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Investments | 9 Months Ended
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Sep. 30, 2016
Investments Debt And Equity Securities [Abstract] |
Investments | Note 4. Investments The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at September 30, 2016 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
States and political subdivisions |  | $ | 418,155 |  |  | $ | 15,675 |  |  | $ | (96 | ) |  | $ | 433,734 |
Corporate bonds |  |  | 158,042 |  |  |  | 1,698 |  |  |  | (81 | ) |  |  | 159,659 |
Commercial mortgage-backed securities |  |  | 290 |  |  |  | — |  |  |  | — |  |  |  | 290 |
U.S. agency-based mortgage-backed securities |  |  | 10,943 |  |  |  | 1,193 |  |  |  | — |  |  |  | 12,136 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 11,863 |  |  |  | 986 |  |  |  | (1 | ) |  |  | 12,848 |
Asset-backed securities |  |  | 2,021 |  |  |  | 158 |  |  |  | (65 | ) |  |  | 2,114 |
Totals |  | $ | 601,314 |  |  | $ | 19,710 |  |  | $ | (243 | ) |  | $ | 620,781 |
The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at September 30, 2016 are summarized as follows:
|  | Cost or Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
Fixed maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 188,689 |  |  | $ | 8,450 |  |  | $ | (359 | ) |  | $ | 196,780 |
Corporate bonds |  |  | 197,167 |  |  |  | 2,259 |  |  |  | (214 | ) |  |  | 199,212 |
U.S. agency-based mortgage-backed securities |  |  | 12,026 |  |  |  | 51 |  |  |  | (797 | ) |  |  | 11,280 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 62,615 |  |  |  | 821 |  |  |  | (88 | ) |  |  | 63,348 |
Total fixed maturity |  |  | 460,497 |  |  |  | 11,581 |  |  |  | (1,458 | ) |  |  | 470,620 |
Other investments |  |  | 10,000 |  |  |  | 2,174 |  |  |  | — |  |  |  | 12,174 |
Equity securities |  |  | — |  |  |  | 32 |  |  |  | — |  |  |  | 32 |
Totals |  | $ | 470,497 |  |  | $ | 13,787 |  |  | $ | (1,458 | ) |  | $ | 482,826 |
The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2015 are summarized as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
States and political subdivisions |  | $ | 408,447 |  |  | $ | 15,352 |  |  | $ | (45 | ) |  | $ | 423,754 |
Corporate bonds |  |  | 171,224 |  |  |  | 159 |  |  |  | (810 | ) |  |  | 170,573 |
Commercial mortgage-backed securities |  |  | 37,494 |  |  |  | 204 |  |  |  | (15 | ) |  |  | 37,683 |
U.S. agency-based mortgage-backed securities |  |  | 13,223 |  |  |  | 1,249 |  |  |  | (1 | ) |  |  | 14,471 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 12,487 |  |  |  | 897 |  |  |  | (4 | ) |  |  | 13,380 |
Asset-backed securities |  |  | 2,289 |  |  |  | 202 |  |  |  | (76 | ) |  |  | 2,415 |
Totals |  | $ | 645,164 |  |  | $ | 18,063 |  |  | $ | (951 | ) |  | $ | 662,276 |
The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2015 are summarized as follows:
|  | Cost or Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
|  | (in thousands) |
Fixed maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 164,684 |  |  | $ | 6,942 |  |  | $ | (207 | ) |  | $ | 171,419 |
Corporate bonds |  |  | 202,537 |  |  |  | 253 |  |  |  | (1,486 | ) |  |  | 201,304 |
U.S. agency-based mortgage-backed securities |  |  | 8,888 |  |  |  | 4 |  |  |  | (1,593 | ) |  |  | 7,299 |
Total fixed maturity |  |  | 376,109 |  |  |  | 7,199 |  |  |  | (3,286 | ) |  |  | 380,022 |
Other investments |  |  | 10,000 |  |  |  | 2,217 |  |  |  | — |  |  |  | 12,217 |
Equity securities |  |  | — |  |  |  | 31 |  |  |  | — |  |  |  | 31 |
Totals |  | $ | 386,109 |  |  | $ | 9,447 |  |  | $ | (3,286 | ) |  | $ | 392,270 |
A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at September 30, 2016, by contractual maturity, is as follows:
Maturity |  | Amortized Cost |  |  | Fair Value |
|  | (in thousands) |
Within one year |  | $ | 95,695 |  |  | $ | 96,339 |
After one year through five years |  |  | 302,699 |  |  |  | 311,060 |
After five years through ten years |  |  | 107,854 |  |  |  | 113,247 |
After ten years |  |  | 81,812 |  |  |  | 85,595 |
U.S. agency-based mortgage-backed securities |  |  | 290 |  |  |  | 290 |
Commercial mortgage-backed securities |  |  | 10,943 |  |  |  | 12,136 |
Asset-backed securities |  |  | 2,021 |  |  |  | 2,114 |
Totals |  | $ | 601,314 |  |  | $ | 620,781 |
A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at September 30, 2016, by contractual maturity, is as follows:
Maturity |  | Amortized Cost |  |  | Fair Value |
|  | (in thousands) |
Within one year |  | $ | 68,399 |  |  | $ | 68,884 |
After one year through five years |  |  | 213,596 |  |  |  | 216,619 |
After five years through ten years |  |  | 38,679 |  |  |  | 39,845 |
After ten years |  |  | 127,797 |  |  |  | 133,992 |
U.S. agency-based mortgage-backed securities |  |  | 12,026 |  |  |  | 11,280 |
Totals |  | $ | 460,497 |  |  | $ | 470,620 |
The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:
|  | Less Than 12 Months |  |  | 12 Months or Greater |  |  | Total |
|  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |
|  | (in thousands) |
September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held-to-Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 23,075 |  |  | $ | 96 |  |  | $ | — |  |  | $ | — |  |  | $ | 23,075 |  |  | $ | 96 |
Corporate bonds |  |  | 9,696 |  |  |  | 55 |  |  |  | 3,173 |  |  |  | 26 |  |  |  | 12,869 |  |  |  | 81 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 637 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 637 |  |  |  | 1 |
Asset-backed securities |  |  | — |  |  |  | — |  |  |  | 1,221 |  |  |  | 65 |  |  |  | 1,221 |  |  |  | 65 |
Total held-to-maturity securities |  |  | 33,408 |  |  |  | 152 |  |  |  | 4,394 |  |  |  | 91 |  |  |  | 37,802 |  |  |  | 243 |
Available-for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 22,147 |  |  | $ | 328 |  |  | $ | 4,746 |  |  | $ | 31 |  |  | $ | 26,893 |  |  | $ | 359 |
Corporate bonds |  |  | 7,673 |  |  |  | 9 |  |  |  | 7,900 |  |  |  | 205 |  |  |  | 15,573 |  |  |  | 214 |
U.S. agency-based mortgage-backed securities |  |  | — |  |  |  | — |  |  |  | 6,930 |  |  |  | 797 |  |  |  | 6,930 |  |  |  | 797 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 3,266 |  |  |  | 88 |  |  |  | — |  |  |  | — |  |  |  | 3,266 |  |  |  | 88 |
Total available-for-sale securities |  |  | 33,086 |  |  |  | 425 |  |  |  | 19,576 |  |  |  | 1,033 |  |  |  | 52,662 |  |  |  | 1,458 |
Total |  | $ | 66,494 |  |  | $ | 577 |  |  | $ | 23,970 |  |  | $ | 1,124 |  |  | $ | 90,464 |  |  | $ | 1,701 |
|  | Less Than 12 Months |  |  | 12 Months or Greater |  |  | Total |
|  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |  |  | Fair Value of Investments with Unrealized Losses |  |  | Gross Unrealized Losses |
|  | (in thousands) |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held-to-Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 24,068 |  |  | $ | 45 |  |  | $ | — |  |  | $ | — |  |  | $ | 24,068 |  |  | $ | 45 |
Corporate bonds |  |  | 128,436 |  |  |  | 687 |  |  |  | 18,139 |  |  |  | 123 |  |  |  | 146,575 |  |  |  | 810 |
Commercial mortgage-backed securities |  |  | 9,784 |  |  |  | 15 |  |  |  | — |  |  |  | — |  |  |  | 9,784 |  |  |  | 15 |
U.S. agency-based mortgage-backed securities |  |  | 18 |  |  |  | — |  |  |  | 28 |  |  |  | 1 |  |  |  | 46 |  |  |  | 1 |
U.S. Treasury securities and obligations of U.S. government agencies |  |  | 2,980 |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 2,980 |  |  |  | 4 |
Asset-backed securities |  |  | — |  |  |  | — |  |  |  | 1,389 |  |  |  | 76 |  |  |  | 1,389 |  |  |  | 76 |
Total held-to-maturity securities |  |  | 165,286 |  |  |  | 751 |  |  |  | 19,556 |  |  |  | 200 |  |  |  | 184,842 |  |  |  | 951 |
Available-for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  | $ | 6,560 |  |  | $ | 9 |  |  | $ | 4,439 |  |  | $ | 198 |  |  | $ | 10,999 |  |  | $ | 207 |
Corporate bonds |  |  | 141,857 |  |  |  | 1,475 |  |  |  | 4,216 |  |  |  | 11 |  |  |  | 146,073 |  |  |  | 1,486 |
U.S. agency-based mortgage-backed securities |  |  | 434 |  |  |  | 37 |  |  |  | 6,794 |  |  |  | 1,556 |  |  |  | 7,228 |  |  |  | 1,593 |
Total available-for-sale securities |  |  | 148,851 |  |  |  | 1,521 |  |  |  | 15,449 |  |  |  | 1,765 |  |  |  | 164,300 |  |  |  | 3,286 |
Total |  | $ | 314,137 |  |  | $ | 2,272 |  |  | $ | 35,005 |  |  | $ | 1,965 |  |  | $ | 349,142 |  |  | $ | 4,237 |
At September 30, 2016, the Company held 73 individual fixed maturity securities that were in an unrealized loss position, of which 19 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months. The Company holds investments in a limited partnership hedge fund accounted for under the equity method. The carrying value of this investment is $12.2 million at September 30, 2016. Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method. We regularly review our investment portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of specific investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:
| • | any reduction or elimination of preferred dividends, or nonpayment of scheduled principal or interest payments;
| • | the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;
| • | how long and by how much the fair value of the security has been below its cost or amortized cost;
| • | any downgrades of the security by a rating agency;
| • | our intent not to sell the security for a sufficient time period for it to recover its value;
| • | the likelihood of being forced to sell the security before the recovery of its value; and
| • | an evaluation as to whether there are any credit losses on debt securities.
We reviewed all securities with unrealized losses in accordance with the impairment policy described above. The Company determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the securities before the recovery of the amortized cost basis. During the nine months ended September 30, 2016, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments compared to $2.7 million for the same period in 2015. Net realized gains in the nine months ended September 30, 2016 were $1.0 million resulting from the sale of fixed maturity securities classified as available-for-sale. Net realized losses in the nine months ended September 30, 2015 were $2.5 million resulting from an impairment loss of $2.7 million recognized for the other-than-temporary decline in the fair value of four fixed maturity securities offset by $0.2 million in gains on called fixed maturity securities.

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