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:


				Gross		Gross		Estimated
		Amortized		Unrealized		Unrealized		Fair
September 30, 2012		Cost		Gains		Losses		Value
Fixed maturities, available-for-sale, at fair value-
Obligations of states and political subdivisions	$	57,914,850	$	5,561,688	$	12,970	$	63,463,568
Corporate debt securities		17,590,282		1,344,750		3,434		18,931,598
Auction rate securities		2,723,393		48,507		0		2,771,900
Total	$	78,228,525	$	6,954,945	$	16,404	$	85,167,066
Equity securities, available-for-sale at fair value-
Common stocks and nonredeemable preferred stocks	$	20,179,479	$	7,942,885	$	40,879	$	28,081,485
Total	$	20,179,479	$	7,942,885	$	40,879	$	28,081,485
Short-term investments-
Money market mutual funds and certificates of deposit	$	11,231,113	$	0	$	0	$	11,231,113
Total	$	11,231,113	$	0	$	0	$	11,231,113


				Gross		Gross		Estimated
		Amortized		Unrealized		Unrealized		Fair
December 31, 2011		Cost		Gains		Losses		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		0		0		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	$	0	$	0	$	14,112,262
Total	$	14,112,262	$	0	$	0	$	14,112,262

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


		Available-for-Sale
		Amortized		Fair
		Cost		Value
Due in one year or less	$	7,089,663	$	7,195,711
Due after one year through five years		48,492,618		52,604,090
Due five years through ten years		17,886,881		20,044,188
Due after ten years		4,759,363		5,323,077
Total	$	78,228,525	$	85,167,066

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


		2012			2011
Gross realized gains:
Obligations of states and political subdivisions	$	2,862		$	20,845
Common stocks and nonredeemable preferred stocks		199,977			279,899
Auction rate securities		118,336			43,200
Total	$	321,175		$	343,944
Gross realized losses:
Common stocks and nonredeemable preferred stocks	$	(91,975	)	$	(141,609	)
Other than temporary impairment of securities		(76,539	)		(214,077	)
Total		(168,514	)		(355,686	)
Net realized gain (loss)	$	152,661		$	(11,742	)

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 nine months ended September 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 September 30, 2012 and December 31, 2011.


		Less than 12 Months					12 Months or Longer					Total
		Fair		Unrealized		Fair		Unrealized				Fair		Unrealized
September 30, 2012		Value		Losses		Value		Losses				Value		Losses
Obligations of states
and political
subdivisions	$	2,367,365	$	(12,970	)	$	0	$	0		$	2,367,365	$	(12,970	)
Corporate debt
securities		0		0			1,013,480		(3,434	)		1,013,480		(3,434	)
Total fixed income
securities	$	2,367,365	$	(12,970	)	$	1,013,480	$	(3,434	)	$	3,380,845	$	(16,404	)
Equity securities		601,776		(40,879	)		0		0			601,776		(40,879	)
Total temporarily
impaired securities	$	2,969,141	$	(53,849	)	$	1,013,480	$	(3,434	)	$	3,982,621	$	(57,283	)


		Less than 12 Months					12 Months or Longer					Total
		Fair		Unrealized			Fair	Unrealized				Fair		Unrealized
December 31, 2011		Value		Losses			Value	Losses				Value		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	)		0		0			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 September 30, 2012, the Company held $3,380,845 in fixed maturity securities with unrealized losses of $16,404. 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 September 30, 2012, the Company held $601,776 in equity securities with unrealized losses of $40,879. 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 7 and 13 securities had unrealized losses at September 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 nine months of 2012 and 2011, the Company recorded other-than-temporary impairment charges in the amount of $76,539 and $242,981, respectively, related to equity securities and fixed maturities. For the 2011 fiscal year, the Company recorded other-than-temporary impairment charges in the amount of $280,987 related to equity securities and fixed maturities, of which, all $101,861 fixed maturities 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.