Mercury Insurance 2007 Annual Report Download - page 74

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72 MERCURYNOW 2007
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNREALIZED INVESTMENT GAINS AND LOSSES
A summary of the net increase (decrease) in unrealized investment gains and losses less applicable income tax expense (benefit) is as follows:
Year ended December 31,
Amounts in thousands 2007 2006 2005
Net increase (decrease) in net unrealized
investment gains and losses:
Fixed maturities available for sale $ (18,612) $ (4,538) $ (28,546)
Income tax benefit (6,514) (1,589) (9,990)
$ (12,098) $ (2,949) $ (18,556)
Equity securities $ 35,382 $ 9,311 $ 6,988
Income tax expense 12,379 3,259 2,432
$ 23,003 $ 6,052 $ 4,556
Accumulated unrealized gains and losses on securities available for sale are as follows:
December 31,
Amounts in thousands 2007 2006
Fixed maturities available for sale:
Unrealized gains $ 54,975 $ 63,705
Unrealized losses (26,314) (16,433)
Tax effect (10,031) (16,545)
$ 18,630 $ 30,727
Equity securities available for sale:
Unrealized gains $ 104,717 $ 65,709
Unrealized losses (9,463) (5,837)
Tax effect (33,326) (20,947)
$ 61,928 $ 38,925
FAIR VALUE OF INVESTMENTS
The amortized cost and estimated fair value of investments in fixed maturities available-for-sale (excluding hybrid financial instruments with an
estimated fair value of $31.8 million) as of December 31, 2007 are as follows:
Gross Gross
Amortized Unrealized Unrealized Estimated
Amounts in thousands Cost Gains Losses Fair Value
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 36,157 $ 283 $ 65 $ 36,375
Obligations of states and political subdivisions 2,435,215 49,878 20,552 2,464,541
Mortgage-backed securities 227,606 2,018 2,049 227,575
Corporate securities 126,272 2,789 3,633 125,428
Redeemable preferred stock 2,079 7 15 2,071
Totals $ 2,827,329 $ 54,975 $ 26,314 $ 2,855,990