Note 7 – Investments in Securities

The aggregate estimated fair value, gross unrealized holding gains, gross unrealized holding losses and cost or amortized cost for securities by major security type are as follows:


June 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities, available-for-sale, at fair value-
Obligations of states and political subdivisions	$	59,082,735	$	5,374,612	$	23,777	$	64,433,570
Corporate debt securities		19,360,049		1,190,590		70,667		20,479,972
Auction rate securities		3,642,324		55,776		-		3,698,100
Total	$	82,085,108	$	6,620,978	$	94,444	$	88,611,642
Equity securities, available-for-sale at fair value-
Common stocks and nonredeemable preferred stocks	$	19,690,734	$	6,446,241	$	175,364	$	25,961,611
Total	$	19,690,734	$	6,446,241	$	175,364	$	25,961,611
Short-term investments-
Money market mutual funds and certificates of deposit	$	8,420,944	$	-	$	-	$	8,420,944
Total	$	8,420,944	$	-	$	-	$	8,420,944


December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities, available-for-sale, at fair value-
Obligations of states and political subdivisions	$	62,042,929	$	5,583,733	$	13,869	$	67,612,793
Corporate debt securities		12,188,639		1,202,149		148,616		13,242,172
Auction rate securities		4,552,400		-		-		4,552,400
Total	$	78,783,968	$	6,785,882	$	162,485	$	85,407,365
Equity securities, available-for-sale at fair value-
Common stocks and nonredeemable preferred stocks	$	17,652,745	$	4,939,053	$	41,823	$	22,549,975
Total	$	17,652,745	$	4,939,053	$	41,823	$	22,549,975
Short-term investments-
Money market mutual funds and certificates of deposit	$	14,112,262	$	-	$	-	$	14,112,262
Total	$	14,112,262	$	-	$	-	$	14,112,262

The scheduled maturities of fixed maturity securities at June 30, 2012 were as follows:


		Available-for-Sale
		Amortized		Fair
		Cost		Value
Due in one year or less	$	6,918,254	$	6,989,491
Due after one year through five years		38,190,552		40,630,171
Due five years through ten years		29,976,851		33,084,023
Due after ten years		6,999,451		7,907,957
Total	$	82,085,108	$	88,611,642

Gross realized gains and losses on securities for the six months ended June 30 are summarized as follows:


	2012			2011
Gross realized gains:
Obligations of states and political subdivisions	$	250		$	20,846
Common stocks and nonredeemable preferred stocks		163,764			262,952
Auction rate securities		40,057			15,428
Total		204,071			299,226
Gross realized losses:
Common stocks and nonredeemable preferred stocks		(74,661	)		(46,413	)
Other than temporary impairment of securities		(76,539	)		(64,468	)
Total		(151,200	)		(110,881	)
Net realized gain	$	52,871		$	188,345

Realized gains and losses are determined on the specific identification method. Also included in net realized gain on investments in the Consolidated Statements of Income are impairments of other investments and gain (loss) on sales of other assets and property acquired in the settlement of claims totaling $205,158 and $(67,430) for the six months ended June 30, 2012 and 2011, respectively.

The following table presents the gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position at June 30, 2012 and December 31, 2011.

Less than 12 Months

12 Months or Longer

Total

June 30, 2012

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

Obligations of states

and political

subdivisions

1,001,350

(23,777

)

1,001,350

(23,777

)

Corporate debt

securities

3,154,335

(12,667

)

960,360

(58,000

)

4,114,695

(70,667

)

Total fixed income

securities

3,154,335

(12,667

)

1,961,710

(81,777

)

5,116,045

(94,444

)

Equity securities

2,513,568

(175,364

)

2,513,568

(175,364

)

Total temporarily

impaired Securities

5,667,903

(188,031

)

1,961,710

(81,777

)

7,629,613

(269,808

)


	Less than 12 Months					12 Months or Longer					Total
December 31, 2011	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Obligations of states
and political
subdivisions	$	663,666	$	(64	)	$	1,023,180	$	(13,805	)	$	1,686,846	$	(13,869	)
Corporate debt
securities		3,015,769		(148,616	)		-		-			3,015,769		(148,616	)
Total fixed income
securities	$	3,679,435	$	(148,680	)	$	1,023,180	$	(13,805	)	$	4,702,615	$	(162,485	)
Equity securities		957,072		(40,893	)		104,130		(930	)		1,061,202		(41,823	)
Total temporarily
impaired securities	$	4,636,507	$	(189,573	)	$	1,127,310	$	(14,735	)	$	5,763,817	$	(204,308	)

As of June 30, 2012, the Company held $5,116,045 in fixed maturity securities with unrealized losses of $94,444. As of December 31, 2011, the Company held $4,702,615 in fixed maturity securities with unrealized losses of $162,485. The decline in fair value of the fixed maturity securities can be attributed primarily to changes in market interest rates and changes in credit spreads over treasury securities. Because the Company does not have the intent to sell these securities and will likely not be compelled to sell them before it can recover its cost basis, the Company does not consider these investments to be other-than-temporarily impaired.

As of June 30, 2012, the Company held $2,513,568 in equity securities with unrealized losses of $175,364. As of December 31, 2011, the Company held $1,061,202 in equity securities with unrealized losses of $41,823. The unrealized losses related to holdings of equity securities were caused by market changes that the Company considers to be temporary. Since the Company has the intent and ability to hold these equity securities until a recovery of fair value, the Company does not consider these investments other-than-temporarily impaired.

Factors considered in determining whether a loss is temporary include the length of time and extent to which fair value has been below cost, the financial condition and prospects of the issuer (including credit ratings and analyst reports) and macro-economic changes. A total of 15 and 13 securities had unrealized losses at June 30, 2012 and December 31, 2011, respectively. Reviews of the values of securities are inherently uncertain and the value of the investment may not fully recover, or may decline in future periods resulting in a realized loss.

During the first six months of 2012 and 2011, the Company recorded other-than-temporary impairment charges in the amount of $76,539 and $64,468, respectively, related to equity securities and other assets. For the 2011 fiscal year, the Company recorded other-than-temporary impairment charges in the amount of $280,987 related to securities and other assets, of which, $101,861 was related to Level 3 auction rate securities. Other-than-temporary impairment charges are included in net realized gain on investments in the Consolidated Statements of Income.