Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value of Assets Measured on Recurring Basis

The following table presents the fair values of the Company’s assets, measured on a recurring basis, as of September 30, 2015 and December 31, 2014:

(in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2015
Assets:
Debt securities:
U.S. Treasury bonds	$	112,805	$	—	$	112,805	$	—
Municipal bonds		692,988		—		692,988		—
Foreign bonds		181,310		—		181,310		—
Governmental agency bonds		421,337		—		421,337		—
Governmental agency mortgage-backed securities		2,077,417		—		2,077,417		—
Corporate debt securities		788,259		—		779,901		8,358
		4,274,116		—		4,265,758		8,358
Equity securities:
Preferred stocks		15,645		15,645		—		—
Common stocks		296,390		296,390		—		—
		312,035		312,035		—		—
Total assets	$	4,586,151	$	312,035	$	4,265,758	$	8,358

(in thousands)	Total		Level 1		Level 2		Level 3
December 31, 2014
Assets:
Debt securities:
U.S. Treasury bonds	$	64,982	$	—	$	64,982	$	—
Municipal bonds		587,677		—		587,677		—
Foreign bonds		196,750		—		196,750		—
Governmental agency bonds		197,874		—		197,874		—
Governmental agency mortgage-backed securities		1,812,162		—		1,812,162		—
Non-agency mortgage-backed securities		16,538		—		—		16,538
Corporate debt securities		574,269		—		574,269		—
		3,450,252		—		3,433,714		16,538
Equity securities:
Preferred stocks		15,525		15,525		—		—
Common stocks		386,887		386,887		—		—
		402,412		402,412		—		—
Total assets	$	3,852,664	$	402,412	$	3,433,714	$	16,538

Summary of Changes in Fair Value of Level 3 Assets Measured on Recurring Basis

The following table presents a summary of the changes in the fair values of Level 3 assets measured on a recurring basis for the three months ended September 30, 2015 and 2014:

(in thousands)	September 30, 2015				September 30, 2014
		Corporate debt securities				Non-agency mortgage-backed securities
Fair value at beginning of period	$	11,358		$		17,994
Transfers into Level 3		1,921				—
Transfers out of Level 3		(4,011	)			—
Net realized and unrealized gains (losses):
Included in earnings:
Net realized investment losses		(2	)			—
Included in other comprehensive income (loss)		(40	)			252
Purchases		1,698				—
Sales		(92	)			—
Settlements		(2,474	)			(695	)
Fair value at end of period	$	8,358		$		17,551

The following table presents a summary of the changes in the fair values of Level 3 assets measured on a recurring basis for the nine months ended September 30, 2015 and 2014:

(in thousands)	September 30, 2015										September 30, 2014
(in thousands)		Corporate debt securities			Non-agency mortgage-backed securities			Total			Non-agency mortgage-backed securities
Fair value at beginning of period	$	—		$	16,538		$	16,538		$	19,022
Net realized and unrealized gains (losses):
Included in earnings:
Net realized investment gains (losses)		1			(1,015	)		(1,014	)		—
Net other-than-temporary impairment losses		—			—			—			(1,033	)
Included in other comprehensive income (loss)		6			(589	)		(583	)		941
Purchases		8,831			—			8,831			—
Sales		(427	)		(14,934	)		(15,361	)		—
Settlements		(53	)		—			(53	)		(1,379	)
Fair value at end of period	$	8,358		$	—		$	8,358		$	17,551
Unrealized gains (losses) included in earnings for the period relating to Level 3 assets that were still held at the end of the period:
Net other-than-temporary impairment losses	$	—		$	—		$	—		$	(1,033	)

Carrying Amounts and Estimated Fair Values of Financial Instruments Not Measured at Fair Value

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value as of September 30, 2015 and December 31, 2014:

Carrying

Estimated fair value

(in thousands)

Amount

Total

Level 1

Level 2

Level 3

September 30, 2015
Assets:
Cash and cash equivalents	$	894,430	$	894,430	$	894,430	$	—	$	—
Deposits with banks	$	16,388	$	16,444	$	547	$	15,897	$	—
Notes receivable, net	$	6,026	$	4,440	$	—	$	—	$	4,440
Liabilities:
Deposits	$	2,621,209	$	2,621,209	$	2,621,209	$	—	$	—
Notes and contracts payable	$	584,952	$	596,894	$	—	$	590,673	$	6,221