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

                                                                                                                                                            March 31, 20160-5534

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 May 1, 2016:

TITLE OF CLASSNUMBER OF SHARES OUTSTANDING

  Common Stock, No Par Value:

Class A (voting)                                                                                                                               2,623,109

Class B (nonvoting)                                                                                                                       12,455,587

Index to Exhibits located on page 28.

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PART I – FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands, except share data)
	March 31			December 31
	2016			2015
Assets
Investments:
Fixed maturities	$	470,983		$	437,184
Equity securities		138,043			145,498
Limited partnerships		73,279			75,458
Short-term		2,215			2,220
		684,520			660,360
Cash and cash equivalents		47,545			73,538
Accounts receivable		66,525			66,522
Reinsurance recoverable		229,740			215,888
Other assets		69,679			65,761
Current federal income taxes		-			3,702
	$	1,098,009		$	1,085,771
Liabilities and shareholders' equity
Reserves for losses and loss expenses	$	524,793		$	513,596
Reserves for unearned premiums		23,176			25,291
Short-term borrowings		20,000			20,000
Accounts payable and accrued expenses		121,530			121,188
Current federal income taxes		1,140			-
Deferred federal income taxes		9,145			11,198
		699,784			691,273
Shareholders' equity:
Common stock-no par value:
Class A voting -- authorized 3,000,000 shares;
outstanding -- 2016 - 2,623,109; 2015 - 2,623,109		112			112
Class B non-voting -- authorized 20,000,000 shares;
outstanding -- 2016 - 12,455,587; 2015 - 12,402,941		531			529
Additional paid-in capital		54,167			52,946
Unrealized net gains on investments		30,874			38,924
Foreign exchange adjustment		(647	)		(1,066	)
Retained earnings		313,188			303,053
		398,225			394,498
	$	1,098,009		$	1,085,771

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(in thousands, except per share data)
	Three Months Ended
	March 31
	2016			2015
Revenues
Net premiums earned	$	66,909		$	66,446
Net investment income		3,440			2,815
Commissions and other income		1,364			1,297
Net realized gains on investments, excluding
impairment losses		11,072			3,957
Total other-than-temporary impairment losses on investments		(2,060	)		(214	)
Net realized gains on investments		9,012			3,743
		80,725			74,301
Expenses
Losses and loss expenses incurred		38,623			41,646
Other operating expenses		20,664			23,364
		59,287			65,010
Income before federal income taxes		21,438			9,291
Federal income taxes		7,326			3,048
Net income	$	14,112		$	6,243
Per share data:
Basic and diluted earnings	$	.94		$	.42
Dividends paid to shareholders	$	.26		$	.25
Reconciliation of shares outstanding:
Average shares outstanding - basic		15,044			14,994
Dilutive effect of share equivalents		32			24
Average shares outstanding - diluted		15,076			15,018

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
	Three Months Ended
	March 31
	2016			2015
Net income	$	14,112		$	6,243
Other comprehensive income (loss), net of tax:
Unrealized net gains (losses) on securities:
Unrealized net gains (losses) arising during the period		(775	)		622
Less: reclassification adjustment for net gains (losses)
included in net income		7,275			(514	)
		(8,050	)		1,136
Foreign currency translation adjustments		419			(779	)
Other comprehensive income (loss)		(7,631	)		357
Comprehensive income	$	6,481		$	6,600

See notes to condensed consolidated financial statements.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
	Three Months Ended
	March 31
	2016			2015
Net cash provided by operating activities	$	1,973		$	10,674
Investing activities:
Purchases of available-for-sale investments		(112,301	)		(126,146	)
Proceeds from sales or maturities
of available-for-sale investments		89,042			104,555
Net sales of short-term investments		5			(3	)
Other investing activities		(1,154	)		(244	)
Net cash used in investing activities		(24,408	)		(21,838	)
Financing activities:
Dividends paid to shareholders		(3,977	)		(3,776	)
Net cash used in financing activities		(3,977	)		(3,776	)
Effect of foreign exchange rates on cash and cash equivalents		419			(779	)
Decrease in cash and cash equivalents		(25,993	)		(15,719	)
Cash and cash equivalents at beginning of period		73,538			64,632
Cash and cash equivalents at end of period	$	47,545		$	48,913

See notes to condensed consolidated financial statements.

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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, 2016. 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, for any equity security where the decline has existed for a period of at least one year, the decline is treated as an other-than-temporary impairment, regardless of the percentage decline. Furthermore, 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 January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of shareholders' equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. The Company has 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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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

In May 2015, the FASB issued ASU 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. The Company has not yet adopted the guidance and the adoption of this guidance will not impact our consolidated financial position, results of operations or cash flows.

In May 2015, the FASB issued ASU 2015-07 – Fair Value Measurement – (Topic 820) Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its equivalent) (a consensus of the Emerging Issues Task Force), which will be effective for fiscal years beginning after December 15, 2015. The new pronouncement was issued to ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. The Company adopted the guidance and the adoption of this guidance does not have a material impact on presentation of data in the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's service and fee income could be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the quarter ending March 31, 2018. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. The Company does not expect the guidance to have a material impact on its results of operations, financial position or liquidity.

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(2) Investments:

The following is a summary of available-for-sale securities at March 31, 2016 and December 31, 2015:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2016
Fixed maturities
U.S. government obligations	$	128,428	$	128,128	$	313	$	(13	)	$	300
Residential mortgage-backed securities		4,534		4,477		133		(76	)		57
Commercial mortgage-backed securities		32,374		32,585		605		(816	)		(211	)
States and municipal obligations		111,882		110,796		1,214		(128	)		1,086
Corporate securities		168,393		172,043		3,159		(6,809	)		(3,650	)
Foreign government obligations		25,372		26,516		470		(1,614	)		(1,144	)
Total fixed maturities		470,983		474,545		5,894		(9,456	)		(3,562	)
Equity securities:
Financial institutions		23,150		13,572		10,011		(433	)		9,578
Industrial & miscellaneous		114,893		73,410		44,878		(3,395	)		41,483
Total equity securities		138,043		86,982		54,889		(3,828	)		51,061
Total	$	609,026	$	561,527	$	60,783	$	(13,284	)		47,499
							Applicable federal income taxes				(16,625	)
							Net unrealized gains - net of tax			$	30,874
December 31, 2015
Fixed maturities
U.S. government obligations	$	103,245	$	103,448	$	56	$	(259	)	$	(203	)
Residential mortgage-backed securities		4,776		4,668		162		(54	)		108
Commercial mortgage-backed securities		30,595		30,977		247		(629	)		(382	)
State and municipal obligations		110,578		109,932		806		(160	)		646
Corporate securities		164,025		168,137		2,445		(6,557	)		(4,112	)
Foreign government obligations		23,965		25,416		404		(1,855	)		(1,451	)
Total fixed maturities		437,184		442,578		4,120		(9,514	)		(5,394	)
Equity securities:
Financial institutions		21,694		10,836		11,069		(211	)		10,858
Industrial & miscellaneous		123,804		69,385		59,338		(4,919	)		54,419
Total equity securities		145,498		80,221		70,407		(5,130	)		65,277
Total	$	582,682	$	522,799	$	74,527	$	(14,644	)		59,883
							Applicable federal income taxes				(20,959	)
							Net unrealized gains - net of tax			$	38,924

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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 March 31, 2016 and December 31, 2015, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2016							December 31, 2015
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		297	$	158,578	$	(7,200	)		328	$	205,475	$	(5,070	)
Greater than 12 months		51		16,419		(2,256	)		168		108,043		(4,444	)
Total fixed maturities		348		174,997		(9,456	)		496		313,518		(9,514	)
Equity securities:
12 months or less		61		35,805		(3,828	)		73		26,517		(5,130	)
Greater than 12 months		-		-		-			-		-		-
Total equity securities		61		35,805		(3,828	)		73		26,517		(5,130	)
Total fixed maturity and equity securities		409	$	210,802	$	(13,284	)		569	$	340,035	$	(14,644	)

The fair value and the cost or amortized costs of fixed maturity investments at March 31, 2016, 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	$	148,336	$	148,846
Excess of one year to five years		201,404		201,288
Excess of five years to ten years		38,182		38,489
Excess of ten years		1,749		1,943
Contractual maturities		389,671		390,566
Asset-backed securities		81,312		83,979
Total	$	470,983	$	474,545

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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
	March 31
	2016			2015
Fixed maturities:
Gross gains	$	1,277		$	1,147
Gross losses		(2,896	)		(1,933	)
Net realized losses		(1,619	)		(786	)
Equity securities:
Gross gains		15,510			749
Gross losses		(2,700	)		(753	)
Net realized gains (losses)		12,810			(4	)
Limited partnerships - net gain (loss)		(2,179	)		4,533
Total net gains	$	9,012		$	3,743

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

	Three Months Ended
	March 31
	2016			2015
Realized net gains (losses) on the disposal of securities	$	8,309		$	(288	)
Mark-to-market adjustment		(301	)		(288	)
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(2,179	)		4,533
Impairment:
Write-downs based upon objective criteria		(2,060	)		(214	)
Recovery of prior write-downs
upon sale or disposal		5,243			-
Total net gains	$	9,012		$	3,743

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 ending March 31, 2016 includes an estimated $874 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at March 31, 2016 includes approximately $5,934 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders' equity at March 31, 2016 includes approximately $25,186, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of March 31, 2016, the Company had committed funds totaling $5,000 to one borrower related to a bridge loan agreement.  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.

At March 31, 2016, limited partnership investments include approximately $43.8 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, pursuant to which, a portion of the gains wil be paid to the affiliated organizations.

At March 31, 2016, invested assets other than limited partnerships include approximately $134.0 million in portfolios managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.

(3) Reinsurance:

The following table summarizes the Company's transactions with reinsurers for the 2016 and 2015 comparative periods.

	2016		2015
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,263	$	31,379
Losses and loss expenses
ceded to reinsurers		29,324		16,398
Commissions from reinsurers		9,137		7,614

(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.  In late 2015, the Company discontinued marketing private passenger automobile liability and physical damage coverages and all business for this product line will expire in 2016.

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

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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.

	2016							2015
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)			Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	93,088	$	63,428	$	13,744		$	90,513	$	59,284	$	6,324
Reinsurance		3,065		3,481		(545	)		6,467		7,162		600
Totals	$	96,153	$	66,909	$	13,199		$	96,980	$	66,446	$	6,924

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

	Three Months Ended
	March 31
	2016			2015
Profit:
Segment profit	$	13,199		$	6,924
Net investment income		3,440			2,815
Net realized gains on investments		9,012			3,743
Corporate expenses and other		(4,213	)		(4,191	)
Income before federal income taxes	$	21,438		$	9,291

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.

(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 March 31, 2016 and December 31, 2015.  At March 31, 2016, the effective interest rate was 1.53%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2016. 

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Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(6) Taxes:

As of March 31, 2016, the Company's calendar years 2015 and 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 March 31, 2016:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	128,428	$	-	$	128,428	$	-
Residential mortgage-backed securities		4,534		-		4,534		-
Commercial mortgage-backed securities		32,374		-		30,967		1,407
State and municipal obligations		111,882		-		111,882		-
Corporate securities		166,188		-		151,589		14,599
Options embedded in convertible securities		2,205		-		2,205		-
Foreign government obligations		25,372		-		25,076		296
Total fixed maturities		470,983		-		454,681		16,302
Equity securities:
Financial institutions		23,150		23,150		-		-
Industrial & miscellaneous		114,893		114,893		-		-
Total equity securities		138,043		138,043		-		-
Short-term		2,215		2,215		-		-
Cash equivalents		42,311		-		42,311		-
	$	653,552	$	140,258	$	496,992	$	16,302

As of December 31, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	103,245	$	-	$	103,245	$	-
Residential mortgage-backed securities		4,776		-		4,776		-
Commercial mortgage-backed securities		30,595		-		29,226		1,369
State and municipal obligations		110,578		-		110,578		-
Corporate securities		161,630		-		146,488		15,142
Options embedded in convertible securities		2,395		-		2,395		-
Foreign government obligations		23,965		-		23,683		282
Total fixed maturities		437,184		-		420,391		16,793
Equity securities:
Financial institutions		21,694		21,694		-		-
Industrial & miscellaneous		123,804		123,804		-		-
Total equity securities		145,498		145,498		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		69,517		-		69,517		-
	$	654,419	$	147,718	$	489,908	$	16,793

- 15 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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

Level Input:	Input Definition:
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.

- 16 -

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 three months ended March 31, 2016 and for the year ended December 31, 2015:

	2016			2015
Beginning of period balance	$	16,793		$	12,208
Total gains or losses (realized or unrealized)
included in income		(175	)		(104	)
Purchases		-			2,284
Settlements		(316	)		(8,068	)
Transfers into level 3		-			11,586
Transfers out of level 3		-			(1,113	)
End of period balance	$	16,302		$	16,793

Quoted market prices are obtained whenever possible. Where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs have not been considered in estimating fair values.

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 three months ended March 31, 2016 and 2015.

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:

- 17 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

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 March 31, 2016 and December 31, 2015 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2016
Assets: Limited partnerships	$	73,279	$	-	$	-	$	73,279	$	73,279
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2015
Assets: Limited partnerships		75,458		-		-		75,458		75,458
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:

Effective	Number of Shares		Vesting	Service	Value Per Share
Date	Issued		Date	Period	on Grant 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.

- 18 -

 Notes to Condensed Unaudited Consolidated Financial Statements (continued)

Effective February 5, 2016, the Company issued 47,333 shares of class B restricted stock to certain of the Company's executives. The restricted shares will be paid solely in the Company's class B stock. The restricted shares represent a portion of the calendar year 2015 compensation to certain executives under the terms of the Company's Executive Incentive Bonus Plan. The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause of ASC 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 $23.30 per share representing a total value of $1,103. 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 Compensation Committee.

(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 March 31, 2016:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	(1,066	)	$	38,924		$	37,858
Other comprehensive income
before reclassifications		419			(775	)		(356	)
Amounts reclassified from
accumulated other
comprehensive income		-			(7,275	)		(7,275	)
Net current-period other
comprehensive income		419			(8,050	)		(7,631	)
Ending balance	$	(647	)	$	30,874		$	30,227

- 19 -

Notes to Condensed Unaudited Consolidated Financial Statements (continued)

(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.

(Space Intentionally Left Blank)

- 20 -

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 three months of 2016, the Company produced positive cash flow from operations totaling $2.0 million, which compares to positive cash flow from operations of $10.7 million generated during the first three months of 2015. The decrease in cash flow from the 2015 period is primarily due to the normal timing differences associated with the settlement of claims, remittances to and from reinsurers and payment of operating expense payments.  The Company has achieved positive cash flow in 25 of the past 27 quarters averaging $11.2 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 4.5 years at March 31, 2016, and the effective duration of the portfolio was 2.3 years, both of which are shorter than the average life of the Company's liabilities.

Financing activity for the first three months of 2016 consisted solely of the regular cash dividend payments to shareholders of $4.0 million ($.26 per share).

The Company's assets at March 31, 2016 included $44.5 million in investments classified as cash equivalents that were readily convertible to cash without significant market penalty. An additional $148.7 million of fixed maturity investments (at par) will mature within the twelve-month period following March 31, 2016.  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 March 31, 2016, $57.5 million may be transferred by dividend or loan to the parent company during the remainder of 2016 without approval by, or prior notification to, regulatory authorities. An additional $247.3 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 $7.6 million at March 31, 2016.

- 21 -

The Company's annualized net premiums written to surplus ratio, a common industry metric to measure surplus leverage, for the first three months of 2016, the Company's annualized net premiums written to surplus ratio was approximately 66%.  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 First Quarter, 2016 to First Quarter, 2015

Direct and assumed premiums written during the first quarter of 2016 decreased $0.8 million (0.9%), while net premiums earned increased $0.5 million (0.7%), as compared to the same period of 2015. The Company's Property and Casualty Insurance segment reported an increase in premium written of 2.8% and an increase in earned premiums of 7.0%, reflecting higher premium from the Company's core fleet transportation products,partially offset by the continued planned reduction in personal automobile volume.  The Reinsurance segment reported a decrease in premium written of 52.6% and a decrease in premium earned of 51.4% reflecting the ongoing planned withdrawal from both property and casualty reinsurance businesses.  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 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 March 31 (dollars in thousands):

	Direct and Assumed Premium Written		Net Premium Written		Net Premium Earned
2016
Property & Casualty Insurance	$	93,088	$	61,544	$	63,428
Reinsurance		3,065		3,021		3,481
Totals	$	96,153	$	64,565	$	66,909
2015
Property & Casualty Insurance	$	90,513	$	58,932	$	59,284
Reinsurance		6,467		6,280		7,162
Totals	$	96,980	$	65,212	$	66,446

- 22 -

Premium ceded to reinsurers on insurance business produced by the Property and Casualty Insurance segment averaged 33.9% of premium written for the current quarter compared to 34.9% in the 2015 first quarter, with the decrease associated principally with reductions in the rates of certain reinsurance treaties.

Net investment income, before tax, during the first quarter of 2016 was 22.2% higher than the first quarter of 2015 due primarily to increased pre-tax yields on the Company's fixed maturity securities resulting in redeployment of assets to higher yielding issues and higher dividend yields on the equity securities portfolio.  Overall investment portfolio after-tax income increased 18.3% compared to the 2015 first quarter while average invested funds increased 7%.

The first quarter 2016 net realized investment gains of $9.0 million resulted primarily from $11.5 million in gains reported from direct trading activities including net impairment write-downs of $2.1 million and net impairment recoveries of $5.2 million, partially offset by $2.2 million in realized losses from limited partnerships.  Comparative first quarter 2015 overall net realized investment gains were $3.7 million, consisting primarily of $4.5 million in gains from limited partnerships, partially offset by $0.3 million in losses from direct trading activities and $0.5 million in losses from impairment allowances and mark-to-market adjustments.  Realized investment gains and losses result from decisions regarding overall portfolio realignment as well as the sale of individual securities, including the change in 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 first quarter of 2016 decreased $3.0 million (7.3%).  The loss ratios for each segment were as follows:

	2016		2015
Property and Casualty Insurance		56.8%		64.4%
Reinsurance		75.5		48.4
Total		57.7		62.7

The decrease in loss ratio for the Property and Casualty Insurance segment primarily relates to more favorable current accident year loss activity in the Company's core fleet transportation products.  The impact of prior year reserve development was consistent, at 3.1%, lowering the calendar first quarter overall loss and loss expense ratio by 3.1% for both 2016 and 2015.  The higher Reinsurance segment loss ratio reflects higher than expected professional liability assumed losses reported during the first quarter of 2016.

Other operating expenses, for the first quarter of 2016, decreased $2.7 million, or 11.6%, from the first quarter of 2015.  The ratio of consolidated other operating expenses to operating revenue was 28.8% during the first quarter of 2016 compared to 33.1% for the 2015 first 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 first quarter of 2016 was 34.2%.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

- 23 -

As a result of the factors mentioned above, and primarily the increase in realized gains on investments, net income increased $7.9 million during the first quarter of 2016 as compared to the 2015 period.

Including changes in the value of investments, comprehensive income declined 2% compared to the 2015 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.

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, 2015.

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 March 31, 2016, amounts due from reinsurers on paid and unpaid losses, are estimated to total approximately $227 million.  Of this total, approximately $104 million (46%) 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.

- 24 -

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, 2015.

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation as of December 31, 2015, 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.

- 25 -

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 CEO                  EXHIBIT 31.1

pursuant to Section 302 of theCertification of CEO

Sarbanes-Oxley Act of 2002

(31.2)      Certification of CFO                  EXHIBIT 31.2

pursuant to Section 302 of theCertification of CFO

Sarbanes-Oxley Act of 2002

(32)         Certification of CEO and CFO                                                                                                                 EXHIBIT 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

- 26 -

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     May 6, 2016By /s/ Joseph J. DeVito

                                                  Joseph J. DeVito, CEO and President

Date     May 6, 2016By /s/ G. Patrick Corydon

                                                  G. Patrick Corydon,

                                        Executive Vice President – Finance

                                        (Principal Financial and Accounting Officer)

- 27 -

BALDWIN & LYONS, INC.

Form 10-Q for the fiscal quarter ended March 31, 2016

INDEX TO EXHIBITS

                         Begins on sequential

                          page number of Form

Exhibit Number             10-Q               

EXHIBIT 31.1                                                                                                                29

       Certification of CEO

                  pursuant to Section 302 of the

      Sarbanes-Oxley Act

EXHIBIT 31.2                                                                                                                31

       Certification of CFO

                  pursuant to Section 302 of the

      Sarbanes-Oxley Act

                                        EXHIBIT 3233

                  Certification of CEO and CFO

               pursuant to 18 U.S.C. 1350,

                  as adopted pursuant to Section

                  906 of the Sarbanes-Oxley Act

- 28 -

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

- 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: May 6, 2016

 /s/ Joseph J. DeVito                                  

Joseph J. DeVito Chief Executive Officer and President

- 30 -

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

- 31 -

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:  May 6, 2016

 /s/ G. Patrick Corydon                                    

G. Patrick Corydon Executive Vice President and Chief Financial Officer

- 32 -

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 March 31, 2016 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.

May 6, 2016

 /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

- 33 -

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 01, 2016
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	2016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
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		12,455,587

XML

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments:
Fixed maturities	$ 470,983	$ 437,184
Equity securities	138,043	145,498
Limited partnerships	73,279	75,458
Short-term	2,215	2,220
Total Investments	684,520	660,360
Cash and cash equivalents	47,545	73,538
Accounts receivable	66,525	66,522
Reinsurance recoverable	229,740	215,888
Other assets	69,679	65,761
Current federal income taxes	0	3,702
Total Assets	1,098,009	1,085,771
Liabilities and shareholders' equity
Reserves for losses and loss expenses	524,793	513,596
Reserves for unearned premiums	23,176	25,291
Short-term borrowings	20,000	20,000
Accounts payable and accrued expenses	121,530	121,188
Current federal income taxes	1,140	0
Deferred federal income taxes	9,145	11,198
Total Liabilities	699,784	691,273
Shareholders' equity:
Additional paid-in capital	54,167	52,946
Unrealized net gains on investments	30,874	38,924
Foreign exchange adjustment	(647)	(1,066)
Retained earnings	313,188	303,053
Shareholders' equity	398,225	394,498
Total liabilities and shareholders' equity	1,098,009	1,085,771
Class A Voting [Member]
Shareholders' equity:
Common stock	112	112
Class B Non-voting [Member]
Shareholders' equity:
Common stock	$ 531	$ 529

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Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
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)	12,455,587	12,402,941

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Unaudited Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues
Net premiums earned	$ 66,909	$ 66,446
Net investment income	3,440	2,815
Commissions and other income	1,364	1,297
Net realized gains on investments, excluding impairment losses	11,072	3,957
Total other-than-temporary impairment losses on investments	(2,060)	(214)
Net realized gains on investments	9,012	3,743
Total revenue	80,725	74,301
Expenses
Losses and loss expenses incurred	38,623	41,646
Other operating expenses	20,664	23,364
Total expenses	59,287	65,010
Income before federal income taxes	21,438	9,291
Federal income taxes	7,326	3,048
Net income	$ 14,112	$ 6,243
Per share data:
Basic and diluted earnings (in dollars per share)	$ 0.94	$ 0.42
Dividends paid to shareholders (in dollars per share)	$ 0.26	$ 0.25
Reconciliation of shares outstanding:
Average shares outstanding - basic (in shares)	15,044	14,994
Dilutive effect of share equivalents (in shares)	32	24
Average shares outstanding - diluted (in shares)	15,076	15,018

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Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Unaudited Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 14,112	$ 6,243
Unrealized net gains (losses) on securities:
Unrealized net gains (losses) arising during the period	(775)	622
Less: reclassification adjustment for net gains (losses) included in net income	7,275	(514)
Change in unrealized gains on investments	(8,050)	1,136
Foreign currency translation adjustments	419	(779)
Other comprehensive income (loss)	(7,631)	357
Comprehensive income	$ 6,481	$ 6,600

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Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Unaudited Consolidated Statements of Cash Flows [Abstract]
Net cash provided by operating activities	$ 1,973	$ 10,674
Investing activities:
Purchases of available-for-sale investments	(112,301)	(126,146)
Proceeds from sales or maturities of available-for-sale investments	89,042	104,555
Net sales of short-term investments	5	(3)
Other investing activities	(1,154)	(244)
Net cash used in investing activities	(24,408)	(21,838)
Financing activities:
Dividends paid to shareholders	(3,977)	(3,776)
Net cash used in financing activities	(3,977)	(3,776)
Effect of foreign exchange rates on cash and cash equivalents	419	(779)
Decrease in cash and cash equivalents	(25,993)	(15,719)
Cash and cash equivalents at beginning of period	73,538	64,632
Cash and cash equivalents at end of period	$ 47,545	$ 48,913

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

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, 2016. 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, for any equity security where the decline has existed for a period of at least one year, the decline is treated as an other-than-temporary impairment, regardless of the percentage decline. Furthermore, 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 January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of shareholders' equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. The Company has 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.

In May 2015, the FASB issued ASU 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. The Company has not yet adopted the guidance and the adoption of this guidance will not impact our consolidated financial position, results of operations or cash flows.

In May 2015, the FASB issued ASU 2015-07 – Fair Value Measurement – (Topic 820) Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its equivalent) (a consensus of the Emerging Issues Task Force), which will be effective for fiscal years beginning after December 15, 2015. The new pronouncement was issued to ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. The Company adopted the guidance and the adoption of this guidance does not have a material impact on presentation of data in the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's service and fee income could be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the quarter ending March 31, 2018. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. The Company does not expect the guidance to have a material impact on its results of operations, financial position or liquidity.

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Investments

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investments

(2)  Investments:

The following is a summary of available-for-sale securities at March 31, 2016 and December 31, 2015:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2016
Fixed maturities
U.S. government obligations	$	128,428	$	128,128	$	313	$	(13	)	$	300
Residential mortgage-backed securities		4,534		4,477		133		(76	)		57
Commercial mortgage-backed securities		32,374		32,585		605		(816	)		(211	)
States and municipal obligations		111,882		110,796		1,214		(128	)		1,086
Corporate securities		168,393		172,043		3,159		(6,809	)		(3,650	)
Foreign government obligations		25,372		26,516		470		(1,614	)		(1,144	)
Total fixed maturities		470,983		474,545		5,894		(9,456	)		(3,562	)
Equity securities:
Financial institutions		23,150		13,572		10,011		(433	)		9,578
Industrial & miscellaneous		114,893		73,410		44,878		(3,395	)		41,483
Total equity securities		138,043		86,982		54,889		(3,828	)		51,061
Total	$	609,026	$	561,527	$	60,783	$	(13,284	)		47,499
							Applicable federal income taxes				(16,625	)
							Net unrealized gains - net of tax			$	30,874
December 31, 2015
Fixed maturities
U.S. government obligations	$	103,245	$	103,448	$	56	$	(259	)	$	(203	)
Residential mortgage-backed securities		4,776		4,668		162		(54	)		108
Commercial mortgage-backed securities		30,595		30,977		247		(629	)		(382	)
State and municipal obligations		110,578		109,932		806		(160	)		646
Corporate securities		164,025		168,137		2,445		(6,557	)		(4,112	)
Foreign government obligations		23,965		25,416		404		(1,855	)		(1,451	)
Total fixed maturities		437,184		442,578		4,120		(9,514	)		(5,394	)
Equity securities:
Financial institutions		21,694		10,836		11,069		(211	)		10,858
Industrial & miscellaneous		123,804		69,385		59,338		(4,919	)		54,419
Total equity securities		145,498		80,221		70,407		(5,130	)		65,277
Total	$	582,682	$	522,799	$	74,527	$	(14,644	)		59,883
							Applicable federal income taxes				(20,959	)
							Net unrealized gains - net of tax			$	38,924

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31, 2016 and December 31, 2015, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2016							December 31, 2015
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		297	$	158,578	$	(7,200	)		328	$	205,475	$	(5,070	)
Greater than 12 months		51		16,419		(2,256	)		168		108,043		(4,444	)
Total fixed maturities		348		174,997		(9,456	)		496		313,518		(9,514	)
Equity securities:
12 months or less		61		35,805		(3,828	)		73		26,517		(5,130	)
Greater than 12 months		-		-		-			-		-		-
Total equity securities		61		35,805		(3,828	)		73		26,517		(5,130	)
Total fixed maturity and equity securities		409	$	210,802	$	(13,284	)		569	$	340,035	$	(14,644	)

The fair value and the cost or amortized costs of fixed maturity investments at March 31, 2016, 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	$	148,336	$	148,846
Excess of one year to five years		201,404		201,288
Excess of five years to ten years		38,182		38,489
Excess of ten years		1,749		1,943
Contractual maturities		389,671		390,566
Asset-backed securities		81,312		83,979
Total	$	470,983	$	474,545

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
	March 31
	2016			2015
Fixed maturities:
Gross gains	$	1,277		$	1,147
Gross losses		(2,896	)		(1,933	)
Net realized losses		(1,619	)		(786	)
Equity securities:
Gross gains		15,510			749
Gross losses		(2,700	)		(753	)
Net realized gains (losses)		12,810			(4	)
Limited partnerships - net gain (loss)		(2,179	)		4,533
Total net gains	$	9,012		$	3,743

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

	Three Months Ended
	March 31
	2016			2015
Realized net gains (losses) on the disposal of securities	$	8,309		$	(288	)
Mark-to-market adjustment		(301	)		(288	)
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(2,179	)		4,533
Impairment:
Write-downs based upon objective criteria		(2,060	)		(214	)
Recovery of prior write-downs
upon sale or disposal		5,243			-
Total net gains	$	9,012		$	3,743

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 ending March 31, 2016 includes an estimated $874 of net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships.  The value of limited partnerships at March 31, 2016 includes approximately $5,934 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders' equity at March 31, 2016 includes approximately $25,186, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of March 31, 2016, the Company had committed funds totaling $5,000 to one borrower related to a bridge loan agreement.  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.

At March 31, 2016, limited partnership investments include approximately $43.8 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, pursuant to which, a portion of the gains wil be paid to the affiliated organizations.

At March 31, 2016, invested assets other than limited partnerships include approximately $134.0 million in portfolios managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.

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Reinsurance

3 Months Ended

Mar. 31, 2016

Reinsurance [Abstract]

Reinsurance

(3)  Reinsurance:

The following table summarizes the Company's transactions with reinsurers for the 2016 and 2015 comparative periods.

	2016		2015
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,263	$	31,379
Losses and loss expenses
ceded to reinsurers		29,324		16,398
Commissions from reinsurers		9,137		7,614

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Reportable Segments

3 Months Ended

Mar. 31, 2016

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.  In late 2015, the Company discontinued marketing private passenger automobile liability and physical damage coverages and all business for this product line will expire in 2016.

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

	2016							2015
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)			Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	93,088	$	63,428	$	13,744		$	90,513	$	59,284	$	6,324
Reinsurance		3,065		3,481		(545	)		6,467		7,162		600
Totals	$	96,153	$	66,909	$	13,199		$	96,980	$	66,446	$	6,924

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

	Three Months Ended
	March 31
	2016			2015
Profit:
Segment profit	$	13,199		$	6,924
Net investment income		3,440			2,815
Net realized gains on investments		9,012			3,743
Corporate expenses and other		(4,213	)		(4,191	)
Income before federal income taxes	$	21,438		$	9,291

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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Debt

3 Months Ended

Mar. 31, 2016

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 March 31, 2016 and December 31, 2015.  At March 31, 2016, the effective interest rate was 1.53%.  The Company has $20,000 remaining unused under the line of credit at March 31, 2016. 

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Taxes

3 Months Ended

Mar. 31, 2016

Taxes [Abstract]

Taxes

(6)  Taxes:

As of March 31, 2016, the Company's calendar years 2015 and 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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Fair Value

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	128,428	$	-	$	128,428	$	-
Residential mortgage-backed securities		4,534		-		4,534		-
Commercial mortgage-backed securities		32,374		-		30,967		1,407
State and municipal obligations		111,882		-		111,882		-
Corporate securities		166,188		-		151,589		14,599
Options embedded in convertible securities		2,205		-		2,205		-
Foreign government obligations		25,372		-		25,076		296
Total fixed maturities		470,983		-		454,681		16,302
Equity securities:
Financial institutions		23,150		23,150		-		-
Industrial & miscellaneous		114,893		114,893		-		-
Total equity securities		138,043		138,043		-		-
Short-term		2,215		2,215		-		-
Cash equivalents		42,311		-		42,311		-
	$	653,552	$	140,258	$	496,992	$	16,302

As of December 31, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	103,245	$	-	$	103,245	$	-
Residential mortgage-backed securities		4,776		-		4,776		-
Commercial mortgage-backed securities		30,595		-		29,226		1,369
State and municipal obligations		110,578		-		110,578		-
Corporate securities		161,630		-		146,488		15,142
Options embedded in convertible securities		2,395		-		2,395		-
Foreign government obligations		23,965		-		23,683		282
Total fixed maturities		437,184		-		420,391		16,793
Equity securities:
Financial institutions		21,694		21,694		-		-
Industrial & miscellaneous		123,804		123,804		-		-
Total equity securities		145,498		145,498		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		69,517		-		69,517		-
	$	654,419	$	147,718	$	489,908	$	16,793

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

Level Input:	Input Definition:
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 three months ended March 31, 2016 and for the year ended December 31, 2015:

	2016			2015
Beginning of period balance	$	16,793		$	12,208
Total gains or losses (realized or unrealized)
included in income		(175	)		(104	)
Purchases		-			2,284
Settlements		(316	)		(8,068	)
Transfers into level 3		-			11,586
Transfers out of level 3		-			(1,113	)
End of period balance	$	16,302		$	16,793

Quoted market prices are obtained whenever possible. Where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs have not been considered in estimating fair values.

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 three months ended March 31, 2016 and 2015.

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 March 31, 2016 and December 31, 2015 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2016
Assets: Limited partnerships	$	73,279	$	-	$	-	$	73,279	$	73,279
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2015
Assets: Limited partnerships		75,458		-		-		75,458		75,458
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000

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Restricted Stock

3 Months Ended

Mar. 31, 2016

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:

Effective Date	Number of Shares Issued		Vesting Date	Service Period	Value Per Share on Grant 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 5, 2016, the Company issued 47,333 shares of class B restricted stock to certain of the Company's executives. The restricted shares will be paid solely in the Company's class B stock. The restricted shares represent a portion of the calendar year 2015 compensation to certain executives under the terms of the Company's Executive Incentive Bonus Plan. The restricted shares will vest ratably over a three year period from the date of grant and are accelerated for retirement eligible recipients in accordance with the non-substantive post-grant date vesting clause of ASC 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 $23.30 per share representing a total value of $1,103. 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 Compensation Committee.

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Litigation, Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

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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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	(1,066	)	$	38,924		$	37,858
Other comprehensive income
before reclassifications		419			(775	)		(356	)
Amounts reclassified from
accumulated other
comprehensive income		-			(7,275	)		(7,275	)
Net current-period other
comprehensive income		419			(8,050	)		(7,631	)
Ending balance	$	(647	)	$	30,874		$	30,227

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Subsequent Events

3 Months Ended

Mar. 31, 2016

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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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

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, 2016. 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, for any equity security where the decline has existed for a period of at least one year, the decline is treated as an other-than-temporary impairment, regardless of the percentage decline. Furthermore, 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 January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Under current guidance, changes in fair value for investments of this nature are recognized in accumulated other comprehensive income as a component of shareholders' equity. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. The Company has 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.

In May 2015, the FASB issued ASU 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. The Company has not yet adopted the guidance and the adoption of this guidance will not impact our consolidated financial position, results of operations or cash flows.

In May 2015, the FASB issued ASU 2015-07 – Fair Value Measurement – (Topic 820) Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its equivalent) (a consensus of the Emerging Issues Task Force), which will be effective for fiscal years beginning after December 15, 2015. The new pronouncement was issued to ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. The Company adopted the guidance and the adoption of this guidance does not have a material impact on presentation of data in the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's service and fee income could be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the quarter ending March 31, 2018. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position or liquidity. The Company does not expect the guidance to have a material impact on its results of operations, financial position or liquidity.

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Investments (Tables)

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Summary of available for sale securities

The following is a summary of available-for-sale securities at March 31, 2016 and December 31, 2015:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
March 31, 2016
Fixed maturities
U.S. government obligations	$	128,428	$	128,128	$	313	$	(13	)	$	300
Residential mortgage-backed securities		4,534		4,477		133		(76	)		57
Commercial mortgage-backed securities		32,374		32,585		605		(816	)		(211	)
States and municipal obligations		111,882		110,796		1,214		(128	)		1,086
Corporate securities		168,393		172,043		3,159		(6,809	)		(3,650	)
Foreign government obligations		25,372		26,516		470		(1,614	)		(1,144	)
Total fixed maturities		470,983		474,545		5,894		(9,456	)		(3,562	)
Equity securities:
Financial institutions		23,150		13,572		10,011		(433	)		9,578
Industrial & miscellaneous		114,893		73,410		44,878		(3,395	)		41,483
Total equity securities		138,043		86,982		54,889		(3,828	)		51,061
Total	$	609,026	$	561,527	$	60,783	$	(13,284	)		47,499
							Applicable federal income taxes				(16,625	)
							Net unrealized gains - net of tax			$	30,874
December 31, 2015
Fixed maturities
U.S. government obligations	$	103,245	$	103,448	$	56	$	(259	)	$	(203	)
Residential mortgage-backed securities		4,776		4,668		162		(54	)		108
Commercial mortgage-backed securities		30,595		30,977		247		(629	)		(382	)
State and municipal obligations		110,578		109,932		806		(160	)		646
Corporate securities		164,025		168,137		2,445		(6,557	)		(4,112	)
Foreign government obligations		23,965		25,416		404		(1,855	)		(1,451	)
Total fixed maturities		437,184		442,578		4,120		(9,514	)		(5,394	)
Equity securities:
Financial institutions		21,694		10,836		11,069		(211	)		10,858
Industrial & miscellaneous		123,804		69,385		59,338		(4,919	)		54,419
Total equity securities		145,498		80,221		70,407		(5,130	)		65,277
Total	$	582,682	$	522,799	$	74,527	$	(14,644	)		59,883
							Applicable federal income taxes				(20,959	)
							Net unrealized gains - net of tax			$	38,924

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 March 31, 2016 and December 31, 2015, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	March 31, 2016							December 31, 2015
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		297	$	158,578	$	(7,200	)		328	$	205,475	$	(5,070	)
Greater than 12 months		51		16,419		(2,256	)		168		108,043		(4,444	)
Total fixed maturities		348		174,997		(9,456	)		496		313,518		(9,514	)
Equity securities:
12 months or less		61		35,805		(3,828	)		73		26,517		(5,130	)
Greater than 12 months		-		-		-			-		-		-
Total equity securities		61		35,805		(3,828	)		73		26,517		(5,130	)
Total fixed maturity and equity securities		409	$	210,802	$	(13,284	)		569	$	340,035	$	(14,644	)

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 March 31, 2016, 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	$	148,336	$	148,846
Excess of one year to five years		201,404		201,288
Excess of five years to ten years		38,182		38,489
Excess of ten years		1,749		1,943
Contractual maturities		389,671		390,566
Asset-backed securities		81,312		83,979
Total	$	470,983	$	474,545

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
	March 31
	2016			2015
Fixed maturities:
Gross gains	$	1,277		$	1,147
Gross losses		(2,896	)		(1,933	)
Net realized losses		(1,619	)		(786	)
Equity securities:
Gross gains		15,510			749
Gross losses		(2,700	)		(753	)
Net realized gains (losses)		12,810			(4	)
Limited partnerships - net gain (loss)		(2,179	)		4,533
Total net gains	$	9,012		$	3,743

Schedule of realized gains

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

	Three Months Ended
	March 31
	2016			2015
Realized net gains (losses) on the disposal of securities	$	8,309		$	(288	)
Mark-to-market adjustment		(301	)		(288	)
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(2,179	)		4,533
Impairment:
Write-downs based upon objective criteria		(2,060	)		(214	)
Recovery of prior write-downs
upon sale or disposal		5,243			-
Total net gains	$	9,012		$	3,743

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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2016

Reinsurance [Abstract]

Reinsurance

The following table summarizes the Company's transactions with reinsurers for the 2016 and 2015 comparative periods.

	2016		2015
Quarter ended March 31:
Premiums ceded to reinsurers	$	31,263	$	31,379
Losses and loss expenses
ceded to reinsurers		29,324		16,398
Commissions from reinsurers		9,137		7,614

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2016

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.

	2016							2015
	Direct and Assumed Premium Written		Net Premium Earned		Segment Profit (Loss)			Direct and Assumed Premium Written		Net Premium Earned		Segment Profit
Three months ended March 31:
Property and Casualty Insurance	$	93,088	$	63,428	$	13,744		$	90,513	$	59,284	$	6,324
Reinsurance		3,065		3,481		(545	)		6,467		7,162		600
Totals	$	96,153	$	66,909	$	13,199		$	96,980	$	66,446	$	6,924

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
	March 31
	2016			2015
Profit:
Segment profit	$	13,199		$	6,924
Net investment income		3,440			2,815
Net realized gains on investments		9,012			3,743
Corporate expenses and other		(4,213	)		(4,191	)
Income before federal income taxes	$	21,438		$	9,291

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	128,428	$	-	$	128,428	$	-
Residential mortgage-backed securities		4,534		-		4,534		-
Commercial mortgage-backed securities		32,374		-		30,967		1,407
State and municipal obligations		111,882		-		111,882		-
Corporate securities		166,188		-		151,589		14,599
Options embedded in convertible securities		2,205		-		2,205		-
Foreign government obligations		25,372		-		25,076		296
Total fixed maturities		470,983		-		454,681		16,302
Equity securities:
Financial institutions		23,150		23,150		-		-
Industrial & miscellaneous		114,893		114,893		-		-
Total equity securities		138,043		138,043		-		-
Short-term		2,215		2,215		-		-
Cash equivalents		42,311		-		42,311		-
	$	653,552	$	140,258	$	496,992	$	16,302

As of December 31, 2015:
Description	Total		Level 1		Level 2		Level 3
Fixed maturities:
U.S. government obligations	$	103,245	$	-	$	103,245	$	-
Residential mortgage-backed securities		4,776		-		4,776		-
Commercial mortgage-backed securities		30,595		-		29,226		1,369
State and municipal obligations		110,578		-		110,578		-
Corporate securities		161,630		-		146,488		15,142
Options embedded in convertible securities		2,395		-		2,395		-
Foreign government obligations		23,965		-		23,683		282
Total fixed maturities		437,184		-		420,391		16,793
Equity securities:
Financial institutions		21,694		21,694		-		-
Industrial & miscellaneous		123,804		123,804		-		-
Total equity securities		145,498		145,498		-		-
Short-term		2,220		2,220		-		-
Cash equivalents		69,517		-		69,517		-
	$	654,419	$	147,718	$	489,908	$	16,793

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 three months ended March 31, 2016 and for the year ended December 31, 2015:

	2016			2015
Beginning of period balance	$	16,793		$	12,208
Total gains or losses (realized or unrealized)
included in income		(175	)		(104	)
Purchases		-			2,284
Settlements		(316	)		(8,068	)
Transfers into level 3		-			11,586
Transfers out of level 3		-			(1,113	)
End of period balance	$	16,302		$	16,793

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 March 31, 2016 and December 31, 2015 are as follows:

	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
March 31, 2016
Assets: Limited partnerships	$	73,279	$	-	$	-	$	73,279	$	73,279
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000
December 31, 2015
Assets: Limited partnerships		75,458		-		-		75,458		75,458
Liabilities: Short-term borrowings		20,000		-		20,000		-		20,000

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Restricted Stock (Tables)

3 Months Ended

Mar. 31, 2016

Restricted Stock [Abstract]

Summary of stock issuances

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

Effective Date	Number of Shares Issued		Vesting Date	Service Period	Value Per Share on Grant 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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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:

				Unrealized
				holding gains on
	Foreign			available-for-sale
	Currency			securities			Total
Beginning balance	$	(1,066	)	$	38,924		$	37,858
Other comprehensive income
before reclassifications		419			(775	)		(356	)
Amounts reclassified from
accumulated other
comprehensive income		-			(7,275	)		(7,275	)
Net current-period other
comprehensive income		419			(8,050	)		(7,631	)
Ending balance	$	(647	)	$	30,874		$	30,227

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2016
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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Investments (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($) Security Borrower Partnership	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($) Security
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	$ 470,983
Cost or amortized cost	474,545
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Applicable federal income taxes	(16,625)		$ (20,959)
Net unrealized gains - net of tax	$ 30,874		$ 38,924
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, total | Security	409		569
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, total	$ 210,802		$ 340,035
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, total	(13,284)		(14,644)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
One year or less, Fair Value	148,336
Excess of one year to five years, Fair Value	201,404
Excess of five years to ten years, Fair Value	38,182
Excess of ten years, Fair Value	1,749
Contractual maturities, Fair Value	389,671
Asset-backed securities, Fair Value	81,312
Total, Fair Value	470,983
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
One year or less, Cost or Amortized Cost Basis	148,846
Excess of one year to five years, Cost or Amortized Cost Basis	201,288
Excess of five years to ten years, Cost or Amortized Cost Basis	38,489
Excess of ten years, Cost or Amortized Cost Basis	1,943
Contractual maturities, Cost or Amortized Cost Basis	390,566
Asset-backed securities, Cost or Amortized Cost Basis	83,979
Cost or amortized cost	474,545
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Limited partnerships - net gain (loss)	(2,179)	$ 4,533
Net realized gains on investments	9,012	3,743
Available for Sale Securities Gain Loss Activity [Abstract]
Realized net gains (losses) on the disposal of securities	8,309	(288)
Mark-to-market adjustment	(301)	(288)
Equity in gains (losses) of limited partnership investments - realized and unrealized	(2,179)	4,533
Write-downs based upon objective criteria	(2,060)	(214)
Recovery of prior write-downs upon sale or disposal	5,243	0
Net realized gains on investments	9,012	3,743
Net unrealized gains on investments	874
Net unrealized gains in limited partnership	5,934
Undistributed earnings of limited partnership, net of taxes	25,186
Committed funds for bridge loans	$ 5,000
Number of separate borrowers related to bridge loan agreements | Borrower	1
Total investment in limited partnerships	$ 43,800
Number of partnerships investment | Partnership	2
Investment assets other than limited partnership	$ 134,000
U.S. Government Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	128,428		103,245
Cost or amortized cost	128,128		103,448
Gross unrealized gains	313		56
Gross unrealized losses	(13)		(259)
Net unrealized gains (losses)	300		(203)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	128,428		103,245
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	128,128		103,448
Residential Mortgage-backed Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	4,534		4,776
Cost or amortized cost	4,477		4,668
Gross unrealized gains	133		162
Gross unrealized losses	(76)		(54)
Net unrealized gains (losses)	57		108
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	4,534		4,776
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	4,477		4,668
Commercial Mortgage-backed Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	32,374		30,595
Cost or amortized cost	32,585		30,977
Gross unrealized gains	605		247
Gross unrealized losses	(816)		(629)
Net unrealized gains (losses)	(211)		(382)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	32,374		30,595
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	32,585		30,977
States and Municipal Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	111,882		110,578
Cost or amortized cost	110,796		109,932
Gross unrealized gains	1,214		806
Gross unrealized losses	(128)		(160)
Net unrealized gains (losses)	1,086		646
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	111,882		110,578
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	110,796		109,932
Corporate Securities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	168,393		164,025
Cost or amortized cost	172,043		168,137
Gross unrealized gains	3,159		2,445
Gross unrealized losses	(6,809)		(6,557)
Net unrealized gains (losses)	(3,650)		(4,112)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	168,393		164,025
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	172,043		168,137
Foreign Government Obligations [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	25,372		23,965
Cost or amortized cost	26,516		25,416
Gross unrealized gains	470		404
Gross unrealized losses	(1,614)		(1,855)
Net unrealized gains (losses)	(1,144)		(1,451)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	25,372		23,965
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	26,516		25,416
Total Fixed Maturities [Member]
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Fair value	470,983		437,184
Cost or amortized cost	474,545		442,578
Gross unrealized gains	5,894		4,120
Gross unrealized losses	(9,456)		(9,514)
Net unrealized gains (losses)	$ (3,562)		$ (5,394)
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, 12 months or less | Security	297		328
Number of Securities, Greater than 12 months | Security	51		168
Number of Securities, total | Security	348		496
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, 12 months or less	$ 158,578		$ 205,475
Fair value, Greater than 12 months	16,419		108,043
Fair value, total	174,997		313,518
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, 12 months or less	(7,200)		(5,070)
Gross unrealized loss, Greater than 12 months	(2,256)		(4,444)
Gross unrealized loss, total	(9,456)		(9,514)
Available-for-sale Securities Debt Maturities Fair Value [Abstract]
Total, Fair Value	470,983		437,184
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract]
Cost or amortized cost	474,545		442,578
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	1,277	1,147
Gross losses	(2,896)	(1,933)
Net realized gains (losses)	(1,619)	(786)
Financial Institutions [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	23,150		21,694
Cost or amortized cost	13,572		10,836
Gross unrealized gains	10,011		11,069
Gross unrealized losses	(433)		(211)
Net unrealized gains (losses)	9,578		10,858
Industrial & Miscellaneous [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	114,893		123,804
Cost or amortized cost	73,410		69,385
Gross unrealized gains	44,878		59,338
Gross unrealized losses	(3,395)		(4,919)
Net unrealized gains (losses)	41,483		54,419
Total Equity Securities [Member]
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Fair value	138,043		145,498
Cost or amortized cost	86,982		80,221
Gross unrealized gains	54,889		70,407
Gross unrealized losses	(3,828)		(5,130)
Net unrealized gains (losses)	$ 51,061		$ 65,277
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract]
Number of Securities, 12 months or less | Security	61		73
Number of Securities, Greater than 12 months | Security	0		0
Number of Securities, total | Security	61		73
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract]
Fair value, 12 months or less	$ 35,805		$ 26,517
Fair value, Greater than 12 months	0		0
Fair value, total	35,805		26,517
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract]
Gross unrealized loss, 12 months or less	(3,828)		(5,130)
Gross unrealized loss, Greater than 12 months	0		0
Gross unrealized loss, total	(3,828)		(5,130)
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Gross gains	15,510	749
Gross losses	(2,700)	(753)
Net realized gains (losses)	12,810	$ (4)
Total Available-for-sale Securities [Member]
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fair value	609,026		582,682
Cost or amortized cost	561,527		522,799
Gross unrealized gains	60,783		74,527
Gross unrealized losses	(13,284)		(14,644)
Net unrealized gains (losses)	$ 47,499		$ 59,883

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Reinsurance (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reinsurance [Abstract]
Premiums ceded to reinsurers	$ 31,263	$ 31,379
Losses and loss expenses ceded to reinsurers	29,324	16,398
Commissions from reinsurers	$ 9,137	$ 7,614

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Reportable Segments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) Segment	Mar. 31, 2015 USD ($)
Reportable Segments [Abstract]
Number of reportable segments | Segment	2
Segment Reporting Information [Line Items]
Net Premiums Earned	$ 66,909	$ 66,446
Reconciliation from segment totals to consolidated [Abstract]
Income before federal income taxes	21,438	9,291
Reportable Segments [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	96,153	96,980
Net Premiums Earned	66,909	66,446
Segment Profit (Loss)	13,199	6,924
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	13,199	6,924
Reportable Segments [Member] | Property and Casualty Insurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	93,088	90,513
Net Premiums Earned	63,428	59,284
Segment Profit (Loss)	13,744	6,324
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	13,744	6,324
Reportable Segments [Member] | Reinsurance [Member]
Segment Reporting Information [Line Items]
Direct and Assumed Premium Written	3,065	6,467
Net Premiums Earned	3,481	7,162
Segment Profit (Loss)	(545)	600
Reconciliation from segment totals to consolidated [Abstract]
Segment profit	(545)	600
Segment Reconciling Items [Member]
Reconciliation from segment totals to consolidated [Abstract]
Net investment income	3,440	2,815
Net realized gains on investments	9,012	3,743
Corporate expenses and other	$ (4,213)	$ (4,191)

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Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
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	1.53%
Remaining unused amount under line of credit	$ 20,000

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Fair Value (Details) - Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fixed maturities [Abstract]
U.S. government obligations	$ 128,428	$ 103,245
Residential mortgage-backed securities	4,534	4,776
Commercial mortgage-backed securities	32,374	30,595
State and municipal obligations	111,882	110,578
Corporate securities	166,188	161,630
Options embedded in convertible securities	2,205	2,395
Foreign government obligations	25,372	23,965
Total fixed maturities	470,983	437,184
Equity securities [Abstract]
Financial institutions	23,150	21,694
Industrial & miscellaneous	114,893	123,804
Total equity securities	138,043	145,498
Short-term	2,215	2,220
Cash equivalents	42,311	69,517
Total fair value	653,552	654,419
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	23,150	21,694
Industrial & miscellaneous	114,893	123,804
Total equity securities	138,043	145,498
Short-term	2,215	2,220
Cash equivalents	0	0
Total fair value	140,258	147,718
Level 2 [Member]
Fixed maturities [Abstract]
U.S. government obligations	128,428	103,245
Residential mortgage-backed securities	4,534	4,776
Commercial mortgage-backed securities	30,967	29,226
State and municipal obligations	111,882	110,578
Corporate securities	151,589	146,488
Options embedded in convertible securities	2,205	2,395
Foreign government obligations	25,076	23,683
Total fixed maturities	454,681	420,391
Equity securities [Abstract]
Financial institutions	0	0
Industrial & miscellaneous	0	0
Total equity securities	0	0
Short-term	0	0
Cash equivalents	42,311	69,517
Total fair value	496,992	489,908
Level 3 [Member]
Fixed maturities [Abstract]
U.S. government obligations	0	0
Residential mortgage-backed securities	0	0
Commercial mortgage-backed securities	1,407	1,369
State and municipal obligations	0	0
Corporate securities	14,599	15,142
Options embedded in convertible securities	0	0
Foreign government obligations	296	282
Total fixed maturities	16,302	16,793
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	$ 16,302	$ 16,793

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Fair Value, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Calculation [Roll Forward]
Beginning of period balance	$ 16,793	$ 12,208
Total gains or losses (realized or unrealized) included in income	(175)	(104)
Purchases	0	2,284
Settlements	(316)	(8,068)
Transfers into level 3	0	11,586
Transfers out of level 3	0	(1,113)
End of period balance	$ 16,302	$ 16,793

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Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Carrying Value [Member]
Assets [Abstract]
Limited partnerships	$ 73,279	$ 75,458
Liabilities [Abstract]
Short-term borrowings	20,000	20,000
Fair Value [Member]
Assets [Abstract]
Limited partnerships	73,279	75,458
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	73,279	75,458
Liabilities [Abstract]
Short-term borrowings	$ 0	$ 0

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Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	12 Months Ended
	Feb. 05, 2016	Mar. 31, 2016	Dec. 31, 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 on grant date (in dollars per share)		$ 25.53
Summary of stock Issuances [Abstract]
Number of shares issued (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 on grant date (in dollars per share)		$ 22.59
Summary of stock Issuances [Abstract]
Number of shares issued (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	$ 1,103
Shares issued (in shares)	47,333
Value of each share issued on grant date (in dollars per share)	$ 23.30

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance	$ 394,498
Other comprehensive income (loss)	(7,631)	$ 357
Ending balance	398,225
AOCI Attributable to Parent [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance	37,858
Other comprehensive income before reclassifications	(356)
Amounts reclassified from accumulated other comprehensive income	(7,275)
Other comprehensive income (loss)	(7,631)
Ending balance	30,227
Foreign Currency [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance	(1,066)
Other comprehensive income before reclassifications	419
Amounts reclassified from accumulated other comprehensive income	0
Other comprehensive income (loss)	419
Ending balance	(647)
Unrealized Holding Gains on Available-for-sale Securities [Member]
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
Beginning balance	38,924
Other comprehensive income before reclassifications	(775)
Amounts reclassified from accumulated other comprehensive income	(7,275)
Other comprehensive income (loss)	(8,050)
Ending balance	$ 30,874