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Investments (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Investments Debt and Equity Securities [Line Items]

Schedule of Available-for-sale Securities Reconciliation

The period-end cost or amortized cost, gross unrealized gains and losses, and fair value of available-for-sale fixed-maturity and equity securities follow:

		September 30, 2016
		Cost or amortized cost				Gross unrealized gains				Gross unrealized losses				Fair value
		(In thousands)
Securities available-for-sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies		$	15,515			$	547			$	(1	)		$	16,061
Foreign government			121,993				9,843				(106	)			131,730
States and political subdivisions			43,326				3,167				(34	)			46,459
Corporates			1,246,969				78,951				(2,840	)			1,323,080
Residential mortgage-backed securities			78,549				6,836				(107	)			85,278
Commercial mortgage-backed securities			104,471				4,355				(51	)			108,775
Other asset-backed securities			49,524				352				(85	)			49,791
Total fixed-maturity securities(1)			1,660,347				104,051				(3,224	)			1,761,174
Equity securities			37,966				10,147				(574	)			47,539
Total fixed-maturity and equity securities		$	1,698,313			$	114,198			$	(3,798	)		$	1,808,713

⁽¹⁾ Includes approximately $0.1 million of other-than-temporary impairment (“OTTI”) losses related to corporates and mortgage- and asset-backed securities recognized in accumulated other comprehensive income.

		December 31, 2015
		Cost or amortized cost				Gross unrealized gains				Gross unrealized losses				Fair value
		(In thousands)
Securities available-for-sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies		$	20,233			$	448			$	(22	)		$	20,659
Foreign government			114,656				7,082				(1,522	)			120,216
States and political subdivisions			38,995				2,111				(541	)			40,565
Corporates			1,276,965				49,008				(24,211	)			1,301,762
Residential mortgage-backed securities			94,532				6,814				(121	)			101,225
Commercial mortgage-backed securities			97,666				2,875				(555	)			99,986
Other asset-backed securities			46,996				129				(79	)			47,046
Total fixed-maturity securities(1)			1,690,043				68,467				(27,051	)			1,731,459
Equity securities			39,969				8,252				(382	)			47,839
Total fixed-maturity and equity securities		$	1,730,012			$	76,719			$	(27,433	)		$	1,779,298

⁽¹⁾ Includes approximately $0.1 million of OTTI related to corporates and mortgage- and asset-backed securities recognized in accumulated other comprehensive income.

Fixed-maturity Securities Classified by Contractual Maturity Date

The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio at September 30, 2016 follows:

		Amortized cost				Fair value
		(In thousands)
Due in one year or less		$	94,127			$	95,946
Due after one year through five years			690,909				734,979
Due after five years through 10 years			594,927				632,004
Due after 10 years			47,840				54,401
			1,427,803				1,517,330
Mortgage-and asset-backed securities			232,544				243,844
Total fixed-maturity securities		$	1,660,347			$	1,761,174

Net Effect on Stockholders' Equity of Unrealized Gains and Losses on Available-for-sale Securities

The net effect on stockholders’ equity of unrealized gains and losses on available-for-sale investments was as follows:

		September 30, 2016				December 31, 2015
		(In thousands)
Net unrealized investment gains including OTTI:
Fixed-maturity and equity securities		$	110,400			$	49,286
OTTI			103				109
Net unrealized investment gains excluding OTTI			110,503				49,395
Deferred income taxes			(38,676	)			(17,288	)
Net unrealized investment gains excluding OTTI, net of tax		$	71,827			$	32,107

Net Investment Income

Investment Income. The components of net investment income were as follows:

		Three months ended September 30,								Nine months ended September 30,
		2016				2015				2016				2015
		(In thousands)
Fixed-maturity securities (available-for-sale)		$	18,578			$	18,786			$	56,204			$	58,132
Fixed-maturity security (held-to-maturity)			4,957				3,772				13,716				8,954
Equity securities			505				514				1,527				1,533
Policy loans and other invested assets			318				354				998				1,049
Cash and cash equivalents			148				51				497				141
Market return on deposit asset underlying 10% coinsurance agreement			1,058				220				5,443				1,776
Gross investment income			25,564				23,697				78,385				71,585
Investment expenses			(1,208	)			(1,210	)			(3,643	)			(3,667	)
Investment income net of investment expenses			24,356				22,487				74,742				67,918
Interest expense on surplus note			(4,957	)			(3,772	)			(13,716	)			(8,954	)
Net investment income		$	19,399			$	18,715			$	61,026			$	58,964

Schedule of Net Realized Investment Gains and Losses

The components of net realized investment gains (losses) as well as details on gross realized investment gains and losses and proceeds from sales or other redemptions were as follows:

		Three months ended September 30,								Nine months ended September 30,
		2016				2015				2016				2015
		(In thousands)
Net realized investment gains (losses):
Gross gains from sales		$	637			$	1,209			$	6,322			$	4,610
Gross losses from sales			(192	)			(26	)			(714	)			(285	)
Other-than-temporary impairment losses			(478	)			(1,564	)			(3,308	)			(2,433	)
Gains (losses) from bifurcated options			(2	)			122				323				(269	)
Net realized investment gains (losses)		$	(35	)		$	(259	)		$	2,623			$	1,623

Schedule of Securities in Unrealized Loss Position

The following tables summarize, for all available-for-sale securities in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

		September 30, 2016
		Less than 12 months												12 months or longer
		Fair value				Unrealized losses				Number of securities				Fair value				Unrealized losses				Number of securities
		(Dollars in thousands)
Fixed-maturity securities:
U.S. government and agencies		$	1,729			$	(1	)			1			$	-			$	-				-
Foreign government			3,398				(19	)			2				3,134				(87	)			3
States and political subdivisions			2,844				(34	)			4				-				-				-
Corporates			31,616				(321	)			29				58,781				(2,519	)			65
Residential mortgage-backed securities			2,451				(39	)			5				4,515				(68	)			8
Commercial mortgage-backed securities			11,873				(18	)			11				7,136				(33	)			10
Other asset-backed securities			11,755				(53	)			14				4,108				(32	)			7
Total fixed-maturity securities			65,666				(485	)							77,674				(2,739	)
Equity securities			1,752				(123	)			11				3,500				(451	)			9
Total fixed-maturity and equity    securities		$	67,418			$	(608	)						$	81,174			$	(3,190	)

		December 31, 2015
		Less than 12 months												12 months or longer
		Fair value				Unrealized losses				Number of securities				Fair value				Unrealized losses				Number of securities
		(Dollars in thousands)
Fixed-maturity securities:
U.S. government and agencies		$	13,651			$	(22	)			7			$	-			$	-				-
Foreign government			23,572				(829	)			20				2,396				(693	)			3
States and political subdivisions			2,729				(44	)			6				878				(497	)			2
Corporates			413,131				(17,481	)			393				34,624				(6,730	)			54
Residential mortgage-backed securities			9,681				(61	)			9				4,762				(60	)			7
Commercial mortgage-backed securities			56,216				(493	)			49				3,199				(62	)			6
Other asset-backed securities			26,611				(77	)			23				260				(2	)			2
Total fixed-maturity securities			545,591				(19,007	)							46,119				(8,044	)
Equity securities			3,652				(287	)			17				3,209				(95	)			8
Total fixed-maturity and equity    securities		$	549,243			$	(19,294	)						$	49,328			$	(8,139	)

Amortized Cost and Fair Value of Available-for-sale Fixed-maturity Securities in Default

The amortized cost and fair value of available-for-sale fixed-maturity securities in default were as follows:

		September 30, 2016								December 31, 2015
		Amortized cost				Fair value				Amortized cost				Fair value
		(In thousands)
Fixed-maturity securities in default		$	5			$	93			$	138			$	262

Impairment Charges in Earnings on Available-for-sale Securities

Impairment charges recognized in earnings on available-for-sale securities were as follows:

		Three months ended September 30,								Nine months ended September 30,
		2016				2015				2016				2015
		(In thousands)
Impairments on fixed-maturity securities not in default		$	466			$	1,287			$	3,145			$	2,075
Impairments on fixed-maturity securities in default			2				2				121				7
Impairments on equity securities			10				275				42				351
Total impairment charges		$	478			$	1,564			$	3,308			$	2,433

Schedule of Net Impairment Losses Recognized in Earnings for AFS Securities

The rollforward of the OTTI recognized in net income for all fixed-maturity securities still held follows:

		Three months ended September 30,								Nine months ended September 30,
		2016				2015				2016				2015
		(In thousands)
Cumulative OTTI recognized in net income for securities still held,     beginning of period		$	7,489			$	7,701			$	11,856			$	9,550
Additions for OTTI securities where no OTTI were recognized    prior to the beginning of the period			451				336				1,682				403
Additions for OTTI securities where OTTI have been recognized    prior to the beginning of the period			17				953				1,584				1,679
Reductions due to sales, maturities, calls, amortization or increases    in cash flows expected to be collected over the remaining life of    credit impaired securities			(640	)			(138	)			(6,134	)			(1,503	)
Reductions for exchanges of securities previously impaired			(112	)			-				(1,783	)			(1,277	)
Cumulative OTTI recognized in net income for securities still    held, end of period		$	7,205			$	8,852			$	7,205			$	8,852

Available-for-Sale [Member]

Schedule of Investments Debt and Equity Securities [Line Items]

Schedule of Net Impairment Losses Recognized in Earnings for AFS Securities

Net impairment losses recognized in earnings for available-for-sale securities were as follows:

		Three months ended September 30,								Nine months ended September 30,
		2016				2015				2016				2015
		(In thousands)
Total impairment losses related to securities which the Company     does not intend to sell or more-likely-than-not will not be     required to sell:
Total OTTI losses recognized		$	445			$	150			$	1,374			$	251
Less portion of OTTI loss recognized in accumulated other    comprehensive income (loss)			-				-				-				-
Net impairment losses recognized in earnings for securities which    the Company does not intend to sell or more-likely-than-not will    not be required to sell before recovery			445				150				1,374				251
OTTI losses recognized in earnings for securities which the Company     intends to sell or more-likely-than-not will be required to sell     before recovery			33				1,414				1,934				2,182
Net impairment losses recognized in earnings		$	478			$	1,564			$	3,308			$	2,433

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