SUMMARY OF INVESTMENTS

Fair Value of Investments

A reconciliation of the amortized cost (cost for equity securities) to fair value of investments in held-to-maturity and available-for-sale fixed maturity and equity securities as of June 30, 2014 and December 31, 2013, is as follows:



June 30, 2014
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Bonds
States, municipalities and political subdivisions	$	249	$	2	$	—	$	251
Corporate bonds - financial services	200		—		—		200
Mortgage-backed securities	181		8		—		189
Total Held-to-Maturity Fixed Maturities	$	630	$	10	$	—	$	640
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	30,468	$	298	$	63	$	30,703
U.S. government agency	360,249		3,018		6,586		356,681
States, municipalities and political subdivisions	705,556		33,895		2,683		736,768
Foreign bonds	143,172		7,054		1		150,225
Public utilities	212,385		8,114		155		220,344
Corporate bonds
Energy	149,380		5,593		373		154,600
Industrials	216,342		7,888		429		223,801
Consumer goods and services	159,084		5,455		213		164,326
Health care	78,429		3,679		148		81,960
Technology, media and telecommunications	128,124		4,485		785		131,824
Financial services	223,412		10,199		68		233,543
Mortgage-backed securities	19,654		610		76		20,188
Collateralized mortgage obligations	320,180		3,559		8,003		315,736
Asset-backed securities	3,023		296		—		3,319
Total Available-for-Sale Fixed Maturities	$	2,749,458	$	94,143	$	19,583	$	2,824,018
Equity securities:
Common stocks
Public utilities	$	7,231	$	11,435	$	—	$	18,666
Energy	5,094		11,391		—		16,485
Industrials	13,286		33,378		40		46,624
Consumer goods and services	10,287		11,492		2		21,777
Health care	7,920		18,846		—		26,766
Technology, media and telecommunications	6,205		7,779		61		13,923
Financial services	16,678		73,260		54		89,884
Nonredeemable preferred stocks	4,984		140		5		5,119
Total Available-for-Sale Equity Securities	$	71,685	$	167,721	$	162	$	239,244
Total Available-for-Sale Securities	$	2,821,143	$	261,864	$	19,745	$	3,063,262



December 31, 2013
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities:
Bonds
States, municipalities and political subdivisions	$	250	$	4	$	—	$	254
Corporate bonds - financial services	200		—		—		200
Mortgage-backed securities	206		9		—		215
Total Held-to-Maturity Fixed Maturities	$	656	$	13	$	—	$	669
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	33,612	$	423	$	140	$	33,895
U.S. government agency	287,988		258		18,663		269,583
States, municipalities and political subdivisions	690,461		34,151		10,705		713,907
Foreign bonds	167,390		5,863		397		172,856
Public utilities	213,479		6,873		1,776		218,576
Corporate bonds
Energy	157,620		4,398		1,008		161,010
Industrials	234,221		5,626		2,819		237,028
Consumer goods and services	165,565		3,770		1,421		167,914
Health care	91,008		3,138		1,200		92,946
Technology, media and telecommunications	121,746		2,541		3,321		120,966
Financial services	234,739		7,735		723		241,751
Mortgage-backed securities	22,034		323		291		22,066
Collateralized mortgage obligations	309,975		1,707		16,919		294,763
Asset-backed securities	3,719		276		—		3,995
Total Available-for-Sale Fixed Maturities	$	2,733,557	$	77,082	$	59,383	$	2,751,256
Equity securities:
Common stocks
Public utilities	$	7,231	$	9,068	$	27	$	16,272
Energy	5,094		9,269		—		14,363
Industrials	13,308		32,823		32		46,099
Consumer goods and services	10,363		10,895		—		21,258
Health care	7,920		17,078		—		24,998
Technology, media and telecommunications	6,204		7,183		83		13,304
Financial services	15,853		72,537		128		88,262
Nonredeemable preferred stocks	4,984		5		177		4,812
Total Available-for-Sale Equity Securities	$	70,957	$	158,858	$	447	$	229,368
Total Available-for-Sale Securities	$	2,804,514	$	235,940	$	59,830	$	2,980,624

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at June 30, 2014, by contractual maturity, are shown in the following table. 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. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.



	Held-To-Maturity				Available-For-Sale				Trading
June 30, 2014	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	135	$	136	$	234,849	$	238,774	$	1,701	$	1,699
Due after one year through five years	314		315		886,016		934,018		7,416		8,715
Due after five years through 10 years	—		—		818,255		845,767		1,139		1,563
Due after 10 years	—		—		467,481		466,216		5,211		6,328
Asset-backed securities	—		—		3,023		3,319		—		—
Mortgage-backed securities	181		189		19,654		20,188		—		—
Collateralized mortgage obligations	—		—		320,180		315,736		—		—
	$	630	$	640	$	2,749,458	$	2,824,018	$	15,467	$	18,305

Net Realized Investment Gains and Losses

Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains is as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013
Net realized investment gains
Fixed maturities:
Available-for-sale	$	705	$	1,185		1,352		1,905
Trading securities
Change in fair value	648		(130		)	948		430
Sales	285		298			520		298
Equity securities:
Available-for-sale	901		3,232			1,736		3,748
Trading securities
Change in fair value	169		(132		)	346		(19		)
Sales	—		38			—		38
Other long-term investments	—		(340		)	—		(340		)
Total net realized investment gains	$	2,708	$	4,151		$	4,902	$	6,060

The proceeds and gross realized gains on the sale of available-for-sale securities are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Proceeds from sales	$	10	$	3,161	$	10	$	5,971
Gross realized gains	—		96		—		238
Gross realized losses	56		—		56		—

There were no sales of held-to-maturity securities during the three- and six-month periods ended June 30, 2014 and 2013.

Our investment portfolio includes trading securities with embedded derivatives. These securities are primarily convertible securities which are recorded at fair value. Income or loss, including the change in the fair value of these trading securities, is recognized currently in earnings as a component of net realized investment gains. Our portfolio of trading securities had a fair value of $21,511 and $12,427 at June 30, 2014 and December 31, 2013, respectively.

Unrealized Appreciation

A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:



	Six Months Ended June 30,
	2014			2013
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	56,861		$	(91,636	)
Available-for-sale equity securities	9,148			19,467
Deferred policy acquisition costs	(17,921		)	29,223
Income tax effect	(16,831		)	15,023
Total change in net unrealized investment appreciation, net of tax	$	31,257		$	(27,923	)

We continually monitor the difference between our cost basis and the estimated fair value of our investments. Our accounting policy for impairment recognition requires other-than-temporary impairment ("OTTI") charges to be recorded when we determine that it is more likely than not that we will be unable to collect all amounts due according to the contractual terms of the fixed maturity security or that the anticipated recovery in fair value of the equity security will not occur in a reasonable amount of time. Impairment charges on investments are recorded based on the fair value of the investments at the measurement date. Factors considered in evaluating whether a decline in value is other-than-temporary include: the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; our intention to hold the investment; and the likelihood that we will be required to sell the investment.

The tables on the following pages summarize our fixed maturity and equity securities that were in an unrealized loss position at June 30, 2014 and December 31, 2013. The securities are presented by the length of time they have been continuously in an unrealized loss position. It is possible that we could recognize OTTI charges in future periods on securities held at June 30, 2014, if future events or information cause us to determine that a decline in fair value is other-than-temporary.

We have evaluated the near-term prospects of the issuers of our fixed maturity securities in relation to the severity and duration of the unrealized loss, and unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at June 30, 2014. We believe the unrealized depreciation in value of other securities in our fixed maturity portfolio is primarily attributable to changes in market interest rates and not the credit quality of the issuer. We have no intent to sell and it is more likely than not that we will not be required to sell these securities until the fair value recovers to at least equal to our cost basis or the securities mature.

We have evaluated the near-term prospects of the issuers of our equity securities in relation to the severity and duration of the unrealized loss, and unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at June 30, 2014. Our largest unrealized loss greater than 12 months on an individual equity security at June 30, 2014 was $54. We have no intention to sell any of these securities prior to a recovery in value, but will continue to monitor the fair value reported for these securities as part of our overall process to evaluate investments for OTTI recognition.




June 30, 2014	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	2	$	1,326	$	4	6	$	6,125	$	59	$	7,451	$	63
U.S. government agency	11	28,268		188		46	131,825		6,398		160,093		6,586
States, municipalities and political subdivisions	22	23,311		108		101	90,012		2,575		113,323		2,683
Foreign bonds	1	3,285		1		—	—		—		3,285		1
Public utilities	2	252		3		10	19,883		152		20,135		155
Corporate bonds
Energy	—	—		—		5	10,266		373		10,266		373
Industrials	—	—		—		4	14,088		429		14,088		429
Consumer goods and services	2	4,274		28		8	15,497		185		19,771		213
Health care	2	7,214		9		3	7,194		139		14,408		148
Technology, media and telecommunications	2	4,591		25		7	27,169		760		31,760		785
Financial services	2	2,264		8		2	6,137		60		8,401		68
Mortgage-backed securities	3	47		1		5	5,868		75		5,915		76
Collateralized mortgage obligations	21	43,158		489		72	144,536		7,514		187,694		8,003
Total Available-for-Sale Fixed Maturities	70	$	117,990	$	864	269	$	478,600	$	18,719	$	596,590	$	19,583
Equity securities:
Common stocks
Industrials	—	$	—	$	—	2	$	73	$	40	$	73	$	40
Consumer goods and services	1	15		2		—	—		—		15		2
Technology, media and telecommunications	—	—		—		6	229		61		229		61
Financial services	—	—		—		3	223		54		223		54
Nonredeemable preferred stocks	—	—		—		1	702		5		702		5
Total Available-for-Sale Equity Securities	1	$	15	$	2	12	$	1,227	$	160	$	1,242	$	162
Total Available-for-Sale Securities	71	$	118,005	$	866	281	$	479,827	$	18,879	$	597,832	$	19,745




December 31, 2013	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	10	$	9,196	$	140	—	$	—	$	—	$	9,196	$	140
U.S. government agency	101	256,203		18,019		2	4,356		644		260,559		18,663
States, municipalities and political subdivisions	136	97,950		7,423		29	29,670		3,282		127,620		10,705
Foreign bonds	10	20,832		397		—	—		—		20,832		397
Public utilities	31	61,582		1,776		—	—		—		61,582		1,776
Corporate bonds
Energy	9	23,735		1,008		—	—		—		23,735		1,008
Industrials	34	77,788		2,819		—	—		—		77,788		2,819
Consumer goods and services	31	58,833		1,276		6	3,218		145		62,051		1,421
Health care	10	25,888		942		2	4,427		258		30,315		1,200
Technology, media and telecommunications	18	58,105		2,147		2	7,468		1,174		65,573		3,321
Financial services	7	15,191		720		1	1,525		3		16,716		723
Mortgage-backed securities	16	4,476		177		6	3,113		114		7,589		291
Collateralized mortgage obligations	111	208,855		11,062		23	55,184		5,857		264,039		16,919
Total Available-for-Sale Fixed Maturities	524	$	918,634	$	47,906	71	$	108,961	$	11,477	$	1,027,595	$	59,383
Equity securities:
Common stocks
Public utilities	—	$	—	$	—	3	$	281	$	27	$	281	$	27
Industrials	1	1		1		2	81		31		82		32
Technology, media and telecommunications	—	—		—		6	206		83		206		83
Financial services	—	—		—		4	215		128		215		128
Nonredeemable preferred stocks	3	3,493		116		2	1,170		61		4,663		177
Total Available-for-Sale Equity Securities	4	$	3,494	$	117	17	$	1,953	$	330	$	5,447	$	447
Total Available-for-Sale Securities	528	$	922,128	$	48,023	88	$	110,914	$	11,807	$	1,033,042	$	59,830