Humana 2009 Annual Report Download - page 94

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Gross unrealized losses and fair values aggregated by investment category and length of time that individual
securities have been in a continuous unrealized loss position were as follows at December 31, 2009 and 2008,
respectively:
Less than 12 months 12 months or more Total
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses
(in thousands)
December 31, 2009
U.S. Treasury and other U.S.
government corporations and
agencies:
U.S. Treasury and agency
obligations .............. $ 301,843 $ (2,425) $ 2,970 $ (109) $ 304,813 $ (2,534)
Mortgage-backed securities . . . 823,365 (11,005) 6,834 (323) 830,199 (11,328)
Tax-exempt municipal securities . . . 598,520 (14,286) 198,327 (9,131) 796,847 (23,417)
Mortgage-backed securities:
Residential ................ 1,771 (5) 73,178 (10,994) 74,949 (10,999)
Commercial ............... 31,941 (359) 142,944 (8,281) 174,885 (8,640)
Asset-backed securities ........... 1,930 (19) 2,179 (88) 4,109 (107)
Corporate debt securities ......... 636,833 (9,354) 99,830 (11,972) 736,663 (21,326)
Total debt securities ..... $2,396,203 $ (37,453) $526,262 $(40,898) $2,922,465 $ (78,351)
December 31, 2008
U.S. Treasury and other U.S.
government corporations and
agencies:
U.S. Treasury and agency
obligations .............. $ 146,315 $ (68) $ — $ — $ 146,315 $ (68)
Mortgage-backed securities . . . 18,308 (168) 4,297 (57) 22,605 (225)
Tax-exempt municipal securities . . . 409,787 (22,238) 141,730 (17,975) 551,517 (40,213)
Mortgage-backed securities:
Residential ................ 246,144 (96,593) 18,092 (8,531) 264,236 (105,124)
Commercial ............... 153,415 (28,404) 106,885 (25,230) 260,300 (53,634)
Asset-backed securities ........... 141,495 (12,200) 1,377 (75) 142,872 (12,275)
Corporate debt securities ......... 422,710 (64,873) 98,124 (35,056) 520,834 (99,929)
Total debt securities ..... 1,538,174 (224,544) 370,505 (86,924) 1,908,679 (311,468)
Equity securities ................ 6,683 (1,568) — — 6,683 (1,568)
Total ............. $1,544,857 $(226,112) $370,505 $(86,924) $1,915,362 $(313,036)
Approximately 99% of our debt securities were investment-grade quality, with an average credit rating of
AA+ by S&P at December 31, 2009. Most of the debt securities that are below investment-grade are rated BB or
better, the higher end of the below investment-grade rating scale. At December 31, 2009, 16% of our tax-exempt
municipal securities were pre-refunded, generally with U.S. government and agency securities, and 26% of our
tax-exempt securities were insured by bond insurers and have an equivalent S&P credit rating of AA- exclusive
of the bond insurers’ guarantee. Our investment policy limits investments in a single issuer and requires
diversification among various asset types.
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