SUMMARY OF INVESTMENTS

Fair Value of Investments

The table that follows is 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 available-for-sale equity securities as of December 31, 2015 and 2014.



December 31, 2015
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value
HELD-TO-MATURITY
Fixed maturities
Bonds
Corporate bonds
Technology, Media & Telecommunications	$	450	$	1	$	—	$	451
Financial services	150		—		—		150
Mortgage-backed securities	72		2		—		74
Total Held-to-Maturity Fixed Maturities	$	672	$	3	$	—	$	675
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	21,587	$	100	$	38	$	21,649
U.S. government agency	232,808		2,622		2,400		233,030
States, municipalities and political subdivisions
General obligations:
Midwest	160,484		4,990		18		165,456
Northeast	56,449		1,996		—		58,445
South	125,565		3,358		134		128,789
West	103,721		3,160		67		106,814
Special revenue:
Midwest	152,780		4,956		30		157,706
Northeast	23,892		919		212		24,599
South	144,183		4,281		27		148,437
West	78,935		3,150		44		82,041
Foreign bonds	82,580		2,405		2,457		82,528
Public utilities	213,233		3,701		1,251		215,683
Corporate bonds
Energy	116,800		1,032		4,713		113,119
Industrials	227,589		3,329		6,663		224,255
Consumer goods and services	172,529		2,844		776		174,597
Health care	92,132		2,168		791		93,509
Technology, media and telecommunications	142,431		1,972		2,003		142,400
Financial services	259,382		5,246		1,143		263,485



Mortgage-backed securities	16,413		376		51		16,738
Collateralized mortgage obligations	364,115		6,168		4,268		366,015
Asset-backed securities	5,461		221		16		5,666
Total Available-For-Sale Fixed Maturities	$	2,793,069	$	58,994	$	27,102	$	2,824,961
Equity securities
Common stocks
Public utilities	$	7,231	$	12,022	$	193	$	19,060
Energy	6,103		5,374		266		11,211
Industrials	13,251		31,872		313		44,810
Consumer goods and services	10,301		13,017		3		23,315
Health care	7,763		20,454		—		28,217
Technology, media and telecommunications	5,931		7,538		105		13,364
Financial services	17,392		78,411		109		95,694
Nonredeemable preferred stocks	542		34		—		576
Total Available-for-Sale Equity Securities	$	68,514	$	168,722	$	989	$	236,247
Total Available-for-Sale Securities	$	2,861,583	$	227,716	$	28,091	$	3,061,208



December 31, 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
Special revenue:
Midwest	$	55	$	—	$	—	$	55
Corporate bonds - financial services	200		—		—		200
Mortgage-backed securities	142		7		—		149
Total Held-to-Maturity Fixed Maturities	$	397	$	7	$	—	$	404
AVAILABLE-FOR-SALE
Fixed maturities
Bonds
U.S. Treasury	$	25,856	$	168	$	52	$	25,972
U.S. government agency	349,747		4,347		2,422		351,672
States, municipalities and political subdivisions
General obligations:
Midwest	179,491		6,599		170		185,920
Northeast	59,084		2,120		50		61,154
South	122,055		4,453		288		126,220
West	75,102		3,350		19		78,433
Special revenue:
Midwest	126,192		5,356		146		131,402
Northeast	11,767		864		—		12,631
South	106,917		4,368		63		111,222
West	68,024		3,285		6		71,303
Foreign bonds	136,487		4,132		446		140,173
Public utilities	206,366		6,479		488		212,357
Corporate bonds
Energy	135,068		2,858		793		137,133
Industrials	211,256		6,373		2,154		215,475
Consumer goods and services	172,623		4,702		324		177,001
Health care	86,017		3,228		210		89,035
Technology, media and telecommunications	131,465		3,863		799		134,529
Financial services	215,095		8,574		87		223,582
Mortgage-backed securities	17,121		483		46		17,558
Collateralized mortgage obligations	335,092		7,003		4,806		337,289
Asset-backed securities	2,741		277		—		3,018
Total Available-For-Sale Fixed Maturities	$	2,773,566	$	82,882	$	13,369	$	2,843,079
Equity securities
Common stocks



Public utilities	$	7,231	$	13,103	$	44	$	20,290
Energy	5,094		8,623		—		13,717
Industrials	13,284		32,299		124		45,459
Consumer goods and services	10,294		13,295		275		23,314
Health care	7,920		22,436		—		30,356
Technology, media and telecommunications	6,207		7,846		58		13,995
Financial services	16,637		77,077		51		93,663
Nonredeemable preferred stocks	4,984		72		7		5,049
Total Available-for-Sale Equity Securities	$	71,651	$	174,751	$	559	$	245,843
Total Available-for-Sale Securities	$	2,845,217	$	257,633	$	13,928	$	3,088,922

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at December 31, 2015, 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
December 31, 2015	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	105,186	$	105,910	$	1,526	$	2,001
Due after one year through five years	600		601		819,617		840,292		7,596		7,676
Due after five years through 10 years	—		—		989,897		989,295		130		404
Due after 10 years	—		—		492,380		501,045		2,223		2,541
Asset-backed securities	—		—		5,461		5,666		—		—
Mortgage-backed securities	72		74		16,413		16,738		—		—
Collateralized mortgage obligations	—		—		364,115		366,015		—		—
	$	672	$	675	$	2,793,069	$	2,824,961	$	11,475	$	12,622

Net Realized Investment Gains and Losses

Net realized gains (losses) on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of net realized investment gains (losses) for 2015, 2014 and 2013, is as follows:



	2015			2014			2013
Net realized investment gains (losses)
Fixed maturities:
Held-to-maturity	$	—		$	—		$	1
Available-for-sale	3,294			3,353			3,211
Trading securities
Change in fair value	(1,353		)	609			1,183
Sales	1,381			1,339			788
Equity securities:
Available-for-sale	2,521			1,732			3,739
Trading securities
Change in fair value	(448		)	238			(126		)
Sales	66			(1		)	38
Other long-term investments	(1,315		)	—			—
Other-than-temporary-impairment charges:
Fixed maturities	(1,300		)	—			(139		)
Total net realized investment gains	$	2,846		$	7,270		$	8,695

The proceeds and gross realized gains (losses) on the sale of available-for-sale securities for 2015, 2014 and 2013, were as follows:



	2015		2014			2013
Proceeds from sales	$	11,543	$	3,091		$	23,007
Gross realized gains	1,134		900			451
Gross realized losses	—		(56		)	—

There were no sales of held-to-maturity securities in 2015, 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 and losses. Our portfolio of trading securities had a fair value of $16,975 and $20,928 at December 31, 2015 and 2014, respectively.

Net Investment Income

Net investment income for the years ended December 31, 2015, 2014 and 2013, is comprised of the following:



Years Ended December 31,	2015		2014		2013
Investment income
Interest on fixed maturities	$	92,777	$	97,969	$	101,950
Dividends on equity securities	7,208		6,602		5,806
Income on other long-term investments
Investment income	2,567		1,927		1,194
Change in value ⁽¹⁾	3,266		1,917		7,030
Interest on mortgage loans	237		252		266
Interest on short-term investments	6		5		6
Interest on cash and cash equivalents	305		255		239
Other	1,452		1,998		1,632
Total investment income	$	107,818	$	110,925	$	118,123
Less investment expenses	7,037		6,316		5,324
Net investment income	$	100,781	$	104,609	$	112,799


(1)	Represents the change in value of our interests in limited liability partnerships that are recorded on the equity method of accounting.

Funding Commitment

At December 31, 2015, pursuant to an agreement with our limited liability partnership investments, we are contractually committed to make capital contributions up to $10,307 upon request of the partnerships through December 31, 2023.

Unrealized Appreciation and Depreciation

A summary of changes in net unrealized investment appreciation for 2015, 2014 and 2013, is as follows:



	2015			2014			2013
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	(37,621	)	$	51,814		$	(132,579	)
Available-for-sale equity securities	(6,459		)	15,781			48,176
Deferred policy acquisition costs	11,380			(16,789		)	42,102
Income tax effect	11,446			(17,784		)	14,806
Total change in net unrealized investment appreciation, net of tax	$	(21,254	)	$	33,022		$	(27,495	)

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 or based on the value calculated using a discounted cash flow model. Credit-related impairments on fixed maturity securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net income. Any non-credit related impairment is recognized as a component of other comprehensive income. 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 December 31, 2015 and 2014. 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 December 31, 2015 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 which resulted in the recognition of a $1,300 credit loss OTTI on an energy sector fixed maturity security in our Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2015. There were no OTTI losses on fixed maturity securities recognized in 2014. In 2013, we recognized an OTTI credit loss of $139 in our Consolidated Statements of Income and Comprehensive Income. All fixed maturity securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. 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 intention 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 unless otherwise noted, these losses do not warrant the recognition of an OTTI charge at December 31, 2015. There were no OTTI losses on equity securities recognized in 2015, 2014 or 2013. Our largest unrealized loss greater than 12 months on an individual equity security at December 31, 2015, 2014 and 2013 was $225, $54 and $58, respectively. 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.




December 31, 2015	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	6	$	6,408	$	26	2	$	1,634	$	12	$	8,042	$	38
U.S. government agency	38	104,621		1,771		6	18,821		629		123,442		2,400
States, municipalities and political subdivisions
General obligations
Midwest	4	2,417		12		1	528		6		2,945		18
South	3	4,805		55		8	3,743		79		8,548		134
West	4	8,927		23		2	2,274		44		11,201		67
Special revenue
Midwest	—	—		—		1	2,494		30		2,494		30
Northeast	1	4,755		212		—	—		—		4,755		212
South	4	7,445		26		2	1,851		1		9,296		27
West	4	6,851		44		—	—		—		6,851		44
Foreign bonds	9	16,991		1,289		2	4,036		1,168		21,027		2,457
Public utilities	35	72,680		880		5	2,840		371		75,520		1,251
Corporate bonds
Energy	29	61,496		3,286		4	7,991		1,427		69,487		4,713
Industrials	38	78,588		3,631		3	6,649		3,032		85,237		6,663
Consumer goods and services	24	64,661		770		4	2,491		6		67,152		776
Health care	18	43,992		652		2	3,737		139		47,729		791
Technology, media and telecommunications	22	59,503		1,478		2	8,940		525		68,443		2,003
Financial services	49	92,814		1,143		—	—		—		92,814		1,143
Mortgage-backed securities	9	7,423		43		4	183		8		7,606		51
Collateralized mortgage obligations	52	97,912		1,605		31	71,876		2,663		169,788		4,268
Asset-backed securities	1	985		16		—	—		—		985		16
Total Available-for-Sale Fixed Maturities	350	$	743,274	$	16,962	79	$	140,088	$	10,140	$	883,362	$	27,102
Equity securities
Common stocks
Public utilities	—	$	—	$	—	3	$	115	$	193	$	115	$	193
Energy	10	2,868		266		—	—		—		2,868		266
Industrials	3	177		44		5	193		269		370		313
Consumer goods and services	—	—		—		2	14		3		14		3
Technology, media and telecommunications	9	438		91		2	12		14		450		105
Financial services	6	326		51		1	136		58		462		109
Total Available-for-Sale Equity Securities	28	$	3,809	$	452	13	$	470	$	537	$	4,279	$	989
Total Available-for-Sale Securities	378	$	747,083	$	17,414	92	$	140,558	$	10,677	$	887,641	$	28,091




December 31, 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	4	$	2,343	$	6	4	$	5,069	$	46	$	7,412	$	52
U.S. government agency	11	41,064		70		35	95,198		2,352		136,262		2,422
States, municipalities and political subdivisions
General obligations
Midwest	1	3,650		74		14	9,856		96		13,506		170
Northeast	—	—		—		9	7,377		50		7,377		50
South	1	3,085		58		19	13,475		230		16,560		288
West	1	1,023		1		5	2,700		18		3,723		19
Special revenue
Midwest	9	10,219		41		8	11,631		105		21,850		146
South	6	12,882		11		3	2,137		52		15,019		63
West	—	—		—		4	3,671		6		3,671		6
Foreign bonds	6	17,158		446		—	—		—		17,158		446
Public utilities	10	21,839		194		4	3,611		294		25,450		488
Corporate bonds
Energy	8	17,416		420		3	7,061		373		24,477		793
Industrials	8	17,103		362		3	9,592		1,792		26,695		2,154
Consumer goods and services	11	28,344		258		7	10,064		66		38,408		324
Health care	3	8,244		36		3	7,104		174		15,348		210
Technology, media and telecommunications	4	8,860		68		4	15,742		731		24,602		799
Financial services	3	5,908		31		2	6,131		56		12,039		87
Mortgage-backed securities	9	425		21		2	1,991		25		2,416		46
Collateralized mortgage obligations	10	20,746		112		56	122,550		4,694		143,296		4,806
Total Available-for-Sale Fixed Maturities	105	$	220,309	$	2,209	185	$	334,960	$	11,160	$	555,269	$	13,369
Equity securities
Common stocks
Public utilities	3	$	263	$	44	—	$	—	$	—	$	263	$	44
Industrials	3	280		70		2	58		54		338		124
Consumer goods and services	1	129		272		2	15		3		144		275
Technology, media and telecommunications	4	503		14		5	218		44		721		58
Financial services	1	186		51		—	—		—		186		51
Nonredeemable preferred stocks	—	—		—		1	700		7		700		7
Total Available-for-Sale Equity Securities	12	$	1,361	$	451	10	$	991	$	108	$	2,352	$	559
Total Available-for-Sale Securities	117	$	221,670	$	2,660	195	$	335,951	$	11,268	$	557,621	$	13,928