3.	INVESTMENTS

A.	Available for Sale Securities - Fixed Maturity and Equity Securities

The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in available for sale securities are summarized as follows:

June 30, 2012	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	25,808,010	$	3,492,117	$	0		$	29,300,127
States, municipalities and political subdivisions		195,000		7,952		0			202,952
Collateralized mortgage obligations		363,190		2,485		(2,599	)		363,076
Public utilities		399,893		63,098		0			462,991
All other corporate bonds		130,486,127		5,684,032		(2,408,880	)		133,761,279
		157,252,220		9,249,684		(2,411,479	)		164,090,425
Equity securities		24,813,689		1,009,534		(91,813	)		25,731,410
Total	$	182,065,909	$	10,259,218	$	(2,503,292	)	$	189,821,835

December 31, 2011	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	56,794,363	$	13,805,565	$	0		$	70,599,928
States, municipalities and political subdivisions		235,000		6,317		0			241,317
Collateralized mortgage obligations		750,944		11,756		(2,973	)		759,727
Public utilities		399,887		62,188		0			462,075
All other corporate bonds		49,334,206		4,901,684		(1,715,760	)		52,520,130
		107,514,400		18,787,510		(1,718,733	)		124,583,177
Equity securities		16,200,043		1,216,286		(116,701	)		17,299,628
Total	$	123,714,443	$	20,003,796	$	(1,835,434	)	$	141,882,805

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

Fixed Maturities Available for Sale June 30, 2012	Amortized Cost		Estimated Market Value

Due in one year or less	$	0	$	0
Due after one year through five years		24,227,580		25,964,171
Due after five years through ten years		91,150,733		94,705,280
Due after ten years		41,510,717		43,057,898
Collateralized mortgage obligations		363,190		363,076
Total	$	157,252,220	$	164,090,425

The fair value of investments with sustained gross unrealized losses at June 30, 2012 and December 31, 2011 are as follows:

	June 30, 2012						December 31, 2011

	Fair value		Unrealized losses		Number of Securities		Fair value		Unrealized losses		Number of Securities
Fixed Maturities:
Less than 12 months:
Collateralized mortgage obligations	$	6,201	$	31		1	$	7,008	$	36		1
All other corporate bonds		41,614,109		771,403		21		3,915,393		17,574		4
Greater than 12 months:
Collateralized mortgage obligations		96,928		2,568		1		97,868		2,937		2
All other corporate bonds		1,324,925		1,637,477		4		1,268,583		1,698,186		4
Total fixed maturities		43,042,163		2,411,479		27		5,288,852		1,718,733		11

Equities:
Less than 12 months		4,675,249		6,951		1		848,032		55,141		2
Greater than 12 months		449,138		84,862		1		292,441		61,560		1
Total equities		5,124,387		91,813		2		1,140,473		116,701		3
Total fixed maturities and equities	$	48,166,550	$	2,503,292		29	$	6,429,325	$	1,835,434		14

Substantially all of the unrealized losses on fixed maturities available for sale at June 30, 2012 and December 31, 2011 relate to investment grade securities and are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. 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, the Company deems these securities to be temporarily impaired as of June 30, 2012.

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary. The factors considered by management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company's intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Income.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company's ability and intent to hold the security to recovery. If a decline in fair value is judged by management to be other-than-temporary or management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Income.

Based on management's review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Condensed Consolidated Statements of Income for the six months ended June 30, 2012 and 2011:

	Six Months Ended
	June 30,
		2012		2011

Other than temporary impairments:
Mortgage loans	$	0	$	262,067

The other-than-temporary impairments recognized during 2011 were due to appraisal valuations and Management's analysis of discounted mortgage loans. The mortgage loans were written down to better reflect current expected market values.

B.	Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Income. Trading securities include exchange-traded equities and exchange-traded options. Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of June 30, 2012 was $7,726,989 and $(6,869,725), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2011 was $3,217,420 and $(4,187,885), respectively. Earnings from trading securities are classified in cash flows from operating activities. Trading revenue charged to net investment income from trading securities was:

	Six Months Ended
	June 30,
		2012		2011

Net unrealized gains	$	167,251	$	1,357,344
Net realized gains		1,698,758		1,725,993
Net unrealized and realized gains	$	1,866,009	$	3,083,337

C.	Mortgage Loans

As of June 30, 2012 and December 31, 2011, the Company's mortgage loan portfolio contained 87 and 101 mortgage loans, including discounted mortgage loans, with a carrying value of $52,851,202 and $36,740,839, respectively.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers' ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices. Given the uncertainty of the current market, management has taken a conservative approach with the discounted mortgage loans and has classified all discounted mortgage loans held as non-accrual. In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held. Discount accruals reported during 2011 and 2012 were the result of the loan basis already being fully paid.

On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment. In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The Company acquires the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary. Those loans not currently paying are being vigorously worked by management. The current discounted commercial mortgage loan portfolio has an average price of 34.2% of face value and management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased.