10-Q

 SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934

                                                                                                                                                                                    For Quarter EndedCommission file number

                                                                                                                                                                                     September 30, 20150-5534

BALDWIN & LYONS, INC.

(Exact name of registrant as specified in its charter)

INDIANA (State or other jurisdiction of  Incorporation or organization	35-0160330 (I.R.S. Employer Identification Number)
111 Congressional Boulevard, Carmel, Indiana (Address of principal executive offices)	46032 (Zip Code)

Registrant's telephone number, including area code:  (317) 636-9800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.  Yes       No___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes       No ____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ____    Accelerated filer Non-accelerated filer ____

Small Reporting Company ____

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ____    No 

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of November 1, 2015:

TITLE OF CLASSNUMBER OF SHARES OUTSTANDING

  Common Stock, No Par Value:

Class A (voting)                                                                                       2,623,109

Class B (nonvoting)                                                                               12,397,628

Index to Exhibits located on page 26.

PART I – FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands, except share data)
	September 30			December 31
	2015			2014
Assets
Investments:
Fixed maturities	$	442,619		$	451,809
Equity securities		142,514			162,107
Limited partnerships		74,702			81,230
Short-term		2,220			2,966
		662,055			698,112
Cash and cash equivalents		69,650			64,632
Accounts receivable		73,045			98,144
Reinsurance recoverable		223,184			220,221
Other assets		65,622			61,447
Current federal income taxes		-			1,691
	$	1,093,556		$	1,144,247
Liabilities and shareholders' equity
Reserves for losses and loss expenses	$	516,929		$	506,102
Reserves for unearned premiums		27,034			35,019
Short-term borrowings		20,000			20,000
Accounts payable and accrued expenses		124,891			163,657
Current federal income taxes		2,213			-
Deferred federal income taxes		9,604			19,973
		700,671			744,751
Shareholders' equity:
Common stock-no par value:
Class A voting -- authorized 3,000,000 shares;
outstanding -- 2015 - 2,623,109; 2014 - 2,623,109		112			112
Class B non-voting -- authorized 20,000,000 shares;
outstanding -- 2015 - 12,397,628; 2014 - 12,356,389		529			527
Additional paid-in capital		52,826			51,854
Unrealized net gains on investments		36,883			51,840
Foreign exchange adjustment		(712	)		390
Retained earnings		303,247			294,773
		392,885			399,496
	$	1,093,556		$	1,144,247

See notes to condensed consolidated financial statements.

- 1 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(in thousands, except per share data)
	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Revenues
Net premiums earned	$	65,445		$	65,947		$	197,340		$	192,694
Net investment income		3,014			2,073			8,727			6,456
Commissions and other income		1,173			1,800			3,970			4,887
Net realized gains on investments, excluding
impairment losses		2,310			1,099			5,994			13,363
Total other-than-temporary impairment losses on investments		(4,396	)		(441	)		(5,503	)		(546	)
Net realized gains (losses) on investments		(2,086	)		658			491			12,817
		67,546			70,478			210,528			216,854
Expenses
Losses and loss expenses incurred		35,212			38,693			113,890			118,264
Other operating expenses		20,724			23,237			67,307			66,566
		55,936			61,930			181,197			184,830
Income before federal income taxes		11,610			8,548			29,331			32,024
Federal income taxes		3,830			2,778			9,590			10,553
Net income	$	7,780		$	5,770		$	19,741		$	21,471
Per share data:
Basic and diluted earnings	$	.52		$	.39		$	1.31		$	1.43
Dividends paid to shareholders	$	.25		$	.25		$	.75		$	.75
Reconciliation of shares outstanding:
Average shares outstanding - basic		15,015			14,971			15,009			14,962
Dilutive effect of share equivalents		3			2			10			12
Average shares outstanding - diluted		15,018			14,973			15,019			14,974

      See notes to condensed consolidated financial statements.

- 2 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Net income	$	7,780		$	5,770		$	19,741		$	21,471
Other comprehensive income (loss), net of tax:
Unrealized net gains (losses) on securities:
Unrealized net gains (losses) arising during the period		(13,192	)		(3,472	)		(13,299	)		9,358
Less: reclassification adjustment for net gains (losses)
included in net income		2,739			1,118			1,658			3,648
		(15,931	)		(4,590	)		(14,957	)		5,710
Foreign currency translation adjustments		(429	)		(705	)		(1,102	)		(835	)
Other comprehensive income (loss)		(16,360	)		(5,295	)		(16,059	)		4,875
Comprehensive income (loss)	$	(8,580	)	$	475		$	3,682		$	26,346

See notes to condensed consolidated financial statements.

- 3 -

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
	Nine Months Ended
	September 30
	2015			2014
Net cash provided by operating activities	$	30,806		$	31,110
Investing activities:
Purchases of available-for-sale investments		(275,591	)		(201,523	)
Purchases of limited partnership interests		-			(4,212	)
Proceeds from sales or maturities
of available-for-sale investments		262,707			204,979
Net sales of short-term investments		746			1,726
Other investing activities		(1,281	)		(9,744	)
Net cash used in investing activities		(13,419	)		(8,774	)
Financing activities:
Dividends paid to shareholders		(11,267	)		(11,222	)
Drawings on line of credit		-			10,000
Net cash used in financing activities		(11,267	)		(1,222	)
Effect of foreign exchange rates on cash and cash equivalents		(1,102	)		(835	)
Increase in cash and cash equivalents		5,018			20,279
Cash and cash equivalents at beginning of period		64,632			59,297
Cash and cash equivalents at end of period	$	69,650		$	79,576

See notes to condensed consolidated financial statements.

- 4 -

Notes to Condensed Unaudited Consolidated Financial Statements

(All dollar amounts presented in these notes are in thousands, except per share data)

(1) Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. Interim financial statements should be read in conjunction with the Company's annual audited financial statements and other disclosures included in the Company's most recent Form 10-K.

Investments: Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available. Equity securities are carried at quoted market prices (fair value). The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income. To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses) on investments.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of income.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of income and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income. In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company's quantitative criteria defined above.

Recent Accounting Pronouncements: In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-09, Disclosures about Short-Duration Contracts, and this new guidance will enhance disclosures about an entity's insurance liabilities. This guidance will provide additional information about unpaid claims and claim development, including supplemental disaggregated incurred and paid claim data.  Under the guidance, enhanced disclosures on claim frequency and reserving methodologies are required. The guidance is effective for annual periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016, however early adoption is permitted. We have not yet adopted the guidance and the adoption of this guidance is not expected to have a material impact on presentation of data in the consolidated financial statements.

- 6 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(2) Investments:

The following is a summary of available-for-sale securities at September 30, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
September 30, 2015
Fixed maturities
U.S. government obligations	$	110,095	$	109,746	$	355	$	(6	)	$	349
Residential mortgage-backed securities		5,116		4,886		244		(14	)		230
Commercial mortgage-backed securities		29,601		29,735		374		(508	)		(134	)
States and municipal obligations		114,304		113,700		946		(342	)		604
Corporate securities		162,294		163,733		2,350		(3,789	)		(1,439	)
Foreign government obligations		21,209		22,450		286		(1,527	)		(1,241	)
Total fixed maturities		442,619		444,250		4,555		(6,186	)		(1,631	)
Equity securities:
Financial institutions		20,161		9,356		10,826		(21	)		10,805
Industrial & miscellaneous		122,353		74,784		54,698		(7,129	)		47,569
Total equity securities		142,514		84,140		65,524		(7,150	)		58,374
Total	$	585,133	$	528,390	$	70,079	$	(13,336	)		56,743
							Applicable federal income taxes				(19,860	)
							Net unrealized gains - net of tax			$	36,883
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at September 30, 2015 and December 31, 2014, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	September 30, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		209	$	98,604	$	(4,939	)		591	$	176,756	$	(6,083	)
Greater than 12 months		67		21,094		(1,247	)		140		27,667		(1,407	)
Total fixed maturities		276		119,698		(6,186	)		731		204,423		(7,490	)
Equity securities:
12 months or less		61		35,888		(6,181	)		33		13,538		(2,170	)
Greater than 12 months		12		2,876		(969	)		3		686		(64	)
Total equity securities		73		38,764		(7,150	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		349	$	158,462	$	(13,336	)		767	$	218,647	$	(9,724	)

The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2015, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	74,675	$	75,062
Excess of one year to five years		244,552		245,370
Excess of five years to ten years		36,252		36,889
Excess of ten years		3,298		3,076
Contractual maturities		358,777		360,397
Asset-backed securities		83,842		83,853
Total	$	442,619	$	444,250

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Following is a summary of the components of net realized gains (losses) on investments for the periods presented in the accompanying consolidated statements of income.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Fixed maturities:
Gross gains	$	1,294		$	798		$	3,426		$	5,399
Gross losses		(5,087	)		(1,259	)		(8,876	)		(3,411	)
Net realized gains (losses)		(3,793	)		(461	)		(5,450	)		1,988
Equity securities:
Gross gains		10,320			2,529			12,299			4,682
Gross losses		(2,312	)		(346	)		(4,297	)		(1,057	)
Net realized gains		8,008			2,183			8,002			3,625
Limited partnerships - net gain (loss)		(6,301	)		(1,064	)		(2,061	)		7,204
Totals	$	(2,086	)	$	658		$	491		$	12,817

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Realized net gains on the disposal of securities	$	7,957		$	2,223		$	7,544		$	5,837
Mark-to-market adjustment		(300	)		(118	)		(692	)		151
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(6,301	)		(1,064	)		(2,061	)		7,204
Impairment:
Write-downs based upon objective criteria		(4,396	)		(441	)		(5,503	)		(546	)
Recovery of prior write-downs
upon sale or disposal		954			58			1,203			171
Totals	$	(2,086	)	$	658		$	491		$	12,817

The mark-to-market adjustments in the table above represent the changes in fair value of (1) options embedded in convertible debt securities and (2) insurance-linked securities held by the Company.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

The income from limited partnerships for the quarter and year-to-date periods ending September 30, 2015 includes an estimated $9,335 and $8,280 of net unrealized losses respectively, reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at September 30, 2015 includes approximately $4,967 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders' equity at September 30, 2015 includes approximately $26,236, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of September 30, 2015, the Company had committed funds totaling $17,000 to two separate borrowers related to bridge loan agreements.  The Company retains possession of these funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market.

(3) Reinsurance:

The following table summarizes the Company's transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended September 30:
Premiums ceded to reinsurers	$	32,822	$	28,711
Losses and loss expenses
ceded to reinsurers		21,068		15,451
Commissions from reinsurers		6,668		5,850
Nine months ended September 30:
Premiums ceded to reinsurers	$	95,397	$	91,345
Losses and loss expenses
ceded to reinsurers		59,306		54,473
Commissions from reinsurers		21,713		17,425

(4) Reportable Segments:

The Company has two reportable business segments in its operations:  Property and Casualty Insurance and Reinsurance.

The Property and Casualty Insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies. In addition, the Company provides private passenger automobile products to individuals, workers' compensation coverage to small businesses and professional liability products on a selective basis.

The Reinsurance segment currently accepts professional liability cessions from other insurance companies.  From 1992 until July 1, 2014, the Reinsurance segment accepted property cessions

- 10 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

from other insurance companies and retrocessions from reinsurance companies, principally reinsuring against catastrophes.  Final exposure to property catastrophe losses expired on June 30, 2015.

The following table provides certain revenue and profit and loss information for each reportable segment. All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2015						2014
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)
Three months ended September 30:
Property and Casualty Insurance	$	92,584	$	60,837	$	14,513	$	84,644	$	57,097	$	9,520
Reinsurance		3,368		4,608		86		9,947		8,850		(906	)
Totals	$	95,952	$	65,445	$	14,599	$	94,591	$	65,947	$	8,614
Nine months ended September 30:
Property and Casualty Insurance	$	272,260	$	180,152	$	31,195	$	253,394	$	163,613	$	23,726
Reinsurance		13,467		17,188		1,099		31,049		29,081		196
Totals	$	285,727	$	197,340	$	32,294	$	284,443	$	192,694	$	23,922

The following table reconciles reportable segment income to the Company's consolidated income before federal income taxes.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Profit:
Segment profit	$	14,599		$	8,614		$	32,294		$	23,922
Net investment income		3,014			2,073			8,727			6,456
Net realized gains (losses) on investments		(2,086	)		658			491			12,817
Corporate expenses and other		(3,917	)		(2,797	)		(12,181	)		(11,171	)
Income before federal income taxes	$	11,610		$	8,548		$	29,331		$	32,024

Segment profit includes both net premiums earned and fees and other income associated with the business conducted by the segment.

Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(5) Debt:

The Company maintains a revolving line of credit with a $40,000 limit and an expiration date of September 23, 2018.  Interest on this line of credit is referenced to LIBOR and can be fixed for periods of up to one year at the Company's option.  Outstanding drawings on this line of credit were $20,000 as of both September 30, 2015 and December 31, 2014.  At September 30, 2015, the effective interest rate was 1.30%.  The Company has $20,000 remaining unused under the line of credit at September 30, 2015. 

(6) Taxes:

As of September 30, 2015, the Company's calendar years 2012 through 2014 remain subject to examination by the IRS.  The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

(Space Intentionally Left Blank)

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(7) Fair Value:

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of September 30, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	110,095	$	-	$	110,095	$	-
Residential mortgage-backed securities		5,116		-		5,116		-
Commercial mortgage-backed securities		29,601		-		29,131		470
State and municipal obligations		114,304		-		114,304		-
Corporate securities		160,087		-		154,436		5,651
Options embedded in convertible securities		2,207		-		2,207		-
Foreign government obligations		21,209		-		20,925		284
Total fixed maturities		442,619		-		436,214		6,405
Equity securities:
Financial institutions		20,161		20,161		-		-
Industrial & miscellaneous		122,353		122,353		-		-
Total equity securities		142,514		142,514		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		59,882		-		59,882		-
	$	647,235	$	144,734	$	496,096	$	6,405

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short-term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

- 13 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Level inputs, as defined by FASB Fair Value Measurements, are as follows:

Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.

Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of highly rated money market funds purchased at par value with specified yield rates. Due to underlying assets of these funds, we designate all cash equivalents as Level 2.

Fixed maturities: Fair values of fixed maturities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures.  For securities not actively traded, the third party pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, benchmark yields, credit spreads, default rates and prepayment speeds.  The Level 3 assets consist of a portfolio of corporate convertible bonds and commercial mortgage-backed securities.  The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes.

Equity securities: Fair values of equity securities are designated as Level 1 and are based on quoted market prices.

- 14 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the nine months ended September 30, 2015 and for the year ended December 31, 2014:

	2015			2014
Beginning of period balance	$	12,208		$	-
Total gains or losses (realized or unrealized)
included in income		47			-
Purchases		2,163			-
Settlements		(8,027	)		-
Transfers into level 3		995			12,208
Transfers out of level 3		(981	)		-
End of period balance	$	6,405		$	12,208

Transfers between levels, if any, are recorded as of the beginning of the reporting period.  There were no significant transfers of assets between Level 1 and Level 2 during the nine months ended September 30, 2015 and 2014.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as reserves for losses and loss expenses are excluded from the fair value disclosures.  Therefore, the fair value amounts cannot be aggregated to determine the Company's underlying economic value.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes receivable or payable and unearned premiums approximate fair value because of the short-term nature of these items.  These assets and liabilities are not included in the table below.

The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument:

Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity.   The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value.  As these investments are not actively traded and there are limitations on distributions and the corresponding inputs are based on data provided by the investees, they are classified as Level 3.

- 15 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to us for debt of similar terms and remaining maturities.

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at September 30, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
September 30, 2015
Assets: Limited partnerships	$	74,702	$	-	$	-	$	74,702	$	74,702
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets: Limited partnerships		81,230		-		-		81,230		81,230
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company's outside directors, in lieu of cash, as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and have had an aggregate total value of $440 and $480 for the 2014 and 2015 annual periods presented, respectively.  The table below provides detail of the stock issuances for 2014 and 2015:

					Value
					Per Share
Effective	Number of Shares		Vesting	Service	on Grant
Date	Issued		Date	Period	Date
5/8/2014		17,237	5/8/2015	7/1/2014 - 6/30/2015	$	25.53
5/12/2015		21,252	5/12/2016	7/1/2015 - 6/30/2016	$	22.59

Compensation expense related to the above stock grant is recognized over the period in which the directors render services.

Effective February 4, 2015, the Company issued 36,646 shares of class B restricted stock to certain of the Company's executives as a portion of compensation under the Company's 2014 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant with acceleration for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause per Accounting Standards Codification 715, Compensation-Retirement Benefits.  Restricted stock was valued based on the closing price of the stock on the day the award was granted.  Each share was valued at $23.29 per share

- 16 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

representing a total value of $853. Non-vested restricted shares will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the 2014 Executive Incentive Bonus Plan.

(9) Litigation, Commitments and Contingencies:

In the ordinary, regular and routine course of their business, the Company and its insurance subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided. No currently pending matter is deemed by management to be material to the Company.

(10) Accumulated Other Comprehensive Income:

The following table illustrates changes in accumulated other comprehensive income by component for the nine months ending September 30, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	390		$	51,840		$	52,230
Other comprehensive income
before reclassifications		(1,102	)		(13,299	)		(14,401	)
Amounts reclassified from
accumulated other
comprehensive income		-			(1,658	)		(1,658	)
Net current-period other
comprehensive income		(1,102	)		(14,957	)		(16,059	)
Ending balance	$	(712	)	$	36,883		$	36,171

(11) Subsequent Events:

We have evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred during the period which require recognition or disclosure.

- 17 -

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

              AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

The Company generally experiences positive cash flow from operations resulting from the fact that premiums are collected on insurance policies in advance of the disbursement of funds in payment of claims.  Operating costs of the property/casualty insurance subsidiaries, other than loss and loss expense payments and commissions paid to related agency companies, generally average less than one-third of premiums earned and the remaining amount is available for investment for varying periods of time pending the settlement of claims relating to the insurance coverage provided. The Company's cash flow relating to premiums is significantly affected by reinsurance programs in effect from time-to-time whereby the Company cedes both premium and risk to other insurance and reinsurance companies.  These programs vary significantly among products and certain contracts call for reinsurance payment patterns which do not coincide with the collection of premium by the Company from its insureds.

For the first nine months of 2015, the Company produced positive cash flow from operations totaling $30.8 million, level with positive cash flow from operations of $31.1 million generated during the first nine months of 2014 with the small difference reflective of normal variances in the timing and amount of loss, LAE and other operating expense payments.  The Company has achieved positive cash flow in 23 of the past 25 quarters averaging $11.7 million per quarter.

The Company's investment philosophy has emphasized the purchase of relatively short-term instruments with maximum quality and liquidity. The average life of the Company's fixed income (bond and short-term investment) portfolio, using contractual maturities applied to par value, was 4.7 years at September 30, 2015, and the effective duration of the portfolio was 1.9 years, both of which are shorter than the average life of the Company's liabilities.

Financing activity for the first nine months of 2015 consisted solely of the regular cash dividend payments to shareholders of $11.3 million ($.75 per share).

The Company's assets at September 30, 2015 included $62.1 million in investments classified as cash equivalents that were readily convertible to cash without significant market penalty.  An additional $76.5 million of fixed maturity investments (at par) will mature within the twelve-month period following September 30, 2015.  The Company believes that these liquid investments are more than sufficient to provide for projected claim payments and operating cost demands without consideration of expected future positive cash flows.

Consolidated shareholders' equity is composed largely of GAAP shareholders' equity of the insurance subsidiaries. As such, there are statutory restrictions on the transfer of substantial portions of this equity to the parent company.  At September 30, 2015, $49.4 million may be transferred by dividend or loan to the parent company during the remainder of 2015 without approval by, or prior notification to, regulatory authorities. An additional $243.4 million of shareholder's equity of the insurance subsidiaries could, theoretically, be advanced or loaned to the parent company with prior notification to, and approval from, regulatory authorities, although transfers of this size would not be practical.  The Company believes that these restrictions pose no material liquidity concerns to the Company.  The Company also believes that the financial strength and stability of the subsidiaries would permit ready access by the parent company to short-term and long-term sources of credit.  The parent company had cash and marketable securities valued at $13.9 million at September 30, 2015.

- 18 -

The Company's annualized net premiums written to surplus ratio, a common industry metric to measure surplus leverage, for the first nine months of 2015 was approximately 65%.  Regulatory guidelines generally allow for a ratio of between 100% and 300% ofsurplus, depending on the lines of business written.  Accordingly, the Company could increase net premium writings significantly with no need to raise additional capital to satisfy regulatory requirements. Further, the insurance subsidiaries' individual capital levels are several times higher than the minimum amounts designated by the National Association of Insurance Commissioners.

Results of Operations

Comparison of Third Quarter, 2015 to Third Quarter, 2014

Direct and assumed premiums written during the third quarter of 2015 increased $1.4 million (1.4%), while net premiums earned decreased $0.5 million (0.8%), as compared to the same period of 2014.  The Company's Property and Casualty Insurance segment reported an increase in premium written of 9.4% and an increase in earned premiums of 6.6%, reflecting higher premium from the Company's core fleet transportation products,partially offset by the continued planned reduction in professional liability volume.  The Reinsurance segment reported a decrease in premium written of 66.1% and a decrease in premium earned of 47.9% reflecting the completion of the Company's planned withdrawal from property catastrophe reinsurance.  The difference in the percentage changes for premium written compared to earned is reflective of the normal differences in the financial statement recognition of earned premium compared to written as well as the differences in reinsurance ceding rates on the mix of business in force.  The following table provides information regarding premiums written and earned for each segment for the quarters ended September 30 (dollars in thousands):

	Direct and Assumed Premium Written		Net Premium Written		Net Premium Earned
2015
Property & Casualty Insurance	$	92,584	$	59,576	$	60,837
Reinsurance		3,368		3,325		4,608
Totals	$	95,952	$	62,901	$	65,445
2014
Property & Casualty Insurance	$	84,644	$	56,407	$	57,097
Reinsurance		9,947		9,610		8,850
Totals	$	94,591	$	66,017	$	65,947

- 19 -

Premium ceded to reinsurers on insurance business produced by the Property and Casualty Insurance segment averaged 35.7% of premium written for the current quarter compared to 33.4% in the 2014 third quarter, with the increase associated principally with changes in relative premium earned volume for certain products.  There have been no material changes in the terms of major reinsurance treaties since 2014.

Net investment income, before tax, during the third quarter of 2015 was 45.4% higher than the third quarter of 2014 due primarily to increased pre-tax yields on the Company's fixed maturity securities resulting from redeployment of assets from lower yielding issues and from higher dividend yields on the equity securities portfolio.  Overall investment portfolio after-tax income increased 34.5% compared to the 2014 third quarter while average invested funds increased 1%.

The third quarter 2015 net realized investment losses of $2.1 million resulted primarily from $6.3 million in losses reported from limited partnerships and $3.4 million in losses related to impairment allowances on energy industry bonds, partially offset by $8.0 million in realized gains from direct trading activities.  Comparative third quarter 2014 overall net realized investment gains were $0.7 million, consisting primarily of $2.2 million in gains from direct trading activities, partially offset by $1.1 million in losses from limited partnerships.  Realized investment gains and losses result from decisions regarding the sale of individual securities and the change in the aggregate value of limited partnerships and, as such, should not be expected to be consistent from period to period.

Losses and loss expenses incurred during the third quarter of 2015 decreased $3.5 million (9.0%).  The loss ratios for each segment were as follows:

	2015	2014
Property and Casualty Insurance	53.7%	56.7%
Reinsurance	55.6	71.2
Total	53.8	58.7

The decrease in loss ratio for the Property and Casualty Insurance segment primarily relates to more favorable loss activity in the Company's core fleet transportation and professional liability products.  The lower Reinsurance segment loss ratio reflects property reinsurance losses reported during the third quarter of 2014 associated with Midwest storm losses which elevated that quarter's ratio.

Other operating expenses, for the third quarter of 2015, decreased $2.5 million, or 10.8%, from the third quarter of 2014.  The ratio of consolidated other operating expenses to operating revenue was 30.7% during the third quarter of 2015 compared to 33.3% for the 2014 third quarter. The lower expense ratios are reflective of higher ceding commissions from reinsurers and the termination of business which carried higher acquisition costs.

The effective federal tax rate on consolidated income for the third quarter of 2015 was 33.0%.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

- 20 -

As a result of the factors mentioned above, and primarily the decrease in loss and loss expenses and other operating expenses, net income increased $2.0 million during the third quarter of 2015 as compared to the 2014 period.

Comparison of Nine Months Ended September 30, 2015 to Nine Months Ended September 30, 2014

Direct and assumed premiums written during the first nine months of 2015 increased $1.3 million (0.5%), while net premiums earned increased $4.6 million (2.4%), as compared to the same period of 2014. The Company's Property and Casualty Insurance segment reported an increase in premium written of 7.4% and an increase in earned premiums of 10.1%, reflecting higher premium from the Company's fleet transportation products. The Reinsurance segment reported a decrease in premium written of 56.6% and a decrease in premium earned of 40.9% reflecting the Company's continued planned withdrawal from property catastrophe reinsurance.  The difference in the percentage changes for premium written compared to earned is reflective of the normal differences in the recognition of earned premium compared to written as well as the differences in reinsurance ceding rates on the mix of business in force.  The following table provides information regarding premiums written and earned for each segment for the nine months ended September 30 (dollars in thousands):

	Direct and Assumed Premium Written		Net Premium Written		Net Premium Earned
2015
Property & Casualty Insurance	$	272,260	$	177,091	$	180,152
Reinsurance		13,467		12,949		17,188
Totals	$	285,727	$	190,040	$	197,340
2014
Property & Casualty Insurance	$	253,394	$	163,388	$	163,613
Reinsurance		31,049		30,040		29,081
Totals	$	284,443	$	193,428	$	192,694

Premium ceded to reinsurers on insurance business produced by the Property and Casualty Insurance segment averaged 35.0% of premium written for the current year period compared to 35.5% a year earlier, with the minor decrease associated principally with changes in the mix of premium earned.  There were no material differences in the terms of major reinsurance treaties between the periods.

Net investment income, before tax, during the first nine months of 2015 was 35.2% higher than the first nine months of 2014 for the same reasons mentioned in the quarterly comparison. Overall investment portfolio after-tax income increased 29.3% compared to the 2014 period while average invested funds increased 1%.

- 21 -

Net realized investment gains for the first nine months of 2015 totaled $0.5 million and resulted primarily from $7.5 million in gains from direct trading activities, substantially offset by $2.1 million in losses from limited partnership activity and $4.3 million in losses related to impairment allowances, as mentioned in the quarterly comparison.  For the same period of 2014, overall net realized investment gains were $12.8 million, consisting primarily of $7.2 million in gains from limited partnerships and $5.8 million in gains from direct trading activities.  Realized investment gains and losses result from decisions regarding the sale of individual securities and the change in total value of limited partnerships and, as such, should not be expected to be consistent from period to period.

Losses and loss expenses incurred during the first nine months of 2015 decreased $4.4 million (3.7%). The loss ratios for each segment were as follows:

	2015	2014
Property and Casualty Insurance	58.4%	61.6%
Reinsurance	50.6	60.0
Total	57.7	61.4

The decrease in loss ratio for the Property and Casualty Insurance segment primarily relates to more favorable loss activity in the Company's core fleet transportation and professional liability products.  The lower Reinsurance segment loss ratio reflects the second quarter 2014 storm losses which elevated that period's ratio while the first nine months of 2015 experienced no significant property losses.

Other operating expenses, for the first nine months of 2015, increased $0.7 million, or 1.1%, from the first nine months of 2014.  The ratio of consolidated other operating expenses to operating revenue was 32.4% during the 2015 period compared to 32.5% for the 2014 period.

The effective federal tax rate on consolidated income for the first nine months of 2015 was 32.7%. The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

As a result of the factors mentioned above,and primarily the difference in realized investment gains and losses, net income decreased $1.7 million as compared to the 2014 period.

Forward-Looking Information

Any forward-looking statements in this report, including without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company;  (ii) the Company's business is highly competitive and the entrance of new competitors into or the expansion of the operations by existing competitors in the Company's markets and other changes in the market for insurance products could adversely affect the Company's plans and results of operations; (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission; and (iv) other risks and factors which may be beyond the control or foresight of the Company.  Readers are     encouraged to review the Company's annual report for its full statement regarding forward-looking information.

- 22 -

Critical Accounting Policies

There have been no changes in the Company's critical accounting policies as disclosed in the Form 10-K filed for the year ended December 31, 2014.

Concentrations of Credit Risk

The insurance subsidiaries cede portions of their gross premiums to numerous reinsurers under quota share and excess of loss treaties as well as facultative placements.  These reinsurers assume commensurate portions of the risk of loss covered by the contracts.  As losses are reported and reserved, portions of the gross losses attributable to reinsurers are established as receivable assets and losses incurred are reduced.  At September 30, 2015, amounts due from reinsurers on paid and unpaid losses, are estimated to total approximately $220 million.  Of this total, approximately $90 million (41%) represents the Company's provision for incurred but not reported losses and loss adjustment expenses attributable to reinsurers.  Because of the large policy limits reinsured by the Company, the ultimate amount of incurred but not reported losses and loss adjustment expenses attributable to reinsurers could vary significantly from the estimate provided; however, absent the inability to collect from reinsurers, such variance would not result in changes in net claim losses incurred by the Company.

At September 30, 2015, limited partnership investments include approximately $45.1 million consisting of two partnerships which are managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.  Each of these investments contains profit sharing agreements to the affiliated organizations.

At September 30, 2015, invested assets other than limited partnerships include approximately $59.0 million in portfolios managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk since the disclosure in our Form 10-K for the year ended December 31, 2014.

- 23 -

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation as of December 31, 2014, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures as defined in Rule 13a-15(e) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the "Exchange Act". Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in timely alerting the Company to material information required to be disclosed in reports under the Exchange Act. In addition, based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective in ensuring that information required to be disclosed in reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. The Company noted no change in internal control over financial reporting that occurred during the last fiscal quarter that materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 5. OTHER INFORMATION

Nothing to report.

ITEM 6 (a) EXHIBITS

Number and caption from Exhibit

Table of Regulation S-K Item 601Exhibit No.

(31.1)Certification of CEOEXHIBIT 31.1

pursuant to Section 302 of theCertification of CEO

Sarbanes-Oxley Act of 2002

(31.2)Certification of CFOEXHIBIT 31.2

pursuant to Section 302 of theCertification of CFO

Sarbanes-Oxley Act of 2002

(32)Certification of CEO and CFOEXHIBIT 32

pursuant to 18 U.S.C. 1350, asCertification of CEO and CFO

adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

- 24 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 BALDWIN & LYONS, INC.

Date     November 5, 2015By /s/ Joseph J. DeVito                           

                          Joseph J. DeVito, CEO and President

Date     November 5, 2015By /s/ G. Patrick Corydon                    

                           G. Patrick Corydon,

                 Executive Vice President – Finance

                (Principal Financial and

                Accounting Officer)

- 25 -

BALDWIN & LYONS, INC.

Form 10-Q for the fiscal quarter ended September 30, 2015

INDEX TO EXHIBITS

Begins on sequential

page number of Form

Exhibit Number             10-Q           _

 EXHIBIT 31.127

        Certification of CEO

                   pursuant to Section 302 of the

       Sarbanes-Oxley Act

 EXHIBIT 31.229

        Certification of CFO

                   pursuant to Section 302 of the

       Sarbanes-Oxley Act

EXHIBIT 3231

                    Certification of CEO and CFO

                 pursuant to 18 U.S.C. 1350,

                     as adopted pursuant to Section

                     906 of the Sarbanes-Oxley Act

- 26 -

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Joseph J. DeVito, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Baldwin & Lyons, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

- 27 -

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 5, 2015

/s/ Joseph J. DeVito                             

Joseph J. DeVito Chief Executive Officer and President

- 28 -

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, G. Patrick Corydon, certify that:

1. I have reviewed this report on Form 10-Q of Baldwin & Lyons, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

- 29 -

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 5, 2015

/s/ G. Patrick Corydon                                

G. Patrick Corydon Executive Vice President and Chief Financial Office

- 30 -

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Baldwin & Lyons, Inc. (the "Company") on Form 10-Q for the quarterly period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Joseph J. DeVito, Chief Executive Officer and President of the Company, and G. Patrick Corydon, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 5, 2015

/s/ Joseph J. DeVito                             

Joseph J. DeVito

Chief Executive Officer and President

/s/ G. Patrick Corydon                            

G. Patrick Corydon

Executive Vice President and Chief Financial Officer

- 31 -

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Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended	12 Months Ended
	Feb. 04, 2015	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares distribution period from grant date			1 year
5/8/2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of each share issued (in dollars per share)		$ 25.53
Summary of stock Issuances [Abstract]
Shares granted (in shares)		17,237
Vesting date		May 08, 2015
5/12/2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of each share issued (in dollars per share)		$ 22.59
Summary of stock Issuances [Abstract]
Shares granted (in shares)		21,252
Vesting date		May 12, 2016
Restricted Stock Units (RSUs) [Member]
Summary of stock Issuances [Abstract]
Period restricted stocks will vest ratably from date of grant			3 years
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Outside Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total value of shares issued			$ 480	$ 440
Restricted Stock Units (RSUs) [Member] | Class B [Member] | Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total value of shares issued	$ 853
Shares issued (in shares)	36,646
Value of each share issued (in dollars per share)	$ 23.29

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Summary of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies [Abstract]
Percentage of decline on cost of securities treated as other-than-temporary impairment	20.00%
Period of decline on the cost of equity securities that will be considered other-than-temporary impairment	6 months

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Reinsurance

9 Months Ended

Sep. 30, 2015

Reinsurance [Abstract]

Reinsurance

(3) Reinsurance:

The following table summarizes the Company's transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended September 30:
Premiums ceded to reinsurers	$	32,822	$	28,711
Losses and loss expenses
ceded to reinsurers		21,068		15,451
Commissions from reinsurers		6,668		5,850
Nine months ended September 30:
Premiums ceded to reinsurers	$	95,397	$	91,345
Losses and loss expenses
ceded to reinsurers		59,306		54,473
Commissions from reinsurers		21,713		17,425

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Debt (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Debt [Abstract]
Revolving line of credit limit	$ 40,000
Line of credit maturity date	Sep. 23, 2018
Period of fixed interest on line of credit at company's options	1 year
Outstanding drawings on line of credit	$ 20,000	$ 20,000
Effective interest rate	1.30%
Remaining unused amount under line of credit	$ 20,000

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Reportable Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Segment	Sep. 30, 2014 USD ($)
Reportable Segments [Abstract]
Number of reportable segments | Segment			2
Segment Reporting Information [Line Items]
Net Premiums Earned	$ 65,445	$ 65,947	$ 197,340	$ 192,694
Reconciliation from segment totals to consolidated [Abstract]
Income before federal income taxes	11,610	8,548	29,331	32,024
Reportable Segments [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	95,952	94,591	285,727	284,443
Net Premiums Earned	65,445	65,947	197,340	192,694
Segment Profit (Loss)	14,599	8,614	32,294	23,922
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	14,599	8,614	32,294	23,922
Reportable Segments [Member] | Property and Casualty Insurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	92,584	84,644	272,260	253,394
Net Premiums Earned	60,837	57,097	180,152	163,613
Segment Profit (Loss)	14,513	9,520	31,195	23,726
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	14,513	9,520	31,195	23,726
Reportable Segments [Member] | Reinsurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	3,368	9,947	13,467	31,049
Net Premiums Earned	4,608	8,850	17,188	29,081
Segment Profit (Loss)	86	(906)	1,099	196
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	86	(906)	1,099	196
Segment Reconciling Items [Member]
Reconciliation from segment totals to consolidated [Abstract]
Net investment income	3,014	2,073	8,727	6,456
Net realized gains (losses) on investments	(2,086)	658	491	12,817
Corporate expenses and other	$ (3,917)	$ (2,797)	$ (12,181)	$ (11,171)

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Fair Value (Details) - Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fixed maturities [Abstract]
U.S. government obligations	$ 110,095	$ 101,094
Residential mortgage-backed securities	5,116	6,066
Commercial mortgage-backed securities	29,601	36,440
State and municipal obligations	114,304	113,777
Corporate securities	160,087	164,068
Options embedded in convertible securities	2,207	2,898
Foreign government obligations	21,209	27,466
Total fixed maturities	442,619	451,809
Equity securities [Abstract]
Financial institutions	20,161	25,343
Industrial & miscellaneous	122,353	136,764
Total equity securities	142,514	162,107
Short-term	2,220	2,966
Cash equivalents	59,882	59,309
Total fair value	647,235	676,191
Level 1 [Member]
Fixed maturities [Abstract]
U.S. government obligations	0	0
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	0	0
State and municipal obligations	0	0
Corporate securities	0	0
Options embedded in convertible securities	0	0
Foreign government obligations	0	0
Total fixed maturities	0	0
Equity securities [Abstract]
Financial institutions	20,161	25,343
Industrial & miscellaneous	122,353	136,764
Total equity securities	142,514	162,107
Short-term	2,220	2,966
Cash equivalents	0	0
Total fair value	144,734	165,073
Level 2 [Member]
Fixed maturities [Abstract]
U.S. government obligations	110,095	101,094
Residential mortgage-backed securities	5,116	6,066
Commercial mortgage-backed securities	29,131	36,440
State and municipal obligations	114,304	113,777
Corporate securities	154,436	151,860
Options embedded in convertible securities	2,207	2,898
Foreign government obligations	20,925	27,466
Total fixed maturities	436,214	439,601
Equity securities [Abstract]
Financial institutions	0	0
Industrial & miscellaneous	0	0
Total equity securities	0	0
Short-term	0	0
Cash equivalents	59,882	59,309
Total fair value	496,096	498,910
Level 3 [Member]
Fixed maturities [Abstract]
U.S. government obligations	0	0
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	470	0
State and municipal obligations	0	0
Corporate securities	5,651	12,208
Options embedded in convertible securities	0	0
Foreign government obligations	284	0
Total fixed maturities	6,405	12,208
Equity securities [Abstract]
Financial institutions	0	0
Industrial & miscellaneous	0	0
Total equity securities	0	0
Short-term	0	0
Cash equivalents	0	0
Total fair value	$ 6,405	$ 12,208

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Fair Value, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Calculation [Roll Forward]
Beginning of period balance	$ 12,208	$ 0
Total gains or losses (realized or unrealized) included in income	47	0
Purchases	2,163	0
Settlements	(8,027)	0
Transfers into level 3	995	12,208
Transfers out of level 3	(981)	0
End of period balance	$ 6,405	$ 12,208

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Investments

9 Months Ended

Sep. 30, 2015

Investments [Abstract]

Investments

(2) Investments:

The following is a summary of available-for-sale securities at September 30, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
September 30, 2015
Fixed maturities
U.S. government obligations	$	110,095	$	109,746	$	355	$	(6	)	$	349
Residential mortgage-backed securities		5,116		4,886		244		(14	)		230
Commercial mortgage-backed securities		29,601		29,735		374		(508	)		(134	)
States and municipal obligations		114,304		113,700		946		(342	)		604
Corporate securities		162,294		163,733		2,350		(3,789	)		(1,439	)
Foreign government obligations		21,209		22,450		286		(1,527	)		(1,241	)
Total fixed maturities		442,619		444,250		4,555		(6,186	)		(1,631	)
Equity securities:
Financial institutions		20,161		9,356		10,826		(21	)		10,805
Industrial & miscellaneous		122,353		74,784		54,698		(7,129	)		47,569
Total equity securities		142,514		84,140		65,524		(7,150	)		58,374
Total	$	585,133	$	528,390	$	70,079	$	(13,336	)		56,743
							Applicable federal income taxes				(19,860	)
							Net unrealized gains - net of tax			$	36,883
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at September 30, 2015 and December 31, 2014, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	September 30, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		209	$	98,604	$	(4,939	)		591	$	176,756	$	(6,083	)
Greater than 12 months		67		21,094		(1,247	)		140		27,667		(1,407	)
Total fixed maturities		276		119,698		(6,186	)		731		204,423		(7,490	)
Equity securities:
12 months or less		61		35,888		(6,181	)		33		13,538		(2,170	)
Greater than 12 months		12		2,876		(969	)		3		686		(64	)
Total equity securities		73		38,764		(7,150	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		349	$	158,462	$	(13,336	)		767	$	218,647	$	(9,724	)

The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2015, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	74,675	$	75,062
Excess of one year to five years		244,552		245,370
Excess of five years to ten years		36,252		36,889
Excess of ten years		3,298		3,076
Contractual maturities		358,777		360,397
Asset-backed securities		83,842		83,853
Total	$	442,619	$	444,250

Following is a summary of the components of net realized gains (losses) on investments for the periods presented in the accompanying consolidated statements of income.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Fixed maturities:
Gross gains	$	1,294		$	798		$	3,426		$	5,399
Gross losses		(5,087	)		(1,259	)		(8,876	)		(3,411	)
Net realized gains (losses)		(3,793	)		(461	)		(5,450	)		1,988
Equity securities:
Gross gains		10,320			2,529			12,299			4,682
Gross losses		(2,312	)		(346	)		(4,297	)		(1,057	)
Net realized gains		8,008			2,183			8,002			3,625
Limited partnerships - net gain (loss)		(6,301	)		(1,064	)		(2,061	)		7,204
Totals	$	(2,086	)	$	658		$	491		$	12,817

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Realized net gains on the disposal of securities	$	7,957		$	2,223		$	7,544		$	5,837
Mark-to-market adjustment		(300	)		(118	)		(692	)		151
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(6,301	)		(1,064	)		(2,061	)		7,204
Impairment:
Write-downs based upon objective criteria		(4,396	)		(441	)		(5,503	)		(546	)
Recovery of prior write-downs
upon sale or disposal		954			58			1,203			171
Totals	$	(2,086	)	$	658		$	491		$	12,817

The mark-to-market adjustments in the table above represent the changes in fair value of (1) options embedded in convertible debt securities and (2) insurance-linked securities held by the Company.

The income from limited partnerships for the quarter and year-to-date periods ending September 30, 2015 includes an estimated $9,335 and $8,280 of net unrealized losses respectively, reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at September 30, 2015 includes approximately $4,967 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders' equity at September 30, 2015 includes approximately $26,236, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of September 30, 2015, the Company had committed funds totaling $17,000 to two separate borrowers related to bridge loan agreements.  The Company retains possession of these funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market.

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Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Carrying Value [Member]
Assets [Abstract]
Limited partnerships	$ 74,702	$ 81,230
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
Fair Value [Member]
Assets [Abstract]
Limited partnerships	74,702	81,230
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
Fair Value [Member] | Level 1 [Member]
Assets [Abstract]
Limited partnerships	0	0
Liabilities [Abstract]
Short-term borrowings	0	0
Fair Value [Member] | Level 2 [Member]
Assets [Abstract]
Limited partnerships	0	0
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Limited partnerships	74,702	81,230
Liabilities [Abstract]
Short-term borrowings	$ 0	$ 0

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Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Investments:
Fixed maturities	$ 442,619	$ 451,809
Equity securities	142,514	162,107
Limited partnerships	74,702	81,230
Short-term	2,220	2,966
Total Investments	662,055	698,112
Cash and cash equivalents	69,650	64,632
Accounts receivable	73,045	98,144
Reinsurance recoverable	223,184	220,221
Other assets	65,622	61,447
Current federal income taxes	0	1,691
Total Assets	1,093,556	1,144,247
Liabilities and shareholders' equity
Reserves for losses and loss expenses	516,929	506,102
Reserves for unearned premiums	27,034	35,019
Short-term borrowings	20,000	20,000
Accounts payable and accrued expenses	124,891	163,657
Current federal income taxes	2,213	0
Deferred federal income taxes	9,604	19,973
Total Liabilities	700,671	744,751
Shareholders' equity:
Additional paid-in capital	52,826	51,854
Unrealized net gains on investments	36,883	51,840
Foreign exchange adjustment	(712)	390
Retained earnings	303,247	294,773
Shareholders' equity	392,885	399,496
Total liabilities and shareholders' equity	1,093,556	1,144,247
Class A Voting [Member]
Shareholders' equity:
Common stock	112	112
Class B Non-voting [Member]
Shareholders' equity:
Common stock	$ 529	$ 527

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Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Unaudited Consolidated Statements of Cash Flows [Abstract]
Net cash provided by operating activities	$ 30,806	$ 31,110
Investing activities:
Purchases of available-for-sale investments	(275,591)	(201,523)
Purchases of limited partnership interests	0	(4,212)
Proceeds from sales or maturities of available-for-sale investments	262,707	204,979
Net sales of short-term investments	746	1,726
Other investing activities	(1,281)	(9,744)
Net cash used in investing activities	(13,419)	(8,774)
Financing activities:
Dividends paid to shareholders	(11,267)	(11,222)
Drawings on line of credit	0	10,000
Net cash used in financing activities	(11,267)	(1,222)
Effect of foreign exchange rates on cash and cash equivalents	(1,102)	(835)
Increase in cash and cash equivalents	5,018	20,279
Cash and cash equivalents at beginning of period	64,632	59,297
Cash and cash equivalents at end of period	$ 69,650	$ 79,576

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value [Abstract]

Fair value measurements by level for assets measured at fair value on a recurring basis

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of September 30, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	110,095	$	-	$	110,095	$	-
Residential mortgage-backed securities		5,116		-		5,116		-
Commercial mortgage-backed securities		29,601		-		29,131		470
State and municipal obligations		114,304		-		114,304		-
Corporate securities		160,087		-		154,436		5,651
Options embedded in convertible securities		2,207		-		2,207		-
Foreign government obligations		21,209		-		20,925		284
Total fixed maturities		442,619		-		436,214		6,405
Equity securities:
Financial institutions		20,161		20,161		-		-
Industrial & miscellaneous		122,353		122,353		-		-
Total equity securities		142,514		142,514		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		59,882		-		59,882		-
	$	647,235	$	144,734	$	496,096	$	6,405

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short-term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

Reconciliation of beginning and ending balances of assets measured at fair value on a recurring basis using level 3 inputs

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the nine months ended September 30, 2015 and for the year ended December 31, 2014:

	2015			2014
Beginning of period balance	$	12,208		$	-
Total gains or losses (realized or unrealized)
included in income		47			-
Purchases		2,163			-
Settlements		(8,027	)		-
Transfers into level 3		995			12,208
Transfers out of level 3		(981	)		-
End of period balance	$	6,405		$	12,208

Summary of the carrying value and fair value by level of financial instruments

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at September 30, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
September 30, 2015
Assets: Limited partnerships	$	74,702	$	-	$	-	$	74,702	$	74,702
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets: Limited partnerships		81,230		-		-		81,230		81,230
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2015

Accumulated Other Comprehensive Income [Abstract]

Changes in accumulated other comprehensive income by component

The following table illustrates changes in accumulated other comprehensive income by component for the nine months ending September 30, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	390		$	51,840		$	52,230
Other comprehensive income
before reclassifications		(1,102	)		(13,299	)		(14,401	)
Amounts reclassified from
accumulated other
comprehensive income		-			(1,658	)		(1,658	)
Net current-period other
comprehensive income		(1,102	)		(14,957	)		(16,059	)
Ending balance	$	(712	)	$	36,883		$	36,171

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. Interim financial statements should be read in conjunction with the Company's annual audited financial statements and other disclosures included in the Company's most recent Form 10-K.

Investments: Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available. Equity securities are carried at quoted market prices (fair value). The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income. To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses) on investments.

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of income.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of income and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income. In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company's quantitative criteria defined above.

Recent Accounting Pronouncements: In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-09, Disclosures about Short-Duration Contracts, and this new guidance will enhance disclosures about an entity's insurance liabilities. This guidance will provide additional information about unpaid claims and claim development, including supplemental disaggregated incurred and paid claim data.  Under the guidance, enhanced disclosures on claim frequency and reserving methodologies are required. The guidance is effective for annual periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016, however early adoption is permitted. We have not yet adopted the guidance and the adoption of this guidance is not expected to have a material impact on presentation of data in the consolidated financial statements.

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Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Class A Voting [Member]
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	3,000,000	3,000,000
Common stock, shares outstanding (in shares)	2,623,109	2,623,109
Class B Non-voting [Member]
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares outstanding (in shares)	12,397,628	12,356,389

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

(11) Subsequent Events:

We have evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred during the period which require recognition or disclosure.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 01, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	BALDWIN & LYONS INC
Entity Central Index Key	0000009346
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Information [Line Items]
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Class A (voting) [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		2,623,109
Class B (nonvoting) [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		12,397,628

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. Interim financial statements should be read in conjunction with the Company's annual audited financial statements and other disclosures included in the Company's most recent Form 10-K.

Investments

Investments: Carrying amounts for fixed maturity securities represent fair value and are based on quoted market prices, where available, or broker/dealer quotes for specific securities where quoted market prices are not available. Equity securities are carried at quoted market prices (fair value). The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income. To the extent that the limited partnership investees include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized as well as realized investment gains or losses.

Other investments, if any, are carried at either fair value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of the cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders' equity.  Included within available for sale fixed maturity securities are insurance-linked securities and convertible debt securities.  The changes in fair values of insurance-linked securities and portions of the changes in fair values of convertible debt securities are reflected as a component of net realized gains (losses) on investments.

With respect to other–than-temporary impairment of investments, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of income.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of income and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders' equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income. In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.  For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration to the Company's quantitative criteria defined above.

Recent Accounting Pronouncements

Recent Accounting Pronouncements: In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-09, Disclosures about Short-Duration Contracts, and this new guidance will enhance disclosures about an entity's insurance liabilities. This guidance will provide additional information about unpaid claims and claim development, including supplemental disaggregated incurred and paid claim data.  Under the guidance, enhanced disclosures on claim frequency and reserving methodologies are required. The guidance is effective for annual periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016, however early adoption is permitted. We have not yet adopted the guidance and the adoption of this guidance is not expected to have a material impact on presentation of data in the consolidated financial statements.

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Unaudited Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues
Net premiums earned	$ 65,445	$ 65,947	$ 197,340	$ 192,694
Net investment income	3,014	2,073	8,727	6,456
Commissions and other income	1,173	1,800	3,970	4,887
Net realized gains on investments, excluding impairment losses	2,310	1,099	5,994	13,363
Total other-than-temporary impairment losses on investments	(4,396)	(441)	(5,503)	(546)
Net realized gains (losses) on investments	(2,086)	658	491	12,817
Total revenue	67,546	70,478	210,528	216,854
Expenses
Losses and loss expenses incurred	35,212	38,693	113,890	118,264
Other operating expenses	20,724	23,237	67,307	66,566
Total expenses	55,936	61,930	181,197	184,830
Income before federal income taxes	11,610	8,548	29,331	32,024
Federal income taxes	3,830	2,778	9,590	10,553
Net income	$ 7,780	$ 5,770	$ 19,741	$ 21,471
Per share data:
Basic and diluted earnings (in dollars per share)	$ 0.52	$ 0.39	$ 1.31	$ 1.43
Dividends paid to shareholders (in dollars per share)	$ 0.25	$ 0.25	$ 0.75	$ 0.75
Reconciliation of shares outstanding:
Average shares outstanding - basic (in shares)	15,015	14,971	15,009	14,962
Dilutive effect of share equivalents (in shares)	3	2	10	12
Average shares outstanding - diluted (in shares)	15,018	14,973	15,019	14,974

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Taxes

9 Months Ended

Sep. 30, 2015

Taxes [Abstract]

Taxes

(6) Taxes:

As of September 30, 2015, the Company's calendar years 2012 through 2014 remain subject to examination by the IRS.  The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

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Debt

9 Months Ended

Sep. 30, 2015

Debt [Abstract]

Debt

(5) Debt:

The Company maintains a revolving line of credit with a $40,000 limit and an expiration date of September 23, 2018.  Interest on this line of credit is referenced to LIBOR and can be fixed for periods of up to one year at the Company's option.  Outstanding drawings on this line of credit were $20,000 as of both September 30, 2015 and December 31, 2014.  At September 30, 2015, the effective interest rate was 1.30%.  The Company has $20,000 remaining unused under the line of credit at September 30, 2015.

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Restricted Stock (Tables)

9 Months Ended

Sep. 30, 2015

Restricted Stock [Abstract]

Summary of stock issuances

The table below provides detail of the stock issuances for 2014 and 2015:

					Value
					Per Share
Effective	Number of Shares		Vesting	Service	on Grant
Date	Issued		Date	Period	Date
5/8/2014		17,237	5/8/2015	7/1/2014 - 6/30/2015	$	25.53
5/12/2015		21,252	5/12/2016	7/1/2015 - 6/30/2016	$	22.59

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Investments (Tables)

9 Months Ended

Sep. 30, 2015

Investments [Abstract]

Summary of available for sale securities

The following is a summary of available-for-sale securities at September 30, 2015 and December 31, 2014:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
September 30, 2015
Fixed maturities
U.S. government obligations	$	110,095	$	109,746	$	355	$	(6	)	$	349
Residential mortgage-backed securities		5,116		4,886		244		(14	)		230
Commercial mortgage-backed securities		29,601		29,735		374		(508	)		(134	)
States and municipal obligations		114,304		113,700		946		(342	)		604
Corporate securities		162,294		163,733		2,350		(3,789	)		(1,439	)
Foreign government obligations		21,209		22,450		286		(1,527	)		(1,241	)
Total fixed maturities		442,619		444,250		4,555		(6,186	)		(1,631	)
Equity securities:
Financial institutions		20,161		9,356		10,826		(21	)		10,805
Industrial & miscellaneous		122,353		74,784		54,698		(7,129	)		47,569
Total equity securities		142,514		84,140		65,524		(7,150	)		58,374
Total	$	585,133	$	528,390	$	70,079	$	(13,336	)		56,743
							Applicable federal income taxes				(19,860	)
							Net unrealized gains - net of tax			$	36,883
December 31, 2014
Fixed maturities
U.S. government obligations	$	101,094	$	101,058	$	108	$	(72	)	$	36
Residential mortgage-backed securities		6,066		5,830		273		(37	)		236
Commercial mortgage-backed securities		36,440		36,210		630		(400	)		230
State and municipal obligations		113,777		113,133		784		(140	)		644
Corporate securities		166,966		170,822		2,005		(5,861	)		(3,856	)
Foreign government obligations		27,466		28,332		114		(980	)		(866	)
Total fixed maturities		451,809		455,385		3,914		(7,490	)		(3,576	)
Equity securities:
Financial institutions		25,343		10,100		15,303		(60	)		15,243
Industrial & miscellaneous		136,764		68,678		70,260		(2,174	)		68,086
Total equity securities		162,107		78,778		85,563		(2,234	)		83,329
Total	$	613,916	$	534,163	$	89,477	$	(9,724	)		79,753
							Applicable federal income taxes				(27,913	)
							Net unrealized gains - net of tax			$	51,840

Fixed maturity and equity security investments in unrealized loss position

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at September 30, 2015 and December 31, 2014, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	September 30, 2015							December 31, 2014
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		209	$	98,604	$	(4,939	)		591	$	176,756	$	(6,083	)
Greater than 12 months		67		21,094		(1,247	)		140		27,667		(1,407	)
Total fixed maturities		276		119,698		(6,186	)		731		204,423		(7,490	)
Equity securities:
12 months or less		61		35,888		(6,181	)		33		13,538		(2,170	)
Greater than 12 months		12		2,876		(969	)		3		686		(64	)
Total equity securities		73		38,764		(7,150	)		36		14,224		(2,234	)
Total fixed maturity and equity securities		349	$	158,462	$	(13,336	)		767	$	218,647	$	(9,724	)

Fair value and cost or amortized cost of fixed maturity investments by contractual maturity

The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2015, by contractual maturity, are shown below.  Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost
One year or less	$	74,675	$	75,062
Excess of one year to five years		244,552		245,370
Excess of five years to ten years		36,252		36,889
Excess of ten years		3,298		3,076
Contractual maturities		358,777		360,397
Asset-backed securities		83,842		83,853
Total	$	442,619	$	444,250

Realized gains (losses) on investments

Following is a summary of the components of net realized gains (losses) on investments for the periods presented in the accompanying consolidated statements of income.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Fixed maturities:
Gross gains	$	1,294		$	798		$	3,426		$	5,399
Gross losses		(5,087	)		(1,259	)		(8,876	)		(3,411	)
Net realized gains (losses)		(3,793	)		(461	)		(5,450	)		1,988
Equity securities:
Gross gains		10,320			2,529			12,299			4,682
Gross losses		(2,312	)		(346	)		(4,297	)		(1,057	)
Net realized gains		8,008			2,183			8,002			3,625
Limited partnerships - net gain (loss)		(6,301	)		(1,064	)		(2,061	)		7,204
Totals	$	(2,086	)	$	658		$	491		$	12,817

Schedule of realized gains

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Realized net gains on the disposal of securities	$	7,957		$	2,223		$	7,544		$	5,837
Mark-to-market adjustment		(300	)		(118	)		(692	)		151
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(6,301	)		(1,064	)		(2,061	)		7,204
Impairment:
Write-downs based upon objective criteria		(4,396	)		(441	)		(5,503	)		(546	)
Recovery of prior write-downs
upon sale or disposal		954			58			1,203			171
Totals	$	(2,086	)	$	658		$	491		$	12,817

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Litigation, Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Litigation, Commitments and Contingencies [Abstract]

Litigation, Commitments and Contingencies

(9) Litigation, Commitments and Contingencies:

In the ordinary, regular and routine course of their business, the Company and its insurance subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided. No currently pending matter is deemed by management to be material to the Company.

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Fair Value

9 Months Ended

Sep. 30, 2015

Fair Value [Abstract]

Fair Value

(7) Fair Value:

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

As of September 30, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	110,095	$	-	$	110,095	$	-
Residential mortgage-backed securities		5,116		-		5,116		-
Commercial mortgage-backed securities		29,601		-		29,131		470
State and municipal obligations		114,304		-		114,304		-
Corporate securities		160,087		-		154,436		5,651
Options embedded in convertible securities		2,207		-		2,207		-
Foreign government obligations		21,209		-		20,925		284
Total fixed maturities		442,619		-		436,214		6,405
Equity securities:
Financial institutions		20,161		20,161		-		-
Industrial & miscellaneous		122,353		122,353		-		-
Total equity securities		142,514		142,514		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		59,882		-		59,882		-
	$	647,235	$	144,734	$	496,096	$	6,405

As of December 31, 2014:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	101,094	$	-	$	101,094	$	-
Residential mortgage-backed securities		6,066		-		6,066		-
Commercial mortgage-backed securities		36,440		-		36,440		-
State and municipal obligations		113,777		-		113,777		-
Corporate securities		164,068		-		151,860		12,208
Options embedded in convertible securities		2,898		-		2,898		-
Foreign government obligations		27,466		-		27,466		-
Total fixed maturities		451,809		-		439,601		12,208
Equity securities:
Financial institutions		25,343		25,343		-		-
Industrial & miscellaneous		136,764		136,764		-		-
Total equity securities		162,107		162,107		-		-
Short-term		2,966		2,966		-		-
Cash equivalents		59,309		-		59,309		-
	$	676,191	$	165,073	$	498,910	$	12,208

Level inputs, as defined by FASB Fair Value Measurements, are as follows:

Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.

Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of highly rated money market funds purchased at par value with specified yield rates. Due to underlying assets of these funds, we designate all cash equivalents as Level 2.

Fixed maturities: Fair values of fixed maturities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures.  For securities not actively traded, the third party pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, benchmark yields, credit spreads, default rates and prepayment speeds.  The Level 3 assets consist of a portfolio of corporate convertible bonds and commercial mortgage-backed securities.  The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes.

Equity securities: Fair values of equity securities are designated as Level 1 and are based on quoted market prices.

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the nine months ended September 30, 2015 and for the year ended December 31, 2014:

	2015			2014
Beginning of period balance	$	12,208		$	-
Total gains or losses (realized or unrealized)
included in income		47			-
Purchases		2,163			-
Settlements		(8,027	)		-
Transfers into level 3		995			12,208
Transfers out of level 3		(981	)		-
End of period balance	$	6,405		$	12,208

Transfers between levels, if any, are recorded as of the beginning of the reporting period.  There were no significant transfers of assets between Level 1 and Level 2 during the nine months ended September 30, 2015 and 2014.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as reserves for losses and loss expenses are excluded from the fair value disclosures.  Therefore, the fair value amounts cannot be aggregated to determine the Company's underlying economic value.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes receivable or payable and unearned premiums approximate fair value because of the short-term nature of these items.  These assets and liabilities are not included in the table below.

The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument:

Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity.   The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value.  As these investments are not actively traded and there are limitations on distributions and the corresponding inputs are based on data provided by the investees, they are classified as Level 3.

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to us for debt of similar terms and remaining maturities.

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at September 30, 2015 and December 31, 2014 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
September 30, 2015
Assets: Limited partnerships	$	74,702	$	-	$	-	$	74,702	$	74,702
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2014
Assets: Limited partnerships		81,230		-		-		81,230		81,230
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000

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Restricted Stock

9 Months Ended

Sep. 30, 2015

Restricted Stock [Abstract]

Restricted Stock

(8) Restricted Stock:

The Company grants shares of class B restricted stock to the Company's outside directors, in lieu of cash, as their annual retainer compensation.  The shares are distributed on the vesting date, one year following the date of grant, and have had an aggregate total value of $440 and $480 for the 2014 and 2015 annual periods presented, respectively.  The table below provides detail of the stock issuances for 2014 and 2015:

					Value
					Per Share
Effective	Number of Shares		Vesting	Service	on Grant
Date	Issued		Date	Period	Date
5/8/2014		17,237	5/8/2015	7/1/2014 - 6/30/2015	$	25.53
5/12/2015		21,252	5/12/2016	7/1/2015 - 6/30/2016	$	22.59

Compensation expense related to the above stock grant is recognized over the period in which the directors render services.

Effective February 4, 2015, the Company issued 36,646 shares of class B restricted stock to certain of the Company's executives as a portion of compensation under the Company's 2014 Executive Incentive Bonus Plan.  The restricted shares will vest ratably over a three year period from the date of grant with acceleration for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause per Accounting Standards Codification 715, Compensation-Retirement Benefits.  Restricted stock was valued based on the closing price of the stock on the day the award was granted.  Each share was valued at $23.29 per share representing a total value of $853. Non-vested restricted shares will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the 2014 Executive Incentive Bonus Plan.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2015

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

(10) Accumulated Other Comprehensive Income:

The following table illustrates changes in accumulated other comprehensive income by component for the nine months ending September 30, 2015:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	390		$	51,840		$	52,230
Other comprehensive income
before reclassifications		(1,102	)		(13,299	)		(14,401	)
Amounts reclassified from
accumulated other
comprehensive income		-			(1,658	)		(1,658	)
Net current-period other
comprehensive income		(1,102	)		(14,957	)		(16,059	)
Ending balance	$	(712	)	$	36,883		$	36,171

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance			$ 399,496
Other comprehensive income (loss)	$ (16,360)	$ (5,295)	(16,059)	$ 4,875
Ending balance	392,885		392,885
AOCI Attributable to Parent [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance			52,230
Other comprehensive income before reclassifications			(14,401)
Amounts reclassified from accumulated other comprehensive income			(1,658)
Other comprehensive income (loss)			(16,059)
Ending balance	36,171		36,171
Foreign Currency [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance			390
Other comprehensive income before reclassifications			(1,102)
Amounts reclassified from accumulated other comprehensive income			0
Other comprehensive income (loss)			(1,102)
Ending balance	(712)		(712)
Unrealized Holding Gains on Available-for-sale Securities [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance			51,840
Other comprehensive income before reclassifications			(13,299)
Amounts reclassified from accumulated other comprehensive income			(1,658)
Other comprehensive income (loss)			(14,957)
Ending balance	$ 36,883		$ 36,883

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Reportable Segments (Tables)

9 Months Ended

Sep. 30, 2015

Reportable Segments [Abstract]

Schedule of segment reporting information, by segment

The following table provides certain revenue and profit and loss information for each reportable segment. All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2015						2014
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)
Three months ended September 30:
Property and Casualty Insurance	$	92,584	$	60,837	$	14,513	$	84,644	$	57,097	$	9,520
Reinsurance		3,368		4,608		86		9,947		8,850		(906	)
Totals	$	95,952	$	65,445	$	14,599	$	94,591	$	65,947	$	8,614
Nine months ended September 30:
Property and Casualty Insurance	$	272,260	$	180,152	$	31,195	$	253,394	$	163,613	$	23,726
Reinsurance		13,467		17,188		1,099		31,049		29,081		196
Totals	$	285,727	$	197,340	$	32,294	$	284,443	$	192,694	$	23,922

Reconciliation of operating profit (loss) from segments to consolidated

The following table reconciles reportable segment income to the Company's consolidated income before federal income taxes.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Profit:
Segment profit	$	14,599		$	8,614		$	32,294		$	23,922
Net investment income		3,014			2,073			8,727			6,456
Net realized gains (losses) on investments		(2,086	)		658			491			12,817
Corporate expenses and other		(3,917	)		(2,797	)		(12,181	)		(11,171	)
Income before federal income taxes	$	11,610		$	8,548		$	29,331		$	32,024

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Investments (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($) Security Borrower	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Security Borrower	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($) Security
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Cost or amortized cost	$ 444,250		$ 444,250
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Applicable federal income taxes			(19,860)		$ (27,913)
Net unrealized gains - net of tax			$ 36,883		$ 51,840
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, total | Security	349		349		767
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, total	$ 158,462		$ 158,462		$ 218,647
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, total	(13,336)		(13,336)		(9,724)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
One year or less, Fair Value	74,675		74,675
Excess of one year to five years, Fair Value	244,552		244,552
Excess of five years to ten years, Fair Value	36,252		36,252
Excess of ten years, Fair Value	3,298		3,298
Contractual maturities, Fair Value	358,777		358,777
Asset-backed securities, Fair Value	83,842		83,842
Total, Fair Value	442,619		442,619
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
One year or less, Cost or Amortized Cost Basis	75,062		75,062
Excess of one year to five years, Cost or Amortized Cost Basis	245,370		245,370
Excess of five years to ten years, Cost or Amortized Cost Basis	36,889		36,889
Excess of ten years, Cost or Amortized Cost Basis	3,076		3,076
Contractual maturities, Cost or Amortized Cost Basis	360,397		360,397
Asset-backed securities, Cost or Amortized Cost Basis	83,853		83,853
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Limited partnerships - net gain (loss)	(6,301)	$ (1,064)	(2,061)	$ 7,204
Net realized gains (losses) on investments	(2,086)	658	491	12,817
Available for Sale Securities Gain Loss Activity [Abstract]
Realized net gains on the disposal of securities	7,957	2,223	7,544	5,837
Mark-to-market adjustment	(300)	(118)	(692)	151
Equity in gains (losses) of limited partnership investments - realized and unrealized	(6,301)	(1,064)	(2,061)	7,204
Write-downs based upon objective criteria	(4,396)	(441)	(5,503)	(546)
Recovery of prior write-downs upon sale or disposal	954	58	1,203	171
Net realized gains (losses) on investments	(2,086)	658	491	12,817
Net unrealized gains (losses) on investments	9,335		8,280
Net unrealized gains in limited partnership			4,967
Undistributed earnings of limited partnership, net of taxes	26,236		26,236
Committed funds for bridge loans	$ 17,000		$ 17,000
Number of separate borrowers related to bridge loan agreements | Borrower	2		2
U.S. Government Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	$ 110,095		$ 110,095		101,094
Cost or amortized cost	109,746		109,746		101,058
Gross unrealized gains	355		355		108
Gross unrealized losses	(6)		(6)		(72)
Net unrealized gains (losses)	349		349		36
Residential Mortgage-backed Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	5,116		5,116		6,066
Cost or amortized cost	4,886		4,886		5,830
Gross unrealized gains	244		244		273
Gross unrealized losses	(14)		(14)		(37)
Net unrealized gains (losses)	230		230		236
Commercial Mortgage-backed Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	29,601		29,601		36,440
Cost or amortized cost	29,735		29,735		36,210
Gross unrealized gains	374		374		630
Gross unrealized losses	(508)		(508)		(400)
Net unrealized gains (losses)	(134)		(134)		230
States and Municipal Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	114,304		114,304		113,777
Cost or amortized cost	113,700		113,700		113,133
Gross unrealized gains	946		946		784
Gross unrealized losses	(342)		(342)		(140)
Net unrealized gains (losses)	604		604		644
Corporate Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	162,294		162,294		166,966
Cost or amortized cost	163,733		163,733		170,822
Gross unrealized gains	2,350		2,350		2,005
Gross unrealized losses	(3,789)		(3,789)		(5,861)
Net unrealized gains (losses)	(1,439)		(1,439)		(3,856)
Foreign Government Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	21,209		21,209		27,466
Cost or amortized cost	22,450		22,450		28,332
Gross unrealized gains	286		286		114
Gross unrealized losses	(1,527)		(1,527)		(980)
Net unrealized gains (losses)	(1,241)		(1,241)		(866)
Total Fixed Maturities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	442,619		442,619		451,809
Cost or amortized cost	444,250		444,250		455,385
Gross unrealized gains	4,555		4,555		3,914
Gross unrealized losses	(6,186)		(6,186)		(7,490)
Net unrealized gains (losses)	$ (1,631)		$ (1,631)		$ (3,576)
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, 12 months or less | Security	209		209		591
Number of Securities, Greater than 12 months | Security	67		67		140
Number of Securities, total | Security	276		276		731
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, 12 months or less	$ 98,604		$ 98,604		$ 176,756
Fair value, Greater than 12 months	21,094		21,094		27,667
Fair value, total	119,698		119,698		204,423
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, 12 months or less	(4,939)		(4,939)		(6,083)
Gross unrealized loss, Greater than 12 months	(1,247)		(1,247)		(1,407)
Gross unrealized loss, total	(6,186)		(6,186)		(7,490)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	1,294	798	3,426	5,399
Gross losses	(5,087)	(1,259)	(8,876)	(3,411)
Net realized gains (losses)	(3,793)	(461)	(5,450)	1,988
Financial Institutions [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	20,161		20,161		25,343
Cost or amortized cost	9,356		9,356		10,100
Gross unrealized gains	10,826		10,826		15,303
Gross unrealized losses	(21)		(21)		(60)
Net unrealized gains (losses)	10,805		10,805		15,243
Industrial & Miscellaneous [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	122,353		122,353		136,764
Cost or amortized cost	74,784		74,784		68,678
Gross unrealized gains	54,698		54,698		70,260
Gross unrealized losses	(7,129)		(7,129)		(2,174)
Net unrealized gains (losses)	47,569		47,569		68,086
Total Equity Securities [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	142,514		142,514		162,107
Cost or amortized cost	84,140		84,140		78,778
Gross unrealized gains	65,524		65,524		85,563
Gross unrealized losses	(7,150)		(7,150)		(2,234)
Net unrealized gains (losses)	$ 58,374		$ 58,374		$ 83,329
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, 12 months or less | Security	61		61		33
Number of Securities, Greater than 12 months | Security	12		12		3
Number of Securities, total | Security	73		73		36
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, 12 months or less	$ 35,888		$ 35,888		$ 13,538
Fair value, Greater than 12 months	2,876		2,876		686
Fair value, total	38,764		38,764		14,224
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, 12 months or less	(6,181)		(6,181)		(2,170)
Gross unrealized loss, Greater than 12 months	(969)		(969)		(64)
Gross unrealized loss, total	(7,150)		(7,150)		(2,234)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	10,320	2,529	12,299	4,682
Gross losses	(2,312)	(346)	(4,297)	(1,057)
Net realized gains (losses)	8,008	$ 2,183	8,002	$ 3,625
Total Available-for-sale Securities [Member]
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fair value	585,133		585,133		613,916
Cost or amortized cost	528,390		528,390		534,163
Gross unrealized gains	70,079		70,079		89,477
Gross unrealized losses	(13,336)		(13,336)		(9,724)
Net unrealized gains (losses)	$ 56,743		$ 56,743		$ 79,753

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Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Unaudited Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 7,780	$ 5,770	$ 19,741	$ 21,471
Unrealized net gains (losses) on securities:
Unrealized net gains (losses) arising during the period	(13,192)	(3,472)	(13,299)	9,358
Less: reclassification adjustment for net gains (losses) included in net income	2,739	1,118	1,658	3,648
Change in unrealized gains on investments	(15,931)	(4,590)	(14,957)	5,710
Foreign currency translation adjustments	(429)	(705)	(1,102)	(835)
Other comprehensive income (loss)	(16,360)	(5,295)	(16,059)	4,875
Comprehensive income (loss)	$ (8,580)	$ 475	$ 3,682	$ 26,346

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Reportable Segments

9 Months Ended

Sep. 30, 2015

Reportable Segments [Abstract]

Reportable Segments

(4) Reportable Segments:

The Company has two reportable business segments in its operations:  Property and Casualty Insurance and Reinsurance.

The Property and Casualty Insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies. In addition, the Company provides private passenger automobile products to individuals, workers' compensation coverage to small businesses and professional liability products on a selective basis.

The Reinsurance segment currently accepts professional liability cessions from other insurance companies.  From 1992 until July 1, 2014, the Reinsurance segment accepted property cessions from other insurance companies and retrocessions from reinsurance companies, principally reinsuring against catastrophes.  Final exposure to property catastrophe losses expired on June 30, 2015.

The following table provides certain revenue and profit and loss information for each reportable segment. All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

	2015						2014
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit		Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)
Three months ended September 30:
Property and Casualty Insurance	$	92,584	$	60,837	$	14,513	$	84,644	$	57,097	$	9,520
Reinsurance		3,368		4,608		86		9,947		8,850		(906	)
Totals	$	95,952	$	65,445	$	14,599	$	94,591	$	65,947	$	8,614
Nine months ended September 30:
Property and Casualty Insurance	$	272,260	$	180,152	$	31,195	$	253,394	$	163,613	$	23,726
Reinsurance		13,467		17,188		1,099		31,049		29,081		196
Totals	$	285,727	$	197,340	$	32,294	$	284,443	$	192,694	$	23,922

The following table reconciles reportable segment income to the Company's consolidated income before federal income taxes.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2015			2014			2015			2014
Profit:
Segment profit	$	14,599		$	8,614		$	32,294		$	23,922
Net investment income		3,014			2,073			8,727			6,456
Net realized gains (losses) on investments		(2,086	)		658			491			12,817
Corporate expenses and other		(3,917	)		(2,797	)		(12,181	)		(11,171	)
Income before federal income taxes	$	11,610		$	8,548		$	29,331		$	32,024

Segment profit includes both net premiums earned and fees and other income associated with the business conducted by the segment.

Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments.

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Reinsurance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Reinsurance [Abstract]
Premiums ceded to reinsurers	$ 32,822	$ 28,711	$ 95,397	$ 91,345
Losses and loss expenses ceded to reinsurers	21,068	15,451	59,306	54,473
Commissions from reinsurers	$ 6,668	$ 5,850	$ 21,713	$ 17,425

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Reinsurance (Tables)

9 Months Ended

Sep. 30, 2015

Reinsurance [Abstract]

Reinsurance

The following table summarizes the Company's transactions with reinsurers for the 2015 and 2014 comparative periods.

	2015		2014
Quarter ended September 30:
Premiums ceded to reinsurers	$	32,822	$	28,711
Losses and loss expenses
ceded to reinsurers		21,068		15,451
Commissions from reinsurers		6,668		5,850
Nine months ended September 30:
Premiums ceded to reinsurers	$	95,397	$	91,345
Losses and loss expenses
ceded to reinsurers		59,306		54,473
Commissions from reinsurers		21,713		17,425