Securities in an Unrealized Loss Position

The following tables summarize all securities in an unrealized loss position at September 30, 2015 and December 31, 2014 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, 2015
U.S. government and government agency	$	18,390	$	222	$	68,963	$	1,254	$	87,353	$	1,476
State and municipal	543,568		7,670		110,634		2,595		654,202		10,265
Mortgage-backed securities	115,152		889		200,490		6,230		315,642		7,119
Corporate	1,782,625		28,626		155,263		13,859		1,937,888		42,485
Foreign	96,348		11,117		22,355		4,960		118,703		16,077
Fixed maturity securities	2,556,083		48,524		557,705		28,898		3,113,788		77,422
Common stocks	24,109		21,352		8,112		902		32,221		22,254
Preferred stocks	4,791		396		22,280		3,394		27,071		3,790
Equity securities	28,900		21,748		30,392		4,296		59,292		26,044
Total	$	2,584,983	$	70,272	$	588,097	$	33,194	$	3,173,080	$	103,466

December 31, 2014
U.S. government and government agency	$	84,750	$	522	$	84,850	$	2,635	$	169,600	$	3,157
State and municipal	158,594		631		150,284		3,389		308,878		4,020
Mortgage-backed securities	75,739		332		312,922		9,169		388,661		9,501
Corporate	1,586,238		8,697		214,628		16,084		1,800,866		24,781
Foreign	76,471		3,907		85,025		14,158		161,496		18,065
Fixed maturity securities	1,981,792		14,089		847,709		45,435		2,829,501		59,524
Common stocks	15,929		5,453		—		—		15,929		5,453
Preferred stocks	27,126		1,139		22,648		3,026		49,774		4,165
Equity securities	43,055		6,592		22,648		3,026		65,703		9,618
Total	$	2,024,847	$	20,681	$	870,357	$	48,461	$	2,895,204	$	69,142

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, 2015 is presented in the table below:



($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Mortgage-backed securities	7	$	23,109	$	1,530
Corporate	17	147,430		9,428
Foreign government	4	26,277		5,305
Total	28	$	196,816	$	16,263

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, 2015 and 2014, 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.

For the three and nine months ended September 30, 2015, OTTI for fixed maturity securities recognized in earnings was $9.0 million, all of which was considered due to credit factors. There were no OTTI of fixed maturity securities for the three and nine months ended September 30, 2014.

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.

Equity Securities – At September 30, 2015, there were six equity securities in an unrealized loss position, with an aggregate fair value of $59.3 million and a gross unrealized loss of $26.0 million. Two of these equity securities are preferred stocks that are rated non-investment grade with an aggregate fair value of $4.8 million and a gross unrealized loss of $0.4 million. Based upon management’s view of the underlying value of these securities, the Company does not consider these equity securities to be OTTI. For the three and nine months ended September 30, 2015, OTTI for common stocks was $3.5 million. There were no OTTI of common stocks for the three and nine months ended September 30, 2014.

Loans Receivable – The Company monitors the performance of its loans receivable, including current market conditions for each loan and the ability to collect principal and interest. For loans where the Company determines it is probable that the contractual terms will not be met, an analysis is performed and a valuation reserve is established, if necessary, with a charge to earnings. Loans receivable are reported net of a valuation reserve of $2 million and $3 million at September 30, 2015 and December 31, 2014, respectively.