Note 10. Investments

The following tables set forth the carrying value, gross unrealized gains, gross unrealized losses and amortized cost of the Company's investments, aggregated by type and industry, as of June 30, 2011 and December 31, 2010.

Investments were comprised of the following:

	June 30, 2011
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	40,041	$	1,515	$	-	$	38,526
Obligations of states and political subdivisions		21,906		370		299		21,835
Corporate securities:
Utilities and telecom		21,658		1,340		317		20,635
Financial services		21,459		397		1,730		22,792
Media		2,503		150		-		2,353
Other business – diversified		35,620		485		429		35,564
Other consumer – diversified		36,723		363		448		36,808
Total corporate securities		117,963		2,735		2,924		118,152
Redeemable preferred stocks:
Utilities and telecom		2,660		160		-		2,500
Financial services		4,926		25		108		5,009
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		7,779		185		108		7,702
Total fixed maturities		187,689		4,805		3,331		186,215
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,117		153		-		964
Financial services		5,532		803		60		4,789
Media		1,173		-		2,025		3,198
Other business – diversified		116		69		-		47
Other consumer – diversified		1,056		75		-		981
Total equity securities		8,994		1,100		2,085		9,979
Other invested assets		956		-		-		956
Policy and student loans		2,201		-		-		2,201
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238

Total investments	$	201,116	$	5,905	$	5,416	$	200,627

	December 31, 2010
	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
Fixed maturities:
Bonds:
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	46,630	$	1,454	$	52	$	45,228
Obligations of states and political subdivisions		21,007		32		876		21,851
Corporate securities:
Utilities and telecom		23,010		1,079		355		22,286
Financial services		21,400		324		1,745		22,821
Media		2,506		153		-		2,353
Other business – diversified		25,919		422		529		26,026
Other consumer – diversified		23,532		149		232		23,615
Total corporate securities		96,367		2,127		2,861		97,101
Redeemable preferred stocks:
Utilities and telecom		2,670		170		-		2,500
Financial services		4,781		22		250		5,009
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		7,644		192		250		7,702
Total fixed maturities		171,648		3,805		4,039		171,882
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,073		109		-		964
Financial services		5,461		754		82		4,789
Media		885		-		2,313		3,198
Other business – diversified		120		73		-		47
Other consumer – diversified		985		4		-		981
Total equity securities		8,524		940		2,395		9,979
Other invested assets		980		-		-		980
Policy and student loans		2,200		-		-		2,200
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238

Total investments	$	184,628	$	4,745	$	6,434	$	186,317

The amortized cost and carrying value of fixed maturities at June 30, 2011 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2011
	Carrying Value		Amortized Cost
Due in one year or less	$	4,100	$	4,025
Due after one year through five years		7,185		6,671
Due after five years through ten years		22,657		21,781
Due after ten years		152,685		152,744
Varying maturities		1,062		994
Totals	$	187,689	$	186,215

The following table sets forth the carrying value, amortized cost, and net unrealized gains or losses of the Company's investments aggregated by industry as of June 30, 2011 and December 31, 2010.

	June 30, 2011							December 31, 2010
	Carrying Value		Amortized Cost		Unrealized Gains (Losses)			Carrying Value		Amortized Cost		Unrealized Gains (Losses)
U.S. Treasury securities and U.S. Government agencies	$	40,041	$	38,526	$	1,515		$	46,630	$	45,228	$	1,402
Obligations of states and political subdivisions		21,906		21,835		71			21,007		21,851		(844	)
Utilities and telecom		25,435		24,099		1,336			26,753		25,750		1,003
Financial services		31,917		32,590		(673	)		31,642		32,619		(977	)
Media (1)		3,676		5,551		(1,875	)		3,391		5,551		(2,160	)
Other business – diversified		35,736		35,611		125			26,039		26,073		(34	)
Other consumer – diversified		37,972		37,982		(10	)		24,710		24,789		(79	)
Other investments		4,433		4,433		-			4,456		4,456		-
Investments	$	201,116	$	200,627	$	489		$	184,628	$	186,317	$	(1,689	)

(1)

Media includes related party investments in Gray Television, Inc. with an amortized cost basis of $3,198 and which had an aggregate carrying value of $1,173 and $885 at June 30, 2011 and December 31, 2010, respectively.

The following tables present the Company's unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of June 30, 2011 and December 31, 2010.

	June 30, 2011
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	$	9,844	$	299	$	-	$	-	$	9,844	$	299
Corporate securities		56,592		1,458		3,534		1,466		60,126		2,924
Redeemable preferred stocks		999		1		2,162		107		3,161		108
Equity securities		2,965		51		1,431		2,034		4,396		2,085
Total temporarily impaired securities	$	70,400	$	1,809	$	7,127	$	3,607	$	77,527	$	5,416

	December 31, 2010
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	5,490	$	52	$	-	$	-	$	5,490	$	52
Obligations of states and political subdivisions		18,919		876		-		-		18,919		876
Corporate securities		40,426		1,263		3,402		1,598		43,828		2,861
Redeemable preferred stocks		2,188		53		2,072		197		4,260		250
Equity securities		972		28		3,114		2,367		4,086		2,395
Total temporarily impaired securities	$	67,995	$	2,272	$	8,588	$	4,162	$	76,583	$	6,434

The evaluation for an other than temporary impairment is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer's financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management's intent and ability to hold these securities until price recovery, the nature of the investment and the prospects for the issuer and its industry, the status of an issuer's continued satisfaction of the investment obligations in accordance with their contractual terms, and management's expectation as to the issuer's ability and intent to continue to do so, as well as ratings actions that may affect the issuer's credit status.

As of June 30, 2011, securities in an unrealized loss position primarily included certain of the Company's investments in fixed maturities and common and non-redeemable preferred stocks within the financial services and media sectors. Investments in the media sector include related party investments in Gray Television, Inc., which had unrealized losses of $2,025 as of June 30, 2011. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, the Company has deemed these securities to be temporarily impaired as of June 30, 2011.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.

Level 1

Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company's Level 1 financial instruments include cash equivalents and exchange traded common stocks.

Level 2

Observable inputs, other than quoted prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company's Level 2 financial instruments include significantly all of its fixed maturities, which consist of U.S. Treasury securities and U.S. Government securities, municipal bonds, and certain corporate fixed maturity securities, as well as its non-redeemable preferred stocks. In determining Level 2 fair value measurements, the Company utilizes various external pricing sources.

Level 3

Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). The Company's Level 3 financial instruments include certain fixed maturity securities and a zero cost interest rate collar. Fair value is based on criteria that use assumptions or other data that are not readily observable from objective sources. As of June 30, 2011, the value of the Company's fixed maturities valued using Level 3 criteria was $1,787 and the value of the zero cost interest rate collar was a liability of $1,288 (See Note 5). The use of different criteria or assumptions regarding data may have yielded different valuations.

As of June 30, 2011, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed maturities	$	-	$	185,902	$	1,787	$	187,689
Equity securities		3,655		5,339		-		8,994
Cash equivalents		24,192		-		-		24,192
Total	$	27,847	$	191,241	$	1,787	$	220,875

Liabilities:
Derivative	$	-	$	-	$	1,288	$	1,288

As of December 31, 2010, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed maturities	$	-	$	169,705	$	1,943	$	171,648
Equity securities		3,273		5,251		-		8,524
Cash equivalents		27,630		-		-		27,630
Total	$	30,903	$	174,956	$	1,943	$	207,802

Liabilities:
Derivative	$	-	$	-	$	1,553	$	1,553

The following is a roll-forward of the financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and six month periods ended June 30, 2011.

	Fixed Maturities			Derivative (Liability)
Balance, December 31, 2010	$	1,943		$	(1,553	)
Total unrealized gains (losses) included in total comprehensive income		(197	)		191
Balance, March 31, 2011	$	1,746		$	(1,362	)
Total unrealized gains included in total comprehensive income		41			74
Balance, June 30, 2011	$	1,787		$	(1,288	)

The Company's fixed maturities valued using Level 3 inputs consist solely of issuances of pooled debt obligations of multiple, smaller financial services companies. They are not actively traded and valuation techniques used to measure fair value are based on future estimated cash flows discounted at a reasonably estimated rate of interest. Other qualitative and quantitative information received from the original underwriter of the pooled offerings is also considered, as applicable. As the derivative is an interest rate collar, changes in valuation are more closely correlated with changes in interest rates and, accordingly, values are estimated using projected cash flows at current interest rates discounted at a reasonably estimated rate of interest. Fair value quotations are also obtained and considered, as applicable, from the counterparty to the transaction.