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 September 30, 2016 and December 31, 2015, is as follows:



September 30, 2016
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 and telecommunications	$	450	$	2	$	—	$	452
Financial services	150		—		—		150
Mortgage-backed securities	52		1		—		53
Total Held-to-Maturity Fixed Maturities	$	652	$	3	$	—	$	655
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	21,966	$	281	$	1	$	22,246
U.S. government agency	71,717		2,893		3		74,607
States, municipalities and political subdivisions
General obligations:
Midwest	153,150		5,302		90		158,362
Northeast	58,373		2,836		—		61,209
South	132,843		4,444		314		136,973
West	123,845		4,631		180		128,296
Special revenue:
Midwest	161,368		6,799		56		168,111
Northeast	54,109		1,863		98		55,874
South	208,747		7,399		542		215,604
West	100,225		4,069		184		104,110
Foreign bonds	71,011		3,484		894		73,601
Public utilities	217,670		10,539		83		228,126
Corporate bonds
Energy	110,345		3,747		187		113,905
Industrials	232,088		12,192		668		243,612
Consumer goods and services	179,502		9,422		—		188,924
Health care	82,497		4,928		—		87,425
Technology, media and telecommunications	141,598		6,225		168		147,655
Financial services	266,576		12,262		20		278,818
Mortgage-backed securities	18,422		465		8		18,879



Collateralized mortgage obligations
Government national mortgage association	131,200		4,635		289		135,546
Federal home loan mortgage corporation	153,379		5,626		262		158,743
Federal national mortgage association	105,952		5,439		131		111,260
Asset-backed securities	4,491		318		231		4,578
Total Available-for-Sale Fixed Maturities	$	2,801,074	$	119,799	$	4,409	$	2,916,464
Equity securities:
Common stocks
Public utilities	$	6,394	$	13,718	$	198	$	19,914
Energy	6,514		7,988		39		14,463
Industrials	13,252		34,387		215		47,424
Consumer goods and services	10,324		15,059		43		25,340
Health care	7,763		21,100		—		28,863
Technology, media and telecommunications	5,931		9,214		37		15,108
Financial services	17,288		82,294		65		99,517
Nonredeemable preferred stocks	443		29		—		472
Total Available-for-Sale Equity Securities	$	67,909	$	183,789	$	597	$	251,101
Total Available-for-Sale Securities	$	2,868,983	$	303,588	$	5,006	$	3,167,565



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 and 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
Government national mortgage association	120,220		1,391		1,985		119,626
Federal home loan mortgage corporation	137,874		2,377		1,342		138,909
Federal national mortgage association	106,021		2,400		941		107,480
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

Maturities

The amortized cost and fair value of held-to-maturity, available-for-sale and trading fixed maturity securities at September 30, 2016, 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
September 30, 2016	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	150	$	150	$	99,301	$	100,197	$	2,430	$	2,919
Due after one year through five years	450		452		820,503		851,672		6,036		6,905
Due after five years through 10 years	—		—		879,226		926,253		961		1,133
Due after 10 years	—		—		588,600		609,336		2,160		2,296
Asset-backed securities	—		—		4,491		4,578		—		—
Mortgage-backed securities	52		53		18,422		18,879		—		—
Collateralized mortgage obligations	—		—		390,531		405,549		—		—
	$	652	$	655	$	2,801,074	$	2,916,464	$	11,587	$	13,253

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 (losses) is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net realized investment gains (losses)
Fixed maturities:
Available-for-sale	$	945		$	407		$	2,307		$	2,363
Trading securities
Change in fair value	148			(999		)	519			(1,461		)
Sales	107			531			568			1,230
Equity securities:
Available-for-sale	1,375			1,418			2,359			2,352
Trading securities
Change in fair value	(5		)	(430		)	325			(634		)
Sales	20			39			(6		)	85
Other long-term investments	—			—			—			(1,313		)
Cash equivalents	—			—			169			—
Total net realized investment gains	$	2,590		$	966		$	6,241		$	2,622

The proceeds and gross realized gains (losses) on the sale of available-for-sale fixed maturity securities are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Proceeds from sales	$	2,007	$	—	$	5,049	$	8,228
Gross realized gains	11		—		986		1,030

There were no sales of held-to-maturity securities during the three- and nine-month periods ended September 30, 2016 and 2015.

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 $17,898 and $16,975 at September 30, 2016 and December 31, 2015, respectively.

Funding Commitment

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through December 31, 2023 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $9,709 at September 30, 2016.

Unrealized Appreciation

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



	Nine Months Ended September 30,
	2016			2015
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	83,498		$	(12,841	)
Available-for-sale equity securities	15,459			(19,119		)
Deferred policy acquisition costs	(19,857		)	2,113
Income tax effect	(27,685		)	10,447
Total change in net unrealized investment appreciation, net of tax	$	51,415		$	(19,400	)

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 September 30, 2016 and December 31, 2015. 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 September 30, 2016, 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 determined that these losses did not warrant the recognition of an OTTI charge at September 30, 2016 or at September 30, 2015. 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 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 determined that these losses did not warrant the recognition of an OTTI charge at September 30, 2016 or September 30, 2015. Our largest unrealized loss greater than 12 months on an individual equity security at September 30, 2016 was $198. 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.




September 30, 2016	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	$	1,625	$	1	—	$	—	$	—	$	1,625	$	1
U.S. government agency	1	3,697		3		—	—		—		3,697		3
States, municipalities and political subdivisions
General obligations
Midwest	2	9,909		90		—	—		—		9,909		90
South	7	16,784		314		—	—		—		16,784		314
West	6	16,353		180		—	—		—		16,353		180
Special revenue
Midwest	3	6,008		56		—	—		—		6,008		56
Northeast	6	13,978		98		—	—		—		13,978		98
South	14	$	37,375	542		—	$	—	—		$	37,375	542
West	9	19,130		184		—	—		—		19,130		184
Foreign bonds	—	—		—		3	6,929		894		6,929		894
Public utilities	—	—		—		5	3,097		83		3,097		83
Corporate bonds
Energy	3	5,345		40		4	9,209		147		14,554		187
Industrials	—	—		—		5	9,522		668		9,522		668
Technology, media and telecommunications	1	2,198		8		3	10,403		160		12,601		168
Financial services	—	—		—		2	8,036		20		8,036		20
Mortgage-backed securities	—	—		—		4	1,262		8		1,262		8
Collateralized mortgage obligations
Government national mortgage association	5	12,340		88		9	14,097		201		26,437		289
Federal home loan mortgage corporation	7	31,530		175		3	5,977		87		37,507		262
Federal national mortgage association	1	5,001		21		4	4,712		110		9,713		131
Asset-backed securities	1	2,571		231		—	—		—		2,571		231
Total Available-for-Sale Fixed Maturities	68	$	183,844	$	2,031	42	$	73,244	$	2,378	$	257,088	$	4,409
Equity securities:
Common stocks
Public utilities	—	$	—	$	—	3	$	109	$	198	$	109	$	198
Energy	1	150		1		2	339		38		489		39
Industrials	—	—		—		6	197		215		197		215
Consumer goods and services	3	299		39		2	14		4		313		43
Technology, media and telecommunications	4	15		1		11	519		36		534		37
Financial services	1	80		1		4	451		64		531		65
Total Available-for-Sale Equity Securities	9	$	544	$	42	28	$	1,629	$	555	$	2,173	$	597
Total Available-for-Sale Securities	77	$	184,388	$	2,073	70	$	74,873	$	2,933	$	259,261	$	5,006




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
Government national mortgage association	17	29,769		437		14	40,027		1,548		69,796		1,985
Federal home loan mortgage corporation	20	35,343		644		6	19,887		698		55,230		1,342
Federal national mortgage association	15	32,800		524		11	11,962		417		44,762		941
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