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Investments
 9 Months Ended
Sep. 30, 2012
Investment [Abstract]  
Investments

(2)  Investments

On March 31, 2012, we reclassified our entire portfolio of fixed maturity securities classified as held to maturity, which consisted of corporate, U.S. government and foreign government securities, to fixed maturity securities classified as available for sale. The European debt crisis and the August 2011 downgrade of U.S. government debt by Standard & Poor's Corporation had recently disrupted the financial markets. Due to these market disruptions and our desire to maintain greater flexibility in managing our entire investment portfolio in an uncertain economy, we changed our prior intent to hold these securities to maturity. On the date of transfer, these securities had a fair value of $139.1 million and an amortized cost of $136.0 million. The securities' net unrealized appreciation, net of tax, increased our accumulated other comprehensive income and shareholders' equity by $2.0 million as of March 31, 2012.

 

The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed maturity and equity securities were as follows:

  Cost or Gross Gross    
  amortized unrealized unrealized    
  cost gain loss Fair value 
September 30, 2012            
             
U.S. government and government agency securities $224,267 $7,769 $0 $232,036 
Fixed maturity securities of states, municipalities and political            
 subdivisions 977,682  101,493  0  1,079,175 
Special purpose revenue bonds of states, municipalities and            
 political subdivisions 1,895,991  180,049  (23)  2,076,017 
Corporate securities 1,152,593  66,475  (1,761)  1,217,307 
Residential mortgage-backed securities  789,172  52,999  (629)  841,542 
Commercial mortgage-backed securities  479,517  44,635  (52)  524,100 
Asset-backed securities  47,354  370  0  47,724 
Foreign government securities  280,602  16,866  (4)  297,464 
 Total fixed maturity securities – available for sale $5,847,178 $470,656 $(2,469) $6,315,365 
              
Equity securities – available for sale$197,469 $8,741 $(3,346) $202,864 

December 31, 2011            
              
U.S. government and government agency securities $285,166 $10,523 $(10) $295,679 
Fixed maturity securities of states, municipalities and political            
 subdivisions 999,940  85,528  (127)  1,085,341 
Special purpose revenue bonds of states, municipalities and            
 political subdivisions 1,741,297  122,746  (155)  1,863,888 
Corporate securities 817,886  35,221  (6,774)  846,333 
Residential mortgage-backed securities  1,036,436  65,771  (2,121)  1,100,086 
Commercial mortgage-backed securities  244,535  15,162  (3,573)  256,124 
Asset-backed securities  34,655  147  (56)  34,746 
Foreign government securities  225,517  11,203  (83)  236,637 
 Total fixed maturity securities – available for sale $5,385,432 $346,301 $(12,899) $5,718,834 

U.S. government securities $6,998 $ 69 $ - $7,067 
Corporate securities 110,284   1,814   (455)  111,643 
Foreign government securities  43,820   746   (140)  44,426 
 Total fixed maturity securities – held to maturity $161,102 $2,629 $(595) $163,136 

Substantially all of our fixed maturity securities are investment grade and only one security was non-income producing in 2012. The following table displays the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated.

   Less than 12 months  12 months or more  Total  
     Unrealized   Unrealized   Unrealized 
    Fair value  losses Fair value  losses  Fair value  losses 
September 30, 2012                  
                     
Fixed maturity securities                  
 Special purpose revenue bonds of states,                   
  municipalities and political subdivisions $2,813 $(23) $0 $0 $2,813 $(23) 
 Corporate securities 89,993  (1,727)  2,441  (34)  92,434  (1,761) 
 Residential mortgage-backed securities  11,540  (97)  6,633  (532)  18,173  (629) 
 Commercial mortgage-backed securities  7,906  (52)  0  0  7,906  (52) 
 Foreign government securities  9,259  (4)  0  0  9,259  (4) 
Equity securities 74,051  (3,346)  0  0  74,051  (3,346) 
  Total $195,562 $(5,249) $9,074 $(566) $204,636 $(5,815) 

December 31, 2011                  
                     
Fixed maturity securities                  
 U.S. government and government agency                   
  securities$13,984 $(10) $0 $0 $13,984 $(10) 
 Fixed maturity securities of states,                   
  municipalities and political subdivisions  10,256  (107)  899  (20)  11,155  (127) 
 Special purpose revenue bonds of states,                   
  municipalities and political subdivisions  21,856  (67)  6,796  (88)  28,652  (155) 
 Corporate securities 154,856  (6,391)  18,005  (383)  172,861  (6,774) 
 Residential mortgage-backed securities  32,430  (1,364)  7,582  (757)  40,012  (2,121) 
 Commercial mortgage-backed securities  39,075  (3,573)  0  0  39,075  (3,573) 
 Asset-backed securities  19,648  (56)  0  0  19,648  (56) 
 Foreign government securities  4,198  (83)  0  0  4,198  (83) 
  Total $296,303 $(11,651) $33,282 $(1,248) $329,585 $(12,899) 

Our other-than-temporary impairment losses were as follows:

   Nine months ended September 30, Three months ended September 30, 
   2012 2011 2012 2011 
Total other-than-temporary impairment loss $(2,069) $(4,677) $(686) $0 
Portion recognized in other comprehensive income  1,041  1,198  55  0 
 Net other-than-temporary impairment loss recognized             
  in earnings (credit loss) $(1,028) $(3,479) $(631) $0 

Certain of our securities with an other-than-temporary impairment loss have had both a credit loss and an impairment loss recorded in other comprehensive income. The rollforward of credit losses on these securities was as follows:

 Nine months ended September 30, Three months ended September 30, 
 2012 2011 2012 2011 
Balance at beginning of period$5,047 $4,273 $5,444 $3,847 
Credit losses recognized in earnings            
Securities previously impaired 899  1,597  631  0 
Securities not previously impaired 129  1,882  0  0 
Securities sold 0  (3,905)  0  0 
Balance at September 30$6,075 $3,847 $6,075 $3,847 

We do not consider the $5.8 million of gross unrealized losses on fixed maturity and equity securities in our portfolio at September 30, 2012 to be other-than-temporary impairments because: 1) as of September 30, 2012, we have received substantially all contractual interest and principal payments on the fixed maturity securities, 2) we do not intend to sell these securities, 3) it is more likely than not that we will not be required to sell the securities before recovery of their amortized cost or cost bases and 4) the unrealized loss relates to non-credit factors, such as interest rate changes and market conditions.

The amortized cost and fair value of our fixed maturity securities at September 30, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.2 years at September 30, 2012.

   Cost or amortized cost Fair value  
Due in 1 year or less  $335,455 $340,330 
Due after 1 year through 5 years   1,063,361  1,121,440 
Due after 5 years through 10 years   1,331,492  1,462,880 
Due after 10 years through 15 years   869,485  961,876 
Due after 15 years   931,342  1,015,473 
 Securities with contractual maturities   4,531,135  4,901,999 
Mortgage-backed and asset-backed securities   1,316,043  1,413,366 
 Total fixed maturity securities  $5,847,178 $6,315,365 

The sources of net investment income were as follows:

   Nine months ended September 30, Three months ended September 30, 
   2012 2011 2012 2011 
Fixed maturity securities             
Taxable $86,548 $84,228 $28,330 $30,009 
Exempt from U.S. income taxes  80,163  74,713  27,291  24,887 
  Total fixed maturity securities  166,711  158,941  55,621  54,896 
Equity securities  2,339  0  1,346  0 
Short-term investments  397  420  295  99 
Other investment income  1,699  2,992  831  962 
 Total investment income  171,146  162,353  58,093  55,957 
Investment expense  (4,504)  (3,571)  (1,751)  (1,192) 
 Net investment income $166,642 $158,782 $56,342 $54,765 

Realized pretax gains (losses) on the sale of investments, which exclude other-than-temporary impairment credit losses, included the following:

   Nine months ended September 30, Three months ended September 30, 
   2012 2011 2012 2011 
               
Gains$11,596 $8,538 $3,469 $4,219 
Losses (3,077)  (5,369)  (1,997)  (1,545) 
  Net realized investment gain (loss)$8,519 $3,169 $1,472 $2,674