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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2016
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2016 and 2015:
December 31, 2016 |  |  |  |  |  |  |  |
(In thousands) |  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 73,530 |  |  | $ | 30,690 |  |  | $ | 42,840 |  |  | $ | — |
Obligations of U.S. states and political subdivisions |  | 2,143,016 |  |  | — |  |  | 2,142,325 |  |  | 691 |
Corporate debt securities |  | 1,743,910 |  |  | — |  |  | 1,743,910 |  |  | — |
ABS |  | 59,565 |  |  | — |  |  | 59,565 |  |  | — |
RMBS |  | 224,209 |  |  | — |  |  | 224,209 |  |  | — |
CMBS |  | 319,817 |  |  | — |  |  | 319,817 |  |  | — |
CLOs |  | 121,175 |  |  | — |  |  | 121,175 |  |  | — |
Total debt securities |  | 4,685,222 |  |  | 30,690 |  |  | 4,653,841 |  |  | 691 |
Equity securities (1) |  | 7,128 |  |  | 2,860 |  |  | — |  |  | 4,268 |
Total investments |  | $ | 4,692,350 |  |  | $ | 33,550 |  |  | $ | 4,653,841 |  |  | $ | 4,959 |
Real estate acquired (2) |  | $ | 11,748 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,748 |
December 31, 2015 |  |  |  |  |  |  |  |
(In thousands) |  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 160,584 |  |  | $ | 46,197 |  |  | $ | 114,387 |  |  | $ | — |
Obligations of U.S. states and political subdivisions |  | 1,792,527 |  |  | — |  |  | 1,791,299 |  |  | 1,228 |
Corporate debt securities |  | 2,004,763 |  |  | — |  |  | 2,004,763 |  |  | — |
ABS |  | 116,617 |  |  | — |  |  | 116,617 |  |  | — |
RMBS |  | 257,648 |  |  | — |  |  | 257,648 |  |  | — |
CMBS |  | 233,491 |  |  | — |  |  | 233,491 |  |  | — |
CLOs |  | 60,200 |  |  | — |  |  | 60,200 |  |  | — |
Debt securities issued by foreign sovereign governments |  | 31,731 |  |  | 31,731 |  |  | — |  |  | — |
Total debt securities |  | 4,657,561 |  |  | 77,928 |  |  | 4,578,405 |  |  | 1,228 |
Equity securities (1) |  | 5,645 |  |  | 2,790 |  |  | — |  |  | 2,855 |
Total investments |  | $ | 4,663,206 |  |  | $ | 80,718 |  |  | $ | 4,578,405 |  |  | $ | 4,083 |
Real estate acquired (2) |  | $ | 12,149 |  |  | $ | — |  |  | $ | — |  |  | $ | 12,149 |
(1) | Equity securities in Level 3 are carried at cost, which approximates fair value.
(2) | Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets.
For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2016, 2015, and 2014 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year.
Level 3 reconciliations:
(In thousands) |  | Obligations of U.S. States and Political Subdivisions |  | Equity Securities |  | Total Investments |  | Real Estate Acquired
Balance at December 31, 2015 |  | $ | 1,228 |  |  | $ | 2,855 |  |  | $ | 4,083 |  |  | $ | 12,149 |
Total realized/unrealized gains (losses): |  |  |  |  |  |  |  |
Included in earnings and reported as net realized investment gains |  | — |  |  | 3,579 |  |  | 3,579 |  |  | — |
Included in earnings and reported as losses incurred, net |  | — |  |  | — |  |  | — |  |  | (1,142 | )
Purchases |  | — |  |  | 4,258 |  |  | 4,258 |  |  | 36,859 |
Sales |  | (537 | ) |  | (6,424 | ) |  | (6,961 | ) |  | (36,118 | )
Balance at December 31, 2016 |  | $ | 691 |  |  | $ | 4,268 |  |  | $ | 4,959 |  |  | $ | 11,748 |
(In thousands) |  | Obligations of U.S. States and Political Subdivisions |  | Equity Securities |  | Total Investments |  | Real Estate Acquired
Balance at December 31, 2014 |  | $ | 1,846 |  |  | $ | 321 |  |  | $ | 2,167 |  |  | $ | 12,658 |
Total realized/unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings and reported as losses incurred, net |  | — |  |  | — |  |  | — |  |  | (2,322 | )
Purchases |  | 7 |  |  | 2,534 |  |  | 2,541 |  |  | 34,624 |
Sales |  | (625 | ) |  | — |  |  | (625 | ) |  | (32,811 | )
Balance at December 31, 2015 |  | $ | 1,228 |  |  | $ | 2,855 |  |  | $ | 4,083 |  |  | $ | 12,149 |
(In thousands) |  | Obligations of U.S. States and Political Subdivisions |  | Equity Securities |  | Total Investments |  | Real Estate Acquired
Balance at December 31, 2013 |  | $ | 2,423 |  |  | $ | 321 |  |  | $ | 2,744 |  |  | $ | 13,280 |
Total realized/unrealized gains (losses): |  |  |  |  |  |  |  |
Included in earnings and reported as losses incurred, net |  | — |  |  | — |  |  | — |  |  | (4,129 | )
Purchases |  | 30 |  |  | — |  |  | 30 |  |  | 42,247 |
Sales |  | (607 | ) |  | — |  |  | (607 | ) |  | (38,740 | )
Balance at December 31, 2014 |  | $ | 1,846 |  |  | $ | 321 |  |  | $ | 2,167 |  |  | $ | 12,658 |
Authoritative guidance over disclosures about the fair value of financial instruments requires additional disclosure for financial instruments not measured at fair value. Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents (Level 1) and accrued investment income (Level 2) approximated their fair values. As of December 31, 2016, the majority of the $5.0 million balance of Level 3 securities are equity securities that can only be redeemed or sold at their par value and only to the security issuer, with the remainder of the balance held in a state premium tax credit investment. The state premium tax credit investment has an average maturity of less than 3 years and a credit rating of AAA, and its balance reflects its remaining scheduled payments discounted at an average annual rate of 7.1%. As of December 31, 2015 our Level 3 securities were equity securities that can only be redeemed or sold at their par value and only to the security issuer and state premium tax credit investments. As of December 31, 2014 the majority of our Level 3 securities were state premium tax credit investments. Additional fair value disclosures related to our investment portfolio are included in Note 5 – “Investments.” We incur financial liabilities in the normal course of our business. The following table presents the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2016 and 2015. The fair values of our 5% Notes, 2% Notes, 5.75% Notes, and 9% Debentures were based on observable market prices and the fair value of the FHLB Advance was estimated using discounted cash flows on current incremental borrowing rates for similar borrowing arrangements, and in all cases they are categorized as Level 2. See Note 7 - "Debt" for a description of the financial liabilities in the table below.
|  | December 31, 2016 |  | December 31, 2015
(In thousands) |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Financial liabilities: |  |  |  |  |  |  |
FHLB Advance |  | $ | 155,000 |  |  | $ | 151,905 |  |  | n/a |  |  | n/a |
5% Notes |  | 144,789 |  |  | 147,679 |  |  | 331,546 |  |  | 345,616 |
2% Notes |  | 204,672 |  |  | 308,605 |  |  | 490,755 |  |  | 701,955 |
5.75% Notes |  | 417,406 |  |  | 445,987 |  |  | n/a |  |  | n/a |
9% Debentures |  | 256,872 |  |  | 323,040 |  |  | 389,522 |  |  | 455,067 |
Total financial liabilities |  | $ | 1,178,739 |  |  | $ | 1,377,216 |  |  | $ | 1,211,823 |  |  | $ | 1,502,638 |
The 5% Notes, 2% Notes, 5.75% Notes, and 9% Debentures are obligations of our holding company, MGIC Investment Corporation, and not of its subsidiaries.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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