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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2012
Fair Value Disclosures [Abstract] |
Fair Value Disclosures [Text Block] | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We hold available-for-sale fixed maturity securities and equity securities, which are carried at fair value. Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories:
• | Level 1 - Quoted prices for identical instruments in active markets.
• | Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable.
• | Level 3 - Instruments whose significant value drivers are unobservable.
Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as U.S. Treasury securities and actively traded mutual fund and stock investments. Level 2 includes those financial instruments that are valued by independent pricing services or broker quotes. These models are primarily industry-standard models that consider various inputs, such as interest rates, credit spreads and foreign exchange rates for the underlying financial instruments. All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category primarily include corporate securities, U.S. Government-sponsored enterprise securities, municipal securities and certain mortgage and asset-backed securities. Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker prices utilizing significant inputs not based on or corroborated by readily available market information. This category consists of two private placement mortgage-backed securities. The following tables set forth our assets and liabilities that are measured at fair value on a recurring basis as of the dates indicated.
| September 30, 2012
Available-for-sale investments | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
| (In thousands)
Financial assets: |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |
U.S. Treasury and U.S. Government-sponsored enterprises | $ | 14,115 |  |  | 93,620 |  |  | — |  |  | 107,735 |
States and political subdivisions | — |  |  | 249,642 |  |  | — |  |  | 249,642 |
Corporate | — |  |  | 229,881 |  |  | — |  |  | 229,881 |
Commercial mortgage-backed | — |  |  | 158 |  |  | 407 |  |  | 565 |
Residential mortgage-backed | — |  |  | 6,654 |  |  | — |  |  | 6,654 |
Foreign governments | — |  |  | 143 |  |  | — |  |  | 143 |
Total fixed maturities | 14,115 |  |  | 580,098 |  |  | 407 |  |  | 594,620 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |
Stock mutual funds | 10,702 |  |  | — |  |  | — |  |  | 10,702 |
Bond mutual funds | 32,133 |  |  | — |  |  | — |  |  | 32,133 |
Common stock | 14 |  |  | — |  |  | — |  |  | 14 |
Preferred stock | 1,242 |  |  | — |  |  | — |  |  | 1,242 |
Total equity securities | 44,091 |  |  | — |  |  | — |  |  | 44,091 |
Total financial assets | $ | 58,206 |  |  | 580,098 |  |  | 407 |  |  | 638,711 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |
Warrants outstanding | $ | — |  |  | 137 |  |  | — |  |  | 137 |
| December 31, 2011
Available-for-sale investments | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
| (In thousands)
Financial assets: |  |  |  |  |  |  |
Fixed maturities: |  |  |  |  |  |  |
U.S. Treasury and U.S. Government-sponsored enterprises | $ | 13,958 |  |  | 146,817 |  |  | — |  |  | 160,775 |
States and political subdivisions | — |  |  | 159,942 |  |  | — |  |  | 159,942 |
Corporate | — |  |  | 184,545 |  |  | — |  |  | 184,545 |
Commercial mortgage-backed | — |  |  | 300 |  |  | 459 |  |  | 759 |
Residential mortgage-backed | — |  |  | 8,090 |  |  | — |  |  | 8,090 |
Foreign governments | — |  |  | 142 |  |  | — |  |  | 142 |
Total fixed maturities | 13,958 |  |  | 499,836 |  |  | 459 |  |  | 514,253 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |
Stock mutual funds | 12,725 |  |  | — |  |  | — |  |  | 12,725 |
Bond mutual funds | 31,414 |  |  | — |  |  | — |  |  | 31,414 |
Common stock | 24 |  |  | — |  |  | — |  |  | 24 |
Preferred stock | 1,974 |  |  | — |  |  | — |  |  | 1,974 |
Total equity securities | 46,137 |  |  | — |  |  | — |  |  | 46,137 |
Total financial assets | $ | 60,095 |  |  | 499,836 |  |  | 459 |  |  | 560,390 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |
Warrants outstanding | $ | — |  |  | 451 |  |  | — |  |  | 451 |
Financial Instruments Valuation Fixed maturity securities, available-for-sale. At September 30, 2012, our fixed maturity securities, valued using a third-party pricing source, totaled $580.1 million for Level 2 assets and comprised 90.8% of total reported fair value of our financial assets. The Level 1 and Level 2 valuations are reviewed and updated quarterly through random testing by comparisons to separate pricing models, other third-party pricing services, and back tested to recent trades. In addition, we obtain information relative to the third-party pricing models and review model parameters for reasonableness. Fair values for Level 3 assets are based upon unadjusted broker quotes that are non-binding, and consist of two private placement mortgage-backed securities with a total value of $0.4 million. Our Level 3 assets are current relative to principal and interest payments and are considered immaterial to our financial statements. For the nine months ended September 30, 2012, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third party prices were changed from the values received. Equity securities, available-for-sale. Our available-for-sale equity securities are classified as Level 1 assets as their fair values are based upon quoted market prices. Warrants outstanding. Our outstanding warrants are classified as Level 2 liabilities as their fair values are based upon industry standard models that consider various observable inputs. The following table presents additional information about fixed maturity securities measured at fair value on a recurring basis that are classified as Level 3 assets and for which we have utilized significant unobservable inputs to determine fair value.
| September 30, 2012 |  | December 31, 2011
| (In thousands)
Balance at beginning of period | $ | 459 |  |  | 519 |
Total realized and unrealized gains (losses) |  |  |  |  |
Included in net income | — |  |  | — |
Included in other comprehensive income | (3 | ) |  | 6 |
Principal paydowns | (49 | ) |  | (66 | )
Transfer in and (out) of Level 3 | — |  |  | — |
Balance at end of period | $ | 407 |  |  | 459 |
We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. There were no transfers in or out of Level 1 or 2. Financial Instruments not Carried at Fair Value Estimates of fair values are made at a specific point in time, based on relevant market prices and information about the financial instruments. The estimated fair values of financial instruments presented below are not necessarily indicative of the amounts the Company might realize in actual market transactions. The carrying amount and fair value for the financial assets and liabilities on the consolidated balance sheets not otherwise disclosed for the periods indicated are as follows:
| September 30, 2012 |  | December 31, 2011
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
| (In thousands)
Financial assets: |  |  |  |  |  |  |
Fixed maturities, held-to-maturity | $ | 203,237 |  |  | 209,580 |  |  | 227,500 |  |  | 230,093 |
Mortgage loans | 1,521 |  |  | 1,333 |  |  | 1,557 |  |  | 1,428 |
Policy loans | 42,784 |  |  | 42,784 |  |  | 39,090 |  |  | 39,090 |
Short-term investments | 2,356 |  |  | 2,356 |  |  | 2,048 |  |  | 2,048 |
Cash and cash equivalents | 39,830 |  |  | 39,830 |  |  | 33,255 |  |  | 33,255 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |
Annuity benefit reserves | 50,125 |  |  | 52,118 |  |  | 47,060 |  |  | 43,402 |
Fair values for fixed income securities, which are characterized as Level 2 assets in the fair value hierarchy, are based on quoted market prices for the same or similar securities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other assumptions, including a discount rate and estimates of future cash flows. Mortgage loans are secured principally by residential and commercial properties. Weighted average interest rates for these loans were approximately 6.6% as of September 30, 2012 and December 31, 2011, with maturities ranging from 1 to 30 years. Management estimated the fair value using an annual interest rate of 6.25% at September 30, 2012. Our mortgage loans are considered Level 3 assets in the fair value hierarchy. Policy loans had a weighted average annual interest rate of 7.7% as of September 30, 2012 and December 31, 2011, and no specified maturity dates. The aggregate fair value of policy loans approximates the carrying value reflected on the consolidated balance sheets. These loans typically carry an interest rate that is tied to the crediting rate applied to the related policy and contract reserves. Policy loans are an integral part of the life insurance policies we have in force, cannot be valued separately and are not marketable. Therefore, the fair value of policy loans approximates the carrying value and policy loans are considered Level 3 assets in the fair value hierarchy. The fair value of short-term investments approximate carrying value due to their short-term nature. Our short-term investments are considered Level 2 assets in the fair value hierarchy. The fair value of cash and cash equivalents approximate carrying value and are characterized as Level 1 assets in the fair value hierarchy. The fair value of the Company's liabilities under annuity contract policies, which are considered Level 3 assets, was estimated at September 30, 2012 using discounted cash flows based upon a swap rate curve with interest rates ranging from 0.67% to 3.81% based upon swap rates adjusted for various risk adjustments. The fair value of liabilities under all insurance contracts are taken into consideration in the overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

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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 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15C, 15D -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44A, 44B -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15A -Subparagraph a-d -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 3, 10, 14, 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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=7491637&loc=d3e13433-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 17-22, 27, 28 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: 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=7491637&loc=d3e13537-108611 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15B -Subparagraph a, b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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