Investments

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



	September 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	$	1,233	$	1,273	$	47	$	7
	$	1,233	$	1,273	$	47	$	7
Fixed-maturities available for sale:
U.S. government and agency securities	$	4,953	$	5,329	$	376	$	—
State and municipal obligations	43,004		43,488		842		358
Corporate bonds and notes	15,788		16,475		994		307
RMBS	53		55		3		1
Other investments	997		1,065		68		—
	$	64,795	$	66,412	$	2,283	$	666
Equity securities available for sale (1)	$	88,260	$	112,884	$	24,624	$	—
Total debt and equity securities	$	154,288	$	180,569	$	26,954	$	673

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(1)	Comprising broadly diversified domestic equity mutual funds ($100.0 million fair value) and various preferred and common stocks invested across numerous companies and industries ($12.9 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)	September 30, 2012		December 31, 2011
Trading securities:
U.S. government and agency securities	$	775,329	$	710,006
State and municipal obligations	597,449		964,748
Corporate bonds and notes	804,592		683,864
RMBS	931,817		928,887
CMBS	190,280		224,180
CDO	—		5,467
Other ABS	220,074		98,729
Foreign government securities (1)	115,652		102,851
Hybrid securities	359,762		346,338
Equity securities	149,647		140,764
Other investments	778		5,225
Total	$	4,145,380	$	4,211,059

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(1)

Our largest concentrations of foreign government securities as of September 30, 2012 and December 31, 2011, were Germany ($21.5 million and $42.6 million fair value, respectively) and Japan ($62.8 million and $28.0 million fair value, respectively). As of September 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 September 30, 2012 and December 31, 2011, our trading portfolio included no foreign sovereign or sub-sovereign 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.

For trading securities that were still held at September 30, 2012 and December 31, 2011, we had net gains during 2012 and 2011 associated with those securities in the amount of $41.9 million and $112.1 million, respectively.

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:



September 30, 2012: ($ 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	—	$	—	$	—	4	$	6,202	$	365	4	$	6,202	$	365
Corporate bonds and notes	—	—		—		7	5,492		307		7	5,492		307
RMBS	1	35		1		—	—		—		1	35		1
Total	1	$	35	$	1	11	$	11,694	$	672	12	$	11,729	$	673



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 nine months of 2012 and 2011, there were no credit losses recognized in earnings.

At September 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 September 30, 2012. For all investment categories, the unrealized losses of 12 months or greater duration as of September 30, 2012, were generally caused by interest rate or credit spread movements since purchase date. As of September 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 September 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 September 30, 2012.

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



	September 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)	$	492	$	532	$	7,461	$	7,578
Due after one year through five years (1)	434		441		11,456		11,834
Due after five years through ten years (1)	—		—		3,046		3,163
Due after ten years (1)	307		300		42,779		43,782
RMBS (2)	—		—		53		55
Total	$	1,233	$	1,273	$	64,795	$	66,412

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


(2)	RMBS are shown separately as they are not due at a single maturity date.