Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair value measurements for items measured at fair value

Fair value measurements for assets measured at fair value included the following as of June 30, 2016 and December 31, 2015:

June 30, 2016

(In thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	61,330	$	14,678	$	46,652	$	—
Obligations of U.S. states and political subdivisions	2,077,452		—		2,076,396		1,056
Corporate debt securities	1,729,965		—		1,729,965		—
Asset-backed securities	104,407		—		104,407		—
Residential mortgage-backed securities	238,340		—		238,340		—
Commercial mortgage-backed securities	284,158		—		284,158		—
Collateralized loan obligations	60,550		—		60,550		—
Total debt securities	4,556,202		14,678		4,540,468		1,056
Equity securities ⁽¹⁾	9,876		2,936		—		6,940
Total investment portfolio	$	4,566,078	$	17,614	$	4,540,468	$	7,996
Real estate acquired ⁽²⁾	$	9,642	$	—	$	—	$	9,642

December 31, 2015

(In thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	160,584	$	46,197	$	114,387	$	—
Obligations of U.S. states and political subdivisions	1,792,527		—		1,791,299		1,228
Corporate debt securities	2,004,763		—		2,004,763		—
Asset-backed securities	116,617		—		116,617		—
Residential mortgage-backed securities	257,648		—		257,648		—
Commercial mortgage-backed securities	233,491		—		233,491		—
Collateralized loan obligations	60,200		—		60,200		—
Debt securities issued by foreign sovereign governments	31,731		31,731		—		—
Total debt securities	4,657,561		77,928		4,578,405		1,228
Equity securities ⁽¹⁾	5,645		2,790		—		2,855
Total investment portfolio	$	4,663,206	$	80,718	$	4,578,405	$	4,083
Real estate acquired ⁽²⁾	$	12,149	$	—	$	—	$	12,149


⁽¹⁾	Certain equity securities in Level 3 are carried at cost, which approximates fair value.


⁽²⁾	Real estate acquired through claim settlement, which is held for sale, is reported in Other assets on the consolidated balance sheets.

Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3)

For assets measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the three and six months ended June 30, 2016 and 2015 is shown in the following tables. There were no transfers into or out of Level 3 in those periods and there were no losses included in earnings for those periods attributable to the change in unrealized losses on assets still held at the end of the applicable period.



Three Months Ended June 30, 2016
(In thousands)	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
Balance at March 31, 2016	$	1,192		$	3,421	$	4,613		$	12,849
Total realized/unrealized gains (losses):
Included in other comprehensive income	—			3,519		3,519			—
Included in earnings and reported as losses incurred, net	—			—		—			651
Purchases	—			—		—			6,748
Sales	(136		)	—		(136		)	(10,606		)
Balance at June 30, 2016	$	1,056		$	6,940	$	7,996		$	9,642



Three Months Ended June 30, 2015
(In thousands)	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
Balance at March 31, 2015	$	1,791		$	321	$	2,112		$	10,897
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			31
Purchases	—			—		—			5,917
Sales	(157		)	—		(157		)	(8,850		)
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995



Six Months Ended June 30, 2016
(In thousands)	Debt Securities			Equity Securities			Total Investments			Real Estate Acquired
Balance at December 31, 2015	$	1,228		$	2,855		$	4,083		$	12,149
Total realized/unrealized gains (losses):
Included in other comprehensive income	—			3,519			3,519			—
Included in earnings and reported as losses incurred, net	—			—			—			358
Purchases	—			3,091			3,091			19,015
Sales	(172		)	(2,525		)	(2,697		)	(21,880		)
Balance at June 30, 2016	$	1,056		$	6,940		$	7,996		$	9,642



Six Months Ended June 30, 2015
(In thousands)	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(472		)
Purchases	7			—		7			16,714
Sales	(219		)	—		(219		)	(20,905		)
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995

Carrying value and fair value of debt

The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at June 30, 2016 and December 31, 2015. The fair values of our Convertible Senior Notes and Convertible Junior Subordinated Debentures were based on observable market prices and the fair value of the Federal Home Loan Bank Advance was estimated using discounted cash flows on current incremental borrowing rates for similar borrowing arrangements, and in all cases they are categorized as Level 2.



June 30, 2016
(In thousands)	Carrying Value		Fair Value
Financial liabilities:
FHLB Advance due 2023	$	155,000	$	160,025
Convertible Senior Notes due 2017	144,470		150,070
Convertible Senior Notes due 2020	491,854		554,670
Convertible Junior Subordinated Debentures due 2063	256,872		285,244
Total Debt	$	1,048,196	$	1,150,009



December 31, 2015
(In thousands)	Carrying Value		Fair Value
Financial liabilities:

Convertible Senior Notes due 2017	$	331,546	$	345,616
Convertible Senior Notes due 2020	490,755		701,955
Convertible Junior Subordinated Debentures due 2063	389,522		455,067
Total Debt	$	1,211,823	$	1,502,638