Investments

The Company invests primarily in fixed maturity securities, which totaled 88.3% of total cash, cash equivalents and investments at March 31, 2016.



	March 31, 2016			December 31, 2015
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	($ In thousands)
Fixed maturity securities	$	1,059,265	88.3	$	995,601	85.0
Equity securities	23,548		2.0	23,438		2.0
Mortgage loans	587		—	594		0.1
Policy loans	62,011		5.2	60,166		5.1
Real estate and other long-term investments	7,988		0.7	8,031		0.7
Short-term investments	—		—	251		—
Cash and cash equivalents	45,355		3.8	82,827		7.1
Total cash, cash equivalents and investments	$	1,198,754	100.0	$	1,170,908	100.0

The following tables represent the cost, gross unrealized gains and losses and fair value for fixed maturities and equity securities as of the periods indicated.



	March 31, 2016
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	9,979	2,975	—	12,954
U.S. Government-sponsored enterprises	19,551		1,217	—	20,768
States and political subdivisions	513,752		22,792	2,233	534,311
Foreign governments	103		29	—	132
Corporate	223,005		13,171	3,481	232,695
Commercial mortgage-backed	118		5	—	123
Residential mortgage-backed	2,536		212	2	2,746
Total available-for-sale securities	769,044		40,401	5,716	803,729
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,008		101	—	2,109
States and political subdivisions	232,394		10,092	343	242,143
Corporate	21,134		1,137	1,337	20,934
Total held-to-maturity securities	255,536		11,330	1,680	265,186
Total fixed maturities	$	1,024,580	51,731	7,396	1,068,915

Short-term investments	$	—	—	—	—

Equity securities:
Stock mutual funds	$	3,270	—	195	3,075
Bond mutual funds	18,798		92	315	18,575
Common stock	65		3	25	43
Preferred stock	1,594		262	1	1,855
Total equity securities	$	23,727	357	536	23,548



	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,995	2,597	—	12,592
U.S. Government-sponsored enterprises	19,676		1,104	—	20,780
States and political subdivisions	470,319		15,815	3,085	483,049
Foreign governments	104		27	—	131
Corporate	211,245		9,683	4,847	216,081
Commercial mortgage-backed	140		5	—	145
Residential mortgage-backed	2,658		214	2	2,870
Total available-for-sale securities	714,137		29,445	7,934	735,648
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,010		110	—	2,120
States and political subdivisions	236,776		6,756	883	242,649
Corporate	21,167		530	1,500	20,197
Total held-to-maturity securities	259,953		7,396	2,383	264,966
Total fixed maturity securities	$	974,090	36,841	10,317	1,000,614

Short-term investments	$	251	—	—	251

Equity securities:
Stock mutual funds	$	3,270	—	237	3,033
Bond mutual funds	18,798		55	349	18,504
Common stock	65		—	22	43
Preferred stock	1,594		266	2	1,858
Total equity securities	$	23,727	321	610	23,438

The majority of the Company's equity securities are diversified stock and bond mutual funds.

Valuation of Investments in Fixed Maturity and Equity Securities

Held-to-maturity securities are reported in the financial statements at amortized cost and available-for-sale securities are reported at fair value.

The Company monitors all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews. The assessment of whether other-than-temporary impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. The Company determines other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an other-than-temporary impairment has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment's cost and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into the following: (a) the amount representing the credit loss; and (b) the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment. The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company evaluates whether a credit impairment exists for debt securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; (d) the length of time to which the fair value has been less than the amortized cost of the security; and (e) the payment structure of the security. The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process. Quantitative review includes information received from third party sources such as financial statements, pricing and rating changes, liquidity and other statistical information. Qualitative factors include judgments related to business strategies, economic impacts on the issuer and overall judgment related to estimates and industry factors. The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and the extent to which the fair value has been less than the cost of the security; (b) changes in the financial condition, credit rating and near-term prospects of the issuer; (c) whether the issuer is current on contractually obligated payments; and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

Other-than-temporary impairments ("OTTI") were recognized during the three months ended March 31, 2016 totaling $1.9 million. No other-than-temporary impairments were recognized during the three months ended in 2015.

The following tables present the fair values and gross unrealized losses of fixed maturities and equity securities that have remained in a continuous unrealized loss position for the periods indicated.



	March 31, 2016
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	52,802	400	47	15,061	1,833	19	67,863	2,233	66
Corporate	48,931		2,309	50	4,861	1,172	8	53,792	3,481	58
Residential mortgage-backed	53		1	1	130	1	3	183	2	4
Total available-for-sale securities	101,786		2,710	98	20,052	3,006	30	121,838	5,716	128
Held-to-maturity securities:
States and political subdivisions	9,813		115	15	10,136	228	10	19,949	343	25
Corporate	1,624		134	1	4,682	1,203	4	6,306	1,337	5
Total held-to-maturity securities	11,437		249	16	14,818	1,431	14	26,255	1,680	30
Total fixed maturities	$	113,223	2,959	114	34,870	4,437	44	148,093	7,396	158
Equity securities:
Stock mutual funds	$	3,073	195	4	2	—	1	3,075	195	5
Bond mutual funds	10,196		280	2	105	35	1	10,301	315	3
Common stocks	—		—	—	16	25	2	16	25	2
Preferred stocks	—		—	—	—	1	1	—	1	1
Total equities	$	13,269	475	6	123	61	5	13,392	536	11

As of March 31, 2016, the Company had 30 available-for-sale fixed maturity securities and 14 held-to-maturity fixed maturity securities that were in an unrealized loss position for greater than 12 months. We reported 5 common stock holdings in an unrealized loss position for greater than 12 months as of March 31, 2016.



	December 31, 2015
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	136,862	1,474	129	12,633	1,611	12	149,495	3,085	141
Corporate	70,081		4,330	69	3,308	517	3	73,389	4,847	72
Residential mortgage-backed	57		1	2	133	1	3	190	2	5
Total available-for-sale securities	207,000		5,805	200	16,074	2,129	18	223,074	7,934	218
Held-to-maturity securities:
States and political subdivisions	74,628		774	59	2,404	109	5	77,032	883	64
Corporate	4,585		641	4	2,160	859	2	6,745	1,500	6
Total held-to-maturity securities	79,213		1,415	63	4,564	968	7	83,777	2,383	70
Total fixed maturities	$	286,213	7,220	263	20,638	3,097	25	306,851	10,317	288
Equity securities:
Stock mutual funds	$	3,030	237	4	2	—	1	3,032	237	5
Bond mutual funds	10,158		318	2	108	31	1	10,266	349	3
Preferred stocks	101		1	1	1	1	1	102	2	2
Common stock	22		1	2	21	21	2	43	22	4
Total equities	$	13,311	557	9	132	53	5	13,443	610	14

We have reviewed these securities for the periods ended March 31, 2016 and December 31, 2015 and determined that no other-than-temporary impairment exists that have not been recognized based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity. We continue to monitor all securities on an on-going basis, and future information may become available which could result in other-than-temporary impairments being recorded.

The amortized cost and fair value of fixed maturity securities at March 31, 2016 by contractual maturity are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date have been reflected based upon final stated maturity.



	March 31, 2016
	Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	39,255	39,635
Due after one year through five years	114,971		118,508
Due after five years through ten years	107,586		114,389
Due after ten years	507,232		531,197
Total available-for-sale securities	769,044		803,729
Held-to-maturity securities:
Due in one year or less	4,377		4,420
Due after one year through five years	38,617		40,966
Due after five years through ten years	52,955		55,963
Due after ten years	159,587		163,837
Total held-to-maturity securities	255,536		265,186
Total fixed maturities	$	1,024,580	1,068,915

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.

There were no sales of available-for-sale securities for the three month periods ended March 31, 2016 or 2015. There were no securities sold from the held-to-maturity portfolio for the three months ended March 31, 2016 or 2015.