Note 7 – Investments

The amortized cost, gross unrealized gains and losses and fair value of the investment portfolio at June 30, 2015 and December 31, 2014 are shown below.

June 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses (1)			Fair Value
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	130,388	$	1,959	$	(2,791	)	$	129,556
Obligations of U.S. states and political subdivisions		1,307,313		10,460		(10,913	)		1,306,860
Corporate debt securities		2,292,817		6,538		(32,409	)		2,266,946
Asset-backed securities		199,763		537		(33	)		200,267
Residential mortgage-backed securities		297,207		265		(10,451	)		287,021
Commercial mortgage-backed securities		263,967		336		(2,635	)		261,668
Collateralized loan obligations		61,341		-		(658	)		60,683
Debt securities issued by foreign sovereign governments		33,521		2,676		(151	)		36,046
Total debt securities		4,586,317		22,771		(60,041	)		4,549,047
Equity securities		3,042		36		(15	)		3,063

Total investment portfolio	$	4,589,359	$	22,807	$	(60,056	)	$	4,552,110

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses (1)			Fair Value
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	349,153	$	2,752	$	(5,130	)	$	346,775
Obligations of U.S. states and political subdivisions		844,942		12,961		(2,761	)		855,142
Corporate debt securities		2,418,991		16,325		(10,035	)		2,425,281
Asset-backed securities		286,260		535		(140	)		286,655
Residential mortgage-backed securities		329,983		254		(9,000	)		321,237
Commercial mortgage-backed securities		276,215		1,221		(2,158	)		275,278
Collateralized loan obligations		61,340		-		(1,264	)		60,076
Debt securities issued by foreign sovereign governments		35,630		3,540		-			39,170
Total debt securities		4,602,514		37,588		(30,488	)		4,609,614
Equity securities		3,003		61		(9	)		3,055

Total investment portfolio	$	4,605,517	$	37,649	$	(30,497	)	$	4,612,669

(1)	At June 30, 2015 and December 31, 2014, 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 86% of the market value of our foreign investments with the remainder invested in corporate securities and cash equivalents with allocations of 10% and 4%, respectively. Eighty-five percent of the Australian portfolio is rated AAA, by one or more of Moody’s, Standard & Poor’s and Fitch Ratings, and the remaining 15% is rated AA.

The amortized cost and fair values of debt securities at June 30, 2015, 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.

June 30, 2015	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	271,482	$	272,149
Due after one year through five years		1,612,642		1,619,983
Due after five years through ten years		1,140,771		1,115,794
Due after ten years		739,144		731,482

	$	3,764,039	$	3,739,408

Asset-backed securities		199,763		200,267
Residential mortgage-backed securities		297,207		287,021
Commercial mortgage-backed securities		263,967		261,668
Collateralized loan obligations		61,341		60,683

Total at June 30, 2015	$	4,586,317	$	4,549,047

At June 30, 2015 and December 31, 2014, the investment portfolio had gross unrealized losses of $60.1 million and $30.5 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
June 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	82,100	$	1,096	$	15,284	$	1,695	$	97,384	$	2,791
Obligations of U.S. states and political subdivisions		525,293		9,733		51,076		1,180		576,369		10,913
Corporate debt securities		1,198,025		28,926		147,131		3,483		1,345,156		32,409
Asset-backed securities		46,789		21		7,696		12		54,485		33
Residential mortgage-backed securities		55,302		364		214,206		10,087		269,508		10,451
Commercial mortgage-backed securities		164,137		1,688		71,721		947		235,858		2,635
Collateralized loan obligations		-		-		60,683		658		60,683		658
Foreign government securities		2,446		151		-		-		2,446		151
Equity securities		351		6		173		9		524		15

Total	$	2,074,443	$	41,985	$	567,970	$	18,071	$	2,642,413	$	60,056

	Less Than 12 Months				12 Months or Greater				Total
December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	58,166	$	138	$	232,351	$	4,992	$	290,517	$	5,130
Obligations of U.S. states and political subdivisions		166,408		1,066		114,465		1,695		280,873		2,761
Corporate debt securities		816,555		5,259		243,208		4,776		1,059,763		10,035
Asset-backed securities		54,491		80		11,895		60		66,386		140
Residential mortgage-backed securities		24,168		34		263,002		8,966		287,170		9,000
Commercial mortgage-backed securities		89,301		810		110,652		1,348		199,953		2,158
Collateralized loan obligations		-		-		60,076		1,264		60,076		1,264
Equity securities		167		1		235		8		402		9

Total	$	1,209,256	$	7,388	$	1,035,884	$	23,109	$	2,245,140	$	30,497

The unrealized losses in all categories of our investments at June 30, 2015 and December 31, 2014 were primarily caused by the difference in interest rates at each respective period, compared to interest rates at the time of purchase. There were 532 and 423 securities in an unrealized loss position at June 30, 2015 and December 31, 2014, respectively.

During each of the three and six months ended June 30, 2015 and 2014 there were no other-than-temporary impairments (“OTTI”) recognized. The net realized investment gains (losses) on the investment portfolio are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(In thousands)

Realized investment gains (losses) on investments:
Fixed maturities	$	161	$	360	$	26,485	$	126
Equity securities		5		162		8		165
Net realized investment gains	$	166	$	522	$	26,493	$	291

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)

Realized investment gains (losses) on investments:
Gains on sales	$	785		$	1,307		$	27,991		$	2,112
Losses on sales		(619	)		(785	)		(1,498	)		(1,821	)
Net realized investment gains	$	166		$	522		$	26,493		$	291