Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

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, 2015 and December 31, 2014:

June 30, 2015	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	129,556	$	26,271	$	103,285	$	-
Obligations of U.S. states and political subdivisions		1,306,860		-		1,305,226		1,634
Corporate debt securities		2,266,946		-		2,266,946		-
Asset-backed securities		200,267		-		200,267		-
Residential mortgage-backed securities		287,021		-		287,021		-
Commercial mortgage-backed securities		261,668		-		261,668		-
Collateralized loan obligations		60,683		-		60,683		-
Debt securities issued by foreign sovereign governments		36,046		36,046		-		-
Total debt securities		4,549,047		62,317		4,485,096		1,634
Equity securities		3,063		2,742		-		321
Total investment portfolio	$	4,552,110	$	65,059	$	4,485,096	$	1,955
Real estate acquired (1)	$	7,995	$	-	$	-	$	7,995

December 31, 2014	Total 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)
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	346,775	$	188,824	$	157,951	$	-
Obligations of U.S. states and political subdivisions		855,142		-		853,296		1,846
Corporate debt securities		2,425,281		-		2,425,281		-
Asset-backed securities		286,655		-		286,655		-
Residential mortgage-backed securities		321,237		-		321,237		-
Commercial mortgage-backed securities		275,278		-		275,278		-
Collateralized loan obligations		60,076		-		60,076		-
Debt securities issued by foreign sovereign governments		39,170		39,170		-		-
Total debt securities		4,609,614		227,994		4,379,774		1,846
Equity securities		3,055		2,734		-		321
Total investment portfolio	$	4,612,669	$	230,728	$	4,379,774	$	2,167
Real estate acquired (1)	$	12,658	$	-	$	-	$	12,658

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

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, 2015 and 2014 is as follows:

	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at March 31, 2015	$	1,791		$	321	$	2,112		$	10,897
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-			31
Purchases		-			-		-			5,917
Sales		(157	)		-		(157	)		(8,850	)
Transfers into Level 3		-			-		-			-
Transfers out of Level 3		-			-		-			-
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995

Amount of total losses included in earnings for the three months ended June 30, 2015 attributable to the change in unrealized losses on assets still held at June 30, 2015	$	-		$	-	$	-		$	-

	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2014	$	1,846		$	321	$	2,167		$	12,658
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-			(472	)
Purchases		7			-		7			16,714
Sales		(219	)		-		(219	)		(20,905	)
Transfers into Level 3		-			-		-			-
Transfers out of Level 3		-			-		-			-
Balance at June 30, 2015	$	1,634		$	321	$	1,955		$	7,995

Amount of total losses included in earnings for the six months ended June 30, 2015 attributable to the change in unrealized losses on assets still held at June 30, 2015	$	-		$	-	$	-		$	-

	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at March 31, 2014	$	2,378		$	321	$	2,699		$	11,137
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-			(1,157	)
Purchases		-			-		-			11,367
Sales		(147	)		-		(147	)		(10,543	)
Transfers into Level 3		-			-		-			-
Transfers out of Level 3		-			-		-			-
Balance at June 30, 2014	$	2,231		$	321	$	2,552		$	10,804

Amount of total losses included in earnings for the three months ended June 30, 2014 attributable to the change in unrealized losses on assets still held at June 30, 2014	$	-		$	-	$	-		$	-

	Debt Securities			Equity Securities		Total Investments			Real Estate Acquired
	(In thousands)
Balance at December 31, 2013	$	2,423		$	321	$	2,744		$	13,280
Total realized/unrealized gains (losses):
Included in earnings and reported as losses incurred, net		-			-		-			(2,316	)
Purchases		30			-		30			19,377
Sales		(222	)		-		(222	)		(19,537	)
Transfers into Level 3		-			-		-			-
Transfers out of Level 3		-			-		-			-
Balance at June 30, 2014	$	2,231		$	321	$	2,552		$	10,804

Amount of total losses included in earnings for the six months ended June 30, 2014 attributable to the change in unrealized losses on assets still held at June 30, 2014	$	-		$	-	$	-		$	-

Par value and fair value of debt

The following tables present the carrying value and fair value of our financial liabilities disclosed, but not carried, at fair value at June 30, 2015 and December 31, 2014, and the level within the fair value hierarchy at which such liabilities are measured on a recurring basis.

June 30, 2015	Par Value			Total 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)
Financial liabilities:
Senior Notes		$	61,953		$	62,689		$	-		$	62,689		$	-
Convertible Senior Notes due 2017			345,000			394,521			-			394,521			-
Convertible Senior Notes due 2020			500,000			837,125			-			837,125			-
Convertible Junior Subordinated Debentures			389,522			512,186			-			512,186			-
Total Debt		$	1,296,475		$	1,806,521		$	-		$	1,806,521		$	-

December 31, 2014	Par Value			Total 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)
Financial liabilities:
Senior Notes		$	61,953		$	63,618		$	-		$	63,618		$	-
Convertible Senior Notes due 2017			345,000			387,997			-			387,997			-
Convertible Senior Notes due 2020			500,000			735,075			-			735,075			-
Convertible Junior Subordinated Debentures			389,522			500,201			-			500,201			-
Total Debt		$	1,296,475		$	1,686,891		$	-		$	1,686,891		$	-