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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The following table presents the carrying amounts and estimated fair values of our financial instruments as of September 30, 2015 and December 31, 2014:
|  | September 30, 2015 |  | December 31, 2014
($ in thousands) |  | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |
HTM |  | $ | 229,869 |  |  | 240,388 |  |  | 318,137 |  |  | 333,961 |
AFS |  | 4,351,046 |  |  | 4,351,046 |  |  | 4,066,122 |  |  | 4,066,122 |
Equity securities, AFS |  | 221,951 |  |  | 221,951 |  |  | 191,400 |  |  | 191,400 |
Short-term investments |  | 125,855 |  |  | 125,855 |  |  | 131,972 |  |  | 131,972 |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Notes payable: |  |  |  |  |  |  |  |  |  |  |  |
0.63% borrowings from FHLBI |  | 15,000 |  |  | 14,995 |  |  | — |  |  | — |
1.25% borrowings from FHLBI |  | 45,000 |  |  | 45,277 |  |  | 45,000 |  |  | 45,244 |
7.25% Senior Notes |  | 49,898 |  |  | 57,929 |  |  | 49,896 |  |  | 59,181 |
6.70% Senior Notes |  | 99,411 |  |  | 112,387 |  |  | 99,401 |  |  | 114,845 |
5.875% Senior Notes |  | 185,000 |  |  | 187,960 |  |  | 185,000 |  |  | 185,000 |
Total notes payable |  | $ | 394,309 |  |  | 418,548 |  |  | 379,297 |  |  | 404,270 |
The fair values of our financial assets and liabilities are generated using various valuation techniques and are placed into the fair value hierarchy considering the following: (i) the highest priority is given to quoted prices in active markets for identical assets (Level 1); (ii) the next highest priority is given to quoted prices in markets that are not active or inputs that are observable either directly or indirectly, including quoted prices for similar assets in markets that are not active and other inputs that can be derived principally from, or corroborated by, observable market data for substantially the full term of the assets (Level 2); and (iii) the lowest priority is given to unobservable inputs supported by little or no market activity and that reflect our assumptions about the exit price, including assumptions that market participants would use in pricing the asset (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. Transfers between levels in the fair value hierarchy are recognized at the end of the reporting period. For a discussion of the techniques used to value our financial assets and liabilities, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2014 Annual Report. The following tables provide quantitative disclosures of our financial assets that were measured at fair value at September 30, 2015 and December 31, 2014:
September 30, 2015 |  |  |  | Fair Value Measurements Using
($ in thousands) |  | Assets Measured at Fair Value at 9/30/2015 |  | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)1 |  | Significant Other Observable Inputs (Level 2)1 |  | Significant Unobservable Inputs (Level 3)
Description |  |  |  |  |  |  |  |  |  |  |  |
Measured on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |
AFS fixed income securities: |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 115,130 |  |  | 51,963 |  |  | 63,167 |  |  | — |
Foreign government |  | 19,687 |  |  | — |  |  | 19,687 |  |  | — |
Obligations of states and political subdivisions |  | 1,338,195 |  |  | — |  |  | 1,338,195 |  |  | — |
Corporate securities |  | 1,886,174 |  |  | — |  |  | 1,886,174 |  |  | — |
ABS |  | 256,923 |  |  | — |  |  | 256,923 |  |  | — |
CMBS |  | 222,002 |  |  | — |  |  | 222,002 |  |  | — |
RMBS |  | 512,935 |  |  | — |  |  | 512,935 |  |  | — |
Total AFS fixed income securities |  | 4,351,046 |  |  | 51,963 |  |  | 4,299,083 |  |  | — |
AFS equity securities: |  |  |  |  |  |  |  |
Common stock |  | 210,197 |  |  | 207,412 |  |  | — |  |  | 2,785 |
Preferred stock |  | 11,754 |  |  | 11,754 |  |  | — |  |  | — |
Total AFS equity securities |  | 221,951 |  |  | 219,166 |  |  | — |  |  | 2,785 |
Total AFS securities |  | 4,572,997 |  |  | 271,129 |  |  | 4,299,083 |  |  | 2,785 |
Short-term investments |  | 125,855 |  |  | 125,855 |  |  | — |  |  | — |
Total assets measured at fair value |  | $ | 4,698,852 |  |  | 396,984 |  |  | 4,299,083 |  |  | 2,785 |
1 | There were no transfers of securities between Level 1 and Level 2.
December 31, 2014 |  |  |  | Fair Value Measurements Using
($ in thousands) |  | Assets Measured at Fair Value at 12/31/14 |  | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)1 |  | Significant Other Observable Inputs (Level 2)1 |  | Significant Unobservable Inputs (Level 3)
Description |  |  |  |  |  |  |  |  |  |  |  |
Measured on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |
AFS fixed income securities: |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 124,130 |  |  | 53,199 |  |  | 70,931 |  |  | — |
Foreign government |  | 27,831 |  |  | — |  |  | 27,831 |  |  | — |
Obligations of states and political subdivisions |  | 1,246,264 |  |  | — |  |  | 1,246,264 |  |  | — |
Corporate securities |  | 1,799,806 |  |  | — |  |  | 1,799,806 |  |  | — |
ABS |  | 177,224 |  |  | — |  |  | 177,224 |  |  | — |
CMBS |  | 179,593 |  |  | — |  |  | 179,593 |  |  | — |
RMBS |  | 511,274 |  |  | — |  |  | 511,274 |  |  | — |
Total AFS fixed income securities |  | 4,066,122 |  |  | 53,199 |  |  | 4,012,923 |  |  | — |
AFS equity securities: |  |  |  |  |  |  |  |
Common stock |  | 191,400 |  |  | 188,500 |  |  | — |  |  | 2,900 |
Total AFS equity securities |  | 191,400 |  |  | 188,500 |  |  | — |  |  | 2,900 |
Total AFS securities |  | 4,257,522 |  |  | 241,699 |  |  | 4,012,923 |  |  | 2,900 |
Short-term investments |  | 131,972 |  |  | 131,972 |  |  | — |  |  | — |
Total assets measured at fair value |  | $ | 4,389,494 |  |  | 373,671 |  |  | 4,012,923 |  |  | 2,900 |
1 | There were no transfers of securities between Level 1 and Level 2.
The following table provides a summary of the changes in the fair value of securities measured using Level 3 inputs and related quantitative information for the nine-month period ended September 30, 2015.
September 30, 2015 | Common Stock
($ in thousands)
Fair value, December 31, 2014 | $ | 2,900 |
Total net (losses) gains for the period included in: |
OCI | — |
Net income | — |
Purchases | — |
Sales | (115 | )
Issuances | — |
Settlements | — |
Transfers into Level 3 | — |
Transfers out of Level 3 | — |
Fair value, September 30, 2015 | $ | 2,785 |
The $2.9 million in fair value of securities measured using Level 3 prices remained unchanged during the full year 2014. The price for these securities, which were measured using Level 3 inputs at September 30, 2015 and December 31, 2014, was obtained through statements provided by the issuer, which we review for reasonableness. The following tables provide quantitative information regarding our financial assets and liabilities that were disclosed at fair value at September 30, 2015 and December 31, 2014:
September 30, 2015 |  |  |  | Fair Value Measurements Using
($ in thousands) |  | Assets/ Liabilities Disclosed at Fair Value at 9/30/2015 |  | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
HTM: |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions |  | $ | 213,974 |  |  | — |  |  | 213,974 |  |  | — |
Corporate securities |  | 20,373 |  |  | — |  |  | 20,373 |  |  | — |
ABS |  | 1,210 |  |  | — |  |  | 1,210 |  |  | — |
CMBS |  | 4,831 |  |  | — |  |  | 4,831 |  |  | — |
Total HTM fixed income securities |  | $ | 240,388 |  |  | — |  |  | 240,388 |  |  | — |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Notes payable: |  |  |  |  |  |  |  |  |  |  |  |
0.63% borrowings from FHLBI |  | $ | 14,995 |  |  | — |  |  | 14,995 |  |  | — |
1.25% borrowings from FHLBI |  | 45,277 |  |  | — |  |  | 45,277 |  |  | — |
7.25% Senior Notes |  | 57,929 |  |  | — |  |  | 57,929 |  |  | — |
6.70% Senior Notes |  | 112,387 |  |  | — |  |  | 112,387 |  |  | — |
5.875% Senior Notes |  | 187,960 |  |  | 187,960 |  |  | — |  |  | — |
Total notes payable |  | $ | 418,548 |  |  | 187,960 |  |  | 230,588 |  |  | — |
December 31, 2014 |  |  |  | Fair Value Measurements Using
($ in thousands) |  | Assets/ Liabilities Disclosed at Fair Value at 12/31/2014 |  | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
HTM: |  |  |  |  |  |  |  |  |  |  |
Foreign government |  | $ | 5,394 |  |  | — |  |  | 5,394 |  |  | — |
Obligations of states and political subdivisions |  | 299,132 |  |  | — |  |  | 299,132 |  |  | — |
Corporate securities |  | 21,422 |  |  | — |  |  | 21,422 |  |  | — |
ABS |  | 2,823 |  |  | — |  |  | 2,823 |  |  | — |
CMBS |  | 5,190 |  |  | — |  |  | 5,190 |  |  | — |
Total HTM fixed income securities |  | $ | 333,961 |  |  | — |  |  | 333,961 |  |  | — |
Financial Liabilities |  |  |  |  |  |  |  |  |
Notes payable: |  |  |  |  |  |  |  |  |
1.25% borrowings from FHLBI |  | $ | 45,244 |  |  | — |  |  | 45,244 |  |  | — |
7.25% Senior Notes |  | 59,181 |  |  | — |  |  | 59,181 |  |  | — |
6.70% Senior Notes |  | 114,845 |  |  | — |  |  | 114,845 |  |  | — |
5.875% Senior Notes |  | 185,000 |  |  | 185,000 |  |  | — |  |  | — |
Total notes payable |  | $ | 404,270 |  |  | 185,000 |  |  | 219,270 |  |  | — |

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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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