3.	Investments

Investments, Available-for-Sale

The following tables summarize the Company’s investment securities (in thousands).

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government and agencies	$	8,039	$	277	$	(26)	$	8,290
State		698		27		—		725
Political subdivisions		500		6		—		506
Revenue and assessment		14,856		1,522		(18)		16,360
Corporate bonds		73,051		2,698		(630)		75,119
Collateralized mortgage obligations:
Agency backed		4,647		160		—		4,807
Non-agency backed – residential		3,513		624		—		4,137
Non-agency backed – commercial		2,414		664		—		3,078
Total fixed maturities, available-for-sale		107,718		5,978		(674)		113,022
Preferred stock, available-for-sale		1,500		267		—		1,767
Mutual funds, available-for-sale		9,901		403		(8)		10,296
	$	119,119	$	6,648	$	(682)	$	125,085

December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government and agencies	$	12,006	$	495	$	(16	)	$	12,485
State		697		39		—			736
Political subdivisions		1,601		51		—			1,652
Revenue and assessment		13,050		579		(11	)		13,618
Corporate bonds		73,461		2,127		(2,263	)		73,325
Collateralized mortgage obligations:
Agency backed		7,113		401		—			7,514
Non-agency backed – residential		4,181		480		(1	)		4,660
Non-agency backed – commercial		3,363		580		—			3,943
Total fixed maturities, available-for-sale		115,472		4,752		(2,291	)		117,933
Preferred stock, available-for-sale		1,500		78		—			1,578
Mutual funds, available-for-sale		9,901		836		—			10,737
	$	126,873	$	5,666	$	(2,291	)	$	130,248

The following tables set forth the scheduled maturities of the Company’s fixed maturity securities based on their fair values (in thousands). Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

December 31, 2014	Securities with Unrealized Gains		Securities with Unrealized Losses		Securities with No Unrealized Gains or Losses		All Fixed Maturity Securities
One year or less	$	8,791	$	—	$	—	$	8,791
After one through five years		22,140		12,888		—		35,028
After five through ten years		24,980		21,450		—		46,430
After ten years		9,009		1,742		—		10,751
No single maturity date		12,022		—		—		12,022
	$	76,942	$	36,080	$	—	$	113,022

December 31, 2013	Securities with Unrealized Gains		Securities with Unrealized Losses		Securities with No Unrealized Gains or Losses		All Fixed Maturity Securities
One year or less	$	14,305	$	—	$	—	$	14,305
After one through five years		25,667		10,888		—		36,555
After five through ten years		20,445		22,836		—		43,281
After ten years		3,667		4,008		—		7,675
No single maturity date		15,928		189		—		16,117
	$	80,012	$	37,921	$	—	$	117,933

The fair value and gross unrealized losses of investments, available-for-sale, by the length of time that individual securities have been in a continuous unrealized loss position follows (in thousands).

December 31, 2014	Less than 12 months				12 months or longer				Total Gross Unrealized Losses
December 31, 2014	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Gross Unrealized Losses
U.S. government and agencies	$	5,012	$	(26)	$	—	$	—	$	(26)
State		—		—		—		—		—
Political subdivisions		—		—		—		—		—
Revenue and assessment		2,820		(18)		—		—		(18)
Corporate bonds		7,681		(38)		20,567		(592)		(630)
Collateralized mortgage obligations:
Agency backed		—		—		—		—		—
Non-agency backed – residential		—		—		—		—		—
Non-agency backed – commercial		—		—		—		—		—
Total fixed maturities, available-for-sale		15,513		(82)		20,567		(592)		(674)
Preferred stock, available-for-sale		—		—		—		—		—
Mutual funds, available-for-sale		1,992		(8)		—		—		(8)
	$	17,505	$	(90)	$	20,567	$	(592)	$	(682)

December 31, 2013	Less than 12 months					12 months or longer					Total Gross Unrealized Losses
December 31, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Total Gross Unrealized Losses
U.S. government and agencies	$	988	$	(16	)	$	—	$	—		$	(16	)
State		—		—			—		—			—
Political subdivisions		—		—			—		—			—
Revenue and assessment		983		(11	)		—		—			(11	)
Corporate bonds		21,781		(993	)		13,980		(1,270	)		(2,263	)
Collateralized mortgage obligations:
Agency backed		—		—			—		—			—
Non-agency backed – residential		189		(1	)		—		—			(1	)
Non-agency backed – commercial		—		—			—		—			—
Total fixed maturities, available-for-sale		23,941		(1,021	)		13,980		(1,270	)		(2,291	)
Preferred stock, available-for-sale		—		—			—		—			—
Mutual funds, available-for-sale		—		—			—		—			—
	$	23,941	$	(1,021	)	$	13,980	$	(1,270	)	$	(2,291	)

The following table reflects the number of fixed maturity securities with gross unrealized gains and losses. Gross unrealized losses are further segregated by the length of time that individual securities have been in a continuous unrealized loss position.

At:	Gross Unrealized Losses				Gross Unrealized Gains
At:	Less than or equal to 12 months		Greater than 12 months		Gross Unrealized Gains
December 31, 2014		9		9		80
December 31, 2013		12		7		83

The following tables reflect the fair value and gross unrealized losses of those fixed maturity securities in a continuous unrealized loss position for greater than 12 months. Gross unrealized losses are further segregated by the percentage of amortized cost (in thousands, except number of securities).

Gross Unrealized Losses at December 31, 2014:	Number of Securities		Fair Value		Gross Unrealized Losses
Less than or equal to 10%		9	$	20,567	$	(592)
Greater than 10%		—		—		—
		9	$	20,567	$	(592)

Gross Unrealized Losses at December 31, 2013:	Number of Securities		Fair Value		Gross Unrealized Losses
Less than or equal to 10%		7	$	13,980	$	(1,270	)
Greater than 10%		—		—		—
		7	$	13,980	$	(1,270	)

The following tables set forth the amount of gross unrealized losses by current severity (as compared to amortized cost) and length of time that individual securities have been in a continuous unrealized loss position (in thousands).

Length of Gross Unrealized Losses at December 31, 2014:	Fair Value of Securities with Gross Unrealized Losses		Gross Unrealized Losses		Severity of Gross Unrealized Losses
Length of Gross Unrealized Losses at December 31, 2014:	Fair Value of Securities with Gross Unrealized Losses		Gross Unrealized Losses		Less than 5%			5% to 10%		Greater than 10%
Less than or equal to:
Three months	$	17,505	$	(90)	$	(90	)	$	—	$	—
Six months		—		—		—			—		—
Nine months		—		—		—			—		—
Twelve months		—		—		—			—		—
Greater than twelve months		20,567		(592)		(592)			—		—
Total	$	38,072	$	(682)	$	(682)		$	—	$	—

Length of Gross Unrealized Losses at December 31, 2013:	Fair Value of Securities with Gross Unrealized Losses		Gross Unrealized Losses			Severity of Gross Unrealized Losses
Length of Gross Unrealized Losses at December 31, 2013:	Fair Value of Securities with Gross Unrealized Losses		Gross Unrealized Losses			Less than 5%			5% to 10%			Greater than 10%
Less than or equal to:
Three months	$	6,417	$	(40	)	$	(40	)	$	—		$	—
Six months		1,653		(129	)		—			(129	)		—
Nine months		15,871		(852	)		(153	)		(699	)		—
Twelve months		—		—			—			—			—
Greater than twelve months		13,980		(1,270	)		(85	)		(1,185	)		—
Total	$	37,921	$	(2,291	)	$	(278	)	$	(2,013	)	$	—

Other Investments

Other investments consist of the common stock of a real estate investment trust and limited partnership interests in three funds that invest in (i) commercial real estate and secured commercial real estate loans acquired from financial intuitions, (ii) small balance distressed secured loans and debt securities and (iii) undervalued international publicly-traded equities. These investments have redemption and transfer restrictions; however, the Company does not intend to sell these investments, and it is more likely than not that the Company will not be required to sell them before the expiration of such restrictions. At December 31, 2014, the Company had unfunded commitments of $2.3 million with two of these investments.

Restrictions

At December 31, 2014, fixed maturities and cash equivalents with a fair value and amortized cost of $5.3 million were on deposit with various insurance departments as a requirement of doing business in those states. Cash equivalents with a fair value and amortized cost of $9.4 million were on deposit with another insurance company as collateral for an assumed reinsurance contract.

Investment Income and Net Realized Gains and Losses

The major categories of investment income follow (in thousands).

	Year Ended December 31,
	2014			2013			2012
Fixed maturities, available-for-sale	$	4,481		$	4,914		$	6,434
Mutual funds, available-for-sale		832			766			613
Other investments		85			399			—
Other		214			213			171
Investment expenses		(489	)		(576	)		(619	)
	$	5,123		$	5,716		$	6,599

The components of net realized gains (losses) on investments, available-for-sale follow (in thousands).

	Year Ended December 31,
	2014			2013			2012
Gains	$	85		$	100		$	3,296
Losses		(62	)		(68	)		(31	)
Other-than-temporary impairment		—			(61	)		(23	)
	$	23		$	(29	)	$	3,242

Realized gains and losses on sales and redemptions are computed based on specific identification. The non-credit related portion of OTTI is included in other comprehensive income (loss). The amounts of non-credit OTTI for securities still owned was $0.9 million for non-agency backed residential CMOs and $0.2 million for non-agency backed commercial at December 31, 2014 and 2013.

Other-Than-Temporary Impairment

The Company separates OTTI into the following two components: (i) the amount related to credit losses, which is recognized in the consolidated statement of operations and comprehensive income (loss) and (ii) the amount related to all other factors, which is recorded in other comprehensive income (loss). The credit-related portion of an OTTI is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge.

The determination of whether unrealized losses are “other-than-temporary” requires judgment based on subjective as well as objective factors. The Company routinely monitors its investment portfolio for changes in fair value that might indicate potential impairments and performs detailed reviews on such securities. Changes in fair value are evaluated to determine the extent to which such changes are attributable to (i) fundamental factors specific to the issuer or (ii) market-related factors such as interest rates or sector declines.

Securities with declines attributable to issuer-specific fundamentals are reviewed to identify all available evidence to estimate the potential for impairment. Resources used include historical financial data included in filings with the United States Securities and Exchange Commission (“SEC”) for corporate bonds and performance data regarding the underlying loans for CMOs. Securities with declines attributable solely to market or sector declines where 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 the full recovery of its amortized cost basis are not deemed to be other-than-temporarily impaired.

The issuer-specific factors considered in reaching the conclusion that securities with declines are not other-than-temporary include (i) the extent and duration of the decline in fair value, including the duration of any significant decline in value, (ii) whether the security is current as to payments of principal and interest, (iii) a valuation of any underlying collateral, (iv) current and future conditions and trends for both the business and its industry, (v) changes in cash flow assumptions for CMOs and (vi) rating agency actions. Based on these factors, the Company makes a determination as to the probability of recovering principal and interest on the security.

The number and amount of securities for which the Company has recognized OTTI charges in net income (loss) are presented in the following tables (in thousands, except for the number of securities).

	Year Ended December 31,
	2014				2013					2012
	Number of Securities		OTTI		Number of Securities		OTTI			Number of Securities		OTTI
Collateralized mortgage obligations:
Non-agency backed – residential		—	$	—		1	$	(61	)		2	$	(8	)
Non-agency backed – commercial		—		—		—		—			1		(15	)
		—		—		1		(61	)		3		(23	)
Portion of loss recognized in accumulated other comprehensive income (loss)				—				—					—
Net OTTI recognized in net income (loss)			$	—			$	(61	)			$	(23	)

The following is a progression of the credit-related portion of OTTI on investments owned at December 31, 2014, 2013 and 2012 (in thousands).

	Year Ended December 31,
	2014			2013			2012
Beginning balance	$	(2,632	)	$	(2,666	)	$	(3,425	)
Additional credit impairments on:
Previously impaired securities		—			(61	)		(23	)
Securities without previous impairments		—			—			—
		—			(61	)		(23	)
Reductions for securities sold (realized)		—			95			782
	$	(2,632	)	$	(2,632	)	$	(2,666	)

The Company believes that the remaining securities having unrealized losses at December 31, 2014 were not other-than-temporarily impaired. The Company also does not intend to sell any of these securities and it is more likely than not that the Company will not be required to sell any of these securities before the recovery of their amortized cost basis.