Investments

The Company invests primarily in fixed maturity securities, which totaled 89.7% of total investments and cash and cash equivalents at December 31, 2016. Holdings in high quality fixed maturity securities rated A or higher by Standard & Poor's, Inc. totaled 78.2% of investment holdings in this category, reflecting the conservative investment philosophy of the Company.



	December 31, 2016			December 31, 2015
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands)			(In thousands)
Fixed maturity securities	$	1,128,672	89.7	$	995,601	85.0
Equity securities	18,159		1.6	23,438		2.0
Mortgage loans	232		—	594		0.1
Policy loans	66,672		5.3	60,166		5.1
Real estate and other long-term investments	7,896		0.6	8,031		0.7
Short-term investments	508		—	251		—
Cash and cash equivalents	35,510		2.8	82,827		7.1
Total cash, cash equivalents and investments	$	1,257,649	100.0	$	1,170,908	100.0

The cost, gross unrealized gains and losses and fair value of investments in fixed maturities and equity securities, as of December 31, 2016 and 2015, are as follows.



	December 31, 2016
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,929	2,261	—	12,190
U.S. Government-sponsored enterprises	7,639		863	—	8,502
States and political subdivisions	563,279		15,017	5,022	573,274
Foreign governments	103		23	—	126
Corporate	277,226		12,095	4,222	285,099
Commercial mortgage-backed	50		1	—	51
Residential mortgage-backed	2,247		181	2	2,426
Total available-for-sale securities	860,473		30,441	9,246	881,668
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,003		28	—	2,031
States and political subdivisions	223,966		6,916	1,599	229,283
Corporate	21,035		888	692	21,231
Total held-to-maturity securities	247,004		7,832	2,291	252,545
Total fixed maturity securities	$	1,107,477	38,273	11,537	1,134,213
Equity securities:
Stock mutual funds	$	2,867	79	—	2,946
Bond mutual funds	14,040		265	108	14,197
Common stock	39		3	17	25
Redeemable preferred stock	819		174	2	991
Total equity securities	$	17,765	521	127	18,159



	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,995	2,597	—	12,592
U.S. Government-sponsored enterprises	19,676		1,104	—	20,780
States and political subdivisions	470,319		15,815	3,085	483,049
Foreign governments	104		27	—	131
Corporate	211,245		9,683	4,847	216,081
Commercial mortgage-backed	140		5	—	145
Residential mortgage-backed	2,658		214	2	2,870
Total available-for-sale securities	714,137		29,445	7,934	735,648
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,010		110	—	2,120
States and political subdivisions	236,776		6,756	883	242,649
Corporate	21,167		530	1,500	20,197
Total held-to-maturity securities	259,953		7,396	2,383	264,966
Total fixed maturity securities	$	974,090	36,841	10,317	1,000,614
Equity securities:
Stock mutual funds	$	3,270	—	237	3,033
Bond mutual funds	18,798		55	349	18,504
Common stock	65		—	22	43
Redeemable preferred stock	1,594		266	2	1,858
Total equity securities	$	23,727	321	610	23,438

For investments of available-for-sale fixed maturities that have unrealized losses as of December 31, 2016, the cost, gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months, gross unrealized losses that have been in a continuous unrealized loss position for 12 months or longer and fair value are as follows.



	December 31, 2016
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	202,788	3,513	184	8,018	1,509	8	210,806	5,022	192
Corporate	91,527		3,578	70	6,102	644	8	97,629	4,222	78
Residential mortgage-backed	116		1	4	105	1	2	221	2	6
Total available-for-sale securities	294,431		7,092	258	14,225	2,154	18	308,656	9,246	276
Held-to-maturity securities:
States and political subdivisions	$	43,659	1,562	47	509	37	1	44,168	1,599	48
Corporate	3,587		12	3	2,171	680	2	5,758	692	5
Total held-to-maturity securities	47,246		1,574	50	2,680	717	3	49,926	2,291	53
Total fixed maturities	$	341,677	8,666	308	16,905	2,871	21	358,582	11,537	329
Equity securities:
Stock mutual funds	$	—	—	—	—	—	—	—	—	—
Bond mutual funds	10,160		108	2	—	—	—	10,160	108	2
Redeemable preferred stock	201		2	2	—	—	—	201	2	2
Common stocks	—		—	—	—	17	1	—	17	1
Total equities	$	10,361	110	4	—	17	1	10,361	127	5

The available-for-sale fixed maturities in a gross unrealized loss position for more than 12 months is primarily related to rises in interest rates which results in lower market prices on fixed maturity securities that have lower coupons than the current market rate. This is interest rate risk and is not a signal of impairment. Management has completed its assessment of other-than-temporary impairment of these securities. Based on our evaluation of the credit worthiness of the issuers and because we do not intend to sell the investments, nor is it likely that we would be required to sell these investments before recovery of their amortized cost bases, which may be maturity, none of the unrealized losses are considered to be other-than-temporary.

We monitor all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews. Our impairment review, in accordance with current guidance, is performed by the Company at each reporting date and management uses its best judgment to decide if impairment is other-than-temporary. We determine other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer, as well as our intent to sell the security or whether we more likely than not will be required to sell the security before its anticipated recovery. All securities with a market price below par were segregated and reviewed as of December 31, 2016 based upon the items above for impairment.

For investments of available-for-sale fixed maturities and equity securities that have unrealized losses as of December 31, 2015, the cost, gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months, gross unrealized losses that have been in a continuous unrealized loss position for 12 months or longer and fair value are as follows.



	December 31, 2015
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	136,862	1,474	129	12,633	1,611	12	149,495	3,085	141
Corporate	70,081		4,330	69	3,308	517	3	73,389	4,847	72
Residential mortgage-backed	57		1	2	133	1	3	190	2	5
Total available-for-sale securities	207,000		5,805	200	16,074	2,129	18	223,074	7,934	218
Held-to-maturity securities:
States and political subdivisions	$	74,628	774	59	2,404	109	5	77,032	883	64
Corporate	4,585		641	4	2,160	859	2	6,745	1,500	6
Total held-to-maturity securities	79,213		1,415	63	4,564	968	7	83,777	2,383	70
Total fixed maturities	$	286,213	7,220	263	20,638	3,097	25	306,851	10,317	288
Equity securities:
Stock mutual funds	$	3,030	237	4	2	—	1	3,032	237	5
Bond mutual funds	10,158		318	2	108	31	1	10,266	349	3
Redeemable preferred stock	101		1	1	1	1	1	102	2	2
Common stocks	22		1	2	21	21	2	43	22	4
Total equities	$	13,311	557	9	132	53	5	13,443	610	14

The amortized cost and fair value of fixed maturities at December 31, 2016 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date have been reflected based upon the final stated maturity.



	Cost or Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	46,129	46,698
Due after one year through five years	103,680		106,407
Due after five years through ten years	120,915		127,697
Due after ten years	589,749		600,866
Total available-for-sale securities	860,473		881,668
Held-to-maturity securities:
Due in one year or less	2,972		2,991
Due after one year through five years	58,138		59,873
Due after five years through ten years	43,320		44,568
Due after ten years	142,574		145,113
Total held-to-maturity securities	247,004		252,545
Total fixed maturities	$	1,107,477	1,134,213

The Company had no investments in any one entity which exceeded 10% of stockholders' equity at December 31, 2016. In addition, there were no investments that were non-income producing for the year ended December 31, 2016.

Major categories of net investment income are summarized as follows:



	Years ended December 31,
	2016			2015		2014
	(In thousands)
Investment income on:
Fixed maturities	$	43,637		39,570		36,670
Equity securities	851			2,909		1,986
Mortgage loans on real estate	24			36		42
Policy loans	5,277			4,614		4,172
Long-term investments	305			247		287
Other	89			53		45
Total investment income	50,183			47,429		43,202
Investment expenses	(1,623		)	(1,647	)	(2,140	)
Net investment income	$	48,560		45,782		41,062

Proceeds and gross realized gains and losses from sales of fixed maturities available-for-sale for 2016, 2015 and 2014 are summarized as follows:



	Years ended December 31,
	2016		2015	2014
	(In thousands)
Proceeds	$	20,638	—	3,074
Gross realized gains	$	1,487	—	235
Gross realized losses	$	—	—	—

In 2016, SPLIC sold eleven bonds from their available-for-sale portfolio to generate funds to pay the extraordinary dividend to CICA. These sales produced proceeds of $20.6 million and realized gains of $1.5 million. In 2015, there were no sales of fixed maturities available-for-sale. In 2014, two bonds were sold for a gain related to potential impending credit issues. There were no securities sold from the held-to-maturity portfolio in 2016, 2015 or 2014.

Proceeds and gross realized gains and losses from sales of equity securities for 2016, 2015 and 2014 are summarized as follows:



	Years ended December 31,
	2016		2015	2014
	(In thousands)
Proceeds	$	5,100	43,163	15,029
Gross realized gains	$	291	634	118
Gross realized losses	$	35	599	169

In 2016, the Company sold five equity and bond mutual funds, some of which had been previously impaired, that resulted in a net gain of $256,000 to eliminate the risk-based-capital charge associated with equity securities. All mutual funds are considered common stocks for regulatory accounting purposes and the RBC charge for stocks is extremely high. In 2015, six equity and bond mutual funds were sold that resulted in a net gain of $35,000 due to regulatory accounting considerations. During 2014, three equity and bond mutual funds were sold resulting in a net loss of $51,000 due to circumstances that arose based on the current environment and due to the fact that they were shorter duration funds.

Realized investment gains (losses) are as follows:



	Years ended December 31,
	2016			2015		2014
	(In thousands)
Realized investment gains (losses):
Sales, calls and maturities:
Fixed maturities	$	2,024		(111	)	359
Equity securities	303			37		49
Net realized gains (losses)	2,327			(74	)	408
Other-than-temporary impairments ("OTTI")
Fixed maturities	(3,970		)	(2,998	)	—
Equity securities	(342		)	(2,387	)	(427	)
Realized loss on OTTI	(4,312		)	(5,385	)	(427	)
Net realized investment losses	$	(1,985	)	(5,459	)	(19	)

We recorded OTTI write-downs in 2016 of $4.3 million related to four equity and bond mutual funds and two bond issuers due to credit quality issues that arose in the current year.

The Company had realized losses of $12,000, $111,000 and $525 from calls of fixed maturities in 2016, 2015 and 2014, respectively.