Investments

The Company invests primarily in fixed maturity securities, which totaled 88.0% of total cash, cash equivalents and investments at June 30, 2018. The Company's cash, cash equivalents and investments are listed below.



	June 30, 2018			December 31, 2017
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands)			(In thousands)
Fixed maturity securities	$	1,190,965	88.0	$	1,208,570	89.3
Equity securities	15,372		1.1	16,164		1.2
Mortgage loans	190		—	195		—
Policy loans	77,577		5.7	73,735		5.5
Real estate and other long-term investments	7,286		0.5	7,452		0.6
Cash and cash equivalents	63,333		4.7	46,064		3.4
Total cash, cash equivalents and investments	$	1,354,723	100.0	$	1,352,180	100.0

The following tables represent the cost, gross unrealized gains and losses and fair value for fixed maturities as of the periods indicated.



	June 30, 2018
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	9,824	1,500	—	11,324
U.S. Government-sponsored enterprises	3,558		741	—	4,299
States and political subdivisions	550,700		12,009	3,170	559,539
Foreign governments	103		16	—	119
Corporate	402,213		9,353	11,994	399,572
Residential mortgage-backed	1,520		81	3	1,598
Total available-for-sale securities	967,918		23,700	15,167	976,451
Held-to-maturity securities:
States and political subdivisions	198,439		5,112	772	202,779
Corporate	16,075		531	611	15,995
Total held-to-maturity securities	214,514		5,643	1,383	218,774
Total fixed maturities	$	1,182,432	29,343	16,550	1,195,225



	December 31, 2017
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,860	1,948	—	11,808
U.S. Government-sponsored enterprises	3,570		926	—	4,496
States and political subdivisions	550,536		18,507	1,540	567,503
Foreign governments	103		18	—	121
Corporate	370,043		20,212	1,552	388,703
Residential mortgage-backed	1,865		118	5	1,978
Total available-for-sale securities	935,977		41,729	3,097	974,609
Held-to-maturity securities:
States and political subdivisions	213,054		7,585	629	220,010
Corporate	20,907		1,118	658	21,367
Total held-to-maturity securities	233,961		8,703	1,287	241,377
Total fixed maturity securities	$	1,169,938	50,432	4,384	1,215,986

The majority of the Company's equity securities are diversified stock and bond mutual funds.



	June 30, 2018		December 31, 2017
	Fair Value		Fair Value
	(In thousands)
Equity securities:
Stock mutual funds	$	3,112	3,217
Bond mutual funds	12,094		12,367
Common stock	23		24
Preferred stock	143		556
Total equity securities	$	15,372	16,164

The Company recognized $86,009 and $388,061 of net realized losses on equity securities still held for the three and six months ended June 30, 2018, respectively.

Valuation of Investments in Fixed Maturity and Equity Securities

Held-to-maturity securities are reported in the financial statements at amortized cost and available-for-sale securities are reported at fair value. Equity securities are measured at fair value with the change in fair value recorded through net income pursuant to the adoption of ASU 2016-01 as described in Note 2.

The Company monitors all debt 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. The assessment of whether other-than-temporary impairments ("OTTI") have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. The Company determines other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an other-than-temporary impairment has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely that the Company will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment's cost and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into the following: (a) the amount representing the credit loss; and (b) the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment. The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company evaluates whether a credit impairment exists for fixed maturity securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; (d) the length of time to which the fair value has been less than the amortized cost of the security; and (e) the payment structure of the security. The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process. Quantitative review includes information received from third party sources such as financial statements, pricing and rating changes, liquidity and other statistical information. Qualitative factors include judgments related to business strategies, economic impacts on the issuer and overall judgment related to estimates and industry factors. The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer.

There were no other-than-temporary impairments recorded for the three months ended June 30, 2018 or 2017. An other-than-temporary impairment of $225,000 was recognized on one bond issuer during the six months ended June 30, 2018 and on one equity security totaling $17,000 during the six months ended June 30, 2017.

The following tables present the fair values and gross unrealized losses of fixed maturity securities that have remained in a continuous unrealized loss position for the periods indicated.



	June 30, 2018
	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	$	174,912	1,683	164	53,199	1,487	44	228,111	3,170	208
Corporate	258,469		10,359	174	13,178	1,635	10	271,647	11,994	184
Residential mortgage-backed	20		1	4	152	2	4	172	3	8
Total available-for-sale securities	433,401		12,043	342	66,529	3,124	58	499,930	15,167	400
Held-to-maturity securities:
States and political subdivisions	34,296		203	34	7,107	569	11	41,403	772	45
Corporate	568		3	1	2,206	608	2	2,774	611	3
Total held-to-maturity securities	34,864		206	35	9,313	1,177	13	44,177	1,383	48
Total fixed maturities	$	468,265	12,249	377	75,842	4,301	71	544,107	16,550	448

As of June 30, 2018, the Company had 58 available-for-sale fixed maturity securities and 13 held-to-maturity fixed maturity securities that were in an unrealized loss position for greater than 12 months.



	December 31, 2017
	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	$	49,408	312	46	47,233	1,228	46	96,641	1,540	92
Corporate	61,071		732	39	7,651	820	10	68,722	1,552	49
Residential mortgage-backed	132		3	4	157	2	4	289	5	8
Total available-for-sale securities	110,611		1,047	89	55,041	2,050	60	165,652	3,097	149
Held-to-maturity securities:
States and political subdivisions	14,178		45	15	7,460	584	14	21,638	629	29
Corporate	—		—	—	2,169	658	2	2,169	658	2
Total held-to-maturity securities	14,178		45	15	9,629	1,242	16	23,807	1,287	31
Total fixed maturities	$	124,789	1,092	104	64,670	3,292	76	189,459	4,384	180
Equity securities:
Redeemable preferred stock	95		6	1	—	—	—	95	6	1
Total equity securities	$	95	6	1	—	—	—	95	6	1

We have reviewed these securities in an unrealized loss position for the periods ended June 30, 2018 and December 31, 2017 and determined that no other-than-temporary impairment exists that have not been recognized based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity. We continue to monitor all securities on an on-going basis and future information may become available which could result in other-than-temporary impairments being recorded.

The amortized cost and fair value of fixed maturity securities at June 30, 2018 by contractual maturity are shown in the table 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 final stated maturity.



	June 30, 2018
	Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	30,664	30,737
Due after one year through five years	107,702		111,166
Due after five years through ten years	182,804		185,086
Due after ten years	646,748		649,462
Total available-for-sale securities	967,918		976,451
Held-to-maturity securities:
Due in one year or less	9,126		9,137
Due after one year through five years	41,986		42,761
Due after five years through ten years	49,031		49,612
Due after ten years	114,371		117,264
Total held-to-maturity securities	214,514		218,774
Total fixed maturities	$	1,182,432	1,195,225

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.



	Fixed Maturities, Available-for-Sale					Equity Securities
	Three Months Ended			Six Months Ended		Three Months Ended		Six Months Ended
	June 30,			June 30,		June 30,		June 30,
	2018		2017	2018	2017	2018	2017	2018	2017
	(In thousands)

Proceeds	$	—	—	—	508	—	—	—	1,940
Gross realized gains	$	—	—	—	6	—	—	—	—
Gross realized losses	$	—	—	—	—	—	—	—	30

There were no sales of available-for-sale fixed maturity securities or equity securities for the three and six months ended June 30, 2018 and for the three months ended June 30, 2017. One available-for-sale fixed maturity security and one equity security were sold during the six months ended June 30, 2017. There were no securities sold from the held-to-maturity portfolio for the three and six months ended June 30, 2018 or 2017.