Note 6: Investment Securities

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of fixed-maturity securities held in trust at March 31, 2013, are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Obligations of U.S. government sponsored enterprises	$	73,055	$	1,040	$	(199	)	$	73,896
Corporate debt securities		105,320		2,853		(59	)		108,114
Commercial paper		69,607		—		—			69,607
Foreign corporate debt securities		20,779		326		(23	)		21,082
Commercial mortgage-backed securities		8,893		33		(78	)		8,848

Total fixed-maturity securities		277,654		4,252		(359	)		281,547
Less total unrestricted fixed-maturity securities – trading		10,002		174		(33	)		10,143
Less total unrestricted fixed-maturity securities – held to maturity		73,456		—		—			73,456

Total fixed-maturity securities held in trust	$	194,196	$	4,078	$	(326	)	$	197,948

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of fixed-maturity securities held in trust at December 31, 2012, are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Obligations of U.S. government sponsored enterprises	$	97,104	$	1,415	$	(156	)	$	98,363
Corporate debt securities		91,997		3,011		(34	)		94,974
Commercial Paper		54,948		—		—			54,948
Foreign corporate debt securities		18,305		379		(18	)		18,666
Commercial mortgage-backed securities		10,541		64		(87	)		10,518

Total fixed-maturity securities		272,895		4,869		(295	)		277,469
Less total unrestricted fixed-maturity securities – trading		14,246		168		(18	)		14,396
Less total unrestricted fixed-maturity securities – held to maturity		61,413		—		—			61,413

Total fixed-maturity securities held in trust	$	197,236	$	4,701	$	(277	)	$	201,660

Amortized cost and estimated fair value of fixed-maturity securities at March 31, 2013 by contractual maturity are as follows:


	Amortized Cost		Estimated Fair Value
Maturity in:
2013	$	89,942	$	90,034
2014-2017		106563		109,789
2018-2022		43,180		43,405
Thereafter		29,076		29,471
Mortgage-backed securities		8,893		8,848

Total fixed-maturity securities	$	277,654	$	281,547

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Net investment income for the periods ending March 31, 2013 and 2012, is summarized as follows:


	Successor			Successor			Predecessor
	Three Months Ended March 31, 2013			Period from March 20, 2012 through March 31, 2012			Period from January 1, 2012 through March 19, 2012
Investment income:
Amortization of premium or discount on fixed-maturity	$	(488	)	$	(87	)	$	(523	)
Investment income on fixed-maturity securities		1,858			401			2,467
Interest income on cash and equivalents		4			—			3
Realized net gain (loss) from sale of investment		134			(7	)		176
Unrealized (losses) gains on trading securities held at period end		(812	)		596			1,049

Net investment income	$	696		$	903		$	3,172

The following tables show how the Company’s investments are categorized in accordance with fair value measurement, as of March 31, 2013 and December 31, 2012:


	March 31, 2013
	Level 1		Level 2		Level 3		Total
Class of Security:
Obligations of U.S. government sponsored securities	$	11,305	$	62,591	$	—	$	73,896
Corporate debt securities		25,236		82,878		—		108,114
Commercial paper		69,607		—		—		69,607
Foreign corporate debt securities		1,552		19,530		—		21,082
Commercial mortgage-backed securities		—		8,848		—		8,848

Total fixed maturity securities		107,700		173,847		—		281,547
Money market funds		25,074		—		—		25,074

Total	$	132,774	$	173,847	$	—	$	306,621


	December 31, 2012
	Level 1		Level 2		Level 3		Total
Class of Security:
Obligations of U.S. government sponsored securities	$	11,362	$	87,001	$	—	$	98,363
Corporate debt securities		22,833		72,141		—		94,974
Commercial paper		54,948		—		—		54.948
Foreign corporate debt securities		1,001		17,665		—		18,666
Commercial mortgage-backed securities		—		10,518		—		10,518

Total fixed maturity securities		90,144		187,325		—		277,469
Money market funds		33,628		—		—		33,628

Total	$	123,772	$	187,325	$	—	$	311,097

A review of the fair value hierarchy classifications of the Company’s investments is conducted quarterly. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications are reported as transfers in or transfers out of the applicable Level at end of the calendar quarter in which the reclassifications occur. During the three months ended March 31, 2013 and the year ended December 31, 2012, $10.1 million and $17.7 million respectively of investments were transferred from Level 2 to Level 1 as a result of improving market conditions for short-term and investment grade corporate securities.


	March 31, 2013				December 31, 2012
	Transfers from Level 1 to Level 2		Transfers from Level 2 to Level 1		Transfers from Level 1 to Level 2		Transfers from Level 2 to Level 1
Class of securities:
Corporate securities	$	—	$	8,585	$	—	$	16,745
Foreign corporate debt securities		—		1,552		—		1,001

Total Transfers	$	—	$	10,137	$	—	$	17,746