Note 3. Investments

Fixed Maturity AFS and Equity AFS Securities

The amortized cost/cost, gross unrealized gains and losses, estimated fair values and other-than-temporary impairments (“OTTI”) reflected in accumulated other comprehensive income (“AOCI”) of investments in fixed maturity and equity AFS securities at March 31, 2018 and December 31, 2017 were:

		March 31, 2018
					Gross Unrealized							Estimated
		Amortized										Fair			OTTI
		Cost/Cost			Gains			Losses				Value			in AOCI (a)
Fixed maturity AFS securities
Corporate securities	$		821,572	$		38,678	$		(6,602	)	$		853,648	$		-
Asset-backed securities			50,647			19			(460	)			50,206			-
Commercial mortgage-backed securities			61,223			638			(1,208	)			60,653			-
Residential mortgage-backed securities			37,680			6,794			(903	)			43,571			-
Municipals			905			-			(21	)			884			-
Government and government agencies
United States			217,502			37,267			(300	)			254,469			-
Foreign			24,123			1,334			(167	)			25,290			-
Redeemable preferred stock			5,791			-			(191	)			5,600			-
Total fixed maturity AFS securities	$		1,219,443	$		84,730	$		(9,852	)	$		1,294,321	$		-

	December 31, 2017
					Gross Unrealized							Estimated
		Amortized										Fair			OTTI
		Cost/Cost			Gains			Losses				Value			in AOCI (a)
Fixed maturity AFS securities
Corporate securities	$		885,440	$		58,766	$		(2,182	)	$		942,024	$		-
Asset-backed securities			56,852			241			(187	)			56,906			-
Commercial mortgage-backed securities			72,373			1,397			(449	)			73,321			-
Residential mortgage-backed securities			74,385			7,076			(44	)			81,417			-
Municipals			906			-			(25	)			881			-
Government and government agencies
United States			298,223			63,998			(102	)			362,119			-
Foreign			24,158			2,168			(46	)			26,280			-
Redeemable preferred stock			5,791			-			(101	)			5,690			-
Total fixed maturity AFS securities	$		1,418,128	$		133,646	$		(3,136	)	$		1,548,638	$		-

Equity AFS securities
Banking securities	$		25,473	$		3,024	$		-		$		28,497	$		-
Total equity AFS securities	$		25,473	$		3,024	$		-		$		28,497	$		-

(a)	Represents OTTI in AOCI, which were not reflected in earnings. Amount excludes $3,358 and $3,364 of unrealized gains at March 31, 2018 and December 31, 2017, respectively.

Excluding investments in U.S. government and government agencies, the Company is not exposed to any significant concentration of credit risk in its fixed maturity securities portfolio.

The amortized cost and estimated fair value of fixed maturity AFS securities by investment grade at March 31, 2018 and December 31, 2017 were:

	March 31, 2018				December 31, 2017
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Investment grade	$	1,156,451	$	1,225,374	$	1,337,738	$	1,460,708
Below investment grade		62,992		68,947		80,390		87,930
Total fixed maturity AFS securities	$	1,219,443	$	1,294,321	$	1,418,128	$	1,548,638

At March 31, 2018 and December 31, 2017, the estimated fair value of fixed maturity securities rated BBB-, which is the lowest investment grade rating given by rating agencies, was $105,274 and $120,663, respectively. Below investment grade securities are speculative and are subject to significantly greater risks related to the creditworthiness of the issuers and the liquidity of the market for such securities. The Company closely monitors such investments to assess whether they are other-than-temporarily impaired.

The amortized cost and estimated fair value of fixed maturity AFS securities at March 31, 2018 and December 31, 2017 by contractual maturities were:

		March 31, 2018						December 31, 2017
					Estimated						Estimated
		Amortized			Fair			Amortized			Fair
		Cost			Value			Cost			Value
Fixed maturity AFS securities
Due in one year or less	$		78,457	$		79,445	$		73,570	$		74,686
Due after one year through five years			418,785			428,159			466,858			484,576
Due after five years through ten years			124,237			124,425			134,939			139,174
Due after ten years			448,414			507,862			539,151			638,558
	$		1,069,893	$		1,139,891	$		1,214,518	$		1,336,994
Mortgage-backed securities and other asset-backed securities	$		149,550	$		154,430	$		203,610	$		211,644
Total fixed maturity AFS securities	$		1,219,443	$		1,294,321	$		1,418,128	$		1,548,638

In the preceding table, fixed maturity securities not due at a single maturity date have been included in the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The Company had investment securities with an estimated fair value of $6,469 and $4,246 that were deposited with insurance regulatory authorities at March 31, 2018 and December 31, 2017, respectively.

Unrealized Losses on Fixed Maturity AFS and Equity AFS Securities

The Company’s investments in fixed maturity and equity securities classified as AFS are carried at estimated fair value with unrealized gains and losses included in stockholder’s equity as a component of AOCI, net of taxes.

The estimated fair value and gross unrealized losses and OTTI related to fixed maturity and equity AFS securities aggregated by length of time that individual securities have been in a continuous unrealized loss position at March 31, 2018 and December 31, 2017 were as follows:

	March 31, 2018
							Gross
	Estimated						Unrealized
	Fair			Amortized			Losses and
	Value			Cost/Cost			OTTI (a)
Less than or equal to six months
Fixed maturity AFS securities
Corporate securities	$	189,755		$	194,764		$	(5,009	)
Asset-backed securities		28,429			28,683			(254	)
Commercial mortgage-backed securities		41,667			42,654			(987	)
Residential mortgage-backed securities		(1,938	)		(1,127	)		(811	)
Government and government agencies
United States		16,468			16,768			(300	)
Foreign		2,529			2,532			(3	)
Total fixed maturity AFS securities	$	276,910		$	284,274		$	(7,364	)
Greater than six months but less than or equal to one year
Fixed maturity AFS securities
Corporate securities	$	3,397		$	3,681		$	(284	)
Commercial mortgage-backed securities		2,798			2,969			(171	)
Residential mortgage-backed securities		2,029			2,121			(92	)
Redeemable preferred stock		5,600			5,791			(191	)
Total fixed maturity AFS securities	$	13,824		$	14,562		$	(738	)
Greater than one year
Fixed maturity AFS securities
Corporate securities	$	8,132		$	9,441		$	(1,309	)
Asset-backed securities		2,344			2,550			(206	)
Commercial mortgage-backed securities		969			1,019			(50	)
Residential mortgage-backed securities		5			5			-
Municipals		884			905			(21	)
Government and government agencies
Foreign		3,650			3,814			(164	)
Total fixed maturity AFS securities	$	15,984		$	17,734		$	(1,750	)
Total fixed maturity AFS securities	$	306,718		$	316,570		$	(9,852	)

	December 31, 2017
					Gross
	Estimated				Unrealized
	Fair		Amortized		Losses and
	Value		Cost/Cost		OTTI (a)
Less than or equal to six months
Fixed maturity AFS securities
Corporate securities	$	109,579	$	110,819	$	(1,240	)
Asset-backed securities		20,762		20,791		(29	)
Commercial mortgage-backed securities		28,994		29,409		(415	)
Residential mortgage-backed securities		2,054		2,098		(44	)
Government and government agencies
United States		7,533		7,635		(102	)
Total fixed maturity and equity AFS securities	$	168,922	$	170,752	$	(1,830	)
Greater than six months but less than or equal to one year
Fixed maturity AFS securities
Commercial mortgage-backed securities	$	26	$	26	$	-
Government and government agencies
Foreign		3,767		3,813		(46	)
Redeemable preferred stock		5,690		5,791		(101	)
Total fixed maturity and equity AFS securities	$	9,483	$	9,630	$	(147	)
Greater than one year
Fixed maturity AFS securities
Corporate securities	$	8,498	$	9,440	$	(942	)
Asset-backed securities		2,610		2,768		(158	)
Commercial mortgage-backed securities		986		1,020		(34	)
Residential mortgage-backed securities		6		6		-
Municipals		881		906		(25	)
Total fixed maturity and equity AFS securities	$	12,981	$	14,140	$	(1,159	)
Total fixed maturity and equity AFS securities	$	191,386	$	194,522	$	(3,136	)

(a)	Subsequent unrealized gains (losses) on OTTI securities are included in Net unrealized OTTI on securities in the Statements of Comprehensive Income (Loss).

The total number of AFS securities in an unrealized loss position with unrealized gains and losses included as a component of AOCI was 121 and 79 at March 31, 2018 and December 31, 2017, respectively. The Company held 350 and 371 total AFS securities at March 31, 2018 and December 31, 2017, respectively.

The fair value, gross unrealized losses/the portion of OTTI recognized in OCI and the number of securities with fair value declining below amortized cost by between 20% and 40% by length of time that those securities have been in a continuous unrealized loss position were as follows at March 31, 2018 and December 31, 2017:

	March 31, 2018							December 31, 2017
	Estimated		Gross Unrealized			Number of		Estimated			Gross Unrealized			Number of
	Fair Value		Losses/OTTI (a)			Securities		Fair Value			Losses/OTTI (a)			Securities
Decline 20% - 40%
Held longer than one year	$	1,922	$	(1,018	)		2	$	2,033	$		(908	)		2
Total	$	1,922	$	(1,018	)		2	$	2,033	$		(908	)		2

(a) Subsequent unrealized gains (losses) on OTTI securities are included in Net unrealized OTTI on securities in the Statements of Comprehensive Income (Loss).

Unrealized gains (losses) incurred during the first three months of 2018 and twelve months of 2017 were primarily due to price fluctuations resulting from changes in interest rates and credit spreads. If the Company has the intent to sell or it is more likely than not that the Company will be required to sell these securities prior to the anticipated recovery of the amortized cost, securities are written down to fair value. If cash flow models indicate a credit event will impact future cash flows, the security is impaired to discounted cash flows. As the remaining unrealized losses in the portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired.

The components of net unrealized gains (losses) and OTTI included in AOCI, net of taxes, at March 31, 2018 and December 31, 2017 were as follows:

	March 31,			December 31,
	2018			2017
Assets
Fixed maturity AFS securities	$	74,880		$	130,511
Cash equivalent securities		(20	)		(2	)
Equity AFS securities		-			3,023
Cash flow hedges		(442	)		(931	)
VOBA		(21,985	)		(30,769	)
	$	52,433		$	101,832
Liabilities
Income taxes - deferred	$	(21,333	)	$	(21,333	)
Stockholder’s Equity
Accumulated other comprehensive income, net of taxes	$	31,100		$	80,499

Equity Securities

The amortized cost/cost, estimated fair value and gross unrealized gains (losses) recorded in net investment income (loss) of investments in equity securities at March 31, 2018 were:

	March 31, 2018
						Gross Unrealized
				Estimated		Gains (Losses) Recorded
		Amortized		Fair		in Net Investment
		Cost/Cost		Value		Income (Loss)
Equity securities
Banking securities	$		25,473	$	28,126	$	2,653
Total equity securities	$		25,473	$	28,126	$	2,653

See Note 1 Summary of Significant Accounting Policies, for discussion on the adoption of ASU 2016-01.

Mortgage Loans on Real Estate

Mortgage loans on real estate consist entirely of mortgages on commercial real estate. Prepayment premiums are collected when borrowers elect to prepay their debt prior to the stated maturity. The Company received prepayment premiums of $482 and $1,183 during the three months ended March 31, 2018 and twelve months ended December, 31 2017, respectively. Prepayment premiums are included in net realized investment gains (losses), excluding OTTI losses on securities, in the Statements of Income (Loss). The Company does not accrue interest on loans ninety days past due. At March 31, 2018 and December 31, 2017, there were no commercial mortgage loans that had two or more payments delinquent.

The fair values of mortgage loans on real estate are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and/or similar remaining maturities. The estimated fair value of the mortgages on commercial real estate at March 31, 2018 and December 31, 2017 was $21,560 and $26,049, respectively.

Loans are considered impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. A valuation allowance is established when a loan is determined to be impaired for the excess carrying value of the loan over its estimated collateral value. There were no impaired mortgage loans at March 31, 2018 and December 31, 2017. For the portion of the mortgage loan portfolio without specific reserves, an allowance for credit losses is established. The change in the allowance for credit losses is reflected in net realized investment gains (losses), excluding OTTI losses on securities, in the Statements of Income (Loss).

The commercial mortgages are geographically diversified throughout the United States as follows: Florida, 28%; Utah, 27%; Minnesota, 24%; Colorado, 11%; and New Jersey, 10% at March 31, 2018.

The credit quality of commercial mortgage loans at March 31, 2018 and December 31, 2017 was as follows:

	March 31,			December 31,
Commercial	2018			2017
AAA - AA	$	8,175		$	11,723
A		13,177			13,246
Total mortgage loans on real estate	$	21,352		$	24,969
Less: allowance for credit losses		(8	)		(7	)

Total mortgage loans on real estate, net	$	21,344		$	24,962

The Company determined the credit quality of the commercial mortgage loans based on an internal credit rating model that assign a letter rating to each mortgage loan in the portfolio as an indicator of the quality of the mortgage loan. The internal credit rating model was designed based on a rating agency methodology, then modified for credit risk associated with the Company’s mortgage lending process, taking into account such factors as projected future cash flows, net operating income, and collateral value. The model produces a rating score and an associated letter rating that is intended to align with S&P Global Rating Services (“S&P GRS”) ratings as closely as possible. Information supporting the risk rating process is updated at least annually. While mortgage loans with a lower rating carry a higher risk of loss, an adequate allowance for credit losses has been established to cover those risks.

Securities Lending

The following table provides a summary of the securities lending program at March 31, 2018 and December 31, 2017:

	March 31,		December 31,
	2018		2017
Payables for collateral under securities loaned	$	141,545	$	209,923
Amortized cost of securities out on loan		123,596		167,195
Estimated fair value of securities out on loan		141,571		203,909

Reverse Repurchase Agreements

The following table provides a summary of the dollar roll reverse repurchase agreements at March 31, 2018 and December 31, 2017:

	March 31,		December 31,
	2018		2017
Payables for reverse repurchase agreements	$	35,222	$	36,494
Amortized cost of securities pledged		36,249		36,249
Estimated fair value of securities pledged		35,454		36,337

Collateral Maturities of Reverse Repurchase Agreements and Securities Lending Transactions

The following tables provide a summary of maturities of collateral underlying reverse repurchase agreements and securities lending transactions at March 31, 2018 and December 31, 2017:

	March 31, 2018
	Overnight and Continuous		Up to 30 days		Total
Reverse repurchase agreements
Residential mortgage-backed securities	$	-	$	35,454	$	35,454
Total	$	-	$	35,454	$	35,454

Securities lending transactions
U.S. Treasury and agency securities	$	93,799	$	-	$	93,799
Corporate securities		44,264		-		44,264
Equity securities - banking		3,508		-		3,508
Total	$	141,571	$	-	$	141,571
Total Borrowings	$	141,571	$	35,454	$	177,025

Gross amount of recognized liabilities for reverse repurchase agreements and securities lending included on the Balance Sheets					$	176,767

	December 31, 2017
	Overnight and Continuous		Up to 30 days		Total
Reverse repurchase agreements
Residential mortgage-backed securities	$	-	$	36,337	$	36,337
Total	$	-	$	36,337	$	36,337

Securities lending transactions
U.S. Treasury and agency securities	$	169,011	$	-	$	169,011
Corporate securities		34,493		-		34,493
Equity securities - banking		405		-		405
Total	$	203,909	$	-	$	203,909
Total Borrowings	$	203,909	$	36,337	$	240,246

Gross amount of recognized liabilities for reverse repurchase agreements and securities lending included on the Balance Sheets					$	246,417

Derivatives and Hedge Accounting

The following table presents the notional and fair value amounts of non-qualifying hedging instruments and cash flow hedges at March 31, 2018 and December 31, 2017:

	Notional				Fair Value
	March 31,		December 31,		March 31,			December 31,
Derivative Type	2018		2017		2018			2017
Non-qualifying hedges
Short futures	$	8,435	$	5,462	$	(80	)	$	-
Long futures		47,993		60,697		216			-
Interest rate swaps		221,000		221,000		(7,475	)		(2,599	)
Variance swaps		318		398		106			(1,847	)
Total return swaps		241,325		248,326		(3,566	)		(4,791	)
Options		1,013,890		1,043,001		39,790			26,023
Credit default swaps		175,000		185,000		6,525			7,350
Total non-qualifying hedges	$	1,707,961	$	1,763,884	$	35,516		$	24,136
Cash flow hedges
Interest rate swaps	$	24,997	$	49,883	$	(2,016	)	$	(3,808	)
Total cash flow hedges	$	24,997	$	49,883	$	(2,016	)	$	(3,808	)
Derivative Total	$	1,732,958	$	1,813,767	$	33,500		$	20,328

The following table presents the net derivative gains (losses) recognized in the Statements of Income (Loss) for the three months ended March 31, 2018 and 2017:

	Net Derivative Gains (Losses) Recognized In Income
	Three Months Ended
	March 31,
Derivative Type	2018				2017
Short futures	$	(2,541	)	$		(724	)
Long futures		(1,375	)			255
Variance swaps		935				(1,629	)
Total return swaps		(122	)			(4,902	)
Options		64				(16,909	)
Interest rate swaps		(7,203	)			(629	)
Credit default swaps		(624	)			310
Total	$	(10,866	)	$		(24,228	)

The following tables present the maximum potential amount of future payments, credit rating, and maturity dates for the credit default swaps at March 31, 2018 and December 31, 2017:

	Maximum Potential Amount
	of Future Payments		Credit Rating		Maturity Date Range
Derivative Type	March 31, 2018
Credit default swaps
Corporate debt	$	95,000		AA-BBB		March 2020-December 2021
Sovereign debt		80,000		AA-A		December 2019-June 2022
Credit default swaps total	$	175,000

	Maximum Potential Amount
	of Future Payments		Credit Rating		Maturity Date Range
Derivative Type	December 31, 2017
Credit default swaps
Corporate debt	$	95,000		AA-BBB	March 2020-December 2021
Sovereign debt		90,000		AA-A	March 2018-June 2022
Credit default swaps total	$	185,000

The following tables present the components of the gains (losses) on derivatives that qualify as cash flow hedges for the three months ended March 31, 2018 and 2017:

	Gains (Losses) Recognized in
	OCI on Derivatives (Effective Portion)
	Three Months Ended
	March 31,
	2018		2017
Interest rate swaps	$	489	$	408
Total	$	489	$	408

	Net Realized Gains (Losses)
	Recognized in Income on Derivatives (Ineffective Portion)
	Three Months Ended
	March 31,
	2018		2017
Interest rate swaps	$	73	$	1
Total	$	73	$	1

	Gains (Losses) Reclassified from
	AOCI into Net Investment Income (Effective Portion)
	Three Months Ended
	March 31,
	2018		2017
Interest rate swaps	$	1,303	$	(247	)
Total	$	1,303	$	(247	)

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At March 31, 2018, the before-tax deferred net gains (losses) on derivatives recorded in AOCI that are expected to be reclassified to the Statements of Income (Loss) during the next twelve months are $5,211. This expectation is based on the anticipated interest payments on the hedged investments in Treasury Inflation Protection Securities (“TIPS”) that will occur over the next twelve months, at which time the Company will recognize the deferred gains (losses) as an adjustment to interest income over the term of the investment cash flows.

In addition, in order to trade futures, the Company is required to post collateral to an exchange (sometimes referred to as margin). The fair value of collateral posted in relation to the futures margin was $2,373 and $2,488 at March 31, 2018 and December 31, 2017, respectively.

Offsetting of Derivative Instruments

The Company mitigates credit risk arising from derivative contracts by entering into International Swaps and Derivatives Association master netting arrangements and collateral agreements. These arrangements with a counterparty create a right to offset amounts due to and due from the same counterparty when the arrangements are enforceable in the event of a default or bankruptcy, which ultimately reduces credit risk exposure. These arrangements are conducted under terms that are usual and customary in standard derivative activities, as well as requirements determined by exchanges where a bank acts as an intermediary.

The following table provides details relating to the effect, or potential effect, of netting and collateral arrangements, including the right to offset, associated with the Company’s recognized financial assets and recognized financial liabilities at March 31, 2018 and December 31, 2017:

	March 31, 2018						December 31, 2017
Derivatives Subject to a Master Netting Arrangement or a Similar Right to Offset	Assets			Liabilities			Assets			Liabilities
Gross estimated fair value of derivatives:
OTC - Bilateral	$	48,057		$	7,218		$	34,487		$	11,560
OTC - Cleared		2,799			10,274			1,590			4,188
Exchange-traded		254			118			-			-
Total gross estimated fair value of derivatives	$	51,110		$	17,610		$	36,077		$	15,748
Amounts offset on the Balance Sheets
Gross estimated fair value of derivatives: (1)
OTC - Bilateral	$	(5,502	)	$	(5,502	)	$	(9,878	)	$	(9,878	)
OTC - Cleared		(2,799	)		(2,799	)		(1,590	)		(1,590	)
Exchange-traded		(117	)		(117	)		-			-
Cash collateral: (2), (3)
OTC - Bilateral		(37,340	)		-			(16,397	)		-
OTC - Cleared		-			(7,476	)		-			(2,054	)
Estimated fair value of derivatives presented on the Balance Sheets	$	5,352		$	1,716		$	8,212		$	2,226
Gross amounts not offset on the Balance Sheets:
Securities collateral: (4)
OTC - Bilateral	$	(5,089	)	$	(1,716	)	$	(8,083	)	$	(1,516	)
Net amount after application of master netting agreements and collateral	$	263		$	0		$	129		$	710

(1)	Estimated fair value of derivatives is limited to the amount that is subject to offset.

(2)

The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. Cash collateral received for OTC-Bilateral and OTC-Cleared derivatives is included in cash and cash equivalents, short-term investments, or fixed maturity securities, and the obligation to return it, beyond what is already being offset, is included in payables for collateral under securities loaned, reverse repurchase agreements and derivatives. At March 31, 2018 and December 31, 2017, the Company received excess cash collateral of $2,004 and $2,213, respectively.

(3)

The receivable for the return of cash collateral provided to the counterparty, beyond what is being offset, is included in other assets. The amount reported in the table above does not include initial margin on exchange-traded and OTC-Cleared derivatives. At March 31, 2018, the Company provided excess cash collateral of $294. The Company had no excess cash collateral provided to counterparties at December 31, 2017.

(4)

Securities collateral received or pledged by the Company is held in separate custodial accounts and is not recorded on the Balance Sheets. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At March 31, 2018 and December 31, 2017, the Company received excess securities collateral with an estimated fair value of $2,995 and $4,214, respectively, for its OTC-Bilateral derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2018 and December 31, 2017, the Company provided excess securities collateral with an estimated fair value of $1,052 and $146, respectively, for its OTC-Bilateral derivatives, which is not included in the table above due to the foregoing limitation. At March 31, 2018 and December 31, 2017, the Company also provided securities for initial margin with an estimated fair value of $10,846 and $11,310, respectively, for its OTC-Cleared derivatives, which is not included in the table above.

There were no other derivative assets or liabilities at March 31, 2018 and December 31, 2017 that were subject to offsetting.

Net Investment Income (Loss)

Net investment income (loss) by source for the three months ended March 31, 2018 and 2017 was as follows:

	Three Months Ended
	March 31,
Net investment income (loss)	2018			2017
Fixed maturity AFS securities	$	15,408		$	15,464
Equity AFS securities		-			418
Equity securities		57			-
Limited partnerships		(173	)		1,664
Mortgage loans on real estate		276			1,463
Policy loans on insurance contracts		7,778			8,220
Derivatives		1,437			1,590
Cash and cash equivalents		1,166			274
Other		91			73
Gross investment income	$	26,040		$	29,166
Less investment expenses		(2,043	)		(1,222	)
Net investment income (loss)	$	23,997		$	27,944

In accordance with the adoption of ASU 2016-01, effective January 1, 2018, the unrealized gains (losses) for the period related to equity securities reported as a component of net investment income were as follows:

	Three Months Ended
	March 31, 2018
Net gains (losses) recognized during the period on equity securities	$	(371)
Less: Net gains (losses) recognized during the period on equity securities sold during the period		-
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(371)

Realized Investment Gains (Losses)

The Company considers fair value at the date of sale to be equal to the proceeds received. Proceeds and gross realized investment gains (losses) from the sale of AFS securities for the three months ended March 31, 2018 and 2017 were as follows:

	Three Months Ended
	March 31,
	2018			2017
Proceeds	$	124,733		$	53,703
Gross realized investment gains		12,547			593
Gross realized investment losses		(1,043	)		(516	)

Proceeds on AFS securities sold at a realized loss		27,439			53,703

Net realized investment gains (losses) for the three months ended March 31, 2018 and 2017 were as follows:

	Three Months Ended
	March 31,
	2018			2017
Fixed maturity AFS securities	$	11,504		$	77
Mortgage loans on real estate		343			58
Adjustment related to VOBA		(73	)		(104	)
Net realized investment gains (losses)	$	11,774		$	31

OTTI

The following table sets forth the amount of credit loss impairments on fixed maturity securities held by the Company, for which the non-credit portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts at March 31, 2018 and December 31, 2017:

	March 31, 2018			December 31, 2017
Balance at beginning of period	$	(3,111	)	$	(2,040	)
Accretion of credit loss impairments previously recognized		(313	)		(1,071	)
Balance at end of period	$	(3,424	)	$	(3,111	)

There were no components of OTTI reflected in the Statements of Income (Loss) for the three months ended March 31, 2018 and 2017.