(2) Investments:

The following is a summary of available-for-sale securities at September 30, 2017 and December 31, 2016:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
September 30, 2017
Fixed maturities
Agency collateralized mortgage obligations	$	11,017	$	10,390	$	636	$	(9	)	$	627
Agency mortgage-backed securities		19,712		19,667		92		(47	)		45
Asset-backed securities		50,030		48,969		1,133		(72	)		1,061
Bank loans		24,986		24,914		182		(110	)		72
Certificates of deposit		3,138		3,125		13		-			13
Collateralized mortgage obligations		7,055		6,625		470		(40	)		430
Corporate securities		165,794		164,965		2,109		(1,280	)		829
Mortgage-backed securities		20,643		19,534		1,508		(399	)		1,109
Municipal obligations		102,805		102,272		744		(211	)		533
Non-U.S. government obligations		32,942		33,399		512		(969	)		(457	)
U.S. government obligations		51,484		51,766		20		(302	)		(282	)
Total fixed maturities		489,606		485,626		7,419		(3,439	)		3,980
Equity securities:
Consumer		41,913		19,749		22,728		(564	)		22,164
Energy		8,168		5,454		2,795		(81	)		2,714
Financial		42,596		29,780		13,213		(397	)		12,816
Industrial		23,972		7,825		16,293		(146	)		16,147
Technology		11,825		5,452		6,373		-			6,373
Mutual fund		58,178		55,025		3,163		(10	)		3,153
Other		7,515		4,881		2,757		(123	)		2,634
Total equity securities		194,167		128,166		67,322		(1,321	)		66,001

Total	$	683,773	$	613,792	$	74,741	$	(4,760	)		69,981

							Applicable federal income taxes				(24,493	)

							Net unrealized gains - net of tax			$	45,488

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
December 31, 2016
Fixed maturities
Agency collateralized mortgage obligations	$	6,171	$	6,000	$	171	$	-		$	171
Agency mortgage-backed securities		4,770		4,751		57		(38	)		19
Asset-backed securities		45,183		45,207		458		(482	)		(24	)
Bank loans		10,349		10,222		149		(22	)		127
Certificates of deposit		3,117		3,126		-		(9	)		(9	)
Collateralized mortgage obligations		9,104		9,096		290		(282	)		8
Corporate securities		142,683		143,356		1,643		(2,316	)		(673	)
Mortgage-backed securities		24,571		23,904		1,132		(465	)		667
Municipal obligations		129,335		130,204		391		(1,260	)		(869	)
Non-U.S. government obligations		24,681		26,461		230		(2,010	)		(1,780	)
U.S. government obligations		91,940		92,234		74		(368	)		(294	)
Total fixed maturities		491,904		494,561		4,595		(7,252	)		(2,657	)
Equity securities:
Consumer		32,576		15,231		17,656		(311	)		17,345
Energy		12,842		5,641		7,203		(2	)		7,201
Financial		31,186		22,417		8,998		(229	)		8,769
Industrial		21,145		6,239		15,098		(192	)		14,906
Technology		8,858		4,117		4,769		(28	)		4,741
Mutual fund		6,995		6,930		121		(56	)		65
Other		6,343		4,327		2,181		(165	)		2,016
Total equity securities		119,945		64,902		56,026		(983	)		55,043

Total	$	611,849	$	559,463	$	60,621	$	(8,235	)		52,386

							Applicable federal income taxes				(18,335	)

							Net unrealized gains - net of tax			$	34,051

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at September 30, 2017 and December 31, 2016, respectively, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position.

	September 30, 2017							December 31, 2016
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		325	$	233,926	$	(1,999	)		397	$	291,048	$	(4,380	)
Greater than 12 months		47		25,633		(1,440	)		54		32,054		(2,872	)
Total fixed maturities		372		259,559		(3,439	)		451		323,102		(7,252	)

Equity securities:
12 months or less		36		33,213		(1,321	)		35		20,698		(983	)
Greater than 12 months		-		-		-			-		-		-
Total equity securities		36		33,213		(1,321	)		35		20,698		(983	)
Total fixed maturity and equity securities		408	$	292,772	$	(4,760	)		486	$	343,800	$	(8,235	)

The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2017, 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	$	47,563	$	47,558
Excess of one year to five years		272,390		272,639
Excess of five years to ten years		60,122		59,322
Excess of ten years		3,486		3,338
Contractual maturities		383,561		382,857
Asset-backed securities		106,045		102,769
Total	$	489,606	$	485,626

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying condensed consolidated statements of operations.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016
Fixed maturities:
Gross gains	$	3,852		$	7,496		$	9,544		$	9,338
Gross losses		(4,011	)		(8,434	)		(10,160	)		(12,470	)
Net realized losses		(159	)		(938	)		(616	)		(3,132	)

Equity securities:
Gross gains		4,103			5,086			8,601			21,722
Gross losses		(498	)		(819	)		(966	)		(4,767	)
Net realized gains		3,605			4,267			7,635			16,955

Limited partnerships - net gain		2,498			4,403			8,515			3,201


Total net gains	$	5,944		$	7,732		$	15,534		$	17,024

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

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016

Realized net gains on the disposal of securities	$	3,244		$	3,482		$	5,886		$	10,649
Mark-to-market adjustment		171			108			136			(326	)
Equity in gains of limited partnership
investments - realized and unrealized		2,498			4,403			8,515			3,201
Impairment:
Write-downs based upon objective criteria		(38	)		(1,844	)		(69	)		(4,999	)
Recovery of prior write-downs
upon sale or disposal		69			1,583			1,066			8,499

Total net gains	$	5,944		$	7,732		$	15,534		$	17,024

The mark-to-market adjustments in the table above represent the changes in fair value of options embedded in convertible debt securities held by the Company.

Shareholders' equity at September 30, 2017 included approximately $30,293, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

At September 30, 2017, limited partnership investments included approximately $40,169 invested in 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 will be paid to the affiliated organizations.

The Company's limited partnerships include one investment which primarily invests in public and private equity markets in India. The limited partnership investment's value as of September 30, 2017 and 2016 was $26,970 and $29,718, respectively. At September 30, 2017, the Company's estimated ownership interest in this limited partnership investment was approximately 5%. The Company's share of earnings from this limited partnership investment was $4,817 and $1,448 for the nine months ended September 30, 2017 and 2016, respectively.

The summarized financial information of the partnership in which the Company has invested is as follows:

	As of and for the
	Nine Months Ended
	September 30
	2017		2016
Total assets	$	517,411	$	487,784
Total partners' capital		517,411		487,784
Net increase in partners' capital resulting from operations		95,314		23,841

At September 30, 2017, the Company's invested assets, excluding limited partnership investments, included approximately $24,229 in portfolios managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.