Investments

9 Months Ended

Sep. 30, 2013

Investment [Abstract]

Investments

(2)  Investments

The cost or amortized cost, gross unrealized gain or loss, and fair value of our available for sale fixed maturity and equity securities were as follows:

		Cost or		Gross		Gross
		amortized		unrealized		unrealized
		cost		gain		loss		Fair value
September 30, 2013
U.S. government and government agency securities		$	115,109	$	2,698	$	(302)	$	117,505
Fixed maturity securities of states, municipalities and
	political subdivisions		965,526		55,813		(5,200)		1,016,139
Special purpose revenue bonds of states, municipalities and
	political subdivisions		2,258,661		81,517		(43,340)		2,296,838
Corporate securities			1,267,387		40,314		(9,997)		1,297,704
Residential mortgage-backed securities			588,696		17,671		(13,410)		592,957
Commercial mortgage-backed securities			524,706		18,519		(12,009)		531,216
Asset-backed securities			141,594		282		(575)		141,301
Foreign government securities			198,174		3,089		(298)		200,965
	Total fixed maturity securities	$	6,059,853	$	219,903	$	(85,131)	$	6,194,625
Equity securities		$	395,018	$	43,023	$	(4,696)	$	433,345

		Cost or		Gross		Gross
		amortized		unrealized		unrealized
		cost		gain		loss		Fair value
December 31, 2012
U.S. government and government agency securities		$	195,049	$	4,560	$	(2)	$	199,607
Fixed maturity securities of states, municipalities and
	political subdivisions		969,966		96,027		(182)		1,065,811
Special purpose revenue bonds of states, municipalities and
	political subdivisions		2,033,947		168,772		(2,388)		2,200,331
Corporate securities			1,247,282		69,243		(1,355)		1,315,170
Residential mortgage-backed securities			632,665		32,560		(338)		664,887
Commercial mortgage-backed securities			482,808		41,748		(267)		524,289
Asset-backed securities			32,801		474		0		33,275
Foreign government securities			261,914		16,515		(18)		278,411
	Total fixed maturity securities	$	5,856,432	$	429,899	$	(4,550)	$	6,281,781
Equity securities		$	275,827	$	13,768	$	(4,956)	$	284,639

Substantially all of our fixed maturity securities are investment grade. The following table displays the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated.

				Less than 12 months				12 months or more				Total
						Unrealized				Unrealized				Unrealized
				Fair value		losses		Fair value		losses		Fair value		losses
September 30, 2013
Fixed maturity securities
	U.S. government and government agency
			securities	$	20,730	$	(302)	$	0	$	0	$	20,730	$	(302)
	Fixed maturity securities of states,
		municipalities and political subdivisions			134,217		(5,200)		0		0		134,217		(5,200)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			724,983		(43,322)		1,323		(18)		726,306		(43,340)
	Corporate securities				307,327		(9,331)		14,821		(666)		322,148		(9,997)
	Residential mortgage-backed securities				270,062		(13,410)		0		0		270,062		(13,410)
	Commercial mortgage-backed securities				212,589		(11,414)		5,042		(595)		217,631		(12,009)
	Asset-backed securities				49,647		(575)		0		0		49,647		(575)
	Foreign government securities				74,354		(298)		0		0		74,354		(298)
Equity securities					95,697		(4,277)		5,711		(419)		101,408		(4,696)
			Total	$	1,889,606	$	(88,129)	$	26,897	$	(1,698)	$	1,916,503	$	(89,827)

				Less than 12 months				12 months or more				Total
						Unrealized				Unrealized				Unrealized
				Fair value		losses		Fair value		losses		Fair value		losses
December 31, 2012
Fixed maturity securities
	U.S. government and government agency
		securities		$	55,034	$	(2)	$	0	$	0	$	55,034	$	(2)
	Fixed maturity securities of states,
		municipalities and political subdivisions			14,162		(182)		0		0		14,162		(182)
	Special purpose revenue bonds of states,
		municipalities and political subdivisions			155,902		(2,388)		0		0		155,902		(2,388)
	Corporate securities				85,245		(1,220)		2,616		(135)		87,861		(1,355)
	Residential mortgage-backed securities				49,486		(338)		0		0		49,486		(338)
	Commercial mortgage-backed securities				26,263		(267)		0		0		26,263		(267)
	Foreign government securities				7,007		(18)		0		0		7,007		(18)
Equity securities					103,647		(4,956)		0		0		103,647		(4,956)
			Total	$	496,746	$	(9,371)	$	2,616	$	(135)	$	499,362	$	(9,506)

A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. Our reviews cover all impaired securities where the loss exceeds $0.5 million and the loss eitherexceeds 10% of cost or the security had been in a loss position for longer than twelve consecutive months. We recognized no other-than-temporary impairment losses in the first nine months of 2013. We recognized$1.0 million and $0.6 million of other-than-temporary impairment losses in the first nine months and third quarterof 2012, respectively.

We do not consider the $89.8million of gross unrealized losses on fixed maturity and equity securities in our portfolio atSeptember 30, 2013 to be other-than-temporary impairments because: 1) as of September 30, 2013,we have received all contractual interest and principal payments on the fixed maturity securities,2) we do not intend to sell the securities, 3) it is more likely than not that we will not be required to sell the securities before recovery of their amortized cost or cost bases and 4) the unrealized loss primarily relates to non-credit factors, particularly the significantinterest rate increases that occurred in mid-2013.

The amortized cost and fair value of our fixed maturity securities at September 30, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.9years at September 30, 2013.

		Cost or amortized cost		Fair value
Due in 1 year or less		$	216,068	$	219,092
Due after 1 year through 5 years			1,098,887		1,139,408
Due after 5 years through 10 years			1,470,040		1,533,694
Due after 10 years through 15 years			1,016,530		1,036,012
Due after 15 years			1,003,332		1,000,945
	Securities with contractual maturities		4,804,857		4,929,151
Mortgage-backed and asset-backed securities			1,254,996		1,265,474
	Total fixed maturity securities	$	6,059,853	$	6,194,625

The sources of net investment income were as follows:

			Nine months ended September 30,				Three months ended September 30,
			2013		2012		2013		2012
Fixed maturity securities
	Taxable		$	75,407	$	86,548	$	24,385	$	28,330
	Exempt from U.S. income taxes			85,063		80,163		28,988		27,291
		Total fixed maturity securities		160,470		166,711		53,373		55,621
Equity securities				10,758		2,339		2,950		1,346
Short-term investments				122		397		42		295
Other investment income				350		1,699		31		831
	Total investment income			171,700		171,146		56,396		58,093
Investment expense				(6,059)		(4,504)		(2,188)		(1,751)
	Net investment income		$	165,641	$	166,642	$	54,208	$	56,342