Note 7 – Investments

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at March 31, 2013 and December 31, 2012 are shown below.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
March 31, 2013	Cost		Gains		Losses (1)			Value
	(In thousands)
U.S. Treasury securities and obligations of U.S.government corporations and agencies	$	882,336	$	2,967	$	(568	)	$	884,735
Obligations of U.S. states and political subdivisions		783,756		16,069		(383	)		799,442
Corporate debt securities		1,693,146		13,683		(3,649	)		1,703,180
Asset-backed securities		329,493		1,315		(69	)		330,739
Residential mortgage-backed securities		432,977		923		(5,940	)		427,960
Commercial mortgage-backed securities		232,936		407		(1,680	)		231,663
Collateralized loan obligations		19,897		4		-			19,901
Debt securities issued by foreign sovereign governments		132,332		8,231		(421	)		140,142
Total debt securities		4,506,873		43,599		(12,710	)		4,537,762
Equity securities		2,815		115		(2	)		2,928

Total investment portfolio	$	4,509,688	$	43,714	$	(12,712	)	$	4,540,690

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2012	Cost		Gains		Losses (1)			Value
	(In thousands)
U.S. Treasury securities and obligations of U.S.government corporations and agencies	$	863,282	$	3,040	$	(71	)	$	866,251
Obligations of U.S. states and political subdivisions		795,935		16,965		(506	)		812,394
Corporate debt securities		1,469,844		13,813		(2,716	)		1,480,941
Asset-backed securities		322,802		1,657		(23	)		324,436
Residential mortgage-backed securities		451,352		871		(1,314	)		450,909
Commercial mortgage-backed securities		150,232		524		(414	)		150,342
Debt securities issued by foreign sovereign governments		132,490		9,784		(208	)		142,066
Total debt securities		4,185,937		46,654		(5,252	)		4,227,339
Equity securities		2,797		139		-			2,936

Total investment portfolio	$	4,188,734	$	46,793	$	(5,252	)	$	4,230,275

(1) At March 31, 2013 and December 31, 2012, there were no other-than-temporary impairment losses recorded in other comprehensive income.

Our foreign investments primarily consist of the investment portfolio supporting our Australian domiciled subsidiary. This portfolio is comprised of Australian government and semi government securities, representing 87% of the market value of our foreign investments with the remaining 11% invested in corporate securities and 2% in cash equivalents. Ninety-two percent of the Australian portfolio is rated AAA, by one or more of Moody's, Standard & Poor's and Fitch Ratings, and the remaining 8% is rated AA.

The amortized cost and fair values of debt securities at March 31, 2013, by contractual maturity, are 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. Because most asset-backed and mortgage-backed securities and collateralized loan obligations provide for periodic payments throughout their lives, they are listed below in separate categories.

	Amortized		Fair
March 31, 2013	Cost		Value
	(In thousands)

Due in one year or less	$	959,410	$	961,273
Due after one year through five years		1,558,703		1,581,603
Due after five years through ten years		600,924		608,277
Due after ten years		372,533		376,346

	$	3,491,570	$	3,527,499

Asset-backed securities		329,493		330,739
Residential mortgage-backed securities		432,977		427,960
Commercial mortgage-backed securities		232,936		231,663
Collateralized loan obligations		19,897		19,901

Total at March 31, 2013	$	4,506,873	$	4,537,762

At March 31, 2013 and December 31, 2012, the investment portfolio had gross unrealized losses of $12.7 million and $5.3 million, respectively. For those securities in an unrealized loss position, the length of time the securities were in such a position, as measured by their month-end fair values, is as follows:

	Less Than 12 Months				12 Months or Greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2013	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S.government corporations and agencies	$	107,846	$	568	$	-	$	-	$	107,846	$	568
Obligations of U.S. states and political subdivisions		102,228		383		56		-		102,284		383
Corporate debt securities		547,075		3,646		3,321		3		550,396		3,649
Asset-backed securities		81,463		69		-		-		81,463		69
Residential mortgage-backed securities		307,541		5,586		18,132		354		325,673		5,940
Commercial mortgage-backed securities		139,102		1,680		-		-		139,102		1,680
Debt securities issued by foreign sovereign governments		22,711		421		-		-		22,711		421
Equity securities		135		2		-		-		135		2
Total investment portfolio	$	1,308,101	$	12,355	$	21,509	$	357	$	1,329,610	$	12,712

	Less Than 12 Months				12 Months or Greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2012	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S.government corporations and agencies	$	24,094	$	71	$	-	$	-	$	24,094	$	71
Obligations of U.S. states and political subdivisions		156,111		505		1,006		1		157,117		506
Corporate debt securities		280,765		2,714		3,353		2		284,118		2,716
Asset-backed securities		29,675		23		-		-		29,675		23
Residential mortgage-backed securities		315,000		982		19,939		332		334,939		1,314
Commercial mortgage-backed securities		72,689		414		-		-		72,689		414
Debt securities issued by foreign sovereign governments		14,695		208		-		-		14,695		208
Total investment portfolio	$	893,029	$	4,917	$	24,298	$	335	$	917,327	$	5,252

The unrealized losses in all categories of our investments at March 31, 2013 and December 31, 2012 were primarily caused by the difference in interest rates at March 31, 2013 and December 31, 2012, respectively, compared to interest rates at the time of purchase.

Under the current guidance a debt security impairment is deemed other than temporary if we either intend to sell the security, or it is more likely than not that we will be required to sell the security before recovery or we do not expect to collect cash flows sufficient to recover the amortized cost basis of the security. During each of the first three months of 2013 and 2012 there were no other-than-temporary impairments ("OTTI") recognized.

The net realized investment gains (losses) and OTTI on the investment portfolio are as follows:

		Three Months Ended
		March 31,
		2013		2012
	(In thousands)
Net realized investment gains (losses) and OTTI on investments:
Fixed maturities		$	1,257	$	75,339
Equity securities			2		382
Other			-		1,840

		$	1,259	$	77,561

		Three Months Ended
		March 31,
		2013		2012
	(In thousands)
Net realized investment gains (losses) and OTTI on investments:
Gains on sales		$	1,934	$	80,035
Losses on sales			(675		(2,474	)
Impairment losses			-		-

		$	1,259	$	77,561