Investments

Our held to maturity and available for sale securities within our investment portfolio consisted of the following as of the dates indicated:



	June 30, 2012
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
Bonds and notes:
State and municipal obligations	$	2,470	$	2,524	$	59	$	5
	$	2,470	$	2,524	$	59	$	5
Fixed-maturities available for sale:
U.S. government and agency securities	$	10,957	$	13,683	$	2,726	$	—
State and municipal obligations	42,971		42,930		696		737
Corporate bonds and notes	16,232		16,329		637		540
RMBS	56		58		3		1
CMBS	244		244		2		2
Other ABS	1,019		1,173		154		—
Other investments	1,021		1,099		78		—
	$	72,500	$	75,516	$	4,296	$	1,280
Equity securities available for sale (1)	$	88,768	$	108,381	$	19,613	$	—
Total debt and equity securities	$	163,738	$	186,421	$	23,968	$	1,285

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(1)	Comprising broadly diversified domestic equity mutual funds ($94.5 million fair value) and various preferred and common stocks invested across numerous companies and industries ($13.9 million fair value).



	December 31, 2011
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
Bonds and notes:
State and municipal obligations	$	2,640	$	2,748	$	115	$	7
	$	2,640	$	2,748	$	115	$	7
Fixed-maturities available for sale:
U.S. government and agency securities	$	10,931	$	13,630	$	2,699	$	—
State and municipal obligations	87,083		82,692		485		4,876
Corporate bonds and notes	17,267		16,610		390		1,047
RMBS	1,308		1,360		53		1
CMBS	1,660		1,669		25		16
Other ABS	1,019		1,177		158		—
Other investments	1,489		1,595		106		—
	$	120,757	$	118,733	$	3,916	$	5,940
Equity securities available for sale (1)	$	114,425	$	128,424	$	14,868	$	869
Total debt and equity securities	$	237,822	$	249,905	$	18,899	$	6,816

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(1)	Comprising broadly diversified domestic equity mutual funds ($116.0 million fair value) and various preferred and common stocks invested across numerous companies and industries ($12.4 million fair value).

The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated:



(In thousands)	June 30, 2012		December 31, 2011
Trading securities:
U.S. government and agency securities	$	703,786	$	710,006
State and municipal obligations	811,041		964,748
Corporate bonds and notes	819,654		683,864
RMBS	968,695		928,887
CMBS	184,917		224,180
CDO	—		5,467
Other ABS	132,563		98,729
Foreign government securities (1)	109,128		102,851
Hybrid securities	353,863		346,338
Equity securities	144,112		140,764
Other investments	763		5,225
Total	$	4,228,522	$	4,211,059

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(1)

Our largest concentrations of foreign government securities as of June 30, 2012 and December 31, 2011, were Germany ($27.0 million and $42.6 million fair value, respectively) and Japan ($58.9 million and $28.0 million fair value, respectively). As of June 30, 2012 and December 31, 2011, nearly all of our foreign government securities were rated A or higher by a nationally recognized statistical rating organization. As of June 30, 2012 and December 31, 2011, our trading portfolio included no securities of the six European countries (Portugal, Ireland, Italy, Greece, Spain, and Hungary) whose sovereign and sub-sovereign obligations have been under particular stress due to economic uncertainty, potential restructuring and ratings downgrades, or securities of any other countries under similar stress.

The following tables show the gross unrealized losses and fair value of our available for sale and held to maturity investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated:



June 30, 2012: ($ in thousands) Description of Securities	Less Than 12 Months					12 Months or Greater					Total
June 30, 2012: ($ in thousands) Description of Securities	# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses
State and municipal obligations	—	$	—	$	—	6	$	16,495	$	742	6	$	16,495	$	742
Corporate bonds and notes	2	930		28		12	6,266		512		14	7,196		540
RMBS	1	38		1		—	—		—		1	38		1
CMBS	1	90		—		1	77		2		2	167		2
Total	4	$	1,058	$	29	19	$	22,838	$	1,256	23	$	23,896	$	1,285



December 31, 2011: ($ in thousands) Description of Securities	Less Than 12 Months					12 Months or Greater					Total
	# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses
State and municipal obligations	1	$	525	$	17	9	$	72,653	$	4,866	10	$	73,178	$	4,883
Corporate bonds and notes	6	2,457		97		18	8,902		950		24	11,359		1,047
RMBS	2	354		1		—	—		—		2	354		1
CMBS	—	—		—		1	527		16		1	527		16
Equity securities	1	9,284		869		—	—		—		1	9,284		869
Total	10	$	12,620	$	984	28	$	82,082	$	5,832	38	$	94,702	$	6,816

During the first six months of 2012 and 2011, there were no credit losses recognized in earnings.

At June 30, 2012, we did not have the intent to sell any debt securities in an unrealized loss position, and we determined that it is more likely than not, that we will not be required to sell the securities before recovery of their cost basis.

Impairments due to credit deterioration that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in fair value (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security, also may serve as a basis to conclude that an OTTI has occurred. To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

We have securities in an unrealized loss position that we did not consider to be other-than-temporarily impaired as of June 30, 2012. For all investment categories, the unrealized losses of 12 months or greater duration as of June 30, 2012, were generally caused by interest rate or credit spread movements since purchase date. As of June 30, 2012, we expected the present value of cash flows to be collected from these securities to be sufficient to recover the amortized cost basis of these securities. As of June 30, 2012, we did not intend to sell these investments, nor did we believe that it was more likely than not that we will be required to sell these investments before recovery of our amortized cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at June 30, 2012.

The contractual maturities of fixed-maturity investments are as follows:



	June 30, 2012
	Held to Maturity				Available for Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less (1)	$	1,734	$	1,784	$	3,547	$	3,547
Due after one year through five years (1)	431		440		16,975		17,294
Due after five years through ten years (1)	—		—		2,377		2,421
Due after ten years (1)	305		300		48,282		50,779
RMBS (2)	—		—		56		58
CMBS (2)	—		—		244		244
Other ABS (2)	—		—		1,019		1,173
Total	$	2,470	$	2,524	$	72,500	$	75,516

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(1)	Actual maturities may differ as a result of calls before scheduled maturity.


(2)	RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date.