Note 7 – Investments

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at March 31, 2014 and December 31, 2013 are shown below.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
March 31, 2014	Cost		Gains		Losses (1)			Value
	(In thousands)
U.S. Treasury securities and obligations of U.S.government corporations and agencies	$	550,477	$	1,649	$	(17,078	)	$	535,048
Obligations of U.S. states and political subdivisions		906,385		8,232		(8,490	)		906,127
Corporate debt securities		2,192,333		9,038		(16,621	)		2,184,750
Asset-backed securities		392,435		1,317		(241	)		393,511
Residential mortgage-backed securities		373,314		141		(19,930	)		353,525
Commercial mortgage-backed securities		286,323		569		(4,331	)		282,561
Collateralized loan obligations		61,337		-		(903	)		60,434
Debt securities issued by foreign sovereign governments		40,922		1,885		(237	)		42,570
Total debt securities		4,803,526		22,831		(67,831	)		4,758,526
Equity securities		2,928		38		(11	)		2,955

Total investment portfolio	$	4,806,454	$	22,869	$	(67,842	)	$	4,761,481

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2013	Cost		Gains		Losses (1)			Value
	(In thousands)

U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	663,642	$	1,469	$	(25,521	)	$	639,590
Obligations of U.S. states and political subdivisions		932,922		5,865		(17,420	)		921,367
Corporate debt securities		2,190,095		6,313		(24,993	)		2,171,415
Asset-backed securities		399,839		1,100		(453	)		400,486
Residential mortgage-backed securities		383,368		146		(24,977	)		358,537
Commercial mortgage-backed securities		277,920		131		(6,668	)		271,383
Collateralized loan obligations		61,337		-		(1,042	)		60,295
Debt securities issued by foreign sovereign governments		39,420		1,722		(290	)		40,852
Total debt securities		4,948,543		16,746		(101,364	)		4,863,925
Equity securities		2,908		9		(23	)		2,894

Total investment portfolio	$	4,951,451	$	16,755	$	(101,387	)	$	4,866,819

(1) At March 31, 2014 and December 31, 2013, 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 85% of the market value of our foreign investments with the remaining 11% invested in corporate securities and 4% in cash equivalents. Seventy-eight percent of the Australian portfolio is rated AAA, by one or more of Moody’s, Standard & Poor’s and Fitch Ratings, and the remaining 22% is rated AA.

The amortized cost and fair values of debt securities at March 31, 2014, 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, 2014	Cost		Value
	(In thousands)

Due in one year or less	$	609,374	$	610,697
Due after one year through five years		1,842,541		1,847,304
Due after five years through ten years		779,379		765,534
Due after ten years		458,823		444,960

	$	3,690,117	$	3,668,495

Asset-backed securities		392,435		393,511
Residential mortgage-backed securities		373,314		353,525
Commercial mortgage-backed securities		286,323		282,561
Collateralized loan obligations		61,337		60,434

Total at March 31, 2014	$	4,803,526	$	4,758,526

At March 31, 2014 and December 31, 2013, the investment portfolio had gross unrealized losses of $67.8 million and $101.4 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, 2014	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	424,490	$	15,477	$	18,043	$	1,601	$	442,533	$	17,078
Obligations of U.S. states and political subdivisions		377,446		8,445		2,692		45		380,138		8,490
Corporate debt securities		1,072,046		13,570		67,839		3,051		1,139,885		16,621
Asset-backed securities		88,241		185		7,087		56		95,328		241
Residential mortgage-backed securities		90,098		2,765		262,298		17,165		352,396		19,930
Commercial mortgage-backed securities		177,235		4,191		15,256		140		192,491		4,331
Collateralized loan obligations		60,434		903		-		-		60,434		903
Debt securities issued by foreign sovereign governments		9,357		237		-		-		9,357		237
Equity securities		299		6		88		5		387		11
Total investment portfolio	$	2,299,646	$	45,779	$	373,303	$	22,063	$	2,672,949	$	67,842

	Less Than 12 Months				12 Months or Greater				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2013	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	465,975	$	24,980	$	4,103	$	541	$	470,078	$	25,521
Obligations of U.S. states and political subdivisions		503,967		17,370		4,226		50		508,193		17,420
Corporate debt securities		1,238,211		20,371		81,593		4,622		1,319,804		24,993
Asset-backed securities		126,991		387		7,114		66		134,105		453
Residential mortgage-backed securities		91,534		3,886		265,827		21,091		357,361		24,977
Commercial mortgage-backed securities		192,440		6,239		43,095		429		235,535		6,668
Collateralized loan obligations		60,295		1,042		-		-		60,295		1,042
Debt securities issued by foreign sovereign governments		7,203		290		-		-		7,203		290
Equity securities		1,012		18		75		5		1,087		23
Total investment portfolio	$	2,687,628	$	74,583	$	406,033	$	26,804	$	3,093,661	$	101,387

The unrealized losses in all categories of our investments at March 31, 2014 and December 31, 2013 were primarily caused by the difference in interest rates at each respective period, 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 three months ended March 31, 2014 and 2013 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,
		2014			2013
	(In thousands)
Net realized investment gains (losses) and OTTI on investments:
Fixed maturities		$	(234	)	$	1,257
Equity securities			3			2

		$	(231	)	$	1,259

		Three Months Ended
		March 31,
		2014			2013
	(In thousands)
Net realized investment gains (losses) and OTTI on investments:
Gains on sales		$	805		$	1,934
Losses on sales			(1,036	)		(675	)

		$	(231	)	$	1,259