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Bank loans are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #231f20; text-transform: none; text-indent: 0.25in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">&#160;</p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #231f20; text-transform: none; text-indent: 0.25in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The average recorded investment in impaired bank loans was $5.3 million and $5.9 million during the three months ended March 31, 2017 and 2016, respectively. Investment income of $84,000 and $71,000, respectively, was recognized during the time within those periods that the loans were impaired. 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If a quoted market price is not available, the Company uses prices of similar securities. Values for U.S. Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique. 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The Company also reviews and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values. 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text-decoration-style: initial; text-decoration-color: initial;"><font style="color: #231f20;">Effective January 1, 2017, the Company adopted Accounting Standards Update (&#8220;ASU&#8221;) 2016-09,&#160;<em>Compensation &#8211; Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting </em>using the prospective method. The guidance requires that all tax effects related to share-based payments be made through the income statement at the time of settlement as opposed to excess tax benefits being recognized in additional paid-in capital under the previous guidance</font>. The&#160;<font style="color: #231f20;">ASU also removes the requirement to delay recognition of a tax benefit until it reduces current taxes payable. 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The LLCs are managed by an affiliate of the Company's largest shareholder and the Company's Chairman and Chief Executive Officer has invested in certain of these LLCs. The equity method is used to account for the Company's LLC investments. Income for the LLCs primarily reflects adjustments to the carrying values of investments in renewable energy projects to their determined fair values. The fair value adjustments are included in revenues for the LLCs. Expenses for the LLCs are not significant and are comprised of administrative and interest expenses. The Company received cash distributions from these investments totaling $1.6 million and $1.5 million for the three months ended March 31, 2017 and 2016, respectively. The Company has held investments in bridge financing notes for renewable energy projects. The notes, all with affiliates of the Company's largest shareholder, generally matured in less than one year and carried primarily variable rates of interest ranging from 7.0% to 15.0%. Original discounts and commitment fees received were recognized over the terms of the notes under the effective interest method. The Company owns investments in limited partnerships that invest in concentrated portfolios of publicly-traded small cap equities, loans of middle market private equity sponsored companies, and equity tranches of collateralized loan obligations (CLOs). Income from the partnerships is recognized under the equity method of accounting. The Company's Corporate and Other segment held an investment in a limited partnership with a carrying value of $2.7 million at March 31, 2017. The Company recognized investment income of $68,000 and $92,000 on the investment for the three months ended March 31, 2017 and 2016, respectively. The Company's Excess and Surplus Lines segment holds investments in limited partnerships of $21.4 million at March 31, 2017. Investment income of $314,000 and $64,000 was recognized on the investments for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017, the Company's Excess and Surplus Lines segment has an outstanding commitment to invest another $1.0 million in a limited partnership that invests in loans of middle market private equity sponsored companies. The Company holds $4.5 million of subordinated notes issued by a bank holding company. Interest on the notes, which mature on August 12, 2023, is fixed at 7.6% per annum. Interest income on the notes was $86,000 in both three months ended March 31, 2017 and 2016. The Company's Chairman and Chief Executive Officer was previously the Lead Independent Director of the bank holding company and an investor in the bank holding company. 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