Total Return Swaps From time to time, the Company uses total return swaps as a means to manage spread duration and credit exposure in its investment portfolio. The fair value of the Company’s total return swaps is determined using broker-dealer bid quotations, market-based prices from pricing vendors or valuation models. At December 31, 2021 and December 31, 2020, the Company had no outstanding total return swaps, respectively. Equity Derivatives Equity Futures From time to time, the Company uses equity derivatives in its investment portfolio to either assume equity risk or hedge its equity exposure. The fair value of the Company’s equity futures is determined using market-based prices from pricing vendors. At December 31, 2021, the Company had a $74.3 million notional long position of equity futures, denominated in U.S. dollars (2020 - $Nil). Derivative Instruments Designated as Hedges of Net Investments in Foreign Operations Foreign Currency Derivatives Hedges of Net Investments in Foreign Operations Certain of the Company’s subsidiaries use non-U.S. dollar functional currencies. The Company, from time to time, enters into foreign exchange forwards to hedge currencies, which, as of December 31, 2021 and 2020, includes the Australian dollar and Euro net investment in foreign operations, on an after-tax basis, from changes in the exchange rate between the U.S. dollar and these currencies. The Company utilizes foreign exchange forward contracts to hedge the fair value of its net investment in a foreign operation. The Company has entered into foreign exchange forward contracts that were formally designated as hedges of its investment in subsidiaries with non-U.S. dollar functional currencies. There was no ineffectiveness in these transactions. The table below provides a summary of derivative instruments designated as hedges of net investments in foreign operations, including the weighted average U.S. dollar equivalent of foreign denominated net (liabilities) assets that were hedged and the resulting derivative gain that are recorded in foreign currency translation adjustments, net of tax, within accumulated other comprehensive loss on the Company’s consolidated statements of changes in shareholders’ equity: Year ended December 31, 2021 2020 Weighted average of U.S. dollar equivalent of foreign denominated net assets (liabilities) $ (66,438) $ (45,803) Derivative gains (losses) (1) $ (4,535) $ 11,685 (1) Derivative gains (losses) from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in foreign currency translation adjustments, net of tax, within accumulated other comprehensive income (loss) on the Company’s consolidated statements of changes in shareholders’ equity. NOTE 20. COMMITMENTS, CONTINGENCIES AND OTHER ITEMS Concentration of Credit Risk Instruments which potentially subject the Company to concentration of credit risk consist principally of investments, including the Company’s equity method investments, cash, premiums receivable and reinsurance balances. The Company limits the amount of credit exposure to any one financial institution and, except for the securities of the U.S. Government and U.S. Government related entities, and money market securities, none of the Company’s fixed-maturity and short-term investments exceeded 10% of shareholders’ equity at December 31, 2021. Refer to “Note 7. Reinsurance,” for information with respect to reinsurance recoverable. F-89