statements.
3

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues
Gross written premiums$162,183 $177,624 $477,775 $480,905 
Increase in gross unearned premiums(1,061)(28,478)(972)(64,836)
Gross earned premiums161,122 149,146 476,803 416,069 
Ceded earned premiums(89,741)(97,191)(275,235)(275,037)
Net earned premiums71,381 51,955 201,568 141,032 
Net investment income2,951 2,187 5,136 6,562 
Net realized gains9 49 311 72 
Other revenue2,140 2,799 7,145 8,683 
Total revenue76,481 56,990 214,160 156,349 
Expenses
Losses and loss adjustment expenses45,647 32,129 125,727 86,735 
General and administrative expenses23,256 13,788 63,235 40,946 
Other expenses  268 845 
Intangible asset amortization1,499 1,499 4,498 4,326 
Noncash stock compensation460 468 1,019 1,098 
Interest expense931 419 1,806 1,271 
Total expenses71,793 48,303 196,553 135,221 
Gains (losses) on embedded derivatives4,871 (121)14,463 1,869 
Other income29 35 76 191 
Income before taxes9,588 8,601 32,146 23,188 
Income tax expense2,014 2,083 6,741 5,102 
Net income$7,574 $6,518 $25,405 $18,086 
Earnings per share:
Basic$0.15 $0.13 $0.50 $0.35 
Diluted$0.15 $0.13 $0.50 $0.35 
Weighted average shares outstanding:
Basic51,216,869 51,171,416 51,197,296 51,157,726 
Diluted51,217,005 51,171,416 51,197,482 51,172,602 
See accompanying notes to the condensed consolidated financial statements.
4

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income$7,574 $6,518 $25,405 $18,086 
Other comprehensive loss, net of tax:
Unrealized investment losses:
Unrealized investment losses arising during the period(19,059)(2,419)(58,333)(8,670)
Income tax benefit(3,996)(508)(12,243)(1,821)
Unrealized investment losses, net of tax(15,063)(1,911)(46,090)(6,849)
Less reclassification adjustments to:
Net realized investment gains (losses) included in net realized gains (losses)21 49 (1,060)72 
Income tax expense (benefit)4 10 (223)15 
Total reclassifications included in net income, net of tax17 39 (837)57 
Other comprehensive loss(15,080)(1,950)(45,253)(6,906)
Total comprehensive income (loss)$(7,506)$4,568 $(19,848)$11,180 
See accompanying notes to the condensed consolidated financial statements.
5

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity
For the Three and Nine Months Ended September 30, 2022 and 2021
(in thousands, except share and unit data)
(unaudited)
Common StockAdditional Paid in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Stockholders' Equity
SharesAmount
Balance at June 30, 202251,202,136 $512 $289,174 $(25,789)$146,221 $410,118 
Stock compensation expense— — 460 — — 460 
Common stock issued pursuant to equity compensation awards, net of shares repurchased18,349 — (16)— — (16)
Other comprehensive loss— — — (15,080)— (15,080)
Net income— — — — 7,574 7,574 
Balance at September 30, 202251,220,485 $512 $289,618 $(40,869)$153,795 $403,056 

Balance at June 30, 202151,157,004 $511 $287,734 $8,470 $120,628 $417,343 
Stock compensation expense— — 468 — — 468 
Common stock issuances pursuant to equity compensation awards, net of shares repurchased17,883 1 (88)— — (87)
Other comprehensive loss— — — (1,950)— (1,950)
Net income— — — — 6,518 6,518 
Balance at September 30, 202151,174,887 $512 $288,114 $6,520 $127,146 $422,292 

Balance at December 31, 202151,176,887 $512 $288,623 $4,384 $128,390 $421,909 
Stock compensation expense— — 1,019 — — 1,019 
Common stock issuances pursuant to equity compensation awards, net of shares repurchased43,598 — (24)— — (24)
Other comprehensive loss— — — (45,253)— (45,253)
Net income— — — — 25,405 25,405 
Balance at September 30, 202251,220,485 $512 $289,618 $(40,869)$153,795 $403,056 

See accompanying notes to the condensed consolidated financial statements.
6

Balance at December 31, 202051,148,782 $511 $287,110 $13,426 $109,060 $410,107 
Stock compensation expense— — 1,098 — — 1,098 
Common stock issuances pursuant to equity compensation awards, net of shares repurchased26,105 1 (94)— — (93)
Other comprehensive loss— — — (6,906)— (6,906)
Net income— — — — 18,086 18,086 
Balance at September 30, 202151,174,887 $512 $288,114 $6,520 $127,146 $422,292 
See accompanying notes to the condensed consolidated financial statements.
7

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
20222021
Operating activities
Net income$25,405 $18,086 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization5,100 5,123 
Stock compensation1,019 1,098 
Unrealized gains on embedded derivatives(16,848)(3,761)
Net gains on investments(311)(72)
Unrealized losses on equity securities4,542  
Bond amortization and accretion996 1,715 
Deferred income taxes1,046 (2,259)
Amortization of debt discount and deferred financing costs131 126 
Changes in operating assets and liabilities:
Accrued investment income(1,097)80 
Premiums and other receivables(11,520)(25,167)
Reinsurance recoverable on paid and unpaid losses(6,963)(18,460)
Prepaid reinsurance premiums10,022 (30,252)
Right of use asset1,238 1,444 
Other assets(9,040)(10,863)
Unpaid loss and loss adjustment expenses34,431 52,975 
Unearned premiums951 64,879 
Funds held under reinsurance agreements25,016 19,585 
Reinsurance premiums payable4,382 (7,829)
Accounts payable, accrued expenses and other liabilities10,518 (11,430)
Lease liability(1,347)(1,537)
Income taxes payable and receivable(1,124)(71)
Net cash provided by operating activities76,547 53,410 
Investing activities
Payments for capital expenditures(339)(92)
Return of capital on equity method investment 232 
Purchase of investments, available for sale(257,929)(129,474)
Proceeds from investments sold, matured or repaid103,526 61,998 
Acquisition of subsidiary, net of cash received (3,795)
Net cash used in investing activities(154,742)(71,131)
Financing activities
Shares redeemed for payroll taxes(23)(94)
Proceeds from surplus notes48,455  
Principal payments on debt(1,238)(1,031)
Payment for deferred financing costs(251) 
Payment for interest rate cap(173) 
Payment for acquisition of subsidiary(750) 
Net cash provided by (used in) financing activities46,020 (1,125)
Net decrease in cash, cash equivalents and restricted cash(32,175)(18,846)
Cash, cash equivalents and restricted cash – beginning of period
129,984 157,234 
Cash, cash equivalents and restricted cash – end of period
$97,809 $138,388 
See accompanying notes to the condensed consolidated financial statements.
8

Trean Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Disaggregation of cash and restricted cash:September 30, 2022December 31, 2021
Cash and cash equivalents$81,489 $129,577 
Restricted cash16,320 407 
Total cash, cash equivalents and restricted cash$97,809 $129,984 


Nine Months Ended September 30,
Supplemental disclosure of cash flow information:20222021
Cash paid during the year for:
Interest$1,319 $1,145 
Income taxes7,081 7,395 
Non-cash investing and financing activity:
Right-of-use assets obtained in exchange for new operating lease liabilities307 319 
Non-cash transfer of investments to settle funds held for reinsurance2,750 13,562 
Non-cash transfer of investments to settle amounts held for others in accounts payable 26,211 
Contingent consideration for the acquisition of subsidiary 1,500 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases1,890 1,824 

See accompanying notes to the condensed consolidated financial statements.
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Notes to the Condensed Consolidated Financial Statements

Note 1. Business and Basis of Presentation
Trean Insurance Group, Inc. (together with its wholly owned subsidiaries, the "Company") provides products and services to the specialty insurance market. Historically, the Company has focused on specialty casualty markets management believes are under-served and where the Company’s expertise allows the Company to achieve higher rates, such as niche workers' compensation markets and small- to medium-sized specialty casualty insurance programs. The Company underwrites specialty-casualty insurance products both through programs where the Company partners with other organizations ("Program Partners") and also through Company owned managing general agencies ("Owned MGAs"). Additionally, the Company provides Program Partners with a variety of services, including issuing carrier services, claims administration, and reinsurance brokerage from which the Company generates fee-based revenues.

The Company's wholly owned subsidiaries include: (i) Benchmark Holding Company, a property and casualty insurance holding company, which owns Benchmark Insurance Company ("Benchmark"), a property and casualty insurance company domiciled in the state of Kansas, American Liberty Insurance Company ("ALIC"), a property and casualty insurance company domiciled in the state of Utah, 7710 Insurance Company ("7710"), a property and casualty insurance company domiciled in the state of South Carolina and Benchmark Specialty Insurance Company ("BSIC"), a property and casualty insurance company domiciled in the state of Arkansas; (ii) Compstar Insurance Services LLC, a California-based general agency; and (iii) Trean Corporation ("Trean Corp"), a reinsurance intermediary manager and a managing general agent, which consists of the following wholly owned subsidiaries: (a) Trean Reinsurance Services, LLC ("TRS"), a reinsurance intermediary broker; Benchmark Administrators LLC ("BIC Admin"), a claims third-party administrator; (b) Western Integrated Care, LLC ("WIC"), a managed care organization; and (c) Westcap Insurance Services, LLC ("Westcap"), a managing general agent based in California.

The accompanying condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to the Quarterly Report on Form 10-Q under the Securities Exchange Act of 1934, as amended. Accordingly, they do not contain all of the information included in the Company's annual consolidated financial statements and notes. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s condensed consolidated financial position and results of operations for the periods presented have been included. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Use of estimates

While preparing the condensed consolidated financial statements, the Company has made certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Reported amounts that require extensive use of estimates include the reserves for unpaid losses and loss adjustment expenses ("LAE"), reinsurance recoverables, investments, goodwill, and other intangible assets. Except for the captions on the condensed consolidated balance sheets and condensed consolidated statements of comprehensive income, generally, the term loss(es) is used to collectively refer to both losses and LAE.

The Company tests for goodwill impairment at the reporting unit level during the fourth quarter of each year and between annual tests if a triggering event indicates the possibility of an impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis. The declining share price of the Company’s stock has caused the market capitalization to fall below the book value as of September 30, 2022. As a result of the decrease in share price, the Company performed an interim impairment analysis at September 30, 2022 and concluded that no impairment relating to goodwill existed as of September 30, 2022.

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Accounting pronouncements

Recently adopted policies

In January 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 ("ASU 2020-01"). This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. ASU 2020-01 is effective for annual periods beginning after December 15, 2021, including interim periods thereafter. The Company adopted this standard effective January 1, 2022. Adoption of this standard did not have a material impact on the condensed consolidated financial statements.

Pending policies

The Company completed its initial public offering in July 2020, and is an emerging growth company as defined under federal securities laws. As such, the Company has elected to adopt pending accounting policies under the dates required for private companies. Therefore, the dates included within this section reflect the effective dates for the adoption of new accounting policies required by private companies.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03"). This update represents changes to clarify and improve the codification to allow for easier application by eliminating inconsistencies and providing clarification on items such as (i) the application of fair value option disclosures; (ii) the accounting for fees related to modifications of debt; and (iii) aligning the contractual term of a net investment in a lease in accordance with ASC Topic 326, Financial Instruments - Credit Losses, and the lease term determined in accordance with ASC Topic 842, Leases. The Company adopted items (i) and (ii) effective January 1, 2020 and will adopt item (iii) on January 1, 2023. Adoption of this standard has not had, and is not expected to have, a material impact on the condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Additionally, credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which the fair value is below the amortized cost. ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2023. The Company is currently evaluating the impact of this standard on the condensed consolidated financial statements.


Note 2. Acquisitions
Western Integrated Care

Effective July 6, 2021, Trean Corp acquired 100% ownership of WIC for a total purchase price of $5,500, which includes $1,500 that is contingent on WIC's future earnings, as defined in the agreement. WIC is a managed care organization that offers services to workers' compensation insurers to enable employees who are injured on the job to access qualified medical treatment. The Company recorded $1,501 of goodwill and intangible assets of $3,624 associated with the business combination. The Company made an earn-out payment of $750 during the three months ended September 30, 2022.


Note 3. Fair Value Measurements

The Company’s financial instruments include assets and liabilities carried at fair value. The inputs to valuation techniques used to measure fair value are prioritized into a three level hierarchy. The fair value hierarchy is as follows:

Level 1: Fair values primarily based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
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Level 2: Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities.

Level 3: Fair values primarily based on valuations derived when one or more of the significant inputs are unobservable. With little or no observable market, the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability.

The Company classifies the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. The following tables present the estimated fair value of the Company’s significant financial instruments.

September 30, 2022
Level 1Level 2Level 3Total
Fixed maturities:
U.S. government and government securities$56,899 $ $ $56,899 
Foreign governments 392  392 
States, territories and possessions 14,380  14,380 
Political subdivisions of states territories and possessions 33,863  33,863 
Special revenue and special assessment obligations 103,318  103,318 
Industrial and public utilities 118,252  118,252 
Commercial mortgage-backed securities 123,478  123,478 
Residential mortgage-backed securities 24,171  24,171 
Other loan-backed securities 50,339  50,339 
Hybrid securities 5,026  5,026 
Total fixed maturities56,899 473,219  530,118 
Equity securities12,180 23,116  35,296 
Total investments$69,079 $496,335 $ $565,414 
Embedded derivatives on funds held under reinsurance agreements$(2,103)$(14,474)$ $(16,577)
Interest rate cap agreement 173  173 
Debt 79,700  79,700 


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December 31, 2021
Level 1Level 2Level 3Total
Fixed maturities:
U.S. government and government securities$2,392 $39,042 $ $41,434 
Foreign governments 2,490  2,490 
States, territories and possessions 10,766  10,766 
Political subdivisions of states, territories and possessions 40,002  40,002 
Special revenue and special assessment obligations 95,991  95,991 
Industrial and public utilities 103,257  103,257 
Commercial mortgage-backed securities 118,218  118,218 
Residential mortgage-backed securities 17,368  17,368 
Other loan-backed securities 41,425  41,425 
Hybrid securities 110  110 
Total fixed maturities2,392 468,669  471,061 
Equity securities 969  969 
Total investments$2,392 $469,638 $ $472,030 
Embedded derivatives on funds held under reinsurance agreements$(4)$275 $ $271 
Debt 30,938  30,938 

Fixed maturities and equity securities: The Company, through its third-party pricing service provider, uses a variety of sources to estimate the fair value of investments such as Refinitiv (formerly Reuters), PricingDirect, ICE Data Services, and for equities, Bloomberg or S&P Capital IQ Pro. Equity securities are generally valued at the closing price on the exchange on which they are primarily traded as provided by a third-party pricing service. Fixed income securities are generally valued at an evaluated bid as provided by a third-party pricing service. Securities and other assets generally valued using third-party pricing services may also be valued at broker/dealer indications. Values obtained from third-party pricing services can utilize several market data sources for inputs such as transaction data, yield, quality, coupon rate, maturity, issue type, trading characteristics, and other market activity. To validate the reasonableness of the prices, the Company performs various qualitative and quantitative procedures such as analysis of recent trading activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service.

Embedded derivatives: The Company enters into funds held contracts under reinsurance agreements, which create embedded derivatives on the underlying investments. These embedded derivatives are valued based upon the unrealized gain or loss position of the funds held portfolio, which is determined consistent with other investments using third-party pricing services. To validate the reasonableness of the quoted prices, the Company performs various qualitative and quantitative procedures such as analysis of recent activity, analytical review of fair values and an evaluation of the underlying pricing methodologies. Based on these procedures, the Company did not adjust the prices or quotes from the third-party pricing service.

Interest rate cap agreement: The Company entered into an interest cap agreement to hedge cash flows associated with interest rate fluctuations on variable rate debt. The fair value of the interest rate cap agreement is based on the terms of the agreement and commonly quoted data for forward interest rate curves and an implied market volatility. The Company also assessed the significance of credit valuation adjustments to appropriately reflect the respective nonperformance risk in the fair value measurement and determined the credit valuation adjustment is not significant to the overall valuation of the interest rate cap.

Debt: The Company holds debt related to its secured credit facility and surplus notes. The Company has determined that the remaining balance of the debt reflected its fair value as this would represent the total amount to repay the debt.


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Note 4. Investments
Fixed income securities include bonds, asset-backed securities, and redeemable preferred securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale and are carried at fair value. Equity securities primarily include common stocks, mutual funds, and non-redeemable preferred stocks, which are carried at fair value.

The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company's fixed maturities investments are as follows:

September 30, 2022
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Fixed maturities:
U.S. government and government securities$59,974 $14 $(3,089)$56,899 
Foreign governments400  (8)392 
States, territories and possessions16,088  (1,708)14,380 
Political subdivisions of states, territories and possessions38,614 1 (4,752)33,863 
Special revenue and special assessment obligations116,311 5 (12,998)103,318 
Industrial and public utilities125,572  (7,320)118,252 
Commercial mortgage-backed securities141,552 20 (18,094)123,478 
Residential mortgage-backed securities25,769 16 (1,614)24,171 
Other loan-backed securities51,857  (1,518)50,339 
Hybrid securities5,798  (772)5,026 
Total fixed maturities available for sale$581,935 $56 $(51,873)$530,118 


December 31, 2021
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Fixed maturities:
U.S. government and government securities$41,490 $113 $(169)$41,434 
Foreign governments2,500  (10)2,490 
States, territories and possessions10,593 189 (16)10,766 
Political subdivisions of states, territories and possessions39,170 975 (143)40,002 
Special revenue and special assessment obligations93,664 2,920 (593)95,991 
Industrial and public utilities100,774 2,835 (352)103,257 
Commercial mortgage-backed securities119,378 591 (1,751)118,218 
Residential mortgage-backed securities16,549 843 (24)17,368 
Other loan-backed securities41,236 248 (59)41,425 
Hybrid securities105 5  110 
Total fixed maturities available for sale$465,459 $8,719 $(3,117)$471,061 


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The following table illustrates the Company’s gross unrealized losses and fair value of fixed maturities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

September 30, 2022
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Fixed maturities:
U.S. government and government securities$47,377 $(2,691)$4,623 $(398)$52,000 $(3,089)
Foreign governments392 (8)  392 (8)
States, territories and possessions14,150 (1,612)229 (96)14,379 (1,708)
Political subdivisions of states, territories and possessions27,617 (3,574)