Note 10. Investments

The following tables set forth the carrying value, gross unrealized gains, gross unrealized losses and amortized cost of the Company's investments, aggregated by type and industry, as of September 30, 2011 and December 31, 2010.

	September 30, 2011
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	38,031	$	4,167	$	-	$	33,864
Obligations of states and political subdivisions		17,109		1,829		-		15,280
Corporate securities:
Utilities and telecom		18,452		2,537		-		15,915
Financial services		31,495		734		2,322		33,083
Media		2,437		84		-		2,353
Other business – diversified		46,376		4,380		41		42,037
Other consumer – diversified		45,320		5,595		-		39,725
Total corporate securities		144,080		13,330		2,363		133,113
Redeemable preferred stocks:
Utilities and telecom		2,694		194		-		2,500
Financial services		4,581		18		446		5,009
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		7,468		212		446		7,702
Total fixed maturities		206,688		19,538		2,809		189,959
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,104		140		-		964
Financial services		5,052		517		254		4,789
Media		643		-		2,555		3,198
Other business – diversified		107		60		-		47
Other consumer – diversified		1,072		91		-		981
Total equity securities		7,978		808		2,809		9,979
Other invested assets		591		-		-		591
Policy and student loans		2,231		-		-		2,231
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238

Total investments	$	218,764	$	20,346	$	5,618	$	204,036

	December 31, 2010
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	46,630	$	1,454	$	52	$	45,228
Obligations of states and political subdivisions		21,007		32		876		21,851
Corporate securities:
Utilities and telecom		23,010		1,079		355		22,286
Financial services		21,400		324		1,745		22,821
Media		2,506		153		-		2,353
Other business – diversified		25,919		422		529		26,026
Other consumer – diversified		23,532		149		232		23,615
Total corporate securities		96,367		2,127		2,861		97,101
Redeemable preferred stocks:
Utilities and telecom		2,670		170		-		2,500
Financial services		4,781		22		250		5,009
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		7,644		192		250		7,702
Total fixed maturities		171,648		3,805		4,039		171,882
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,073		109		-		964
Financial services		5,461		754		82		4,789
Media		885		-		2,313		3,198
Other business – diversified		120		73		-		47
Other consumer – diversified		985		4		-		981
Total equity securities		8,524		940		2,395		9,979
Other invested assets		980		-		-		980
Policy and student loans		2,200		-		-		2,200
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238

Total investments	$	184,628	$	4,745	$	6,434	$	186,317

The amortized cost and carrying value of fixed maturities at September 30, 2011 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2011
	Carrying Value		Amortized Cost
Due in one year or less	$	3,384	$	3,350
Due after one year through five years		8,193		7,656
Due after five years through ten years		30,928		30,066
Due after ten years		163,035		147,893
Varying maturities		1,148		994
Totals	$	206,688	$	189,959

The following table sets forth the carrying value, amortized cost, and net unrealized gains or losses of the Company's investments aggregated by industry as of September 30, 2011 and December 31, 2010.

	September 30, 2011							December 31, 2010
	Carrying Value		Amortized Cost		Unrealized Gains (Losses)			Carrying Value		Amortized Cost		Unrealized Gains (Losses)
U.S. Treasury securities and U.S. Government agencies	$	38,031	$	33,864	$	4,167		$	46,630	$	45,228	$	1,402
Obligations of states and political subdivisions		17,109		15,280		1,829			21,007		21,851		(844	)
Utilities and telecom		22,250		19,379		2,871			26,753		25,750		1,003
Financial services		41,128		42,881		(1,753	)		31,642		32,619		(977	)
Media (1)		3,080		5,551		(2,471	)		3,391		5,551		(2,160	)
Other business – diversified		46,483		42,084		4,399			26,039		26,073		(34	)
Other consumer – diversified		46,585		40,899		5,686			24,710		24,789		(79	)
Other investments		4,098		4,098		-			4,456		4,456		-
Investments	$	218,764	$	204,036	$	14,728		$	184,628	$	186,317	$	(1,689	)

(1)

Media includes related party investments in Gray Television, Inc. with an amortized cost basis of $3,198 and which had an aggregate carrying value of $643 and $885 at September 30, 2011 and December 31, 2010, respectively.

The following tables present the Company's unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of September 30, 2011 and December 31, 2010.

	September 30, 2011
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate securities	$	18,166	$	850	$	3,487	$	1,513	$	21,653	$	2,363
Redeemable preferred stocks		-		-		2,823		446		2,823		446
Equity securities		1,801		215		1,870		2,594		3,671		2,809
Total temporarily impaired securities	$	19,967	$	1,065	$	8,180	$	4,553	$	28,147	$	5,618

	December 31, 2010
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	5,490	$	52	$	-	$	-	$	5,490	$	52
Obligations of states and political subdivisions		18,919		876		-		-		18,919		876
Corporate securities		40,426		1,263		3,402		1,598		43,828		2,861
Redeemable preferred stocks		2,188		53		2,072		197		4,260		250
Equity securities		972		28		3,114		2,367		4,086		2,395
Total temporarily impaired securities	$	67,995	$	2,272	$	8,588	$	4,162	$	76,583	$	6,434

The evaluation for an other than temporary impairment is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer's financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management's intent and ability to hold these securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer's continued satisfaction of its obligations in accordance with their contractual terms, and management's expectation as to the issuer's ability and intent to continue to do so, as well as ratings actions that may affect the issuer's credit status.

As of September 30, 2011, securities in an unrealized loss position primarily included certain of the Company's investments in fixed maturities and common and non-redeemable preferred stocks within the financial services and media sectors. Investments in the media sector include related party investments in Gray Television, Inc., which had unrealized losses of $2,555 as of September 30, 2011. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company's evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of September 30, 2011.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.

Level 1

Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company's financial instruments valued using Level 1 criteria include cash equivalents and exchange traded common stocks.

Level 2

Observable inputs, other than quoted prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company's financial instruments valued using Level 2 criteria include significantly all of its fixed maturities, which consist of U.S. Treasury securities and U.S. Government securities, municipal bonds, and certain corporate fixed maturity securities, as well as its non-redeemable preferred stocks. In determining fair value measurements using Level 2 criteria, the Company utilizes various external pricing sources.

Level 3

Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). The Company's financial instruments valued using Level 3 criteria include certain fixed maturity securities and a zero cost interest rate collar. Fair value is based on criteria that use assumptions or other data that are not readily observable from objective sources. As of September 30, 2011, the value of the Company's fixed maturities valued using Level 3 criteria was $1,994 and the value of the zero cost interest rate collar was a liability of $1,100 (See Note 5). The use of different criteria or assumptions regarding data may have yielded different valuations.

As of September 30, 2011, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed maturities	$	-	$	204,694	$	1,994	$	206,688
Equity securities		3,078		4,900		-		7,978
Cash equivalents		21,586		-		-		21,586

Total	$	24,664	$	209,594	$	1,994	$	236,252

Liabilities:
Derivative	$	-	$	-	$	1,100	$	1,100

As of December 31, 2010, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed maturities	$	-	$	169,705	$	1,943	$	171,648
Equity securities		3,273		5,251		-		8,524
Cash equivalents		27,630		-		-		27,630

Total	$	30,903	$	174,956	$	1,943	$	207,802

Liabilities:
Derivative	$	-	$	-	$	1,553	$	1,553

The following is a roll-forward of the financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and nine month periods ended September 30, 2011.

	Fixed Maturities			Derivative (Liability)
Balance, December 31, 2010	$	1,943		$	(1,553	)
Total unrealized gains (losses) included in total comprehensive income		(197	)		191
Balance, March 31, 2011	$	1,746		$	(1,362	)
Total unrealized gains included in total comprehensive income		41			74
Balance, June 30, 2011	$	1,787		$	(1,288	)
Total unrealized gains included in total comprehensive income		207			188
Balance, September 30, 2011	$	1,994		$	(1,100	)

The Company's fixed maturities valued using Level 3 inputs consist solely of issuances of pooled debt obligations of multiple, smaller financial services companies. They are not actively traded and valuation techniques used to measure fair value are based on future estimated cash flows discounted at a reasonably estimated rate of interest. Other qualitative and quantitative information received from the original underwriter of the pooled offerings is also considered, as applicable. As the derivative is an interest rate collar, changes in valuation are more closely correlated with changes in interest rates and, accordingly, values are estimated using projected cash flows at current interest rates discounted at a reasonably estimated rate of interest. Fair value quotations are also obtained and considered, as applicable, from the counterparty to the transaction.