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Investments
 3 Months Ended
Mar. 31, 2012
Investments [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Investments
At March 31, 2012 and December 31, 2011, the amortized cost and fair value of fixed maturity securities and equity securities were as follows:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
 
(Dollars in thousands)
March 31, 2012
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
4,084

 
$
502

 
$
—

 
$
4,586

United States Government sponsored agencies
1,669,737

 
12,903

 
(1,751
)
 
1,680,889

United States municipalities, states and territories
3,015,682

 
316,645

 
(1,162
)
 
3,331,165

Foreign government obligations
36,387

 
7,326

 
—

 
43,713

Corporate securities
9,982,373

 
932,175

 
(61,740
)
 
10,852,808

Residential mortgage backed securities
2,529,727

 
131,170

 
(77,198
)
 
2,583,699

Other asset backed securities
500,421

 
17,352

 
(7,480
)
 
510,293

 
$
17,738,411

 
$
1,418,073

 
$
(149,331
)
 
$
19,007,153

Held for investment:
 
 
 
 
 
 
 
United States Government sponsored agencies
$
1,455,793

 
$
7,761

 
$
—

 
$
1,463,554

Corporate security
75,970

 
—

 
(17,734
)
 
58,236

 
$
1,531,763

 
$
7,761

 
$
(17,734
)
 
$
1,521,790

Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
56,396

 
$
9,900

 
$
(1,069
)
 
$
65,227

 
 
 
 
 
 
 
 
December 31, 2011
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
United States Government full faith and credit
$
4,084

 
$
594

 
$
—

 
$
4,678

United States Government sponsored agencies
1,780,401

 
19,378

 
—

 
1,799,779

United States municipalities, states and territories
2,981,699

 
351,694

 
(10
)
 
3,333,383

Foreign government obligations
36,373

 
6,855

 
—

 
43,228

Corporate securities
9,117,173

 
1,079,422

 
(80,234
)
 
10,116,361

Residential mortgage backed securities
2,618,040

 
157,331

 
(72,081
)
 
2,703,290

Other asset backed securities
442,509

 
26,492

 
(5,611
)
 
463,390

 
$
16,980,279

 
$
1,641,766

 
$
(157,936
)
 
$
18,464,109

Held for investment:
 
 
 
 
 
 
 
United States Government sponsored agencies
$
2,568,274

 
$
16,806

 
$
—

 
$
2,585,080

Corporate security
75,932

 
—

 
(16,590
)
 
59,342

 
$
2,644,206

 
$
16,806

 
$
(16,590
)
 
$
2,644,422

Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance, and real estate
$
58,438

 
$
8,752

 
$
(4,345
)
 
$
62,845

During the three months ended March 31, 2012 and 2011, we received $1.9 billion and $1.5 billion, respectively, in redemption proceeds related to calls of our callable United States Government sponsored agency securities and public and private corporate bonds, of which $1.1 billion were classified as held for investment for the three months ended March 31, 2012. There were no calls of held for investment securities during the three months ended March 31, 2011. We reinvested the proceeds from these redemptions primarily in United States Government sponsored agencies, corporate securities and other asset backed securities. At March 31, 2012, 34% of our fixed income securities have call features and 1% ($0.1 billion) were subject to call redemption. Another 13% ($2.5 billion) will become subject to call redemption during the next twelve months (principally the last three quarters of 2012).
The amortized cost and fair value of fixed maturity securities at March 31, 2012, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our residential mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines.
 
Available for sale
 
Held for investment
 
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
 
(Dollars in thousands)
Due in one year or less
$
54,155

 
$
56,064

 
$
—

 
$
—

Due after one year through five years
478,530

 
537,796

 
—

 
—

Due after five years through ten years
2,902,552

 
3,144,559

 
—

 
—

Due after ten years through twenty years
4,321,964

 
4,622,946

 
—

 
—

Due after twenty years
6,951,062

 
7,551,796

 
1,531,763

 
1,521,790

 
14,708,263

 
15,913,161

 
1,531,763

 
1,521,790

Residential mortgage backed securities
2,529,727

 
2,583,699

 
—

 
—

Other asset backed securities
500,421

 
510,293

 
—

 
—

 
$
17,738,411

 
$
19,007,153

 
$
1,531,763

 
$
1,521,790

Net unrealized gains on available for sale fixed maturity securities and equity securities reported as a separate component of stockholders' equity were comprised of the following:
 
March 31,
2012
 
December 31,
2011
 
(Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities and equity securities
$
1,277,573

 
$
1,488,237

Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements
(683,398
)
 
(819,476
)
Deferred income tax valuation allowance reversal
22,534

 
22,534

Deferred income tax benefit
(207,962
)
 
(234,066
)
Net unrealized gains reported as accumulated other comprehensive income
$
408,747

 
$
457,229

The National Association of Insurance Commissioners (“NAIC”) assigns designations to fixed maturity securities. These designations range from Class 1 (highest quality) to Class 6 (lowest quality). In general, securities are assigned a designation based upon the ratings they are given by the Nationally Recognized Statistical Rating Organizations (“NRSRO’s”). The NAIC designations are utilized by insurers in preparing their annual statutory statements. NAIC Class 1 and 2 designations are considered “investment grade” while NAIC Class 3 through 6 designations are considered “non-investment grade.” Based on the NAIC designations, we had 98% of our fixed maturity portfolio rated investment grade at March 31, 2012 and December 31, 2011.
The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated:
 
 
March 31, 2012
 
December 31, 2011
NAIC
Designation
 
Amortized Cost

 
Fair Value
 
Amortized Cost
 
Fair Value
 
 
(Dollars in thousands)
1
 
$
13,459,266

 
$
14,395,046

 
$
14,359,272

 
$
15,486,571

2
 
5,477,252

 
5,821,823

 
4,894,739

 
5,272,759

3
 
302,139

 
280,833

 
335,642

 
315,406

4
 
22,851

 
21,137

 
26,674

 
23,989

5
 
5,613

 
5,872

 
4,932

 
5,756

6
 
3,053

 
4,232

 
3,226

 
4,050

 
 
$
19,270,174

 
$
20,528,943

 
$
19,624,485

 
$
21,108,531


The following tables show our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 302 and 246 securities, respectively) have been in a continuous unrealized loss position, at March 31, 2012 and December 31, 2011:
 
Less than 12 months
 
12 months or more
 
Total
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
(Dollars in thousands)
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States Government sponsored agencies
$
607,349

 
$
(1,751
)
 
$
—

 
$
—

 
$
607,349

 
$
(1,751
)
United States municipalities, states and territories
47,597

 
(1,162
)
 
—

 
—

 
47,597

 
(1,162
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
393,955

 
(18,721
)
 
137,166

 
(12,238
)
 
531,121

 
(30,959
)
Manufacturing, construction and mining
312,333

 
(11,078
)
 
16,838

 
(1,543
)
 
329,171

 
(12,621
)
Utilities and related sectors
220,057

 
(7,749
)
 
40,567

 
(4,148
)
 
260,624

 
(11,897
)
Wholesale/retail trade
18,001

 
(605
)
 
9,575

 
(891
)
 
27,576

 
(1,496
)
Services, media and other
121,293

 
(1,219
)
 
16,452

 
(3,548
)
 
137,745

 
(4,767
)
Residential mortgage backed securities
445,892

 
(30,080
)
 
563,164

 
(47,118
)
 
1,009,056

 
(77,198
)
Other asset backed securities
174,011

 
(5,166
)
 
30,378

 
(2,314
)
 
204,389

 
(7,480
)
 
$
2,340,488

 
$
(77,531
)
 
$
814,140

 
$
(71,800
)
 
$
3,154,628

 
$
(149,331
)
Held for investment:
 
 
 
 
 
 
 
 
 
 
 
Corporate security:
 
 
 
 
 
 
 
 
 
 
 
Insurance
$
—

 
$
—

 
$
58,236

 
$
(17,734
)
 
$
58,236

 
$
(17,734
)
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
$
12,212

 
$
(913
)
 
$
4,844

 
$
(156
)
 
$
17,056

 
$
(1,069
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
United States municipalities, states and territories
$
3,535

 
$
(10
)
 
$
—

 
$
—

 
$
3,535

 
$
(10
)
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
363,909

 
(36,575
)
 
146,354

 
(15,611
)
 
510,263

 
(52,186
)
Manufacturing, construction and mining
201,762

 
(7,131
)
 
29,875

 
(1,869
)
 
231,637

 
(9,000
)
Utilities and related sectors
174,251

 
(7,576
)
 
37,778

 
(6,946
)
 
212,029

 
(14,522
)
Wholesale/retail trade
15,523

 
(188
)
 
9,275

 
(1,194
)
 
24,798

 
(1,382
)
Services, media and other
27,688

 
(249
)
 
17,105

 
(2,895
)
 
44,793

 
(3,144
)
Residential mortgage backed securities
295,352

 
(19,920
)
 
709,612

 
(52,161
)
 
1,004,964

 
(72,081
)
Other asset backed securities
115,542

 
(2,863
)
 
15,550

 
(2,748
)
 
131,092

 
(5,611
)
 
$
1,197,562

 
$
(74,512
)
 
$
965,549

 
$
(83,424
)
 
$
2,163,111

 
$
(157,936
)
Held for investment:
 
 
 
 
 
 
 
 
 
 
 
Corporate security:
 
 
 
 
 
 
 
 
 
 
 
Insurance
$
—

 
$
—

 
$
59,342

 
$
(16,590
)
 
$
59,342

 
$
(16,590
)
 


 


 


 


 


 


Equity securities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
Finance, insurance and real estate
$
20,028

 
$
(3,095
)
 
$
3,750

 
$
(1,250
)
 
$
23,778

 
$
(4,345
)

The following is a description of the factors causing the temporary unrealized losses by investment category as of March 31, 2012:
United States Government sponsored agencies; and United States municipalities, states and territories: These securities are relatively long in duration, making the value of such securities sensitive to changes in market interest rates. We purchase these securities regularly over time at different interest rates available at time of purchase; thus, some securities carry yields less than those available at March 31, 2012.
Corporate securities: The unrealized losses in these securities are due partially to the timing of purchases in 2011 and a small number of securities seeing their yield spreads widen due to issuer specific news. In addition, the financial sector credit spreads narrowed from year end 2011 but remain wide as the result of continued economic uncertainty and further concerns around the European Union.
Residential mortgage backed securities: At March 31, 2012, we had no exposure to sub-prime residential mortgage backed securities. All of our residential mortgage backed securities are pools of first-lien residential mortgage loans. Substantially all of the securities that we own are in the most senior tranche of the securitization in which they are structured and are not subordinated to any other tranche. Our "Alt-A" residential mortgage backed securities are comprised of 36 securities with a total amortized cost basis of $418.3 million and a fair value of $383.5 million. Despite recent improvements in the capital markets, the fair values of RMBS continue at prices below amortized cost. RMBS prices will likely remain below our cost basis until the housing market is able to absorb current and future foreclosures.
Other asset backed securities: The unrealized losses in these securities are predominantly assigned to financial sector capital trust securities which have longer maturity dates and have declined in price due to prolonged stress in the financial sector. Only one security in an unrealized loss position is rated below investment grade.
Equity securities: Equity securities in an unrealized loss position are in the financial sector and have exposure to the economic uncertainty in the European Union and the United States. A majority of these securities have been in an unrealized loss position for 12 months or more and are investment grade perpetual preferred stocks that are absent credit deterioration. A continued difficult investment environment has raised concerns in regard to earnings and dividend stability in many companies which directly affect the values of these securities.
Approximately 83% of the unrealized losses on fixed maturity securities shown in the above table for March 31, 2012 and December 31, 2011, are on securities that are rated investment grade, defined as being the highest two NAIC designations. All of the securities with unrealized losses are current with respect to the payment of principal and interest.
Changes in net unrealized gains on investments for the three months ended March 31, 2012 and 2011 are as follows:
 
Three Months Ended March 31,
 
2012
 
2011
 
 
 
 
Fixed maturity securities held for investment carried at amortized cost
$
10,189

 
$
(25,658
)
 
 
 
 
Investments carried at fair value:
 
 
 
Fixed maturity securities, available for sale
$
(215,088
)
 
$
(52,144
)
Equity securities, available for sale
4,424

 
2,081

 
(210,664
)
 
(50,063
)
Adjustment for effect on other balance sheet accounts:
 
 
 
Deferred policy acquisition costs and deferred sales inducements
136,078

 
28,154

Deferred income tax asset
26,104

 
7,668

 
162,182

 
35,822

Decrease in net unrealized gains on investments carried at fair value
$
(48,482
)
 
$
(14,241
)
Proceeds from sales of available for sale securities for the three months ended March 31, 2012 and 2011 were $51.7 million and $40.5 million, respectively. Scheduled principal repayments, calls and tenders for available for sale securities for the three months ended March 31, 2012 and 2011 were $0.9 billion and $1.7 billion, respectively.
Realized gains and losses on sales are determined on the basis of specific identification of investments based on the trade date. Net realized gains (losses) on investments, excluding net OTTI losses for the three months ended March 31, 2012 and 2011 are as follows:
 
Three Months Ended March 31,
 
2,012
 
2,011
 
(Dollars in thousands)
Available for sale fixed maturity securities:
 
 
 
Gross realized gains
$
1,018

 
$
1,641

Gross realized losses
(296
)
 
—

 
722

 
1,641

Equity securities:
 
 
 
Gross realized gains
562

 
—

Mortgage loans on real estate:
 
 
 
Increase in allowance for credit losses
(7,831
)
 
(2,834
)
Other investments:
 
 
 
Gain on sale of real estate
1,445

 
—

Impairment losses on real estate
(974
)
 
—

 
471

 
—

 
$
(6,076
)
 
$
(1,193
)

We review and analyze all investments on an ongoing basis for changes in market interest rates and credit deterioration. This review process includes analyzing our ability to recover the amortized cost basis of each investment that has a fair value that is materially lower than its amortized cost and requires a high degree of management judgment and involves uncertainty. The evaluation of securities for other than temporary impairments is a quantitative and qualitative process, which is subject to risks and uncertainties.
We have a policy and process in place to identify securities that could potentially have impairments that are other than temporary. This process involves monitoring market events and other items that could impact issuers. The evaluation includes but is not limited to such factors as:
•
the length of time and the extent to which the fair value has been less than amortized cost or cost;
•
whether the issuer is current on all payments and all contractual payments have been made as agreed;
•
the remaining payment terms and the financial condition and near-term prospects of the issuer;
•
the lack of ability to refinance due to liquidity problems in the credit market;
•
the fair value of any underlying collateral;
•
the existence of any credit protection available;
•
our intent to sell and whether it is more likely than not we would be required to sell prior to recovery for debt securities;
•
our assessment in the case of equity securities including perpetual preferred stocks with credit deterioration that the security cannot recover to cost in a reasonable period of time;
•
our intent and ability to retain equity securities for a period of time sufficient to allow for recovery;
•
consideration of rating agency actions; and
•
changes in estimated cash flows of residential mortgage and asset backed securities.
We determine whether other than temporary impairment losses should be recognized for debt and equity securities by assessing all facts and circumstances surrounding each security. Where the decline in market value of debt securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and we anticipate recovery of all contractual or expected cash flows, we do not consider these investments to be other than temporarily impaired because we do not intend to sell these investments and it is not more likely than not we will be required to sell these investments before a recovery of amortized cost, which may be maturity. For equity securities, we recognize an impairment charge in the period in which we do not have the intent and ability to hold the securities until recovery of cost or we determine that the security will not recover to book value within a reasonable period of time. We determine what constitutes a reasonable period of time on a security-by-security basis by considering all the evidence available to us, including the magnitude of any unrealized loss and its duration. In any event, this period does not exceed 18 months from the date of impairment for perpetual preferred securities for which there is evidence of deterioration in credit of the issuer and common equity securities. For perpetual preferred securities absent evidence of a deterioration in credit of the issuer we apply an impairment model, including an anticipated recovery period, similar to a debt security.
Other than temporary impairment losses on equity securities are recognized in operations. If we intend to sell a debt security or if it is more likely than not that we will be required to sell a debt security before recovery of its amortized cost basis, other than temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in operations.
If we do not intend to sell and it is not more likely than not we will be required to sell the debt security but also do not expect to recover the entire amortized cost basis of the security, an impairment loss would be recognized in operations in the amount of the expected credit loss. We determine the amount of expected credit loss by calculating the present value of the cash flows expected to be collected discounted at each security's acquisition yield based on our consideration of whether the security was of high credit quality at the time of acquisition. The difference between the present value of expected future cash flows and the amortized cost basis of the security is the amount of credit loss recognized in operations. The remaining amount of the other than temporary impairment is recognized in other comprehensive income.
The determination of the credit loss component of a residential mortgage backed security is based on a number of factors. The primary consideration in this evaluation process is the issuer's ability to meet current and future interest and principal payments as contractually stated at time of purchase. Our review of these securities includes an analysis of the cash flow modeling under various default scenarios considering independent third party benchmarks, the seniority of the specific tranche within the structure of the security, the composition of the collateral and the actual default, loss severity and prepayment experience exhibited. With the input of third party assumptions for default projections, loss severity and prepayment expectations, we evaluate the cash flow projections to determine whether the security is performing in accordance with its contractual obligation.
We utilize the models from a leading structured product software specialist serving institutional investors. These models incorporate each security's seniority and cash flow structure. In circumstances where the analysis implies a potential for principal loss at some point in the future, we use the "best estimate" cash flow projection discounted at the security's effective yield at acquisition to determine the amount of our potential credit loss associated with this security. The discounted expected future cash flows equates to our expected recovery value. Any shortfall of the expected recovery when compared to the amortized cost of the security will be recorded as the credit loss component of other than temporary impairment.
The cash flow modeling is performed on a security-by-security basis and incorporates actual cash flows on the residential mortgage backed securities through the current period, as well as the projection of remaining cash flows using a number of assumptions including default rates, prepayment rates and loss severity rates. The default curves we use are tailored to the Prime or Alt-A residential mortgage backed securities that we own, which assume lower default rates and loss severity for Prime securities versus Alt-A securities. These default curves are scaled higher or lower depending on factors such as current underlying mortgage loan performance, rating agency loss projections, loan to value ratios, geographic diversity, as well as other appropriate considerations. The default curves generally assume lower loss levels for older vintage securities versus more recent vintage securities, which reflects the decline in underwriting standards over the years.
The following table presents the range of significant assumptions used to determine the credit loss component of other than temporary impairments we have recognized on residential mortgage backed securities for the three months ended March 31, 2012 and 2011, which are all senior level tranches within the structure of the securities:
 
 
 
 
Discount Rate
 
Default Rate
 
Loss Severity
Sector
 
Vintage
 
Min
 
Max
 
Min
 
Max
 
Min
 
Max
Three months ended March 31, 2012
Prime
 
2005
 
7.5
%
 
7.5
%
 
13
%
 
13
%
 
50
%
 
50
%
 
 
2006
 
6.9
%
 
7.4
%
 
19
%
 
19
%
 
50
%
 
55
%
 
 
2007
 
6.4
%
 
7.3
%
 
15
%
 
38
%
 
50
%
 
60
%
Alt-A
 
2005
 
6.4
%
 
7.4
%
 
14
%
 
27
%
 
5
%
 
50
%
 
 
2006
 
6.0
%
 
6.0
%
 
46
%
 
46
%
 
55
%
 
55
%
 
 
2007
 
6.6
%
 
7.0
%
 
42
%
 
55
%
 
55
%
 
60
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2011
Prime
 
2005
 
7.7
%
 
7.7
%
 
8
%
 
8
%
 
50
%
 
50
%
 
 
2006
 
7.3
%
 
7.6
%
 
9
%
 
11
%
 
50
%
 
55
%
 
 
2007
 
5.8
%
 
7.3
%
 
8
%
 
30
%
 
40
%
 
60
%
Alt-A
 
2005
 
6.0
%
 
7.7
%
 
18
%
 
18
%
 
50
%
 
50
%
 
 
2006
 
6.0
%
 
6.0
%
 
30
%
 
30
%
 
50
%
 
50
%
 
 
2007
 
6.2
%
 
7.4
%
 
29
%
 
41
%
 
50
%
 
60
%
The determination of the credit loss component of a corporate bond (including redeemable preferred stocks) is based on the underlying financial performance of the issuer and their ability to meet their contractual obligations. Considerations in our evaluation include, but are not limited to, credit rating changes, financial statement and ratio analysis, changes in management, significant changes in credit spreads, breaches of financial covenants and a review of the economic outlook for the industry and markets in which they trade. In circumstances where an issuer appears unlikely to meet its future obligation, or the security's price decline is deemed other than temporary, an estimate of credit loss is determined. Credit loss is calculated using default probabilities as derived from the credit default swaps markets in conjunction with recovery rates derived from independent third party analysis or a best estimate of credit loss. This credit loss rate is then incorporated into a present value calculation based on an expected principal loss in the future discounted at the yield at the date of purchase and compared to amortized cost to determine the amount of credit loss associated with the security.
In addition, for debt securities which we do not intend to sell and it is not more likely than not we will be required to sell, but our intent changes due to changes or events that could not have been reasonably anticipated, an other than temporary impairment charge is recognized. Once an impairment charge has been recorded, we then continue to review the other than temporarily impaired securities for appropriate valuation on an ongoing basis. Unrealized losses may be recognized in future periods through a charge to earnings, should we later conclude that the decline in fair value below amortized cost is other than temporary pursuant to our accounting policy described above. The use of different methodologies and assumptions to determine the fair value of investments and the timing and amount of impairments may have a material effect on the amounts presented in our consolidated financial statements.
The following table summarizes other than temporary impairments for the three months ended March 31, 2012 and 2011, by asset type:
 
Number
of
Securities

 
Total OTTI
Losses

 
Portion of OTTI
Losses Recognized in (from) Other
Comprehensive
Income

 
Net OTTI Losses
Recognized in Operations

 
 
 
(Dollars in thousands)
Three months ended March 31, 2012
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
20

 
$
(1,781
)
 
$
(1,100
)
 
$
(2,881
)
 
 
 
 
 
 
 
 
Three months ended March 31, 2011
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Residential mortgage backed securities
24

 
$
(5,100
)
 
$
(1,471
)
 
$
(6,571
)
The cumulative portion of other than temporary impairments determined to be credit losses which have been recognized in operations for debt securities are summarized as follows:
 
Three Months Ended March 31,
 
2012
 
2011
 
(Dollars in thousands)
Cumulative credit loss at beginning of period
$
(119,095
)
 
$
(96,893
)
Credit losses on securities for which OTTI has not previously been recognized
—

 
(789
)
Additional credit losses on securities for which OTTI has previously been recognized
(2,881
)
 
(5,782
)
Accumulated losses on securities that were disposed of during the period
—

 
1,213

Cumulative credit loss at end of period
$
(121,976
)
 
$
(102,251
)
The following table summarizes the cumulative noncredit portion of OTTI and the change in fair value since recognition of OTTI, both of which were recognized in other comprehensive income, by major type of security for securities that are part of our investment portfolio at March 31, 2012 and December 31, 2011:
 
Amortized Cost
 
OTTI
Recognized in
Other
Comprehensive
Income
 
Change in Fair
Value Since
OTTI was
Recognized
 
Fair Value
 
(Dollars in thousands)
March 31, 2012
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
3,401

 
$
(2,151
)
 
$
5,683

 
$
6,933

Residential mortgage backed securities
969,010

 
(186,026
)
 
126,626

 
909,610

Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance and real estate
9,976

 
—

 
8,512

 
18,488

 
$
982,387

 
$
(188,177
)
 
$
140,821

 
$
935,031

December 31, 2011
 
 
 
 
 
 
 
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
Corporate securities
$
3,347

 
$
(2,151
)
 
$
4,818

 
$
6,014

Residential mortgage backed securities
999,024

 
(187,126
)
 
125,502

 
937,400

Equity securities, available for sale:
 
 
 
 
 
 
 
Finance, insurance and real estate
12,019

 
—

 
8,110

 
20,129

 
$
1,014,390

 
$
(189,277
)
 
$
138,430

 
$
963,543