3. Investments

Investments, Available-for-Sale

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

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2015	Cost		Gains		Losses			Value
U.S. government and agencies	$	13,037	$	277	$	—		$	13,314
State		698		5		—			703
Political subdivisions		499		—		—			499
Revenue and assessment		12,544		936		—			13,480
Corporate bonds		84,579		2,279		(669	)		86,189
Collateralized mortgage obligations:
Agency backed		1,734		93		—			1,827
Non-agency backed – residential		3,054		618		(2	)		3,670
Non-agency backed – commercial		2,009		610	—				2,619
Total fixed maturities, available-for-sale		118,154		4,818		(671	)		122,301
Preferred stock, available-for-sale		1,500		227		—			1,727
Mutual funds, available-for-sale		11,960		49		(292	)		11,717
	$	131,614	$	5,094	$	(963	)	$	135,745

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2014	Cost		Gains		Losses			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

The following table sets 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.

					Securities
	Securities		Securities		with No		All
	with		with		Unrealized		Fixed
	Unrealized		Unrealized		Gains or		Maturity
September 30, 2015	Gains		Losses		Losses		Securities
One year or less	$	11,067	$	—	$	—	$	11,067
After one through five years		24,166		8,770		—		32,936
After five through ten years		29,276		30,152		500		59,928
After ten years		10,254		—		—		10,254
No single maturity date		7,922		194		—		8,116
	$	82,685	$	39,116	$	500	$	122,301

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.

Gross Unrealized Losses

Less than

Greater

Gross

or equal to

than 12

Unrealized

At:

12 months

months

Gains

September 30, 2015

December 31, 2014

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).

	Number				Gross
Gross Unrealized Losses	of		Fair		Unrealized
at September 30, 2015:	Securities		Value		Losses
Less than or equal to 10%		4	$	7,796		(165	)
Greater than 10%		—		—		—
		4	$	7,796	$	(165	)

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

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).

	Fair Value of
	Securities with
Length of	Gross		Gross			Severity of Gross Unrealized Losses
Gross Unrealized Losses	Unrealized		Unrealized			Less			5% to			Greater
at September 30, 2015:	Losses		Losses			than 5%				10%		than 10%
Less than or equal to:
Three months	$	14,736	$	(180	)	$	(180	)	$	—		$	—
Six months		18,036		(379	)		(254	)		(124	)		(1	)
Nine months		7,857		(239	)		(239	)		—			—
Twelve months		—		—			—			—			—
Greater than twelve months		7,796		(165	)		(165	)		—			—
Total	$	48,425	$	(963	)	$	(838	)	$	(124	)	$	(1	)

	Fair Value of
	Securities with
Length of	Gross		Gross			Severity of Gross Unrealized Losses
Gross Unrealized Losses	Unrealized		Unrealized			Less			5% to		Greater
at December 31, 2014:	Losses		Losses			than 5%				10%	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	)	$	—	$	—

Other-Than-Temporary Impairment

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.

The Company believes that the securities having unrealized losses at September 30, 2015 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.

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. The Company has started the withdrawal process for one of the limited partnership investments which will take place over a twelve-month period in 25% increments. The Company does not intend to sell the remaining 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 September 30, 2015, the Company had unfunded commitments of $0.5 million with two of these investments.

Restrictions

At September 30, 2015, fixed maturities and cash equivalents with a fair value of $6.3 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).

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Fixed maturities, available-for-sale	$	1,077		$	1,089		$	3,131		$	3,442
Mutual funds, available-for-sale		164			151			457			458
Other investments		(27	)		(29	)		301			248
Other		56			54			174			156
Investment expenses		(126	)		(123	)		(368	)		(368	)
	$	1,144		$	1,142		$	3,695		$	3,936

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Gains	$	-		$	-		$	3		$	85
Losses		(6	)		(4	)		(16	)		(49	)
	$	(6	)	$	(4	)	$	(13	)	$	36

Realized gains and losses on sales and redemptions are computed based on specific identification. The non-credit related portion of other-than-temporary impairment (“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 collateralized mortgage obligations (“CMOs”) and $0.2 million related to non-agency backed commercial CMOs at both September 30, 2015 and 2014.