Investments

6 Months Ended

Jun. 30, 2011

Investments

Investments

Note 3 – Investments

The Company holds investments in fixed maturity securities as well as equity securities, which are classified as available for sale. At June 30, 2011 and December 31, 2010, the amortized cost, gross unrealized gains and losses, and estimated fair value of the Company's available-for-sale securities by security type were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
June 30, 2011
Fixed Maturity Securities:
U.S. Treasury and U.S. government agencies	$	587		17		(2	)		602
Corporate bonds		12,114		152		(110	)		12,156
Commercial mortgage-backed securities		10,310		96		(26	)		10,380
Other		265		1		—			266
Total	$	23,276		266		(138	)		23,404
Equity securities	$	5,248		104		(327	)		5,025
December 31, 2010
Fixed Maturity Securities:
U.S. Treasury and U.S. government agencies	$	8,044		88		(37	)		8,095
Corporate bonds		12,192		149		(75	)		12,266
Commercial mortgage-backed securities		7,756		40		(53	)		7,743
Other		464		5		(9	)		460
Total	$	28,456		282		(174	)		28,564
Equity securities	$	1,061		12		(189	)		884

The scheduled maturities of fixed maturity securities at June 30, 2011 are as follows (in thousands):

	Amortized Cost		Fair Value
Available-for-sale
Due after one year through five years	$	8,469		8,519
Due after five years through ten years		4,378		4,384
Due after ten years		119		121
Commercial mortgage-backed securities		10,310		10,380
	$	23,276		23,404

Investment Sales – 2011 and 2010

Proceeds received, and the gross realized gains and losses from sales of available for sale securities, for the three and six months ended June 30, 2011 and 2010 were as follows (in thousands):

	Proceeds		Gross Realized Gains		Gross Realized Losses
Three months ended June 30, 2011
Fixed maturity securities	$	11,916		238		(15	)
Equity securities*	$	574		53		(136	)
Three months ended June 30, 2010
Fixed maturity securities	$	12,242		505		—
Six months ended June 30, 2011
Fixed maturity securities	$	19,614		369		(38	)
Equity securities*	$	1,106		105		(143	)
Six months ended June 30, 2010
Fixed maturity securities	$	12,242		505		—

* Amounts reported for the three and six months ended June 30, 2011 include the gross realized gains and losses from equity option contracts. During the three and six months ended June 30, 2011, the Company entered into equity contracts for exchange traded call and put options to meet certain investment objectives. With respect to these option contracts, the Company received net proceeds of $22,000 and $73,000 and realized gains of $22,000 and $73,000 for the three and six months ended June 30, 2011, respectively, which is included in the realized investment gains in the Condensed Consolidated Statements of Earnings. There were no open option contracts at June 30, 2011. There were no equity option contracts during the three and six month periods ended June 30, 2010.

Other-than-temporary Impairment

The Company regularly reviews its individual investment securities for other-than-temporary impairment. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including:

• the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

• the length of time and the extent to which the market value of the security has been below its cost or amortized cost;

• general market conditions and industry or sector specific factors;

• nonpayment by the issuer of its contractually obligated interest and principal payments; and

• the Company's intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss positions at June 30, 2011, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows (in thousands):

	Less Than twelve months
	Gross Unrealized Loss			Fair Value
U.S. Treasury and U.S. government agencies	$	(2	)		77
Corporate bonds		(110	)		7,007
Commercial mortgage-backed securities		(26	)		3,952
Total fixed maturity securities	$	(138	)		11,036
Equity securities	$	(327	)		1,144

The Company believes there were no fundamental issues such as credit losses or other factors with respect to any of its available-for-sale securities. The unrealized losses on investments in fixed maturity securities were caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. In determining whether equity securities are other than temporarily impaired, the Company considers its intent and ability to hold a security for a period of time sufficient to allow for the recovery of cost. Because the decline in fair value is attributable to changes in interest rates or market conditions and not credit quality, and because the Company has the ability and intent to hold its available-for-sale investments until a market price recovery or maturity, the Company does not consider any of its investments to be other-than-temporarily impaired at June 30, 2011.