Note 8.

Investments

The following tables set forth the carrying value, gross unrealized gains, gross unrealized losses and amortized cost of the Company’s investments, aggregated by type and industry, as of September 30, 2016 and December 31, 2015.

Investments were comprised of the following:

	September 30, 2016
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	26,823	$	458	$	80	$	26,445
Obligations of states and political subdivisions		18,491		1,232		-		17,259
Corporate securities:
Utilities and telecom		17,969		2,305		-		15,664
Financial services		59,795		3,276		826		57,345
Other business – diversified		63,298		2,626		2,029		62,701
Other consumer – diversified		28,180		1,267		535		27,448
Total corporate securities		169,242		9,474		3,390		163,158
Redeemable preferred stocks:
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		193		-		-		193
Total fixed maturities		214,749		11,164		3,470		207,055
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,559		595		-		964
Financial services		5,634		806		-		4,828
Other business – diversified		216		169		-		47
Other consumer – diversified		12,545		6,931		-		5,614
Total equity securities		19,954		8,501		-		11,453
Other invested assets		10,763		-		-		10,763
Policy loans		2,209		-		-		2,209
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238
Total investments	$	248,951	$	19,665	$	3,470	$	232,756

	December 31, 2015
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	22,234	$	290	$	175	$	22,119
Obligations of states and political subdivisions		25,479		621		552		25,410
Corporate securities:
Utilities and telecom		17,589		1,357		692		16,924
Financial services		54,035		1,797		1,351		53,589
Other business – diversified		60,960		729		5,898		66,129
Other consumer – diversified		24,581		136		1,391		25,836
Total corporate securities		157,165		4,019		9,332		162,478
Redeemable preferred stocks:
Financial services		253		3		-		250
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		446		3		-		443
Total fixed maturities		205,324		4,933		10,059		210,450
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,386		422		-		964
Financial services		5,175		847		-		4,328
Other business – diversified		198		151		-		47
Other consumer – diversified		16,372		10,758		-		5,614
Total equity securities		23,131		12,178		-		10,953
Other invested assets		6,454		-		-		6,454
Policy loans		2,200		-		-		2,200
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238
Total investments	$	238,385	$	17,111	$	10,059	$	231,333

Bonds having an amortized cost of $11,143 and $11,259 and included in the tables above were on deposit with insurance regulatory authorities at September 30, 2016 and December 31, 2015, respectively, in accordance with statutory requirements.

The carrying value and amortized cost of the Company’s investments in fixed maturities at September 30, 2016 and December 31, 2015 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	1,648	$	1,643	$	4,143	$	4,113
Due after one year through five years		24,219		24,024		20,557		20,591
Due after five years through ten years		95,711		92,293		99,614		103,066
Due after ten years		80,800		76,849		79,882		81,684
Varying maturities		12,371		12,246		1,128		996
Totals	$	214,749	$	207,055	$	205,324	$	210,450

The following table sets forth the carrying value, amortized cost, and net unrealized gains (losses) of the Company’s investments aggregated by industry as of September 30, 2016 and December 31, 2015.

	September 30, 2016						December 31, 2015
	Carrying Value		Amortized Cost		Unrealized Gains		Carrying Value		Amortized Cost		Unrealized Gains (Losses)
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	26,823	$	26,445	$	378	$	22,234	$	22,119	$	115
Obligations of states and political subdivisions		18,491		17,259		1,232		25,479		25,410		69
Utilities and telecom		19,528		16,628		2,900		18,975		17,888		1,087
Financial services		65,429		62,173		3,256		59,463		58,167		1,296
Other business – diversified		63,514		62,748		766		61,158		66,176		(5,018	)
Other consumer – diversified		40,918		33,255		7,663		41,146		31,643		9,503
Other investments		14,248		14,248		-		9,930		9,930		-
Investments	$	248,951	$	232,756	$	16,195	$	238,385	$	231,333	$	7,052

The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of September 30, 2016 and December 31, 2015.

	September 30, 2016
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	11,987	$	80	$	501	$	-	$	12,488	$	80
Corporate securities		19,031		392		22,224		2,998		41,255		3,390
Total temporarily impaired securities	$	31,018	$	472	$	22,725	$	2,998	$	53,743	$	3,470

	December 31, 2015
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	9,209	$	120	$	2,243	$	55	$	11,452	$	175
Obligations of states and political subdivisions		16,079		552		-		-		16,079		552
Corporate securities		79,482		4,284		16,131		5,048		95,613		9,332
Total temporarily impaired securities	$	104,770	$	4,956	$	18,374	$	5,103	$	123,144	$	10,059

The evaluation for an other than temporary impairment is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management’s intent and ability to hold the securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer’s continued satisfaction of its obligations in accordance with their contractual terms, and management’s expectation as to the issuer’s ability and intent to continue to do so, as well as ratings actions that may affect the issuer’s credit status.

As of September 30, 2016, there were thirty-five securities in an unrealized loss position, which primarily included certain of the Company’s investments in fixed maturities within the other diversified business, other diversified consumer and financial services sectors. Securities in an unrealized loss position reported in the other diversified business sector included gross unrealized losses of $1,665 related to investments in fixed maturities of eight different issuers, all related to the oil and gas industry. The oil and gas investee companies represent a diversified group of businesses which include, among others, refiners, pipeline owners and operators, deep water offshore rig owners and operators, all of which we believe are in continuing stages of rationalizing their current operations, investments, future capital expenditures and carefully managing their capital and liquidity positions. To our knowledge, the companies are continuing to assess and revise short-term, intermediate and long-term business plans in response to the current trends in oil and gas markets. While these companies have generally experienced credit downgrades or may be currently under credit rating review, the Company believes that many of the downgrades are in response to external market forces and not necessarily specific credit events of any obligor which would currently indicate that an other than temporary impairment need be recorded. All of the investees have continued to make regular interest payments on their debt when and as due and the Company continues to perform in-depth analysis of the financial disclosures of each of the investees on a regular basis. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of September 30, 2016.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.

Level 1

Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company’s financial instruments valued using Level 1 criteria include cash equivalents and exchange traded common stocks.

Level 2

Observable inputs, other than quoted prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company’s financial instruments valued using Level 2 criteria include significantly all of its fixed maturities, which consist of U.S. Treasury securities and U.S. Government securities, obligations of states and political subdivisions, and certain corporate fixed maturities, as well as its non-redeemable preferred stocks. In determining fair value measurements of its fixed maturities and non-redeemable preferred stocks using Level 2 criteria, the Company utilizes data from outside sources, including nationally recognized pricing services and broker/dealers. Prices for the majority of the Company’s Level 2 fixed maturities and non-redeemable preferred stocks were determined using unadjusted prices received from pricing services that utilize a matrix pricing concept, which is a mathematical technique used widely in the industry to value debt securities based on various relationships to other benchmark quoted prices.

Level 3

Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Fair value is based on criteria that use assumptions or other data that are not readily observable from objective sources. The Company’s financial instruments valued using Level 3 criteria consist of a limited number of fixed maturities. As of September 30, 2016 and December 31, 2015, the value of the Company’s fixed maturities valued using Level 3 criteria was $1,364 and $2,237, respectively. The use of different criteria or assumptions regarding data may have yielded materially different valuations.

As of September 30, 2016, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total
Assets:
Fixed maturities	$	-	$	213,385		$	1,364	⁽¹⁾	$	214,749
Equity securities		14,563		5,391	⁽¹⁾		-			19,954
Cash equivalents		9,312		-			-			9,312
Total	$	23,875	$	218,776		$	1,364		$	244,015

⁽¹⁾

All underlying securities are financial service industry related.

As of December 31, 2015, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total
Assets:
Fixed maturities	$	-	$	203,087		$	2,237	⁽¹⁾	$	205,324
Equity securities		18,245		4,886	⁽¹⁾		-			23,131
Cash equivalents		13,772		-			-			13,772
Total	$	32,017	$	207,973		$	2,237		$	242,227

⁽¹⁾

All underlying securities are financial service industry related.

The following tables provide a roll-forward of the Company’s financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and nine month periods ended September 30, 2016 and 2015.

	Fixed Maturities
Balance, December 31, 2015	$	2,237
Total unrealized gains included in other comprehensive income		63
Balance, March 31, 2016		2,300
Total unrealized gains included in other comprehensive income		68
Balance, June 30, 2016		2,368
Total realized gains included in earnings		57
Total unrealized losses included in other comprehensive income		(61	)
Settlements		(1,000	)
Balance, September 30, 2016	$	1,364

	Fixed Maturities
Balance, December 31, 2014	$	2,214
Total unrealized gains included in other comprehensive income		50
Balance, March 31, 2015		2,264
Total unrealized losses included in other comprehensive loss		(57	)
Balance, June 30, 2015		2,207
Total unrealized gains included in other comprehensive loss		34
Balance, September 30, 2015	$	2,241

The Company’s fixed maturities valued using Level 3 inputs consist solely of issuances of pooled debt obligations of multiple, smaller financial services companies. They are not actively traded and valuation techniques used to measure fair value are based on future estimated cash flows (based on current cash flows) discounted at reasonable estimated rates of interest. There are no assumed prepayments and/or default probability assumptions as a majority of these instruments contain certain U.S. government agency strips to support repayment of the principal. Other qualitative and quantitative information received from the original underwriter of the pooled offerings is also considered, as applicable.

The following table is a summary of realized investment gains (losses) for the three month and nine month periods ended September 30, 2016 and 2015.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Gross gains	$	543		$	35		$	1,497		$	5,493
Gross losses		(16	)		(28	)		(86	)		(387	)
Realized investment gains, net	$	527		$	7		$	1,411		$	5,106