Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Mar. 10, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | PRUCO LIFE INSURANCE OF NEW JERSEY | |
Entity Central Index Key | 1,038,509 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 400,000 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Public Float | $ 0 | |
Entity Current Reporting Status | Yes |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2015-$1,087,582; 2014–$911,279) | $ 1,105,195 | $ 973,483 |
Equity securities, available-for-sale, at fair value (cost: 2015–$18,275; 2014–$8,291) | 17,084 | 8,295 |
Trading account assets, at fair value | 15,491 | 9,679 |
Policy loans | 185,508 | 182,560 |
Short-term investments | 715 | 15,469 |
Commercial mortgage and other loans | 248,209 | 283,057 |
Other long-term investments | 60,454 | 47,855 |
Total investments | 1,632,656 | 1,520,398 |
Cash and cash equivalents | 160,737 | 100,919 |
Deferred policy acquisition costs | 468,743 | 457,420 |
Accrued investment income | 16,644 | 14,768 |
Reinsurance recoverables | 1,634,696 | 1,436,470 |
Receivables from parent and affiliates | 35,689 | 42,825 |
Deferred sales inducements | 63,043 | 76,534 |
Other assets | 6,413 | 8,161 |
Separate account assets | 11,613,148 | 11,376,940 |
TOTAL ASSETS | 15,631,769 | 15,034,435 |
LIABILITIES | ||
Policyholders’ account balances | 1,680,586 | 1,475,803 |
Future policy benefits and other policyholder liabilities | 1,450,110 | 1,342,111 |
Cash collateral for loaned securities | 3,030 | 4,455 |
Income taxes | (2,631) | 11,672 |
Short-term debt to affiliates | 24,000 | 24,000 |
Long-term debt to affiliates | 92,000 | 97,000 |
Payables to parent and affiliates | 8,441 | 7,309 |
Other liabilities | 96,476 | 80,138 |
Separate account liabilities | 11,613,148 | 11,376,940 |
TOTAL LIABILITIES | $ 14,965,160 | $ 14,419,428 |
Commitments and Contingent Liabilities | ||
EQUITY | ||
Common stock ($5 par value; 400,000 shares authorized, issued and outstanding) | $ 2,000 | $ 2,000 |
Additional paid-in capital | 208,314 | 210,818 |
Retained earnings | 444,514 | 368,450 |
Accumulated other comprehensive income | 11,781 | 33,739 |
TOTAL EQUITY | 666,609 | 615,007 |
TOTAL LIABILITIES AND EQUITY | $ 15,631,769 | $ 15,034,435 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, amortized cost | $ 1,087,582 | $ 911,279 |
Available For Sale Equity Securities Amortized Cost Basis | $ 18,275 | $ 8,291 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 5 | $ 5 |
Common Stock, Shares Authorized | 400,000 | 400,000 |
Common Stock, Shares, Issued | 400,000 | 400,000 |
Common Stock, Shares, Outstanding | 400,000 | 400,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUES | |||
Premiums | $ 14,991 | $ 14,323 | $ 14,893 |
Policy charges and fee income | 197,535 | 181,086 | 156,811 |
Net investment income | 68,891 | 67,872 | 68,653 |
Asset administration fees | 38,370 | 38,264 | 33,752 |
Other income | 2,495 | 2,558 | 3,410 |
Realized investment gains (losses), net: | |||
Other-than-temporary impairments on fixed maturity securities | (1,093) | (103) | 0 |
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income | 32 | 79 | 0 |
Other realized investment gains (losses), net | 6,814 | (73,246) | 22,581 |
Total realized investment gains (losses), net | 5,753 | (73,270) | 22,581 |
TOTAL REVENUES | 328,035 | 230,833 | 300,100 |
BENEFITS AND EXPENSES | |||
Policyholders’ benefits | 27,399 | 26,605 | 22,893 |
Interest credited to policyholders’ account balances | 50,047 | 45,830 | 17,173 |
Amortization of deferred policy acquisition costs | 59,327 | 37,692 | (44,181) |
General, administrative and other expenses | 101,835 | 102,665 | 73,006 |
TOTAL BENEFITS AND EXPENSES | 238,608 | 212,792 | 68,891 |
INCOME FROM OPERATIONS BEFORE INCOME TAXES | 89,427 | 18,041 | 231,209 |
Total income tax expense (benefit) | 13,363 | (10,224) | 65,366 |
NET INCOME | 76,064 | 28,265 | 165,843 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | (86) | (125) | 38 |
Net unrealized investment gains (losses): | |||
Unrealized investment gains (losses) for the period | (31,993) | 30,963 | (42,217) |
Reclassification adjustment for (gains) losses included in net income | (1,702) | (5,242) | (4,511) |
Net unrealized investment gains (losses) | (33,695) | 25,721 | (46,728) |
Other comprehensive income (loss), before tax | (33,781) | 25,596 | (46,690) |
Less: Income tax expense (benefit) related to: | |||
Foreign currency translation adjustments | (30) | (44) | 13 |
Net unrealized investment gains (losses) | (11,793) | 9,002 | (16,355) |
Total | (11,823) | 8,958 | (16,342) |
Other comprehensive income (loss), net of tax | (21,958) | 16,638 | (30,348) |
COMPREHENSIVE INCOME | $ 54,106 | $ 44,903 | $ 135,495 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholder’s Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Equity |
Balance at Dec. 31, 2012 | $ 2,000 | $ 211,049 | $ 409,342 | $ 47,449 | $ 669,840 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Contributed/(distributed) capital- parent/child asset transfers | 98 | 98 | ||||
Dividend to parent | (155,000) | (155,000) | ||||
Comprehensive income (loss): | ||||||
Net income (loss) | $ 165,843 | 165,843 | 165,843 | |||
Other comprehensive income (loss), net of tax | (30,348) | (30,348) | (30,348) | |||
Total comprehensive income (loss) | 135,495 | |||||
Balance at Dec. 31, 2013 | 2,000 | 211,147 | 420,185 | 17,101 | 650,433 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Contributed/(distributed) capital- parent/child asset transfers | (329) | (329) | ||||
Dividend to parent | (80,000) | (80,000) | ||||
Comprehensive income (loss): | ||||||
Net income (loss) | 28,265 | 28,265 | 28,265 | |||
Other comprehensive income (loss), net of tax | 16,638 | 16,638 | 16,638 | |||
Total comprehensive income (loss) | 44,903 | |||||
Balance at Dec. 31, 2014 | 2,000 | 210,818 | 368,450 | 33,739 | 615,007 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Contributed/(distributed) capital- parent/child asset transfers | (2,504) | (2,504) | ||||
Comprehensive income (loss): | ||||||
Net income (loss) | 76,064 | 76,064 | 76,064 | |||
Other comprehensive income (loss), net of tax | $ (21,958) | (21,958) | (21,958) | |||
Total comprehensive income (loss) | 54,106 | |||||
Balance at Dec. 31, 2015 | $ 2,000 | $ 208,314 | $ 444,514 | $ 11,781 | $ 666,609 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 76,064 | $ 28,265 | $ 165,843 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Policy charges and fee income | 8,047 | 6,016 | 7,462 |
Interest credited to policyholders’ account balances | 50,047 | 45,830 | 17,173 |
Realized investment (gains) losses, net | (5,753) | 73,270 | (22,581) |
Amortization and other non-cash items | (13,050) | (12,397) | (11,323) |
Change in: | |||
Future policy benefits and other policyholder liabilities | 157,138 | 152,600 | 148,527 |
Reinsurance recoverables | (153,690) | (121,292) | (157,241) |
Accrued investment income | (1,876) | 257 | 757 |
Net payables to/receivables from parent and affiliates | 4,807 | (2,502) | (959) |
Deferred policy acquisition costs | (698) | (22,515) | (98,081) |
Income taxes | (1,132) | (20,576) | 73,312 |
Deferred sales inducements | (678) | (842) | (1,793) |
Derivatives, net | 1,049 | 1,530 | (620) |
Other, net | 17,406 | (8,265) | 7,255 |
Cash flows from operating activities | 137,681 | 119,379 | 127,731 |
Proceeds from the sale/maturity/prepayment of: | |||
Fixed maturities, available-for-sale | 124,482 | 151,419 | 239,272 |
Short-term investments | 99,898 | 47,153 | 20,680 |
Policy loans | 23,785 | 27,422 | 24,664 |
Ceded policy loans | (1,799) | (3,453) | (3,527) |
Commercial mortgage and other loans | 37,099 | 21,258 | 25,683 |
Other long-term investments | 3,310 | 210 | 2,110 |
Equity securities, available-for-sale | 2,122 | 7,808 | 6,650 |
Trading account assets | 0 | 0 | 1,499 |
Payments for the purchase/origination of: | |||
Fixed maturities, available-for-sale | (301,629) | (168,537) | (148,365) |
Short-term investments | (83,642) | (57,434) | (23,631) |
Policy loans | (21,128) | (22,786) | (17,687) |
Ceded policy loans | 2,981 | 2,166 | 2,224 |
Commercial mortgage and other loans | (2,096) | (10,989) | (96,841) |
Other long-term investments | (1,411) | (2,479) | (8,946) |
Equity securities, available-for-sale | (12,032) | (15,551) | (5,253) |
Trading account assets | (5,999) | (10,000) | 0 |
Notes receivable from parent and affiliates, net | 3,432 | (3,060) | (2,235) |
Derivatives, net | (293) | (306) | (51) |
Other, net | (55) | 233 | (123) |
Cash flows from (used in) investing activities | (132,975) | (36,926) | 16,123 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Policyholders’ account deposits | 383,590 | 271,937 | 230,627 |
Ceded policyholders’ account deposits | (146,920) | (93,043) | (124,909) |
Policyholders’ account withdrawals | (178,765) | (130,985) | (130,982) |
Ceded policyholders’ account withdrawals | 4,972 | 6,991 | 10,785 |
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities | (1,425) | 374 | 1,947 |
Dividend to parent | 0 | (80,000) | (155,000) |
Contributed (distributed) capital - parent/child asset transfers | (3,852) | (506) | 150 |
Proceeds from the issuance of debt (maturities longer than 90 days) | 45,000 | 28,000 | 32,000 |
Repayments of debt (maturities longer than 90 days) | (50,000) | (24,000) | (24,000) |
Drafts outstanding | 2,512 | (943) | 5,573 |
Cash flows from (used in) financing activities | 55,112 | (22,175) | (153,809) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 59,818 | 60,278 | (9,955) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 100,919 | 40,641 | 50,596 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 160,737 | 100,919 | 40,641 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Income taxes paid, net of refunds | 14,494 | 10,352 | (7,265) |
Interest paid | $ 3,123 | $ 2,810 | $ 2,341 |
Business and Basis of Presentat
Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | BUSINESS AND BASIS OF PRESENTATION Pruco Life Insurance Company of New Jersey, or “PLNJ”, is a wholly-owned subsidiary of Pruco Life Insurance Company (“Pruco Life”), which in turn is a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential Insurance”). Prudential Insurance is a direct wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). PLNJ is a stock life insurance company organized in 1982 under the laws of the State of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York only, and sells such products primarily through affiliated and unaffiliated distributors. PLNJ has one subsidiary, formed in 2009 for the purpose of holding certain commercial loans and other investments. PLNJ and its subsidiary are together referred to as the the ("Company", "we" or "our") and all financial information is shown on a consolidated basis. Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs ("DAC") and related amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; reinsurance recoverables; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Significant Accounting Policies
Significant Accounting Policies and Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Pronouncements | SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS Investments and Investment Related Liabilities The Company’s principal investments are fixed maturities; equity securities; commercial mortgage and other loans; policy loans; other long-term investments, including joint ventures (other than operating joint ventures), limited partnerships and real estate; and short-term investments. Investments and investment-related liabilities also include securities repurchase and resale agreements and securities lending transactions. The accounting policies related to each are as follows: Fixed maturities, available-for-sale, at fair value are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as “available-for-sale” are carried at fair value. See Note 9 for additional information regarding the determination of fair value. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts over the contractual lives of the investments. Interest income, as well as the related amortization of premium and accretion of discount is included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also vary based on other assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of OTTI recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to Net investment income in accordance with the retrospective method. For mortgage-backed and asset-backed securities rated below AA or those for which an OTTI has been recorded, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Unrealized gains and losses on fixed maturities classified as “available-for-sale,” net of tax, and the effect on DAC, deferred sales inducements (“DSI”), future policy benefits, reinsurance recoverables and policyholders’ account balances that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss)” (“AOCI”). Trading account assets, at fair value represents equity securities held in support of a deferred compensation plan and other fixed maturity securities carried at fair value. Realized and unrealized gains and losses for these investments are reported in “Other income.” Interest and dividend income from these investments is reported in “Net investment income.” Equity securities, available-for-sale, at fair value are comprised of common stock and non-redeemable preferred stock, and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on DAC, DSI, future policy benefits, reinsurance recoverables and policyholders’ account balances that would result from the realization of unrealized gains and losses, are included in AOCI. The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in “Net investment income” when earned. Commercial mortgage and other loans consist of commercial mortgage loans, agricultural loans and uncollateralized loans. Commercial mortgage and other loans held for investment are generally carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses and net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances. Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, related to commercial mortgage and other loans are included in “Net investment income”. Impaired loans include those loans for which it is probable that amounts due will not all be collected according to the contractual terms of the loan agreement. The Company defines “past due” as principal or interest not collected at least 30 days past the scheduled contractual due date. Interest received on loans that are past due, including impaired and non-impaired loans as well as loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income based on the Company’s assessment as to the collectability of the principal. See Note 3 for additional information about the Company’s past due loans. The Company discontinues accruing interest on loans after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability. When the Company discontinues accruing interest on a loan, any accrued but uncollectible interest on the loan and other loans backed by the same collateral, if any, is charged to interest income in the same period. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, or the loan has been modified, a regular payment performance has been established. The Company reviews the performance and credit quality of the commercial mortgage and other loan portfolio on an on-going basis. Loans are placed on watch list status based on a predefined set of criteria and are assigned one of three categories. Loans are placed on “early warning” status in cases where, based on the Company’s analysis of the loan’s collateral, the financial situation of the borrower or tenants or other market factors, it is believed a loss of principal or interest could occur. Loans are classified as “closely monitored” when it is determined that there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans “not in good standing” are those loans where the Company has concluded that there is a high probability of loss of principal, such as when the loan is delinquent or in the process of foreclosure. As described below, in determining the allowance for losses, the Company evaluates each loan on the watch list to determine if it is probable that amounts due will not be collected according to the contractual terms of the loan agreement. Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage loan and agricultural loan portfolio, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a quality re-rating process, whereby the internal quality rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary quality rating system. The loan-to-value ratio is the most significant of several inputs used to establish the internal credit rating of a loan which in turn drives the allowance for losses. Other key factors considered in determining the internal credit rating include debt service coverage ratios, amortization, loan term, estimated market value growth rate and volatility for the property type and region. See Note 3 for additional information related to the loan-to-value ratios and debt service coverage ratios related to the Company’s commercial mortgage and agricultural loan portfolios. The allowance for losses includes a loan specific reserve for each impaired loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. For impaired commercial mortgage and other loans, the allowances for losses are determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or based upon the fair value of the collateral if the loan is collateral dependent. The portfolio reserves for probable incurred but not specifically identified losses in the commercial mortgage and agricultural loan portfolios consider the current credit composition of the portfolio based on an internal quality rating (as described above). The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed each quarter and updated as appropriate. The allowance for losses on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. “Realized investment gains (losses), net” includes changes in the allowance for losses. “Realized investment gains (losses), net” also includes gains and losses on sales, certain restructurings, and foreclosures. When a commercial mortgage or other loan is deemed to be uncollectible, any specific valuation allowance associated with the loan is reversed and a direct write down to the carrying amount of the loan is made. The carrying amount of the loan is not adjusted for subsequent recoveries in value. In situations where a loan has been restructured in a troubled debt restructuring and the loan has subsequently defaulted, this factor is considered when evaluating the loan for a specific allowance for losses in accordance with the credit review process noted above. See Note 3 for additional information about commercial mortgage and other loans that have been restructured in a troubled debt restructuring. Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in “Net investment income” at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies. Other long-term investments consist of the Company’s investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments. Joint venture and partnership interests are either accounted for using the equity method of accounting or under the cost method when the Company’s partnership interest is so minor (generally less than 3% ) that it exercises virtually no influence over operating and financial policies. The Company’s income from investments in joint ventures and partnerships accounted for using the equity method or the cost method, other than the Company’s investment in operating joint ventures, is included in “Net investment income”. The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method or the cost method (including assessment for OTTI), the Company uses financial information provided by the investee, generally on a one to three month lag. Short-term investments primarily consist of highly liquid debt instruments with a maturity of twelve months or less and greater than three months when purchased. These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments. Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net OTTI recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, allowance for losses on commercial mortgage and other loans, and fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment. See “Derivative Financial Instruments” below for additional information regarding the accounting for derivatives. The Company’s available-for-sale securities with unrealized losses are reviewed quarterly to identify OTTI in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings. An OTTI is recognized in earnings for a debt security in an unrealized loss position when the Company either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the Company analyzes its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment an OTTI is recognized. When an OTTI of a debt security has occurred, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the OTTI recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. For OTTI of debt securities that do not meet these criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in “Other comprehensive income (loss)” (“OCI”). Unrealized gains or losses on securities for which an OTTI has been recognized in earnings is tracked as a separate component of AOCI. For debt securities, the split between the amount of an OTTI recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also include other assumptions regarding the underlying collateral including default rates and recoveries which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security’s position within the capital structure of the issuer. The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an OTTI, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into Net investment income in future periods, including increases in cash flow on a prospective basis. In certain cases where there are decreased cash flow expectations, the security is reviewed for further cash flow impairments. Unrealized investment gains and losses are also considered in determining certain other balances, including DAC, DSI, certain future policy benefits, reinsurance recoverables, policyholders’ account balances and deferred tax assets or liabilities. These balances are adjusted, as applicable, for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. Each of these balances is discussed in greater detail below. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments and other debt instruments with maturities of three months or less when purchased, other than cash equivalents that are included in “Trading account assets, at fair value.” The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates which are considered cash and cash equivalents. Deferred Policy Acquisition Costs Costs that are related directly to the successful acquisition of new and renewal insurance and annuity business are deferred to the extent such costs are deemed recoverable from future profits. Such DAC primarily includes commissions, costs of policy issuance and underwriting, and certain other expenses that are directly related to successfully negotiated contracts. In each reporting period, capitalized DAC is amortized to “Amortization of deferred policy acquisition costs”, net of the accrual of imputed interest on DAC balances. DAC is subject to periodic recoverability testing. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. DAC related to universal and variable life products and fixed and variable deferred annuity products are generally deferred and amortized over the expected life of the contracts in proportion to gross profits arising principally from investment margins, mortality and expense margins, and surrender charges, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach for equities to derive future equity return assumptions. However, if the projected equity return calculated using this approach is greater than the maximum equity return assumption, the maximum equity return is utilized. Gross profits also include impacts from the embedded derivatives associated with certain of the optional living benefit features of the Company’s variable annuity contracts and related hedging activities. In calculating gross profits, profits and losses related to contracts issued by the Company that are reported in affiliated legal entities other than the Company as a result of, for example, reinsurance agreements with those affiliated entities are also included. The Company is an indirect subsidiary of Prudential Financial (an SEC registrant) and has extensive transactions and relationships with other subsidiaries of Prudential Financial, including reinsurance agreements, as described in Note 12 . Incorporating all product-related profits and losses in gross profits, including those that are reported in affiliated legal entities, produces a DAC amortization pattern representative of the total economics of the products. The effect of changes to total gross profits on unamortized DAC is reflected in the period such total gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums. For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a non-integrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies. Deferred sales inducements The Company offers various types of sales inducements to contractholders primarily related to fixed and variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize DAC. Sales inducements balances are subject to periodic recoverability testing. The Company records amortization of deferred sales inducements in “Interest credited to policyholders’ account balances.” Deferred sales inducements for applicable products are adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. See Note 6 for additional information regarding sales inducements. Reinsurance recoverables Reinsurance recoverables include corresponding receivables associated with reinsurance arrangements with affiliates. For additional information about these arrangements see Note 12 . Separate Account Assets and Liabilities Separate account assets are reported at fair value and represent segregated funds that are invested for certain contractholders and other customers. The assets consist primarily of equity securities and real estate related investments. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. Investment risks associated with market value changes are borne by the contractholders, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities primarily represent the contractholders’ account balance in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See Note 6 to the Consolidated Financial Statements for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate accounts generally accrue to the contractholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income”. Asset administration fees charged to the accounts are included in “Asset administration fees”. Other Assets and Other Liabilities Other assets consist primarily of premiums due, certain restricted assets, and receivables resulting from sales of securities that had not yet settled at the balance sheet date. Other liabilities consist primarily of accrued expenses, reinsurance payables, technical overdrafts, derivatives, and payables resulting from purchases of securities that had not yet been settled at the balance sheet date. Future Policy Benefits The Company’s liability for future policy benefits includes liabilities related to certain long-duration life and annuity contracts, which are discussed more fully in Note 6 . These liabilities represent reserves for the guaranteed minimum death and optional living benefit features on our variable annuity products and no lapse guarantees for our variable and universal life products. The optional living benefits are primarily accounted for as embedded derivatives, with fair values calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. For additional information regarding the valuation of these optional living benefit features, see Note 6 and Note 9. The Company’s liability for future policy benefits also includes reserves based on the present value of estimated future payments to or on behalf of policyholders related to contracts that have fixed and guaranteed terms, where the timing and amount of payment depends on policyholder mortality, and maintenance expenses less the present value of future net premiums. Expected mortality is generally based on Company experience, industry data and/or other factors. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and interest rate assumptions are “locked-in” upon the issuance of new insurance or annuity business with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses. Premium deficiency reserves do not include a provision for the risk of adverse deviation. Any adjustments to future policy benefit reserves related to net unrealized gains on securities classified as available-for-sale are included in AOCI. See Note 5 for additional information regarding future policy benefits. Policyholders’ Account Balances The Company’s liability for policyholders’ account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is primarily associated with the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues. Securities repurchase and resale agreements and securities loaned transactions Securities repurchase and resale agreements and securities loaned transactions are used primarily to earn spread income, to borrow funds, or to facilitate trading activity. As part of securities repurchase agreements or securities loaned transactions, the Company transfers U.S. and foreign debt and equity securities, as well as U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company invests cash and receives as collateral U.S. government securities or other debt securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short-term investments or fixed maturities. Securities repurchase and resale agreements that satisfy certain criteria are treated as secured borrowing or secured lending arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective transactions. For securities purchased under agreements to resell, the Company’s policy is to take possession or control of the securities either directly or through a third party custodian. These securities are valued daily and additional securities or cash collateral is received, or returned, when appropriate to protect against credit exposure. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. The Company obtains collateral in an amount at least equal to 95% of the fair value of the securities sold. Securities to be repurchased are the same, or substantially the same, as those sold. Income and expenses related to these transactions executed within the insurance companies used to earn spread income are reported as “Net investment income”; however, for transactions used for funding purposes, the associated borrowing cost is reported as interest expense (included in “General, administrative and other expenses”). Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company’s securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are reported as “Net investment income”; however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in “General, administrative and other expenses”). Contingent Liabilities Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual. Insurance Revenue and Expense Recogni |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | INVESTMENTS Fixed Maturities and Equity Securities The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated: December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (3) (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 23,582 $ 3,010 $ — $ 26,592 $ — Obligations of U.S. states and their political subdivisions 127,734 4,048 409 131,373 — Foreign government bonds 8,211 29 1,122 7,118 — Public utilities 152,580 5,656 2,374 155,862 — All other U.S. public corporate securities 291,835 13,145 5,306 299,674 (45 ) All other U.S. private corporate securities 162,781 3,718 3,458 163,041 — All other foreign public corporate securities 29,507 1,432 1,359 29,580 — All other foreign private corporate securities 163,641 2,824 6,629 159,836 — Asset-backed securities (1) 47,898 606 258 48,246 (79 ) Commercial mortgage-backed securities 62,355 2,126 41 64,440 — Residential mortgage-backed securities (2) 17,458 1,982 7 19,433 (177 ) Total fixed maturities, available-for-sale $ 1,087,582 $ 38,576 $ 20,963 $ 1,105,195 $ (301 ) Equity securities, available-for-sale Common stocks: Mutual funds $ 18,275 $ 28 $ 1,219 $ 17,084 Non-redeemable preferred stocks — — — — Total equity securities, available-for-sale $ 18,275 $ 28 $ 1,219 $ 17,084 (1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.5 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. December 31, 2014 (4) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (3) (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 23,991 $ 3,590 $ — $ 27,581 $ — Obligations of U.S. states and their political subdivisions 39,343 1,846 — 41,189 — Foreign government bonds 6,344 149 — 6,493 — Public utilities 109,686 10,305 21 119,970 — All other U.S. public corporate securities 226,026 23,017 390 248,653 (45 ) All other U.S. private corporate securities 191,898 8,273 256 199,915 — All other foreign public corporate securities 25,086 2,388 83 27,391 — All other foreign private corporate securities 154,450 7,316 1,182 160,584 — Asset-backed securities (1) 38,069 1,295 152 39,212 (79 ) Commercial mortgage-backed securities 74,610 3,487 13 78,084 — Residential mortgage-backed securities (2) 21,776 2,643 8 24,411 (242 ) Total fixed maturities, available-for-sale $ 911,279 $ 64,309 $ 2,105 $ 973,483 $ (366 ) Equity securities, available-for-sale Common stocks: Mutual funds $ 8,238 $ 83 $ 118 $ 8,203 Non-redeemable preferred stocks 53 39 — 92 Total equity securities, available-for-sale $ 8,291 $ 122 $ 118 $ 8,295 (1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.6 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. (4) Prior period amounts are presented on a basis consistent with the current period presentation. The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2015 , are as follows: Available-for-Sale Amortized Cost Fair Value (in thousands) Due in one year or less $ 56,384 $ 54,298 Due after one year through five years 207,606 216,519 Due after five years through ten years 157,830 158,671 Due after ten years 538,051 543,588 Asset-backed securities 47,898 48,246 Commercial mortgage-backed securities 62,355 64,440 Residential mortgage-backed securities 17,458 19,433 Total $ 1,087,582 $ 1,105,195 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date. The following table depicts the sources of fixed maturity and equity security proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities: 2015 2014 2013 (in thousands) Fixed maturities, available-for-sale Proceeds from sales $ 4,300 $ 49,137 $ 108,332 Proceeds from maturities/repayments 119,987 102,303 131,032 Gross investment gains from sales, prepayments and maturities 2,689 5,160 5,704 Gross investment losses from sales and maturities — (249 ) (1,379 ) Equity securities, available-for-sale Proceeds from sales $ 2,122 $ 7,808 $ 6,650 Gross investment gains from sales 74 456 587 Gross investment losses from sales — — (395 ) Fixed maturity and equity security impairments Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings (1) $ (1,061 ) $ (25 ) $ — Writedowns for impairments on equity securities — — (6 ) (1) Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment. As discussed in Note 2 , a portion of certain OTTI losses on fixed maturity securities is recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts. Year Ended December 31, 2015 2014 (in thousands) Balance, beginning of period $ 663 $ 716 Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period (46 ) (42 ) Additional credit loss impairments recognized in the current period on securities previously impaired 26 — Increases due to the passage of time on previously recorded credit losses 21 21 Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected (13 ) (32 ) Balance, end of period $ 651 $ 663 Trading Account Assets The following table sets forth the composition of “Trading account assets” as of the dates indicated: December 31, 2015 December 31, 2014 Amortized Cost Fair Value Amortized Cost Fair Value Trading account assets (in thousands) Fixed maturities $ 10,000 $ 8,441 $ 10,000 $ 9,679 Equity securities 5,999 7,050 — — Total trading account assets $ 15,999 $ 15,491 $ 10,000 $ 9,679 The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Other income,” was $(0.2) million , $(0.3) million and $0.3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. Commercial Mortgage and Other Loans The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated: December 31, 2015 December 31, 2014 Amount (in thousands) % of Total Amount (in thousands) % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 79,481 33.1 % $ 89,817 32.6 % Retail 62,881 26.2 64,149 23.3 Industrial 25,059 10.4 35,190 12.8 Office 21,058 8.8 29,997 10.9 Other 17,803 7.4 18,061 6.6 Hospitality 23,176 9.6 23,725 8.6 Total commercial mortgage loans 229,458 95.5 260,939 94.8 Agricultural property loans 10,769 4.5 14,479 5.2 Total commercial mortgage and agricultural property loans by property type 240,227 100.0 % 275,418 100.0 % Valuation allowance (428 ) (771 ) Total net commercial mortgage and agricultural property loans by property type 239,799 274,647 Other loans Uncollateralized loans 8,410 8,410 Valuation allowance — — Total net other loans 8,410 8,410 Total commercial mortgage and other loans $ 248,209 $ 283,057 The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States (with the largest concentrations in Illinois ( 17% ), Texas ( 16% ), and New York ( 11% )) and include loans secured by properties in Europe at December 31, 2015 . Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows: December 31, 2015 December 31, 2014 December 31, 2013 (in thousands) Allowance for credit losses, beginning of year $ 771 $ 1,785 $ 1,162 Addition to (release of) allowance for losses (343 ) (1,014 ) 623 Total ending balance (1) $ 428 $ 771 $ 1,785 (1) Agricultural loans represent less than $0.1 million of the ending allowance at December 31, 2015 , 2014 and 2013 . The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated: December 31, 2015 December 31, 2014 (in thousands) Allowance for Credit Losses: Individually evaluated for impairment (1) $ — $ — Collectively evaluated for impairment (2) 428 771 Total ending balance $ 428 $ 771 Recorded Investment (3): Gross of reserves: individually evaluated for impairment (1) $ — $ — Gross of reserves: collectively evaluated for impairment (2) 248,637 283,828 Total ending balance, gross of reserves $ 248,637 $ 283,828 (1) There were no loans individually evaluated for impairment at both December 31, 2015 and 2014 . (2) Agricultural loans collectively evaluated for impairment had a recorded investment of $10.8 million and $14.5 million at December 31, 2015 and 2014 , respectively, and an allowance of less than $0.1 million at December 31, 2015 and 2014 . Uncollateralized loans collectively evaluated for impairment had a recorded investment of $8.4 million at December 31, 2015 and 2014 and no related allowance at both period ends. (3) Recorded investment reflects the balance sheet carrying value gross of related allowance. Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. There were no impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and no related allowance for losses at both December 31, 2015 and 2014 . Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans’ expected future cash flows equals or exceeds the recorded investment. The Company had no such loans at both December 31, 2015 and 2014 . See Note 2 for information regarding the Company’s accounting policies for non-performing loans. The following tables set forth certain key credit quality indicators as of December 31, 2015 and 2014 , based upon the recorded investment gross of allowance for credit losses. Total commercial mortgage and agricultural property loans Debt Service Coverage Ratio - December 31, 2015 Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total (in thousands) Loan-to-Value Ratio 0%-59.99% $ 158,983 $ 1,993 $ — $ 160,976 60%-69.99% 60,849 — — 60,849 70%-79.99% 11,312 2,687 — 13,999 Greater than 80% — 2,938 1,465 4,403 Total commercial mortgage and agricultural property loans $ 231,144 $ 7,618 $ 1,465 $ 240,227 Debt Service Coverage Ratio - December 31, 2014 Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total (in thousands) Loan-to-Value Ratio 0%-59.99% $ 162,454 $ — $ 1,634 $ 164,088 60%-69.99% 84,761 — 4,878 89,639 70%-79.99% 14,389 2,796 — 17,185 Greater than 80% 2,991 — 1,515 4,506 Total commercial mortgage and agricultural property loans $ 264,595 $ 2,796 $ 8,027 $ 275,418 As of both December 31, 2015 and 2014 , all commercial mortgage and other loans were in current status. The Company defines current in its aging of past due commercial mortgage and other loans as less than 30 days past due. Based upon the recorded investment gross of allowance for credit losses, there were no commercial mortgage and other loans in nonaccrual status as of both December 31, 2015 and 2014 . Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan specific reserve has been established. See Note 2 for further discussion regarding nonaccrual status loans. For the years ended December 31, 2015 and 2014 , there were no commercial mortgage and other loans acquired, other than those through direct origination, nor were there any commercial mortgage and other loans sold. The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both December 31, 2015 and 2014 , the Company had no significant commitments to borrowers that have been involved in a troubled debt restructuring. As of both December 31, 2015 and 2014 , there were no new troubled debt restructurings related to commercial mortgage and other loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective year. See Note 2 for additional information related to the accounting for troubled debt restructurings. As of both December 31, 2015 and 2014 , the Company did not have any foreclosed residential real estate property. Other Long-Term Investments The following table sets forth the composition of “Other long-term investments” at December 31 for the years indicated. 2015 2014 (in thousands) Company’s investment in separate accounts $ 1,853 $ 1,606 Joint ventures and limited partnerships 41,106 38,920 Derivatives 17,495 7,329 Total other long-term investments $ 60,454 $ 47,855 As of both December 31, 2015 and 2014 , the Company had no significant equity method investments. Net Investment Income Net investment income for the years ended December 31, was from the following sources: 2015 2014 2013 (in thousands) Fixed maturities, available-for-sale $ 44,959 $ 44,073 $ 46,071 Trading account assets 866 119 11 Commercial mortgage and other loans 13,528 13,686 13,831 Policy loans 10,335 10,127 9,901 Short-term investments and cash equivalents 218 79 63 Other long-term investments 2,632 3,103 2,105 Gross investment income 72,538 71,187 71,982 Less: investment expenses (3,647 ) (3,315 ) (3,329 ) Net investment income $ 68,891 $ 67,872 $ 68,653 There were no non-income producing assets as of December 31, 2015 . Non-income producing assets represent investments that have not produced income for the twelve months preceding December 31, 2015 . As of both December 31, 2015 and 2014 , the Company had no significant low income housing tax credit investments. Realized Investment Gains (Losses), Net Realized investment gains (losses), net, for the years ended December 31, were from the following sources: 2015 2014 2013 (in thousands) Fixed maturities $ 1,628 $ 4,786 $ 4,325 Equity securities 74 456 186 Commercial mortgage and other loans 343 1,015 (623 ) Short-term investments and cash equivalents — 2 2 Joint ventures and limited partnerships 320 210 (13 ) Derivatives 3,388 (79,739 ) 18,704 Realized investment gains (losses), net $ 5,753 $ (73,270 ) $ 22,581 Accumulated Other Comprehensive Income (Loss) The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the years ended December 31, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Investment Gains (Losses) (1) Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2012 $ 43 $ 47,406 $ 47,449 Change in component during period (2) 25 (30,373 ) (30,348 ) Balance, December 31, 2013 $ 68 $ 17,033 $ 17,101 Change in component during period (2) (81 ) 16,719 16,638 Balance, December 31, 2014 $ (13 ) $ 33,752 $ 33,739 Change in other comprehensive income before reclassifications (86 ) (31,993 ) (32,079 ) Amounts reclassified from AOCI — (1,702 ) (1,702 ) Income tax benefit (expense) 30 11,793 11,823 Balance, December 31, 2015 $ (69 ) $ 11,850 $ 11,781 (1) Includes cash flow hedges of $5.7 million , $0.2 million and $(3.1) million as of December 31, 2015 , 2014 and 2013 , respectively. (2) Net of taxes. Reclassifications out of Accumulated Other Comprehensive Income (Loss) Year Ended Year Ended Year Ended (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/Interest rate (3) $ 249 $ 230 $ (237 ) Net unrealized investment gains (losses) on available-for-sale securities (4) 1,453 5,012 4,748 Total net unrealized investment gains (losses) 1,702 5,242 4,511 Total reclassifications for the period $ 1,702 $ 5,242 $ 4,511 (1) All amounts are shown before tax. (2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI. (3) See Note 10 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ account balances. Net Unrealized Investment Gains (Losses) Net unrealized investment gains and losses on securities classified as “available-for-sale” and certain other long-term investments and other assets are included in the Company’s Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows: Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized Net Unrealized Gains (Losses) on Investments Deferred Policy Acquisition Costs and Other Costs Future Policy Benefits and Policyholders' Account Balances(1) Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) (in thousands) Balance, December 31, 2012 $ 230 $ 95 $ 164 $ (172 ) $ 317 Net investment gains (losses) on investments arising during the period 126 — — (44 ) 82 Reclassification adjustment for (gains) losses included in net income (132 ) — — 46 (86 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — (723 ) — 253 (470 ) Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (12 ) 4 (8 ) Balance, December 31, 2013 $ 224 $ (628 ) $ 152 $ 87 $ (165 ) Net investment gains (losses) on investments arising during the period 13 — — (5 ) 8 Reclassification adjustment for (gains) losses included in net income (12 ) — — 4 (8 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 77 — (27 ) 50 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (30 ) 11 (19 ) Balance, December 31, 2014 $ 225 $ (551 ) $ 122 $ 70 $ (134 ) Net investment gains (losses) on investments arising during the period (20 ) — — 7 (13 ) Reclassification adjustment for (gains) losses included in net income 6 — — (2 ) 4 Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 744 — (260 ) 484 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — 18 (6 ) 12 Balance, December 31, 2015 $ 211 $ 193 $ 140 $ (191 ) $ 353 (1) Balances are net of reinsurance. All Other Net Unrealized Investment Gains and Losses in AOCI Net Unrealized Gains (Losses) on Investments(1) Deferred Policy Acquisition Costs and Other Costs Future Policy Benefits and Policyholders' Account Balances(2) Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) (in thousands) Balance, December 31, 2012 $ 89,750 $ (26,309 ) $ 9,001 $ (25,354 ) $ 47,088 Net investment gains (losses) on investments arising during the period (49,387 ) — — 17,285 (32,102 ) Reclassification adjustment for (gains) losses included in net income (4,379 ) — — 1,534 (2,845 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 14,655 — (5,129 ) 9,526 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (6,875 ) 2,406 (4,469 ) Balance, December 31, 2013 $ 35,984 $ (11,654 ) $ 2,126 $ (9,258 ) $ 17,198 Net investment gains (losses) on investments arising during the period 32,609 — — (11,413 ) 21,196 Reclassification adjustment for (gains) losses included in net income (5,230 ) — — 1,830 (3,400 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — (4,521 ) — 1,582 (2,939 ) Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — 2,816 (985 ) 1,831 Balance, December 31, 2014 $ 63,363 $ (16,175 ) $ 4,942 $ (18,244 ) $ 33,886 Net investment gains (losses) on investments arising during the period (38,860 ) — — 13,600 (25,260 ) Reclassification adjustment for (gains) losses included in net income (1,708 ) — — 598 (1,110 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 10,509 — (3,678 ) 6,831 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (4,385 ) 1,535 (2,850 ) Balance, December 31, 2015 $ 22,795 $ (5,666 ) $ 557 $ (6,189 ) $ 11,497 (1) Includes cash flow hedges. See Note 10 for information on cash flow hedges. (2) Balances are net of reinsurance. Net Unrealized Gains (Losses) on Investments by Asset Class The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated: 2015 2014 2013 (in thousands) Fixed maturity securities on which an OTTI loss has been recognized $ 211 $ 225 $ 224 Fixed maturity securities, available-for-sale - all other 17,402 61,979 37,569 Equity securities, available-for-sale (1,191 ) 4 25 Derivatives designated as cash flow hedges (1) 5,651 159 (3,057 ) Other investments 933 1,221 1,447 Net unrealized gains (losses) on investments $ 23,006 $ 63,588 $ 36,208 (1) See Note 10 for more information on cash flow hedges. Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, at December 31 for the years indicated: 2015 Less than twelve months Twelve months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Fixed maturities, available-for-sale Obligations of U.S. states and their political subdivisions $ 10,312 $ 409 $ — $ — $ 10,312 $ 409 Foreign government bonds 3,079 271 1,813 851 4,892 1,122 Public utilities 58,351 2,374 — — 58,351 2,374 All other U.S. public corporate securities 76,154 4,478 7,342 828 83,496 5,306 All other U.S. private corporate securities 52,647 3,458 — — 52,647 3,458 All other foreign public corporate securities 8,252 835 1,295 524 9,547 1,359 All other foreign private corporate securities 41,343 2,712 26,304 3,917 67,647 6,629 Asset-backed securities 18,052 141 10,672 117 28,724 258 Commercial mortgage-backed securities 12,059 35 398 6 12,457 41 Residential mortgage-backed securities 361 7 — — 361 7 Total $ 280,610 $ 14,720 $ 47,824 $ 6,243 $ 328,434 $ 20,963 Equity securities, available-for-sale $ 12,145 $ 931 $ 3,712 $ 288 $ 15,857 $ 1,219 2014(1) Less than twelve months Twelve months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Fixed maturities, available-for-sale Obligations of U.S. states and their political subdivisions $ — $ — $ — $ — $ — $ — Public utilities 4,733 21 — — 4,733 21 All other U.S. public corporate securities 6,101 361 3,194 29 9,295 390 All other U.S. private corporate securities — — 14,548 256 14,548 256 All other foreign public corporate securities 1,738 83 — — 1,738 83 All other foreign private corporate securities 20,747 1,112 3,775 70 24,522 1,182 Asset-backed securities 1,988 5 11,387 147 13,375 152 Commercial mortgage-backed securities 9,016 9 402 4 9,418 13 Residential mortgage-backed securities 456 8 — — 456 8 Total $ 44,779 $ 1,599 $ 33,306 $ 506 $ 78,085 $ 2,105 Equity securities, available-for-sale $ 5,882 $ 118 $ — $ — $ 5,882 $ 118 (1) Prior period amounts are presented on a basis consistent with the current period presentation. The gross unrealized losses on fixed maturity securities at December 31, 2015 and 2014 , were composed of $16.8 million and $1.2 million , respectively, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $4.2 million and $0.9 million , respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At December 31, 2015 , the $6.2 million of gross unrealized losses of twelve months or more were concentrated in the consumer non-cyclical, capital goods and finance sectors of the Company’s corporate securities. At December 31, 2014 , the $0.5 million of gross unrealized losses of twelve months or more were concentrated in the consumer cyclical and finance sectors of the Company’s corporate securities and in asset-backed securities. In accordance with its policy described in Note 2 , the Company concluded that an adjustment to earnings for OTTI for these securities was not warranted at December 31, 2015 or 2014 . These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to general credit spread widening and foreign currency exchange rate movements. At December 31, 2015 , the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis. At both December 31, 2015 and 2014 , none of the gross unrealized losses related to equity securities represented declines in value of greater than 20%. In accordance with its policy described in Note 2 , the Company concluded that an adjustment for OTTI for these equity securities was not warranted at either December 31, 2015 or 2014 . Securities Lending and Repurchase Agreements In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of December 31, 2015 , the Company had $3 million of securities lending transactions recorded as "Cash collateral loaned for securities," all of which were corporate securities. The remaining contractual maturity of all securities lending transactions is overnight and continuous. As of December 31, 2015 , the Company had no repurchase transactions. Securities Pledged, Restricted Assets and Special Deposits The Company pledges as collateral investment securities it owns to unaffiliated parties through certain transactions, including securities lending, securities sold under agreements to repurchase, collateralized borrowings and postings of collateral with derivative counterparties. At December 31, the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial Position included the following: 2015 2014 (in thousands) Fixed maturity securities, available-for-sale $ 2,905 $ 4,269 Total securities pledged $ 2,905 $ 4,269 As of December 31, 2015 and 2014 , the carrying amount of the associated liabilities supported by the pledged collateral was $3 million and $5 million , respectively, all of which was “Cash collateral for loaned securities.” In the normal course of business activities, the Company accepts collateral that can be sold or repledged. The primary sources of this collateral are securities purchased under agreements to resell. The fair value of this collateral was $97 million and $38 million at December 31, 2015 and 2014 , respectively, none of which had either been sold or repledged. Fixed maturities of less than $1 million at December 31, 2015 and 2014 , were on deposit with governmental authorities or trustees as required by certain insurance laws. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | DEFERRED POLICY ACQUISITION COSTS The balances of and changes in DAC as of and for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Balance, beginning of year $ 457,420 $ 439,315 $ 327,832 Capitalization of commissions, sales and issue expenses 60,024 60,207 53,901 Amortization- Impact of assumption and experience unlocking and true-ups 6,125 23,034 (15,114 ) Amortization- All other (65,452 ) (60,726 ) 59,295 Change in unrealized investment gains and losses 10,626 (4,410 ) 13,402 Balance, end of year $ 468,743 $ 457,420 $ 439,315 DAC include reductions in capitalization and amortization related to reinsurance expense allowances resulting from the coinsurance treaties with PARCC, PAR Term, Term Re, and PAR U, as well as reductions for the initial balance transferred to PAR U at inception of the coinsurance agreement (see Note 12 ). Ceded capitalization was $52 million , $41 million and $48 million in 2015 , 2014 and 2013 , respectively. Ceded amortization amounted to $18 million , $28 million and $10 million in 2015 , 2014 and 2013 , respectively. The ceded portion of the impact of changes in unrealized gains (losses) resulted in decreases in the deferred acquisition cost asset of $8 million and $20 million in 2015 and 2013 , respectively, and an increase in the deferred acquisition cost asset of $10 million in 2014 . |
Policyholders' Liabilities
Policyholders' Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Policyholder Funds [Abstract] | |
Policyholders' Liabilities | POLICYHOLDERS’ LIABILITIES Future Policy Benefits Future policy benefits at December 31, for the years indicated were as follows: 2015 2014 (in thousands) Life insurance $ 974,108 $ 889,556 Individual annuities and supplementary contracts 23,297 20,220 Other contract liabilities 452,705 432,335 Total future policy benefits and other policyholder liabilities $ 1,450,110 $ 1,342,111 Life insurance liabilities include reserves for death benefits. Individual annuities and supplementary contract liabilities include reserves for life contingent immediate annuities. Other contract liabilities include unearned premiums and certain other reserves for annuities and individual life products. Future policy benefits for individual non-participating traditional life insurance policies are generally equal to the present value of future benefit payments and related expenses, less the present value of future net premiums. Assumptions as to mortality, morbidity and persistency are based on the Company’s experience, industry data, and/or other factors, when the basis of the reserve is established. Interest rates used in the determination of the present values range from 2.3% to 7.0% . Future policy benefits for individual annuities and supplementary contracts with life contingencies are generally equal to the present value of expected future payments. Assumptions as to mortality are based on the Company’s experience, industry data, and/or other factors when the basis of the reserve is established. The interest rates used in the determination of the present value range from 0.0% to 7.3% . The Company’s liability for future policy benefits are primarily liabilities for guaranteed benefits related to certain long-duration life and annuity contracts. Liabilities for guaranteed benefits with embedded derivative features are primarily in "Other contract liabilities" in the above table. The remaining liabilities for guaranteed benefits are primarily reflected with the underlying contract. The interest rates used in the determination of the present values range from 0.9% to 4.4% . See Note 6 for additional information regarding liabilities for guaranteed benefits related to certain long-duration contracts. Policyholders’ Account Balances Policyholders’ account balances at December 31 are as follows: 2015 2014 (in thousands) Universal life contracts $ 1,246,611 $ 1,090,721 Individual annuities 258,299 222,252 Guaranteed interest accounts 30,164 32,217 Other 145,512 130,613 Total policyholders’ account balances $ 1,680,586 $ 1,475,803 Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable. These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities. Interest crediting rates for universal life contracts range from 0.6% to 4.5% . Interest crediting rates for individual annuities range from 0.1% to 4.9% . Interest crediting rates for guaranteed interest accounts range from 1.0% to 5.3% . Interest crediting rates range from 0.5% to 3.5% for other. |
Certain Long-Duration Contracts
Certain Long-Duration Contracts With Guarantees | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Certain Long-Duration Contracts With Guarantees | CERTAIN LONG-DURATION CONTRACTS WITH GUARANTEES The Company issues variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract less any partial withdrawals (“return of net deposits”). In certain of these variable annuity contracts, the Company also contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”), and/or (2) the highest contract value on a specified date adjusted for any withdrawals (“contract value”). These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods. The Company also issues annuity contracts with market value adjusted investment options (“MVAs”), which provide for a return of principal plus a fixed rate of return if held to maturity, or, alternatively, a “market adjusted value” if surrendered prior to maturity or if funds are allocated to other investment options. The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable. The Company also issues fixed deferred annuity contracts without MVA that have a guaranteed credited rate and annuity benefit. In addition, the Company issues certain variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (“no lapse guarantee”). Variable life and variable universal life contracts are offered with general and separate account options similar to variable annuities. The assets supporting the variable portion of all variable annuities are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits” or “Realized investment gains (losses), net.” For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality. For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, benefit utilization, timing of annuitization, contract lapses and contractholder mortality. For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility or contractholder behavior. The Company’s contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed may not be mutually exclusive. The liabilities related to the net amount at risk are reflected within “Future policy benefits and other policyholder liabilities”. As of December 31, 2015 and 2014 , the Company had the following guarantees associated with these contracts, by product and guarantee type: December 31, 2015 December 31, 2014 In the Event of Death At Annuitization / Accumulation (1) In the Event of Death At Annuitization / Accumulation (1) (in thousands) Variable Annuity Contracts Return of Net Deposits Account value $ 6,770,691 N/A $ 6,546,610 N/A Net amount at risk $ 37,256 N/A $ 2,887 N/A Average attained age of contractholders 63 years N/A 62 years N/A Minimum return or contract value Account value $ 1,935,482 $ 8,013,005 $ 2,020,664 $ 7,837,167 Net amount at risk $ 83,010 $ 214,361 $ 10,123 $ 100,125 Average attained age of contractholders 66 years 64 years 65 years 62 years Average period remaining until earliest expected annuitization N/A 0 N/A 0.02 years (1) Includes income and withdrawal benefits as described herein December 31, 2015 December 31, 2014 In the Event of Death (in thousands) Variable Life, Variable Universal Life and Universal Life Contracts No Lapse Guarantees Separate account value $ 692,364 $ 726,853 General account value $ 552,888 $ 440,913 Net amount at risk $ 12,072,957 $ 9,970,707 Average attained age of contractholders 53 years 52 years Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows: December 31, 2015 December 31, 2014 (in thousands) Equity funds $ 5,048,026 $ 5,120,921 Bond funds 3,102,431 2,836,575 Money market funds 313,040 402,526 Total $ 8,463,497 $ 8,360,022 In addition to the above mentioned amounts invested in separate account investment options, $243 million and $207 million of account balances of variable annuity contracts with guarantees, inclusive of contracts with MVA feature were invested in general account investment options as of December 31, 2015 and 2014 , respectively. For the years ended December 31, 2015 , 2014 and 2013 there were no transfers of assets, other than cash, from the general account to any separate account, and accordingly no gains or losses recorded. Liabilities for Guarantee Benefits The table below summarizes the changes in general account liabilities for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) are included in “Future policy benefits and other policyholder liabilities” and the related changes in the liabilities are included in “Policyholders' benefits”. Guaranteed minimum income and withdrawal benefits (“GMIWB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum accumulation benefits (“GMAB”) features are accounted for as embedded derivatives and are recorded at fair value within “Future policy benefits and other policyholder liabilities”. Changes in the fair value of these derivatives, including changes in the Company’s own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in “Realized investment gains (losses), net.” See Note 9 for additional information regarding the methodology used in determining the fair value of these embedded derivatives. GMDB GMIB GMWB/GMIWB/GMAB Total Variable Annuity Variable Life, Variable Universal Life & Universal Life Variable Annuity (in thousands) Balances as of December 31, 2012 $ 2,611 $ 33,079 $ 2,290 $ 116,672 $ 154,652 Incurred guarantee benefits (1) 116 6,802 (1,277 ) (154,862 ) (149,221 ) Paid guarantee benefits (147 ) — (52 ) — (199 ) Other 109 2,574 12 — 2,695 Balance as of December 31, 2013 $ 2,689 $ 42,455 $ 973 $ (38,190 ) $ 7,927 Incurred guarantee benefits (1) 5,428 20,545 915 467,026 493,914 Paid guarantee benefits (264 ) (1,050 ) — — (1,314 ) Other 141 7,262 6 — 7,409 Balance as of December 31, 2014 $ 7,994 $ 69,212 $ 1,894 $ 428,836 $ 507,936 Incurred guarantee benefits (1) 3,409 25,049 (424 ) 20,236 48,270 Paid guarantee benefits (720 ) (5,174 ) (12 ) — (5,906 ) Other (102 ) (4,911 ) (12 ) — (5,025 ) Balance as of December 31, 2015 $ 10,581 $ 84,176 $ 1,446 $ 449,072 $ 545,275 (1) Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features accounted for as embedded derivatives. The GMDB liability is determined each period end by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the excess death benefits. The GMIB liability associated with variable annuities is determined each period by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the excess income benefits. The portion of assessments used is chosen such that, at issue the present value of expected death benefits or expected income benefits in excess of the projected account balance and the portion of the present value of total expected assessments over the lifetime of the contracts are equal. The Company regularly evaluates the estimates used and adjusts the GMDB and GMIB liability balances, with an associated charge or credit to earnings, if actual experience or other evidence suggests that earlier estimates should be revised. The GMAB features provide the contractholder with a guaranteed return of initial account value or an enhanced value if applicable. The most significant of the Company’s GMAB features are the guaranteed return option (“GRO”) features, which includes an asset transfer feature that reduces the Company’s exposure to these guarantees. The GMAB liability is calculated as the present value of future expected payments to customers less the present value of future expected rider fees attributable to the embedded derivative feature. The GMWB features provide the contractholder with access to a guaranteed remaining balance if the account value is reduced to zero through a combination of market declines and withdrawals. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of the account value or cumulative deposits when withdrawals commence, adjusted for cumulative withdrawals. The contractholder also has the option, after a specified time period, to reset the guaranteed remaining balance to the then-current account value, if greater. The contractholder accesses the guaranteed remaining balance through payments over time, subject to maximum annual limits. The GMWB liability is calculated as the present value of future expected payments to customers less the present value of future expected rider fees attributable to the embedded derivative feature. The GMIWB features, taken collectively, provide a contractholder two optional methods to receive guaranteed minimum payments over time, a “withdrawal” option or an “income” option. The withdrawal option (which was available under only one of the GMIWBs and is no longer offered) guarantees that a contractholder can withdraw an amount each year until the cumulative withdrawals reach a total guaranteed balance. The income option (which varies among the Company’s GMIWBs) in general guarantees the contractholder the ability to withdraw an amount each year for life (or for joint lives, in the case of any spousal version of the benefit) where such amount is equal to a percentage of a protected value under the benefit. The contractholder also has the potential to increase this annual amount, based on certain subsequent increases in account value that may occur. The GMIWB can be elected by the contractholder upon issuance of an appropriate deferred variable annuity contract or at any time following contract issue prior to annuitization. Certain GMIWB features include an asset transfer feature that reduces the Company’s exposure to these guarantees. The GMIWB liability is calculated as the present value of future expected payments to customers less the present value of future expected rider fees attributable to the embedded derivative feature. Sales Inducements The Company generally defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. DSI is included in “Deferred sales inducements” in the Company’s Consolidated Statements of Financial Position. The Company offered various types of sales inducements, including: (1) a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s initial deposit and (2) additional credits after a certain number of years a contract is held. Changes in DSI, reported as “Interest credited to policyholders’ account balances,” are as follows: 2015 2014 2013 (in thousands) Balance, beginning of year $ 76,534 $ 88,350 $ 70,728 Capitalization 678 842 1,793 Amortization- Impact of assumption and experience unlocking and true-ups 1,348 3,108 1,799 Amortization- All other (16,144 ) (15,733 ) 13,501 Change in unrealized investment gains (losses) 627 (33 ) 529 Balance, end of year $ 63,043 $ 76,534 $ 88,350 |
Statutory Net Income and Surplu
Statutory Net Income and Surplus and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2015 | |
Statutory Net Income And Surplus And Dividend Restrictions [Abstract] | |
Statutory Net Income and Surplus and Dividend Restrictions | STATUTORY NET INCOME AND SURPLUS AND DIVIDEND RESTRICTIONS The Company is required to prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the New Jersey Department of Banking and Insurance. Statutory accounting practices primarily differ from U.S. GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions and valuing investments, deferred taxes, and certain assets on a different basis. Statutory net income of the Company amounted to $62 million , $60 million and $81 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Statutory surplus of the Company amounted to $410 million and $352 million at December 31, 2015 and 2014 , respectively. The Company does not utilize prescribed or permitted practices that vary materially from the statutory accounting practices prescribed by the NAIC. The Company is subject to New Jersey law, which limits the amount of dividends that insurance companies can pay to stockholders without approval of the New Jersey Department of Banking and Insurance. The maximum dividend, which may be paid in any twelve -month period without notification or approval, is limited to the greater of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, there is a capacity to pay a dividend of $67 million in 2016 without prior approval. The Company did not pay a dividend in 2015 . The Company paid dividends to Pruco Life of $80 million and $155 million in 2014 and 2013 respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The components of income tax expense (benefit) for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Current tax expense (benefit): U.S. Federal $ 21,849 $ 21,129 $ 33,370 Total 21,849 21,129 33,370 Deferred tax expense (benefit): U.S. Federal (8,486 ) (31,353 ) 31,996 Total (8,486 ) (31,353 ) 31,996 Total income tax expense (benefit) from operations 13,363 (10,224 ) 65,366 Income tax expense (benefit) reported in equity related to: Other comprehensive income (loss) (11,823 ) 8,958 (16,342 ) Additional paid-in capital (1,348 ) (177 ) 53 Total income tax expense (benefit) $ 192 $ (1,443 ) $ 49,077 The Company’s actual income tax expense (benefit) for the years ended December 31 differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from operations before income taxes for the following reasons: 2015 2014 2013 (in thousands) Expected federal income tax expense (benefit) $ 31,299 $ 6,314 $ 80,923 Non-taxable investment income (16,021 ) (13,891 ) (13,840 ) Tax credits (2,008 ) (2,884 ) (1,789 ) Other 93 237 72 Total income tax expense (benefit) on income from continuing operations $ 13,363 $ (10,224 ) $ 65,366 The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and accounts for most of the non-taxable investment income shown in the table above, and as a result, is a major reason for the difference between the Company’s effective tax rate and the federal statutory tax rate of 35% . The DRD for the current period was estimated using information from 2014 and current year results, and was adjusted to take into account the current year’s equity market performance. The actual current year DRD can vary based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from fund investments, changes in the account balances of variable life and annuity contracts and the Company’s taxable income before the DRD. In August 2007, the Internal IRS released Revenue Ruling 2007-54, which included, among other items, guidance on the methodology to be followed in calculating the DRD related to variable life insurance and annuity contracts. In September 2007, the IRS released Revenue Ruling 2007-61. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 and informed taxpayers that the U.S. Treasury Department and the IRS intend to address through new guidance the issues considered in Revenue Ruling 2007-54, including the methodology to be followed in determining the DRD related to variable life insurance and annuity contracts. In May 2010, the IRS issued an Industry Director Directive (“IDD”) confirming that the methodology for calculating the DRD set forth in Revenue Ruling 2007-54 should not be followed. The IDD also confirmed that the IRS guidance issued before Revenue Ruling 2007-54, which guidance the Company relied upon in calculating its DRD, should be used to determine the DRD. In February 2014, the IRS released Revenue Ruling 2014-7, which modified and superseded Revenue Ruling 2007-54, by removing the provisions of Revenue Ruling 2007-54 related to the methodology to be followed in calculating the DRD and making Revenue Ruling 2007-61 obsolete. These activities had no impact on the Company’s 2013, 2014 or 2015 results. However, there remains the possibility that the IRS and the U.S. Treasury will address, through subsequent guidance, the issues related to the calculation of the DRD. For the last several years, the revenue proposals included in the Obama Administration’s budgets included a proposal that would change the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company’s consolidated net income. Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table: 2015 2014 (in thousands) Deferred tax assets Insurance reserves $ 149,569 $ 152,757 Deferred tax assets 149,569 152,757 Deferred tax liabilities Deferred policy acquisition costs 105,590 107,495 Deferred sales inducements 22,065 26,787 Net unrealized gains on securities 6,074 22,200 Investments 5,251 6,884 Other 701 1,161 Deferred tax liabilities 139,681 164,527 Net deferred tax asset (liability) $ 9,888 $ (11,770 ) The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company considers many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. The company had no valuation allowance as of December 31, 2015 , and 2014 . Management believes that based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of deferred tax asset that is realizable. The Company’s income (loss) from operations before income taxes includes income from domestic operations of $89 million , $18 million and $231 million , and no income from foreign operation for the years ended December 31, 2015 , 2014 and 2013 , respectively. The Company’s liability for income taxes includes the liability for unrecognized tax benefits and interest that relate to tax years still subject to review by the IRS or other taxing authorities. The completion of review or the expiration of the Federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense (benefit). As of December 31, 2015 and 2014 , the Company recognized nothing in the Consolidated Statements of Operations and Comprehensive Income and recognized no liabilities in the Consolidated Statements of Financial Position for tax-related interest and penalties. The Company had no unrecognized tax benefits for the years ended December 31, 2015 , 2014 and 2013 . The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired. At December 31, 2015 , the Company remains subject to examination in the U.S. for tax years 2007 through 2015 . For tax years 2007 through 2016 , the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions as they occur in order to reach agreement with the Company on how they should be reported in the relevant tax returns. If disagreements arise, accelerated resolutions program are available to resolve the disagreements in a timely manner before the tax returns are filed. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | FAIR VALUE OF ASSETS AND LIABILITIES Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short-term investments. Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value ("NAV")), certain short-term investments and certain cash equivalents, and certain over-the-counter ("OTC") derivatives. Level 3 - Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured OTC derivative contracts, certain real estate funds for which the Company is the general partner, and embedded derivatives resulting from certain products with guaranteed benefits. Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated. As of December 31, 2015 Level 1 Level 2 Level 3 Netting (1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ — $ 26,592 $ — $ — $ 26,592 Obligations of U.S. states and their political subdivisions — 131,373 — — 131,373 Foreign government bonds — 7,118 — — 7,118 U.S. corporate public securities — 401,754 — — 401,754 U.S. corporate private securities — 204,659 9,781 — 214,440 Foreign corporate public securities — 29,580 — — 29,580 Foreign corporate private securities — 154,191 8,028 — 162,219 Asset-backed securities (5) — 23,100 25,146 — 48,246 Commercial mortgage-backed securities — 64,440 — — 64,440 Residential mortgage-backed securities — 19,433 — — 19,433 Sub-total — 1,062,240 42,955 — 1,105,195 Trading account assets: Equity securities — — 7,050 — 7,050 Corporate securities — 8,441 — — 8,441 Sub-total — 8,441 7,050 — 15,491 Equity securities, available-for-sale — 17,084 — — 17,084 Short-term investments 715 — — — 715 Cash equivalents 30,998 31,982 — — 62,980 Other long-term investments — 16,245 222 (364 ) 16,103 Reinsurance recoverables — — 356,337 — 356,337 Receivables from parent and affiliates — 8,966 3,511 — 12,477 Sub-total excluding separate account assets 31,713 1,144,958 410,075 (364 ) 1,586,382 Separate account assets (2) — 11,605,964 7,184 — 11,613,148 Total assets $ 31,713 $ 12,750,922 $ 417,259 $ (364 ) $ 13,199,530 Future policy benefits (3) $ — $ — $ 449,073 $ — $ 449,073 Payables to parent and affiliates — 364 — (364 ) — Total liabilities $ — $ 364 $ 449,073 $ (364 ) $ 449,073 As of December 31, 2014(4) Level 1 Level 2 Level 3 Netting (1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ — $ 27,581 $ — $ — $ 27,581 Obligations of U.S. states and their political subdivisions — 41,189 — — 41,189 Foreign government bonds — 6,493 — — 6,493 U.S. corporate public securities — 316,274 537 — 316,811 U.S. corporate private securities — 243,251 5,818 — 249,069 Foreign corporate public securities — 27,390 — — 27,390 Foreign corporate private securities — 158,802 4,441 — 163,243 Asset-backed securities (5) — 29,120 10,092 — 39,212 Commercial mortgage-backed securities — 78,084 — — 78,084 Residential mortgage-backed securities — 24,411 — — 24,411 Sub-total — 952,595 20,888 — 973,483 Trading account assets: Corporate securities — 9,679 — — 9,679 Sub-total — 9,679 — — 9,679 Equity securities, available-for-sale — 8,203 92 — 8,295 Short-term investments 470 14,999 — — 15,469 Cash equivalents 40,000 21,259 — — 61,259 Other long-term investments — 8,753 253 (1,424 ) 7,582 Reinsurance recoverables — — 339,982 — 339,982 Receivables from parent and affiliates — 10,013 4,594 — 14,607 Sub-total excluding separate account assets 40,470 1,025,501 365,809 (1,424 ) 1,430,356 Separate account assets (2) — 11,370,061 6,879 — 11,376,940 Total assets $ 40,470 $ 12,395,562 $ 372,688 $ (1,424 ) $ 12,807,296 Future policy benefits (3) $ — $ — $ 428,837 $ — $ 428,837 Payables to parent and affiliates — 1,424 — (1,424 ) — Total liabilities $ — $ 1,424 $ 428,837 $ (1,424 ) $ 428,837 (1) “Netting” amounts represent the impact of offsetting asset and liability positions held within the same counterparty, subject to master netting arrangements. (2) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position. (3) For the year ended December 31, 2015 , the net embedded derivative liability position of $449 million includes $76 million of embedded derivatives in an asset position and $525 million of embedded derivatives in a liability position. For the year ended December 31, 2014 , the net embedded derivative liability position of $429 million includes $62 million of embedded derivatives in an asset position and $491 million of embedded derivatives in a liability position. (4) Prior period amounts are presented on a basis consistent with the current period presentation. (5) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. Fixed Maturity Securities – The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience with various vendors. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Typical inputs used by these pricing services include but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, and/or estimated cash flow, prepayment speeds, and default rates. If the pricing information received from third party pricing services is deemed not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service or classify the securities as Level 3. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2. Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing services is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may override the information with an internally-developed valuation. As of December 31, 2015 and 2014 , overrides on a net basis were not material. Pricing service overrides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy. The Company conducts several specific price monitoring activities. Daily analyses identify price changes over predetermined thresholds defined at the financial instrument level. Various pricing integrity reports are reviewed on a daily and monthly basis to determine if pricing is reflective of market activity or if it would warrant any adjustments. Other procedures performed include, but are not limited to, reviews of third-party pricing services methodologies, reviews of pricing trends, and back testing. The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including observed prices and spreads for similar publicly traded or privately traded issues, they have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the price of a security, a Level 3 classification is made. Trading Account Assets – Trading account assets consist of corporate securities, whose fair values are determined consistent with similar instruments described above under “Fixed maturity Securities” and below under “Equity Securities.” Equity Securities – Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3. Derivative Instruments – Derivatives are recorded at fair value either as assets, within “Other long-term investments,” or as liabilities, within “Payables to parent and affiliates,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, credit spreads, market volatility, expected returns, non-performance risk (“NPR”), liquidity and other factors. For derivative positions included within Level 3 of the fair value hierarchy, liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position. The majority of the Company’s derivative positions are traded in the OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate, cross currency swaps, currency forward contracts and single name credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility and other factors. The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including Overnight Indexed Swap discount rates, obtained from external market data providers, third-party pricing vendors and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy. To reflect the market’s perception of the Company's counterparty’s NPR, the Company incorporates additional spreads over LIBOR into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized. Derivatives classified as Level 3 include structured products. These derivatives are valued based upon models such as Monte Carlo simulation models and other techniques that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values. Cash Equivalents and Short-Term Investments – Cash equivalents and short-term investments include money market instruments, and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in this category are generally fair valued based on market observable inputs and, these investments have primarily been classified within Level 2. Separate Account Assets – Separate account assets include fixed maturity securities, treasuries, equity securities, mutual funds, and real estate investments for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and “Equity Securities”. Receivables from Parent and Affiliates – Receivables from parent and affiliates carried at fair value include affiliated bonds within the Company’s legal entity whose fair value are determined consistent with similar securities described above under “Fixed Maturity Securities” managed by affiliated asset managers. Reinsurance Recoverables – Reinsurance recoverables carried at fair value include the reinsurance of the Company’s living benefit guarantees on certain variable annuity contracts. These guarantees are accounted for as embedded derivatives and are recorded in “Reinsurance Recoverables” or “Other Liabilities” when fair value is in an asset or liability position, respectively. The methods and assumptions used to estimate the fair value are consistent with those described below in “Future Policy Benefits.” The reinsurance agreements covering these guarantees are derivatives with fair value determined in the same manner as the living benefit guarantee. Future Policy Benefits – The liability for future policy benefits is related to guarantees primarily associated with the optional living benefit features of certain variable annuity contracts, including GMAB, GMWB and GMIWB, accounted for as embedded derivatives. The fair values of the GMAB, GMWB, and GMIWB liabilities are calculated as the present value of future expected benefit payments to contractholders less the present value of future expected rider fees attributable to the optional living benefit feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management's judgment. The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy. Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets, and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the LIBOR swap curve adjusted for an additional spread relative to LIBOR to reflect NPR. Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. These assumptions are generally updated annually unless a material change that the Company feels is indicative of a long-term trend is observed in an interim period. Transfers between Levels 1 and 2 – Overall, transfers between levels are made to reflect changes in observability of inputs and market activity. Transfers into or out of any level are generally reported as the value as of the beginning of the quarter in which the transfers occur for any such assets still held at the end of the quarter. Periodically there are transfers between Level 1 and Level 2 for assets held in the Company’s Separate Account. During the year ended December 31, 2015 , there were no transfers between Level 1 and Level 2. During the year ended December 31, 2014 , $58 million was transferred from Level 1 to Level 2. Level 3 Assets and Liabilities by Price Source – The tables below present the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources. As of December 31, 2015 Internal (1) External (2) Total (in thousands) Corporate securities $ 17,809 $ — $ 17,809 Asset-backed securities 66 25,080 25,146 Equity securities — 7,050 7,050 Other long-term investments — 222 222 Reinsurance recoverables 356,337 — 356,337 Receivables from parent and affiliates 3,511 3,511 Subtotal excluding separate account assets 374,212 35,863 410,075 Separate account assets 7,184 — 7,184 Total assets $ 381,396 $ 35,863 $ 417,259 Future policy benefits $ 449,073 $ — $ 449,073 Total liabilities $ 449,073 $ — $ 449,073 As of December 31, 2014 Internal (1) External (2) Total (in thousands) Corporate securities $ 10,258 $ 538 $ 10,796 Asset-backed securities 101 9,991 10,092 Equity securities 92 — 92 Other long-term investments — 253 253 Reinsurance recoverables 339,982 — 339,982 Receivables from parent and affiliates — 4,594 4,594 Subtotal excluding separate account assets 350,433 15,376 365,809 Separate account assets 6,879 — 6,879 Total assets $ 357,312 $ 15,376 $ 372,688 Future policy benefits $ 428,837 $ — $ 428,837 Total liabilities $ 428,837 $ — $ 428,837 (1) Represents valuations reflecting both internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table. (2) Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets). As of December 31, 2015 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 17,809 Discounted cash flow Discount rate 5.76 % 7.98 % 6.71 % Decrease Reinsurance recoverables $ 356,337 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 449,073 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0.06 % 1.76 % Decrease Utilization rate (5) 56 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase As of December 31, 2014 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 10,258 Discounted cash flow Discount rate 10.47 % 10.55 % 10.48 % Decrease Reinsurance recoverables $ 339,982 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 428,837 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0 % 1.30 % Decrease Utilization rate (5) 63 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table. (2) Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (3) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. (4) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company and its affiliates, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. (5) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status, and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits. (6) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status, and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%. (7) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table. Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows: Corporate Securities – The rate used to discount future cash flows reflects current risk free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. Future Policy Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money. Separate Account Assets – In addition to the significant internally-priced Level 3 assets and liabilities presented and described above, the Company also has internally-priced separate account assets reported within Level 3. Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Consolidated Statements of Financial Position. As a result, changes in value associated with these investments do not impact the Company’s Consolidated Statements of Operations and Comprehensive Income. Quantitative information about significant internally-priced Level 3 separate account assets is as follows: Real Estate and Other Invested Assets – Separate account assets include $7.2 and $6.9 million of investments in real estate as of December 31, 2015 and 2014 , respectively, that are classified as Level 3 and reported at fair value which is determined by the Company’s equity in net assets of the entities. In general, these fair value estimates of real estate are based on property appraisal reports prepared by independent real estate appraisers. Key inputs and assumptions to the appraisal process include rental income and expense amounts, related growth rates, discount rates and capitalization rates. Because of the subjective nature of inputs and the judgment involved in the appraisal process, real estate investments are typically included in the Level 3 classification. Key unobservable inputs to real estate valuation include capitalization rates, which ranged from 4.75% to 10.00% ( 6.07% weighted average) as of December 31, 2015 and 5.00% to 10.00% ( 6.68% weighted average) as of December 31, 2014 and discount rates which ranged from 6.00% to 11.00% ( 6.95% weighted average) as of December 31, 2015 and 6.75% to 11.00% ( 7.66% weighted average) as of December 31, 2014 . Valuation Process for Fair Value Measurements Categorized within Level 3 – The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various business groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company has established oversight teams, often in the form of pricing committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company’s investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of living benefit features of the Company’s variable annuity contracts. The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, analysis of portfolio returns to corresponding benchmark returns, back-testing, review of bid/ask spreads to assess activity, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For living benefit features of the Company’s variable annuity products, the actuarial valuation unit periodically tests contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. The valuation policies and guidelines are re |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Types of Derivative Instruments and Derivative Strategies Interest Rate Contracts Interest rate swaps are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount. Equity Contracts Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range. Foreign Exchange Contracts Currency derivatives, including currency swaps and forwards, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell. Under currency forwards, the Company agrees with counterparties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated. These earnings hedges do not qualify for hedge accounting. Under currency swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. Credit Contracts Credit derivatives are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company sells credit protection on a single name reference, or certain index reference, and in return receives a quarterly premium. With credit default derivatives, this premium or credit spread generally corresponds to the difference between the yield on the referenced name’s public fixed maturity cash instruments and swap rates at the time the agreement is executed. If there is an event of default by the referenced name, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security or pay the referenced amount less the auction recovery rate. See credit derivatives section for discussion of guarantees related to credit derivatives written. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. Embedded Derivatives The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to affiliates, Pruco Re and Pruco Life. The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models, as described in Note 9 . The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying, excluding embedded derivatives which are recorded with the associated host. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral held with the same counterparty, and non-performance risk. December 31, 2015 December 31, 2014 Gross Fair Value Gross Fair Value Primary Underlying Notional Assets Liabilities Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Currency Swaps $ 54,443 $ 5,572 $ — $ 44,221 $ 840 $ (691 ) Total Qualifying Hedges $ 54,443 $ 5,572 $ — $ 44,221 $ 840 $ (691 ) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 57,201 $ 6,076 $ — $ 57,200 $ 6,269 $ — Credit Credit Default Swaps 7,275 268 (222 ) 7,275 150 (451 ) Currency/Interest Rate Foreign Currency Swaps 24,715 3,597 — 25,370 1,049 (171 ) Currency Forwards 550 5 — — — — Equity Equity Options 30,501 2,341 (142 ) 1,875,551 446 (112 ) Total Non-Qualifying Hedges $ 120,242 $ 12,287 $ (364 ) $ 1,965,396 $ 7,914 $ (734 ) Total Derivatives (1) $ 174,685 $ 17,859 $ (364 ) $ 2,009,617 $ 8,754 $ (1,425 ) (1) Excludes embedded derivatives which contain multiple underlyings. The fair value of the embedded derivatives related to living benefit feature was a net liability of $449 million and $429 million as of December 31, 2015 and 2014 , respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Pruco Life was a net asset of $356 million and $340 million as of December 31, 2015 and 2014 , respectively, included in “Reinsurance Recoverables”. Offsetting Assets and Liabilities The following table presents recognized derivative instruments (excluding embedded derivatives and reinsurance recoverables), and repurchase and reverse repurchase agreements, that are offset in the Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Consolidated Statements of Financial Position. December 31, 2015 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 16,245 $ (364 ) $ 15,881 $ (15,157 ) $ 724 Securities purchased under agreement to resell 96,599 — 96,599 (96,599 ) — Total Assets $ 112,844 $ (364 ) $ 112,480 $ (111,756 ) $ 724 Offsetting of Financial Liabilities: Derivatives $ 364 $ (364 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 364 $ (364 ) $ — $ — $ — December 31, 2014 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 8,753 $ (1,424 ) $ 7,329 $ (7,194 ) $ 135 Securities purchased under agreement to resell 38,048 — 38,048 (38,048 ) — Total Assets $ 46,801 $ (1,424 ) $ 45,377 $ (45,242 ) $ 135 Offsetting of Financial Liabilities: Derivatives $ 1,424 $ (1,424 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 1,424 $ (1,424 ) $ — $ — $ — (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Consolidated Financial Statements . Cash Flow Hedges The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its cash flow hedge accounting relationships. The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship. Year Ended December 31, 2015 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ 247 $ 301 $ 5,492 Total qualifying hedges — 247 301 5,492 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 1,675 — — — Currency 19 — — — Currency/Interest Rate 2,729 — 55 — Credit 152 — — — Equity 856 — — — Embedded Derivatives (2,043 ) — — — Total non-qualifying hedges 3,388 — 55 — Total $ 3,388 $ 247 $ 356 $ 5,492 Year Ended December 31, 2014 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ (58 ) $ 288 $ 3,216 Total qualifying hedges — (58 ) 288 3,216 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 4,713 — — — Currency/Interest Rate 1,445 — 25 — Credit (43 ) — — — Equity (720 ) — — — Embedded Derivatives (85,134 ) — — — Total non-qualifying hedges (79,739 ) — 25 — Total $ (79,739 ) $ (58 ) $ 313 $ 3,216 Year Ended December 31, 2013 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ 64 $ (301 ) $ (1,730 ) Total qualifying hedges — 64 (301 ) (1,730 ) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (4,050 ) — — — Currency/Interest Rate (110 ) — 12 — Credit (1,016 ) — — — Equity (3,875 ) — — — Embedded Derivatives 27,755 — — — Total non-qualifying hedges 18,704 — 12 — Total $ 18,704 $ 64 $ (289 ) $ (1,730 ) (1) Amounts deferred in AOCI. For the years ended December 31, 2015 , 2014 and 2013 , the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations. Also, there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes: (in thousands) Balance, December 31, 2012 $ (1,327 ) Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2013 (1,493 ) Amount reclassified into current period earnings (237 ) Balance, December 31, 2013 (3,057 ) Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2014 3,446 Amount reclassified into current period earnings (230 ) Balance, December 31, 2014 159 Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2015 5,741 Amount reclassified into current period earnings (249 ) Balance, December 31, 2015 $ 5,651 Using December 31, 2015 values, it is estimated that a pre-tax gain of approximately less than $1 million will be reclassified from AOCI to earnings during the subsequent twelve months ending December 31, 2016, offset by amounts pertaining to the hedged items. As of December 31, 2015 and 2014 , the Company did not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 15 years . Income amounts deferred in AOCI as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” within OCI in the Consolidated Statements of Operations and Comprehensive Income (Loss). Credit Derivatives The Company has no exposure from credit derivatives where it has written credit protection as of December 31, 2015 and 2014 . The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of both December 31, 2015 and 2014 , the Company had $7 million of outstanding notional amounts reported at fair value as an asset of less than $1 million and a liability of less than $1 million , respectively. Credit Risk The Company is exposed to credit-related losses in the event of non-performance by our counterparty to financial derivative transactions. The Company has credit risk exposure to an affiliate, Prudential Global Funding LLC (“PGF”), related to its OTC derivative transactions. PGF manages credit risk with external counterparties by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral, such as cash and securities, when appropriate. Additionally, limits are set on single party credit exposures which are subject to periodic management review. Under fair value measurements, the Company incorporates the market’s perception of its own and the counterparty’s non-performance risk in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company’s own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions. |
Commitments, Contingent Liabili
Commitments, Contingent Liabilities and Litigation and Regulatory Matters | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingent Liabilities and Litigation and Regulatory Matters | COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS Commitments The Company has made commitments to fund commercial loans. As of December 31, 2015 and 2014 , the outstanding balance on this commitment was $4 million and $0.2 million , respectively. The Company has made commitments to purchase or fund investments, mostly private fixed maturities. As of both December 31, 2015 and 2014 , $1 million of this commitment was outstanding. Contingent Liabilities On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the costs of such remediation, administrative costs and regulatory fines. The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below. It is possible that the results of operations or the cash flows of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flows for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position. Litigation and Regulatory Matters The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed, including matters discussed below. The Company estimates that as of December 31, 2015 , the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $1 million . This estimate is not an indication of expected loss, if any, or the Company's maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews. Escheatment Audit and Claims Settlement Practices Market Conduct Exam In January 2012, a Global Resolution Agreement entered into by the Company and a third-party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third-party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File (“SSMDF") to identify deceased insureds and contractholders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by the Company to resolve a multi-state market conduct examination regarding its adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires the Company to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Substantially all other jurisdictions that are not signatories to the Global Resolution Agreement or the Regulatory Settlement Agreement have entered into similar agreements with the Company. The New York Attorney General has subpoenaed the Company, along with other companies, regarding its unclaimed property procedures and may ultimately seek remediation and other relief, including damages. Additionally, the New York Office of Unclaimed Funds is conducting an audit of the Company’s compliance with New York’s unclaimed property laws. Securities Lending Matter In February 2016, Prudential Financial self-reported to the SEC, and notified other regulators, that in some cases it failed to maximize securities lending income due to a long-standing restriction benefitting the Company and Prudential Financial that limited the availability of loanable securities for certain of the Company's separate account investments. The restriction has been removed and Prudential Financial intends to implement a remediation plan for the benefit of customers. Prudential Financial intends to fully cooperate with regulators in this matter. Summary The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flows in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flows for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties. Expense Charges and Allocations Many of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses. The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses include allocations of stock compensation expenses related to a stock option program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock option program was less than $1 million for each of the years ended December 31, 2015 , 2014 and 2013 . The expense charged to the Company for the deferred compensation program was $1 million for each of the years ended December 31, 2015 , 2014 and 2013 . The Company is charged for its share of employee benefits expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on final group earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during a career. The Company’s share of net expense for the pension plans was $3 million , $3 million and $2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Prudential Insurance sponsors voluntary savings plans for its employee’s 401(k) plans. The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company’s expense for its share of the voluntary savings plan was $1 million for each of the years ended December 31, 2015 , 2014 and 2013 . The Company is charged distribution expenses from Prudential Insurance’s agency network for both its domestic life and annuity products through a transfer pricing agreement, which is intended to reflect a market based pricing arrangement. The Company pays commissions and certain other fees to Prudential Annuities Distributors, Incorporated (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s products. Commissions and fees paid by the Company to PAD were $73 million , $83 million and $75 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. Corporate Owned Life Insurance The Company has sold three Corporate Owned Life Insurance ("COLI") policies to Prudential Insurance and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI contracts was $1,660 million at December 31, 2015 and $1,546 million at December 31, 2014 . Fees related to these COLI policies were $26 million , $26 million and $22 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Derivative Trades In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF. For these OTC derivative contracts, PGF has a substantially equal and offsetting position with an external counterparty. Reinsurance with Affiliates The Company participates in reinsurance with its affiliates Prudential Arizona Reinsurance Captive Company (“PARCC”), Pruco Re, Prudential Arizona Reinsurance Term Company (“PAR Term”), Prudential Arizona Reinsurance Universal Company (“PAR U”), and Prudential Term Reinsurance Company (“Term Re”), and its parent companies, Pruco Life and Prudential Insurance, in order to provide risk diversification and additional capacity for future growth, limit the maximum net loss potential, manage the statutory capital for its individual life business, facilitate its capital market hedging program and align accounting methodology for the assets and liabilities of living benefit riders contained in annuities contracts. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely. Effective April 1, 2008 , the Company entered into an agreement to reinsure certain COLI policies with Pruco Life. Reserves related to reinsured long duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers for long duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. Reinsurance premiums ceded for universal life products are accounted for as a reduction of policy charges and fee income. Reinsurance premiums ceded for term insurance products are accounted for as a reduction of premiums. Realized investment gains and losses include the impact of reinsurance agreements that are accounted for as embedded derivatives. Changes in the fair value of the embedded derivatives are recognized through “Realized investment gains (losses), net”. The Company has entered into reinsurance agreements to transfer the risk related to certain living benefit options on variable annuities to Pruco Re and to Pruco Life. The reinsurance agreements are derivatives and have been accounted for in the same manner as an embedded derivative. See Note 10 for additional information related to the accounting for embedded derivatives. Reinsurance amounts included in the Company’s Consolidated Statements of Financial Position at December 31, were as follows: December 31, 2015 December 31, 2014 (in thousands) Reinsurance recoverables $ 1,634,696 $ 1,436,470 Policy loans (12,989 ) (11,388 ) Deferred policy acquisition costs (252,795 ) (211,128 ) Other liabilities 47,421 37,934 The reinsurance recoverables by counterparty are broken out below. Reinsurance Recoverables December 31, 2015 December 31, 2014 (in thousands) PARCC $ 496,591 $ 482,487 PAR Term 142,068 116,930 Prudential Insurance 30,079 27,652 PAR U 560,188 446,182 Pruco Life 29,796 17,469 Pruco Re 336,653 332,741 Term Re 37,391 11,039 Unaffiliated 1,930 1,970 Total reinsurance recoverables $ 1,634,696 $ 1,436,470 Reinsurance amounts, excluding investment gains (losses) on affiliated asset transfers, included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Premiums: Direct $ 205,978 $ 193,928 $ 186,778 Assumed — — — Ceded (190,987 ) (179,605 ) (171,885 ) Net premiums 14,991 14,323 14,893 Policy charges and fee income: Direct 314,357 287,766 239,758 Assumed — — — Ceded (116,822 ) (106,680 ) (82,947 ) Net policy charges and fee income 197,535 181,086 156,811 Net investment income: Direct 69,371 68,364 69,157 Assumed — — — Ceded (480 ) (492 ) (504 ) Net investment income 68,891 67,872 68,653 Other income : Direct 2,495 2,558 3,410 Assumed & Ceded — — — Net other income 2,495 2,558 3,410 Interest credited to policyholders’ account balances: Direct 61,665 56,615 27,616 Assumed — — — Ceded (11,618 ) (10,785 ) (10,443 ) Net interest credited to policyholders’ account balances 50,047 45,830 17,173 Policyholders’ benefits (including change in reserves): Direct 250,487 226,854 228,176 Assumed — — — Ceded (223,088 ) (200,249 ) (205,283 ) Net policyholders’ benefits (including change in reserves) 27,399 26,605 22,893 Realized investment gains (losses), net: Direct 51,989 (398,154 ) 199,483 Assumed — — — Ceded (46,236 ) 324,884 (176,902 ) Realized investment gains (losses), net 5,753 (73,270 ) 22,581 Net reinsurance expense allowances, net of capitalization and amortization (27,102 ) (38,881 ) (24,700 ) Substantially all reinsurance contracts are with affiliates as of December 31, 2015 , 2014 and 2013 . The gross and net amounts of life insurance face amount in force as of December 31, were as follows: 2015 2014 2013 (in thousands) Gross life insurance face amount in force $ 122,191,480 $ 114,395,367 $ 107,125,219 Reinsurance ceded (111,392,626 ) (103,951,166 ) (97,197,953 ) Net life insurance face amount in force $ 10,798,854 $ 10,444,201 $ 9,927,266 Pruco Life The Company reinsures certain COLI and Prudential Defined Income “PDI” policies with Pruco Life. PARCC The Company reinsures 90% of the risks under its term life insurance policies, with effective dates prior to January 1, 2010 through an automatic coinsurance agreement with PARCC. PAR Term The Company reinsures 95% of the risks under its term life insurance policies, with effective dates January 1, 2010 through December 31, 2013, through an automatic coinsurance agreement with PAR Term. Term Re The Company reinsures 95% of the risk under its term life insurance policies, with effective dates on or after January 1, 2014 through an automatic coinsurance agreement with Term Re. Prudential Insurance The Company has a yearly renewable term reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. PAR U Effective July 1, 2012 , the Company entered into an automatic coinsurance agreement with PAR U, an affiliated company, to reinsure an amount equal to 95% of all risks associated with its universal life policies. Pruco Re The Company uses reinsurance as part of its risk management and capital management strategies for certain of its optional living benefit features. Starting from 2005, the Company has entered into various automatic coinsurance agreements with Pruco Re, an affiliated company, to reinsure its living benefit features sold on certain of its annuities. In 2016, the Company expects to recapture these living benefit features, and begin managing all of the product risks associated with our variable annuities in Prudential Financial's statutory insurance entities. Affiliated Asset Administration Fee Income The Company has a revenue sharing agreement with AST Investment Services, Inc. and Prudential Investments LLC whereby the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust. Income received from AST Investment Services, Inc. and Prudential Investments LLC related to this agreement was $30 million , $31 million and $26 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These revenues are recorded as “Asset administration fees” in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has a revenue sharing agreement with Prudential Investments LLC, whereby the Company receives fee income based on policyholders’ separate account balances invested in The Prudential Series Fund (“PSF”). Income received from Prudential Investments LLC related to this agreement was $8 million , $7 million and $7 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These revenues are recorded as “Asset administration fees” in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Affiliated Investment Management Expenses In accordance with an agreement with Prudential Investment Management, Inc. (“PIMI”, renamed PGIM, Inc. beginning January 1, 2016), the Company pays investment management expenses to PIMI who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PIMI related to this agreement were $3 million , $2 million and $2 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These expenses are recorded as “Net investment income” in the Consolidated Statements of Operations and Comprehensive Income (Loss). Affiliated Asset Transfers From time to time, the Company participates in affiliated asset trades with parent and sister companies. Book and market value differences for trades with a parent and sister are recognized within Additional paid-in capital (“APIC”) and Realized investment gain (loss), respectively. The table below shows affiliated asset trades for the years ended December 31, 2014 and 2015 . Affiliate Date Transaction Security Type Fair Value Book Value Additional Paid-in Capital, Net of Tax Increase/ (Decrease) Realized Investment Gain/ (Loss) Derivative Gain/ (Loss) (in millions) Prudential Insurance Dec-14 Purchase Commercial Mortgages $ 6 $ 5 $ — $ — $ — Prudential Insurance Mar-15 Purchase Fixed Maturities & Trading Account Assets $ 24 $ 20 $ (3 ) $ — $ — Debt Agreements The Company is authorized to borrow funds up to $200 million from affiliates to meet its capital and other funding needs. The following table provides the breakout of the Company’s short-term and long-term debt with affiliates: Affiliate Date Issued Amount of Notes- December 31, 2015 Amount of Notes- December 31, 2014 Interest Rate Date of Maturity (in thousands) Prudential Financial 12/16/2011 11,000 22,000 3.32 % - 3.61 % 12/16/2015 - 12/16/2016 Washington Street Investment 12/17/2012 — 39,000 1.33 % - 1.87 % 12/17/2015 - 12/17/2017 Prudential Financial 11/15/2013 9,000 9,000 2.24 % 12/15/2018 Prudential Financial 11/15/2013 23,000 23,000 3.19 % 12/15/2020 Prudential Financial 12/15/2014 5,000 5,000 2.57 % 12/15/2019 Prudential Financial 12/15/2014 23,000 23,000 3.14 % 12/15/2021 Prudential Financial 9/21/2015 26,000 — 1.40 % - 1.93 % 12/17/2016 - 12/17/2017 Prudential Financial 12/16/2015 1,000 — 2.85 % 12/16/2020 Prudential Financial 12/16/2015 18,000 — 3.37 % 12/16/2022 Total Loans Payable to Affiliates $ 116,000 $ 121,000 The total interest expense to the Company related to loans payable to affiliates was $3.1 million , $2.8 million and $2.3 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Contributed Capital and Dividends For the year ended December 31, 2015 , the Company did not pay any dividends. In June 2014 , the Company paid a dividend in the amount of $80 million to Pruco Life. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Quarterly Results of Operations (Unaudited) | QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 are summarized in the table below: March 31 June 30 September 30 December 31 (in thousands) 2015 Total revenues $ 71,645 $ 132,445 $ 29,205 $ 94,740 Total benefits and expenses 74,048 51,084 76,568 36,908 Income (loss) from operations before income taxes (2,403 ) 81,361 (47,363 ) 57,832 Net income (loss) $ (1,933 ) $ 64,308 $ (37,072 ) $ 50,761 2014 Total revenues $ 59,537 $ 73,806 $ 45,046 $ 52,444 Total benefits and expenses 48,788 47,651 44,434 71,919 Income (loss) from operations before income taxes 10,749 26,155 612 (19,475 ) Net income (loss) $ 8,429 $ 21,382 $ 4,732 $ (6,278 ) Results for the fourth quarter of 2014 include a pre-tax expense of $0.4 million related to an out-of-period adjustment recorded by the Company primarily due to additional DAC amortization related to the overstatement of reinsured reserves in the third quarter of 2014 . This item impacted only the third and fourth quarters of 2014 and had no impact to full year 2014 reported results. Subsequent to 2014 , the Company identified and recorded additional out-of-period adjustments primarily related to the third and fourth quarter of 2014 , primarily reflecting a benefit from the release of reserves related to certain variable annuities products with optional living benefit guarantees. The total impacts of out-of-period adjustments recorded related to the third and fourth quarter of 2014 were $0.7 million and $0.1 million , respectively. Management has evaluated the impact of all out-of-period adjustments in 2014 and 2015 , both individually and in the aggregate, and concluded that they are not material to the current quarter or to any previously reported quarterly or annual financial statements. |
Significant Accounting Polici20
Significant Accounting Policies and Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Consolidation policy | Pruco Life Insurance Company of New Jersey, or “PLNJ”, is a wholly-owned subsidiary of Pruco Life Insurance Company (“Pruco Life”), which in turn is a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential Insurance”). Prudential Insurance is a direct wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). PLNJ is a stock life insurance company organized in 1982 under the laws of the State of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York only, and sells such products primarily through affiliated and unaffiliated distributors. PLNJ has one subsidiary, formed in 2009 for the purpose of holding certain commercial loans and other investments. PLNJ and its subsidiary are together referred to as the the ("Company", "we" or "our") and all financial information is shown on a consolidated basis. |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs ("DAC") and related amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; reinsurance recoverables; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Investments in Debt, Equity Securities, and Commercial Mortgage and Other Loans | Investments and Investment Related Liabilities The Company’s principal investments are fixed maturities; equity securities; commercial mortgage and other loans; policy loans; other long-term investments, including joint ventures (other than operating joint ventures), limited partnerships and real estate; and short-term investments. Investments and investment-related liabilities also include securities repurchase and resale agreements and securities lending transactions. The accounting policies related to each are as follows: Fixed maturities, available-for-sale, at fair value are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as “available-for-sale” are carried at fair value. See Note 9 for additional information regarding the determination of fair value. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts over the contractual lives of the investments. Interest income, as well as the related amortization of premium and accretion of discount is included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also vary based on other assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of OTTI recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to Net investment income in accordance with the retrospective method. For mortgage-backed and asset-backed securities rated below AA or those for which an OTTI has been recorded, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Unrealized gains and losses on fixed maturities classified as “available-for-sale,” net of tax, and the effect on DAC, deferred sales inducements (“DSI”), future policy benefits, reinsurance recoverables and policyholders’ account balances that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss)” (“AOCI”). Trading account assets, at fair value represents equity securities held in support of a deferred compensation plan and other fixed maturity securities carried at fair value. Realized and unrealized gains and losses for these investments are reported in “Other income.” Interest and dividend income from these investments is reported in “Net investment income.” Equity securities, available-for-sale, at fair value are comprised of common stock and non-redeemable preferred stock, and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on DAC, DSI, future policy benefits, reinsurance recoverables and policyholders’ account balances that would result from the realization of unrealized gains and losses, are included in AOCI. The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in “Net investment income” when earned. Commercial mortgage and other loans consist of commercial mortgage loans, agricultural loans and uncollateralized loans. Commercial mortgage and other loans held for investment are generally carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses and net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances. Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, related to commercial mortgage and other loans are included in “Net investment income”. Impaired loans include those loans for which it is probable that amounts due will not all be collected according to the contractual terms of the loan agreement. The Company defines “past due” as principal or interest not collected at least 30 days past the scheduled contractual due date. Interest received on loans that are past due, including impaired and non-impaired loans as well as loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income based on the Company’s assessment as to the collectability of the principal. See Note 3 for additional information about the Company’s past due loans. The Company discontinues accruing interest on loans after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability. When the Company discontinues accruing interest on a loan, any accrued but uncollectible interest on the loan and other loans backed by the same collateral, if any, is charged to interest income in the same period. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, or the loan has been modified, a regular payment performance has been established. The Company reviews the performance and credit quality of the commercial mortgage and other loan portfolio on an on-going basis. Loans are placed on watch list status based on a predefined set of criteria and are assigned one of three categories. Loans are placed on “early warning” status in cases where, based on the Company’s analysis of the loan’s collateral, the financial situation of the borrower or tenants or other market factors, it is believed a loss of principal or interest could occur. Loans are classified as “closely monitored” when it is determined that there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans “not in good standing” are those loans where the Company has concluded that there is a high probability of loss of principal, such as when the loan is delinquent or in the process of foreclosure. As described below, in determining the allowance for losses, the Company evaluates each loan on the watch list to determine if it is probable that amounts due will not be collected according to the contractual terms of the loan agreement. Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage loan and agricultural loan portfolio, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a quality re-rating process, whereby the internal quality rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary quality rating system. The loan-to-value ratio is the most significant of several inputs used to establish the internal credit rating of a loan which in turn drives the allowance for losses. Other key factors considered in determining the internal credit rating include debt service coverage ratios, amortization, loan term, estimated market value growth rate and volatility for the property type and region. See Note 3 for additional information related to the loan-to-value ratios and debt service coverage ratios related to the Company’s commercial mortgage and agricultural loan portfolios. The allowance for losses includes a loan specific reserve for each impaired loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. For impaired commercial mortgage and other loans, the allowances for losses are determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or based upon the fair value of the collateral if the loan is collateral dependent. The portfolio reserves for probable incurred but not specifically identified losses in the commercial mortgage and agricultural loan portfolios consider the current credit composition of the portfolio based on an internal quality rating (as described above). The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed each quarter and updated as appropriate. The allowance for losses on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. “Realized investment gains (losses), net” includes changes in the allowance for losses. “Realized investment gains (losses), net” also includes gains and losses on sales, certain restructurings, and foreclosures. When a commercial mortgage or other loan is deemed to be uncollectible, any specific valuation allowance associated with the loan is reversed and a direct write down to the carrying amount of the loan is made. The carrying amount of the loan is not adjusted for subsequent recoveries in value. In situations where a loan has been restructured in a troubled debt restructuring and the loan has subsequently defaulted, this factor is considered when evaluating the loan for a specific allowance for losses in accordance with the credit review process noted above. See Note 3 for additional information about commercial mortgage and other loans that have been restructured in a troubled debt restructuring. Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in “Net investment income” at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies. Other long-term investments consist of the Company’s investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments. Joint venture and partnership interests are either accounted for using the equity method of accounting or under the cost method when the Company’s partnership interest is so minor (generally less than 3% ) that it exercises virtually no influence over operating and financial policies. The Company’s income from investments in joint ventures and partnerships accounted for using the equity method or the cost method, other than the Company’s investment in operating joint ventures, is included in “Net investment income”. The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method or the cost method (including assessment for OTTI), the Company uses financial information provided by the investee, generally on a one to three month lag. Short-term investments primarily consist of highly liquid debt instruments with a maturity of twelve months or less and greater than three months when purchased. These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments. Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net OTTI recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, allowance for losses on commercial mortgage and other loans, and fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment. See “Derivative Financial Instruments” below for additional information regarding the accounting for derivatives. The Company’s available-for-sale securities with unrealized losses are reviewed quarterly to identify OTTI in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings. An OTTI is recognized in earnings for a debt security in an unrealized loss position when the Company either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the Company analyzes its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment an OTTI is recognized. When an OTTI of a debt security has occurred, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the OTTI recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. For OTTI of debt securities that do not meet these criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in “Other comprehensive income (loss)” (“OCI”). Unrealized gains or losses on securities for which an OTTI has been recognized in earnings is tracked as a separate component of AOCI. For debt securities, the split between the amount of an OTTI recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including interest rate and prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to interest rate and prepayment assumptions, cash flow estimates also include other assumptions regarding the underlying collateral including default rates and recoveries which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security’s position within the capital structure of the issuer. The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an OTTI, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into Net investment income in future periods, including increases in cash flow on a prospective basis. In certain cases where there are decreased cash flow expectations, the security is reviewed for further cash flow impairments. Unrealized investment gains and losses are also considered in determining certain other balances, including DAC, DSI, certain future policy benefits, reinsurance recoverables, policyholders’ account balances and deferred tax assets or liabilities. These balances are adjusted, as applicable, for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. Each of these balances is discussed in greater detail below. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments and other debt instruments with maturities of three months or less when purchased, other than cash equivalents that are included in “Trading account assets, at fair value.” The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates which are considered cash and cash equivalents. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs Costs that are related directly to the successful acquisition of new and renewal insurance and annuity business are deferred to the extent such costs are deemed recoverable from future profits. Such DAC primarily includes commissions, costs of policy issuance and underwriting, and certain other expenses that are directly related to successfully negotiated contracts. In each reporting period, capitalized DAC is amortized to “Amortization of deferred policy acquisition costs”, net of the accrual of imputed interest on DAC balances. DAC is subject to periodic recoverability testing. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. DAC related to universal and variable life products and fixed and variable deferred annuity products are generally deferred and amortized over the expected life of the contracts in proportion to gross profits arising principally from investment margins, mortality and expense margins, and surrender charges, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach for equities to derive future equity return assumptions. However, if the projected equity return calculated using this approach is greater than the maximum equity return assumption, the maximum equity return is utilized. Gross profits also include impacts from the embedded derivatives associated with certain of the optional living benefit features of the Company’s variable annuity contracts and related hedging activities. In calculating gross profits, profits and losses related to contracts issued by the Company that are reported in affiliated legal entities other than the Company as a result of, for example, reinsurance agreements with those affiliated entities are also included. The Company is an indirect subsidiary of Prudential Financial (an SEC registrant) and has extensive transactions and relationships with other subsidiaries of Prudential Financial, including reinsurance agreements, as described in Note 12 . Incorporating all product-related profits and losses in gross profits, including those that are reported in affiliated legal entities, produces a DAC amortization pattern representative of the total economics of the products. The effect of changes to total gross profits on unamortized DAC is reflected in the period such total gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums. For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a non-integrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies. |
Deferred Sales Inducements | Deferred sales inducements The Company offers various types of sales inducements to contractholders primarily related to fixed and variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize DAC. Sales inducements balances are subject to periodic recoverability testing. The Company records amortization of deferred sales inducements in “Interest credited to policyholders’ account balances.” Deferred sales inducements for applicable products are adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in AOCI. See Note 6 for additional information regarding sales inducements. |
Reinsurance Recoverables | Reinsurance recoverables Reinsurance recoverables include corresponding receivables associated with reinsurance arrangements with affiliates. For additional information about these arrangements see Note 12 . |
Separate Account Assets and Liabilities | Separate Account Assets and Liabilities Separate account assets are reported at fair value and represent segregated funds that are invested for certain contractholders and other customers. The assets consist primarily of equity securities and real estate related investments. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. Investment risks associated with market value changes are borne by the contractholders, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities primarily represent the contractholders’ account balance in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See Note 6 to the Consolidated Financial Statements for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate accounts generally accrue to the contractholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income”. Asset administration fees charged to the accounts are included in “Asset administration fees”. |
Other Assets and Other Liabilities | Other Assets and Other Liabilities Other assets consist primarily of premiums due, certain restricted assets, and receivables resulting from sales of securities that had not yet settled at the balance sheet date. Other liabilities consist primarily of accrued expenses, reinsurance payables, technical overdrafts, derivatives, and payables resulting from purchases of securities that had not yet been settled at the balance sheet date. |
Future Policy Benefits | Future Policy Benefits The Company’s liability for future policy benefits includes liabilities related to certain long-duration life and annuity contracts, which are discussed more fully in Note 6 . These liabilities represent reserves for the guaranteed minimum death and optional living benefit features on our variable annuity products and no lapse guarantees for our variable and universal life products. The optional living benefits are primarily accounted for as embedded derivatives, with fair values calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. For additional information regarding the valuation of these optional living benefit features, see Note 6 and Note 9. The Company’s liability for future policy benefits also includes reserves based on the present value of estimated future payments to or on behalf of policyholders related to contracts that have fixed and guaranteed terms, where the timing and amount of payment depends on policyholder mortality, and maintenance expenses less the present value of future net premiums. Expected mortality is generally based on Company experience, industry data and/or other factors. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and interest rate assumptions are “locked-in” upon the issuance of new insurance or annuity business with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses. Premium deficiency reserves do not include a provision for the risk of adverse deviation. Any adjustments to future policy benefit reserves related to net unrealized gains on securities classified as available-for-sale are included in AOCI. See Note 5 for additional information regarding future policy benefits. |
Policyholders Account Balances | Policyholders’ Account Balances The Company’s liability for policyholders’ account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is primarily associated with the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues. |
Securities Repurchase and Resale Agreements | Securities repurchase and resale agreements and securities loaned transactions are used primarily to earn spread income, to borrow funds, or to facilitate trading activity. As part of securities repurchase agreements or securities loaned transactions, the Company transfers U.S. and foreign debt and equity securities, as well as U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company invests cash and receives as collateral U.S. government securities or other debt securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short-term investments or fixed maturities. Securities repurchase and resale agreements that satisfy certain criteria are treated as secured borrowing or secured lending arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective transactions. For securities purchased under agreements to resell, the Company’s policy is to take possession or control of the securities either directly or through a third party custodian. These securities are valued daily and additional securities or cash collateral is received, or returned, when appropriate to protect against credit exposure. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. The Company obtains collateral in an amount at least equal to 95% of the fair value of the securities sold. Securities to be repurchased are the same, or substantially the same, as those sold. Income and expenses related to these transactions executed within the insurance companies used to earn spread income are reported as “Net investment income”; however, for transactions used for funding purposes, the associated borrowing cost is reported as interest expense (included in “General, administrative and other expenses”). |
Securities Loaned Transactions | Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company’s securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are reported as “Net investment income”; however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in “General, administrative and other expenses”). |
Contingent Liabilities | Contingent Liabilities Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual. |
Insurance Revenue and Expense Recognitions | Insurance Revenue and Expense Recognition Premiums from individual life products, other than universal and variable life contracts, are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is generally deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net level premium method. Premiums from single premium immediate annuities with life contingencies are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium is generally deferred and recognized into revenue based on expected future benefit payments. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net premium method. Certain individual annuity contracts provide the contractholder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance contracts. The Company also provides contracts with certain living benefits which are considered embedded derivatives. See Note 6 for additional information regarding these contracts. Amounts received as payment for universal or variable individual life contracts, deferred fixed or variable annuities and other contracts without life contingencies are reported as deposits to “Policyholders’ account balances” and/or “Separate account liabilities.” Revenues from these contracts are reflected in “Policy charges and fee income” consisting primarily of fees assessed during the period against the policyholders’ account balances for mortality and other benefit charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of deposits in the Company’s general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are generally deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders’ account balances and amortization of DAC and DSI. Premiums, benefits and expenses are stated net of reinsurance ceded to other companies. |
Asset Management Fees | Asset Administration Fees The Company receives asset administration fee income on contractholders’ account balances invested in The Prudential Series Funds or “PSF”, which are a portfolio of mutual fund investments related to the Company’s separate account products. Also, the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust (see Note 12 ). In addition, the Company receives fees from contractholders’ account balances invested in funds managed by companies other than affiliates of Prudential Insurance. Asset administration fees are recognized as income when earned. |
Derivative Financial Instruments | Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns, and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk ("NPR") used in valuation models. Derivative financial instruments generally used by the Company include swaps, futures, forwards and options and may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Derivative positions are carried at fair value, generally by obtaining quoted market prices or through the use of valuation models. Derivatives are used to manage the interest rate and currency characteristics of assets or liabilities. Additionally, derivatives may be used to seek to reduce exposure to interest rate, credit, foreign currency and equity risks associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. As discussed in detail below and in Note 10 , all realized and unrealized changes in fair value of derivatives are recorded in current earnings, with the exception of the effective portion of cash flow hedges. Cash flows from derivatives are reported in the operating, investing or financing activities sections in the Consolidated Statements of Cash Flows based on the nature and purpose of the derivative. Derivatives are recorded either as assets, within “Trading account assets, at fair value” or “Other long-term investments”, or as liabilities, within “Other liabilities”, except for embedded derivatives which are recorded with the associated host contract. The Company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement has been executed. The Company designates derivatives as either (1) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge); or (2) a derivative that does not qualify for hedge accounting. To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. Under such circumstances, the ineffective portion is recorded in “Realized investment gains (losses), net”. The Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded in AOCI until earnings are affected by the variability of cash flows being hedged (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). At that time, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in the income statement line item associated with the hedged item. If it is determined that a derivative no longer qualifies as an effective cash flow hedge or management removes the hedge designation, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net”. The component of AOCI related to discontinued cash flow hedges is reclassified to the income statement line associated with the hedged cash flows consistent with the earnings impact of the original hedged cash flows. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, or because it is probable that the forecasted transaction will not occur by the end of the specified time period, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net”. Any asset or liability that was recorded pursuant to recognition of the firm commitment is removed from the balance sheet and recognized currently in “Realized investment gains (losses), net”. Gains and losses that were in AOCI pursuant to the hedge of a forecasted transaction are recognized immediately in “Realized investment gains (losses), net”. If a derivative does not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in “Realized investment gains (losses), net” without considering changes in the fair value of the economically associated assets or liabilities. The Company is a party to financial instruments that contain derivative instruments that are “embedded” in the financial instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded instrument possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded instrument qualifies as an embedded derivative that is separated from the host contract, carried at fair value, and changes in its fair value are included in “Realized investment gains (losses), net.” For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company may elect to classify the entire instrument as a trading account asset and report it within “Trading account assets, at fair value”. The Company sells variable annuity contracts that include optional living benefit features that may be treated from an accounting perspective as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to an affiliate, Pruco Reinsurance Ltd. (“Pruco Re”). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value and included in “Future policy benefits and other policyholder liabilities” and “Reinsurance recoverables” or “Other liabilities”, respectively. Changes in the fair value are determined using valuation models as described in Note 9 and are recorded in “Realized investment gains (losses), net” |
Short-Term and Long-Term Debt | Short-Term and Long-Term Debt Liabilities for short-term and long-term debt are primarily carried at an amount equal to unpaid principal balance, net of unamortized discount or premium. Original-issue discount or premium and debt-issue costs are recognized as a component of interest expense over the period the debt is expected to be outstanding, using the interest method of amortization. Interest expense is generally presented within “General, administrative and other expenses” in the Company’s Consolidated Statements of Operations. Short-term debt is debt coming due in the next twelve months , including that portion of debt otherwise classified as long-term. The short-term debt caption may exclude short-term debt items the Company intends to refinance on a long-term basis in the near term. See Note 12 for additional information regarding short-term and long-term debt. |
Income Taxes | Income Taxes The Company is a member of the federal income tax return of Prudential Financial and primarily files separate company state and local tax returns. Pursuant to the tax allocation arrangement with Prudential Financial, total federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognized in the consolidated federal tax provision. Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to reduce a deferred tax asset to the amount expected to be realized. Items required by tax regulations to be included in the tax return may differ from the items reflected in the financial statements. As a result, the effective tax rate reflected in the financial statements may be different than the actual rate applied on the tax return. Some of these differences are permanent such as expenses that are not deductible in the Company’s tax return, and some differences are temporary, reversing over time, such as valuation of insurance reserves. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in future years for which the Company has already recorded the tax benefit in the Company’s income statement. Deferred tax liabilities generally represent tax expense recognized in the Company’s financial statements for which payment has been deferred, or expenditures for which the Company has already taken a deduction in the Company’s tax returns but have not yet been recognized in the Company’s financial statements. The application of U.S. GAAP requires the Company to evaluate the recoverability of the Company’s deferred tax assets and establish a valuation allowance if necessary to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company may consider many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. U.S. GAAP prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on tax returns. The application of this guidance is a two-step process, the first step being recognition. The Company determines whether it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. The Company measures the tax position as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority that has full knowledge of all relevant information. This measurement considers the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances, and information available at the reporting date. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. See Note 8 for additional information regarding income taxes. |
Adoption and Future Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements In August 2014 , the Financial Accounting Standards Board (“FASB”) issued updated guidance (Accounting Standards Update (“ASU”) 2014-14, Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure) requiring that mortgage loans be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014 , and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures. In June 2014 , the FASB issued updated guidance (ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures) that requires repurchase-to-maturity transactions to be accounted for as secured borrowings and eliminates existing guidance for repurchase financings. The guidance also requires new disclosures for certain transactions accounted for as secured borrowings and for transfers accounted for as sales when the transferor also retains substantially all of the exposure to the economic return on the transferred financial assets. Accounting changes and new disclosures for transfers accounted for as sales under the new guidance were effective for the first interim or annual period beginning after December 15, 2014 and did not have a significant effect on the Company's consolidated financial position, results of operations or financial statement disclosures. Disclosures for certain transactions accounted for as secured borrowings were effective for interim periods beginning after March 15, 2015 and are included in Note 3 . In January 2014 , the FASB issued updated guidance (ASU 2014-04, Receivables-Troubled Debt Restructuring by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure) for troubled debt restructurings clarifying when an in-substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014 , and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures. In December 2013 , the FASB issued updated guidance (ASU 2013-12, Definition of a Public Business Entity-An Addition to the Master Glossary) establishing a single definition of a public entity for use in financial accounting and reporting guidance. The new guidance became effective for all current and future reporting periods and did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures. In July 2013 , the FASB issued updated guidance (ASU 2013-11, Income Taxes (Topic 740)) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists) regarding the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The new guidance became effective for interim or annual reporting periods that began after December 15, 2013 , and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures. In July 2013 , the FASB issued new guidance (ASU 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes) regarding derivatives. The guidance permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting in addition to the United States Treasury rate and London Interbank Offered Rate (“LIBOR”). The guidance also removes the restriction on using different benchmark rates for similar hedges. The guidance became effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 , and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures. In December 2011 and January 2013 , the FASB issued updated guidance (ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities) regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar agreement (irrespective of whether they are offset in the statement of financial position). The new guidance requires an entity to disclose information on both a gross and net basis about instruments and transactions within the scope of this guidance. The new guidance became effective for interim or annual reporting periods that began on or after January 1, 2013 , and was applied retrospectively for all comparative periods presented. The disclosures required by this guidance are included in Note 10 . Future Adoption of New Accounting Pronouncements In May 2014 , the FASB issued updated guidance (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)) on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. In August 2015 , the FASB issued an update to defer the original effective date of this guidance. As a result of the deferral, the new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017 , and must be applied using one of two retrospective application methods. Early adoption is permitted only for annual reporting periods beginning after December 15, 2016 , including interim reporting periods within that reporting period. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. In August 2014 , the FASB issued updated guidance (ASU 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity) for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If adopted, the guidance eliminates the measurement difference that exists when both are measured at fair value. The Company adopted the updated guidance effective January 1, 2016 , and applied the modified retrospective method of adoption. This guidance did not have a significant impact on the Company’s consolidated financial position, results of operations, or financial statement disclosures. In February 2015 , the FASB issued updated guidance (ASU 2015-02, Consolidation (Topic 810): Amendments to Consolidation Analysis) that modifies the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities, and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 , with early adoption permitted. The Company adopted the updated guidance effective January 1, 2016 . This guidance did not have a significant impact on the Company’s consolidated financial position, results of operations, or financial statement disclosures. In January 2016, the FASB issued updated guidance (ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial assets and financial liabilities. The guidance revises an entity’s accounting related to the classification and measurement of certain equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance is effective for annual periods and interim reporting periods within those annual periods beginning after December 15, 2017. Early adoption is not permitted except for the provisions related to the presentation of certain fair value changes for financial liabilities measured at fair value. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Fixed Maturities and Equity Securities, Available-for-sale Securities | The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated: December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (3) (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 23,582 $ 3,010 $ — $ 26,592 $ — Obligations of U.S. states and their political subdivisions 127,734 4,048 409 131,373 — Foreign government bonds 8,211 29 1,122 7,118 — Public utilities 152,580 5,656 2,374 155,862 — All other U.S. public corporate securities 291,835 13,145 5,306 299,674 (45 ) All other U.S. private corporate securities 162,781 3,718 3,458 163,041 — All other foreign public corporate securities 29,507 1,432 1,359 29,580 — All other foreign private corporate securities 163,641 2,824 6,629 159,836 — Asset-backed securities (1) 47,898 606 258 48,246 (79 ) Commercial mortgage-backed securities 62,355 2,126 41 64,440 — Residential mortgage-backed securities (2) 17,458 1,982 7 19,433 (177 ) Total fixed maturities, available-for-sale $ 1,087,582 $ 38,576 $ 20,963 $ 1,105,195 $ (301 ) Equity securities, available-for-sale Common stocks: Mutual funds $ 18,275 $ 28 $ 1,219 $ 17,084 Non-redeemable preferred stocks — — — — Total equity securities, available-for-sale $ 18,275 $ 28 $ 1,219 $ 17,084 (1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.5 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. December 31, 2014 (4) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value OTTI in AOCI (3) (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 23,991 $ 3,590 $ — $ 27,581 $ — Obligations of U.S. states and their political subdivisions 39,343 1,846 — 41,189 — Foreign government bonds 6,344 149 — 6,493 — Public utilities 109,686 10,305 21 119,970 — All other U.S. public corporate securities 226,026 23,017 390 248,653 (45 ) All other U.S. private corporate securities 191,898 8,273 256 199,915 — All other foreign public corporate securities 25,086 2,388 83 27,391 — All other foreign private corporate securities 154,450 7,316 1,182 160,584 — Asset-backed securities (1) 38,069 1,295 152 39,212 (79 ) Commercial mortgage-backed securities 74,610 3,487 13 78,084 — Residential mortgage-backed securities (2) 21,776 2,643 8 24,411 (242 ) Total fixed maturities, available-for-sale $ 911,279 $ 64,309 $ 2,105 $ 973,483 $ (366 ) Equity securities, available-for-sale Common stocks: Mutual funds $ 8,238 $ 83 $ 118 $ 8,203 Non-redeemable preferred stocks 53 39 — 92 Total equity securities, available-for-sale $ 8,291 $ 122 $ 118 $ 8,295 (1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $0.6 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date. (4) Prior period amounts are presented on a basis consistent with the current period presentation. |
Investments Classified by Contractual Maturity Date | The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2015 , are as follows: Available-for-Sale Amortized Cost Fair Value (in thousands) Due in one year or less $ 56,384 $ 54,298 Due after one year through five years 207,606 216,519 Due after five years through ten years 157,830 158,671 Due after ten years 538,051 543,588 Asset-backed securities 47,898 48,246 Commercial mortgage-backed securities 62,355 64,440 Residential mortgage-backed securities 17,458 19,433 Total $ 1,087,582 $ 1,105,195 |
Sources of Fixed Maturity Proceeds, Related Investment Gains (Losses), and Losses on Impairments of Fixed Maturities and Equity Securities | The following table depicts the sources of fixed maturity and equity security proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities: 2015 2014 2013 (in thousands) Fixed maturities, available-for-sale Proceeds from sales $ 4,300 $ 49,137 $ 108,332 Proceeds from maturities/repayments 119,987 102,303 131,032 Gross investment gains from sales, prepayments and maturities 2,689 5,160 5,704 Gross investment losses from sales and maturities — (249 ) (1,379 ) Equity securities, available-for-sale Proceeds from sales $ 2,122 $ 7,808 $ 6,650 Gross investment gains from sales 74 456 587 Gross investment losses from sales — — (395 ) Fixed maturity and equity security impairments Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings (1) $ (1,061 ) $ (25 ) $ — Writedowns for impairments on equity securities — — (6 ) (1) Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of the impairment. |
Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI | The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts. Year Ended December 31, 2015 2014 (in thousands) Balance, beginning of period $ 663 $ 716 Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period (46 ) (42 ) Additional credit loss impairments recognized in the current period on securities previously impaired 26 — Increases due to the passage of time on previously recorded credit losses 21 21 Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected (13 ) (32 ) Balance, end of period $ 651 $ 663 |
Trading Account Assets Disclosure | The following table sets forth the composition of “Trading account assets” as of the dates indicated: December 31, 2015 December 31, 2014 Amortized Cost Fair Value Amortized Cost Fair Value Trading account assets (in thousands) Fixed maturities $ 10,000 $ 8,441 $ 10,000 $ 9,679 Equity securities 5,999 7,050 — — Total trading account assets $ 15,999 $ 15,491 $ 10,000 $ 9,679 |
Commercial Mortgage and Other Loans | The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated: December 31, 2015 December 31, 2014 Amount (in thousands) % of Total Amount (in thousands) % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 79,481 33.1 % $ 89,817 32.6 % Retail 62,881 26.2 64,149 23.3 Industrial 25,059 10.4 35,190 12.8 Office 21,058 8.8 29,997 10.9 Other 17,803 7.4 18,061 6.6 Hospitality 23,176 9.6 23,725 8.6 Total commercial mortgage loans 229,458 95.5 260,939 94.8 Agricultural property loans 10,769 4.5 14,479 5.2 Total commercial mortgage and agricultural property loans by property type 240,227 100.0 % 275,418 100.0 % Valuation allowance (428 ) (771 ) Total net commercial mortgage and agricultural property loans by property type 239,799 274,647 Other loans Uncollateralized loans 8,410 8,410 Valuation allowance — — Total net other loans 8,410 8,410 Total commercial mortgage and other loans $ 248,209 $ 283,057 |
Allowance for Losses | Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows: December 31, 2015 December 31, 2014 December 31, 2013 (in thousands) Allowance for credit losses, beginning of year $ 771 $ 1,785 $ 1,162 Addition to (release of) allowance for losses (343 ) (1,014 ) 623 Total ending balance (1) $ 428 $ 771 $ 1,785 (1) Agricultural loans represent less than $0.1 million of the ending allowance at December 31, 2015 , 2014 and 2013 . |
Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans | The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated: December 31, 2015 December 31, 2014 (in thousands) Allowance for Credit Losses: Individually evaluated for impairment (1) $ — $ — Collectively evaluated for impairment (2) 428 771 Total ending balance $ 428 $ 771 Recorded Investment (3): Gross of reserves: individually evaluated for impairment (1) $ — $ — Gross of reserves: collectively evaluated for impairment (2) 248,637 283,828 Total ending balance, gross of reserves $ 248,637 $ 283,828 (1) There were no loans individually evaluated for impairment at both December 31, 2015 and 2014 . (2) Agricultural loans collectively evaluated for impairment had a recorded investment of $10.8 million and $14.5 million at December 31, 2015 and 2014 , respectively, and an allowance of less than $0.1 million at December 31, 2015 and 2014 . Uncollateralized loans collectively evaluated for impairment had a recorded investment of $8.4 million at December 31, 2015 and 2014 and no related allowance at both period ends. (3) Recorded investment reflects the balance sheet carrying value gross of related allowance. |
Credit Quality Indicators | The following tables set forth certain key credit quality indicators as of December 31, 2015 and 2014 , based upon the recorded investment gross of allowance for credit losses. Total commercial mortgage and agricultural property loans Debt Service Coverage Ratio - December 31, 2015 Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total (in thousands) Loan-to-Value Ratio 0%-59.99% $ 158,983 $ 1,993 $ — $ 160,976 60%-69.99% 60,849 — — 60,849 70%-79.99% 11,312 2,687 — 13,999 Greater than 80% — 2,938 1,465 4,403 Total commercial mortgage and agricultural property loans $ 231,144 $ 7,618 $ 1,465 $ 240,227 Debt Service Coverage Ratio - December 31, 2014 Greater than 1.2X 1.0X to <1.2X Less than 1.0X Total (in thousands) Loan-to-Value Ratio 0%-59.99% $ 162,454 $ — $ 1,634 $ 164,088 60%-69.99% 84,761 — 4,878 89,639 70%-79.99% 14,389 2,796 — 17,185 Greater than 80% 2,991 — 1,515 4,506 Total commercial mortgage and agricultural property loans $ 264,595 $ 2,796 $ 8,027 $ 275,418 |
Schedule of Other Long Term Investments | The following table sets forth the composition of “Other long-term investments” at December 31 for the years indicated. 2015 2014 (in thousands) Company’s investment in separate accounts $ 1,853 $ 1,606 Joint ventures and limited partnerships 41,106 38,920 Derivatives 17,495 7,329 Total other long-term investments $ 60,454 $ 47,855 |
Net Investment Income | Net investment income for the years ended December 31, was from the following sources: 2015 2014 2013 (in thousands) Fixed maturities, available-for-sale $ 44,959 $ 44,073 $ 46,071 Trading account assets 866 119 11 Commercial mortgage and other loans 13,528 13,686 13,831 Policy loans 10,335 10,127 9,901 Short-term investments and cash equivalents 218 79 63 Other long-term investments 2,632 3,103 2,105 Gross investment income 72,538 71,187 71,982 Less: investment expenses (3,647 ) (3,315 ) (3,329 ) Net investment income $ 68,891 $ 67,872 $ 68,653 |
Realized Gain (Loss) on Investments | Realized investment gains (losses), net, for the years ended December 31, were from the following sources: 2015 2014 2013 (in thousands) Fixed maturities $ 1,628 $ 4,786 $ 4,325 Equity securities 74 456 186 Commercial mortgage and other loans 343 1,015 (623 ) Short-term investments and cash equivalents — 2 2 Joint ventures and limited partnerships 320 210 (13 ) Derivatives 3,388 (79,739 ) 18,704 Realized investment gains (losses), net $ 5,753 $ (73,270 ) $ 22,581 |
Components of Accumulated Other Comprehensive Income | The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the years ended December 31, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Investment Gains (Losses) (1) Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2012 $ 43 $ 47,406 $ 47,449 Change in component during period (2) 25 (30,373 ) (30,348 ) Balance, December 31, 2013 $ 68 $ 17,033 $ 17,101 Change in component during period (2) (81 ) 16,719 16,638 Balance, December 31, 2014 $ (13 ) $ 33,752 $ 33,739 Change in other comprehensive income before reclassifications (86 ) (31,993 ) (32,079 ) Amounts reclassified from AOCI — (1,702 ) (1,702 ) Income tax benefit (expense) 30 11,793 11,823 Balance, December 31, 2015 $ (69 ) $ 11,850 $ 11,781 (1) Includes cash flow hedges of $5.7 million , $0.2 million and $(3.1) million as of December 31, 2015 , 2014 and 2013 , respectively. (2) Net of taxes. |
Reclassification Out Of Accumulated Other Comprehensive Income | Reclassifications out of Accumulated Other Comprehensive Income (Loss) Year Ended Year Ended Year Ended (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/Interest rate (3) $ 249 $ 230 $ (237 ) Net unrealized investment gains (losses) on available-for-sale securities (4) 1,453 5,012 4,748 Total net unrealized investment gains (losses) 1,702 5,242 4,511 Total reclassifications for the period $ 1,702 $ 5,242 $ 4,511 (1) All amounts are shown before tax. (2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI. (3) See Note 10 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ account balances. |
Net Unrealized Investment Gain (Loss) AOCI Rollforward | Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized Net Unrealized Gains (Losses) on Investments Deferred Policy Acquisition Costs and Other Costs Future Policy Benefits and Policyholders' Account Balances(1) Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) (in thousands) Balance, December 31, 2012 $ 230 $ 95 $ 164 $ (172 ) $ 317 Net investment gains (losses) on investments arising during the period 126 — — (44 ) 82 Reclassification adjustment for (gains) losses included in net income (132 ) — — 46 (86 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — (723 ) — 253 (470 ) Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (12 ) 4 (8 ) Balance, December 31, 2013 $ 224 $ (628 ) $ 152 $ 87 $ (165 ) Net investment gains (losses) on investments arising during the period 13 — — (5 ) 8 Reclassification adjustment for (gains) losses included in net income (12 ) — — 4 (8 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 77 — (27 ) 50 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (30 ) 11 (19 ) Balance, December 31, 2014 $ 225 $ (551 ) $ 122 $ 70 $ (134 ) Net investment gains (losses) on investments arising during the period (20 ) — — 7 (13 ) Reclassification adjustment for (gains) losses included in net income 6 — — (2 ) 4 Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 744 — (260 ) 484 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — 18 (6 ) 12 Balance, December 31, 2015 $ 211 $ 193 $ 140 $ (191 ) $ 353 (1) Balances are net of reinsurance. |
All Other Net Unrealized Investment Gain (Loss) AOCI Rollforward | All Other Net Unrealized Investment Gains and Losses in AOCI Net Unrealized Gains (Losses) on Investments(1) Deferred Policy Acquisition Costs and Other Costs Future Policy Benefits and Policyholders' Account Balances(2) Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) (in thousands) Balance, December 31, 2012 $ 89,750 $ (26,309 ) $ 9,001 $ (25,354 ) $ 47,088 Net investment gains (losses) on investments arising during the period (49,387 ) — — 17,285 (32,102 ) Reclassification adjustment for (gains) losses included in net income (4,379 ) — — 1,534 (2,845 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 14,655 — (5,129 ) 9,526 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (6,875 ) 2,406 (4,469 ) Balance, December 31, 2013 $ 35,984 $ (11,654 ) $ 2,126 $ (9,258 ) $ 17,198 Net investment gains (losses) on investments arising during the period 32,609 — — (11,413 ) 21,196 Reclassification adjustment for (gains) losses included in net income (5,230 ) — — 1,830 (3,400 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — (4,521 ) — 1,582 (2,939 ) Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — 2,816 (985 ) 1,831 Balance, December 31, 2014 $ 63,363 $ (16,175 ) $ 4,942 $ (18,244 ) $ 33,886 Net investment gains (losses) on investments arising during the period (38,860 ) — — 13,600 (25,260 ) Reclassification adjustment for (gains) losses included in net income (1,708 ) — — 598 (1,110 ) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs — 10,509 — (3,678 ) 6,831 Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances — — (4,385 ) 1,535 (2,850 ) Balance, December 31, 2015 $ 22,795 $ (5,666 ) $ 557 $ (6,189 ) $ 11,497 (1) Includes cash flow hedges. See Note 10 for information on cash flow hedges. (2) Balances are net of reinsurance. |
Unrealized Gains and (Losses) on Investments | Net Unrealized Gains (Losses) on Investments by Asset Class The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated: 2015 2014 2013 (in thousands) Fixed maturity securities on which an OTTI loss has been recognized $ 211 $ 225 $ 224 Fixed maturity securities, available-for-sale - all other 17,402 61,979 37,569 Equity securities, available-for-sale (1,191 ) 4 25 Derivatives designated as cash flow hedges (1) 5,651 159 (3,057 ) Other investments 933 1,221 1,447 Net unrealized gains (losses) on investments $ 23,006 $ 63,588 $ 36,208 (1) See Note 10 for more information on cash flow hedges. |
Duration of Gross Unrealized Losses on Fixed Maturity Securities Disclosures | The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, at December 31 for the years indicated: 2015 Less than twelve months Twelve months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Fixed maturities, available-for-sale Obligations of U.S. states and their political subdivisions $ 10,312 $ 409 $ — $ — $ 10,312 $ 409 Foreign government bonds 3,079 271 1,813 851 4,892 1,122 Public utilities 58,351 2,374 — — 58,351 2,374 All other U.S. public corporate securities 76,154 4,478 7,342 828 83,496 5,306 All other U.S. private corporate securities 52,647 3,458 — — 52,647 3,458 All other foreign public corporate securities 8,252 835 1,295 524 9,547 1,359 All other foreign private corporate securities 41,343 2,712 26,304 3,917 67,647 6,629 Asset-backed securities 18,052 141 10,672 117 28,724 258 Commercial mortgage-backed securities 12,059 35 398 6 12,457 41 Residential mortgage-backed securities 361 7 — — 361 7 Total $ 280,610 $ 14,720 $ 47,824 $ 6,243 $ 328,434 $ 20,963 Equity securities, available-for-sale $ 12,145 $ 931 $ 3,712 $ 288 $ 15,857 $ 1,219 2014(1) Less than twelve months Twelve months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Fixed maturities, available-for-sale Obligations of U.S. states and their political subdivisions $ — $ — $ — $ — $ — $ — Public utilities 4,733 21 — — 4,733 21 All other U.S. public corporate securities 6,101 361 3,194 29 9,295 390 All other U.S. private corporate securities — — 14,548 256 14,548 256 All other foreign public corporate securities 1,738 83 — — 1,738 83 All other foreign private corporate securities 20,747 1,112 3,775 70 24,522 1,182 Asset-backed securities 1,988 5 11,387 147 13,375 152 Commercial mortgage-backed securities 9,016 9 402 4 9,418 13 Residential mortgage-backed securities 456 8 — — 456 8 Total $ 44,779 $ 1,599 $ 33,306 $ 506 $ 78,085 $ 2,105 Equity securities, available-for-sale $ 5,882 $ 118 $ — $ — $ 5,882 $ 118 (1) Prior period amounts are presented on a basis consistent with the current period presentation. |
Securities Pledged | At December 31, the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial Position included the following: 2015 2014 (in thousands) Fixed maturity securities, available-for-sale $ 2,905 $ 4,269 Total securities pledged $ 2,905 $ 4,269 |
Deferred Policy Acquisition C22
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Schedule of Deferred Acquisition Costs | The balances of and changes in DAC as of and for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Balance, beginning of year $ 457,420 $ 439,315 $ 327,832 Capitalization of commissions, sales and issue expenses 60,024 60,207 53,901 Amortization- Impact of assumption and experience unlocking and true-ups 6,125 23,034 (15,114 ) Amortization- All other (65,452 ) (60,726 ) 59,295 Change in unrealized investment gains and losses 10,626 (4,410 ) 13,402 Balance, end of year $ 468,743 $ 457,420 $ 439,315 |
Policyholders' Liabilities (Tab
Policyholders' Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Policyholder Funds [Abstract] | |
Schedule of future policy benefits | Future policy benefits at December 31, for the years indicated were as follows: 2015 2014 (in thousands) Life insurance $ 974,108 $ 889,556 Individual annuities and supplementary contracts 23,297 20,220 Other contract liabilities 452,705 432,335 Total future policy benefits and other policyholder liabilities $ 1,450,110 $ 1,342,111 |
Schedule pf policyholders' account balances | Policyholders’ account balances at December 31 are as follows: 2015 2014 (in thousands) Universal life contracts $ 1,246,611 $ 1,090,721 Individual annuities 258,299 222,252 Guaranteed interest accounts 30,164 32,217 Other 145,512 130,613 Total policyholders’ account balances $ 1,680,586 $ 1,475,803 |
Certain Long-Duration Contrac24
Certain Long-Duration Contracts With Guarantees (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Insurance [Abstract] | |
Schedule of Net Amount of Risk by Product and Guarantee | As of December 31, 2015 and 2014 , the Company had the following guarantees associated with these contracts, by product and guarantee type: December 31, 2015 December 31, 2014 In the Event of Death At Annuitization / Accumulation (1) In the Event of Death At Annuitization / Accumulation (1) (in thousands) Variable Annuity Contracts Return of Net Deposits Account value $ 6,770,691 N/A $ 6,546,610 N/A Net amount at risk $ 37,256 N/A $ 2,887 N/A Average attained age of contractholders 63 years N/A 62 years N/A Minimum return or contract value Account value $ 1,935,482 $ 8,013,005 $ 2,020,664 $ 7,837,167 Net amount at risk $ 83,010 $ 214,361 $ 10,123 $ 100,125 Average attained age of contractholders 66 years 64 years 65 years 62 years Average period remaining until earliest expected annuitization N/A 0 N/A 0.02 years (1) Includes income and withdrawal benefits as described herein December 31, 2015 December 31, 2014 In the Event of Death (in thousands) Variable Life, Variable Universal Life and Universal Life Contracts No Lapse Guarantees Separate account value $ 692,364 $ 726,853 General account value $ 552,888 $ 440,913 Net amount at risk $ 12,072,957 $ 9,970,707 Average attained age of contractholders 53 years 52 years |
Schedule of Fair Value of Separate Accounts by Major Category of Investment | Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows: December 31, 2015 December 31, 2014 (in thousands) Equity funds $ 5,048,026 $ 5,120,921 Bond funds 3,102,431 2,836,575 Money market funds 313,040 402,526 Total $ 8,463,497 $ 8,360,022 |
Schedule of Minimum Guaranteed Benefit Liabilities | The table below summarizes the changes in general account liabilities for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) are included in “Future policy benefits and other policyholder liabilities” and the related changes in the liabilities are included in “Policyholders' benefits”. Guaranteed minimum income and withdrawal benefits (“GMIWB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum accumulation benefits (“GMAB”) features are accounted for as embedded derivatives and are recorded at fair value within “Future policy benefits and other policyholder liabilities”. Changes in the fair value of these derivatives, including changes in the Company’s own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in “Realized investment gains (losses), net.” See Note 9 for additional information regarding the methodology used in determining the fair value of these embedded derivatives. GMDB GMIB GMWB/GMIWB/GMAB Total Variable Annuity Variable Life, Variable Universal Life & Universal Life Variable Annuity (in thousands) Balances as of December 31, 2012 $ 2,611 $ 33,079 $ 2,290 $ 116,672 $ 154,652 Incurred guarantee benefits (1) 116 6,802 (1,277 ) (154,862 ) (149,221 ) Paid guarantee benefits (147 ) — (52 ) — (199 ) Other 109 2,574 12 — 2,695 Balance as of December 31, 2013 $ 2,689 $ 42,455 $ 973 $ (38,190 ) $ 7,927 Incurred guarantee benefits (1) 5,428 20,545 915 467,026 493,914 Paid guarantee benefits (264 ) (1,050 ) — — (1,314 ) Other 141 7,262 6 — 7,409 Balance as of December 31, 2014 $ 7,994 $ 69,212 $ 1,894 $ 428,836 $ 507,936 Incurred guarantee benefits (1) 3,409 25,049 (424 ) 20,236 48,270 Paid guarantee benefits (720 ) (5,174 ) (12 ) — (5,906 ) Other (102 ) (4,911 ) (12 ) — (5,025 ) Balance as of December 31, 2015 $ 10,581 $ 84,176 $ 1,446 $ 449,072 $ 545,275 (1) Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features accounted for as embedded derivatives. |
Deferred Sales Inducements | Changes in DSI, reported as “Interest credited to policyholders’ account balances,” are as follows: 2015 2014 2013 (in thousands) Balance, beginning of year $ 76,534 $ 88,350 $ 70,728 Capitalization 678 842 1,793 Amortization- Impact of assumption and experience unlocking and true-ups 1,348 3,108 1,799 Amortization- All other (16,144 ) (15,733 ) 13,501 Change in unrealized investment gains (losses) 627 (33 ) 529 Balance, end of year $ 63,043 $ 76,534 $ 88,350 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Current tax expense (benefit): U.S. Federal $ 21,849 $ 21,129 $ 33,370 Total 21,849 21,129 33,370 Deferred tax expense (benefit): U.S. Federal (8,486 ) (31,353 ) 31,996 Total (8,486 ) (31,353 ) 31,996 Total income tax expense (benefit) from operations 13,363 (10,224 ) 65,366 Income tax expense (benefit) reported in equity related to: Other comprehensive income (loss) (11,823 ) 8,958 (16,342 ) Additional paid-in capital (1,348 ) (177 ) 53 Total income tax expense (benefit) $ 192 $ (1,443 ) $ 49,077 |
Schedule of Effective Income Tax Rate Reconciliation | The Company’s actual income tax expense (benefit) for the years ended December 31 differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from operations before income taxes for the following reasons: 2015 2014 2013 (in thousands) Expected federal income tax expense (benefit) $ 31,299 $ 6,314 $ 80,923 Non-taxable investment income (16,021 ) (13,891 ) (13,840 ) Tax credits (2,008 ) (2,884 ) (1,789 ) Other 93 237 72 Total income tax expense (benefit) on income from continuing operations $ 13,363 $ (10,224 ) $ 65,366 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table: 2015 2014 (in thousands) Deferred tax assets Insurance reserves $ 149,569 $ 152,757 Deferred tax assets 149,569 152,757 Deferred tax liabilities Deferred policy acquisition costs 105,590 107,495 Deferred sales inducements 22,065 26,787 Net unrealized gains on securities 6,074 22,200 Investments 5,251 6,884 Other 701 1,161 Deferred tax liabilities 139,681 164,527 Net deferred tax asset (liability) $ 9,888 $ (11,770 ) |
Fair Value of Assets and Liab26
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated. As of December 31, 2015 Level 1 Level 2 Level 3 Netting (1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ — $ 26,592 $ — $ — $ 26,592 Obligations of U.S. states and their political subdivisions — 131,373 — — 131,373 Foreign government bonds — 7,118 — — 7,118 U.S. corporate public securities — 401,754 — — 401,754 U.S. corporate private securities — 204,659 9,781 — 214,440 Foreign corporate public securities — 29,580 — — 29,580 Foreign corporate private securities — 154,191 8,028 — 162,219 Asset-backed securities (5) — 23,100 25,146 — 48,246 Commercial mortgage-backed securities — 64,440 — — 64,440 Residential mortgage-backed securities — 19,433 — — 19,433 Sub-total — 1,062,240 42,955 — 1,105,195 Trading account assets: Equity securities — — 7,050 — 7,050 Corporate securities — 8,441 — — 8,441 Sub-total — 8,441 7,050 — 15,491 Equity securities, available-for-sale — 17,084 — — 17,084 Short-term investments 715 — — — 715 Cash equivalents 30,998 31,982 — — 62,980 Other long-term investments — 16,245 222 (364 ) 16,103 Reinsurance recoverables — — 356,337 — 356,337 Receivables from parent and affiliates — 8,966 3,511 — 12,477 Sub-total excluding separate account assets 31,713 1,144,958 410,075 (364 ) 1,586,382 Separate account assets (2) — 11,605,964 7,184 — 11,613,148 Total assets $ 31,713 $ 12,750,922 $ 417,259 $ (364 ) $ 13,199,530 Future policy benefits (3) $ — $ — $ 449,073 $ — $ 449,073 Payables to parent and affiliates — 364 — (364 ) — Total liabilities $ — $ 364 $ 449,073 $ (364 ) $ 449,073 As of December 31, 2014(4) Level 1 Level 2 Level 3 Netting (1) Total (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ — $ 27,581 $ — $ — $ 27,581 Obligations of U.S. states and their political subdivisions — 41,189 — — 41,189 Foreign government bonds — 6,493 — — 6,493 U.S. corporate public securities — 316,274 537 — 316,811 U.S. corporate private securities — 243,251 5,818 — 249,069 Foreign corporate public securities — 27,390 — — 27,390 Foreign corporate private securities — 158,802 4,441 — 163,243 Asset-backed securities (5) — 29,120 10,092 — 39,212 Commercial mortgage-backed securities — 78,084 — — 78,084 Residential mortgage-backed securities — 24,411 — — 24,411 Sub-total — 952,595 20,888 — 973,483 Trading account assets: Corporate securities — 9,679 — — 9,679 Sub-total — 9,679 — — 9,679 Equity securities, available-for-sale — 8,203 92 — 8,295 Short-term investments 470 14,999 — — 15,469 Cash equivalents 40,000 21,259 — — 61,259 Other long-term investments — 8,753 253 (1,424 ) 7,582 Reinsurance recoverables — — 339,982 — 339,982 Receivables from parent and affiliates — 10,013 4,594 — 14,607 Sub-total excluding separate account assets 40,470 1,025,501 365,809 (1,424 ) 1,430,356 Separate account assets (2) — 11,370,061 6,879 — 11,376,940 Total assets $ 40,470 $ 12,395,562 $ 372,688 $ (1,424 ) $ 12,807,296 Future policy benefits (3) $ — $ — $ 428,837 $ — $ 428,837 Payables to parent and affiliates — 1,424 — (1,424 ) — Total liabilities $ — $ 1,424 $ 428,837 $ (1,424 ) $ 428,837 (1) “Netting” amounts represent the impact of offsetting asset and liability positions held within the same counterparty, subject to master netting arrangements. (2) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position. (3) For the year ended December 31, 2015 , the net embedded derivative liability position of $449 million includes $76 million of embedded derivatives in an asset position and $525 million of embedded derivatives in a liability position. For the year ended December 31, 2014 , the net embedded derivative liability position of $429 million includes $62 million of embedded derivatives in an asset position and $491 million of embedded derivatives in a liability position. (4) Prior period amounts are presented on a basis consistent with the current period presentation. (5) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. |
Fair Value Level Three Amounts By Pricing Source | The tables below present the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources. As of December 31, 2015 Internal (1) External (2) Total (in thousands) Corporate securities $ 17,809 $ — $ 17,809 Asset-backed securities 66 25,080 25,146 Equity securities — 7,050 7,050 Other long-term investments — 222 222 Reinsurance recoverables 356,337 — 356,337 Receivables from parent and affiliates 3,511 3,511 Subtotal excluding separate account assets 374,212 35,863 410,075 Separate account assets 7,184 — 7,184 Total assets $ 381,396 $ 35,863 $ 417,259 Future policy benefits $ 449,073 $ — $ 449,073 Total liabilities $ 449,073 $ — $ 449,073 As of December 31, 2014 Internal (1) External (2) Total (in thousands) Corporate securities $ 10,258 $ 538 $ 10,796 Asset-backed securities 101 9,991 10,092 Equity securities 92 — 92 Other long-term investments — 253 253 Reinsurance recoverables 339,982 — 339,982 Receivables from parent and affiliates — 4,594 4,594 Subtotal excluding separate account assets 350,433 15,376 365,809 Separate account assets 6,879 — 6,879 Total assets $ 357,312 $ 15,376 $ 372,688 Future policy benefits $ 428,837 $ — $ 428,837 Total liabilities $ 428,837 $ — $ 428,837 (1) Represents valuations reflecting both internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table. (2) Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available. |
Fair Value Inputs, Assets, Quantitative Information | The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets). As of December 31, 2015 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 17,809 Discounted cash flow Discount rate 5.76 % 7.98 % 6.71 % Decrease Reinsurance recoverables $ 356,337 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 449,073 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0.06 % 1.76 % Decrease Utilization rate (5) 56 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase As of December 31, 2014 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 10,258 Discounted cash flow Discount rate 10.47 % 10.55 % 10.48 % Decrease Reinsurance recoverables $ 339,982 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 428,837 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0 % 1.30 % Decrease Utilization rate (5) 63 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table. (2) Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (3) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. (4) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company and its affiliates, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. (5) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status, and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits. (6) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status, and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%. (7) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table. |
Fair Value Inputs, Liabilities, Quantitative Information | The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets). As of December 31, 2015 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 17,809 Discounted cash flow Discount rate 5.76 % 7.98 % 6.71 % Decrease Reinsurance recoverables $ 356,337 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 449,073 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0.06 % 1.76 % Decrease Utilization rate (5) 56 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase As of December 31, 2014 Fair Value Valuation Techniques Unobservable Inputs Minimum Maximum Weighted Average Impact of Increase in Input on Fair Value (1) (in thousands) Assets: Corporate securities $ 10,258 Discounted cash flow Discount rate 10.47 % 10.55 % 10.48 % Decrease Reinsurance recoverables $ 339,982 Fair values are determined in the same manner as future policy benefits. Liabilities: Future policy benefits (2) $ 428,837 Discounted cash flow Lapse rate (3) 0 % 14 % Decrease NPR spread (4) 0 % 1.30 % Decrease Utilization rate (5) 63 % 96 % Increase Withdrawal rate (6) 74 % 100 % Increase Mortality rate (7) 0 % 14 % Decrease Equity volatility curve 17 % 28 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table. (2) Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (3) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. (4) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company and its affiliates, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. (5) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status, and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits. (6) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status, and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%. (7) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table. |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. Year Ended December 31, 2015 Fixed Maturities - Available-For-Sale U.S. Corporate Public U.S. Corporate Private Foreign Corporate Public Foreign Corporate Private Asset-Backed Securities Trading Account Assets - Equity Securities Equity Securities, Available-For-Sale (in thousands) Fair value, beginning of period assets/(liabilities) $ 537 $ 5,818 $ — $ 4,441 $ 10,092 $ — $ 92 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net — (67 ) — (973 ) 7 — 52 Asset management fees and other income — — — — — 1,051 — Interest credited to policyholders’ account balances — — — — — — — Included in other comprehensive income (loss) (8 ) (186 ) 5 280 (106 ) — (39 ) Net investment income (1 ) 7 — (22 ) (12 ) — — Purchases — 13,610 364 537 17,727 — — Sales — (4,437 ) — (69 ) (2,000 ) — — Issuances — — — — — — — Settlements — (4,964 ) — (5,475 ) (789 ) — (105 ) Transfers into Level 3 (2) — — — 9,309 9,404 — — Transfers out of Level 3 (2) (528 ) — (369 ) — (9,177 ) — — Other (4) — — — — — 5,999 — Fair value, end of period $ — $ 9,781 $ — $ 8,028 $ 25,146 $ 7,050 $ — Unrealized gains (losses) for assets still held (3): Included in earnings: Realized investment gains (losses), net $ — $ — $ — $ — $ — $ — $ — Asset management fees and other income $ — $ — $ — $ — $ — $ 1,051 $ — Year Ended December 31, 2015 Other Long- term Investments Reinsurance Recoverables Receivables from Parent and Affiliates Separate Account Assets (1) Future Policy Benefits (in thousands) Fair value, beginning of period assets/(liabilities) $ 253 $ 339,982 $ 4,594 $ 6,879 $ (428,837 ) Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net (7 ) (35,413 ) — — 44,114 Asset management fees and other income — — — — — Interest credited to policyholders’ account balances — — — 305 — Included in other comprehensive income (loss) 9 — (53 ) — — Net investment income 8 — 1 — — Purchases — 51,768 — — — Sales — — — — — Issuances (41 ) — — — (64,350 ) Settlements — — — — — Transfers into Level 3 (2) — — 3,964 — — Transfers out of Level 3 (2) — — (4,995 ) — — Fair value, end of period $ 222 $ 356,337 $ 3,511 $ 7,184 $ (449,073 ) Unrealized gains (losses) for assets/liabilities still held (3): Included in earnings: Realized investment gains (losses), net $ — $ (28,430 ) $ — $ — $ 35,179 Asset management fees and other income $ (7 ) $ — $ — $ — $ — Interest credited to policyholders’ account balances $ — $ — $ — $ 304 $ — Year Ended December 31, 2014(6) Fixed Maturities Available-For-Sale U.S. Corporate Public U.S. Corporate Private Foreign Corporate Public Foreign Corporate Private Asset-Backed Securities (7) Equity Securities, Available-For-Sale (in thousands) Fair value, beginning of period assets/(liabilities) $ — $ 270 $ — $ 4,092 $ 16,023 $ 79 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net — — — 168 58 — Asset management fees and other income — — — — — — Included in other comprehensive income (loss) 6 519 — (76 ) — 13 Net investment income (5 ) — — 43 (45 ) — Purchases 869 10,030 — 660 40 — Sales — (5,001 ) — (253 ) — — Issuances — — — — — — Settlements — — — (193 ) (5,752 ) — Transfers into Level 3 (2) 537 — — — 7,938 — Transfers out of Level 3 (2) (870 ) — — — (8,170 ) — Fair value, end of period $ 537 $ 5,818 $ — $ 4,441 $ 10,092 $ 92 Unrealized gains (losses) for assets still held (3): Included in earnings: Realized investment gains (losses), net $ — $ — $ — $ — $ — $ — Asset management fees and other income $ — $ — $ — $ — $ — $ — Year Ended December 31, 2014 Other Long-term Investments Reinsurance Recoverables Receivables from Parent and Affiliates Separate Account Assets (1) Future Policy Benefits (in thousands) Fair value, beginning of period assets/(liabilities) $ — $ (43,340 ) $ 3,138 $ 6,692 $ 38,190 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net — 335,729 — — (409,978 ) Asset management fees and other income (6 ) — — — — Interest credited to policyholders’ account balances — — — 187 — Included in other comprehensive income (loss) — — (84 ) — — Net investment income — — — — — Purchases 66 47,593 4,000 — — Sales — — — — — Issuances — — — — (57,049 ) Settlements (2 ) — — — — Transfers into Level 3 (2) — — 992 — — Transfers out of Level 3 (2) — — (3,452 ) — — Other (4) (5) 195 — — — — Fair value, end of period $ 253 $ 339,982 $ 4,594 $ 6,879 $ (428,837 ) Unrealized gains (losses) for assets/liabilities still held(3): Included in earnings: Realized investment gains (losses), net $ — $ 335,135 $ — $ — $ (409,525 ) Asset management fees and other income $ (6 ) $ — $ — $ — $ — Interest credited to policyholders’ account balances $ — $ — $ — $ 187 $ — Year Ended December 31, 2013(6) Fixed Maturities Available-For-Sale U.S. Corporate Public U.S. Corporate Private Foreign Corporate Public Foreign Corporate Private Asset-Backed Securities (7) Trading Account Assets- Equity Securities Equity Securities, Available-For-Sale (in thousands) Fair value, beginning of period assets/(liabilities) $ 916 $ 863 $ — $ 4,294 $ 18,301 $ 1,390 $ 1,067 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net — (88 ) — 1 — — 483 Asset management fees and other income — — — — — 109 — Included in other comprehensive income (loss) 29 40 — (164 ) 86 — 11 Net investment income (4 ) — — 40 244 — — Purchases — 251 — 101 12,016 — — Sales — (1 ) — — — (1,499 ) (1,482 ) Issuances — — — — — — — Settlements — (795 ) — (180 ) (5,109 ) — — Transfers into Level 3 (2) — — — — — — — Transfers out of Level 3 (2) (941 ) — — — (7,518 ) — — Other (4) $ — $ — $ — $ — $ (1,997 ) $ — $ — Fair value, end of period $ — $ 270 $ — $ 4,092 $ 16,023 $ — $ 79 Unrealized gains (losses) for assets still held(3): Included in earnings: Realized investment gains (losses), net $ — $ — $ — $ — $ — $ — $ — Asset management fees and other income $ — $ — $ — $ — $ — $ 25 $ — Year Ended December 31, 2013 Receivables from Parent and Affiliates Separate Account Assets (1) Future Policy Benefits Other Liabilities (in thousands) Fair value, beginning of period assets/(liabilities) $ 998 $ 6,201 $ (116,673 ) $ 85,164 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net — — 204,349 (169,386 ) Asset management fees and other income — 491 — — Interest credited to policyholders’ account balances — — — — Included in other comprehensive income (loss) (9 ) — — — Net investment income — — — — Purchases 3,648 — — 40,882 Sales (2,497 ) — — — Issuances — — (49,486 ) — Settlements — — — — Transfers into Level 3 (2) — — — — Transfers out of Level 3 (2) (999 ) — — — Other (4) (5) 1,997 — — — Fair value, end of period 3,138 6,692 38,190 (43,340 ) Unrealized gains (losses) for assets/liabilities still held(3): Included in earnings: Realized investment gains (losses), net $ — $ — $ 202,622 $ (168,474 ) Asset management fees and other income $ — $ — $ — $ — Interest credited to policyholders’ account balances $ — $ 491 $ — $ — (1) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position. (2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfers occur for any such assets still held at the end of the quarter. (3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts. (4) Other primarily represents reclassifications of certain assets between reporting categories. (5) Reinsurance of variable annuity living benefit features that were classified as “Other Liabilities” at 2013 and were reclassified to “Reinsurance Recoverables” at 2014 as they were in a net asset position. (6) Prior period amounts are presented on a basis consistent with the current period presentation. (7) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. |
Fair Value Disclosure Financial Instruments Not Carried at Fair Value | The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Consolidated Statements of Financial Position; however, in some cases, as described below, the carrying amount equals or approximates fair value. December 31, 2015 Fair Value Carrying Amount (1) Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ — $ 8,540 $ 245,041 $ 253,581 $ 248,209 Policy loans — — 185,508 185,508 185,508 Other long-term investments — — 1,402 1,402 1,340 Cash and cash equivalents 1,158 96,599 — 97,757 97,757 Accrued investment income — 16,644 — 16,644 16,644 Receivables from parent and affiliates — 23,212 — 23,212 23,212 Other assets — 2,664 — 2,664 2,664 Total assets $ 1,158 $ 147,659 $ 431,951 $ 580,768 $ 575,334 Liabilities: Policyholders’ account balances - investment contracts $ — $ 145,502 $ 41,262 $ 186,764 $ 187,827 Cash collateral for loaned securities — 3,030 — 3,030 3,030 Short-term debt to affiliates — 24,188 — 24,188 24,000 Long-term debt to affiliates — 92,470 — 92,470 92,000 Payables to parent and affiliates — 8,441 — 8,441 8,441 Other liabilities — 39,009 — 39,009 39,009 Total liabilities $ — $ 312,640 $ 41,262 $ 353,902 $ 354,307 December 31, 2014 (2) Fair Value Carrying Amount (1) Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ — $ 8,486 $ 287,293 $ 295,779 $ 283,057 Policy loans — — 182,560 182,560 182,560 Other long-term investments — — 1,278 1,278 1,128 Cash and cash equivalents 1,612 38,048 — 39,660 39,660 Accrued investment income — 14,768 — 14,768 14,768 Receivables from parent and affiliates — 25,148 — 25,148 25,155 Other assets — 3,141 — 3,141 3,141 Total assets $ 1,612 $ 89,591 $ 471,131 $ 562,334 $ 549,469 Liabilities: Policyholders’ account balances - investment contracts $ — $ 140,116 $ 10,783 $ 150,899 $ 152,557 Cash collateral for loaned securities — 4,455 — 4,455 4,455 Short-term debt to affiliates — 24,251 — 24,251 24,000 Long-term debt to affiliates — 97,862 — 97,862 97,000 Payables to parent and affiliates — 4,244 — 4,244 4,244 Other liabilities — 34,432 — 34,432 34,432 Total liabilities $ — $ 305,360 $ 10,783 $ 316,143 $ 316,688 (1) Carrying values presented herein differ from those in the Company’s Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments. (2) Prior period amounts are presented on a basis consistent with current period presentation. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying, excluding embedded derivatives which are recorded with the associated host. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral held with the same counterparty, and non-performance risk. December 31, 2015 December 31, 2014 Gross Fair Value Gross Fair Value Primary Underlying Notional Assets Liabilities Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Currency Swaps $ 54,443 $ 5,572 $ — $ 44,221 $ 840 $ (691 ) Total Qualifying Hedges $ 54,443 $ 5,572 $ — $ 44,221 $ 840 $ (691 ) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 57,201 $ 6,076 $ — $ 57,200 $ 6,269 $ — Credit Credit Default Swaps 7,275 268 (222 ) 7,275 150 (451 ) Currency/Interest Rate Foreign Currency Swaps 24,715 3,597 — 25,370 1,049 (171 ) Currency Forwards 550 5 — — — — Equity Equity Options 30,501 2,341 (142 ) 1,875,551 446 (112 ) Total Non-Qualifying Hedges $ 120,242 $ 12,287 $ (364 ) $ 1,965,396 $ 7,914 $ (734 ) Total Derivatives (1) $ 174,685 $ 17,859 $ (364 ) $ 2,009,617 $ 8,754 $ (1,425 ) (1) Excludes embedded derivatives which contain multiple underlyings. The fair value of the embedded derivatives related to living benefit feature was a net liability of $449 million and $429 million as of December 31, 2015 and 2014 , respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Pruco Life was a net asset of $356 million and $340 million as of December 31, 2015 and 2014 , respectively, included in “Reinsurance Recoverables”. |
Offsetting of Financial Assets | The following table presents recognized derivative instruments (excluding embedded derivatives and reinsurance recoverables), and repurchase and reverse repurchase agreements, that are offset in the Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Consolidated Statements of Financial Position. December 31, 2015 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 16,245 $ (364 ) $ 15,881 $ (15,157 ) $ 724 Securities purchased under agreement to resell 96,599 — 96,599 (96,599 ) — Total Assets $ 112,844 $ (364 ) $ 112,480 $ (111,756 ) $ 724 Offsetting of Financial Liabilities: Derivatives $ 364 $ (364 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 364 $ (364 ) $ — $ — $ — December 31, 2014 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 8,753 $ (1,424 ) $ 7,329 $ (7,194 ) $ 135 Securities purchased under agreement to resell 38,048 — 38,048 (38,048 ) — Total Assets $ 46,801 $ (1,424 ) $ 45,377 $ (45,242 ) $ 135 Offsetting of Financial Liabilities: Derivatives $ 1,424 $ (1,424 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 1,424 $ (1,424 ) $ — $ — $ — (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. |
Offsetting of Financial Liabilities | The following table presents recognized derivative instruments (excluding embedded derivatives and reinsurance recoverables), and repurchase and reverse repurchase agreements, that are offset in the Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Consolidated Statements of Financial Position. December 31, 2015 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 16,245 $ (364 ) $ 15,881 $ (15,157 ) $ 724 Securities purchased under agreement to resell 96,599 — 96,599 (96,599 ) — Total Assets $ 112,844 $ (364 ) $ 112,480 $ (111,756 ) $ 724 Offsetting of Financial Liabilities: Derivatives $ 364 $ (364 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 364 $ (364 ) $ — $ — $ — December 31, 2014 Gross Amounts of Recognized Financial Instruments Gross Net Financial Net Amount (in thousands) Offsetting of Financial Assets: Derivatives $ 8,753 $ (1,424 ) $ 7,329 $ (7,194 ) $ 135 Securities purchased under agreement to resell 38,048 — 38,048 (38,048 ) — Total Assets $ 46,801 $ (1,424 ) $ 45,377 $ (45,242 ) $ 135 Offsetting of Financial Liabilities: Derivatives $ 1,424 $ (1,424 ) $ — $ — $ — Securities sold under agreement to repurchase — — — — — Total Liabilities $ 1,424 $ (1,424 ) $ — $ — $ — (1) Amounts exclude the excess of collateral received/pledged from/to the counterparty. |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship. Year Ended December 31, 2015 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ 247 $ 301 $ 5,492 Total qualifying hedges — 247 301 5,492 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 1,675 — — — Currency 19 — — — Currency/Interest Rate 2,729 — 55 — Credit 152 — — — Equity 856 — — — Embedded Derivatives (2,043 ) — — — Total non-qualifying hedges 3,388 — 55 — Total $ 3,388 $ 247 $ 356 $ 5,492 Year Ended December 31, 2014 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ (58 ) $ 288 $ 3,216 Total qualifying hedges — (58 ) 288 3,216 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 4,713 — — — Currency/Interest Rate 1,445 — 25 — Credit (43 ) — — — Equity (720 ) — — — Embedded Derivatives (85,134 ) — — — Total non-qualifying hedges (79,739 ) — 25 — Total $ (79,739 ) $ (58 ) $ 313 $ 3,216 Year Ended December 31, 2013 Realized Investment Gains (Losses) Net Investment Income Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ — $ 64 $ (301 ) $ (1,730 ) Total qualifying hedges — 64 (301 ) (1,730 ) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (4,050 ) — — — Currency/Interest Rate (110 ) — 12 — Credit (1,016 ) — — — Equity (3,875 ) — — — Embedded Derivatives 27,755 — — — Total non-qualifying hedges 18,704 — 12 — Total $ 18,704 $ 64 $ (289 ) $ (1,730 ) (1) Amounts deferred in AOCI. |
Schedule of Derivative Instruments Recognized in Accumulated Other Comprehensive Income(Loss) Before Taxes | Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes: (in thousands) Balance, December 31, 2012 $ (1,327 ) Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2013 (1,493 ) Amount reclassified into current period earnings (237 ) Balance, December 31, 2013 (3,057 ) Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2014 3,446 Amount reclassified into current period earnings (230 ) Balance, December 31, 2014 159 Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2015 5,741 Amount reclassified into current period earnings (249 ) Balance, December 31, 2015 $ 5,651 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Reinsurance Table | Reinsurance amounts included in the Company’s Consolidated Statements of Financial Position at December 31, were as follows: December 31, 2015 December 31, 2014 (in thousands) Reinsurance recoverables $ 1,634,696 $ 1,436,470 Policy loans (12,989 ) (11,388 ) Deferred policy acquisition costs (252,795 ) (211,128 ) Other liabilities 47,421 37,934 |
Reinsurance Table By Affiliate | The reinsurance recoverables by counterparty are broken out below. Reinsurance Recoverables December 31, 2015 December 31, 2014 (in thousands) PARCC $ 496,591 $ 482,487 PAR Term 142,068 116,930 Prudential Insurance 30,079 27,652 PAR U 560,188 446,182 Pruco Life 29,796 17,469 Pruco Re 336,653 332,741 Term Re 37,391 11,039 Unaffiliated 1,930 1,970 Total reinsurance recoverables $ 1,634,696 $ 1,436,470 |
Reinsurance Impact On Income Statement | Reinsurance amounts, excluding investment gains (losses) on affiliated asset transfers, included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, were as follows: 2015 2014 2013 (in thousands) Premiums: Direct $ 205,978 $ 193,928 $ 186,778 Assumed — — — Ceded (190,987 ) (179,605 ) (171,885 ) Net premiums 14,991 14,323 14,893 Policy charges and fee income: Direct 314,357 287,766 239,758 Assumed — — — Ceded (116,822 ) (106,680 ) (82,947 ) Net policy charges and fee income 197,535 181,086 156,811 Net investment income: Direct 69,371 68,364 69,157 Assumed — — — Ceded (480 ) (492 ) (504 ) Net investment income 68,891 67,872 68,653 Other income : Direct 2,495 2,558 3,410 Assumed & Ceded — — — Net other income 2,495 2,558 3,410 Interest credited to policyholders’ account balances: Direct 61,665 56,615 27,616 Assumed — — — Ceded (11,618 ) (10,785 ) (10,443 ) Net interest credited to policyholders’ account balances 50,047 45,830 17,173 Policyholders’ benefits (including change in reserves): Direct 250,487 226,854 228,176 Assumed — — — Ceded (223,088 ) (200,249 ) (205,283 ) Net policyholders’ benefits (including change in reserves) 27,399 26,605 22,893 Realized investment gains (losses), net: Direct 51,989 (398,154 ) 199,483 Assumed — — — Ceded (46,236 ) 324,884 (176,902 ) Realized investment gains (losses), net 5,753 (73,270 ) 22,581 Net reinsurance expense allowances, net of capitalization and amortization (27,102 ) (38,881 ) (24,700 ) |
Gross and Net Life Insurance in Force | Substantially all reinsurance contracts are with affiliates as of December 31, 2015 , 2014 and 2013 . The gross and net amounts of life insurance face amount in force as of December 31, were as follows: 2015 2014 2013 (in thousands) Gross life insurance face amount in force $ 122,191,480 $ 114,395,367 $ 107,125,219 Reinsurance ceded (111,392,626 ) (103,951,166 ) (97,197,953 ) Net life insurance face amount in force $ 10,798,854 $ 10,444,201 $ 9,927,266 |
Affiliated Asset Transfer | The table below shows affiliated asset trades for the years ended December 31, 2014 and 2015 . Affiliate Date Transaction Security Type Fair Value Book Value Additional Paid-in Capital, Net of Tax Increase/ (Decrease) Realized Investment Gain/ (Loss) Derivative Gain/ (Loss) (in millions) Prudential Insurance Dec-14 Purchase Commercial Mortgages $ 6 $ 5 $ — $ — $ — Prudential Insurance Mar-15 Purchase Fixed Maturities & Trading Account Assets $ 24 $ 20 $ (3 ) $ — $ — |
Debt Agreements | The following table provides the breakout of the Company’s short-term and long-term debt with affiliates: Affiliate Date Issued Amount of Notes- December 31, 2015 Amount of Notes- December 31, 2014 Interest Rate Date of Maturity (in thousands) Prudential Financial 12/16/2011 11,000 22,000 3.32 % - 3.61 % 12/16/2015 - 12/16/2016 Washington Street Investment 12/17/2012 — 39,000 1.33 % - 1.87 % 12/17/2015 - 12/17/2017 Prudential Financial 11/15/2013 9,000 9,000 2.24 % 12/15/2018 Prudential Financial 11/15/2013 23,000 23,000 3.19 % 12/15/2020 Prudential Financial 12/15/2014 5,000 5,000 2.57 % 12/15/2019 Prudential Financial 12/15/2014 23,000 23,000 3.14 % 12/15/2021 Prudential Financial 9/21/2015 26,000 — 1.40 % - 1.93 % 12/17/2016 - 12/17/2017 Prudential Financial 12/16/2015 1,000 — 2.85 % 12/16/2020 Prudential Financial 12/16/2015 18,000 — 3.37 % 12/16/2022 Total Loans Payable to Affiliates $ 116,000 $ 121,000 |
Quarterly Results of Operatio29
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Financial Information | The unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 are summarized in the table below: March 31 June 30 September 30 December 31 (in thousands) 2015 Total revenues $ 71,645 $ 132,445 $ 29,205 $ 94,740 Total benefits and expenses 74,048 51,084 76,568 36,908 Income (loss) from operations before income taxes (2,403 ) 81,361 (47,363 ) 57,832 Net income (loss) $ (1,933 ) $ 64,308 $ (37,072 ) $ 50,761 2014 Total revenues $ 59,537 $ 73,806 $ 45,046 $ 52,444 Total benefits and expenses 48,788 47,651 44,434 71,919 Income (loss) from operations before income taxes 10,749 26,155 612 (19,475 ) Net income (loss) $ 8,429 $ 21,382 $ 4,732 $ (6,278 ) |
Business and Basis of Present30
Business and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2015subsidiary | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of subsidiaries | 1 |
Significant Accounting Polici31
Significant Accounting Policies and Pronouncements (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Loan-to-value ratios (greater than) | 100.00% |
Debt service coverage ratios | 1 |
Partnership Interest Threshold, Policy, Percentage (less than) | 3.00% |
Significant Accounting Policies [Line Items] | |
Securities loaned transactions collateral, minimum | 102.00% |
Securities loaned transactions collateral, maximum | 105.00% |
Minimum | |
Significant Accounting Policies [Line Items] | |
Investee Financial Information, Lag Period | 1 month |
Repurchase and Resale Agreements, Collateral, Percentage | 95.00% |
Maximum | |
Significant Accounting Policies [Line Items] | |
Investee Financial Information, Lag Period | 3 months |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investment [Line Items] | |||
Net change in unrealized gains (losses) from other trading account assets | $ (200,000) | $ (300,000) | $ 300,000 |
Commercial mortgage loans, Percentage | 100.00% | 100.00% | |
Non Income Producing Assets, Fixed Maturities | $ 0 | ||
Gross unrealized losses related to high or highest quality securities | 16,800,000 | $ 1,200,000 | |
Gross unrealized losses related to other than high or highest quality securities | 4,200,000 | 900,000 | |
Twelve months or more Unrealized Losses | 6,243,000 | 506,000 | |
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 3,000,000 | ||
Financial Instruments Owned and Pledged as Collateral, Associated Liabilities | 3,000,000 | 5,000,000 | |
Securities Sold under Agreements to Repurchase | |||
Investment [Line Items] | |||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 97,000,000 | 38,000,000 | |
Fixed maturities, available-for-sale | |||
Investment [Line Items] | |||
Assets Deposited With Governmental Authorities (less than) | 1,000,000 | 1,000,000 | |
Equity securities, available-for-sale | |||
Investment [Line Items] | |||
Gross unrealized losses representing declines in value of greater than 20% | 0 | 0 | |
Commercial Loan on Hospitality | |||
Investment [Line Items] | |||
Commercial Mortgage and Other Loans on Nonaccrual Status | $ 0 | $ 0 | |
Illinois | |||
Investment [Line Items] | |||
Commercial mortgage loans, Percentage | 17.00% | ||
Texas | |||
Investment [Line Items] | |||
Commercial mortgage loans, Percentage | 16.00% | ||
New York | |||
Investment [Line Items] | |||
Commercial mortgage loans, Percentage | 11.00% |
Investments (Fixed Maturities a
Investments (Fixed Maturities and Equity Securities Excluding Investments Classified as Trading) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | $ 1,087,582 | $ 911,279 |
Fixed maturities, available-for-sale: | 1,105,195 | 973,483 |
Amortized Cost | 18,275 | 8,291 |
Fair Value | 17,084 | 8,295 |
Net unrealized gains on impaired securities relating to changes in value of securities subsequent to the impairment measurement date | 500 | |
Available-for-sale Securities | 600 | |
Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 1,087,582 | 911,279 |
Gross Unrealized Gains | 38,576 | 64,309 |
Gross Unrealized Losses | 20,963 | 2,105 |
Fixed maturities, available-for-sale: | 1,105,195 | 973,483 |
OTTI in AOCI | (301) | (366) |
Equity securities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 18,275 | 8,291 |
Gross Unrealized Gains | 28 | 122 |
Gross Unrealized Losses | 1,219 | 118 |
Fair Value | 17,084 | 8,295 |
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 23,582 | 23,991 |
Gross Unrealized Gains | 3,010 | 3,590 |
Gross Unrealized Losses | 0 | 0 |
Fixed maturities, available-for-sale: | 26,592 | 27,581 |
OTTI in AOCI | 0 | 0 |
Obligations of U.S. states and their political subdivisions | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 127,734 | 39,343 |
Gross Unrealized Gains | 4,048 | 1,846 |
Gross Unrealized Losses | 409 | 0 |
Fixed maturities, available-for-sale: | 131,373 | 41,189 |
OTTI in AOCI | 0 | 0 |
Foreign government bonds | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 8,211 | 6,344 |
Gross Unrealized Gains | 29 | 149 |
Gross Unrealized Losses | 1,122 | 0 |
Fixed maturities, available-for-sale: | 7,118 | 6,493 |
OTTI in AOCI | 0 | 0 |
Public utilities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 152,580 | 109,686 |
Gross Unrealized Gains | 5,656 | 10,305 |
Gross Unrealized Losses | 2,374 | 21 |
Fixed maturities, available-for-sale: | 155,862 | 119,970 |
OTTI in AOCI | 0 | 0 |
All other U.S. public corporate securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 291,835 | 226,026 |
Gross Unrealized Gains | 13,145 | 23,017 |
Gross Unrealized Losses | 5,306 | 390 |
Fixed maturities, available-for-sale: | 299,674 | 248,653 |
OTTI in AOCI | (45) | (45) |
All other U.S. private corporate securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 162,781 | 191,898 |
Gross Unrealized Gains | 3,718 | 8,273 |
Gross Unrealized Losses | 3,458 | 256 |
Fixed maturities, available-for-sale: | 163,041 | 199,915 |
OTTI in AOCI | 0 | 0 |
All other foreign public corporate securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 29,507 | 25,086 |
Gross Unrealized Gains | 1,432 | 2,388 |
Gross Unrealized Losses | 1,359 | 83 |
Fixed maturities, available-for-sale: | 29,580 | 27,391 |
OTTI in AOCI | 0 | 0 |
All other foreign private corporate securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 163,641 | 154,450 |
Gross Unrealized Gains | 2,824 | 7,316 |
Gross Unrealized Losses | 6,629 | 1,182 |
Fixed maturities, available-for-sale: | 159,836 | 160,584 |
OTTI in AOCI | 0 | 0 |
Asset-backed securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 47,898 | 38,069 |
Gross Unrealized Gains | 606 | 1,295 |
Gross Unrealized Losses | 258 | 152 |
Fixed maturities, available-for-sale: | 48,246 | 39,212 |
OTTI in AOCI | (79) | (79) |
Commercial mortgage-backed securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 62,355 | 74,610 |
Gross Unrealized Gains | 2,126 | 3,487 |
Gross Unrealized Losses | 41 | 13 |
Fixed maturities, available-for-sale: | 64,440 | 78,084 |
OTTI in AOCI | 0 | 0 |
Residential mortgage-backed securities | Fixed maturities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 17,458 | 21,776 |
Gross Unrealized Gains | 1,982 | 2,643 |
Gross Unrealized Losses | 7 | 8 |
Fixed maturities, available-for-sale: | 19,433 | 24,411 |
OTTI in AOCI | (177) | (242) |
Mutual funds | Equity securities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 18,275 | 8,238 |
Gross Unrealized Gains | 28 | 83 |
Gross Unrealized Losses | 1,219 | 118 |
Fair Value | 17,084 | 8,203 |
Non-redeemable preferred stocks | Equity securities, available-for-sale | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 0 | 53 |
Gross Unrealized Gains | 0 | 39 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 0 | $ 92 |
Investments (Amortized Cost and
Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Available for Sale Amortized Cost | ||
Due in one year or less | $ 56,384 | |
Due after one year through five years | 207,606 | |
Due after five years through ten years | 157,830 | |
Due after ten years | 538,051 | |
Total | 1,087,582 | $ 911,279 |
Available for Sale Securities Fair Value | ||
Due in one year or less | 54,298 | |
Due after one year through five years | 216,519 | |
Due after five years through ten years | 158,671 | |
Due after ten years | 543,588 | |
Total | 1,105,195 | $ 973,483 |
Asset-backed securities | ||
Available for Sale Amortized Cost | ||
Debt Maturities, without single maturity date | 47,898 | |
Available for Sale Securities Fair Value | ||
Debt Maturities, without Single Maturity Date | 48,246 | |
Commercial mortgage-backed securities | ||
Available for Sale Amortized Cost | ||
Debt Maturities, without single maturity date | 62,355 | |
Available for Sale Securities Fair Value | ||
Debt Maturities, without Single Maturity Date | 64,440 | |
Residential mortgage-backed securities | ||
Available for Sale Amortized Cost | ||
Debt Maturities, without single maturity date | 17,458 | |
Available for Sale Securities Fair Value | ||
Debt Maturities, without Single Maturity Date | $ 19,433 |
Investments (Fixed Maturities P
Investments (Fixed Maturities Proceeds) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fixed maturity and equity security impairments | |||
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings | $ (1,061) | $ (25) | $ 0 |
Fixed maturities, available-for-sale | |||
Available For Sale | |||
Proceeds from sales | 4,300 | 49,137 | 108,332 |
Proceeds from maturities/repayments | 119,987 | 102,303 | 131,032 |
Gross investment gains from sales, prepayments and maturities | 2,689 | 5,160 | 5,704 |
Gross investment losses from sales and maturities | 0 | (249) | (1,379) |
Equity securities, available-for-sale | |||
Available For Sale | |||
Proceeds from sales | 2,122 | 7,808 | 6,650 |
Gross investment gains from sales, prepayments and maturities | 74 | 456 | 587 |
Gross investment losses from sales and maturities | 0 | 0 | (395) |
Fixed maturity and equity security impairments | |||
Writedowns for impairments on equity securities | $ 0 | $ 0 | $ (6) |
Investments (Credit Losses Reco
Investments (Credit Losses Recognized In Earnings on Fixed Maturity Securities Held by the Company) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance, beginning of period | $ 663 | $ 716 |
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period | (46) | (42) |
Additional credit loss impairments recognized in the current period on securities previously impaired | 26 | 0 |
Increases due to the passage of time on previously recorded credit losses | 21 | 21 |
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected | (13) | (32) |
Balance, end of period | $ 651 | $ 663 |
Investments (Trading Account As
Investments (Trading Account Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Amortized Cost | $ 15,999 | $ 10,000 |
Fair Value | 15,491 | 9,679 |
Fixed maturities | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Amortized Cost | 10,000 | 10,000 |
Fair Value | 8,441 | 9,679 |
Equity securities | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Amortized Cost | 5,999 | 0 |
Fair Value | $ 7,050 | $ 0 |
Investments (Commercial Mortgag
Investments (Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 240,227 | $ 275,418 |
Total commercial mortgage and agricultural property loans by property type, % of total | 100.00% | 100.00% |
Valuation allowance | $ (428) | $ (771) |
Total net commercial mortgage and agricultural property loans by property type | 239,799 | 274,647 |
Total net other loans | 8,410 | 8,410 |
Total commercial mortgage and other loans | 248,209 | 283,057 |
Apartments/Multi-Family | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 79,481 | $ 89,817 |
Total commercial mortgage and agricultural property loans by property type, % of total | 33.10% | 32.60% |
Retail | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 62,881 | $ 64,149 |
Total commercial mortgage and agricultural property loans by property type, % of total | 26.20% | 23.30% |
Industrial | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 25,059 | $ 35,190 |
Total commercial mortgage and agricultural property loans by property type, % of total | 10.40% | 12.80% |
Office | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 21,058 | $ 29,997 |
Total commercial mortgage and agricultural property loans by property type, % of total | 8.80% | 10.90% |
Other | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 17,803 | $ 18,061 |
Total commercial mortgage and agricultural property loans by property type, % of total | 7.40% | 6.60% |
Hospitality | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 23,176 | $ 23,725 |
Total commercial mortgage and agricultural property loans by property type, % of total | 9.60% | 8.60% |
Commercial mortgage loans | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 229,458 | $ 260,939 |
Total commercial mortgage and agricultural property loans by property type, % of total | 95.50% | 94.80% |
Agricultural property loans | ||
Servicing Assets at Fair Value [Line Items] | ||
Total commercial mortgage and agricultural property loans by property type | $ 10,769 | $ 14,479 |
Total commercial mortgage and agricultural property loans by property type, % of total | 4.50% | 5.20% |
Valuation allowance | $ 0 | $ 0 |
Uncollateralized loans | ||
Servicing Assets at Fair Value [Line Items] | ||
Uncollateralized loans | $ 8,410 | $ 8,410 |
Investments (Allowance for Loss
Investments (Allowance for Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Allowance for credit losses, beginning of year | $ 771 | $ 1,785 | $ 1,162 |
Addition to (release of) allowance for losses | (343) | (1,014) | 623 |
Allowance for credit losses, end of year | 428 | 771 | 1,785 |
Agricultural Property Loans | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Allowance for credit losses, beginning of year | 100 | 100 | |
Allowance for credit losses, end of year | $ 100 | $ 100 | $ 100 |
Investments (Allowance for Cred
Investments (Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for Credit Losses: | ||
Individually evaluated for impairment | $ 0 | $ 0 |
Collectively evaluated for impairment | 428,000 | 771,000 |
Total ending balance | 428,000 | 771,000 |
Recorded Investment: | ||
Gross of reserves: individually evaluated for impairment | 0 | 0 |
Gross of reserves: collectively evaluated for impairment | 248,637,000 | 283,828,000 |
Total ending balance, gross of reserves | 248,637,000 | 283,828,000 |
Class Of Financing Receivable | Uncollateralized loans | ||
Recorded Investment: | ||
Gross of reserves: individually evaluated for impairment | 0 | 0 |
Uncollateralized loans | ||
Recorded Investment: | ||
Gross of reserves: collectively evaluated for impairment | 8,400,000 | 8,400,000 |
Agricultural Property Loans | ||
Allowance for Credit Losses: | ||
Collectively evaluated for impairment | 100,000 | 100,000 |
Recorded Investment: | ||
Gross of reserves: collectively evaluated for impairment | $ 10,800,000 | $ 14,500,000 |
Investments (Credit Quality Ind
Investments (Credit Quality Indicators) (Details) - Commercial Mortgage and Agricultural Loans - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Credit Quality Indicators [Line Items] | ||
Financing Receivable | $ 240,227 | $ 275,418 |
0%-59.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 160,976 | 164,088 |
60%-69.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 60,849 | 89,639 |
70%-79.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 13,999 | 17,185 |
Greater than 80% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 4,403 | 4,506 |
Greater than 1.2X | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 231,144 | 264,595 |
Greater than 1.2X | 0%-59.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 158,983 | 162,454 |
Greater than 1.2X | 60%-69.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 60,849 | 84,761 |
Greater than 1.2X | 70%-79.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 11,312 | 14,389 |
Greater than 1.2X | Greater than 80% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 0 | 2,991 |
1.0X to 1.2X | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 7,618 | 2,796 |
1.0X to 1.2X | 0%-59.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 1,993 | 0 |
1.0X to 1.2X | 60%-69.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 0 | 0 |
1.0X to 1.2X | 70%-79.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 2,687 | 2,796 |
1.0X to 1.2X | Greater than 80% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 2,938 | 0 |
Less than 1.0X | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 1,465 | 8,027 |
Less than 1.0X | 0%-59.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 0 | 1,634 |
Less than 1.0X | 60%-69.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 0 | 4,878 |
Less than 1.0X | 70%-79.99% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | 0 | 0 |
Less than 1.0X | Greater than 80% | ||
Credit Quality Indicators [Line Items] | ||
Financing Receivable | $ 1,465 | $ 1,515 |
Investments (Other Long Term In
Investments (Other Long Term Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Long Term Investments [Line Items] | ||
Total other long-term investments | $ 60,454 | $ 47,855 |
Company’s investment in separate accounts | ||
Other Long Term Investments [Line Items] | ||
Total other long-term investments | 1,853 | 1,606 |
Joint ventures and limited partnerships | ||
Other Long Term Investments [Line Items] | ||
Total other long-term investments | 41,106 | 38,920 |
Derivatives | ||
Other Long Term Investments [Line Items] | ||
Total other long-term investments | $ 17,495 | $ 7,329 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Investment Income [Line Items] | |||
Gross investment income | $ 72,538 | $ 71,187 | $ 71,982 |
Less: investment expenses | (3,647) | (3,315) | (3,329) |
Net investment income | 68,891 | 67,872 | 68,653 |
Fixed maturities, available-for-sale | |||
Net Investment Income [Line Items] | |||
Gross investment income | 44,959 | 44,073 | 46,071 |
Trading account assets | |||
Net Investment Income [Line Items] | |||
Gross investment income | 866 | 119 | 11 |
Commercial mortgage and other loans | |||
Net Investment Income [Line Items] | |||
Gross investment income | 13,528 | 13,686 | 13,831 |
Policy loans | |||
Net Investment Income [Line Items] | |||
Gross investment income | 10,335 | 10,127 | 9,901 |
Short-term investments and cash equivalents | |||
Net Investment Income [Line Items] | |||
Gross investment income | 218 | 79 | 63 |
Other long-term investments | |||
Net Investment Income [Line Items] | |||
Gross investment income | $ 2,632 | $ 3,103 | $ 2,105 |
Investments (Realized Investmen
Investments (Realized Investment Gains Losses Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | $ 5,753 | $ (73,270) | $ 22,581 |
Fixed maturities | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | 1,628 | 4,786 | 4,325 |
Equity securities | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | 74 | 456 | 186 |
Commercial mortgage and other loans | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | 343 | 1,015 | (623) |
Short-term investments and cash equivalents | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | 0 | 2 | 2 |
Joint ventures and limited partnerships | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | 320 | 210 | (13) |
Derivatives | |||
Schedule Of Gain Loss On Investments [Line Items] | |||
Realized investment gains (losses), net | $ 3,388 | $ (79,739) | $ 18,704 |
Investments (Balance of and Cha
Investments (Balance of and Changes in AOCI Components) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 33,739 | ||
Income tax benefit (expense) | (13,363) | $ 10,224 | $ (65,366) |
Ending Balance | 11,781 | 33,739 | |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (13) | 68 | 43 |
Change in other comprehensive income before reclassifications | (86) | (81) | 25 |
Amounts reclassified from AOCI | 0 | ||
Income tax benefit (expense) | 30 | ||
Ending Balance | (69) | (13) | 68 |
Net Unrealized Investment Gains (Losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 33,752 | 17,033 | 47,406 |
Change in other comprehensive income before reclassifications | (31,993) | 16,719 | (30,373) |
Amounts reclassified from AOCI | (1,702) | (5,242) | (4,511) |
Income tax benefit (expense) | 11,793 | ||
Ending Balance | 11,850 | 33,752 | 17,033 |
Cash Flow Hedge Gain Loss To AOCI | 5,700 | 200 | (3,100) |
Accumulated Other Comprehensive Income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 33,739 | 17,101 | 47,449 |
Change in other comprehensive income before reclassifications | (32,079) | 16,638 | (30,348) |
Amounts reclassified from AOCI | (1,702) | (5,242) | (4,511) |
Income tax benefit (expense) | 11,823 | ||
Ending Balance | $ 11,781 | $ 33,739 | $ 17,101 |
Investments (Reclassifications
Investments (Reclassifications of AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flow hedges - Currency/Interest rate | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
Amounts reclassified from AOCI | $ 249 | $ 230 | $ (237) |
Net unrealized investment gains (losses) on available-for-sale securities | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
Amounts reclassified from AOCI | 1,453 | 5,012 | 4,748 |
Total net unrealized investment gains (losses) | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
Amounts reclassified from AOCI | 1,702 | 5,242 | 4,511 |
Total reclassifications for the period | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
Amounts reclassified from AOCI | $ 1,702 | $ 5,242 | $ 4,511 |
Investments (Net Unrealized Inv
Investments (Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 33,739 | ||
Ending Balance | 11,781 | $ 33,739 | |
Net Unrealized Gains (Losses) on Investments | Fixed maturity securities on which an OTTI loss has been recognized | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 225 | 224 | $ 230 |
Net investment gains (losses) on investments arising during the period | (20) | 13 | 126 |
Reclassification adjustment for (gains) losses included in net income | 6 | (12) | (132) |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 0 | 0 | 0 |
Ending Balance | 211 | 225 | 224 |
Deferred Policy Acquisition Costs and Other Costs | Fixed maturity securities on which an OTTI loss has been recognized | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (551) | (628) | 95 |
Net investment gains (losses) on investments arising during the period | 0 | 0 | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 744 | 77 | (723) |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 0 | 0 | 0 |
Ending Balance | 193 | (551) | (628) |
Future Policy Benefits and Policy Holder Account Balances | Fixed maturity securities on which an OTTI loss has been recognized | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 122 | 152 | 164 |
Net investment gains (losses) on investments arising during the period | 0 | 0 | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 18 | (30) | (12) |
Ending Balance | 140 | 122 | 152 |
Deferred Income Tax (Liability) Benefit | Fixed maturity securities on which an OTTI loss has been recognized | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 70 | 87 | (172) |
Net investment gains (losses) on investments arising during the period | 7 | (5) | (44) |
Reclassification adjustment for (gains) losses included in net income | (2) | 4 | 46 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | (260) | (27) | 253 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | (6) | 11 | 4 |
Ending Balance | (191) | 70 | 87 |
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) | Fixed maturity securities on which an OTTI loss has been recognized | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (134) | (165) | 317 |
Net investment gains (losses) on investments arising during the period | (13) | 8 | 82 |
Reclassification adjustment for (gains) losses included in net income | 4 | (8) | (86) |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 484 | 50 | (470) |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 12 | (19) | (8) |
Ending Balance | $ 353 | $ (134) | $ (165) |
Investments (All Other Net Unre
Investments (All Other Net Unrealized Investment Gains and Losses in AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 33,739 | ||
Ending Balance | 11,781 | $ 33,739 | |
Net Unrealized Gains (Losses) on Investments | Other Net Unrealized Investment Gains and Losses [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 63,363 | 35,984 | $ 89,750 |
Net investment gains (losses) on investments arising during the period | (38,860) | 32,609 | (49,387) |
Reclassification adjustment for (gains) losses included in net income | (1,708) | (5,230) | (4,379) |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 0 | 0 | 0 |
Ending Balance | 22,795 | 63,363 | 35,984 |
Deferred Policy Acquisition Costs and Other Costs | Other Net Unrealized Investment Gains and Losses [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (16,175) | (11,654) | (26,309) |
Net investment gains (losses) on investments arising during the period | 0 | 0 | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 10,509 | (4,521) | 14,655 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 0 | 0 | 0 |
Ending Balance | (5,666) | (16,175) | (11,654) |
Future Policy Benefits and Policy Holder Account Balances | Other Net Unrealized Investment Gains and Losses [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 4,942 | 2,126 | 9,001 |
Net investment gains (losses) on investments arising during the period | 0 | 0 | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 0 | 0 | 0 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | (4,385) | 2,816 | (6,875) |
Ending Balance | 557 | 4,942 | 2,126 |
Deferred Income Tax (Liability) Benefit | Other Net Unrealized Investment Gains and Losses [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (18,244) | (9,258) | (25,354) |
Net investment gains (losses) on investments arising during the period | 13,600 | (11,413) | 17,285 |
Reclassification adjustment for (gains) losses included in net income | 598 | 1,830 | 1,534 |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | (3,678) | 1,582 | (5,129) |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | 1,535 | (985) | 2,406 |
Ending Balance | (6,189) | (18,244) | (9,258) |
Total net unrealized investment gains (losses) | Other Net Unrealized Investment Gains and Losses [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 33,886 | 17,198 | 47,088 |
Net investment gains (losses) on investments arising during the period | (25,260) | 21,196 | (32,102) |
Reclassification adjustment for (gains) losses included in net income | (1,110) | (3,400) | (2,845) |
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs | 6,831 | (2,939) | 9,526 |
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances | (2,850) | 1,831 | (4,469) |
Ending Balance | $ 11,497 | $ 33,886 | $ 17,198 |
Investments (Net Unrealized Gai
Investments (Net Unrealized Gains Losses on Investments by Asset Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | $ 23,006 | $ 63,588 | $ 36,208 |
Other investments | |||
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | 933 | 1,221 | 1,447 |
Derivatives designated as cash flow hedges | |||
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | 5,651 | 159 | (3,057) |
Available-for-sale Securities | Fixed maturities | |||
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | 17,402 | 61,979 | 37,569 |
Available-for-sale Securities | Equity securities, available-for-sale | |||
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | (1,191) | 4 | 25 |
Fixed maturity securities on which an OTTI loss has been recognized | Fixed maturities | |||
Investment [Line Items] | |||
Net unrealized gains (losses) on investments | $ 211 | $ 225 | $ 224 |
Investments (Fair Value and Los
Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | $ 280,610 | $ 44,779 |
Less than 12 months Gross Unrealized Losses | 14,720 | 1,599 |
Twelve months or more Fair Value | 47,824 | 33,306 |
Twelve months or more Gross Unrealized Losses | 6,243 | 506 |
Total Fair Value | 328,434 | 78,085 |
Total Gross Unrealized Losses | 20,963 | 2,105 |
Obligations of U.S. states and their political subdivisions | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 10,312 | 0 |
Less than 12 months Gross Unrealized Losses | 409 | 0 |
Twelve months or more Fair Value | 0 | 0 |
Twelve months or more Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 10,312 | 0 |
Total Gross Unrealized Losses | 409 | 0 |
Foreign government bonds | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 3,079 | |
Less than 12 months Gross Unrealized Losses | 271 | |
Twelve months or more Fair Value | 1,813 | |
Twelve months or more Gross Unrealized Losses | 851 | |
Total Fair Value | 4,892 | |
Total Gross Unrealized Losses | 1,122 | |
Public utilities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 58,351 | 4,733 |
Less than 12 months Gross Unrealized Losses | 2,374 | 21 |
Twelve months or more Fair Value | 0 | 0 |
Twelve months or more Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 58,351 | 4,733 |
Total Gross Unrealized Losses | 2,374 | 21 |
All other U.S. public corporate securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 76,154 | 6,101 |
Less than 12 months Gross Unrealized Losses | 4,478 | 361 |
Twelve months or more Fair Value | 7,342 | 3,194 |
Twelve months or more Gross Unrealized Losses | 828 | 29 |
Total Fair Value | 83,496 | 9,295 |
Total Gross Unrealized Losses | 5,306 | 390 |
All other U.S. private corporate securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 52,647 | 0 |
Less than 12 months Gross Unrealized Losses | 3,458 | 0 |
Twelve months or more Fair Value | 0 | 14,548 |
Twelve months or more Gross Unrealized Losses | 0 | 256 |
Total Fair Value | 52,647 | 14,548 |
Total Gross Unrealized Losses | 3,458 | 256 |
All other foreign public corporate securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 8,252 | 1,738 |
Less than 12 months Gross Unrealized Losses | 835 | 83 |
Twelve months or more Fair Value | 1,295 | 0 |
Twelve months or more Gross Unrealized Losses | 524 | 0 |
Total Fair Value | 9,547 | 1,738 |
Total Gross Unrealized Losses | 1,359 | 83 |
All other foreign private corporate securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 41,343 | 20,747 |
Less than 12 months Gross Unrealized Losses | 2,712 | 1,112 |
Twelve months or more Fair Value | 26,304 | 3,775 |
Twelve months or more Gross Unrealized Losses | 3,917 | 70 |
Total Fair Value | 67,647 | 24,522 |
Total Gross Unrealized Losses | 6,629 | 1,182 |
Asset-backed securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 18,052 | 1,988 |
Less than 12 months Gross Unrealized Losses | 141 | 5 |
Twelve months or more Fair Value | 10,672 | 11,387 |
Twelve months or more Gross Unrealized Losses | 117 | 147 |
Total Fair Value | 28,724 | 13,375 |
Total Gross Unrealized Losses | 258 | 152 |
Commercial mortgage-backed securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 12,059 | 9,016 |
Less than 12 months Gross Unrealized Losses | 35 | 9 |
Twelve months or more Fair Value | 398 | 402 |
Twelve months or more Gross Unrealized Losses | 6 | 4 |
Total Fair Value | 12,457 | 9,418 |
Total Gross Unrealized Losses | 41 | 13 |
Residential mortgage-backed securities | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 361 | 456 |
Less than 12 months Gross Unrealized Losses | 7 | 8 |
Twelve months or more Fair Value | 0 | 0 |
Twelve months or more Gross Unrealized Losses | 0 | 0 |
Total Fair Value | 361 | 456 |
Total Gross Unrealized Losses | 7 | 8 |
Equity securities, available-for-sale | ||
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items] | ||
Less than twelve months Fair Value | 12,145 | 5,882 |
Less than 12 months Gross Unrealized Losses | 931 | 118 |
Twelve months or more Fair Value | 3,712 | 0 |
Twelve months or more Gross Unrealized Losses | 288 | 0 |
Total Fair Value | 15,857 | 5,882 |
Total Gross Unrealized Losses | $ 1,219 | $ 118 |
Investments (Securities Pledged
Investments (Securities Pledged) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Total securities pledged | $ 2,905 | $ 4,269 |
Fixed maturity securities, available-for-sale | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Total securities pledged | $ 2,905 | $ 4,269 |
Deferred Policy Acquisition C52
Deferred Policy Acquisition Costs (Rollforward) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Balance, beginning of year | $ 457,420 | $ 439,315 | $ 327,832 |
Capitalization of commissions, sales and issue expenses | 60,024 | 60,207 | 53,901 |
Amortization- Impact of assumption and experience unlocking and true-ups | 6,125 | 23,034 | (15,114) |
Amortization- All other | (65,452) | (60,726) | 59,295 |
Change in unrealized investment gains and losses | 10,626 | (4,410) | 13,402 |
Balance, end of year | $ 468,743 | $ 457,420 | $ 439,315 |
Deferred Policy Acquisition C53
Deferred Policy Acquisition Costs (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |||
Ceded Capitalization | $ 52 | $ 41 | $ 48 |
Ceded Amortization | 18 | 28 | 10 |
Ceded Unrealized Gain (Loss) | $ (8) | $ 10 | $ (20) |
Policyholders' Liabilities (Fut
Policyholders' Liabilities (Future Policy Benefits) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Policyholder Funds [Abstract] | ||
Life insurance | $ 974,108 | $ 889,556 |
Individual annuities and supplementary contracts | 23,297 | 20,220 |
Other contract liabilities | 452,705 | 432,335 |
Total future policy benefits and other policyholder liabilities | $ 1,450,110 | $ 1,342,111 |
Policyholders' Liabilities (Nar
Policyholders' Liabilities (Narrative Future Policy Benefits) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Policyholder Funds [Abstract] | |
Traditional Life Interest Rate Low End | 2.30% |
Traditional Life Interest Rate High End | 7.00% |
Liability for Future Policy Benefit, by Product Segment [Line Items] | |
Other Interest Rates Low End | 0.90% |
Other Interest Rates High End | 4.40% |
Individual And Group Annuities And Supplementary Contracts | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | |
Future Policy Benefits Interest Rate Low End | 0.00% |
Future Policy Benefits Interest Rate High End | 7.30% |
Policyholders' Liabilities (Pol
Policyholders' Liabilities (Policyholders Account Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Policyholder Liabilities [Line Items] | ||
Total policyholders’ account balances | $ 1,680,586 | $ 1,475,803 |
Universal life contracts | ||
Policyholder Liabilities [Line Items] | ||
Total policyholders’ account balances | 1,246,611 | 1,090,721 |
Individual annuities | ||
Policyholder Liabilities [Line Items] | ||
Total policyholders’ account balances | 258,299 | 222,252 |
Guaranteed interest accounts | ||
Policyholder Liabilities [Line Items] | ||
Total policyholders’ account balances | 30,164 | 32,217 |
Other | ||
Policyholder Liabilities [Line Items] | ||
Total policyholders’ account balances | $ 145,512 | $ 130,613 |
Policyholders' Liabilities (N57
Policyholders' Liabilities (Narrative Policyholders Account Balances) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Policyholder Funds [Abstract] | |
Interest Sensitive Life Interest Rate Assumptions Low End | 0.60% |
Interest Sensitive Life Interest Rate Assumptions High End | 4.50% |
Individual Annuities Interest Rates Low End | 0.10% |
Individual Annuities Interest Rates High End | 4.90% |
Guaranteed Interest Accounts Interest Rates Low End | 1.00% |
Guaranteed Interest Accounts Interest Rates High End | 5.30% |
Other Interest Rates Low End | 0.50% |
Other Interest Rates High End | 3.50% |
Certain Long-Duration Contrac58
Certain Long-Duration Contracts With Guarantees (Guarantees Associated with Variable Annuity Contracts, by Guarantee Type) (Details) - Variable Annuity Contracts - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Return of Net Deposits | In the Event of Death | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Account value | $ 6,770,691 | $ 6,546,610 |
Net amount at risk | $ 37,256 | $ 2,887 |
Average attained age of contractholders | 63 years | 62 years |
Minimum return or contract value | In the Event of Death | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Account value | $ 1,935,482 | $ 2,020,664 |
Net amount at risk | $ 83,010 | $ 10,123 |
Average attained age of contractholders | 66 years | 65 years |
Minimum return or contract value | At Annuitization / Accumulation | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Account value | $ 8,013,005 | $ 7,837,167 |
Net amount at risk | $ 214,361 | $ 100,125 |
Average attained age of contractholders | 64 years | 62 years |
Average period remaining until earliest expected annuitization | 7 days |
Certain Long-Duration Contrac59
Certain Long-Duration Contracts With Guarantees (Guarantees Associated with Variable Life Contracts, by Guarantee Type) (Details) - Variable Life, Variable Universal Life and Universal Life Contracts - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate account value | $ 692,364 | $ 726,853 |
General account value | 552,888 | 440,913 |
Net amount at risk | $ 12,072,957 | $ 9,970,707 |
Average attained age of contractholders | 53 years | 52 years |
Certain Long-Duration Contrac60
Certain Long-Duration Contracts With Guarantees (Account Balances of Variable Annuity Contracts with Guarantees Invested in General and Separate Account Investment Options) (Details) - Variable Annuity Contracts - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate Account Value | $ 8,463,497 | $ 8,360,022 |
General Account Value | 243,000 | 207,000 |
Equity funds | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate Account Value | 5,048,026 | 5,120,921 |
Bond funds | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate Account Value | 3,102,431 | 2,836,575 |
Money market funds | ||
Net Amount at Risk by Product and Guarantee [Line Items] | ||
Separate Account Value | $ 313,040 | $ 402,526 |
Certain Long-Duration Contrac61
Certain Long-Duration Contracts With Guarantees (Summary of the Changes in General Account Liabilities for Guarantees on Variable Contracts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | |||
Beginning balance | $ 507,936 | $ 7,927 | $ 154,652 |
Incurred guarantee benefits | 48,270 | 493,914 | (149,221) |
Paid guarantee benefits | (5,906) | (1,314) | (199) |
Other | (5,025) | 7,409 | 2,695 |
Ending balance | 545,275 | 507,936 | 7,927 |
GMDB | Variable Annuity Contracts | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | |||
Beginning balance | 7,994 | 2,689 | 2,611 |
Incurred guarantee benefits | 3,409 | 5,428 | 116 |
Paid guarantee benefits | (720) | (264) | (147) |
Other | (102) | 141 | 109 |
Ending balance | 10,581 | 7,994 | 2,689 |
GMDB | Variable Life, Variable Universal Life and Universal Life Contracts | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | |||
Beginning balance | 69,212 | 42,455 | 33,079 |
Incurred guarantee benefits | 25,049 | 20,545 | 6,802 |
Paid guarantee benefits | (5,174) | (1,050) | 0 |
Other | (4,911) | 7,262 | 2,574 |
Ending balance | 84,176 | 69,212 | 42,455 |
GMIB | Variable Annuity Contracts | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | |||
Beginning balance | 1,894 | 973 | 2,290 |
Incurred guarantee benefits | (424) | 915 | (1,277) |
Paid guarantee benefits | (12) | 0 | (52) |
Other | (12) | 6 | 12 |
Ending balance | 1,446 | 1,894 | 973 |
GMWB/GMIWB/GMAB | Variable Annuity Contracts | |||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | |||
Beginning balance | 428,836 | (38,190) | 116,672 |
Incurred guarantee benefits | 20,236 | 467,026 | (154,862) |
Paid guarantee benefits | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Ending balance | $ 449,072 | $ 428,836 | $ (38,190) |
Certain Long-Duration Contrac62
Certain Long-Duration Contracts With Guarantees (Changes in Deferred Sales Inducements, Reported as "Interest credited to policyholders' account balances") (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Deferred Sales Inducements [Roll Forward] | |||
Balance, beginning of year | $ 76,534 | $ 88,350 | $ 70,728 |
Capitalization | 678 | 842 | 1,793 |
Amortization- Impact of assumption and experience unlocking and true-ups | 1,348 | 3,108 | 1,799 |
Amortization- All other | (16,144) | (15,733) | 13,501 |
Change in unrealized investment gains (losses) | 627 | (33) | 529 |
Balance, end of year | $ 63,043 | $ 76,534 | $ 88,350 |
Statutory Net Income and Surp63
Statutory Net Income and Surplus and Dividend Restrictions (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statutory Net Income And Surplus And Dividend Restrictions [Abstract] | |||
Statutory Net Income | $ 62,000,000 | $ 60,000,000 | $ 81,000,000 |
Statutory Surplus | 410,000,000 | 352,000,000 | |
Capacity For STAT Dividend | 67,000,000 | ||
Statutory Dividend | $ 0 | $ 80,000,000 | $ 155,000,000 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current tax expense (benefit): | |||
U.S. Federal | $ 21,849 | $ 21,129 | $ 33,370 |
Total | 21,849 | 21,129 | 33,370 |
Deferred tax expense (benefit): | |||
U.S. Federal | (8,486) | (31,353) | 31,996 |
Total | (8,486) | (31,353) | 31,996 |
Total income tax expense (benefit) from operations | 13,363 | (10,224) | 65,366 |
Income tax expense (benefit) reported in equity related to: | |||
Other comprehensive income (loss) | (11,823) | 8,958 | (16,342) |
Additional paid-in capital | (1,348) | (177) | 53 |
Total income tax expense (benefit) | $ 192 | $ (1,443) | $ 49,077 |
Income Taxes (Reconciliation To
Income Taxes (Reconciliation To Effective Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Expected federal income tax expense (benefit) | $ 31,299 | $ 6,314 | $ 80,923 |
Non-taxable investment income | (16,021) | (13,891) | (13,840) |
Tax credits | (2,008) | (2,884) | (1,789) |
Other | 93 | 237 | 72 |
Total income tax expense (benefit) from operations | $ 13,363 | $ (10,224) | $ 65,366 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Insurance reserves | $ 149,569 | $ 152,757 |
Deferred tax assets | 149,569 | 152,757 |
Deferred tax liabilities | ||
Deferred policy acquisition costs | 105,590 | 107,495 |
Deferred sales inducements | 22,065 | 26,787 |
Net unrealized gains on securities | 6,074 | 22,200 |
Investments | 5,251 | 6,884 |
Other | 701 | 1,161 |
Deferred tax liabilities | 139,681 | 164,527 |
Net deferred tax asset (liability) | $ 9,888 | |
Net deferred tax asset (liability) | $ (11,770) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 35.00% | ||
Income before income tax | $ 89,000,000 | $ 18,000,000 | $ 231,000,000 |
Income before income tax, Foreign | 0 | 0 | 0 |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Fair Value of Assets and Liab68
Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | $ 1,105,195 | $ 973,483 |
Trading account assets, at fair value | 15,491 | 9,679 |
Equity securities, available-for-sale | 17,084 | 8,295 |
Separate account assets | 11,613,148 | 11,376,940 |
Net Embedded Derivative Asset (Liability) | (449,000) | (429,000) |
Embedded Derivative Gross Asset | 76,000 | 62,000 |
Embedded Derivative Gross Liability | 525,000 | 491,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 1,105,195 | 973,483 |
Trading account assets, at fair value | 15,491 | 9,679 |
Equity securities, available-for-sale | 17,084 | 8,295 |
Short-term investments | 715 | 15,469 |
Cash equivalents | 62,980 | 61,259 |
Other long-term investments | 16,103 | 7,582 |
Reinsurance recoverables | 356,337 | 339,982 |
Receivables from parent and affiliates | 12,477 | 14,607 |
Sub-total excluding separate account assets | 1,586,382 | 1,430,356 |
Separate account assets | 11,613,148 | 11,376,940 |
Total assets | 13,199,530 | 12,807,296 |
Future policy benefits | 449,073 | 428,837 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 449,073 | 428,837 |
Asset, Netting | (364) | (1,424) |
Liability, Netting | (364) | (1,424) |
Fair Value, Measurements, Recurring | Other long-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset, Netting | (364) | (1,424) |
Fair Value, Measurements, Recurring | Payables to parent and affiliates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability, Netting | (364) | (1,424) |
Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 26,592 | 27,581 |
Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 131,373 | 41,189 |
Fair Value, Measurements, Recurring | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 7,118 | 6,493 |
Fair Value, Measurements, Recurring | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 401,754 | 316,811 |
Fair Value, Measurements, Recurring | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 214,440 | 249,069 |
Fair Value, Measurements, Recurring | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 29,580 | 27,390 |
Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 162,219 | 163,243 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 48,246 | 39,212 |
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 64,440 | 78,084 |
Fair Value, Measurements, Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 19,433 | 24,411 |
Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 8,441 | 9,679 |
Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 7,050 | |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Trading account assets, at fair value | 0 | 0 |
Equity securities, available-for-sale | 0 | 0 |
Short-term investments | 715 | 470 |
Cash equivalents | 30,998 | 40,000 |
Other long-term investments | 0 | 0 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Sub-total excluding separate account assets | 31,713 | 40,470 |
Separate account assets | 0 | 0 |
Total assets | 31,713 | 40,470 |
Future policy benefits | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 0 | |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 1,062,240 | 952,595 |
Trading account assets, at fair value | 8,441 | 9,679 |
Equity securities, available-for-sale | 17,084 | 8,203 |
Short-term investments | 0 | 14,999 |
Cash equivalents | 31,982 | 21,259 |
Other long-term investments | 16,245 | 8,753 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 8,966 | 10,013 |
Sub-total excluding separate account assets | 1,144,958 | 1,025,501 |
Separate account assets | 11,605,964 | 11,370,061 |
Total assets | 12,750,922 | 12,395,562 |
Future policy benefits | 0 | 0 |
Payables to parent and affiliates | 364 | 1,424 |
Total liabilities | 364 | 1,424 |
Level 2 | Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 26,592 | 27,581 |
Level 2 | Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 131,373 | 41,189 |
Level 2 | Fair Value, Measurements, Recurring | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 7,118 | 6,493 |
Level 2 | Fair Value, Measurements, Recurring | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 401,754 | 316,274 |
Level 2 | Fair Value, Measurements, Recurring | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 204,659 | 243,251 |
Level 2 | Fair Value, Measurements, Recurring | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 29,580 | 27,390 |
Level 2 | Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 154,191 | 158,802 |
Level 2 | Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 23,100 | 29,120 |
Level 2 | Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 64,440 | 78,084 |
Level 2 | Fair Value, Measurements, Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 19,433 | 24,411 |
Level 2 | Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 8,441 | 9,679 |
Level 2 | Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 0 | |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 42,955 | 20,888 |
Trading account assets, at fair value | 7,050 | 0 |
Equity securities, available-for-sale | 0 | 92 |
Short-term investments | 0 | 0 |
Cash equivalents | 0 | 0 |
Other long-term investments | 222 | 253 |
Reinsurance recoverables | 356,337 | 339,982 |
Receivables from parent and affiliates | 3,511 | 4,594 |
Sub-total excluding separate account assets | 410,075 | 365,809 |
Separate account assets | 7,184 | 6,879 |
Total assets | 417,259 | 372,688 |
Future policy benefits | 449,073 | 428,837 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 449,073 | 428,837 |
Level 3 | Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 537 |
Level 3 | Fair Value, Measurements, Recurring | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 9,781 | 5,818 |
Level 3 | Fair Value, Measurements, Recurring | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 8,028 | 4,441 |
Level 3 | Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 25,146 | 10,092 |
Level 3 | Fair Value, Measurements, Recurring | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale: | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | 0 | $ 0 |
Level 3 | Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading account assets, at fair value | $ 7,050 |
Fair Value of Assets and Liab69
Fair Value of Assets and Liabilities (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Separate Account assets transferred from Level 1 to Level 2 | $ 0 | $ 58,000,000 |
Separate Account Assets Invested In Real Estate | $ 7,200,000 | $ 6,900,000 |
Minimum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Capitalization Rates | 4.75% | 5.00% |
Discount Rates | 6.00% | 6.75% |
Maximum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Capitalization Rates | 10.00% | 10.00% |
Discount Rates | 11.00% | 11.00% |
Weighted Average | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Capitalization Rates | 6.07% | 6.68% |
Discount Rates | 6.95% | 7.66% |
Fair Value of Assets and Liab70
Fair Value of Assets and Liabilities (Level 3 by Pricing Source) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Separate account assets | $ 11,613,148 | $ 11,376,940 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other long-term investments | 16,103 | 7,582 |
Reinsurance recoverables | 356,337 | 339,982 |
Receivables from parent and affiliates | 12,477 | 14,607 |
Subtotal excluding separate account assets | 1,586,382 | 1,430,356 |
Separate account assets | 11,613,148 | 11,376,940 |
Total assets | 13,199,530 | 12,807,296 |
Future policy benefits | 449,073 | 428,837 |
Total liabilities | 449,073 | 428,837 |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 7,050 | 92 |
Other long-term investments | 222 | 253 |
Reinsurance recoverables | 356,337 | 339,982 |
Receivables from parent and affiliates | 3,511 | 4,594 |
Subtotal excluding separate account assets | 410,075 | 365,809 |
Separate account assets | 7,184 | 6,879 |
Total assets | 417,259 | 372,688 |
Future policy benefits | 449,073 | 428,837 |
Total liabilities | 449,073 | 428,837 |
Level 3 | Fair Value, Measurements, Recurring | Separate account assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Separate account assets | 7,184 | 6,879 |
Level 3 | Fair Value, Measurements, Recurring | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | 17,809 | 10,796 |
Level 3 | Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | 25,146 | 10,092 |
Level 3 | Fair Value, Measurements, Recurring | Internal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 92 |
Other long-term investments | 0 | 0 |
Reinsurance recoverables | $ 356,337 | 339,982 |
Receivables from parent and affiliates | 0 | |
Subtotal excluding separate account assets | $ 374,212 | 350,433 |
Total assets | 381,396 | 357,312 |
Future policy benefits | 449,073 | 428,837 |
Total liabilities | 449,073 | 428,837 |
Level 3 | Fair Value, Measurements, Recurring | Internal | Separate account assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Separate account assets | 7,184 | 6,879 |
Level 3 | Fair Value, Measurements, Recurring | Internal | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | 17,809 | 10,258 |
Level 3 | Fair Value, Measurements, Recurring | Internal | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | 66 | 101 |
Level 3 | Fair Value, Measurements, Recurring | External | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 7,050 | 0 |
Other long-term investments | 222 | 253 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 3,511 | 4,594 |
Subtotal excluding separate account assets | 35,863 | 15,376 |
Total assets | 35,863 | 15,376 |
Future policy benefits | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | External | Separate account assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Separate account assets | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | External | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | 0 | 538 |
Level 3 | Fair Value, Measurements, Recurring | External | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed securities | $ 25,080 | $ 9,991 |
Fair Value of Assets and Liab71
Fair Value of Assets and Liabilities (Quantitative Info for Level 3 Inputs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fixed maturities, available-for-sale: | $ 1,105,195 | $ 973,483 |
Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Reinsurance recoverables | $ 356,337 | 339,982 |
Minimum | Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair Value Inputs, Policyholder Age | 35 years | |
Maximum | Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fair Value Inputs, Policyholder Age | 90 years | |
Foreign corporate private securities | Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Fixed maturities, available-for-sale: | $ 17,809 | $ 10,258 |
Foreign corporate private securities | Minimum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Discount rate | 5.76% | 10.47% |
Foreign corporate private securities | Maximum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Discount rate | 7.98% | 10.55% |
Foreign corporate private securities | Weighted Average | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Discount rate | 6.71% | 10.48% |
Future Policy Benefits | Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Future policy benefits | $ 449,073 | $ 428,837 |
Future Policy Benefits | Minimum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Lapse rate | 0.00% | 0.00% |
NPR spread | 0.06% | 0.00% |
Utilization rate | 56.00% | 63.00% |
Withdrawal rate | 74.00% | 74.00% |
Mortality rate | 0.00% | 0.00% |
Equity volatility curve | 17.00% | 17.00% |
Future Policy Benefits | Maximum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Lapse rate | 14.00% | 14.00% |
NPR spread | 1.76% | 1.30% |
Utilization rate | 96.00% | 96.00% |
Withdrawal rate | 100.00% | 100.00% |
Mortality rate | 14.00% | 14.00% |
Equity volatility curve | 28.00% | 28.00% |
Fair Value of Assets and Liab72
Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity securities, available-for-sale | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | $ 92 | $ 79 | $ 1,067 |
Included in earnings: | |||
Realized investment gains (losses), net | 52 | 0 | 483 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | (39) | 13 | 11 |
Net investment income | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | (1,482) |
Issuances | 0 | 0 | 0 |
Settlements | (105) | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | 0 | 92 | 79 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Fixed Maturities - Available-For-Sale | U.S. Corporate Public | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 537 | 0 | 916 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | (8) | 6 | 29 |
Net investment income | (1) | (5) | (4) |
Purchases | 0 | 869 | 0 |
Sales | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 537 | 0 |
Transfers out of Level 3 | (528) | (870) | (941) |
Other | 0 | 0 | |
Fair Value, end of period | 0 | 537 | 0 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Fixed Maturities - Available-For-Sale | U.S. Corporate Private | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 5,818 | 270 | 863 |
Included in earnings: | |||
Realized investment gains (losses), net | (67) | 0 | (88) |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | (186) | 519 | 40 |
Net investment income | 7 | 0 | 0 |
Purchases | 13,610 | 10,030 | 251 |
Sales | (4,437) | (5,001) | (1) |
Issuances | 0 | 0 | 0 |
Settlements | (4,964) | 0 | (795) |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | 9,781 | 5,818 | 270 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Fixed Maturities - Available-For-Sale | Foreign Corporate Public | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 0 | 0 | 0 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | 5 | 0 | 0 |
Net investment income | 0 | 0 | 0 |
Purchases | 364 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | (369) | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | 0 | 0 | 0 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Fixed Maturities - Available-For-Sale | Foreign Corporate Private | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 4,441 | 4,092 | 4,294 |
Included in earnings: | |||
Realized investment gains (losses), net | (973) | 168 | 1 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | 280 | (76) | (164) |
Net investment income | (22) | 43 | 40 |
Purchases | 537 | 660 | 101 |
Sales | (69) | (253) | 0 |
Issuances | 0 | 0 | 0 |
Settlements | (5,475) | (193) | (180) |
Transfers into Level 3 | 9,309 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | 8,028 | 4,441 | 4,092 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Fixed Maturities - Available-For-Sale | Asset-Backed Securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 10,092 | 16,023 | 18,301 |
Included in earnings: | |||
Realized investment gains (losses), net | 7 | 58 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | (106) | 0 | 86 |
Net investment income | (12) | (45) | 244 |
Purchases | 17,727 | 40 | 12,016 |
Sales | (2,000) | 0 | 0 |
Issuances | 0 | 0 | 0 |
Settlements | (789) | (5,752) | (5,109) |
Transfers into Level 3 | 9,404 | 7,938 | 0 |
Transfers out of Level 3 | (9,177) | (8,170) | (7,518) |
Other | 0 | (1,997) | |
Fair Value, end of period | 25,146 | 10,092 | 16,023 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Trading Account Assets - Equity Securities | Equity securities, available-for-sale | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 0 | 0 | 1,390 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | |
Asset management fees and other income | 1,051 | 109 | |
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | 0 | 0 | |
Net investment income | 0 | 0 | |
Purchases | 0 | 0 | |
Sales | 0 | (1,499) | |
Issuances | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | |
Other | 5,999 | 0 | |
Fair Value, end of period | 7,050 | 0 | 0 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | |
Asset management fees and other income | 1,051 | 25 | |
Other long-term investments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 253 | 0 | |
Included in earnings: | |||
Realized investment gains (losses), net | (7) | 0 | |
Asset management fees and other income | 0 | (6) | |
Interest credited to policyholders’ account balances | 0 | 0 | |
Included in other comprehensive income (loss) | 9 | 0 | |
Net investment income | 8 | 0 | |
Purchases | 0 | 66 | |
Sales | 0 | 0 | |
Issuances | (41) | 0 | |
Settlements | 0 | (2) | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | |
Other | 195 | ||
Fair Value, end of period | 222 | 253 | 0 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | |
Asset management fees and other income | (7) | (6) | |
Interest credited to policyholders’ account balances | 0 | 0 | |
Reinsurance Recoverables | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 339,982 | (43,340) | |
Included in earnings: | |||
Realized investment gains (losses), net | (35,413) | 335,729 | |
Asset management fees and other income | 0 | 0 | |
Interest credited to policyholders’ account balances | 0 | 0 | |
Included in other comprehensive income (loss) | 0 | 0 | |
Net investment income | 0 | 0 | |
Purchases | 51,768 | 47,593 | |
Sales | 0 | 0 | |
Issuances | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | |
Other | 0 | ||
Fair Value, end of period | 356,337 | 339,982 | (43,340) |
Included in earnings: | |||
Realized investment gains (losses), net | (28,430) | 335,135 | |
Asset management fees and other income | 0 | 0 | |
Interest credited to policyholders’ account balances | 0 | 0 | |
Receivables from Parent and Affiliates | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 4,594 | 3,138 | 998 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | 0 | 0 |
Included in other comprehensive income (loss) | (53) | (84) | (9) |
Net investment income | 1 | 0 | 0 |
Purchases | 0 | 4,000 | 3,648 |
Sales | 0 | 0 | (2,497) |
Issuances | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Transfers into Level 3 | 3,964 | 992 | 0 |
Transfers out of Level 3 | (4,995) | (3,452) | (999) |
Other | 0 | 1,997 | |
Fair Value, end of period | 3,511 | 4,594 | 3,138 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | 0 | 0 |
Separate Account Assets | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | 6,879 | 6,692 | 6,201 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 491 |
Interest credited to policyholders’ account balances | 305 | 187 | 0 |
Included in other comprehensive income (loss) | 0 | 0 | 0 |
Net investment income | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | 7,184 | 6,879 | 6,692 |
Included in earnings: | |||
Realized investment gains (losses), net | 0 | 0 | 0 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 304 | 187 | 491 |
Future Policy Benefits | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | (428,837) | 38,190 | (116,673) |
Included in earnings: | |||
Realized investment gains (losses), net | 44,114 | (409,978) | 204,349 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | 0 | 0 | 0 |
Included in other comprehensive income (loss) | 0 | 0 | 0 |
Net investment income | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issuances | (64,350) | (57,049) | (49,486) |
Settlements | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Other | 0 | 0 | |
Fair Value, end of period | (449,073) | (428,837) | 38,190 |
Included in earnings: | |||
Realized investment gains (losses), net | 35,179 | (409,525) | 202,622 |
Asset management fees and other income | 0 | 0 | 0 |
Interest credited to policyholders’ account balances | $ 0 | 0 | 0 |
Other Liabilities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning of period | $ (43,340) | 85,164 | |
Included in earnings: | |||
Realized investment gains (losses), net | (169,386) | ||
Asset management fees and other income | 0 | ||
Interest credited to policyholders’ account balances | 0 | ||
Included in other comprehensive income (loss) | 0 | ||
Net investment income | 0 | ||
Purchases | 40,882 | ||
Sales | 0 | ||
Issuances | 0 | ||
Settlements | 0 | ||
Transfers into Level 3 | 0 | ||
Transfers out of Level 3 | 0 | ||
Other | 0 | ||
Fair Value, end of period | (43,340) | ||
Included in earnings: | |||
Realized investment gains (losses), net | (168,474) | ||
Asset management fees and other income | 0 | ||
Interest credited to policyholders’ account balances | $ 0 |
Fair Value of Assets and Liab73
Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Commercial mortgage and other loans | $ 248,209 | $ 283,057 |
Policy loans | 185,508 | 182,560 |
Other long-term investments | 60,454 | 47,855 |
Accrued investment income | 16,644 | 14,768 |
Liabilities: | ||
Cash collateral for loaned securities | 3,030 | 4,455 |
Short-term debt to affiliates | 24,000 | 24,000 |
Long-term debt to affiliates | 92,000 | 97,000 |
Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 253,581 | 295,779 |
Policy loans | 185,508 | 182,560 |
Other long-term investments | 1,402 | 1,278 |
Cash and cash equivalents | 97,757 | 39,660 |
Accrued investment income | 16,644 | 14,768 |
Receivables from parent and affiliates | 23,212 | 25,148 |
Other assets | 2,664 | 3,141 |
Total assets | 580,768 | 562,334 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 186,764 | 150,899 |
Cash collateral for loaned securities | 3,030 | 4,455 |
Short-term debt to affiliates | 24,188 | 24,251 |
Long-term debt to affiliates | 92,470 | 97,862 |
Payables to parent and affiliates | 8,441 | 4,244 |
Other liabilities | 39,009 | 34,432 |
Total liabilities | 353,902 | 316,143 |
Fair Value | Level 1 | ||
Assets: | ||
Commercial mortgage and other loans | 0 | 0 |
Policy loans | 0 | 0 |
Other long-term investments | 0 | 0 |
Cash and cash equivalents | 1,158 | 1,612 |
Accrued investment income | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 1,158 | 1,612 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 0 | 0 |
Cash collateral for loaned securities | 0 | 0 |
Short-term debt to affiliates | 0 | 0 |
Long-term debt to affiliates | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value | Level 2 | ||
Assets: | ||
Commercial mortgage and other loans | 8,540 | 8,486 |
Policy loans | 0 | 0 |
Other long-term investments | 0 | 0 |
Cash and cash equivalents | 96,599 | 38,048 |
Accrued investment income | 16,644 | 14,768 |
Receivables from parent and affiliates | 23,212 | 25,148 |
Other assets | 2,664 | 3,141 |
Total assets | 147,659 | 89,591 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 145,502 | 140,116 |
Cash collateral for loaned securities | 3,030 | 4,455 |
Short-term debt to affiliates | 24,188 | 24,251 |
Long-term debt to affiliates | 92,470 | 97,862 |
Payables to parent and affiliates | 8,441 | 4,244 |
Other liabilities | 39,009 | 34,432 |
Total liabilities | 312,640 | 305,360 |
Fair Value | Level 3 | ||
Assets: | ||
Commercial mortgage and other loans | 245,041 | 287,293 |
Policy loans | 185,508 | 182,560 |
Other long-term investments | 1,402 | 1,278 |
Cash and cash equivalents | 0 | 0 |
Accrued investment income | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 431,951 | 471,131 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 41,262 | 10,783 |
Cash collateral for loaned securities | 0 | 0 |
Short-term debt to affiliates | 0 | 0 |
Long-term debt to affiliates | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | 41,262 | 10,783 |
Carrying Amount | ||
Assets: | ||
Commercial mortgage and other loans | 248,209 | 283,057 |
Policy loans | 185,508 | 182,560 |
Other long-term investments | 1,340 | 1,128 |
Cash and cash equivalents | 97,757 | 39,660 |
Accrued investment income | 16,644 | 14,768 |
Receivables from parent and affiliates | 23,212 | 25,155 |
Other assets | 2,664 | 3,141 |
Total assets | 575,334 | 549,469 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 187,827 | 152,557 |
Cash collateral for loaned securities | 3,030 | 4,455 |
Short-term debt to affiliates | 24,000 | 24,000 |
Long-term debt to affiliates | 92,000 | 97,000 |
Payables to parent and affiliates | 8,441 | 4,244 |
Other liabilities | 39,009 | 34,432 |
Total liabilities | $ 354,307 | $ 316,688 |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months (less than) | $ 1 | |
Maximum length of time hedged in cash flow hedge (in years) | 15 years | |
Credit Derivative, Maximum Exposure, Undiscounted | $ 7 | $ 7 |
Credit Derivative Protection Purchased Fair Value Asset (Liability) (less than) | $ 1 | $ 1 |
Derivative Instruments (Gross N
Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Notional | $ 174,685 | $ 2,009,617 |
Gross Fair Value Assets | 17,859 | 8,754 |
Gross Fair Value Liabilities | (364) | (1,425) |
Net Embedded Derivative Asset (Liability) | (449,000) | (429,000) |
Future Policy Benefits | ||
Derivative [Line Items] | ||
Net Embedded Derivative Asset (Liability) | (449,000) | (429,000) |
Reinsurance Recoverables | ||
Derivative [Line Items] | ||
Net Embedded Derivative Asset (Liability) | 356,000 | 340,000 |
Derivatives Designated as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 54,443 | 44,221 |
Gross Fair Value Assets | 5,572 | 840 |
Gross Fair Value Liabilities | 0 | (691) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 120,242 | 1,965,396 |
Gross Fair Value Assets | 12,287 | 7,914 |
Gross Fair Value Liabilities | (364) | (734) |
Interest Rate Swaps | Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 57,201 | 57,200 |
Gross Fair Value Assets | 6,076 | 6,269 |
Gross Fair Value Liabilities | 0 | 0 |
Credit Default Swaps | Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 7,275 | 7,275 |
Gross Fair Value Assets | 268 | 150 |
Gross Fair Value Liabilities | (222) | (451) |
Currency Swaps | Derivatives Designated as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 54,443 | 44,221 |
Gross Fair Value Assets | 5,572 | 840 |
Gross Fair Value Liabilities | 0 | (691) |
Currency Swaps | Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 24,715 | 25,370 |
Gross Fair Value Assets | 3,597 | 1,049 |
Gross Fair Value Liabilities | 0 | (171) |
Forwards | Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 550 | 0 |
Gross Fair Value Assets | 5 | 0 |
Gross Fair Value Liabilities | 0 | 0 |
Equity Options | Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 30,501 | 1,875,551 |
Gross Fair Value Assets | 2,341 | 446 |
Gross Fair Value Liabilities | $ (142) | $ (112) |
Derivative Instruments (Offsett
Derivative Instruments (Offsetting Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Offsetting of Financial Assets, Derivatives | ||
Gross Amounts of Recognized Financial Instruments | $ 17,859 | $ 8,754 |
Securities purchased under agreement to resell | ||
Gross Amounts of Recognized Financial Instruments | 96,599 | 38,048 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statement of Financial Position | 96,599 | 38,048 |
Financial Instruments / Collateral | (96,599) | (38,048) |
Net Amount | 0 | 0 |
Total Assets | ||
Gross Amounts of Recognized Financial Instruments | 112,844 | 46,801 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | (364) | (1,424) |
Net Amounts Presented in the Consolidated Statement of Financial Position | 112,480 | 45,377 |
Financial Instruments / Collateral | (111,756) | (45,242) |
Net Amount | 724 | 135 |
Offsetting of Financial Liabilities, Derivatives | ||
Gross Amounts of Recognized Financial Instruments | 364 | 1,425 |
Securities sold under agreement to repurchase | ||
Gross Amounts of Recognized Financial Instruments | 0 | 0 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statement of Financial Position | 0 | 0 |
Financial Instruments / Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Total Liabilities | ||
Gross Amounts of Recognized Financial Instruments | 364 | 1,424 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | (364) | (1,424) |
Net Amounts Presented in the Consolidated Statement of Financial Position | 0 | 0 |
Financial Instruments / Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Counterparty A | ||
Offsetting of Financial Assets, Derivatives | ||
Gross Amounts of Recognized Financial Instruments | 16,245 | 8,753 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | (364) | (1,424) |
Net Amounts Presented in the Consolidated Statement of Financial Position | 15,881 | 7,329 |
Financial Instruments / Collateral | (15,157) | (7,194) |
Net Amount | 724 | 135 |
Offsetting of Financial Liabilities, Derivatives | ||
Gross Amounts of Recognized Financial Instruments | 364 | 1,424 |
Gross Amounts Offset in the Consolidated Statement of Financial Position | (364) | (1,424) |
Net Amounts Presented in the Consolidated Statement of Financial Position | 0 | 0 |
Financial Instruments / Collateral | 0 | 0 |
Net Amount | $ 0 | $ 0 |
Derivative Instruments (Financi
Derivative Instruments (Financial Statement Classification and Impact of Derivatives Used in Qualifying and Non-qualifying Hedge Relationships) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ 3,388 | $ (79,739) | $ 18,704 |
Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 247 | (58) | 64 |
Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 356 | 313 | (289) |
AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 5,492 | 3,216 | (1,730) |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 247 | (58) | 64 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 301 | 288 | (301) |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 5,492 | 3,216 | (1,730) |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 247 | (58) | 64 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 301 | 288 | (301) |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 5,492 | 3,216 | (1,730) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 3,388 | (79,739) | 18,704 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 55 | 25 | 12 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 1,675 | 4,713 | (4,050) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 19 | ||
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | ||
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | ||
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | ||
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 2,729 | 1,445 | (110) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 55 | 25 | 12 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 152 | (43) | (1,016) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 856 | (720) | (3,875) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Realized Investment Gains (Losses) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | (2,043) | (85,134) | 27,755 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Net Investment Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Other Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | AOCI | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ 0 | $ 0 | $ 0 |
Derivative Instruments (Current
Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 159 | $ (3,057) | $ (1,327) |
Net deferred gains (losses) on cash flow hedges for the period | 5,741 | 3,446 | (1,493) |
Amount reclassified into current period earnings | (249) | (230) | (237) |
Ending Balance | $ 5,651 | $ 159 | $ (3,057) |
Commitments, Contingent Liabi79
Commitments, Contingent Liabilities and Litigation and Regulatory Matters (Narrative Excluding Litigation) (Details) $ in Millions | 1 Months Ended | ||
Jan. 31, 2012state | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Purchase Obligation Commercial Mortgage Loan | $ 4 | $ 0.2 | |
Purchase Obligation To Purchase Or Fund Investments | $ 1 | $ 1 | |
Number of States Needed for Agreement to Become Effective | state | 20 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | Jan. 01, 2014 | Jul. 01, 2012 | Jun. 30, 2014USD ($) | Dec. 31, 2015USD ($)policy | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Related Party Transactions [Abstract] | ||||||
Stock or Unit Option Plan Expense (less than) | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
Deferred Compensation Arrangement with Individual, Compensation Expense | 1,000,000 | 1,000,000 | 1,000,000 | |||
Pension Expense | $ 3,000,000 | 3,000,000 | 2,000,000 | |||
Defined Contribution Plan Employer Matching Contribution Percent | 4.00% | |||||
Defined Contribution Plan, Cost Recognized | $ 1,000,000 | 1,000,000 | 1,000,000 | |||
Commissions Paid To PAD | 73,000,000 | 83,000,000 | 75,000,000 | |||
Related Party Transaction [Line Items] | ||||||
Life Insurance, Corporate or Bank Owned, Amount | 1,660,000,000 | 1,546,000,000 | ||||
Fees related to corporate owned life insurance | $ 26,000,000 | 26,000,000 | 22,000,000 | |||
PARCC Reinsurance Percentage | 90.00% | |||||
PAR TERM Reinsurance Percentage | 95.00% | |||||
PAR U Reinsurance Percentage | 95.00% | |||||
AST Revenue Sharing Income | $ 30,000,000 | 31,000,000 | 26,000,000 | |||
PSF Revenue Sharing Income | 8,000,000 | 7,000,000 | 7,000,000 | |||
PIM Management Expenses | 3,000,000 | 2,000,000 | 2,000,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 200,000,000 | |||||
Interest Expense | 3,100,000 | $ 2,800,000 | $ 2,300,000 | |||
Dividend | $ 80,000,000 | $ 0 | ||||
Prudential Insurance | ||||||
Related Party Transaction [Line Items] | ||||||
Number Of Corporate Owned Life Insurance Policies Sold | policy | 3 | |||||
Prudential Financial | ||||||
Related Party Transaction [Line Items] | ||||||
Number Of Corporate Owned Life Insurance Policies Sold | policy | 1 | |||||
Term Re | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% |
Related Party Transactions (Rei
Related Party Transactions (Reinsurance With Affiliates) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | ||
Reinsurance recoverables | $ 1,634,696 | $ 1,436,470 |
Policy loans | (12,989) | (11,388) |
Deferred policy acquisition costs | (252,795) | (211,128) |
Other liabilities | $ 47,421 | $ 37,934 |
Related Party Transactions (R82
Related Party Transactions (Reinsurance Recoverable Breakout By Affiliate) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party [Line Items] | ||
Total reinsurance recoverables | $ 1,634,696 | $ 1,436,470 |
PARCC | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 496,591 | 482,487 |
PAR Term | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 142,068 | 116,930 |
Prudential Insurance | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 30,079 | 27,652 |
PAR U | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 560,188 | 446,182 |
Pruco Life | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 29,796 | 17,469 |
Pruco Re | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 336,653 | 332,741 |
Term Re | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | 37,391 | 11,039 |
Unaffiliated | ||
Related Party [Line Items] | ||
Total reinsurance recoverables | $ 1,930 | $ 1,970 |
Related Party Transactions (Inc
Related Party Transactions (Income Statement Reinsurance Results) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Premiums: | |||
Direct | $ 205,978 | $ 193,928 | $ 186,778 |
Assumed | 0 | 0 | 0 |
Ceded | (190,987) | (179,605) | (171,885) |
Net premiums | 14,991 | 14,323 | 14,893 |
Policy charges and fee income: | |||
Direct | 314,357 | 287,766 | 239,758 |
Assumed | 0 | 0 | 0 |
Ceded | (116,822) | (106,680) | (82,947) |
Net policy charges and fee income | 197,535 | 181,086 | 156,811 |
Net investment income: | |||
Direct | 69,371 | 68,364 | 69,157 |
Assumed | 0 | 0 | 0 |
Ceded | (480) | (492) | (504) |
Net investment income | 68,891 | 67,872 | 68,653 |
Other income : | |||
Direct | 2,495 | 2,558 | 3,410 |
Assumed & Ceded | 0 | 0 | 0 |
Net other income | 2,495 | 2,558 | 3,410 |
Interest credited to policyholders’ account balances: | |||
Direct | 61,665 | 56,615 | 27,616 |
Assumed | 0 | 0 | 0 |
Ceded | (11,618) | (10,785) | (10,443) |
Net interest credited to policyholders’ account balances | 50,047 | 45,830 | 17,173 |
Policyholders’ benefits (including change in reserves): | |||
Direct | 250,487 | 226,854 | 228,176 |
Assumed | 0 | 0 | 0 |
Ceded | (223,088) | (200,249) | (205,283) |
Net policyholders’ benefits (including change in reserves) | 27,399 | 26,605 | 22,893 |
Realized investment gains (losses), net: | |||
Direct | 51,989 | (398,154) | 199,483 |
Assumed | 0 | 0 | 0 |
Ceded | (46,236) | 324,884 | (176,902) |
Total realized investment gains (losses), net | 5,753 | (73,270) | 22,581 |
Net reinsurance expense allowances, net of capitalization and amortization | $ (27,102) | $ (38,881) | $ (24,700) |
Related Party Transactions (Lif
Related Party Transactions (Life Insurance In Force) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transactions [Abstract] | |||
Gross life insurance face amount in force | $ 122,191,480 | $ 114,395,367 | $ 107,125,219 |
Reinsurance ceded | (111,392,626) | (103,951,166) | (97,197,953) |
Net life insurance face amount in force | $ 10,798,854 | $ 10,444,201 | $ 9,927,266 |
Related Party Transactions (Aff
Related Party Transactions (Affiliated Asset Transfers) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Prudential Insurance Purchase, December 2014 | |
Asset Transfers [Line Items] | |
Fair Value | $ 6 |
Book Value | 5 |
Additional Paid-in Capital, Net of Tax Increase/ (Decrease) | 0 |
Realized Investment Gain/ (Loss) | 0 |
Derivative Gain/ (Loss) | 0 |
Prudential Insurance Purchase, March 2015 | |
Asset Transfers [Line Items] | |
Fair Value | 24 |
Book Value | 20 |
Additional Paid-in Capital, Net of Tax Increase/ (Decrease) | (3) |
Realized Investment Gain/ (Loss) | 0 |
Derivative Gain/ (Loss) | $ 0 |
Related Party Transactions (Deb
Related Party Transactions (Debt Agreements) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party [Line Items] | ||
Amount of Notes, Current | $ 116,000 | |
Amount of Notes, Prior Period | $ 121,000 | |
Prudential Financial, Issued 12/16/2011 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 11,000 | |
Amount of Notes, Prior Period | 22,000 | |
Interest Rate Near | 3.32% | |
Interest Rate Far | 3.61% | |
Washington Street Investment, Issued 12/17/2012 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 0 | |
Amount of Notes, Prior Period | 39,000 | |
Interest Rate Near | 1.33% | |
Interest Rate Far | 1.87% | |
Prudential Financial, Issued 11/15/2013 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 9,000 | |
Amount of Notes, Prior Period | 9,000 | |
Interest Rate | 2.24% | |
Prudential Financial, Issued 11/15/2013 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 23,000 | |
Amount of Notes, Prior Period | 23,000 | |
Interest Rate | 3.19% | |
Prudential Financial, Issued 12/15/2014 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 5,000 | |
Amount of Notes, Prior Period | 5,000 | |
Interest Rate | 2.57% | |
Prudential Financial, Issued 12/15/2014 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 23,000 | |
Amount of Notes, Prior Period | 23,000 | |
Interest Rate | 3.14% | |
Prudential Financial, Issued 9/21/2015 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 26,000 | |
Amount of Notes, Prior Period | 0 | |
Interest Rate Near | 1.40% | |
Interest Rate Far | 1.93% | |
Prudential Financial, Issued 12/16/2015 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 1,000 | |
Amount of Notes, Prior Period | 0 | |
Interest Rate | 2.85% | |
Prudential Financial, Issued 12/16/2015 | ||
Related Party [Line Items] | ||
Amount of Notes, Current | $ 18,000 | |
Amount of Notes, Prior Period | $ 0 | |
Interest Rate | 3.37% |
Quarterly Results of Operatio87
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Total revenues | $ 94,740 | $ 29,205 | $ 132,445 | $ 71,645 | $ 52,444 | $ 45,046 | $ 73,806 | $ 59,537 | $ 328,035 | $ 230,833 | $ 300,100 |
Total benefits and expenses | 36,908 | 76,568 | 51,084 | 74,048 | 71,919 | 44,434 | 47,651 | 48,788 | 238,608 | 212,792 | 68,891 |
Income (loss) from operations before income taxes | 57,832 | (47,363) | 81,361 | (2,403) | (19,475) | 612 | 26,155 | 10,749 | 89,427 | 18,041 | 231,209 |
Net income (loss) | $ 50,761 | $ (37,072) | $ 64,308 | $ (1,933) | (6,278) | 4,732 | $ 21,382 | $ 8,429 | $ 76,064 | $ 28,265 | $ 165,843 |
Quantifying Misstatement in Current Year Financial Statements, Amount | 400 | ||||||||||
Scenario, Adjustment | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Total benefits and expenses | $ 100 | $ 700 |