Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair value measurements for items measured at fair value

Fair value measurements for assets measured at fair value included the following as of June 30, 2013 and December 31, 2012:

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
June 30, 2013

U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	910,123	$	910,123	$	-	$	-
Obligations of U.S. states and political subdivisions		916,079		-		913,268		2,811
Corporate debt securities		2,061,738		-		2,061,738		-
Asset-backed securities		310,528		-		310,528		-
Residential mortgage-backed securities		392,087		-		392,087		-
Commercial mortgage-backed securities		222,376		-		222,376		-
Collateralized loan obligations		61,226		-		61,226		-
Debt securities issued by foreign sovereign governments		121,974		121,974		-		-
Total debt securities		4,996,131		1,032,097		3,961,223		2,811
Equity securities		2,860		2,539		-		321
Total investments	$	4,998,991	$	1,034,636	$	3,961,223	$	3,132
Real estate acquired (1)	$	8,741	$	-	$	-	$	8,741

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)

December 31, 2012

U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	866,251	$	866,251	$	-	$	-
Obligations of U.S. states and political subdivisions		812,394		-		809,264		3,130
Corporate debt securities		1,480,941		-		1,463,827		17,114
Asset-backed securities		324,436		-		324,436		-
Residential mortgage-backed securities		450,909		-		450,909		-
Commercial mortgage-backed securities		150,342		-		150,342		-
Debt securities issued by foreign sovereign governments		142,066		142,066		-		-
Total debt securities		4,227,339		1,008,317		3,198,778		20,244
Equity securities		2,936		2,615		-		321
Total investments	$	4,230,275	$	1,010,932	$	3,198,778	$	20,565
Real estate acquired (1)	$	3,463	$	-	$	-	$	3,463

(1) Real estate acquired through claim settlement, which is held for sale, is reported in Other Assets on the consolidated balance sheet.

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

For assets measured at fair value using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances for the three and six months ended June 30, 2013 and 2012 is as follows:

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities		Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at March 31, 2013	$	2,957		$	-	$	321	$	3,278		$	7,524
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-		-			(1,000	)
Purchases		-			-		-		-			9,530
Sales		(146	)		-		-		(146	)		(7,313	)
Transfers into Level 3		-			-		-		-			-
Transfers out of Level 3		-			-		-		-			-
Balance at June 30, 2013	$	2,811		$	-	$	321	$	3,132		$	8,741

Amount of total losses included in earnings for the three months ended June 30, 2013 attributable to the change in unrealized losses on assets still held at June 30, 2013	$	-		$	-	$	-	$	-		$	-

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
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		-			-			-		-			(2,302	)
Purchases		30			-			-		30			17,544
Sales		(349	)		(16,889	)		-		(17,238	)		(9,964	)
Transfers into Level 3		-			-			-		-			-
Transfers out of Level 3		-			-			-		-			-
Balance at June 30, 2013	$	2,811		$	-		$	321	$	3,132		$	8,741

Amount of total losses included in earnings for the three months ended June 30, 2013 attributable to the change in unrealized losses on assets still held at June 30, 2013	$	-		$	-		$	-	$	-		$	-

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at March 31, 2012	$	95,516		$	51,118		$	321	$	146,955		$	2,340
Total realized/unrealized gains (losses):
Included in earnings and reported as realized investment gains (losses), net		(575	)		(700	)		-		(1,275	)		-
Included in earnings and reported as impairment losses, net		-			(339	)		-		(339	)		-
Included in earnings and reported as losses incurred, net		-			-			-		-			(149	)
Included in other comprehensive income		(1,113	)		78			-		(1,035	)		-
Purchases		-			-			-		-			3,888
Sales		(9,847	)		(9,300	)		-		(19,147	)		(3,005	)
Transfers into Level 3		-			-			-		-			-
Transfers out of Level 3		-			-			-		-			-
Balance at June 30, 2012	$	83,981		$	40,857		$	321	$	125,159		$	3,074

Amount of total losses included in earnings for the three months ended June 30, 2012 attributable to the change in unrealized losses on assets still held at June 30, 2012	$	-		$	-		$	-	$	-		$	-

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2011	$	114,226		$	60,228		$	321	$	174,775		$	1,621
Total realized/unrealized gains (losses):
Included in earnings and reported as realized investment gains (losses), net		(2,525	)		(1,081	)		-		(3,606	)		-
Included in earnings and reported as impairment losses, net		-			(339	)		-		(339	)		-
Included in earnings and reported as losses incurred, net		-			-			-		-			(465	)
Included in other comprehensive income		756			355			-		1,111			-
Purchases		27			-			-		27			5,970
Sales		(28,503	)		(18,306	)		-		(46,809	)		(4,052	)
Transfers into Level 3		-			-			-		-			-
Transfers out of Level 3		-			-			-		-			-
Balance at June 30, 2012	$	83,981		$	40,857		$	321	$	125,159		$	3,074

Amount of total losses included in earnings for the three months ended June 30, 2012 attributable to the change in unrealized losses on assets still held at June 30, 2012	$	-		$	-		$	-	$	-		$	-

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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