Note 2.

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 December 31, 2011 and December 31, 2010.

Investments were comprised of the following:

	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	$	35,922	$	4,186	$	-	$	31,736
Obligations of states and political subdivisions		17,030		1,757		-		15,273
Corporate securities:
Utilities and telecom		18,598		2,736		-		15,862
Financial services		34,900		725		1,346		35,521
Media		1,537		92		-		1,445
Other business – diversified		56,553		5,043		152		51,662
Other consumer – diversified		45,371		6,078		12		39,305
Total corporate securities		156,959		14,674		1,510		143,795
Redeemable preferred stocks:
Utilities and telecom		2,668		168		-		2,500
Financial services		4,576		29		462		5,009
Other consumer – diversified		193		-		-		193
Total redeemable preferred stocks		7,437		197		462		7,702
Total fixed maturities		217,348		20,814		1,972		198,506
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom		1,203		239		-		964
Financial services		5,148		558		199		4,789
Media		696		-		-		696
Other business – diversified		115		68		-		47
Other consumer – diversified		1,186		205		-		981
Total equity securities		8,348		1,070		199		7,477
Other invested assets		567		-		-		567
Policy loans		2,246		-		-		2,246
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238
Total investments	$	229,785	$	21,884	$	2,171	$	210,072

	Restated
	2010
			Gross		Gross
	Carrying		Unrealized		Unrealized		Amortized
	Value		Gains		Losses		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		-		-		885
Other business – diversified		120		73		-		47
Other consumer – diversified		985		4		-		981
Total equity securities		8,524		940		82		7,666
Other invested assets		980		-		-		980
Policy loans		2,200		-		-		2,200
Real estate		38		-		-		38
Investments in unconsolidated trusts		1,238		-		-		1,238
Total investments	$	184,628	$	4,745	$	4,121	$	184,004

Bonds having an amortized cost of $6,107 and $9,557 were on deposit with insurance regulatory authorities at December 31, 2011 and 2010, respectively, in accordance with statutory requirements.

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 December 31, 2011 and 2010.

								Restated
	2011							2010
	Carrying Value		Amortized Cost		Unrealized Gains (Losses)			Carrying Value		Amortized Cost		Unrealized Gains (Losses)
U.S. Treasury securities and obligations of U.S. Government agencies and authorities	$	35,922	$	31,736	$	4,186		$	46,630	$	45,228	$	1,402
Obligations of states and political subdivisions		17,030		15,273		1,757			21,007		21,851		(844	)
Utilities and telecom		22,469		19,326		3,143			26,753		25,750		1,003
Financial services		44,624		45,319		(695	)		31,642		32,619		(977	)
Media		2,233		2,141		92			3,391		3,238		153
Other business – diversified		56,668		51,709		4,959			26,039		26,073		(34	)
Other consumer – diversified		46,750		40,479		6,271			24,710		24,789		(79	)
Other investments		4,089		4,089		-			4,456		4,456		-
Investments	$	229,785	$	210,072	$	19,713		$	184,628	$	184,004	$	624

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 December 31, 2011 and 2010.

	2011
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate securities	$	30,675	$	1,112	$	1,602	$	398	$	32,277	$	1,510
Redeemable preferred stocks		-		-		2,807		462		2,807		462
Common and non-redeemable preferred stocks		824		176		1,245		23		2,069		199
Total temporarily impaired securities	$	31,499	$	1,288	$	5,654	$	883	$	37,153	$	2,171

	Restated
	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
Common and non-redeemable preferred stocks		972		28		2,229		54		3,201		82
Total temporarily impaired securities	$	67,995	$	2,272	$	7,703	$	1,849	$	75,698	$	4,121

The following is a summary of investment impairments the Company recorded due to other than temporary declines in values for the years ended December 31, 2011 and 2010.

			Restated
	2011		2010
Corporate securities	$	965	$	-
Related party common stocks		190		2,312
Total	$	1,155	$	2,312

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 expectation of prospects for the issuer and its industry, the status of an issuer's continued satisfaction of its 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 December 31, 2011, securities in an unrealized loss position primarily included certain of the Company's investments in fixed maturities within the financial services sector. 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, as well as the Company's evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of December 31, 2011.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of 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 financial instruments valued using Level 1 criteria 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 financial instruments valued using Level 2 criteria 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 maturities, as well as its non-redeemable preferred stocks. In determining fair value measurements using Level 2 criteria, 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 financial instruments valued using Level 3 criteria include certain fixed maturities 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 December 31, 2011, the value of the Company's fixed maturities valued using Level 3 criteria was $2,035 and the value of the zero cost interest rate collar was a liability of $876 (See Note 15). The use of different criteria or assumptions regarding data may have yielded different valuations.

As of December 31, 2011, financial instruments carried at fair value were measured on a recurring basis as summarized below:

Assets:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Fixed maturities	$	-	$	215,313	$	2,035	$	217,348
Equity securities		3,374		4,974		-		8,348
Cash equivalents		19,519		-		-		19,519
Total	$	22,893	$	220,287	$	2,035	$	245,215

Liabilities:
Derivative	$	-	$	-	$	876	$	876

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

Assets:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
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 Company's financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended December 31, 2011 and 2010.

	Fixed Maturities			Derivative (Liability)
Balance, January 1, 2010	$	1,779		$	(1,547	)
Total unrealized gains (losses) included in comprehensive income		164			(6	)
Balance, December 31, 2010		1,943			(1,553	)
Realized impairment losses included in net income		(965	)		-
Total unrealized gains included in comprehensive income		1,057			677
Balance, December 31, 2011	$	2,035		$	(876	)

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.

The amortized cost and carrying value of fixed maturities at December 31, 2011 and 2010 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.

	2011				2010
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	1,263	$	1,250	$	5,007	$	4,903
Due after one year through five years		7,207		6,742		5,504		5,179
Due after five years through ten years		32,052		31,008		18,955		18,263
Due after ten years		175,676		158,512		141,157		142,544
Varying maturities		1,150		994		1,025		993
Totals	$	217,348	$	198,506	$	171,648	$	171,882

Investment income was earned from the following sources:

	2011			2010
Fixed maturities	$	9,874		$	8,901
Equity securities		509			481
Other		204			355
Total investment income		10,587			9,737
Less investment expenses		(177	)		(158	)
Net investment income	$	10,410		$	9,579

A summary of realized investment gains (losses) follows:

	2011
	Equity Securities			Fixed Maturities			Other Invested Assets		Total
Gains	$	-		$	860		$	335	$	1,195
Losses		(190	)		(978	)		-		(1,168	)
Realized investment gains, net	$	(190	)	$	(118	)	$	335	$	27

	Restated 2010
	Equity Securities			Fixed Maturities			Other Invested Assets		Total
Gains	$	486		$	1,149		$	-	$	1,635
Losses		(2,312	)		(64	)		-		(2,376	)
Realized investment losses, net	$	(1,826	)	$	1,085		$	-	$	(741	)

Proceeds from the sales of investments were as follows:

	2011		2010
Equity securities	$	813	$	270
Fixed maturities		37,910		2,968
Other investments		729		52
Total proceeds	$	39,452	$	3,290

The Company's bond portfolio included 97% investment grade securities, as defined by the NAIC, at December 31, 2011.