Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Fair value measurements for items measured at fair value

Assets measured at fair value included those listed, by hierarchy level, in the following tables as of December 31, 2015 and 2014:



December 31, 2015
(In thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	160,584	$	46,197	$	114,387	$	—
Obligations of U.S. states and political subdivisions	1,792,527		—		1,791,299		1,228
Corporate debt securities	2,004,763		—		2,004,763		—
Asset-backed securities	116,617		—		116,617		—
Residential mortgage-backed securities	257,648		—		257,648		—
Commercial mortgage-backed securities	233,491		—		233,491		—
Collateralized loan obligations	60,200		—		60,200		—
Debt securities issued by foreign sovereign governments	31,731		31,731		—		—
Total debt securities	4,657,561		77,928		4,578,405		1,228
Equity securities (1)	5,645		2,790		—		2,855
Total investments	$	4,663,206	$	80,718	$	4,578,405	$	4,083
Real estate acquired (2)	$	12,149	$	—	$	—	$	12,149



December 31, 2014
(In thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	346,775	$	188,824	$	157,951	$	—
Obligations of U.S. states and political subdivisions	855,142		—		853,296		1,846
Corporate debt securities	2,425,281		—		2,425,281		—
Asset-backed securities	286,655		—		286,655		—
Residential mortgage-backed securities	321,237		—		321,237		—
Commercial mortgage-backed securities	275,278		—		275,278		—
Collateralized loan obligations	60,076		—		60,076		—
Debt securities issued by foreign sovereign governments	39,170		39,170		—		—
Total debt securities	4,609,614		227,994		4,379,774		1,846
Equity securities (1)	3,055		2,734		—		321
Total investments	$	4,612,669	$	230,728	$	4,379,774	$	2,167
Real estate acquired (2)	$	12,658	$	—	$	—	$	12,658


(1)	Equity securities in Level 3 are carried at cost, which approximates fair value.


(2)	Real estate acquired through claim settlement, which is held for sale, is reported in other assets on the consolidated balance sheets.

Reconciliation of beginning and ending balance for assets and liabilities measured at fair value with significant unobservable inputs (level 3)

For assets and liabilities measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the years ended December 31, 2015, 2014, and 2013 is shown in the following tables. There were no transfers into or out of Level 3 in those years and there we no losses included in earnings for those years attributable to the change in unrealized losses on assets still held at the end of each applicable year.



(In thousands)	Obligations of U.S. States and Political Subdivisions			Equity Securities		Total Investments			Real Estate Acquired
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(2,322		)
Purchases	7			2,534		2,541			34,624
Sales	(625		)	—		(625		)	(32,811		)
Balance at December 31, 2015	$	1,228		$	2,855	$	4,083		$	12,149



(In thousands)	Obligations of U.S. States and Political Subdivisions			Equity Securities		Total Investments			Real Estate Acquired
Balance at December 31, 2013	$	2,423		$	321	$	2,744		$	13,280
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net	—			—		—			(4,129		)
Purchases	30			—		30			42,247
Sales	(607		)	—		(607		)	(38,740		)
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658



(In thousands)	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
Balance at December 31, 2012	$	3,130		$	17,114		$	321	$	20,565		$	3,463
Total realized/unrealized gains (losses):
Included in earnings and reported as realized investment gains (losses), net	—			(225		)	—		(225		)	—
Included in earnings and reported as losses incurred, net	—			—			—		—			(4,959		)
Included in other comprehensive income	—			—			—		—			—
Purchases	30			—			—		30			39,188
Sales	(737		)	(16,889		)	—		(17,626		)	(24,412		)
Balance at December 31, 2013	$	2,423		$	—		$	321	$	2,744		$	13,280

Schedule of carrying value and fair value of financial liabilities measured on a recurring basis

The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at December 31, 2015 and 2014. The fair values of our Senior Notes, Convertible Senior Notes and Convertible Junior Debentures were determined using available pricing for these notes, debentures, or similar instruments and they are categorized as Level 2 as described in Note 3 – “Summary of Significant Accounting Policies - Fair Value Measurements.”



(In thousands)	Par Value		Fair Value

December 31, 2015
Financial liabilities:
Convertible Senior Notes due 2017	$	333,503	$	345,616
Convertible Senior Notes due 2020	500,000		701,955
Convertible Junior Subordinated Debentures due 2063	389,522		455,067
Total financial liabilities	$	1,223,025	$	1,502,638

December 31, 2014
Financial liabilities:
Senior Notes	$	61,953	$	63,618
Convertible Senior Notes due 2017	345,000		387,997
Convertible Senior Notes due 2020	500,000		735,075
Convertible Junior Subordinated Debentures due 2063	389,522		500,201
Total financial liabilities	$	1,296,475	$	1,686,891