9. INVESTMENTS

Investments of the Company's insurance subsidiaries are subject to the insurance laws of the state of their incorporation. These laws prescribe the kind, quality and concentration of investments that may be made by insurance companies. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common stocks and real estate mortgages. The Company believes that it is in compliance with these laws.

The amortized cost and estimated fair value of securities available-for-sale as of September 30, 2012 and December 31, 2011 are as follows. All securities are classified as available-for-sale and are carried at fair value.

			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
September 30, 2012	cost		gains		losses		fair value
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	4,693,684	$	314,968	$	-	$	5,008,652
U.S. government-sponsored agencies		138,938,913		3,260,182		63,772		142,135,323
Obligations of states and political subdivisions		352,445,952		36,568,282		-		389,014,234
Commercial mortgage-backed		73,535,477		10,468,189		14,490		83,989,176
Residential mortgage-backed		35,457,322		1,479,262		28,350		36,908,234
Other asset-backed		9,730,063		1,531,763		-		11,261,826
Corporate		292,827,920		27,503,217		118,795		320,212,342
Total fixed maturity securities		907,629,331		81,125,863		225,407		988,529,787

Equity securities:
Common stocks:
Financial services		12,393,822		2,926,013		106,542		15,213,293
Information technology		12,245,496		6,035,495		80,396		18,200,595
Healthcare		14,326,047		4,188,968		-		18,515,015
Consumer staples		11,905,575		2,076,710		4,488		13,977,797
Consumer discretionary		11,370,958		6,472,964		30,065		17,813,857
Energy		14,676,669		5,405,359		402		20,081,626
Industrials		6,756,963		749,001		58,574		7,447,390
Other		18,453,802		2,548,583		146,677		20,855,708
Non-redeemable preferred stocks		8,332,437		675,917		201,600		8,806,754
Total equity securities		110,461,769		31,079,010		628,744		140,912,035
Total securities available-for-sale	$	1,018,091,100	$	112,204,873	$	854,151	$	1,129,441,822

			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
December 31, 2011	cost		gains		losses		fair value
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	4,681,611	$	329,639	$	-	$	5,011,250
U.S. government-sponsored agencies		149,016,862		3,162,822		-		152,179,684
Obligations of states and political subdivisions		373,597,081		27,530,447		-		401,127,528
Commercial mortgage-backed		89,452,202		9,694,648		40,791		99,106,059
Residential mortgage-backed		20,740,802		1,191,625		30,315		21,902,112
Other asset-backed		10,440,167		1,502,024		-		11,942,191
Corporate		252,010,891		16,438,873		1,515,012		266,934,752
Total fixed maturity securities		899,939,616		59,850,078		1,586,118		958,203,576

Equity securities:
Common stocks:
Financial services		8,479,330		1,055,486		16,131		9,518,685
Information technology		12,757,833		5,165,021		104,487		17,818,367
Healthcare		13,150,669		3,090,110		3,615		16,237,164
Consumer staples		9,572,447		896,769		8,346		10,460,870
Consumer discretionary		9,054,299		4,675,095		19,015		13,710,379
Energy		15,932,242		4,029,892		15,105		19,947,029
Industrials		4,983,996		802,862		44,340		5,742,518
Other		11,774,715		1,164,832		23,506		12,916,041
Non-redeemable preferred stocks		5,160,600		232,400		444,000		4,949,000
Total equity securities		90,866,131		21,112,467		678,545		111,300,053
Total securities available-for-sale	$	990,805,747	$	80,962,545	$	2,264,663	$	1,069,503,629

The following table sets forth the estimated fair value and gross unrealized losses associated with investment securities that were in an unrealized loss position as of September 30, 2012 and December 31, 2011, listed by length of time the securities were in an unrealized loss position.

September 30, 2012	Less than twelve months				Twelve months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Fixed maturity securities:
U.S. government-sponsored agencies	$	17,407,052	$	63,772	$	-	$	-	$	17,407,052	$	63,772
Commercial mortgage-backed		4,309,297		14,490		-		-		4,309,297		14,490
Residential mortgage-backed		6,752,062		27,092		317,683		1,258		7,069,745		28,350
Corporate		7,185,790		106,603		925,100		12,192		8,110,890		118,795
Total, fixed maturity securities		35,654,201		211,957		1,242,783		13,450		36,896,984		225,407

Equity securities:
Common stocks:
Financial services		1,282,898		106,542		-		-		1,282,898		106,542
Information technology		1,988,700		80,396		-		-		1,988,700		80,396
Consumer staples		27,948		4,488		-		-		27,948		4,488
Consumer discretionary		1,107,695		30,065		-		-		1,107,695		30,065
Energy		22,872		402		-		-		22,872		402
Industrials		1,157,800		58,574		-		-		1,157,800		58,574
Other		3,164,049		146,677		-		-		3,164,049		146,677
Non-redeemable preferred stocks		-		-		1,798,400		201,600		1,798,400		201,600
Total, equity securities		8,751,962		427,144		1,798,400		201,600		10,550,362		628,744
Total temporarily impaired securities	$	44,406,163	$	639,101	$	3,041,183	$	215,050	$	47,447,346	$	854,151

December 31, 2011	Less than twelve months				Twelve months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Fixed maturity securities:
Commercial mortgage-backed	$	8,865,991	$	30,729	$	2,987,967	$	10,062	$	11,853,958	$	40,791
Residential mortgage-backed		-		-		471,941		30,315		471,941		30,315
Corporate		40,789,555		1,332,242		817,500		182,770		41,607,055		1,515,012
Total, fixed maturity securities		49,655,546		1,362,971		4,277,408		223,147		53,932,954		1,586,118

Equity securities:
Common stocks:
Financial services		853,572		16,131		-		-		853,572		16,131
Information technology		3,074,796		101,096		49,324		3,391		3,124,120		104,487
Healthcare		1,912,273		3,615		-		-		1,912,273		3,615
Consumer staples		1,259,440		8,346		-		-		1,259,440		8,346
Consumer discretionary		191,508		19,015		-		-		191,508		19,015
Energy		712,268		15,105		-		-		712,268		15,105
Industrials		1,486,762		44,340		-		-		1,486,762		44,340
Other		1,053,572		23,506		-		-		1,053,572		23,506
Non-redeemable preferred stocks		-		-		1,556,000		444,000		1,556,000		444,000
Total, equity securities		10,544,191		231,154		1,605,324		447,391		12,149,515		678,545
Total temporarily impaired securities	$	60,199,737	$	1,594,125	$	5,882,732	$	670,538	$	66,082,469	$	2,264,663

Unrealized losses on fixed maturity securities are primarily associated with corporate securities at September 30, 2012. Most of these securities are considered investment grade by credit rating agencies. Because management does not intend to sell these securities, does not believe it will be required to sell these securities before recovery, and believes it will collect the amounts due on these securities, it was determined that these securities were not "other-than-temporarily" impaired at September 30, 2012.

The unrealized losses on common stocks at September 30, 2012 are not concentrated in a particular sector or an individual security. The Company believes the unrealized losses on common stocks are primarily due to general fluctuations in the equity markets. Because the Company has the ability and intent to hold these securities for a reasonable amount of time to allow for recovery, it was determined that these securities were not "other-than-temporarily" impaired at September 30, 2012.

All of the Company's preferred stock holdings are perpetual preferred stocks. The Company evaluates perpetual preferred stocks with unrealized losses for "other-than-temporary" impairment similar to fixed maturity securities since they have debt-like characteristics such as periodic cash flows in the form of dividends and call features, are rated by rating agencies and are priced like other long-term callable fixed maturity securities. There was no evidence of any credit deterioration in the issuers of the preferred stocks and the Company does not intend to sell these securities before recovery, nor does it believe it will be required to sell these securities before recovery; therefore, it was determined that these securities were not "other-than-temporarily" impaired at September 30, 2012.

The amortized cost and estimated fair value of fixed maturity securities at September 30, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.

	Amortized		Estimated
	cost		fair value
Securities available-for-sale:
Due in one year or less	$	19,307,290	$	19,936,725
Due after one year through five years		130,099,520		137,853,821
Due after five years through ten years		152,858,935		173,113,512
Due after ten years		496,370,787		536,728,319
Mortgage-backed securities		108,992,799		120,897,410
Totals	$	907,629,331	$	988,529,787

A summary of realized investment gains and (losses) is as follows:

	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Fixed maturity securities available-for-sale:
Gross realized investment gains	$	134,537		$	102,269		$	643,044		$	286,325
Gross realized investment losses		-			(225,777	)		-			(572,071	)
"Other-than-temporary" impairments		-			-			-			(221,956	)

Equity securities available-for-sale:
Gross realized investment gains		377,701			2,165,117			9,332,119			13,619,368
Gross realized investment losses		(665,791	)		(651,228	)		(2,222,675	)		(1,068,488	)
"Other-than-temporary" impairments		(22,815	)		(4,912,062	)		(148,863	)		(5,606,420	)
Totals	$	(176,368	)	$	(3,521,681	)	$	7,603,625		$	6,436,758

Gains and losses realized on the disposition of investments are included in net income. The cost of investments sold is determined on the specific identification method using the highest cost basis first. The amounts reported as "other-than-temporary" impairments for both the three and nine months ended September 30, 2012 do not include any individually significant items.

The following table is a roll forward of the cumulative credit losses on fixed maturity securities that have been recognized in earnings from "other-than-temporary" impairments. Note that this table only includes the credit loss component of "other-than-temporary" impairments, and does not include the non-credit loss component of impairments (which is recognized through "other comprehensive income") or impairments that are recognized through earnings in their entirety (not subject to bifurcation between credit and non-credit components). During the second quarter of 2011, management determined that it would sell certain residential mortgage-backed securities that were in an unrealized loss position, resulting in the recognition of the non-credit loss component of the impairments through earnings.

	Nine months ended September 30,
	2012		2011
Balance at beginning of year	$	-	$	207,854

Reduction for credit loss associated with previously recognized "other-than-temporary" impairment due to management's intent to sell the security		-		(207,854	)
Balance at September 30	$	-	$	-