Securities in an Unrealized Loss Position

The following table summarizes all securities in an unrealized loss position at September 30, 2013 and December 31, 2012 by the length of time those securities have been continuously in an unrealized loss position:



	Less Than 12 Months				12 Months or Greater				Total
(In thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2013
U.S. government and agency	$	145,472	$	4,462	$	—	$	—	$	145,472	$	4,462
State and municipal	644,312		19,393		61,210		2,572		705,522		21,965
Mortgage-backed securities	498,700		17,880		84,047		5,018		582,747		22,898
Corporate	1,069,096		17,738		70,276		10,975		1,139,372		28,713
Foreign	344,301		12,062		—		—		344,301		12,062
Fixed maturity securities	2,701,881		71,535		215,533		18,565		2,917,414		90,100
Common stocks	36,899		5,576		—		—		36,899		5,576
Preferred stocks	26,906		1,901		19,939		5,735		46,845		7,636
Equity securities	63,805		7,477		19,939		5,735		83,744		13,212
Total	$	2,765,686	$	79,012	$	235,472	$	24,300	$	3,001,158	$	103,312

December 31, 2012
U.S. government and agency	$	69,551	$	1,660	$	—	$	—	$	69,551	$	1,660
State and municipal	152,694		1,639		135,967		8,054		288,661		9,693
Mortgage-backed securities	484,731		3,629		58,292		4,571		543,023		8,200
Corporate	371,781		2,964		70,537		9,119		442,318		12,083
Foreign	95,623		996		11,210		28		106,833		1,024
Fixed maturity securities	1,174,380		10,888		276,006		21,772		1,450,386		32,660
Common stocks	46,725		707		—		—		46,725		707
Preferred stocks	—		—		39,812		1,651		39,812		1,651
Equity securities	46,725		707		39,812		1,651		86,537		2,358
Total	$	1,221,105	$	11,595	$	315,818	$	23,423	$	1,536,923	$	35,018

Fixed Maturity Securities – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2013 is presented in the table below.



($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Mortgage-backed securities	12	$	56,553	$	4,141
Corporate	10	44,525		2,534
State and municipal	1	10,864		2
Foreign	3	24,529		744
Total	26	$	136,471	$	7,421

For OTTI of fixed maturity securities that management does not intend to sell or, more likely than not, would not be required to sell, the portion of the decline in value considered to be due to credit factors is recognized in earnings and the portion of the decline in value considered to be due to non-credit factors is recognized in other comprehensive income. For the nine months ended September 30, 2013 and 2012, there were no changes in the portion of impairments recognized in earnings for those securities that have been impaired due to both credit factors and non-credit factors.

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI.

Preferred Stocks – At September 30, 2013, there were four preferred stocks in an unrealized loss position, with an aggregate fair value of $47 million and a gross unrealized loss of $8 million. Based upon management’s view of the underlying value of these securities, the Company does not consider these preferred stocks to be OTTI.

Common Stocks – At September 30, 2013, the Company owned two common stocks in an unrealized loss position with an aggregate fair value of $37 million and an aggregate unrealized loss of $6 million. The Company does not consider these common stocks to be OTTI.