Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 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)
September 30, 2013

U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	786,767	$	786,767	$	-	$	-
Obligations of U.S. states and political subdivisions		912,833		-		910,263		2,570
Corporate debt securities		2,164,458		-		2,164,458		-
Asset-backed securities		340,814		-		340,814		-
Residential mortgage-backed securities		377,565		-		377,565		-
Commercial mortgage-backed securities		253,807		-		253,807		-
Collateralized loan obligations		60,505		-		60,505		-
Debt securities issued by foreign sovereign governments		120,539		120,539		-		-
Total debt securities		5,017,288		907,306		4,107,412		2,570
Equity securities		2,884		2,563		-		321
Total investments	$	5,020,172	$	909,869	$	4,107,412	$	2,891
Real estate acquired (1)	$	12,376	$	-	$	-	$	12,376

	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 nine months ended September 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 June 30, 2013	$	2,811		$	-	$	321	$	3,132		$	8,741
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-		-			(1,378	)
Purchases		-			-		-		-			10,857
Sales		(241	)		-		-		(241	)		(5,844	)
Transfers into Level 3		-			-		-		-			-
Transfers out of Level 3		-			-		-		-			-
Balance at September 30, 2013	$	2,570		$	-	$	321	$	2,891		$	12,376

Amount of total losses included in earnings for the three months ended September 30, 2013 attributable to the change in unrealized losses on assets still held at September 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		-			-			-		-			(3,680	)
Purchases		30			-			-		30			28,401
Sales		(590	)		(16,889	)		-		(17,479	)		(15,808	)
Transfers into Level 3		-			-			-		-			-
Transfers out of Level 3		-			-			-		-			-
Balance at September 30, 2013	$	2,570		$	-		$	321	$	2,891		$	12,376

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

	Obligations of U.S. States and Political Subdivisions			Corporate Debt Securities		Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at June 30, 2012	$	83,981		$	40,857	$	321	$	125,159		$	3,074
Total realized/unrealized gains (losses):
Included in earnings and reported as realized investment gains (losses), net		(467	)		-		-		(467	)		-
Included in earnings and reported as impairment losses, net		-			-		-		-			-
Included in earnings and reported as losses incurred, net		-			-		-		-			(309	)
Included in other comprehensive income		971			68		-		1,039			-
Purchases		-			-		-		-			2,718
Sales		(10,690	)		-		-		(10,690	)		(2,386	)
Transfers into Level 3		-			-		-		-			-
Transfers out of Level 3		-			-		-		-			-
Balance at September 30, 2012	$	73,795		$	40,925	$	321	$	115,041		$	3,097

Amount of total losses included in earnings for the three months ended September 30, 2012 attributable to the change in unrealized losses on assets still held at September 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		(2,992	)		(1,081	)		-		(4,073	)		-
Included in earnings and reported as impairment losses, net		-			(339	)		-		(339	)		-
Included in earnings and reported as losses incurred, net		-			-			-		-			(774	)
Included in other comprehensive income		1,727			423			-		2,150			-
Purchases		27			-			-		27			8,688
Sales		(39,193	)		(18,306	)		-		(57,499	)		(6,438	)
Transfers into Level 3		-			-			-		-			-
Transfers out of Level 3		-			-			-		-			-
Balance at September 30, 2012	$	73,795		$	40,925		$	321	$	115,041		$	3,097

Amount of total losses included in earnings for the nine months ended September 30, 2012 attributable to the change in unrealized losses on assets still held at September 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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