Investments

The Company invests primarily in fixed maturity securities, which totaled 88.7% of total investments and cash and cash equivalents at December 31, 2018. Holdings in high quality fixed maturity securities rated A or higher by Standard & Poor's, Inc. totaled 75.5% of investment holdings in this category, reflecting the Company's conservative investment philosophy.



	December 31, 2018			December 31, 2017
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands, except for %)
Fixed maturity securities	$	1,231,039	88.7	$	1,208,570	89.3
Equity securities	15,068		1.1	16,164		1.2
Mortgage loans	186		—	195		—
Policy loans	80,825		5.8	73,735		5.5
Real estate and other long-term investments	7,223		0.5	7,452		0.6
Short-term investments	7,865		0.6	—		—
Cash and cash equivalents	45,492		3.3	46,064		3.4
Total cash, cash equivalents and investments	$	1,387,698	100.0	$	1,352,180	100.0

The cost, gross unrealized gains and losses and fair value of investments in fixed maturities and equity securities, as of December 31, 2018 and 2017, are as follows.



	December 31, 2018
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,864	1,410	—	11,274
U.S. Government-sponsored enterprises	3,540		740	—	4,280
States and political subdivisions	713,991		7,614	1,490	720,115
Corporate	384,817		6,725	9,746	381,796
Commercial mortgage-backed	39,694		386	66	40,014
Residential mortgage-backed	66,960		1,726	2	68,684
Asset-backed	4,764		1	8	4,757
Foreign governments	117		2	—	119
Total fixed maturity securities	$	1,223,747	18,604	11,312	1,231,039

We reclassified all of our fixed maturity holdings that were previously classified as held-to-maturity to available-for-sale based upon our intent and investment strategy as of September 30, 2018. The net carrying value of the fixed maturities held-to-maturity reclassified as available-for-sale amounted to $209.7 million and resulted in a net unrealized gain of $0.5 million being recorded in other comprehensive income before tax.



	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
Equity securities:
Stock mutual funds	$	2,867	350	—	3,217
Bond mutual funds	11,880		487	—	12,367
Common stock	22		2	—	24
Redeemable preferred stock	520		42	6	556
Total equity securities	$	15,289	881	6	16,164

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



	December 31, 2018		December 31, 2017
	Fair Value		Fair Value
	(In thousands)
Equity securities:
Stock mutual funds	$	2,906	3,217
Bond mutual funds	11,774		12,367
Common stock	94		24
Preferred stock	294		556
Total equity securities	$	15,068	16,164

For fixed maturity security investments that have unrealized losses as of December 31, 2018, 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, 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	$	227,132	883	233	33,891	607	46	261,023	1,490	279
Corporate	230,030		8,770	191	9,936	976	8	239,966	9,746	199
Commercial mortgage-backed	14,992		66	11	—	—	—	14,992	66	11
Residential mortgage-backed	18		—	3	98	2	4	116	2	7
Asset-backed	3,747		8	4	—	—	—	3,747	8	4
Total fixed maturity securities	$	475,919	9,727	442	43,925	1,585	58	519,844	11,312	500

The available-for-sale fixed maturities in a gross unrealized loss position for more than 12 months is primarily related to increases in market 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, 2018 based upon the items above for impairment.

For fixed maturity and equity security investments that have unrealized losses as of December 31, 2017, 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, 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 equities	$	95	6	1	—	—	—	95	6	1

The amortized cost and fair value of fixed maturities at December 31, 2018 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)
Fixed maturity securities:
Due in one year or less	$	64,803	64,833
Due after one year through five years	145,979		147,186
Due after five years through ten years	215,349		217,143
Due after ten years	797,616		801,877
Total available-for-sale securities	$	1,223,747	1,231,039

The Company had no investments in any one entity which exceeded 10% of stockholders' equity at December 31, 2018. In addition, there were no investments that were non-income producing for the year ended December 31, 2018.

Major categories of net investment income are summarized as follows:



	Years ended December 31,
	2018			2017		2016
	(In thousands)
Investment income:
Fixed maturities	$	49,126		48,164		43,637
Equity securities	722			708		851
Mortgage loans on real estate	12			11		24
Policy loans	6,210			5,735		5,277
Long-term investments	3			76		305
Other	409			68		89
Total investment income	56,482			54,762		50,183
Investment expenses	(2,277		)	(1,616	)	(1,623	)
Net investment income	$	54,205		53,146		48,560

Proceeds and gross realized gains and losses from sales of fixed maturities available-for-sale for 2018, 2017 and 2016 are summarized as follows:



	Years ended December 31,
	2018		2017	2016
	(In thousands)
Proceeds	$	38,823	1,077	20,638
Gross realized gains	$	1,301	19	1,487
Gross realized losses	$	653	16	—

In 2018, we sold forty-one fixed maturity securities from our available-for-sale portfolio as part of a repositioning strategy recommended by our asset manager. In 2017, we sold four fixed maturity security from the available for sale portfolio. In 2016, SPLIC sold eleven fixed maturity securities 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. There were no securities sold from the held-to-maturity portfolio in 2018, 2017 or 2016. The Company uses specific identification for securities sold.

Proceeds and gross realized gains and losses from sales of equity securities for 2018, 2017 and 2016 are summarized as follows:



	Years ended December 31,
	2018		2017	2016
	(In thousands)
Proceeds	$	—	1,940	5,100
Gross realized gains	$	—	—	291
Gross realized losses	$	—	30	35

Realized investment gains (losses) are as follows:



	Years ended December 31,
	2018			2017		2016
	(In thousands)
Realized investment gains (losses):
Sales, calls and maturities:
Fixed maturities	$	1,792		(506	)	2,024
Equity securities	—			121		303
Real estate	—			1,110		—
Property and equipment	(80		)	—		—
Net realized gains (losses)	1,712			725		2,327
Change in fair value of equity securities	(828		)	—		—
Other-than-temporary impairments ("OTTI")
Fixed maturities	(776		)	—		(3,970	)
Equity securities	—			(207	)	(342	)
Realized loss on OTTI	(776		)	(207	)	(4,312	)
Net realized investment gains (losses)	$	108		518		(1,985	)

During 2017, the Company sold its Markham building in Little Rock, Arkansas for a gross sales price of $3.25 million, resulting in a gain on sale of $1.1 million.