INVESTMENTS

The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at December 31, 2012, and 2011:



	Cost or Adjusted/Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2012
U.S. government and agency securities	$	95,296	$	201	$	289	$	95,208
States, municipalities and political subdivisions	17,117		1,918		—		19,035
Public utilities	4,135		225		—		4,360
All other corporate securities	28,282		2,013		1		30,294
Redeemable preferred stocks	259		2		1		260
Total fixed maturities	145,089		4,359		291		149,157
Public utilities	316		16		6		326
All other common stocks	1,949		228		38		2,139
Nonredeemable preferred stocks	272		—		14		258
Total equity securities	2,537		244		58		2,723
Other long-term investments	300		—		—		300
Total investments	$	147,926	$	4,603	$	349	$	152,180

December 31, 2011
U.S. government and agency securities	$	48,011	$	219	$	111	$	48,119
States, municipalities and political subdivisions	17,159		1,207		—		18,366
Public utilities	7,407		296		—		7,703
All other corporate securities	43,728		2,070		145		45,653
Redeemable preferred stocks	558		—		21		537
Total fixed maturities	116,863		3,792		277		120,378
Public utilities	209		45		—		254
All other common stocks	2,598		314		43		2,869
Nonredeemable preferred stocks	477		—		19		458
Total equity securities	3,284		359		62		3,581
Other long-term investments	300		—		—		300
Total investments	$	120,447	$	4,151	$	339	$	124,259

On September 25, 2012, we acquired an investment in a limited partnership, recorded in other assets, that is currently being accounted for at cost. Our total investment in the partnership is $750,000 and is currently bifurcated between a capital contribution of $187,500 and a note receivable of $562,500 that will be utilized to fund our future capital contributions. We are not required to fund any additional amounts in excess of our initial $750,000 investment. As the limited partnership is still in the acquisition phase, the cost basis of our investment approximated its fair value at December 31, 2012.

When we sell investments, we calculate the gain or loss realized on the sale by comparing the sales price (fair value) to the cost or adjusted/amortized cost of the security sold. We determine the cost or adjusted/amortized cost of the security sold using the specific-identification method. The following tables detail our realized gains (losses) by major investment category for the years ended December 31, 2012, 2011 and 2010:



	2012					2011					2010
	Gains (Losses)			Fair Value at Sale		Gains (Losses)			Fair Value at Sale		Gains (Losses)			Fair Value at Sale
Fixed maturities	$	2,043		$	28,999	$	231		$	21,803	$	4,278		$	105,637
Equity securities	279			1,907		10			65		149			2,731
Total realized gains	2,322			30,906		241			21,868		4,427			108,368
Fixed maturities	(141		)	9,243		(58		)	3,191		(43		)	15,700
Equity securities	(21		)	391		(25		)	335		(38		)	1,310
Total realized losses	(162		)	9,634		(83		)	3,526		(81		)	17,010
Net realized investment gains	$	2,160		$	40,540	$	158		$	25,394	$	4,346		$	125,378

The table below summarizes our fixed maturities at year end by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.



	December 31, 2012
	Cost or Amortized Cost		Percent of Total		Fair Value		Percent of Total
Due in one year or less	$	79,118	54.5	%	$	79,021	53.0	%
Due after one year through five years	13,412		9.2	%	13,754		9.2	%
Due after five years through ten years	24,292		16.8	%	26,663		17.9	%
Due after ten years	28,267		19.5	%	29,719		19.9	%
Total	$	145,089	100.0	%	$	149,157	100.0	%

The following table summarizes our net investment income by major investment category:



	Year Ended December 31,
	2012			2011			2010
Fixed maturities	$	2,902		$	2,628		$	3,639
Equity securities	138			142			203
Cash, cash equivalents and short-term investments	43			19			37
Other investments	—			34			—
Net investment income	$	3,083		$	2,823		$	3,879
Investment expenses	(142		)	(140		)	(147		)
Net investment income, less investment expenses	$	2,941		$	2,683		$	3,732

The following table presents an aging of our unrealized investment losses by investment class:



	Less Than Twelve Months					Twelve Months or More
	Number of Securities*	Gross Unrealized Losses		Fair Value		Number of Securities*	Gross Unrealized Losses		Fair Value
December 31, 2012
U.S. government and agency securities	13	$	289	$	44,174	—	$	—	$	—
Corporate securities	1	1		2,000		—	—		—
Redeemable preferred stocks	—	—		—		1	1		102
Total fixed maturities	14	290		46,174		1	1		102
Common stocks	16	41		620		1	3		53
Nonredeemable preferred stocks	—	—		—		2	14		258
Total equity securities	16	41		620		3	17		311
Total	30	$	331	$	46,794	4	$	18	$	413

December 31, 2011
U.S. government and agency securities	2	$	90	$	16,915	1	$	21	$	1,627
Corporate securities	3	145		3,924		—	—		—
Redeemable preferred stocks	—	—		—		4	21		537
Total fixed maturities	5	235		20,839		5	42		2,164
Common stocks	12	40		740		1	3		9
Nonredeemable preferred stocks	—	—		—		3	19		458
Total equity securities	12	40		740		4	22		467
Total	17	$	275	$	21,579	9	$	64	$	2,631

* This amount represents the actual number of discrete securities, not the number of shares of those securities. The number is not presented in thousands.

During the years ended December 31, 2012, 2011 and 2010, we recorded other-than-temporary impairment charges of $0, $31,000, and $97,000, respectively related to our equity positions. We have never recorded an OTTI charge on our debt-security investments.

During our quarterly evaluations of our securities for impairment, we determined that none of our investments in debt and equity securities that reflected an unrealized loss position were other-than-temporarily impaired. The issuers of our debt securities continue to make interest payments on a timely basis and have not suffered any credit rating reductions. We do not intend to sell nor is it likely that we would be required to sell the debt securities before we recover our amortized cost basis. All the issuers of the equity securities we own had near-term prospects that indicated we could recover our cost basis, and we also have the ability and the intent to hold these securities until their value equals or exceeds their cost.

The following table presents the fair value measurements of our financial instruments by level at December 31, 2012, and December 31, 2011:



December 31, 2012	Total		Level 1		Level 2
U.S. government and agency securities	$	95,208	$	66,710	$	28,498
States, municipalities and political subdivisions	19,035		—		19,035
Corporate securities	34,654		—		34,654
Redeemable preferred stocks	260		260		—
Total fixed maturities	149,157		66,970		82,187
Common stocks	2,465		2,465		—
Nonredeemable preferred stocks	258		258		—
Total equity securities	2,723		2,723		—
Other long-term investments	300		300		—
Total investments	$	152,180	$	69,993	$	82,187

December 31, 2011
U.S. government and agency securities	$	48,119	$	24,176	$	23,943
States, municipalities and political subdivisions	18,366		—		18,366
Corporate securities	53,356		—		53,356
Redeemable preferred stocks	537		537		—
Total fixed maturities	120,378		24,713		95,665
Common stocks	3,123		3,123		—
Nonredeemable preferred stocks	458		458		—
Total equity securities	3,581		3,581		—
Other long-term investments	300		300		—
Total investments	$	124,259	$	28,594	$	95,665

For our investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, we obtain the fair values from Synovus Trust Company, NA, which uses a third-party valuation service. The valuation service calculates prices for our investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, then adds final spreads to the U.S. Treasury curve at 3 p.m. (ET) as of quarter end. Since the inputs the valuation service uses in their calculations are not quoted prices in active markets, but are observable inputs, they represent Level 2 inputs.