Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value of Financial Instruments [Abstract]

Fair Value Disclosures [Text Block]

Fair Value of Financial Instruments 

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents: The estimated fair value of cash and cash equivalents approximates their carrying value.

Fixed maturity securities: Fair values were obtained from market value quotations provided by an independent pricing service.

Common and preferred stock: The fair value of publicly traded common and preferred stocks were obtained from market value quotations provided by an independent pricing service. The fair values of non-publicly traded common stocks were based on prices obtained from an independent pricing service.

Notes receivable: The carrying amounts approximate fair value because the interest rates charged approximate current market rates for similar credit risks. These values are net of allowance for doubtful accounts.

Other receivables: The carrying amounts approximate fair value since no interest rate is charged on these short duration assets.

Short-term investments:The carrying amounts approximate fair value because of the short maturities of these instruments.

Notes payable and preferred trust securities: The carrying amounts approximate fair value because the applicable interest rates approximate current rates offered to the Company for similar instruments.

Interest rate swap: The fair value of the interest rate swap is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the interest rate swap. This analysis reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

The carrying and fair values of financial instruments are as follows:	March 31, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	18,676	$	18,676	$	31,339	$	31,339
Fixed maturity securities	92,843		92,843		93,509		93,509
Common stock - publicly traded	58		58		39		39
Preferred stock - publicly traded	2,630		2,630		52		52
Common stock - non-publicly traded	92		92		114		114
Preferred stock - non-publicly traded	1,013		1,013		1,014		1,014
Notes receivable	3,802		3,802		3,603		3,603
Other receivables	47,982		47,982		29,275		29,275
Short-term investments	970		970		1,070		1,070
Total financial assets	$	168,066	$	168,066	$	160,015	$	160,015
Financial liabilities:
Notes payable	$	74,700	$	74,700	$	73,000	$	73,000
Preferred trust securities	35,000		35,000		35,000		35,000
Interest rate swap contract	3,671		3,671		3,601		3,601
Total financial liabilities	$	113,371	$	113,371	$	111,601	$	111,601

The FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs use to measure fair value are as follows:

Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active

markets.

Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted

prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable

for the asset or liability and market-corroborated inputs.

Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value

measurement. These unobservable inputs are derived from the Company's internal calculations, estimates and assumptions and

require significant management judgment or estimation.

The following tables set forth the Company's financial assets and liabilities that were accounted for at fair value by level within the fair value hierarchy at March 31, 2012 and December 31, 2011:

			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
March 31, 2012	Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity securities	$	92,843	$	—	$	92,789	$	54
Common stock - publicly traded	58		58		—		—
Preferred stock - publicly traded	2,630		2,630		—		—
Common stock - non-publicly traded	92		—		—		92
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	970		970		—		—
Total assets	$	97,606	$	3,658	$	92,789	$	1,159
Liabilities
Interest rate swap contract	3,671		—		3,671		—
Total liabilities	$	3,671	$	—	$	3,671	$	—

			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
December 31, 2011	Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity securities	$	93,509	—		$	93,433	$	76
Common stock - publicly traded	39		39		—		—
Preferred stock - publicly traded	52		52		—		—
Common stock - non-publicly traded	114		—		—		114
Preferred stock - non-publicly traded	1,014		—		—		1,014
Short-term investments	1,070		1,070		—		—
Total Assets	$	95,798	$	1,161	$	93,433	$	1,204
Liabilities
Interest rate swap contract	3,601		—		3,601		—
Total liabilities	$	3,601	$	—	$	3,601	$	—

The Company's use of Level 3 unobservable inputs included 9 securities that accounted for 1.2% of total investments at March 31, 2012. The Company utilized an independent third party pricing service to value 8 of the Level 3 securities. The Level 3 pricing of the single non-publicly traded preferred stock was calculated by the Company taking into account the strength of the issuer's parent company guaranteeing the dividend of the issuer. At December 31, 2011, the Company had 12 securities valued under Level 3 that accounted for 1.3% of total investments. The following table summarizes the changes in Level 3 assets measured at fair value:

	For The Three Months Ended
	March 31, 2012			March 31, 2011
Beginning balance, January 1,	1,204			1,425
Total gains or losses realized/(unrealized):
Included in other comprehensive (loss) income	(22		)	(2		)
Sales	(22		)	—
Transfers (out of) Level 3	(1		)	—
Ending balance, March 31,	$	1,159		$	1,423