Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 333-18053 | |
Entity Registrant Name | PRUCO LIFE INSURANCE OF NEW JERSEY | |
Entity Central Index Key | 0001038509 | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-2426091 | |
Entity Address, Address Line One | 213 Washington Street | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07102 | |
City Area Code | 973 | |
Local Phone Number | 802-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 400,000 |
Unaudited Interim Statements of
Unaudited Interim Statements of Financial Position - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Fixed maturities available for sale, at fair value (allowance for credit losses: 2021-$0; 2020-$0) (amortized cost: 2021-$1,746,952; 2020-$1,635,870) | $ 1,944,652 | $ 1,894,195 |
Fixed maturities, trading, at fair value (amortized cost: 2021-$17,718; 2020-$17,718) | 18,515 | 19,269 |
Equity securities, at fair value (cost: 2021-$4,660; 2020-$4,660) | 6,029 | 6,218 |
Policy loans | 211,669 | 212,163 |
Commercial mortgage and other loans (net of $350 and $440 allowance for credit losses at June 30, 2021 and December 31, 2020, respectively) | 127,258 | 133,115 |
Other invested assets (includes $14,569 and $17,581 of assets measured at fair value at June 30, 2021 and December 31, 2020, respectively) | 107,509 | 97,509 |
Total investments | 2,415,632 | 2,362,469 |
Cash and cash equivalents | 41,878 | 68,527 |
Deferred policy acquisition costs | 263,179 | 224,425 |
Accrued investment income | 22,154 | 21,248 |
Reinsurance recoverables | 3,541,640 | 3,860,612 |
Receivables from parent and affiliates | 36,482 | 31,061 |
Other assets | 19,513 | 23,007 |
Separate account assets | 17,780,468 | 17,117,510 |
TOTAL ASSETS | 24,120,946 | 23,708,859 |
LIABILITIES | ||
Policyholders’ account balances | 2,667,461 | 2,976,575 |
Future policy benefits | 2,618,892 | 2,532,766 |
Cash collateral for loaned securities | 2,725 | 2,725 |
Income taxes payable | 4,606 | 10,821 |
Payables to parent and affiliates | 14,765 | 16,250 |
Other liabilities | 176,903 | 187,620 |
Separate account liabilities | 17,780,468 | 17,117,510 |
Total liabilities | 23,265,820 | 22,844,267 |
EQUITY | ||
Common stock ($5 par value; 400,000 shares authorized, issued and outstanding) | 2,000 | 2,000 |
Additional paid-in capital | 350,035 | 348,735 |
Retained earnings | 358,452 | 328,450 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 144,639 | 185,407 |
Total equity | 855,126 | 864,592 |
TOTAL LIABILITIES AND EQUITY | $ 24,120,946 | $ 23,708,859 |
Unaudited Interim Statements _2
Unaudited Interim Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Fixed Maturities, Available-for-sale, at fair value (AFS), allowance for credit loss | $ 0 | $ 0 |
Fixed Maturities, Available-for-sale, amortized cost | 1,746,952 | 1,635,870 |
Fixed maturities, trading, amortized cost | 17,718 | 17,718 |
Equity securities, at cost | 4,660 | 4,660 |
Commercial mortgage and other loans, allowance for credit losses | 350 | 440 |
Other invested assets, at fair value | $ 14,569 | $ 17,581 |
Common Stock, Par or Stated Value 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 |
Unaudited Interim Statements _3
Unaudited Interim Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
REVENUES | ||||
Premiums | $ 7,086 | $ 5,129 | $ 14,645 | $ 10,323 |
Policy charges and fee income | 22,924 | 18,243 | 51,242 | 42,212 |
Net investment income | 24,898 | 20,683 | 48,443 | 37,648 |
Asset administration fees | 2,140 | 1,546 | 4,166 | 3,111 |
Other income | 686 | 1,640 | 422 | (309) |
Realized investment gains (losses), net | (16,444) | (7,512) | (612) | 5,553 |
TOTAL REVENUES | 41,290 | 39,729 | 118,306 | 98,538 |
BENEFITS AND EXPENSES | ||||
Policyholders’ benefits | 11,289 | 13,443 | 30,124 | 30,129 |
Interest credited to policyholders’ account balances | 9,298 | 11,987 | 20,009 | 22,178 |
Amortization of deferred policy acquisition costs | 4,151 | 1,967 | 11,274 | 7,279 |
General, administrative and other expenses | 10,524 | 10,395 | 24,608 | 20,769 |
TOTAL BENEFITS AND EXPENSES | 35,262 | 37,792 | 86,015 | 80,355 |
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES | 6,028 | 1,937 | 32,291 | 18,183 |
Income tax expense (benefit) | 164 | (8,425) | 2,289 | (6,724) |
NET INCOME (LOSS) | 5,864 | 10,362 | 30,002 | 24,907 |
Other comprehensive income (loss), before tax: | ||||
Foreign currency translation adjustments | 28 | 42 | (80) | 41 |
Net unrealized investment gains (losses) | 62,037 | 97,427 | (51,524) | 76,459 |
Total | 62,065 | 97,469 | (51,604) | 76,500 |
Less: Income tax expense (benefit) related to other comprehensive income (loss) | 13,035 | 20,470 | (10,836) | 16,066 |
Other comprehensive income (loss), net of taxes | 49,030 | 76,999 | (40,768) | 60,434 |
Comprehensive income (loss) | $ 54,894 | $ 87,361 | $ (10,766) | $ 85,341 |
Unaudited Interim Statements _4
Unaudited Interim Statements of Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative effect of adoption of accounting changes | [1] | Cumulative effect of adoption of accounting changesRetained Earnings | [1] |
Beginning balance at Dec. 31, 2019 | $ 635,902,000 | $ 2,000,000 | $ 268,021,000 | $ 280,246,000 | $ 85,635,000 | $ (167,000) | $ (167,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 85,112,000 | 85,112,000 | |||||||
Contributed (distributed) capital-parent/child asset transfers | (4,268,000) | (4,268,000) | |||||||
Net income (loss) | 14,545,000 | 14,545,000 | |||||||
Other comprehensive income (loss), net of tax | (16,565,000) | (16,565,000) | |||||||
Total comprehensive income (loss) | (2,020,000) | ||||||||
Ending balance at Mar. 31, 2020 | 714,559,000 | 2,000,000 | 348,865,000 | 294,624,000 | 69,070,000 | ||||
Beginning balance at Dec. 31, 2019 | 635,902,000 | 2,000,000 | 268,021,000 | 280,246,000 | 85,635,000 | $ (167,000) | $ (167,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 24,907,000 | ||||||||
Other comprehensive income (loss), net of tax | 60,434,000 | ||||||||
Ending balance at Jun. 30, 2020 | 801,790,000 | 2,000,000 | 348,735,000 | 304,986,000 | 146,069,000 | ||||
Beginning balance at Mar. 31, 2020 | 714,559,000 | 2,000,000 | 348,865,000 | 294,624,000 | 69,070,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | ||||||||
Contributed (distributed) capital-parent/child asset transfers | (130,000) | (130,000) | |||||||
Net income (loss) | 10,362,000 | 10,362,000 | |||||||
Other comprehensive income (loss), net of tax | 76,999,000 | 76,999,000 | |||||||
Total comprehensive income (loss) | 87,361,000 | ||||||||
Ending balance at Jun. 30, 2020 | 801,790,000 | 2,000,000 | 348,735,000 | 304,986,000 | 146,069,000 | ||||
Beginning balance at Dec. 31, 2020 | 864,592,000 | 2,000,000 | 348,735,000 | 328,450,000 | 185,407,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 1,300,000 | 1,300,000 | |||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | ||||||||
Net income (loss) | 24,138,000 | 24,138,000 | |||||||
Other comprehensive income (loss), net of tax | (89,798,000) | (89,798,000) | |||||||
Total comprehensive income (loss) | (65,660,000) | ||||||||
Ending balance at Mar. 31, 2021 | 800,232,000 | 2,000,000 | 350,035,000 | 352,588,000 | 95,609,000 | ||||
Beginning balance at Dec. 31, 2020 | 864,592,000 | 2,000,000 | 348,735,000 | 328,450,000 | 185,407,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 30,002,000 | ||||||||
Other comprehensive income (loss), net of tax | (40,768,000) | ||||||||
Ending balance at Jun. 30, 2021 | 855,126,000 | 2,000,000 | 350,035,000 | 358,452,000 | 144,639,000 | ||||
Beginning balance at Mar. 31, 2021 | 800,232,000 | 2,000,000 | 350,035,000 | 352,588,000 | 95,609,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributed capital | 0 | ||||||||
Contributed (distributed) capital-parent/child asset transfers | 0 | ||||||||
Net income (loss) | 5,864,000 | 5,864,000 | |||||||
Other comprehensive income (loss), net of tax | 49,030,000 | 49,030,000 | |||||||
Total comprehensive income (loss) | 54,894,000 | ||||||||
Ending balance at Jun. 30, 2021 | $ 855,126,000 | $ 2,000,000 | $ 350,035,000 | $ 358,452,000 | $ 144,639,000 | ||||
[1] | Includes the impact from the adoption of ASU 2016-13. See Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional information. |
Unaudited Interim Statements _5
Unaudited Interim Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 30,002 | $ 24,907 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Policy charges and fee income | (13,104) | (11,802) |
Interest credited to policyholders’ account balances | 20,009 | 22,178 |
Realized investment (gains) losses, net | 612 | (5,553) |
Amortization and other non-cash items | (12,069) | 2,238 |
Change in: | ||
Future policy benefits | 131,462 | 161,149 |
Reinsurance recoverables | (92,096) | (143,500) |
Accrued investment income | (906) | (1,445) |
Net payables to/receivables from parent and affiliates | (6,924) | (5,474) |
Deferred policy acquisition costs | (34,248) | (30,587) |
Income taxes | 4,622 | (10,410) |
Derivatives, net | 11,314 | (292) |
Other, net | 7,978 | (1,756) |
Cash flows from (used in) operating activities | 46,652 | (347) |
Proceeds from the sale/maturity/prepayment of: | ||
Fixed maturities, available-for-sale | 43,789 | 19,910 |
Equity securities | 0 | 84 |
Policy loans | 14,368 | 13,902 |
Ceded policy loans | (1,151) | (693) |
Commercial mortgage and other loans | 6,857 | 6,794 |
Other invested assets | 4,279 | 1,391 |
Payments for the purchase/origination of: | ||
Fixed maturities, available-for-sale | (154,593) | (90,832) |
Policy loans | (9,337) | (13,334) |
Ceded policy loans | 955 | 3,077 |
Commercial mortgage and other loans | (822) | (2,552) |
Other invested assets | (8,766) | (6,758) |
Notes receivable from parent and affiliates, net | (17) | 145 |
Derivatives, net | 147 | (1,252) |
Other, net | (282) | 98 |
Cash flows from (used in) investing activities | (104,573) | (70,020) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Policyholders’ account deposits | 225,366 | 272,218 |
Ceded policyholders’ account deposits | (164,719) | (179,733) |
Policyholders’ account withdrawals | (165,954) | (166,760) |
Ceded policyholders’ account withdrawals | 124,823 | 125,471 |
Net change in securities sold under agreement to repurchase and cash collateral for loaned securities | 0 | 219 |
Contributed (distributed) capital - parent/child asset transfers | 0 | (5,567) |
Net change in all other financing arrangements (maturities 90 days or less) | 0 | (89) |
Drafts outstanding | (1,009) | 4,456 |
Other, net | 12,765 | 5,348 |
Cash flows from (used in) financing activities | 31,272 | 55,563 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (26,649) | (14,804) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 68,527 | 55,924 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 41,878 | 41,120 |
Significant Non-Cash Transactions | ||
Non-cash assets received | $ 0 | $ 85,000 |
Business and Basis of Presentat
Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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 ("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. Basis of Presentation The Unaudited Interim Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 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; policyholders' account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life products; valuation of investments including derivatives, measurement of allowance for credit losses, 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 accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters. COVID-19 Beginning in the first quarter of 2020, the outbreak of the novel coronavirus (“COVID-19”) resulted in extreme stress and disruption in the global economy and financial markets. While markets have rebounded, the pandemic has adversely impacted, and may continue to adversely impact, the Company's results of operations, financial condition and cash flows. Due to the highly uncertain nature of these conditions, it is not possible to estimate the ultimate impacts at this time. The risks may have manifested, and may continue to manifest, in the Company's financial statements in the areas of, among others, i) investments: increased risk of loss on our investments due to default or deterioration in credit quality or value; and ii) insurance liabilities and related balances: potential changes to assumptions regarding investment returns, mortality and policyholder behavior which are reflected in our insurance liabilities and certain related balances (e.g., DAC, etc.). The Company cannot predict what impact the COVID-19 pandemic will ultimately have on its businesses. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Significant Accounting Policies
Significant Accounting Policies and Pronouncements | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Pronouncements | SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of June 30, 2021, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material. ASU issued but not yet adopted as of June 30, 2021 — ASU 2018-12 ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Financial Statements and Notes to the Financial Statements. In October 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date to affirm its decision to defer the effective date of ASU 2018-12 to January 1, 2022 (with early adoption permitted), representing a one year extension from the original effective date of January 1, 2021. As a result of the COVID-19 pandemic, in November 2020 the FASB issued ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application to defer for an additional one year the effective date of ASU 2018-12 from January 1, 2022 to January 1, 2023, and to provide transition relief to facilitate the early adoption of the ASU. The transition relief would allow large calendar-year public companies that early adopt ASU 2018-12 to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in the 2022 financial statements. Companies that do not early adopt ASU 2018-12 would apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements. The Company currently intends to adopt ASU 2018-12 effective January 1, 2023 using the modified retrospective transition method where permitted. ASU 2018-12 will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other less significant changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to the pattern of earnings emergence following the transition date. ASU 2018-12 Amended Topic Description Method of adoption Effect on the financial statements or other significant matters Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Statements of Operations. An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in Accumulated other comprehensive income (loss) ("AOCI") or (2) a full retrospective transition method. The Company currently intends to adopt this guidance effective January 1, 2023 using the modified retrospective transition method. The impacts of electing such method are currently under assessment. Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield, which will be updated each quarter with the impact recorded through OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the discount rate assumptions. As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of either the beginning of the prior year (if early adoption is elected) or the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI. As noted above, the Company currently intends to adopt the guidance for the liability for future policy benefits effective January 1, 2023 using the modified retrospective transition method. Upon adoption, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between discount rates locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed. Amortization of DAC and other balances Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements ("DSI"), to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability. An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its liability for future policy benefits, as described above, it is required to also use a full retrospective transition method for DAC and other balances. The Company currently intends to adopt this guidance effective January 1, 2023 using the modified retrospective transition method. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI. Market Risk Benefits ("MRB") Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value, and record MRB assets and liabilities separately on the Statements of Financial Position. Changes in fair value of market risk benefits are recorded in net income, except for the portion of the change in MRB liabilities attributable to changes in an entity’s non-performance risk ("NPR"), which is recognized in OCI. An entity shall adopt the guidance for market risk benefits using the retrospective transition method which includes a cumulative-effect adjustment on the balance sheet as of either the beginning of prior year (if early adoption is elected) or the beginning of the earliest period presented. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the balance of the market risk benefits upon adoption. The Company currently intends to adopt this guidance effective January 1, 2023 using the retrospective transition method. Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed. Modifications related to COVID-19 We assess modifications to certain fixed income instruments on a case-by-case basis to evaluate whether a troubled debt restructuring ("TDR") has occurred. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") provides a temporary suspension of TDR accounting for certain COVID-19 related modifications where the investment was not more than 30 days past due as of December 31, 2019 (“TDR Relief”). The TDR Relief was set to expire on December 31, 2020, but was extended through December 31, 2021 by the Consolidated Appropriations Act of 2021. The Company elected to apply the TDR Relief beginning in the first quarter of 2021. The TDR Relief does not apply to modifications completed 60 days after the national emergency related to COVID-19 ends, or December 31, 2021, whichever comes earlier. As of June 30, 2021, any such modifications did not have a material impact on the Company's results of operations. For additional information regarding the Company’s policies for troubled debt restructurings, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2021 | |
Investments [Abstract] | |
Investments | 3. INVESTMENTS Fixed Maturity Securities The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated: June 30, 2021 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 13,014 $ 897 $ 0 $ 0 $ 13,911 Obligations of U.S. states and their political subdivisions 162,022 19,271 0 0 181,293 Foreign government bonds 92,936 9,102 562 0 101,476 U.S. public corporate securities 868,806 123,295 2,546 0 989,555 U.S. private corporate securities 209,626 18,297 89 0 227,834 Foreign public corporate securities 96,454 8,588 671 0 104,371 Foreign private corporate securities 145,604 11,493 1,110 0 155,987 Asset-backed securities(1) 16,252 618 1 0 16,869 Commercial mortgage-backed securities 139,431 10,627 2 0 150,056 Residential mortgage-backed securities(2) 2,807 493 0 0 3,300 Total fixed maturities, available-for-sale $ 1,746,952 $ 202,681 $ 4,981 $ 0 $ 1,944,652 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. December 31, 2020 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 10,638 $ 1,017 $ 0 $ 0 $ 11,655 Obligations of U.S. states and their political subdivisions 162,227 20,399 0 0 182,626 Foreign government bonds 79,318 13,347 29 0 92,636 U.S. public corporate securities 791,616 158,087 118 0 949,585 U.S. private corporate securities 222,279 23,564 225 0 245,618 Foreign public corporate securities 60,376 10,022 51 0 70,347 Foreign private corporate securities 148,103 17,892 640 0 165,355 Asset-backed securities(1) 16,535 666 12 0 17,189 Commercial mortgage-backed securities 141,564 13,854 0 0 155,418 Residential mortgage-backed securities(2) 3,214 552 0 0 3,766 Total fixed maturities, available-for-sale $ 1,635,870 $ 259,400 $ 1,075 $ 0 $ 1,894,195 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated: June 30, 2021 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 20,013 $ 562 $ 0 $ 0 $ 20,013 $ 562 U.S. public corporate securities 79,595 2,546 0 0 79,595 2,546 U.S. private corporate securities 0 0 5,179 89 5,179 89 Foreign public corporate securities 14,937 671 0 0 14,937 671 Foreign private corporate securities 0 0 11,547 1,110 11,547 1,110 Asset-backed securities 1,387 1 0 0 1,387 1 Commercial mortgage-backed securities 3,809 2 0 0 3,809 2 Total fixed maturities, available-for-sale $ 119,741 $ 3,782 $ 16,726 $ 1,199 $ 136,467 $ 4,981 December 31, 2020 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 2,122 $ 29 $ 0 $ 0 $ 2,122 $ 29 U.S. public corporate securities 10,416 118 0 0 10,416 118 U.S. private corporate securities 9,635 225 0 0 9,635 225 Foreign public corporate securities 1,611 51 0 0 1,611 51 Foreign private corporate securities 0 0 12,017 640 12,017 640 Asset-backed securities 988 2 3,941 10 4,929 12 Residential mortgage-backed securities 0 0 0 0 0 0 Total fixed maturities, available-for-sale $ 24,772 $ 425 $ 15,958 $ 650 $ 40,730 $ 1,075 As of June 30, 2021 and December 31, 2020, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance were composed of $4.3 million and $0.4 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $0.7 million and $0.7 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of June 30, 2021, the $1.2 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance, consumer non-cyclical and transportation sectors. As of December 31, 2020, the $0.7 million of gross unrealized losses of twelve months or more were concentrated in the Company’s corporate securities within the finance and consumer non-cyclical sectors. In accordance with its policy described in Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at June 30, 2021. This conclusion was based on a detailed analysis of the underlying credit and cash flows on each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening, foreign currency exchange rate movements and the financial condition or near-term prospects of the issuer. As of June 30, 2021, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated: June 30, 2021 Amortized Cost Fair Value (in thousands) Fixed maturities, available-for-sale: Due in one year or less $ 31,651 $ 31,421 Due after one year through five years 237,435 253,149 Due after five years through ten years 148,576 161,339 Due after ten years 1,170,800 1,328,518 Asset-backed securities 16,252 16,869 Commercial mortgage-backed securities 139,431 150,056 Residential mortgage-backed securities 2,807 3,300 Total fixed maturities, available-for-sale $ 1,746,952 $ 1,944,652 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 do not have a single maturity date. The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities, available-for-sale: Proceeds from sales(1) $ 9,513 $ 885 $ 12,435 $ 2,295 Proceeds from maturities/prepayments 20,780 5,361 30,866 17,615 Gross investment gains from sales and maturities 32 2 57 26 Gross investment losses from sales and maturities (459) (44) (626) (44) Write-downs recognized in earnings(2) 0 0 0 (625) (Addition to) release of allowance for credit losses 0 0 0 0 (1) Includes $(0.5) million and $0.0 million of non-cash related proceeds due to the timing of trade settlements for the six months ended June 30, 2021 and 2020, respectively. (2) Amounts represent securities actively marketed for sale. For both the three and six months ended June 30, 2021 and 2020, there was no activity in the allowance for credit losses for fixed maturity securities. See Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for additional information about the Company's methodology for developing our allowance for credit losses. The Company did not have any fixed maturity securities purchased with credit deterioration, as of both June 30, 2021 and December 31, 2020. Equity Securities The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income,” was $0.1 million and $0.4 million during the three months ended June 30, 2021 and 2020, respectively, and $(0.2) million and $(0.1) million during the six months ended June 30, 2021 and 2020, respectively. Commercial Mortgage and Other Loans The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated: June 30, 2021 December 31, 2020 Amount % of Total Amount % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 46,065 36.1 % $ 46,755 35.0 % Hospitality 13,942 10.9 14,031 10.5 Industrial 12,260 9.6 13,936 10.4 Office 20,533 16.1 23,649 17.7 Other 16,794 13.2 16,929 12.7 Retail 15,690 12.3 15,857 11.9 Total commercial mortgage loans 125,284 98.2 131,157 98.2 Agricultural property loans 2,324 1.8 2,398 1.8 Total commercial mortgage and agricultural property loans 127,608 100.0 % 133,555 100.0 % Allowance for credit losses (350) (440) Total net commercial mortgage and other loans $ 127,258 $ 133,115 As of June 30, 2021, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in New York (14%), Florida (10%), Illinois (10%) and Texas (8%)) and included loans secured by properties in Europe (7%). The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated: Three Months Ended June 30, 2021 2020 Commercial Mortgage Loans Agricultural Property Loans Total Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Allowance, beginning of period $ 466 $ 0 $ 466 $ 441 $ 1 $ 442 Addition to (release of) allowance for expected losses (116) 0 (116) 16 (1) 15 Allowance, end of period $ 350 $ 0 $ 350 $ 457 $ 0 $ 457 Six Months Ended June 30, 2021 2020 Commercial Mortgage Loans Agricultural Property Loans Total Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Allowance, beginning of period $ 440 $ 0 $ 440 $ 164 $ 1 $ 165 Cumulative effect of adoption of ASU 2016-13 0 0 0 204 0 204 Addition to (release of) allowance for expected losses (90) 0 (90) 89 (1) 88 Allowance, end of period $ 350 $ 0 $ 350 $ 457 $ 0 $ 457 See Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional information about the Company's methodology for developing our allowance and expected losses. For the three months ended June 30, 2021, the net decrease in the allowance for credit losses on commercial mortgage and other loans was primarily related to the improving credit environment. For the three months ended June 30, 2020, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to net negative migration. For the six months ended June 30, 2021, the net decrease in the allowance for credit losses on commercial mortgage and other loans was primarily related to the improving credit environment. For the six months ended June 30, 2020, the net increase in the allowance for credit losses on commercial mortgage and other loans was primarily related to the cumulative effect of adoption of ASU 2016-13. The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated: June 30, 2021 Amortized Cost by Origination Year 2021 2020 2019 2018 2017 Prior Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 6,204 $ 1,456 $ 9,036 $ 46,413 $ 63,109 60%-69.99% 820 2,198 27,778 0 1,015 25,625 57,436 70%-79.99% 0 0 1,870 0 0 1,900 3,770 80% or greater 0 0 0 0 969 0 969 Total $ 820 $ 2,198 $ 35,852 $ 1,456 $ 11,020 $ 73,938 $ 125,284 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 820 $ 2,198 $ 31,501 $ 1,456 $ 10,051 $ 67,778 $ 113,804 1.0 - 1.2x 0 0 3,354 0 969 6,160 10,483 Less than 1.0x 0 0 997 0 0 0 997 Total $ 820 $ 2,198 $ 35,852 $ 1,456 $ 11,020 $ 73,938 $ 125,284 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 60%-69.99% 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 1.0 - 1.2x 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 December 31, 2020 Amortized Cost by Origination Year 2020 2019 2018 2017 2016 Prior Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 6,285 $ 0 $ 6,349 $ 9,731 $ 45,261 $ 67,626 60%-69.99% 2,198 27,970 1,478 5,381 3,191 18,533 58,751 70%-79.99% 0 1,870 0 0 0 1,931 3,801 80% or greater 0 0 0 979 0 0 979 Total $ 2,198 $ 36,125 $ 1,478 $ 12,709 $ 12,922 $ 65,725 $ 131,157 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 2,198 $ 31,751 $ 1,478 $ 11,730 $ 11,872 $ 60,499 $ 119,528 1.0 - 1.2x 0 3,364 0 979 1,050 5,226 10,619 Less than 1.0x 0 1,010 0 0 0 0 1,010 Total $ 2,198 $ 36,125 $ 1,478 $ 12,709 $ 12,922 $ 65,725 $ 131,157 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 60%-69.99% 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 1.0 - 1.2x 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 See Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional information about the Company's commercial mortgage and other loans credit quality monitoring process. The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated: June 30, 2021 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 125,284 $ 0 $ 0 $ 0 $ 125,284 $ 0 Agricultural property loans 2,324 0 0 0 2,324 0 Total $ 127,608 $ 0 $ 0 $ 0 $ 127,608 $ 0 (1) As of June 30, 2021, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. December 31, 2020 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 131,157 $ 0 $ 0 $ 0 $ 131,157 $ 0 Agricultural property loans 2,398 0 0 0 2,398 0 Total $ 133,555 $ 0 $ 0 $ 0 $ 133,555 $ 0 (1) As of December 31, 2020, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company did not have any commercial mortgage and other loans purchased with credit deterioration, as of both June 30, 2021 and December 31, 2020. For both the three and six months ended June 30, 2021 and 2020, there were no commercial mortgage and other loans acquired, other than those through direct origination, and there were no commercial mortgage and other loans sold. Other Invested Assets The following table sets forth the composition of “Other invested assets,” as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Company’s investment in separate accounts $ 3,550 $ 3,269 LPs/LLCs: Equity method: Private equity 49,038 38,261 Hedge funds 35,188 33,773 Real estate-related 5,164 4,625 Subtotal equity method 89,390 76,659 Fair value: Private equity 510 590 Hedge funds 61 69 Real estate-related 2,284 2,141 Subtotal fair value 2,855 2,800 Total LPs/LLCs 92,245 79,459 Derivative instruments 11,714 14,781 Total other invested assets $ 107,509 $ 97,509 Accrued Investment Income The following table sets forth the composition of “Accrued investment income,” as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Fixed maturities $ 16,161 $ 15,178 Equity securities 1 1 Commercial mortgage and other loans 336 372 Policy loans 5,653 5,688 Short-term investments and cash equivalents 3 9 Total accrued investment income $ 22,154 $ 21,248 There were no write-downs on accrued investment income for both the three months and six months ended June 30, 2021 and 2020. Net Investment Income The following table sets forth “Net investment income” by investment type, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities, available-for-sale $ 16,624 $ 15,681 $ 32,590 $ 29,843 Fixed maturities, trading 170 121 337 242 Equity securities 91 91 182 182 Commercial mortgage and other loans 1,518 1,442 2,785 2,844 Policy loans 2,832 2,885 5,659 5,761 Other invested assets 4,673 1,370 8,916 325 Short-term investments and cash equivalents 10 56 32 359 Gross investment income 25,918 21,646 50,501 39,556 Less: investment expenses (1,020) (963) (2,058) (1,908) Net investment income $ 24,898 $ 20,683 $ 48,443 $ 37,648 Realized Investment Gains (Losses), Net The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities(1) $ (427) $ (42) $ (569) $ (643) Commercial mortgage and other loans 116 (15) 90 (88) Other invested assets 137 1 171 (59) Derivatives (16,266) (7,493) (296) 6,378 Short term investments and cash equivalents (4) 37 (8) (35) Realized investment gains (losses), net $ (16,444) $ (7,512) $ (612) $ 5,553 (1) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading. Net Unrealized Gains (Losses) on Investments within AOCI The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Fixed maturity securities, available-for-sale without an allowance $ 197,700 $ 258,325 Derivatives designated as cash flow hedges(1) 692 (2,998) Affiliated notes, available-for-sale 220 254 Other investments 338 143 Net unrealized gains (losses) on investments $ 198,950 $ 255,724 (1) For more information on cash flow hedges, see Note 4. Repurchase Agreements and Securities Lending In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. As of both June 30, 2021 and December 31, 2020, the Company had no repurchase agreements. The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated: June 30, 2021 December 31, 2020 Remaining Contractual Maturities of the Agreements Remaining Contractual Maturities of the Agreements Overnight & Continuous Up to 30 Days Total Overnight & Continuous Up to 30 Days Total (in thousands) Foreign public corporate securities $ 2,725 $ 0 $ 2,725 $ 2,725 $ 0 $ 2,725 Total cash collateral for loaned securities(1) $ 2,725 $ 0 $ 2,725 $ 2,725 $ 0 $ 2,725 (1) The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 4. DERIVATIVES AND HEDGING Types of Derivative Instruments and Derivative Strategies The Company utilizes various derivative instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to: • Interest rate contracts: futures, swaps, options, caps and floors • Equity contracts: futures, options and total return swaps • Foreign exchange contracts: futures, options, forwards and swaps • Credit contracts: single and index reference credit default swaps Other types of financial contracts that the Company accounts for as derivatives include: • Embedded derivatives For detailed information on these contracts and the related strategies, see Note 4 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Primary Risks Managed by Derivatives The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. June 30, 2021 December 31, 2020 Primary Underlying Risk/Instrument Type Fair Value Fair Value Gross Notional Assets Liabilities Gross Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Foreign Currency Swaps $ 121,185 $ 2,314 $ (3,291) $ 126,806 $ 2,404 $ (7,017) Total Derivatives Designated as Hedge Accounting Instruments: $ 121,185 $ 2,314 $ (3,291) $ 126,806 $ 2,404 $ (7,017) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 30,200 $ 3,549 $ 0 $ 30,200 $ 4,535 $ 0 Credit Credit Default Swaps 0 0 0 713 0 (6) Currency/Interest Rate Foreign Currency Swaps 33,224 2,328 (1,189) 33,224 2,374 (1,650) Foreign Currency Foreign Currency Forwards 4,041 9 (3) 3,087 0 (96) Equity Equity Options 467,000 34,673 (26,676) 441,725 41,582 (27,350) Total Derivatives Not Qualifying as Hedge Accounting Instruments: $ 534,465 $ 40,559 $ (27,868) $ 508,949 $ 48,491 $ (29,102) Total Derivatives(1)(2) $ 655,650 $ 42,873 $ (31,159) $ 635,755 $ 50,895 $ (36,119) (1) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $834 million and $1,195 million as of June 30, 2021 and December 31, 2020, respectively included in “Future policy benefits” and $152 million and $154 million as of June 30, 2021 and December 31, 2020, respectively included in “Policyholders’ account balances". The fair value of the related reinsurance, included in "Reinsurance recoverables" or "Other liabilities" was an asset of $834 million and $1,195 million as of June 30, 2021 and December 31, 2020, respectively. (2) Recorded in "Other invested assets" and "Payables to parent and affiliates" on the Unaudited Interim Statements of Financial Position. Offsetting Assets and Liabilities The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim 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 Unaudited Interim Statements of Financial Position. June 30, 2021 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Offsetting of Financial Liabilities: Derivatives $ 31,159 $ (31,159) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 31,159 $ (31,159) $ 0 $ 0 $ 0 December 31, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Offsetting of Financial Liabilities: Derivatives $ 36,119 $ (36,119) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 36,119 $ (36,119) $ 0 $ 0 $ 0 (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 and Note 9. 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 Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 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 or equity 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. Three Months Ended June 30, 2021 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 45 $ 375 $ (125) $ 2,145 Total cash flow hedges 45 375 (125) 2,145 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 315 0 0 0 Currency (16) 0 0 0 Currency/Interest Rate 637 0 (1) 0 Credit 0 0 0 0 Equity 2,484 0 0 0 Embedded Derivatives (19,731) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (16,311) 0 (1) 0 Total $ (16,266) $ 375 $ (126) $ 2,145 Six Months Ended June 30, 2021 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 37 $ 776 $ 33 $ 3,689 Total cash flow hedges 37 776 33 3,689 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (512) 0 0 0 Currency 95 0 0 0 Currency/Interest Rate 640 0 (6) 0 Credit (4) 0 0 0 Equity 4,449 0 0 0 Embedded Derivatives (5,001) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (333) 0 (6) 0 Total $ (296) $ 776 $ 27 $ 3,689 Three Months Ended June 30, 2020 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 0 $ 488 $ (324) $ (5,608) Total cash flow hedges 0 488 (324) (5,608) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 254 0 0 0 Currency (42) 0 0 0 Currency/Interest Rate (963) 0 1 0 Credit (69) 0 0 0 Equity 5,727 0 0 0 Embedded Derivatives (12,400) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (7,493) 0 1 0 Total $ (7,493) $ 488 $ (323) $ (5,608) Six Months Ended June 30, 2020 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 26 $ 966 $ 681 $ 10,403 Total cash flow hedges 26 966 681 10,403 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 2,093 0 0 0 Currency 31 0 0 0 Currency/Interest Rate 3,564 0 20 0 Credit (69) 0 0 0 Equity (4,657) 0 0 0 Embedded Derivatives 5,390 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 6,352 0 20 0 Total $ 6,378 $ 966 $ 701 $ 10,403 (1) Net change in AOCI. Presented below is a rollforward of current period cash flow hedges in AOCI before taxes: (in thousands) Balance, December 31, 2020 $ (2,998) Amount recorded in AOCI Currency/Interest Rate 4,536 Total amount recorded in AOCI 4,536 Amount reclassified from AOCI to income Currency/Interest Rate (846) Total amount reclassified from AOCI to income (846) Balance, June 30, 2021 $ 692 . The changes in fair value of cash flow hedges are deferred in AOCI and are included in "Net unrealized investment gains (losses)" in the Unaudited Interim Statements of Operations and Comprehensive Income (Loss); these amounts are then reclassified to earnings when the hedged item affects earnings. Using June 30, 2021 values, it is estimated that a pre-tax gain of $1.5 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending June 30, 2022. The exposures the Company is hedging with these qualifying cash flow hedges include the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. There were no material amounts reclassified from AOCI 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. Credit Derivatives The Company has no exposure from credit derivative positions where it has written credit protection as of June 30, 2021 and December 31, 2020. The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. The Company has outstanding notional amounts of $0 million and $0.7 million reported as of June 30, 2021 and December 31, 2020, respectively with a fair value of $0 million for both periods. Counterparty Credit Risk The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by entering into derivative transactions with its affiliate, Prudential Global Funding LLC (“PGF”), related to its over-the-counter ("OTC") derivatives. PGF, in turn, manages its credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreement, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single-party credit exposures which are subject to periodic management review. Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
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. 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. 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. For a discussion of the Company's valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 5 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. 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. June 30, 2021 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 $ 0 $ 13,911 $ 0 $ $ 13,911 Obligations of U.S. states and their political subdivisions 0 181,293 0 181,293 Foreign government bonds 0 101,476 0 101,476 U.S. corporate public securities 0 989,555 0 989,555 U.S. corporate private securities 0 227,411 423 227,834 Foreign corporate public securities 0 104,371 0 104,371 Foreign corporate private securities 0 133,667 22,320 155,987 Asset-backed securities(2) 0 16,869 0 16,869 Commercial mortgage-backed securities 0 150,056 0 150,056 Residential mortgage-backed securities 0 3,300 0 3,300 Subtotal 0 1,921,909 22,743 1,944,652 Fixed maturities, trading 0 18,515 0 18,515 Equity securities 0 125 5,904 6,029 Cash equivalents 0 34,739 0 34,739 Other invested assets(3) 0 42,873 0 (31,159) 11,714 Reinsurance recoverables 0 0 834,207 834,207 Receivables from parent and affiliates 0 798 0 798 Subtotal excluding separate account assets 0 2,018,959 862,854 (31,159) 2,850,654 Separate account assets(4)(5) 0 15,620,579 0 15,620,579 Total assets $ 0 $ 17,639,538 $ 862,854 $ (31,159) $ 18,471,233 Future policy benefits(6) $ 0 $ 0 $ 834,207 $ $ 834,207 Policyholders' account balances 0 0 152,149 152,149 Payables to parent and affiliates 0 31,159 0 (31,159) 0 Total liabilities $ 0 $ 31,159 $ 986,356 $ (31,159) $ 986,356 December 31, 2020 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 $ 0 $ 11,655 $ 0 $ $ 11,655 Obligations of U.S. states and their political subdivisions 0 182,626 0 182,626 Foreign government bonds 0 92,636 0 92,636 U.S. corporate public securities 0 949,585 0 949,585 U.S. corporate private securities 0 245,194 424 245,618 Foreign corporate public securities 0 70,347 0 70,347 Foreign corporate private securities 0 141,734 23,621 165,355 Asset-backed securities(2) 0 17,189 0 17,189 Commercial mortgage-backed securities 0 155,418 0 155,418 Residential mortgage-backed securities 0 3,766 0 3,766 Subtotal 0 1,870,150 24,045 1,894,195 Fixed maturities, trading 0 19,269 0 19,269 Equity securities 0 123 6,095 6,218 Cash equivalents 0 60,879 0 60,879 Other invested assets(3) 0 50,895 0 (36,114) 14,781 Reinsurance recoverables 0 0 1,195,469 1,195,469 Receivables from parent and affiliates 0 815 0 815 Subtotal excluding separate account assets 0 2,002,131 1,225,609 (36,114) 3,191,626 Separate account assets(4)(5) 0 15,044,796 0 15,044,796 Total assets $ 0 $ 17,046,927 $ 1,225,609 $ (36,114) $ 18,236,422 Future policy benefits(6) $ 0 $ 0 $ 1,195,469 $ $ 1,195,469 Policyholders' account balances 0 0 153,937 153,937 Payables to parent and affiliates 0 36,119 0 (36,119) 0 Total liabilities $ 0 $ 36,119 $ 1,349,406 $ (36,119) $ 1,349,406 (1) “Netting” amounts represent cash collateral of $0 million and $0.0 million as of June 30, 2021 and December 31, 2020, respectively. (2) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types. (3) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of June 30, 2021 and December 31, 2020, the fair values of such investments were $2.9 million and $2.8 million, respectively. (4) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund, for which fair value is measured at NAV per share (or its equivalent). At June 30, 2021 and December 31, 2020, the fair value of such investments was $2,160 million and $2,073 million, respectively. (5) 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 Unaudited Interim Statements of Financial Position. (6) As of June 30, 2021, the net embedded derivative liability position of $834 million includes $66 million of embedded derivatives in an asset position and $900 million of embedded derivatives in a liability position. As of December 31, 2020, the net embedded derivative liability position of $1,195 million includes $51 million of embedded derivatives in an asset position and $1,246 million of embedded derivatives in a liability position. 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. June 30, 2021 Fair Value Valuation Unobservable Minimum Maximum Weighted Impact of Increase in Input on Fair (in thousands) Assets: Corporate securities(2) $ 22,743 Discounted cash flow Discount rate 2.15 % 5.37 % 2.60 % Decrease Reinsurance recoverables $ 834,207 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 834,207 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.05 % 1.12 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote (8) below. Mortality rate (9) 0 % 15 % Decrease Equity volatility curve 16 % 25 % Increase Policyholders' account balances(4) $ 152,149 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.05 % 1.12 % Decrease Mortality rate (9) 0 % 23 % Decrease Equity volatility curve 11 % 26 % Increase December 31, 2020 Fair Value Valuation Unobservable Inputs Minimum Maximum Weighted Impact of Increase (in thousands) Assets: Corporate securities(2) $ 24,045 Discounted cash flow Discount rate 1.84 % 6.55 % 2.32 % Decrease Reinsurance recoverables $ 1,195,469 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 1,195,469 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.06 % 1.17 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote(8) below. Mortality rate(9) 0 % 15 % Decrease Equity volatility curve 18 % 26 % Increase Policyholders' account balances(4) $ 153,937 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.06 % 1.17 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 15 % 30 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table. (2) Includes assets classified as fixed maturities available-for-sale. (3) Future policy benefits primarily represent general account liabilities for the 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. (4) Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life products that 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. (5) Lapse rates for contracts with living benefit guarantees 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 for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives. (6) The spread over the London Inter-Bank Offered Rate ("LIBOR") swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt. (7) 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. (8) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of June 30, 2021 and December 31, 2020, the minimum withdrawal rate assumption is 76% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%. (9) The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. 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. During weaker economic cycles, as the expectations of default increases, credit spreads widen, which results in a decrease in fair value. Future Policy Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is 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 that 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. Changes in Level 3 Assets and Liabilities – The following tables describe 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. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 22,331 $ 449 $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ 449 Other assets: Equity securities 5,857 47 0 0 0 0 0 0 0 5,904 47 Reinsurance recoverables 660,533 145,996 27,678 0 0 0 0 0 0 834,207 154,090 Liabilities: Future policy benefits (660,533) (145,996) 0 0 (27,678) 0 0 0 0 (834,207) (154,090) Policyholders' account balances(4) (136,773) (19,713) 0 0 0 4,337 0 0 0 (152,149) (17,642) Three Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 449 $ 0 $ 0 $ 0 $ 449 Other assets: Equity securities 0 47 0 0 0 47 0 Reinsurance recoverables 145,996 0 0 0 154,090 0 0 Liabilities: Future policy benefits (145,996) 0 0 0 (154,090) 0 0 Policyholders' account balances (19,713) 0 0 0 (17,642) 0 0 Six Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 24,045 $ (1,265) $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ (1,264) Other assets: Equity securities 6,095 (191) 0 0 0 0 0 0 0 5,904 (191) Reinsurance recoverables 1,195,469 (416,724) 55,462 0 0 0 0 0 0 834,207 (390,243) Liabilities: Future policy benefits (1,195,469) 416,724 0 0 (55,462) 0 0 0 0 (834,207) 390,243 Policyholders' account balances(4) (153,937) (5,671) 0 0 0 7,459 0 0 0 (152,149) (1,365) Six Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ (1,265) $ 0 $ 0 $ 0 $ (1,264) Other assets: Equity securities 0 (191) 0 0 0 (191) 0 Reinsurance recoverables (416,724) 0 0 0 (390,243) 0 0 Liabilities: Future policy benefits 416,724 0 0 0 390,243 0 0 Policyholders' account balances (5,671) 0 0 0 (1,365) 0 0 Three Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 18,274 $ 1,959 $ 0 $ (1) $ 0 $ 0 $ 0 $ 0 $ 0 $ 20,232 $ 1,959 Other assets: Equity securities 6,840 347 0 0 0 0 0 0 0 7,187 348 Reinsurance recoverables 1,868,539 (153,382) 26,767 0 0 0 0 0 0 1,741,924 (141,848) Liabilities: Future policy benefits (1,868,539) 153,382 0 0 (26,767) 0 0 0 0 (1,741,924) 141,848 Policyholders' account balances(4) (123,608) (11,691) 0 0 (7,943) 0 0 0 0 (143,242) (12,621) Three Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 1,959 $ 0 $ 0 $ 0 $ 1,959 Other assets: Equity securities 0 347 0 0 0 348 0 Reinsurance recoverables (153,382) 0 0 0 (141,848) 0 0 Liabilities: Future policy benefits 153,382 0 0 0 141,848 0 0 Policyholders' account balances (11,691) 0 0 0 (12,621) 0 0 Six Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 185 $ 0 $ (861) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 20,232 $ 190 Other assets: Equity securities 7,305 (118) 0 0 0 0 0 0 0 7,187 (118) Reinsurance recoverables 760,558 928,281 53,085 0 0 0 0 0 0 1,741,924 940,465 Liabilities: Future policy benefits (760,558) (928,281) 0 0 (53,085) 0 0 0 0 (1,741,924) (940,465) Policyholders' account balances(4) (133,793) 5,249 0 0 (14,698) 0 0 0 0 (143,242) 5,039 Six Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 145 $ 8 $ 0 $ 0 $ 190 Other assets: Equity securities 0 (118) 0 0 0 (118) 0 Reinsurance recoverables 928,281 0 0 0 940,465 0 0 Liabilities: Future policy benefits (928,281) 0 0 0 (940,465) 0 0 Policyholders' account balances 5,249 0 0 0 5,039 0 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) 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. (3) Includes U.S. corporate public, U.S. corporate private and foreign corporate private securities. (4) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. Fair Value of Financial Instruments 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 Unaudited Interim Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value. June 30, 2021 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 136,372 $ 136,372 $ 127,258 Policy loans 0 0 211,669 211,669 211,669 Cash and cash equivalents 7,139 0 0 7,139 7,139 Accrued investment income 0 22,154 0 22,154 22,154 Reinsurance recoverables 0 0 29,063 29,063 27,733 Receivables from parent and affiliates 0 35,684 0 35,684 35,684 Other assets 0 3,992 0 3,992 3,992 Total assets $ 7,139 $ 61,830 $ 377,104 $ 446,073 $ 435,629 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 220,818 $ 41,272 $ 262,090 $ 260,760 Cash collateral for loaned securities 0 2,725 0 2,725 2,725 Payables to parent and affiliates 0 14,765 0 14,765 14,765 Other liabilities 0 44,856 0 44,856 44,856 Total liabilities $ 0 $ 283,164 $ 41,272 $ 324,436 $ 323,106 December 31, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 140,921 $ 140,921 $ 133,115 Policy loans 0 0 212,163 212,163 212,163 Cash and cash equivalents 7,648 0 0 7,648 7,648 Accrued investment income 0 21,248 0 21,248 21,248 Reinsurance recoverables 0 0 28,654 28,654 26,915 Receivables from parent and affiliates 0 30,246 0 30,246 30,246 Other assets 0 6,205 0 6,205 6,205 Total assets $ 7,648 $ 57,699 $ 381,738 $ 447,085 $ 437,540 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 220,527 $ 41,341 $ 261,868 $ 260,128 Cash collateral for loaned securities 0 2,725 0 2,725 2,725 Payables to parent and affiliates 0 16,250 0 16,250 16,250 Other liabilities 0 50,335 0 50,335 50,335 Total liabilities $ 0 $ 289,837 $ 41,341 $ 331,178 $ 329,438 (1) Carrying values presented herein differ from those in the Company’s Unaudited Interim 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company uses a full-year projected effective tax rate approach to calculate year-to-date taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Income tax expense (benefit)” divided by projected “Income (loss) from operations before income taxes". The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year. The Company's income tax provision amounted to an income tax expense of $2.3 million, or 7.09% of income (loss) from operations before income taxes in the first six months of 2021, compared to an income tax benefit of $(6.7) million, or (36.98)%, in the first six months of 2020. The Company’s current and prior effective tax rates differed from the U.S. statutory tax rate of 21% primarily due to non-taxable investment income and tax credits. |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE The Company participates in reinsurance with its affiliates Prudential Arizona Reinsurance Captive Company (“PARCC”), Prudential Arizona Reinsurance Term Company (“PAR Term”), Prudential Arizona Reinsurance Universal Company (“PAR U”), Prudential Term Reinsurance Company (“Term Re”) and Dryden Arizona Reinsurance Term Company (“DART”), its parent companies, Pruco Life and Prudential Insurance, as well as third parties. The reinsurance agreements provide risk diversification and additional capacity for future growth, limit the maximum net loss potential, manage statutory capital, and facilitate the Company's capital market hedging program. 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. 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 policy charges and fee income ceded for universal life and variable annuity 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, particularly reinsurance agreements involving living benefit guarantees. The Company has entered into a reinsurance agreement to transfer the risk related to living benefit guarantees on variable annuities to Prudential Insurance. These reinsurance agreements are derivatives and have been accounted for in the same manner as embedded derivatives and the changes in the fair value of these derivatives are recognized through “Realized investment gains (losses), net”. See Note 4 for additional information related to the accounting for embedded derivatives. Reinsurance amounts included in the Company’s Unaudited Interim Statements of Financial Position as of June 30, 2021 and December 31, 2020 were as follows: June 30, 2021 December 31, 2020 (in thousands) Reinsurance recoverables $ 3,541,640 $ 3,860,612 Policy loans (21,593) (21,466) Deferred policy acquisition costs (656,672) (661,732) Deferred sales inducements (39,658) (40,980) Other assets 13,886 15,172 Other liabilities 126,082 127,234 Reinsurance recoverables by counterparty are broken out below: June 30, 2021 December 31, 2020 (in thousands) Prudential Insurance $ 1,357,298 $ 1,726,545 PAR U 1,158,414 1,119,545 PARCC 433,487 448,884 PAR Term 239,749 236,561 Term Re 243,094 232,398 DART 71,543 69,268 Pruco Life 35,475 24,744 Unaffiliated 2,580 2,667 Total reinsurance recoverables $ 3,541,640 $ 3,860,612 Reinsurance amounts, included in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Premiums: Direct $ 64,457 $ 62,975 $ 128,807 $ 127,608 Ceded (57,371) (57,846) (114,162) (117,285) Net premiums 7,086 5,129 14,645 10,323 Policy charges and fee income: Direct 99,420 94,937 206,958 204,009 Ceded(1) (76,496) (76,694) (155,716) (161,797) Net policy charges and fee income 22,924 18,243 51,242 42,212 Net investment income: Direct 25,101 20,874 48,854 38,066 Ceded (203) (191) (411) (418) Net investment income 24,898 20,683 48,443 37,648 Asset administration fees: Direct 11,134 9,290 21,940 19,015 Ceded (8,994) (7,744) (17,774) (15,904) Net asset administration fees 2,140 1,546 4,166 3,111 Realized investment gains (losses), net: Direct (162,428) 146,576 415,419 (922,872) Ceded 145,984 (154,088) (416,031) 928,425 Realized investment gains (losses), net (16,444) (7,512) (612) 5,553 Policyholders’ benefits (including change in reserves): Direct 107,782 126,289 217,945 257,575 Ceded(2) (96,493) (112,846) (187,821) (227,446) Net policyholders’ benefits (including change in reserves) 11,289 13,443 30,124 30,129 Interest credited to policyholders’ account balances: Direct 15,148 16,061 36,460 38,319 Ceded (5,850) (4,074) (16,451) (16,141) Net interest credited to policyholders’ account balances 9,298 11,987 20,009 22,178 Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization (36,633) (24,163) (73,062) (99,696) (1) Includes $0.0 million of unaffiliated activity for both the three months ended June 30, 2021 and 2020, respectively, and $0.0 million for both the six months ended June 30, 2021 and 2020. (2) Includes $1.1 million and $0.5 million of unaffiliated activity for the three months ended June 30, 2021 and 2020, respectively, and $0.1 million and $1.5 million for the six months ended June 30, 2021 and 2020, respectively. The gross and net amounts of life insurance face amount in force as of June 30, 2021 and 2020 were as follows: 2021 2020 (in thousands) Direct gross life insurance face amount in force $ 155,482,024 $ 151,576,594 Reinsurance ceded (140,507,672) (138,189,156) Net life insurance face amount in force $ 14,974,352 $ 13,387,438 Information regarding significant affiliated reinsurance agreements is described below. 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. Effective July 1, 2017, this agreement was terminated for certain new business, primarily Universal Life business, and such business was reinsured to Pruco Life under a yearly renewable term reinsurance agreement. As of January 1, 2020, the remaining portions of new business (specifically Term policies) ceased being reinsured by the Company to Prudential Insurance, and a separate yearly renewable term reinsurance agreement was established with Pruco Life for Term policies. Effective April 1, 2016, the Company entered into a reinsurance agreement with Prudential Insurance to reinsure its variable annuity base contracts, along with the living benefit guarantees. As of December 31, 2020, the Company discontinued the sales of traditional variable annuities with guaranteed living benefit riders. This discontinuation has no impact on the reinsurance agreement between Prudential Insurance and the Company. PAR U Effective July 1, 2012, the Company reinsures an amount equal to 95% of all risks associated with Universal Protector policies having no-lapse guarantees as well as certain of its universal policies, with effective dates through December 31, 2019, excluding those policies that are subject to principle-based reserving. 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 risks under its term life insurance policies with effective dates on or after January 1, 2014 through December 31, 2017, through an automatic coinsurance agreement with Term Re. Pruco Life Effective July 1, 2017, the Company entered into a yearly renewable term reinsurance agreement with Pruco Life for new business, primarily covering Universal Life policies. Effective January 1, 2020, the Company entered in a similar yearly renewable term reinsurance agreement with Pruco Life for new business relating to Term policies. Under these agreements the majority of all mortality risk is ceded to Pruco Life. The Company also reinsures certain Corporate Owned Life Insurance (“COLI”) policies with Pruco Life. Through March 31, 2016, the Company reinsured Prudential Defined Income ("PDI") living benefit guarantees with Pruco Life. Effective April 1, 2016, the Company recaptured PDI living benefit guarantees from Pruco Life and reinsured them, together with the related variable annuity base contracts, with Prudential Insurance. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity | EQUITY Accumulated Other Comprehensive Income (Loss) AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Statements of Operations and Comprehensive Income (Loss). The balance of and changes in each component of AOCI as of and for the six months ended June 30, 2021 and 2020, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2020 $ (783) $ 186,190 $ 185,407 Change in OCI before reclassifications (80) (51,247) (51,327) Amounts reclassified from AOCI 0 (277) (277) Income tax benefit (expense) 17 10,819 10,836 Balance, June 30, 2021 $ (846) $ 145,485 $ 144,639 Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2019 $ (981) $ 86,616 $ 85,635 Change in OCI before reclassifications 41 77,489 77,530 Amounts reclassified from AOCI 0 (1,030) (1,030) Income tax benefit (expense) (9) (16,057) (16,066) Balance, June 30, 2020 $ (949) $ 147,018 $ 146,069 (1) Includes cash flow hedges of $1 million and $(3) million as of June 30, 2021 and December 31, 2020, respectively, and $14 million and $3 million as of June 30, 2020 and December 31, 2019, respectively . Reclassifications out of Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended 2021 2020 2021 2020 (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/ Interest rate(3) $ 294 $ 164 $ 846 $ 1,673 Net unrealized investment gains (losses) on available-for-sale securities (427) (41) (569) (643) Total net unrealized investment gains (losses)(4) (133) 123 277 1,030 Total reclassifications for the period $ (133) $ 123 $ 277 $ 1,030 (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 4 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on DAC and other costs, future policy benefits, policyholders’ account balances and other liabilities. Net Unrealized Investment Gains (Losses) Net unrealized investment gains (losses) on available-for-sale fixed maturity securities and certain other invested assets and other assets are included in the Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from OCI those items that are included as part of “Net income” for a period that had been part of OCI in earlier periods. There are no amounts related to net unrealized investment gains (losses) on available-for-sale fixed maturity securities on which an allowance for credit losses has been recognized as of June 30, 2021. The amounts for the periods indicated below represent all other net unrealized investment gains (losses): All Other Net Unrealized Investment Gains (Losses) in AOCI Net Unrealized Gains (Losses) on DAC and Other Costs(2) Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(3) Income Tax Accumulated Other Comprehensive Balance, December 31, 2020 $ 255,724 $ 28,241 $ (48,283) $ (49,492) $ 186,190 Net investment gains (losses) on investments arising during the period (56,497) 0 0 11,864 (44,633) Reclassification adjustment for (gains) losses included in net income (277) 0 0 58 (219) Impact of net unrealized investment (gains) losses 0 (4,592) 9,842 (1,103) 4,147 Balance, June 30, 2021 $ 198,950 $ 23,649 $ (38,441) $ (38,673) $ 145,485 (1) Includes cash flow hedges. See Note 4 for information on cash flow hedges. (2) "Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
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 The majority 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-based awards program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock-based awards program was $0.0 million for both the three months ended June 30, 2021 and 2020, and $0.0 million and $0.1 million for the six months ended June 30, 2021 and 2020, respectively. The expense charged to the Company for the deferred compensation program was $0.1 million and $0.0 million for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million for both the six months ended June 30, 2021 and 2020. The Company is charged for its share of employee benefit expenses. These expenses include costs for funded and non-funded, non-contributory defined benefit pension plans. Some of these benefits are based on final 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 $0.3 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively, and $0.6 million and $1.0 million for the six months ended June 30, 2021 and 2020, respectively. The Company is also charged for its share of the costs associated with welfare plans issued by Prudential Insurance. These expenses include costs related to medical, dental, life insurance and disability. The Company's share of net expense for the welfare plans was $0.3 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively, and $0.7 million and $1.1 million for the six months ended June 30, 2021 and 2020, respectively. Prudential Insurance sponsors voluntary savings plans for its employee 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 $0.1 million and $0.2 million for the three months ended June 30, 2021 and 2020, respectively, and $0.2 million and $0.4 million for the six months ended June 30, 2021 and 2020, respectively. 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, Inc. (“PAD”) in consideration for PAD’s marketing and underwriting of the Company’s annuity products. Commissions and fees are paid by PAD to broker-dealers who sell the Company’s annuity products. Commissions and fees paid by the Company to PAD were $9 million and $12 million for the three months ended June 30, 2021 and 2020, respectively, and $18 million and $29 million for the six months ended June 30, 2021 and 2020, respectively. The Company is charged for its share of corporate expenses incurred by Prudential Financial to benefit its businesses, such as advertising, executive oversight, external affairs and philanthropic activity. The Company’s share of corporate expenses was $2 million and $1 million for the three months ended June 30, 2021 and 2020, respectively, and $4 million and $3 million for the six months ended June 30, 2021 and 2020, 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 policies was $3,305 million at June 30, 2021 and $3,071 million at December 31, 2020. Fees related to these COLI policies were $7 million and $6 million for the three months ended June 30, 2021 and 2020, respectively, and $14 million for both the six months ended June 30, 2021 and 2020. The Company retains 10% of the mortality risk associated with these COLI policies up to $0.1 million per individual policy. Affiliated Investment Management Expenses In accordance with an agreement with PGIM, Inc. (“PGIM”), the Company pays investment management expenses to PGIM who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PGIM related to this agreement were $0.7 million for both the three months ended June 30, 2021 and 2020, and $1.4 million and $1.3 million for the six months ended June 30, 2021 and 2020, respectively. These expenses are recorded as “Net investment income” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss). 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. See Note 4 for additional information. Joint Ventures The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. "Other invested assets" includes $43 million and $41 million as of June 30, 2021 and December 31, 2020, respectively. "Net investment income" related to these ventures includes gains of $0.7 million and $2.0 million for the three months ended June 30, 2021 and 2020, respectively, and gains of $1.5 million and $0.3 million for the six months ended June 30, 2021 and 2020, respectively. Affiliated Asset Administration Fee Income The Company has a revenue sharing agreement with AST Investment Services, Inc. ("ASTISI") and PGIM Investments LLC ("PGIM Investments") whereby the Company receives fee income based on policyholders' separate account balances invested in the Advanced Series Trust. Income rec eived from ASTISI and PGIM Investments related to this agreement was $9 million and $8 million for the three months ended June 30, 2021 and 2020, respectively, and $18 million and $16 million for the six months ended June 30, 2021 and 2020, respectively. These revenues are recorded as “Asset administration fees” in the Company's Unaudited Interim Statements of Operations and Comprehensive Income (Loss). The Company has a revenue sharing agreement with PGIM Investments, whereby the Company receives fee income based on policyholders' separate account balances invested in The Prudential Series Fund. Income received from PGIM Investments related to this agreement was $2 million and $1 million for the three months ended June 30, 2021 and 2020, respectively, and $4 million and $3 million for the six months ended June 30, 2021 and 2020, respectively. These revenues are recorded as “Asset administration fees” in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss). Affiliated Notes Receivable Affiliated notes receivable included in “Receivables from parent and affiliates” at June 30, 2021 and December 31, 2020 were as follows: Maturity Date Interest Rates June 30, 2021 December 31, 2020 (in thousands) U.S. dollar fixed rate notes 2027 0.00% - 14.85 % $ 798 $ 815 Total long-term notes receivable - affiliated(1) $ 798 $ 815 (1) All long-term notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances. The affiliated notes receivable shown above are classified as available-for-sale securities carried at fair value. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Insurance for loans due from affiliates. Accrued interest receivable related to these loans was $0.0 million at both June 30, 2021 and December 31, 2020 and is included in “Other assets”. Revenues related to these loans were $0.0 million for both the three months ended June 30, 2021 and 2020, and $0.0 million and $0.1 million for both the six months ended June 30, 2021 and 2020, respectively, and are included in “Other income”. Affiliated Asset Transfers 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 gains (losses), net", respectively. The table below shows affiliated asset trades for the six months ended June 30, 2021 and for the year ended December 31, 2020. Affiliate Date Transaction Security Type Fair Value Book Value APIC, Net of Tax Increase/(Decrease) Realized (in thousands) Prudential Insurance April 2020 Purchase Fixed Maturities $ 3,485 $ 3,320 $ (130) $ 0 Debt Agreements The Company is authorized to borrow funds up to $200 million from affiliates to meet its capital and other funding needs. As of June 30, 2021 and December 31, 2020, there was no debt outstanding. The total interest expense to the Company related to loans payable to affiliates was $0.0 million for both the three months ended June 30, 2021 and 2020, and $0.0 million for both the six months ended June 30, 2021 and 2020. Contributed Capital and Dividends Through June 2021, the Company received a capital contribution in the amount of $1 million from Pruco Life. In March 2020, the Company received a capital contribution in the amount of $85 million from Pruco Life. Through June 2021 and December 2020, the Company did not pay any dividends to Pruco Life. Reinsurance with Affiliates As discussed in Note 6, the Company participates in reinsurance transactions with certain affiliates. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | COMMITMENTS AND CONTINGENT LIABILITIES Commitments The Company has made commitments to fund commercial mortgage loans. As of June 30, 2021, the outstanding balance on these commitments was $3 million and no outstanding balance as of December 31, 2020. This amount includes unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was no allowance for credit losses as of either June 30, 2021 or December 31, 2020. For either the three or six months ended June 30, 2021, there was no change in allowance. There was a change in allowance of $0.0 million for both the three and six months ended June 30, 2020. The Company has made commitments to purchase or fund investments, mostly private fixed maturities. As of June 30, 2021 and December 31, 2020, $64 million and $74 million, respectively, of these commitments were outstanding. The amounts include unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for the three or six months ended June 30, 2021 or 2020. Contingent Liabilities On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost 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. The Company estimates that as of June 30, 2021, 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 th an $10 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. The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 14 to the Company's Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and should be read in conjunction with the complete descriptions provided in the Form 10-K. Regulatory Variable Products The Company has received regulatory inquiries and requests for information from state and federal regulators, including a subpoena from the U.S. Securities and Exchange Commission, concerning the appropriateness of variable product sales and replacement activity. The Company is cooperating with regulators and may become subject to additional regulatory inquiries and other actions related to 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 statements. 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 statements. |
Significant Accounting Polici_2
Significant Accounting Policies and Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Interim Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
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; policyholders' account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life products; valuation of investments including derivatives, measurement of allowance for credit losses, 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 accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Adoption of New Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of June 30, 2021, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material. |
Future Adoption Of New Accounting Pronouncements | ASU issued but not yet adopted as of June 30, 2021 — ASU 2018-12 ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Financial Statements and Notes to the Financial Statements. In October 2019, the FASB issued ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date to affirm its decision to defer the effective date of ASU 2018-12 to January 1, 2022 (with early adoption permitted), representing a one year extension from the original effective date of January 1, 2021. As a result of the COVID-19 pandemic, in November 2020 the FASB issued ASU 2020-11, Financial Services-Insurance (Topic 944): Effective Date and Early Application to defer for an additional one year the effective date of ASU 2018-12 from January 1, 2022 to January 1, 2023, and to provide transition relief to facilitate the early adoption of the ASU. The transition relief would allow large calendar-year public companies that early adopt ASU 2018-12 to apply the guidance either as of January 1, 2020 or January 1, 2021 (and record transition adjustments as of January 1, 2020 or January 1, 2021, respectively) in the 2022 financial statements. Companies that do not early adopt ASU 2018-12 would apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the 2023 financial statements. The Company currently intends to adopt ASU 2018-12 effective January 1, 2023 using the modified retrospective transition method where permitted. ASU 2018-12 will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other less significant changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to the pattern of earnings emergence following the transition date. ASU 2018-12 Amended Topic Description Method of adoption Effect on the financial statements or other significant matters Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Statements of Operations. An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in Accumulated other comprehensive income (loss) ("AOCI") or (2) a full retrospective transition method. The Company currently intends to adopt this guidance effective January 1, 2023 using the modified retrospective transition method. The impacts of electing such method are currently under assessment. Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield, which will be updated each quarter with the impact recorded through OCI. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the discount rate assumptions. As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of either the beginning of the prior year (if early adoption is elected) or the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI. As noted above, the Company currently intends to adopt the guidance for the liability for future policy benefits effective January 1, 2023 using the modified retrospective transition method. Upon adoption, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between discount rates locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed. Amortization of DAC and other balances Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements ("DSI"), to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability. An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity may choose to apply the amendments to contracts in force as of the beginning of the prior year (if early adoption is elected) or as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its liability for future policy benefits, as described above, it is required to also use a full retrospective transition method for DAC and other balances. The Company currently intends to adopt this guidance effective January 1, 2023 using the modified retrospective transition method. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI. Market Risk Benefits ("MRB") Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value, and record MRB assets and liabilities separately on the Statements of Financial Position. Changes in fair value of market risk benefits are recorded in net income, except for the portion of the change in MRB liabilities attributable to changes in an entity’s non-performance risk ("NPR"), which is recognized in OCI. An entity shall adopt the guidance for market risk benefits using the retrospective transition method which includes a cumulative-effect adjustment on the balance sheet as of either the beginning of prior year (if early adoption is elected) or the beginning of the earliest period presented. An entity shall maximize the use of relevant observable information and minimize the use of unobservable information in determining the balance of the market risk benefits upon adoption. The Company currently intends to adopt this guidance effective January 1, 2023 using the retrospective transition method. Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Investments [Abstract] | |
Fixed Maturities, Available-for-sale Securities | The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated: June 30, 2021 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 13,014 $ 897 $ 0 $ 0 $ 13,911 Obligations of U.S. states and their political subdivisions 162,022 19,271 0 0 181,293 Foreign government bonds 92,936 9,102 562 0 101,476 U.S. public corporate securities 868,806 123,295 2,546 0 989,555 U.S. private corporate securities 209,626 18,297 89 0 227,834 Foreign public corporate securities 96,454 8,588 671 0 104,371 Foreign private corporate securities 145,604 11,493 1,110 0 155,987 Asset-backed securities(1) 16,252 618 1 0 16,869 Commercial mortgage-backed securities 139,431 10,627 2 0 150,056 Residential mortgage-backed securities(2) 2,807 493 0 0 3,300 Total fixed maturities, available-for-sale $ 1,746,952 $ 202,681 $ 4,981 $ 0 $ 1,944,652 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. December 31, 2020 Amortized Gross Gross Allowance for Credit Losses Fair (in thousands) Fixed maturities, available-for-sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 10,638 $ 1,017 $ 0 $ 0 $ 11,655 Obligations of U.S. states and their political subdivisions 162,227 20,399 0 0 182,626 Foreign government bonds 79,318 13,347 29 0 92,636 U.S. public corporate securities 791,616 158,087 118 0 949,585 U.S. private corporate securities 222,279 23,564 225 0 245,618 Foreign public corporate securities 60,376 10,022 51 0 70,347 Foreign private corporate securities 148,103 17,892 640 0 165,355 Asset-backed securities(1) 16,535 666 12 0 17,189 Commercial mortgage-backed securities 141,564 13,854 0 0 155,418 Residential mortgage-backed securities(2) 3,214 552 0 0 3,766 Total fixed maturities, available-for-sale $ 1,635,870 $ 259,400 $ 1,075 $ 0 $ 1,894,195 (1) Includes credit-tranched securities collateralized by loan obligations and education loans. (2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. |
Duration Of Gross Unrealized Losses On Fixed Maturity Securities | The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated: June 30, 2021 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 20,013 $ 562 $ 0 $ 0 $ 20,013 $ 562 U.S. public corporate securities 79,595 2,546 0 0 79,595 2,546 U.S. private corporate securities 0 0 5,179 89 5,179 89 Foreign public corporate securities 14,937 671 0 0 14,937 671 Foreign private corporate securities 0 0 11,547 1,110 11,547 1,110 Asset-backed securities 1,387 1 0 0 1,387 1 Commercial mortgage-backed securities 3,809 2 0 0 3,809 2 Total fixed maturities, available-for-sale $ 119,741 $ 3,782 $ 16,726 $ 1,199 $ 136,467 $ 4,981 December 31, 2020 Less Than Twelve Months Twelve Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross (in thousands) Fixed maturities, available-for-sale: Foreign government bonds $ 2,122 $ 29 $ 0 $ 0 $ 2,122 $ 29 U.S. public corporate securities 10,416 118 0 0 10,416 118 U.S. private corporate securities 9,635 225 0 0 9,635 225 Foreign public corporate securities 1,611 51 0 0 1,611 51 Foreign private corporate securities 0 0 12,017 640 12,017 640 Asset-backed securities 988 2 3,941 10 4,929 12 Residential mortgage-backed securities 0 0 0 0 0 0 Total fixed maturities, available-for-sale $ 24,772 $ 425 $ 15,958 $ 650 $ 40,730 $ 1,075 |
Fixed Maturities Classified by Contractual Maturity Date | The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated: June 30, 2021 Amortized Cost Fair Value (in thousands) Fixed maturities, available-for-sale: Due in one year or less $ 31,651 $ 31,421 Due after one year through five years 237,435 253,149 Due after five years through ten years 148,576 161,339 Due after ten years 1,170,800 1,328,518 Asset-backed securities 16,252 16,869 Commercial mortgage-backed securities 139,431 150,056 Residential mortgage-backed securities 2,807 3,300 Total fixed maturities, available-for-sale $ 1,746,952 $ 1,944,652 |
Sources of Fixed Maturity Proceeds, Realized Investment Gains (Losses), and Losses on Impairments | The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities, available-for-sale: Proceeds from sales(1) $ 9,513 $ 885 $ 12,435 $ 2,295 Proceeds from maturities/prepayments 20,780 5,361 30,866 17,615 Gross investment gains from sales and maturities 32 2 57 26 Gross investment losses from sales and maturities (459) (44) (626) (44) Write-downs recognized in earnings(2) 0 0 0 (625) (Addition to) release of allowance for credit losses 0 0 0 0 (1) Includes $(0.5) million and $0.0 million of non-cash related proceeds due to the timing of trade settlements for the six months ended June 30, 2021 and 2020, respectively. (2) Amounts represent securities actively marketed for sale. |
Commercial Mortgage and Other Loans | The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated: June 30, 2021 December 31, 2020 Amount % of Total Amount % of Total Commercial mortgage and agricultural property loans by property type: Apartments/Multi-Family $ 46,065 36.1 % $ 46,755 35.0 % Hospitality 13,942 10.9 14,031 10.5 Industrial 12,260 9.6 13,936 10.4 Office 20,533 16.1 23,649 17.7 Other 16,794 13.2 16,929 12.7 Retail 15,690 12.3 15,857 11.9 Total commercial mortgage loans 125,284 98.2 131,157 98.2 Agricultural property loans 2,324 1.8 2,398 1.8 Total commercial mortgage and agricultural property loans 127,608 100.0 % 133,555 100.0 % Allowance for credit losses (350) (440) Total net commercial mortgage and other loans $ 127,258 $ 133,115 |
Allowance for Credit Losses | The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated: Three Months Ended June 30, 2021 2020 Commercial Mortgage Loans Agricultural Property Loans Total Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Allowance, beginning of period $ 466 $ 0 $ 466 $ 441 $ 1 $ 442 Addition to (release of) allowance for expected losses (116) 0 (116) 16 (1) 15 Allowance, end of period $ 350 $ 0 $ 350 $ 457 $ 0 $ 457 Six Months Ended June 30, 2021 2020 Commercial Mortgage Loans Agricultural Property Loans Total Commercial Mortgage Loans Agricultural Property Loans Total (in thousands) Allowance, beginning of period $ 440 $ 0 $ 440 $ 164 $ 1 $ 165 Cumulative effect of adoption of ASU 2016-13 0 0 0 204 0 204 Addition to (release of) allowance for expected losses (90) 0 (90) 89 (1) 88 Allowance, end of period $ 350 $ 0 $ 350 $ 457 $ 0 $ 457 |
Financing Receivable Credit Quality Indicators | The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated: June 30, 2021 Amortized Cost by Origination Year 2021 2020 2019 2018 2017 Prior Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 6,204 $ 1,456 $ 9,036 $ 46,413 $ 63,109 60%-69.99% 820 2,198 27,778 0 1,015 25,625 57,436 70%-79.99% 0 0 1,870 0 0 1,900 3,770 80% or greater 0 0 0 0 969 0 969 Total $ 820 $ 2,198 $ 35,852 $ 1,456 $ 11,020 $ 73,938 $ 125,284 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 820 $ 2,198 $ 31,501 $ 1,456 $ 10,051 $ 67,778 $ 113,804 1.0 - 1.2x 0 0 3,354 0 969 6,160 10,483 Less than 1.0x 0 0 997 0 0 0 997 Total $ 820 $ 2,198 $ 35,852 $ 1,456 $ 11,020 $ 73,938 $ 125,284 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 60%-69.99% 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 1.0 - 1.2x 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,324 $ 2,324 December 31, 2020 Amortized Cost by Origination Year 2020 2019 2018 2017 2016 Prior Total (in thousands) Commercial Mortgage Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 6,285 $ 0 $ 6,349 $ 9,731 $ 45,261 $ 67,626 60%-69.99% 2,198 27,970 1,478 5,381 3,191 18,533 58,751 70%-79.99% 0 1,870 0 0 0 1,931 3,801 80% or greater 0 0 0 979 0 0 979 Total $ 2,198 $ 36,125 $ 1,478 $ 12,709 $ 12,922 $ 65,725 $ 131,157 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 2,198 $ 31,751 $ 1,478 $ 11,730 $ 11,872 $ 60,499 $ 119,528 1.0 - 1.2x 0 3,364 0 979 1,050 5,226 10,619 Less than 1.0x 0 1,010 0 0 0 0 1,010 Total $ 2,198 $ 36,125 $ 1,478 $ 12,709 $ 12,922 $ 65,725 $ 131,157 Agricultural Property Loans Loan-to-Value Ratio: 0%-59.99% $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 60%-69.99% 0 0 0 0 0 0 0 70%-79.99% 0 0 0 0 0 0 0 80% or greater 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 Debt Service Coverage Ratio: Greater or Equal to 1.2x $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 1.0 - 1.2x 0 0 0 0 0 0 0 Less than 1.0x 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,398 $ 2,398 |
Aging of Past Due Commercial Mortgage and Other Loans and Nonaccrual Status | The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated: June 30, 2021 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 125,284 $ 0 $ 0 $ 0 $ 125,284 $ 0 Agricultural property loans 2,324 0 0 0 2,324 0 Total $ 127,608 $ 0 $ 0 $ 0 $ 127,608 $ 0 (1) As of June 30, 2021, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. December 31, 2020 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due(1) Total Loans Non-Accrual Status(2) (in thousands) Commercial mortgage loans $ 131,157 $ 0 $ 0 $ 0 $ 131,157 $ 0 Agricultural property loans 2,398 0 0 0 2,398 0 Total $ 133,555 $ 0 $ 0 $ 0 $ 133,555 $ 0 (1) As of December 31, 2020, there were no loans in this category accruing interest. (2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Other Invested Assets | The following table sets forth the composition of “Other invested assets,” as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Company’s investment in separate accounts $ 3,550 $ 3,269 LPs/LLCs: Equity method: Private equity 49,038 38,261 Hedge funds 35,188 33,773 Real estate-related 5,164 4,625 Subtotal equity method 89,390 76,659 Fair value: Private equity 510 590 Hedge funds 61 69 Real estate-related 2,284 2,141 Subtotal fair value 2,855 2,800 Total LPs/LLCs 92,245 79,459 Derivative instruments 11,714 14,781 Total other invested assets $ 107,509 $ 97,509 |
Accrued Investment Income | The following table sets forth the composition of “Accrued investment income,” as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Fixed maturities $ 16,161 $ 15,178 Equity securities 1 1 Commercial mortgage and other loans 336 372 Policy loans 5,653 5,688 Short-term investments and cash equivalents 3 9 Total accrued investment income $ 22,154 $ 21,248 |
Net Investment Income | The following table sets forth “Net investment income” by investment type, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities, available-for-sale $ 16,624 $ 15,681 $ 32,590 $ 29,843 Fixed maturities, trading 170 121 337 242 Equity securities 91 91 182 182 Commercial mortgage and other loans 1,518 1,442 2,785 2,844 Policy loans 2,832 2,885 5,659 5,761 Other invested assets 4,673 1,370 8,916 325 Short-term investments and cash equivalents 10 56 32 359 Gross investment income 25,918 21,646 50,501 39,556 Less: investment expenses (1,020) (963) (2,058) (1,908) Net investment income $ 24,898 $ 20,683 $ 48,443 $ 37,648 |
Realized Investment Gains (Losses), Net | The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Fixed maturities(1) $ (427) $ (42) $ (569) $ (643) Commercial mortgage and other loans 116 (15) 90 (88) Other invested assets 137 1 171 (59) Derivatives (16,266) (7,493) (296) 6,378 Short term investments and cash equivalents (4) 37 (8) (35) Realized investment gains (losses), net $ (16,444) $ (7,512) $ (612) $ 5,553 (1) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading. |
Net Unrealized Gains and (Losses) on Investments | The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated: June 30, 2021 December 31, 2020 (in thousands) Fixed maturity securities, available-for-sale without an allowance $ 197,700 $ 258,325 Derivatives designated as cash flow hedges(1) 692 (2,998) Affiliated notes, available-for-sale 220 254 Other investments 338 143 Net unrealized gains (losses) on investments $ 198,950 $ 255,724 (1) For more information on cash flow hedges, see Note 4. |
Repurchase Agreements and Securities Lending | The following table sets forth the composition of “Cash collateral for loaned securities,” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated: June 30, 2021 December 31, 2020 Remaining Contractual Maturities of the Agreements Remaining Contractual Maturities of the Agreements Overnight & Continuous Up to 30 Days Total Overnight & Continuous Up to 30 Days Total (in thousands) Foreign public corporate securities $ 2,725 $ 0 $ 2,725 $ 2,725 $ 0 $ 2,725 Total cash collateral for loaned securities(1) $ 2,725 $ 0 $ 2,725 $ 2,725 $ 0 $ 2,725 (1) The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. June 30, 2021 December 31, 2020 Primary Underlying Risk/Instrument Type Fair Value Fair Value Gross Notional Assets Liabilities Gross Notional Assets Liabilities (in thousands) Derivatives Designated as Hedge Accounting Instruments: Currency/Interest Rate Foreign Currency Swaps $ 121,185 $ 2,314 $ (3,291) $ 126,806 $ 2,404 $ (7,017) Total Derivatives Designated as Hedge Accounting Instruments: $ 121,185 $ 2,314 $ (3,291) $ 126,806 $ 2,404 $ (7,017) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate Interest Rate Swaps $ 30,200 $ 3,549 $ 0 $ 30,200 $ 4,535 $ 0 Credit Credit Default Swaps 0 0 0 713 0 (6) Currency/Interest Rate Foreign Currency Swaps 33,224 2,328 (1,189) 33,224 2,374 (1,650) Foreign Currency Foreign Currency Forwards 4,041 9 (3) 3,087 0 (96) Equity Equity Options 467,000 34,673 (26,676) 441,725 41,582 (27,350) Total Derivatives Not Qualifying as Hedge Accounting Instruments: $ 534,465 $ 40,559 $ (27,868) $ 508,949 $ 48,491 $ (29,102) Total Derivatives(1)(2) $ 655,650 $ 42,873 $ (31,159) $ 635,755 $ 50,895 $ (36,119) (1) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $834 million and $1,195 million as of June 30, 2021 and December 31, 2020, respectively included in “Future policy benefits” and $152 million and $154 million as of June 30, 2021 and December 31, 2020, respectively included in “Policyholders’ account balances". The fair value of the related reinsurance, included in "Reinsurance recoverables" or "Other liabilities" was an asset of $834 million and $1,195 million as of June 30, 2021 and December 31, 2020, respectively. (2) Recorded in "Other invested assets" and "Payables to parent and affiliates" on the Unaudited Interim Statements of Financial Position. |
Offsetting of Financial Assets | The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim 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 Unaudited Interim Statements of Financial Position. June 30, 2021 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Offsetting of Financial Liabilities: Derivatives $ 31,159 $ (31,159) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 31,159 $ (31,159) $ 0 $ 0 $ 0 December 31, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Offsetting of Financial Liabilities: Derivatives $ 36,119 $ (36,119) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 36,119 $ (36,119) $ 0 $ 0 $ 0 (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 associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim 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 Unaudited Interim Statements of Financial Position. June 30, 2021 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 42,873 $ (31,159) $ 11,714 $ (11,040) $ 674 Offsetting of Financial Liabilities: Derivatives $ 31,159 $ (31,159) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 31,159 $ (31,159) $ 0 $ 0 $ 0 December 31, 2020 Gross Gross Net Amounts Financial Net (in thousands) Offsetting of Financial Assets: Derivatives $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Securities purchased under agreements to resell 0 0 0 0 0 Total Assets $ 50,895 $ (36,114) $ 14,781 $ (14,572) $ 209 Offsetting of Financial Liabilities: Derivatives $ 36,119 $ (36,119) $ 0 $ 0 $ 0 Securities sold under agreements to repurchase 0 0 0 0 0 Total Liabilities $ 36,119 $ (36,119) $ 0 $ 0 $ 0 (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. Three Months Ended June 30, 2021 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 45 $ 375 $ (125) $ 2,145 Total cash flow hedges 45 375 (125) 2,145 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 315 0 0 0 Currency (16) 0 0 0 Currency/Interest Rate 637 0 (1) 0 Credit 0 0 0 0 Equity 2,484 0 0 0 Embedded Derivatives (19,731) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (16,311) 0 (1) 0 Total $ (16,266) $ 375 $ (126) $ 2,145 Six Months Ended June 30, 2021 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 37 $ 776 $ 33 $ 3,689 Total cash flow hedges 37 776 33 3,689 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate (512) 0 0 0 Currency 95 0 0 0 Currency/Interest Rate 640 0 (6) 0 Credit (4) 0 0 0 Equity 4,449 0 0 0 Embedded Derivatives (5,001) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (333) 0 (6) 0 Total $ (296) $ 776 $ 27 $ 3,689 Three Months Ended June 30, 2020 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 0 $ 488 $ (324) $ (5,608) Total cash flow hedges 0 488 (324) (5,608) Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 254 0 0 0 Currency (42) 0 0 0 Currency/Interest Rate (963) 0 1 0 Credit (69) 0 0 0 Equity 5,727 0 0 0 Embedded Derivatives (12,400) 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: (7,493) 0 1 0 Total $ (7,493) $ 488 $ (323) $ (5,608) Six Months Ended June 30, 2020 Realized Net Other Income AOCI(1) (in thousands) Derivatives Designated as Hedge Accounting Instruments: Cash flow hedges Currency/Interest Rate $ 26 $ 966 $ 681 $ 10,403 Total cash flow hedges 26 966 681 10,403 Derivatives Not Qualifying as Hedge Accounting Instruments: Interest Rate 2,093 0 0 0 Currency 31 0 0 0 Currency/Interest Rate 3,564 0 20 0 Credit (69) 0 0 0 Equity (4,657) 0 0 0 Embedded Derivatives 5,390 0 0 0 Total Derivatives Not Qualifying as Hedge Accounting Instruments: 6,352 0 20 0 Total $ 6,378 $ 966 $ 701 $ 10,403 |
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 AOCI before taxes: (in thousands) Balance, December 31, 2020 $ (2,998) Amount recorded in AOCI Currency/Interest Rate 4,536 Total amount recorded in AOCI 4,536 Amount reclassified from AOCI to income Currency/Interest Rate (846) Total amount reclassified from AOCI to income (846) Balance, June 30, 2021 $ 692 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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. June 30, 2021 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 $ 0 $ 13,911 $ 0 $ $ 13,911 Obligations of U.S. states and their political subdivisions 0 181,293 0 181,293 Foreign government bonds 0 101,476 0 101,476 U.S. corporate public securities 0 989,555 0 989,555 U.S. corporate private securities 0 227,411 423 227,834 Foreign corporate public securities 0 104,371 0 104,371 Foreign corporate private securities 0 133,667 22,320 155,987 Asset-backed securities(2) 0 16,869 0 16,869 Commercial mortgage-backed securities 0 150,056 0 150,056 Residential mortgage-backed securities 0 3,300 0 3,300 Subtotal 0 1,921,909 22,743 1,944,652 Fixed maturities, trading 0 18,515 0 18,515 Equity securities 0 125 5,904 6,029 Cash equivalents 0 34,739 0 34,739 Other invested assets(3) 0 42,873 0 (31,159) 11,714 Reinsurance recoverables 0 0 834,207 834,207 Receivables from parent and affiliates 0 798 0 798 Subtotal excluding separate account assets 0 2,018,959 862,854 (31,159) 2,850,654 Separate account assets(4)(5) 0 15,620,579 0 15,620,579 Total assets $ 0 $ 17,639,538 $ 862,854 $ (31,159) $ 18,471,233 Future policy benefits(6) $ 0 $ 0 $ 834,207 $ $ 834,207 Policyholders' account balances 0 0 152,149 152,149 Payables to parent and affiliates 0 31,159 0 (31,159) 0 Total liabilities $ 0 $ 31,159 $ 986,356 $ (31,159) $ 986,356 December 31, 2020 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 $ 0 $ 11,655 $ 0 $ $ 11,655 Obligations of U.S. states and their political subdivisions 0 182,626 0 182,626 Foreign government bonds 0 92,636 0 92,636 U.S. corporate public securities 0 949,585 0 949,585 U.S. corporate private securities 0 245,194 424 245,618 Foreign corporate public securities 0 70,347 0 70,347 Foreign corporate private securities 0 141,734 23,621 165,355 Asset-backed securities(2) 0 17,189 0 17,189 Commercial mortgage-backed securities 0 155,418 0 155,418 Residential mortgage-backed securities 0 3,766 0 3,766 Subtotal 0 1,870,150 24,045 1,894,195 Fixed maturities, trading 0 19,269 0 19,269 Equity securities 0 123 6,095 6,218 Cash equivalents 0 60,879 0 60,879 Other invested assets(3) 0 50,895 0 (36,114) 14,781 Reinsurance recoverables 0 0 1,195,469 1,195,469 Receivables from parent and affiliates 0 815 0 815 Subtotal excluding separate account assets 0 2,002,131 1,225,609 (36,114) 3,191,626 Separate account assets(4)(5) 0 15,044,796 0 15,044,796 Total assets $ 0 $ 17,046,927 $ 1,225,609 $ (36,114) $ 18,236,422 Future policy benefits(6) $ 0 $ 0 $ 1,195,469 $ $ 1,195,469 Policyholders' account balances 0 0 153,937 153,937 Payables to parent and affiliates 0 36,119 0 (36,119) 0 Total liabilities $ 0 $ 36,119 $ 1,349,406 $ (36,119) $ 1,349,406 (1) “Netting” amounts represent cash collateral of $0 million and $0.0 million as of June 30, 2021 and December 31, 2020, respectively. (2) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types. (3) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value ("NAV") per share (or its equivalent) as a practical expedient. As of June 30, 2021 and December 31, 2020, the fair values of such investments were $2.9 million and $2.8 million, respectively. (4) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and a corporate owned life insurance fund, for which fair value is measured at NAV per share (or its equivalent). At June 30, 2021 and December 31, 2020, the fair value of such investments was $2,160 million and $2,073 million, respectively. (5) 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 Unaudited Interim Statements of Financial Position. (6) As of June 30, 2021, the net embedded derivative liability position of $834 million includes $66 million of embedded derivatives in an asset position and $900 million of embedded derivatives in a liability position. As of December 31, 2020, the net embedded derivative liability position of $1,195 million includes $51 million of embedded derivatives in an asset position and $1,246 million of embedded derivatives in a liability position. |
Fair Value Inputs, Assets and Liabilities, Quantitative Information | The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities. June 30, 2021 Fair Value Valuation Unobservable Minimum Maximum Weighted Impact of Increase in Input on Fair (in thousands) Assets: Corporate securities(2) $ 22,743 Discounted cash flow Discount rate 2.15 % 5.37 % 2.60 % Decrease Reinsurance recoverables $ 834,207 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 834,207 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.05 % 1.12 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote (8) below. Mortality rate (9) 0 % 15 % Decrease Equity volatility curve 16 % 25 % Increase Policyholders' account balances(4) $ 152,149 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.05 % 1.12 % Decrease Mortality rate (9) 0 % 23 % Decrease Equity volatility curve 11 % 26 % Increase December 31, 2020 Fair Value Valuation Unobservable Inputs Minimum Maximum Weighted Impact of Increase (in thousands) Assets: Corporate securities(2) $ 24,045 Discounted cash flow Discount rate 1.84 % 6.55 % 2.32 % Decrease Reinsurance recoverables $ 1,195,469 Fair values are determined using the same unobservable inputs as future policy benefits. Liabilities: Future policy benefits(3) $ 1,195,469 Discounted cash flow Lapse rate(5) 1 % 20 % Decrease Spread over LIBOR(6) 0.06 % 1.17 % Decrease Utilization rate(7) 39 % 96 % Increase Withdrawal rate See table footnote(8) below. Mortality rate(9) 0 % 15 % Decrease Equity volatility curve 18 % 26 % Increase Policyholders' account balances(4) $ 153,937 Discounted cash flow Lapse rate(5) 1 % 6 % Decrease Spread over LIBOR(6) 0.06 % 1.17 % Decrease Mortality rate (9) 0 % 24 % Decrease Equity volatility curve 15 % 30 % Increase (1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table. (2) Includes assets classified as fixed maturities available-for-sale. (3) Future policy benefits primarily represent general account liabilities for the 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. (4) Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life products that 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. (5) Lapse rates for contracts with living benefit guarantees 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 for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these embedded derivatives. (6) The spread over the London Inter-Bank Offered Rate ("LIBOR") swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect the Company's estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements, living benefit guarantees, and index-linked interest crediting guarantees are insurance liabilities and are therefore senior to debt. (7) 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. (8) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of June 30, 2021 and December 31, 2020, the minimum withdrawal rate assumption is 76% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%. (9) The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 45 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables describe 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. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 22,331 $ 449 $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ 449 Other assets: Equity securities 5,857 47 0 0 0 0 0 0 0 5,904 47 Reinsurance recoverables 660,533 145,996 27,678 0 0 0 0 0 0 834,207 154,090 Liabilities: Future policy benefits (660,533) (145,996) 0 0 (27,678) 0 0 0 0 (834,207) (154,090) Policyholders' account balances(4) (136,773) (19,713) 0 0 0 4,337 0 0 0 (152,149) (17,642) Three Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 449 $ 0 $ 0 $ 0 $ 449 Other assets: Equity securities 0 47 0 0 0 47 0 Reinsurance recoverables 145,996 0 0 0 154,090 0 0 Liabilities: Future policy benefits (145,996) 0 0 0 (154,090) 0 0 Policyholders' account balances (19,713) 0 0 0 (17,642) 0 0 Six Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 24,045 $ (1,265) $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ (1,264) Other assets: Equity securities 6,095 (191) 0 0 0 0 0 0 0 5,904 (191) Reinsurance recoverables 1,195,469 (416,724) 55,462 0 0 0 0 0 0 834,207 (390,243) Liabilities: Future policy benefits (1,195,469) 416,724 0 0 (55,462) 0 0 0 0 (834,207) 390,243 Policyholders' account balances(4) (153,937) (5,671) 0 0 0 7,459 0 0 0 (152,149) (1,365) Six Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ (1,265) $ 0 $ 0 $ 0 $ (1,264) Other assets: Equity securities 0 (191) 0 0 0 (191) 0 Reinsurance recoverables (416,724) 0 0 0 (390,243) 0 0 Liabilities: Future policy benefits 416,724 0 0 0 390,243 0 0 Policyholders' account balances (5,671) 0 0 0 (1,365) 0 0 Three Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 18,274 $ 1,959 $ 0 $ (1) $ 0 $ 0 $ 0 $ 0 $ 0 $ 20,232 $ 1,959 Other assets: Equity securities 6,840 347 0 0 0 0 0 0 0 7,187 348 Reinsurance recoverables 1,868,539 (153,382) 26,767 0 0 0 0 0 0 1,741,924 (141,848) Liabilities: Future policy benefits (1,868,539) 153,382 0 0 (26,767) 0 0 0 0 (1,741,924) 141,848 Policyholders' account balances(4) (123,608) (11,691) 0 0 (7,943) 0 0 0 0 (143,242) (12,621) Three Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 1,959 $ 0 $ 0 $ 0 $ 1,959 Other assets: Equity securities 0 347 0 0 0 348 0 Reinsurance recoverables (153,382) 0 0 0 (141,848) 0 0 Liabilities: Future policy benefits 153,382 0 0 0 141,848 0 0 Policyholders' account balances (11,691) 0 0 0 (12,621) 0 0 Six Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 185 $ 0 $ (861) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 20,232 $ 190 Other assets: Equity securities 7,305 (118) 0 0 0 0 0 0 0 7,187 (118) Reinsurance recoverables 760,558 928,281 53,085 0 0 0 0 0 0 1,741,924 940,465 Liabilities: Future policy benefits (760,558) (928,281) 0 0 (53,085) 0 0 0 0 (1,741,924) (940,465) Policyholders' account balances(4) (133,793) 5,249 0 0 (14,698) 0 0 0 0 (143,242) 5,039 Six Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 145 $ 8 $ 0 $ 0 $ 190 Other assets: Equity securities 0 (118) 0 0 0 (118) 0 Reinsurance recoverables 928,281 0 0 0 940,465 0 0 Liabilities: Future policy benefits (928,281) 0 0 0 (940,465) 0 0 Policyholders' account balances 5,249 0 0 0 5,039 0 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) 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. (3) Includes U.S. corporate public, U.S. corporate private and foreign corporate private securities. (4) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables describe 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. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate. Three Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 22,331 $ 449 $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ 449 Other assets: Equity securities 5,857 47 0 0 0 0 0 0 0 5,904 47 Reinsurance recoverables 660,533 145,996 27,678 0 0 0 0 0 0 834,207 154,090 Liabilities: Future policy benefits (660,533) (145,996) 0 0 (27,678) 0 0 0 0 (834,207) (154,090) Policyholders' account balances(4) (136,773) (19,713) 0 0 0 4,337 0 0 0 (152,149) (17,642) Three Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 449 $ 0 $ 0 $ 0 $ 449 Other assets: Equity securities 0 47 0 0 0 47 0 Reinsurance recoverables 145,996 0 0 0 154,090 0 0 Liabilities: Future policy benefits (145,996) 0 0 0 (154,090) 0 0 Policyholders' account balances (19,713) 0 0 0 (17,642) 0 0 Six Months Ended June 30, 2021 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 24,045 $ (1,265) $ 0 $ 0 $ 0 $ (37) $ 0 $ 0 $ 0 $ 22,743 $ (1,264) Other assets: Equity securities 6,095 (191) 0 0 0 0 0 0 0 5,904 (191) Reinsurance recoverables 1,195,469 (416,724) 55,462 0 0 0 0 0 0 834,207 (390,243) Liabilities: Future policy benefits (1,195,469) 416,724 0 0 (55,462) 0 0 0 0 (834,207) 390,243 Policyholders' account balances(4) (153,937) (5,671) 0 0 0 7,459 0 0 0 (152,149) (1,365) Six Months Ended June 30, 2021 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ (1,265) $ 0 $ 0 $ 0 $ (1,264) Other assets: Equity securities 0 (191) 0 0 0 (191) 0 Reinsurance recoverables (416,724) 0 0 0 (390,243) 0 0 Liabilities: Future policy benefits 416,724 0 0 0 390,243 0 0 Policyholders' account balances (5,671) 0 0 0 (1,365) 0 0 Three Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 18,274 $ 1,959 $ 0 $ (1) $ 0 $ 0 $ 0 $ 0 $ 0 $ 20,232 $ 1,959 Other assets: Equity securities 6,840 347 0 0 0 0 0 0 0 7,187 348 Reinsurance recoverables 1,868,539 (153,382) 26,767 0 0 0 0 0 0 1,741,924 (141,848) Liabilities: Future policy benefits (1,868,539) 153,382 0 0 (26,767) 0 0 0 0 (1,741,924) 141,848 Policyholders' account balances(4) (123,608) (11,691) 0 0 (7,943) 0 0 0 0 (143,242) (12,621) Three Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 0 $ 0 $ 1,959 $ 0 $ 0 $ 0 $ 1,959 Other assets: Equity securities 0 347 0 0 0 348 0 Reinsurance recoverables (153,382) 0 0 0 (141,848) 0 0 Liabilities: Future policy benefits 153,382 0 0 0 141,848 0 0 Policyholders' account balances (11,691) 0 0 0 (12,621) 0 0 Six Months Ended June 30, 2020 Fair Value, beginning of period Total realized and unrealized gains (losses)(1) Purchases Sales Issuances Settlements Other Transfers into Level 3 Transfers out of Level 3 Fair Value, end of period Unrealized gains (losses) for assets still held(2) (in thousands) Fixed maturities, available-for-sale: Corporate securities(3) $ 1,178 $ 185 $ 0 $ (861) $ 0 $ 0 $ 0 $ 19,730 $ 0 $ 20,232 $ 190 Other assets: Equity securities 7,305 (118) 0 0 0 0 0 0 0 7,187 (118) Reinsurance recoverables 760,558 928,281 53,085 0 0 0 0 0 0 1,741,924 940,465 Liabilities: Future policy benefits (760,558) (928,281) 0 0 (53,085) 0 0 0 0 (1,741,924) (940,465) Policyholders' account balances(4) (133,793) 5,249 0 0 (14,698) 0 0 0 0 (143,242) 5,039 Six Months Ended June 30, 2020 Total realized and unrealized gains (losses) Unrealized gains (losses) for assets still held(2) Realized investment gains (losses), net(1) Other income (loss) Included in other comprehensive income (loss) Net investment income Realized investment gains (losses), net Other income (loss) Included in other comprehensive income (loss) (in thousands) Fixed maturities, available-for-sale $ 32 $ 0 $ 145 $ 8 $ 0 $ 0 $ 190 Other assets: Equity securities 0 (118) 0 0 0 (118) 0 Reinsurance recoverables 928,281 0 0 0 940,465 0 0 Liabilities: Future policy benefits (928,281) 0 0 0 (940,465) 0 0 Policyholders' account balances 5,249 0 0 0 5,039 0 0 (1) Realized investment gains (losses) on future policy benefits and reinsurance recoverables primarily represent the change in the fair value of the Company's living benefit guarantees on certain of its variable annuity contracts. (2) 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. (3) Includes U.S. corporate public, U.S. corporate private and foreign corporate private securities. (4) Issuances and settlements for Policyholders' account balances are presented net in the rollforward. |
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 Unaudited Interim Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value. June 30, 2021 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 136,372 $ 136,372 $ 127,258 Policy loans 0 0 211,669 211,669 211,669 Cash and cash equivalents 7,139 0 0 7,139 7,139 Accrued investment income 0 22,154 0 22,154 22,154 Reinsurance recoverables 0 0 29,063 29,063 27,733 Receivables from parent and affiliates 0 35,684 0 35,684 35,684 Other assets 0 3,992 0 3,992 3,992 Total assets $ 7,139 $ 61,830 $ 377,104 $ 446,073 $ 435,629 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 220,818 $ 41,272 $ 262,090 $ 260,760 Cash collateral for loaned securities 0 2,725 0 2,725 2,725 Payables to parent and affiliates 0 14,765 0 14,765 14,765 Other liabilities 0 44,856 0 44,856 44,856 Total liabilities $ 0 $ 283,164 $ 41,272 $ 324,436 $ 323,106 December 31, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Total Total (in thousands) Assets: Commercial mortgage and other loans $ 0 $ 0 $ 140,921 $ 140,921 $ 133,115 Policy loans 0 0 212,163 212,163 212,163 Cash and cash equivalents 7,648 0 0 7,648 7,648 Accrued investment income 0 21,248 0 21,248 21,248 Reinsurance recoverables 0 0 28,654 28,654 26,915 Receivables from parent and affiliates 0 30,246 0 30,246 30,246 Other assets 0 6,205 0 6,205 6,205 Total assets $ 7,648 $ 57,699 $ 381,738 $ 447,085 $ 437,540 Liabilities: Policyholders’ account balances - investment contracts $ 0 $ 220,527 $ 41,341 $ 261,868 $ 260,128 Cash collateral for loaned securities 0 2,725 0 2,725 2,725 Payables to parent and affiliates 0 16,250 0 16,250 16,250 Other liabilities 0 50,335 0 50,335 50,335 Total liabilities $ 0 $ 289,837 $ 41,341 $ 331,178 $ 329,438 (1) Carrying values presented herein differ from those in the Company’s Unaudited Interim 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. |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance Impact on Statement of Financial Position | Reinsurance amounts included in the Company’s Unaudited Interim Statements of Financial Position as of June 30, 2021 and December 31, 2020 were as follows: June 30, 2021 December 31, 2020 (in thousands) Reinsurance recoverables $ 3,541,640 $ 3,860,612 Policy loans (21,593) (21,466) Deferred policy acquisition costs (656,672) (661,732) Deferred sales inducements (39,658) (40,980) Other assets 13,886 15,172 Other liabilities 126,082 127,234 |
Reinsurance Recoverable by Counterparty | Reinsurance recoverables by counterparty are broken out below: June 30, 2021 December 31, 2020 (in thousands) Prudential Insurance $ 1,357,298 $ 1,726,545 PAR U 1,158,414 1,119,545 PARCC 433,487 448,884 PAR Term 239,749 236,561 Term Re 243,094 232,398 DART 71,543 69,268 Pruco Life 35,475 24,744 Unaffiliated 2,580 2,667 Total reinsurance recoverables $ 3,541,640 $ 3,860,612 |
Reinsurance Impact on Statements of Operations and Comprehensive Income (Loss) | Reinsurance amounts, included in the Company’s Unaudited Interim Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands) Premiums: Direct $ 64,457 $ 62,975 $ 128,807 $ 127,608 Ceded (57,371) (57,846) (114,162) (117,285) Net premiums 7,086 5,129 14,645 10,323 Policy charges and fee income: Direct 99,420 94,937 206,958 204,009 Ceded(1) (76,496) (76,694) (155,716) (161,797) Net policy charges and fee income 22,924 18,243 51,242 42,212 Net investment income: Direct 25,101 20,874 48,854 38,066 Ceded (203) (191) (411) (418) Net investment income 24,898 20,683 48,443 37,648 Asset administration fees: Direct 11,134 9,290 21,940 19,015 Ceded (8,994) (7,744) (17,774) (15,904) Net asset administration fees 2,140 1,546 4,166 3,111 Realized investment gains (losses), net: Direct (162,428) 146,576 415,419 (922,872) Ceded 145,984 (154,088) (416,031) 928,425 Realized investment gains (losses), net (16,444) (7,512) (612) 5,553 Policyholders’ benefits (including change in reserves): Direct 107,782 126,289 217,945 257,575 Ceded(2) (96,493) (112,846) (187,821) (227,446) Net policyholders’ benefits (including change in reserves) 11,289 13,443 30,124 30,129 Interest credited to policyholders’ account balances: Direct 15,148 16,061 36,460 38,319 Ceded (5,850) (4,074) (16,451) (16,141) Net interest credited to policyholders’ account balances 9,298 11,987 20,009 22,178 Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization (36,633) (24,163) (73,062) (99,696) (1) Includes $0.0 million of unaffiliated activity for both the three months ended June 30, 2021 and 2020, respectively, and $0.0 million for both the six months ended June 30, 2021 and 2020. (2) Includes $1.1 million and |
Gross and Net Life Insurance in Force | The gross and net amounts of life insurance face amount in force as of June 30, 2021 and 2020 were as follows: 2021 2020 (in thousands) Direct gross life insurance face amount in force $ 155,482,024 $ 151,576,594 Reinsurance ceded (140,507,672) (138,189,156) Net life insurance face amount in force $ 14,974,352 $ 13,387,438 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | The balance of and changes in each component of AOCI as of and for the six months ended June 30, 2021 and 2020, are as follows: Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2020 $ (783) $ 186,190 $ 185,407 Change in OCI before reclassifications (80) (51,247) (51,327) Amounts reclassified from AOCI 0 (277) (277) Income tax benefit (expense) 17 10,819 10,836 Balance, June 30, 2021 $ (846) $ 145,485 $ 144,639 Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustment Net Unrealized Total Accumulated Other Comprehensive Income (Loss) (in thousands) Balance, December 31, 2019 $ (981) $ 86,616 $ 85,635 Change in OCI before reclassifications 41 77,489 77,530 Amounts reclassified from AOCI 0 (1,030) (1,030) Income tax benefit (expense) (9) (16,057) (16,066) Balance, June 30, 2020 $ (949) $ 147,018 $ 146,069 (1) Includes cash flow hedges of $1 million and $(3) million as of June 30, 2021 and December 31, 2020, respectively, and $14 million and $3 million as of June 30, 2020 and December 31, 2019, respectively . |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended 2021 2020 2021 2020 (in thousands) Amounts reclassified from AOCI (1)(2): Net unrealized investment gains (losses): Cash flow hedges - Currency/ Interest rate(3) $ 294 $ 164 $ 846 $ 1,673 Net unrealized investment gains (losses) on available-for-sale securities (427) (41) (569) (643) Total net unrealized investment gains (losses)(4) (133) 123 277 1,030 Total reclassifications for the period $ (133) $ 123 $ 277 $ 1,030 (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 4 for additional information on cash flow hedges. (4) See table below for additional information on unrealized investment gains (losses), including the impact on DAC and other costs, future policy benefits, policyholders’ account balances and other liabilities. |
All Other Net Unrealized Investment Gain Loss AOCI Rollforward | The amounts for the periods indicated below represent all other net unrealized investment gains (losses): All Other Net Unrealized Investment Gains (Losses) in AOCI Net Unrealized Gains (Losses) on DAC and Other Costs(2) Future Policy Benefits, Policyholders' Account Balances and Other Liabilities(3) Income Tax Accumulated Other Comprehensive Balance, December 31, 2020 $ 255,724 $ 28,241 $ (48,283) $ (49,492) $ 186,190 Net investment gains (losses) on investments arising during the period (56,497) 0 0 11,864 (44,633) Reclassification adjustment for (gains) losses included in net income (277) 0 0 58 (219) Impact of net unrealized investment (gains) losses 0 (4,592) 9,842 (1,103) 4,147 Balance, June 30, 2021 $ 198,950 $ 23,649 $ (38,441) $ (38,673) $ 145,485 (1) Includes cash flow hedges. See Note 4 for information on cash flow hedges. (2) "Other costs" primarily includes reinsurance recoverables and deferred reinsurance losses. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transaction [Line Items] | |
Affiliated Asset Transfers | The table below shows affiliated asset trades for the six months ended June 30, 2021 and for the year ended December 31, 2020. Affiliate Date Transaction Security Type Fair Value Book Value APIC, Net of Tax Increase/(Decrease) Realized (in thousands) Prudential Insurance April 2020 Purchase Fixed Maturities $ 3,485 $ 3,320 $ (130) $ 0 |
Affiliated Entity | |
Related Party Transaction [Line Items] | |
Affiliated Notes Receivable | Affiliated notes receivable included in “Receivables from parent and affiliates” at June 30, 2021 and December 31, 2020 were as follows: Maturity Date Interest Rates June 30, 2021 December 31, 2020 (in thousands) U.S. dollar fixed rate notes 2027 0.00% - 14.85 % $ 798 $ 815 Total long-term notes receivable - affiliated(1) $ 798 $ 815 (1) All long-term notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances. |
Investments (Fixed Maturities S
Investments (Fixed Maturities Securities Excluding Investments Classified as Trading) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,746,952 | $ 1,635,870 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 1,944,652 | 1,894,195 |
Fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,746,952 | 1,635,870 |
Gross Unrealized Gains | 202,681 | 259,400 |
Gross Unrealized Losses | 4,981 | 1,075 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 1,944,652 | 1,894,195 |
Fixed maturities | U.S. Treasury securities and obligations of U.S. government authorities and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,014 | 10,638 |
Gross Unrealized Gains | 897 | 1,017 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 13,911 | 11,655 |
Fixed maturities | Obligations of U.S. states and their political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 162,022 | 162,227 |
Gross Unrealized Gains | 19,271 | 20,399 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 181,293 | 182,626 |
Fixed maturities | Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 92,936 | 79,318 |
Gross Unrealized Gains | 9,102 | 13,347 |
Gross Unrealized Losses | 562 | 29 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 101,476 | 92,636 |
Fixed maturities | U.S. public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 868,806 | 791,616 |
Gross Unrealized Gains | 123,295 | 158,087 |
Gross Unrealized Losses | 2,546 | 118 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 989,555 | 949,585 |
Fixed maturities | U.S. private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 209,626 | 222,279 |
Gross Unrealized Gains | 18,297 | 23,564 |
Gross Unrealized Losses | 89 | 225 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 227,834 | 245,618 |
Fixed maturities | Foreign public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 96,454 | 60,376 |
Gross Unrealized Gains | 8,588 | 10,022 |
Gross Unrealized Losses | 671 | 51 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 104,371 | 70,347 |
Fixed maturities | Foreign private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 145,604 | 148,103 |
Gross Unrealized Gains | 11,493 | 17,892 |
Gross Unrealized Losses | 1,110 | 640 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 155,987 | 165,355 |
Fixed maturities | Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,252 | 16,535 |
Gross Unrealized Gains | 618 | 666 |
Gross Unrealized Losses | 1 | 12 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 16,869 | 17,189 |
Fixed maturities | Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 139,431 | 141,564 |
Gross Unrealized Gains | 10,627 | 13,854 |
Gross Unrealized Losses | 2 | 0 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | 150,056 | 155,418 |
Fixed maturities | Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,807 | 3,214 |
Gross Unrealized Gains | 493 | 552 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | 0 |
Fair Value | $ 3,300 | $ 3,766 |
Investments (Fair Value and Los
Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) - Fixed maturities - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | $ 119,741 | $ 24,772 |
Less than Twelve Months, Gross Unrealized Losses | 3,782 | 425 |
Twelve Months or More, Fair Value | 16,726 | 15,958 |
Twelve Months or More, Gross Unrealized Losses | 1,199 | 650 |
Total, Fair Value | 136,467 | 40,730 |
Total, Gross Unrealized Losses | 4,981 | 1,075 |
Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 20,013 | 2,122 |
Less than Twelve Months, Gross Unrealized Losses | 562 | 29 |
Twelve Months or More, Fair Value | 0 | 0 |
Twelve Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 20,013 | 2,122 |
Total, Gross Unrealized Losses | 562 | 29 |
U.S. public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 79,595 | 10,416 |
Less than Twelve Months, Gross Unrealized Losses | 2,546 | 118 |
Twelve Months or More, Fair Value | 0 | 0 |
Twelve Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 79,595 | 10,416 |
Total, Gross Unrealized Losses | 2,546 | 118 |
U.S. private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 0 | 9,635 |
Less than Twelve Months, Gross Unrealized Losses | 0 | 225 |
Twelve Months or More, Fair Value | 5,179 | 0 |
Twelve Months or More, Gross Unrealized Losses | 89 | 0 |
Total, Fair Value | 5,179 | 9,635 |
Total, Gross Unrealized Losses | 89 | 225 |
Foreign public corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 14,937 | 1,611 |
Less than Twelve Months, Gross Unrealized Losses | 671 | 51 |
Twelve Months or More, Fair Value | 0 | 0 |
Twelve Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 14,937 | 1,611 |
Total, Gross Unrealized Losses | 671 | 51 |
Foreign private corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 0 | 0 |
Less than Twelve Months, Gross Unrealized Losses | 0 | 0 |
Twelve Months or More, Fair Value | 11,547 | 12,017 |
Twelve Months or More, Gross Unrealized Losses | 1,110 | 640 |
Total, Fair Value | 11,547 | 12,017 |
Total, Gross Unrealized Losses | 1,110 | 640 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 1,387 | 988 |
Less than Twelve Months, Gross Unrealized Losses | 1 | 2 |
Twelve Months or More, Fair Value | 0 | 3,941 |
Twelve Months or More, Gross Unrealized Losses | 0 | 10 |
Total, Fair Value | 1,387 | 4,929 |
Total, Gross Unrealized Losses | 1 | 12 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 3,809 | |
Less than Twelve Months, Gross Unrealized Losses | 2 | |
Twelve Months or More, Fair Value | 0 | |
Twelve Months or More, Gross Unrealized Losses | 0 | |
Total, Fair Value | 3,809 | |
Total, Gross Unrealized Losses | $ 2 | |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than Twelve Months, Fair Value | 0 | |
Less than Twelve Months, Gross Unrealized Losses | 0 | |
Twelve Months or More, Fair Value | 0 | |
Twelve Months or More, Gross Unrealized Losses | 0 | |
Total, Fair Value | 0 | |
Total, Gross Unrealized Losses | $ 0 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Investments [Line Items] | |||||
Loans acquired | $ 0 | $ 0 | $ 0 | $ 0 | |
Loans sold | 0 | 0 | 0 | 0 | |
Fixed Maturities purchased with Credit Deterioration | 0 | $ 0 | |||
Accrued Investment Income Write Down | 0 | 0 | 0 | 0 | |
Allowance for credit losses for fixed maturity securities | 0 | 0 | 0 | 0 | |
Securities Sold under Agreements to Repurchase | $ 0 | 0 | 0 | ||
Commercial mortgage and others loans Purchased with Credit Deterioration | $ 0 | $ 0 | |||
Commercial mortgage loans, Percentage | 100.00% | 100.00% | 100.00% | ||
Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses of twelve months or more concentrated in various sectors | $ 1,200 | $ 1,200 | $ 700 | ||
Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | 4,981 | 4,981 | 1,075 | ||
Gross unrealized losses of twelve months or more concentrated in various sectors | 1,199 | 1,199 | 650 | ||
Other Income | Equity securities | |||||
Schedule of Investments [Line Items] | |||||
Unrealized Gain (Loss) on Investments | $ 100 | $ 400 | $ (200) | $ (100) | |
New York | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 14.00% | 14.00% | |||
Florida | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 10.00% | 10.00% | |||
Illinois | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 10.00% | 10.00% | |||
Texas | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 8.00% | 8.00% | |||
Europe | |||||
Schedule of Investments [Line Items] | |||||
Commercial mortgage loans, Percentage | 7.00% | 7.00% | |||
NAIC High or Highest Quality Rating | Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | $ 4,300 | $ 4,300 | 400 | ||
NAIC Other Than High or Highest Quality Rating | Fixed maturities | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | $ 700 | $ 700 | $ 700 |
Investments (Amortized Cost and
Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Amortized Cost: | ||
Due in one year or less | $ 31,651 | |
Due after one year through five years | 237,435 | |
Due after five years through ten years | 148,576 | |
Due after ten years | 1,170,800 | |
Amortized Cost | 1,746,952 | $ 1,635,870 |
Fair value: | ||
Due in one year or less | 31,421 | |
Due after one year through five years | 253,149 | |
Due after five years through ten years | 161,339 | |
Due after ten years | 1,328,518 | |
Fair Value | 1,944,652 | $ 1,894,195 |
Asset-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 16,252 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 16,869 | |
Commercial mortgage-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 139,431 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | 150,056 | |
Residential mortgage-backed securities | ||
Amortized Cost: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Amortized Cost | 2,807 | |
Fair value: | ||
Debt Securities, Available-for-sale, Maturity, without Single Maturity Date, Fair Value | $ 3,300 |
Investments (Fixed Maturities_2
Investments (Fixed Maturities Securities Proceeds) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Proceeds from maturities/prepayments | $ 43,789 | $ 19,910 | ||
Fixed maturities | Available-for-sale | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Proceeds from sales | $ 9,513 | $ 885 | 12,435 | 2,295 |
Proceeds from maturities/prepayments | 20,780 | 5,361 | 30,866 | 17,615 |
Gross investment gains from sales and maturities | 32 | 2 | 57 | 26 |
Gross investment losses from sales and maturities | (459) | (44) | (626) | (44) |
Write-downs recognized in earnings | 0 | 0 | 0 | (625) |
(Addition to) release of allowance for credit losses | $ 0 | $ 0 | 0 | 0 |
Non-cash related proceeds | $ (500) | $ 0 |
Investments (Commercial Mortgag
Investments (Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 127,608 | $ 133,555 |
Commercial mortgage loans, Percentage | 100.00% | 100.00% |
Allowance for Credit Losses | $ (350) | $ (440) |
Total net commercial mortgage and other loans | 127,258 | 133,115 |
Apartments and multi-family | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 46,065 | $ 46,755 |
Commercial mortgage loans, Percentage | 36.10% | 35.00% |
Hospitality | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 13,942 | $ 14,031 |
Commercial mortgage loans, Percentage | 10.90% | 10.50% |
Industrial | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 12,260 | $ 13,936 |
Commercial mortgage loans, Percentage | 9.60% | 10.40% |
Office | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 20,533 | $ 23,649 |
Commercial mortgage loans, Percentage | 16.10% | 17.70% |
Other | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 16,794 | $ 16,929 |
Commercial mortgage loans, Percentage | 13.20% | 12.70% |
Retail | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 15,690 | $ 15,857 |
Commercial mortgage loans, Percentage | 12.30% | 11.90% |
Commercial Mortgage Loans | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 125,284 | $ 131,157 |
Commercial mortgage loans, Percentage | 98.20% | 98.20% |
Agricultural property loans | ||
Commercial Mortgage and Other Loans [Line Items] | ||
Commercial mortgage and agricultural property loans | $ 2,324 | $ 2,398 |
Commercial mortgage loans, Percentage | 1.80% | 1.80% |
Investments (Allowance for Cred
Investments (Allowance for Credit Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | $ 466 | $ 442 | $ 440 | $ 165 |
Cumulative effect of adoption of ASU 2016-13 | 0 | 204 | ||
Addition to (release of) allowance for expected losses | (116) | 15 | (90) | 88 |
Total ending balance | 350 | 457 | 350 | 457 |
Commercial Mortgage Loans | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | 466 | 441 | 440 | 164 |
Cumulative effect of adoption of ASU 2016-13 | 0 | 204 | ||
Addition to (release of) allowance for expected losses | (116) | 16 | (90) | 89 |
Total ending balance | 350 | 457 | 350 | 457 |
Agricultural property loans | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Balance, beginning of period | 0 | 1 | 0 | 1 |
Cumulative effect of adoption of ASU 2016-13 | 0 | 0 | ||
Addition to (release of) allowance for expected losses | 0 | (1) | 0 | (1) |
Total ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Investments (Credit Quality Ind
Investments (Credit Quality Indicators) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Recording investment gross of allowance for credit losses | $ 127,608 | $ 133,555 |
Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 820 | 2,198 |
One Year Prior | 2,198 | 36,125 |
Two Year Prior | 35,852 | 1,478 |
Three Year Prior | 1,456 | 12,709 |
Four Year Prior | 11,020 | 12,922 |
Prior | 73,938 | 65,725 |
Recording investment gross of allowance for credit losses | 125,284 | 131,157 |
Commercial Mortgage Loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 820 | 2,198 |
One Year Prior | 2,198 | 31,751 |
Two Year Prior | 31,501 | 1,478 |
Three Year Prior | 1,456 | 11,730 |
Four Year Prior | 10,051 | 11,872 |
Prior | 67,778 | 60,499 |
Recording investment gross of allowance for credit losses | 113,804 | 119,528 |
Commercial Mortgage Loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 3,364 |
Two Year Prior | 3,354 | 0 |
Three Year Prior | 0 | 979 |
Four Year Prior | 969 | 1,050 |
Prior | 6,160 | 5,226 |
Recording investment gross of allowance for credit losses | 10,483 | 10,619 |
Commercial Mortgage Loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 1,010 |
Two Year Prior | 997 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 997 | 1,010 |
Agricultural property loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 2,324 | 2,398 |
Recording investment gross of allowance for credit losses | 2,324 | 2,398 |
Agricultural property loans | ≥ 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 2,324 | 2,398 |
Recording investment gross of allowance for credit losses | 2,324 | 2,398 |
Agricultural property loans | 1.0X to 1.2X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural property loans | Less than 1.0X | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 0 | 0 |
0% to 59.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 6,285 |
Two Year Prior | 6,204 | 0 |
Three Year Prior | 1,456 | 6,349 |
Four Year Prior | 9,036 | 9,731 |
Prior | 46,413 | 45,261 |
Recording investment gross of allowance for credit losses | 63,109 | 67,626 |
0% to 59.99% | Agricultural property loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 2,324 | 2,398 |
Recording investment gross of allowance for credit losses | 2,324 | 2,398 |
60% to 69.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 820 | 2,198 |
One Year Prior | 2,198 | 27,970 |
Two Year Prior | 27,778 | 1,478 |
Three Year Prior | 0 | 5,381 |
Four Year Prior | 1,015 | 3,191 |
Prior | 25,625 | 18,533 |
Recording investment gross of allowance for credit losses | 57,436 | 58,751 |
60% to 69.99% | Agricultural property loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 0 | 0 |
70% to 79.99% | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 1,870 |
Two Year Prior | 1,870 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 1,900 | 1,931 |
Recording investment gross of allowance for credit losses | 3,770 | 3,801 |
70% to 79.99% | Agricultural property loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 0 | 0 |
80% or greater | Commercial Mortgage Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 979 |
Four Year Prior | 969 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | 969 | 979 |
80% or greater | Agricultural property loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Year | 0 | 0 |
One Year Prior | 0 | 0 |
Two Year Prior | 0 | 0 |
Three Year Prior | 0 | 0 |
Four Year Prior | 0 | 0 |
Prior | 0 | 0 |
Recording investment gross of allowance for credit losses | $ 0 | $ 0 |
Investments (Analysis of Past D
Investments (Analysis of Past Due Commercial Mortgage, Agricultural and Other Loans) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Non-Accrual Status | $ 0 | $ 0 |
Recording investment gross of allowance for credit losses | 127,608 | 133,555 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 127,608 | 133,555 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
90 Days or More Past Due | Commercial mortgage and other loans | ||
Financing Receivable, Past Due [Line Items] | ||
Accruing Interest | 0 | 0 |
Commercial Mortgage Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Non-Accrual Status | 0 | 0 |
Recording investment gross of allowance for credit losses | 125,284 | 131,157 |
Commercial Mortgage Loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 125,284 | 131,157 |
Commercial Mortgage Loans | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
Commercial Mortgage Loans | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
Commercial Mortgage Loans | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural Loan | ||
Financing Receivable, Past Due [Line Items] | ||
Non-Accrual Status | 0 | 0 |
Recording investment gross of allowance for credit losses | 2,324 | 2,398 |
Agricultural Loan | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 2,324 | 2,398 |
Agricultural Loan | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural Loan | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | 0 | 0 |
Agricultural Loan | 90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Recording investment gross of allowance for credit losses | $ 0 | $ 0 |
Investments (Other Invested Ass
Investments (Other Invested Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Other Invested Assets [Line Items] | ||
Other invested assets | $ 107,509 | $ 97,509 |
LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 92,245 | 79,459 |
Company’s investment in separate accounts | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 3,550 | 3,269 |
Derivative instruments | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 11,714 | 14,781 |
Equity method | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 89,390 | 76,659 |
Equity method | Private equity | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 49,038 | 38,261 |
Equity method | Hedge funds | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 35,188 | 33,773 |
Equity method | Real estate-related | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 5,164 | 4,625 |
Fair Value | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 2,855 | 2,800 |
Fair Value | Private equity | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 510 | 590 |
Fair Value | Hedge funds | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | 61 | 69 |
Fair Value | Real estate-related | LPs/LLCs | ||
Other Invested Assets [Line Items] | ||
Other invested assets | $ 2,284 | $ 2,141 |
Investments (Accrued Investment
Investments (Accrued Investment Income) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Net Investment Income [Line Items] | ||
Accrued investment income | $ 22,154 | $ 21,248 |
Equity securities | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 1 | 1 |
Commercial mortgage and other loans | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 336 | 372 |
Policy loans | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 5,653 | 5,688 |
Short-term investments and cash equivalents | ||
Net Investment Income [Line Items] | ||
Accrued investment income | 3 | 9 |
Available-for-sale | Fixed maturities | ||
Net Investment Income [Line Items] | ||
Accrued investment income | $ 16,161 | $ 15,178 |
Investments (Net Investment Inc
Investments (Net Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 25,918 | $ 21,646 | $ 50,501 | $ 39,556 |
Less: investment expenses | (1,020) | (963) | (2,058) | (1,908) |
Net investment income | 24,898 | 20,683 | 48,443 | 37,648 |
Equity securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 91 | 91 | 182 | 182 |
Commercial mortgage and other loans | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 1,518 | 1,442 | 2,785 | 2,844 |
Policy loans | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 2,832 | 2,885 | 5,659 | 5,761 |
Other invested assets | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 4,673 | 1,370 | 8,916 | 325 |
Short-term investments and cash equivalents | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 10 | 56 | 32 | 359 |
Available-for-sale | Fixed maturities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | 16,624 | 15,681 | 32,590 | 29,843 |
Trading | Fixed maturities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 170 | $ 121 | $ 337 | $ 242 |
Investments (Realized Investmen
Investments (Realized Investment Gains Losses, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | $ (16,444) | $ (7,512) | $ (612) | $ 5,553 |
Fixed maturities | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | (427) | (42) | (569) | (643) |
Commercial mortgage and other loans | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 116 | (15) | 90 | (88) |
Other invested assets | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | 137 | 1 | 171 | (59) |
Derivatives | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | (16,266) | (7,493) | (296) | 6,378 |
Short-term investments and cash equivalents | ||||
Schedule Of Gain Loss On Investments [Line Items] | ||||
Realized investment gains (losses), net | $ (4) | $ 37 | $ (8) | $ (35) |
Investments (Net Unrealized Gai
Investments (Net Unrealized Gains Losses on Investments by Asset Class) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | $ 198,950 | $ 255,724 |
Fixed maturities | Available-for-sale | Without an allowance | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 197,700 | 258,325 |
Derivatives designated as cash flow hedges | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 692 | (2,998) |
Affiliated notes, available-for-sale | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | 220 | 254 |
Other investments | ||
Gain (Loss) on Securities [Line Items] | ||
Net unrealized gains (losses) on investments | $ 338 | $ 143 |
Investments (Repurchase Agreeme
Investments (Repurchase Agreement and Securities Lending) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | $ 2,725 | $ 2,725 |
Overnight & Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,725 | 2,725 |
Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 0 | 0 |
30 Days or Greater | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 0 | 0 |
Foreign public corporate securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,725 | 2,725 |
Foreign public corporate securities | Overnight & Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | 2,725 | 2,725 |
Foreign public corporate securities | Up to 30 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total cash collateral for loaned securities | $ 0 | $ 0 |
Derivative Instruments (Gross N
Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Notional | $ 655,650 | $ 635,755 |
Gross Fair Value Assets | 42,873 | 50,895 |
Gross Fair Value Liabilities | (31,159) | (36,119) |
Derivatives Designated as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 121,185 | 126,806 |
Gross Fair Value Assets | 2,314 | 2,404 |
Gross Fair Value Liabilities | (3,291) | (7,017) |
Derivatives Designated as Hedge Accounting Instruments: | Foreign Currency Swaps | ||
Derivative [Line Items] | ||
Notional | 121,185 | 126,806 |
Gross Fair Value Assets | 2,314 | 2,404 |
Gross Fair Value Liabilities | (3,291) | (7,017) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | ||
Derivative [Line Items] | ||
Notional | 534,465 | 508,949 |
Gross Fair Value Assets | 40,559 | 48,491 |
Gross Fair Value Liabilities | (27,868) | (29,102) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Notional | 30,200 | 30,200 |
Gross Fair Value Assets | 3,549 | 4,535 |
Gross Fair Value Liabilities | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit Default Swaps | ||
Derivative [Line Items] | ||
Notional | 0 | 713 |
Gross Fair Value Assets | 0 | 0 |
Gross Fair Value Liabilities | 0 | (6) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Swaps | ||
Derivative [Line Items] | ||
Notional | 33,224 | 33,224 |
Gross Fair Value Assets | 2,328 | 2,374 |
Gross Fair Value Liabilities | (1,189) | (1,650) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Forward | ||
Derivative [Line Items] | ||
Notional | 4,041 | 3,087 |
Gross Fair Value Assets | 9 | 0 |
Gross Fair Value Liabilities | (3) | (96) |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity Options | ||
Derivative [Line Items] | ||
Notional | 467,000 | 441,725 |
Gross Fair Value Assets | 34,673 | 41,582 |
Gross Fair Value Liabilities | $ (26,676) | $ (27,350) |
Derivative Instruments (Offsett
Derivative Instruments (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives Assets | ||
Gross Amounts of Recognized Financial Instruments | $ 42,873 | $ 50,895 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (31,159) | (36,114) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 11,714 | 14,781 |
Financial Instruments/ Collateral | (11,040) | (14,572) |
Net Amount | 674 | 209 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Financial Instruments | 0 | 0 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Total Assets | ||
Gross Amounts of Recognized Financial Instruments | 42,873 | 50,895 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (31,159) | (36,114) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 11,714 | 14,781 |
Financial Instruments/ Collateral | (11,040) | (14,572) |
Net Amount | 674 | 209 |
Derivatives Liabilities | ||
Gross Amounts of Recognized Financial Instruments | 31,159 | 36,119 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (31,159) | (36,119) |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Securities sold under agreements to repurchase | ||
Gross Amounts of Recognized Financial Instruments | 0 | 0 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Position | 0 | 0 |
Financial Instruments/ Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Total Liabilities | ||
Gross Amounts of Recognized Financial Instruments | 31,159 | 36,119 |
Gross Amounts Offset in the Consolidated Statements of Financial Position | (31,159) | (36,119) |
Net Amounts Presented in the Consolidated Statements 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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ (16,266) | $ (7,493) | $ (296) | $ 6,378 |
Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 375 | 488 | 776 | 966 |
Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (126) | (323) | 27 | 701 |
AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 2,145 | (5,608) | 3,689 | 10,403 |
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 | 45 | 0 | 37 | 26 |
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 | 375 | 488 | 776 | 966 |
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 | (125) | (324) | 33 | 681 |
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 2,145 | (5,608) | 3,689 | 10,403 |
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 | 45 | 0 | 37 | 26 |
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 | 375 | 488 | 776 | 966 |
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 | (125) | (324) | 33 | 681 |
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 | 2,145 | (5,608) | 3,689 | 10,403 |
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 | (16,311) | (7,493) | (333) | 6,352 |
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 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (1) | 1 | (6) | 20 |
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 | 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 | 315 | 254 | (512) | 2,093 |
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 | 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 | 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 | 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 | (16) | (42) | 95 | 31 |
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 | 0 | 0 | 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 | 0 | 0 | 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 | 0 | 0 | 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 | 637 | (963) | 640 | 3,564 |
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 | 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 | (1) | 1 | (6) | 20 |
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 | 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 | 0 | (69) | (4) | (69) |
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 | 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 | 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 | 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 | 2,484 | 5,727 | 4,449 | (4,657) |
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 | 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 | 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 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Realized Investment Gains (Losses) | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | (19,731) | (12,400) | (5,001) | 5,390 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Net Investment Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | Other Income | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | 0 | 0 | 0 | 0 |
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivative Financial Instruments | AOCI | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative Instruments Gain (Loss) Recognized In Income Net | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Instruments (Current
Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Cash flow hedges in AOCI | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |
Balance, beginning | $ (2,998) |
Amount recorded in AOCI | 4,536 |
Amounts reclassified into current period earnings | (846) |
Balance, ending | 692 |
Currency/Interest Rate | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |
Amount recorded in AOCI | 4,536 |
Amounts reclassified into current period earnings | $ (846) |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 1.5 | |
Credit Derivative Protection Purchased Fair Value Asset (Liability) | 0 | $ 0 |
Credit Derivative, Maximum Exposure, Undiscounted | 0 | 0.7 |
Future Policy Benefits | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative, Net | (834) | (1,195) |
Reinsurance recoverables | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative, Net | 834 | 1,195 |
Policyholders' Account Balances | ||
Derivative [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative, Net | $ (152) | $ (154) |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | $ 1,944,652 | $ 1,894,195 |
Fixed maturities, trading | 18,515 | 19,269 |
Equity securities | 6,029 | 6,218 |
Other invested assets | 107,509 | 97,509 |
Reinsurance recoverables | 3,541,640 | 3,860,612 |
Receivables from parent and affiliates | 36,482 | 31,061 |
Separate account assets | 17,780,468 | 17,117,510 |
TOTAL ASSETS | 24,120,946 | 23,708,859 |
Future policy benefits | 2,667,461 | 2,976,575 |
Policyholders' account balances | 2,618,892 | 2,532,766 |
Payables to parent and affiliates | 14,765 | 16,250 |
Total liabilities | 23,265,820 | 22,844,267 |
Future policy benefits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Embedded Derivative, Fair Value of Embedded Derivative, Net Liability | 834,000 | 1,195,000 |
Embedded Derivative, Fair Value of Embedded Derivative Gross Asset | 66,000 | 51,000 |
Embedded Derivative, Fair Value of Embedded Derivative Gross Liability | 900,000 | 1,246,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 1,944,652 | 1,894,195 |
Fixed maturities, trading | 18,515 | 19,269 |
Equity securities | 6,029 | 6,218 |
Cash equivalents | 34,739 | 60,879 |
Other invested assets | 11,714 | 14,781 |
Reinsurance recoverables | 834,207 | 1,195,469 |
Receivables from parent and affiliates | 798 | 815 |
Subtotal excluding separate account assets | 2,850,654 | 3,191,626 |
Separate account assets | 15,620,579 | 15,044,796 |
TOTAL ASSETS | 18,471,233 | 18,236,422 |
Future policy benefits | 834,207 | 1,195,469 |
Policyholders' account balances | 152,149 | 153,937 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 986,356 | 1,349,406 |
Assets Netting | (31,159) | (36,114) |
Liabilities Netting | (31,159) | (36,119) |
Netting | 0 | 0 |
Fair Value, Measurements, Recurring | Other invested assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Netting | (31,159) | (36,114) |
Fair Value, Measurements, Recurring | Payables to parent and affiliates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities Netting | (31,159) | (36,119) |
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 | 13,911 | 11,655 |
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 | 181,293 | 182,626 |
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 | 101,476 | 92,636 |
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 | 989,555 | 949,585 |
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 | 227,834 | 245,618 |
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 | 104,371 | 70,347 |
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 | 155,987 | 165,355 |
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 | 16,869 | 17,189 |
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 | 150,056 | 155,418 |
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 | 3,300 | 3,766 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fixed maturities, trading | 0 | 0 |
Equity securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Other invested assets | 0 | 0 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Subtotal excluding separate account assets | 0 | 0 |
Separate account assets | 0 | 0 |
TOTAL ASSETS | 0 | 0 |
Future policy benefits | 0 | 0 |
Policyholders' account balances | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | 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 |
Fair Value, Measurements, Recurring | Level 1 | 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 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | 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 |
Fair Value, Measurements, Recurring | Level 1 | 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 |
Fair Value, Measurements, Recurring | Level 1 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 1,921,909 | 1,870,150 |
Fixed maturities, trading | 18,515 | 19,269 |
Equity securities | 125 | 123 |
Cash equivalents | 34,739 | 60,879 |
Other invested assets | 42,873 | 50,895 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 798 | 815 |
Subtotal excluding separate account assets | 2,018,959 | 2,002,131 |
Separate account assets | 15,620,579 | 15,044,796 |
TOTAL ASSETS | 17,639,538 | 17,046,927 |
Future policy benefits | 0 | 0 |
Policyholders' account balances | 0 | 0 |
Payables to parent and affiliates | 31,159 | 36,119 |
Total liabilities | 31,159 | 36,119 |
Fair Value, Measurements, Recurring | Level 2 | 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 | 13,911 | 11,655 |
Fair Value, Measurements, Recurring | Level 2 | 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 | 181,293 | 182,626 |
Fair Value, Measurements, Recurring | Level 2 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 101,476 | 92,636 |
Fair Value, Measurements, Recurring | Level 2 | U.S. corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 989,555 | 949,585 |
Fair Value, Measurements, Recurring | Level 2 | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 227,411 | 245,194 |
Fair Value, Measurements, Recurring | Level 2 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 104,371 | 70,347 |
Fair Value, Measurements, Recurring | Level 2 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 133,667 | 141,734 |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 16,869 | 17,189 |
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 150,056 | 155,418 |
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 3,300 | 3,766 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 22,743 | 24,045 |
Fixed maturities, trading | 0 | 0 |
Equity securities | 5,904 | 6,095 |
Cash equivalents | 0 | 0 |
Other invested assets | 0 | 0 |
Reinsurance recoverables | 834,207 | 1,195,469 |
Receivables from parent and affiliates | 0 | 0 |
Subtotal excluding separate account assets | 862,854 | 1,225,609 |
Separate account assets | 0 | 0 |
TOTAL ASSETS | 862,854 | 1,225,609 |
Future policy benefits | 834,207 | 1,195,469 |
Policyholders' account balances | 152,149 | 153,937 |
Payables to parent and affiliates | 0 | 0 |
Total liabilities | 986,356 | 1,349,406 |
Fair Value, Measurements, Recurring | Level 3 | 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 |
Fair Value, Measurements, Recurring | Level 3 | 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 |
Fair Value, Measurements, Recurring | Level 3 | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | 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 |
Fair Value, Measurements, Recurring | Level 3 | U.S. corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 423 | 424 |
Fair Value, Measurements, Recurring | Level 3 | Foreign corporate public securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Foreign corporate private securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 22,320 | 23,621 |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities, available-for-sale | 0 | 0 |
Other invested assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investment measured at NAV per share | 2,900 | 2,800 |
Separate account assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investment measured at NAV per share | $ 2,160,000 | $ 2,073,000 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities (Quantitative Info for Level 3 Inputs) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Corporate securities | $ 4,660 | $ 4,660 |
Future policy benefits | 2,667,461 | 2,976,575 |
Policyholders' account balances | 2,618,892 | 2,532,766 |
Fair Value, Measurements, Recurring | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | 834,207 | 1,195,469 |
Policyholders' account balances | 152,149 | 153,937 |
Derivative Asset, Collateral, Obligation to Return Cash, Offset | $ 0 | 0 |
Level 3 | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs, Policyholder Age | 45 years | |
Level 3 | Minimum | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Mortality rate | 0.00% | |
Level 3 | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Fair Value Inputs, Policyholder Age | 90 years | |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | $ 834,207 | 1,195,469 |
Policyholders' account balances | $ 152,149 | $ 153,937 |
Level 3 | Internal | Minimum | Discounted cash flow | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 1.00% | 1.00% |
Spread over LIBOR | 0.05% | 0.06% |
Utilization rate | 39.00% | 39.00% |
Withdrawal rate (greater than maximum) | 76.00% | 76.00% |
Mortality rate | 0.00% | 0.00% |
Equity volatility curve | 16.00% | 18.00% |
Level 3 | Internal | Minimum | Discounted cash flow | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 1.00% | 1.00% |
Spread over LIBOR | 0.05% | 0.06% |
Mortality rate | 0.00% | 0.00% |
Equity volatility curve | 11.00% | 15.00% |
Level 3 | Internal | Minimum | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.15% | 1.84% |
Level 3 | Internal | Maximum | Discounted cash flow | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 20.00% | 20.00% |
Spread over LIBOR | 1.12% | 1.17% |
Utilization rate | 96.00% | 96.00% |
Withdrawal rate (greater than maximum) | 100.00% | 100.00% |
Mortality rate | 15.00% | 15.00% |
Equity volatility curve | 25.00% | 26.00% |
Level 3 | Internal | Maximum | Discounted cash flow | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Lapse rate | 6.00% | 6.00% |
Spread over LIBOR | 1.12% | 1.17% |
Mortality rate | 23.00% | 24.00% |
Equity volatility curve | 26.00% | 30.00% |
Level 3 | Internal | Maximum | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 5.37% | 6.55% |
Level 3 | Internal | Weighted Average | Discounted cash flow | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Discount rate | 2.60% | 2.32% |
Level 3 | Internal | Fair Value, Measurements, Recurring | Future policy benefits | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Future policy benefits | $ 834,207 | $ 1,195,469 |
Level 3 | Internal | Fair Value, Measurements, Recurring | Policyholders' account balances | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholders' account balances | 152,149 | 153,937 |
Level 3 | Internal | Fair Value, Measurements, Recurring | Corporate securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Corporate securities | 22,743 | 24,045 |
Level 3 | Internal | Fair Value, Measurements, Recurring | Reinsurance recoverables | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Reinsurance recoverables | $ 834,207 | $ 1,195,469 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | $ 5,857 | $ 6,840 | $ 6,095 | $ 7,305 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 5,904 | 7,187 | 5,904 | 7,187 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 47 | 347 | (191) | (118) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 47 | 348 | (191) | (118) |
Equity securities | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Equity securities | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 47 | 347 | (191) | (118) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 47 | 348 | (191) | (118) |
Equity securities | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Equity securities | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Reinsurance recoverables | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | 660,533 | 1,868,539 | 1,195,469 | 760,558 |
Purchases | 27,678 | 26,767 | 55,462 | 53,085 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 834,207 | 1,741,924 | 834,207 | 1,741,924 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 145,996 | (153,382) | (416,724) | 928,281 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 154,090 | (141,848) | (390,243) | 940,465 |
Reinsurance recoverables | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 145,996 | (153,382) | (416,724) | 928,281 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 154,090 | (141,848) | (390,243) | 940,465 |
Reinsurance recoverables | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Reinsurance recoverables | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Reinsurance recoverables | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Future policy benefits | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | (660,533) | (1,868,539) | (1,195,469) | (760,558) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | (27,678) | (26,767) | (55,462) | (53,085) |
Settlements | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | (834,207) | (1,741,924) | (834,207) | (1,741,924) |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (145,996) | 153,382 | 416,724 | (928,281) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (154,090) | 141,848 | 390,243 | (940,465) |
Future policy benefits | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (145,996) | 153,382 | 416,724 | (928,281) |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (154,090) | 141,848 | 390,243 | (940,465) |
Future policy benefits | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Future policy benefits | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Future policy benefits | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Policyholders' account balances | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | (136,773) | (123,608) | (153,937) | (133,793) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | (7,943) | 0 | (14,698) |
Settlements | 4,337 | 0 | 7,459 | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | (152,149) | (143,242) | (152,149) | (143,242) |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (19,713) | (11,691) | (5,671) | 5,249 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (17,642) | (12,621) | (1,365) | 5,039 |
Policyholders' account balances | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | (19,713) | (11,691) | (5,671) | 5,249 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | (17,642) | (12,621) | (1,365) | 5,039 |
Policyholders' account balances | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Policyholders' account balances | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Policyholders' account balances | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Available-for-sale | Fixed maturities | Realized investment gains (losses), net | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 32 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Available-for-sale | Fixed maturities | Other income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 0 | 0 | 0 | 0 |
Available-for-sale | Fixed maturities | Included in other comprehensive income (loss) | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 449 | 1,959 | (1,265) | 145 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | 449 | 1,959 | (1,264) | 190 |
Available-for-sale | Fixed maturities | Net investment income | ||||
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 0 | 0 | 0 | 8 |
Available-for-sale | Fixed maturities | Corporate securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, beginning of period | 22,331 | 18,274 | 24,045 | 1,178 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | (1) | 0 | (861) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | (37) | 0 | (37) | 0 |
Other | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 19,730 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, end of period | 22,743 | 20,232 | 22,743 | 20,232 |
Total gains (losses) (realized/unrealized): | ||||
Included in earnings | 449 | 1,959 | (1,265) | 185 |
Unrealized gains (losses) for assets/liabilities still held: | ||||
Included in earnings | $ 449 | $ 1,959 | $ (1,264) | $ 190 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Policy loans | $ 211,669 | $ 212,163 |
Cash and cash equivalents | 41,878 | 68,527 |
Accrued investment income | 22,154 | 21,248 |
Reinsurance recoverables | 3,541,640 | 3,860,612 |
Receivables from parent and affiliates | 36,482 | 31,061 |
Liabilities: | ||
Cash collateral for loaned securities | 2,725 | 2,725 |
Short-term debt | 0 | 0 |
Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 136,372 | 140,921 |
Policy loans | 211,669 | 212,163 |
Cash and cash equivalents | 7,139 | 7,648 |
Accrued investment income | 22,154 | 21,248 |
Reinsurance recoverables | 29,063 | 28,654 |
Receivables from parent and affiliates | 35,684 | 30,246 |
Other assets | 3,992 | 6,205 |
Total assets | 446,073 | 447,085 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 262,090 | 261,868 |
Cash collateral for loaned securities | 2,725 | 2,725 |
Payables to parent and affiliates | 14,765 | 16,250 |
Other liabilities | 44,856 | 50,335 |
Total liabilities | 324,436 | 331,178 |
Carrying Amount | ||
Assets: | ||
Commercial mortgage and other loans | 127,258 | 133,115 |
Policy loans | 211,669 | 212,163 |
Cash and cash equivalents | 7,139 | 7,648 |
Accrued investment income | 22,154 | 21,248 |
Reinsurance recoverables | 27,733 | 26,915 |
Receivables from parent and affiliates | 35,684 | 30,246 |
Other assets | 3,992 | 6,205 |
Total assets | 435,629 | 437,540 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 260,760 | 260,128 |
Cash collateral for loaned securities | 2,725 | 2,725 |
Payables to parent and affiliates | 14,765 | 16,250 |
Other liabilities | 44,856 | 50,335 |
Total liabilities | 323,106 | 329,438 |
Level 1 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 0 | 0 |
Policy loans | 0 | 0 |
Cash and cash equivalents | 7,139 | 7,648 |
Accrued investment income | 0 | 0 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 7,139 | 7,648 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 0 | 0 |
Cash collateral for loaned securities | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 0 | 0 |
Policy loans | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Accrued investment income | 22,154 | 21,248 |
Reinsurance recoverables | 0 | 0 |
Receivables from parent and affiliates | 35,684 | 30,246 |
Other assets | 3,992 | 6,205 |
Total assets | 61,830 | 57,699 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 220,818 | 220,527 |
Cash collateral for loaned securities | 2,725 | 2,725 |
Payables to parent and affiliates | 14,765 | 16,250 |
Other liabilities | 44,856 | 50,335 |
Total liabilities | 283,164 | 289,837 |
Level 3 | Fair Value | ||
Assets: | ||
Commercial mortgage and other loans | 136,372 | 140,921 |
Policy loans | 211,669 | 212,163 |
Cash and cash equivalents | 0 | 0 |
Accrued investment income | 0 | 0 |
Reinsurance recoverables | 29,063 | 28,654 |
Receivables from parent and affiliates | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 377,104 | 381,738 |
Liabilities: | ||
Policyholders’ account balances - investment contracts | 41,272 | 41,341 |
Cash collateral for loaned securities | 0 | 0 |
Payables to parent and affiliates | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | $ 41,272 | $ 41,341 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 164 | $ (8,425) | $ 2,289 | $ (6,724) | |
Effective income tax rate, percent | 7.09% | (36.98%) | |||
Federal Statutory income tax rate, percent | 21.00% | 35.00% | |||
CARES Act NOL Carryback | $ 7,000 |
Reinsurance (Reinsurance amount
Reinsurance (Reinsurance amounts included in the Statement of Financial Position) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverables | $ 3,541,640 | $ 3,860,612 |
Policy loans | (211,669) | (212,163) |
Deferred policy acquisition costs | (263,179) | (224,425) |
Other assets | 19,513 | 23,007 |
Other liabilities | 176,903 | 187,620 |
Impacts of Reinsurance | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverables | 3,541,640 | 3,860,612 |
Policy loans | (21,593) | (21,466) |
Deferred policy acquisition costs | (656,672) | (661,732) |
Deferred sales inducements | (39,658) | (40,980) |
Other assets | 13,886 | 15,172 |
Other liabilities | $ 126,082 | $ 127,234 |
Reinsurance (Reinsurance Recove
Reinsurance (Reinsurance Recoverable by Counterparty) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | $ 3,541,640 | $ 3,860,612 |
Prudential Insurance | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 1,357,298 | 1,726,545 |
PAR U | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 1,158,414 | 1,119,545 |
PARCC | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 433,487 | 448,884 |
PAR Term | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 239,749 | 236,561 |
Term Re | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 243,094 | 232,398 |
DART | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 71,543 | 69,268 |
Pruco Life | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | 35,475 | 24,744 |
Unaffiliated | ||
Effects of Reinsurance [Line Items] | ||
Total reinsurance recoverables | $ 2,580 | $ 2,667 |
Reinsurance (Reinsurance amou_2
Reinsurance (Reinsurance amounts included in the Statements of Operations and Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Premiums: | ||||
Direct | $ 64,457 | $ 62,975 | $ 128,807 | $ 127,608 |
Ceded | (57,371) | (57,846) | (114,162) | (117,285) |
Net premiums | 7,086 | 5,129 | 14,645 | 10,323 |
Policy charges and fee income: | ||||
Direct | 99,420 | 94,937 | 206,958 | 204,009 |
Ceded | (76,496) | (76,694) | (155,716) | (161,797) |
Net policy charges and fee income | 22,924 | 18,243 | 51,242 | 42,212 |
Net investment income: | ||||
Direct | 25,101 | 20,874 | 48,854 | 38,066 |
Ceded | (203) | (191) | (411) | (418) |
Net investment income | 24,898 | 20,683 | 48,443 | 37,648 |
Asset administration fees: | ||||
Direct | 11,134 | 9,290 | 21,940 | 19,015 |
Ceded | (8,994) | (7,744) | (17,774) | (15,904) |
Net asset administration fees | 2,140 | 1,546 | 4,166 | 3,111 |
Realized investment gains (losses), net: | ||||
Direct | (162,428) | 146,576 | 415,419 | (922,872) |
Ceded | 145,984 | (154,088) | (416,031) | 928,425 |
Realized investment gains (losses), net | (16,444) | (7,512) | (612) | 5,553 |
Policyholders’ benefits (including change in reserves): | ||||
Direct | 107,782 | 126,289 | 217,945 | 257,575 |
Ceded | (96,493) | (112,846) | (187,821) | (227,446) |
Net policyholders’ benefits (including change in reserves) | 11,289 | 13,443 | 30,124 | 30,129 |
Interest credited to policyholders’ account balances: | ||||
Direct | 15,148 | 16,061 | 36,460 | 38,319 |
Ceded | (5,850) | (4,074) | (16,451) | (16,141) |
Net interest credited to policyholders’ account balances | 9,298 | 11,987 | 20,009 | 22,178 |
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization | (36,633) | (24,163) | (73,062) | (99,696) |
Unaffiliated activity | ||||
Policy charges and fee income: | ||||
Ceded | 0 | 0 | 0 | 0 |
Policyholders’ benefits (including change in reserves): | ||||
Ceded | $ (1,100) | $ (500) | $ (100) | $ (1,500) |
Reinsurance (Life Insurance In
Reinsurance (Life Insurance In Force) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Reinsurance Disclosures [Abstract] | ||
Direct gross life insurance face amount in force | $ 155,482,024 | $ 151,576,594 |
Reinsurance ceded | (140,507,672) | (138,189,156) |
Net life insurance face amount in force | $ 14,974,352 | $ 13,387,438 |
Reinsurance (Narratives) (Detai
Reinsurance (Narratives) (Details) - Affiliated Entity | Jul. 01, 2012 | Dec. 31, 2009 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2013 |
PAR U | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
PARCC | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 90.00% | ||||
PAR Term | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
Term Re | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% | ||||
DART | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance Retention Policy, Reinsured Risk, Percentage | 95.00% |
Equity (Accumulated Other Compr
Equity (Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 185,407 | |||
Income tax benefit (expense) | $ (13,035) | $ (20,470) | 10,836 | $ (16,066) |
Ending Balance | 144,639 | 144,639 | ||
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (783) | (981) | ||
Change in OCI before reclassifications | (80) | 41 | ||
Amounts reclassified from AOCI | 0 | 0 | ||
Income tax benefit (expense) | 17 | (9) | ||
Ending Balance | (846) | (949) | (846) | (949) |
Net Unrealized Investment Gains (Losses) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 186,190 | 86,616 | ||
Change in OCI before reclassifications | (51,247) | 77,489 | ||
Amounts reclassified from AOCI | (277) | (1,030) | ||
Income tax benefit (expense) | 10,819 | (16,057) | ||
Ending Balance | 145,485 | 147,018 | 145,485 | 147,018 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 185,407 | 85,635 | ||
Change in OCI before reclassifications | (51,327) | 77,530 | ||
Amounts reclassified from AOCI | (277) | (1,030) | ||
Income tax benefit (expense) | 10,836 | (16,066) | ||
Ending Balance | 144,639 | 146,069 | 144,639 | 146,069 |
Cash flow hedges | Net Unrealized Investment Gains (Losses) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (3,000) | 3,000 | ||
Ending Balance | $ 1,000 | $ 14,000 | $ 1,000 | $ 14,000 |
Equity (Reclassification out of
Equity (Reclassification out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net Unrealized Investment Gains (Losses) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | $ (277) | $ (1,030) | ||
Total reclassifications for the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | (277) | (1,030) | ||
Reclassification out of Accumulated Other Comprehensive Income | Net Unrealized Investment Gains (Losses) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | $ (133) | $ 123 | 277 | 1,030 |
Reclassification out of Accumulated Other Comprehensive Income | Total reclassifications for the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from AOCI | (133) | 123 | 277 | 1,030 |
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized investment gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net unrealized investment gains (losses) | (427) | (41) | (569) | (643) |
Reclassification out of Accumulated Other Comprehensive Income | Currency/Interest Rate | Cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net unrealized investment gains (losses) | $ 294 | $ 164 | $ 846 | $ 1,673 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Ending Balance - net unrealized investment gains (losses) on AFS securities with allowance | $ 144,639 | $ 185,407 |
Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on which an allowance for credit loss has been recognized | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Ending Balance - net unrealized investment gains (losses) on AFS securities with allowance | $ 0 |
Equity (All Other Net Unrealize
Equity (All Other Net Unrealized Investment Gains (Losses) in AOCI) (Details) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 185,407 |
Ending Balance | 144,639 |
Net Unrealized Gains (Losses) on Investments | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 255,724 |
Net investment gains (losses) on investments arising during the period | (56,497) |
Reclassification adjustment for (gains) losses included in net income | (277) |
Impact of net unrealized investment (gains) losses | 0 |
Ending Balance | 198,950 |
Deferred Policy Acquisition Costs and Other Costs | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 28,241 |
Net investment gains (losses) on investments arising during the period | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 |
Impact of net unrealized investment (gains) losses | (4,592) |
Ending Balance | 23,649 |
Future Policy Benefits and Policyholders' Account Balances | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (48,283) |
Net investment gains (losses) on investments arising during the period | 0 |
Reclassification adjustment for (gains) losses included in net income | 0 |
Impact of net unrealized investment (gains) losses | 9,842 |
Ending Balance | (38,441) |
Income Tax Benefit (Expense) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (49,492) |
Net investment gains (losses) on investments arising during the period | 11,864 |
Reclassification adjustment for (gains) losses included in net income | 58 |
Impact of net unrealized investment (gains) losses | (1,103) |
Ending Balance | (38,673) |
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 186,190 |
Net investment gains (losses) on investments arising during the period | (44,633) |
Reclassification adjustment for (gains) losses included in net income | (219) |
Impact of net unrealized investment (gains) losses | 4,147 |
Ending Balance | $ 145,485 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($)policy | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Related Party Transaction [Line Items] | ||||||
Asset administration fees | $ 2,140,000 | $ 1,546,000 | $ 4,166,000 | $ 3,111,000 | ||
Commissions and fees | 22,924,000 | 18,243,000 | 51,242,000 | 42,212,000 | ||
Other invested assets | 107,509,000 | 107,509,000 | $ 97,509,000 | |||
Net investment income | 24,898,000 | 20,683,000 | 48,443,000 | 37,648,000 | ||
Debt Outstanding | 0 | 0 | 0 | |||
Contributed capital | $ 85,000,000 | 1,000,000 | ||||
Dividends | 0 | 0 | ||||
Prudential Insurance | ||||||
Related Party Transaction [Line Items] | ||||||
Stock option program plan expense | 0 | 0 | 0 | 100,000 | ||
Deferred compensation program expense | 100,000 | 0 | 300,000 | 300,000 | ||
Pension plan expense | 300,000 | 400,000 | 600,000 | 1,000,000 | ||
Welfare plan expense | 300,000 | 400,000 | $ 700,000 | 1,100,000 | ||
Defined contribution plan employer matching contribution percent | 4.00% | |||||
Defined contribution plan, cost recognized | 100,000 | 200,000 | $ 200,000 | 400,000 | ||
Number of Corporate Owned Life Insurance policies sold | policy | 3 | |||||
Prudential Financial | ||||||
Related Party Transaction [Line Items] | ||||||
Company’s share of corporate expenses | 2,000,000 | 1,000,000 | $ 4,000,000 | 3,000,000 | ||
Number of Corporate Owned Life Insurance policies sold | policy | 1 | |||||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Accrued interest receivable related to long-term notes receivable | 0 | $ 0 | 0 | |||
Revenue related to long-term notes receivables | 0 | 0 | 0 | 100,000 | ||
Line of credit facility, maximum borrowing capacity | 200,000,000 | 200,000,000 | ||||
Interest expense related to loans payable | 0 | 0 | 0 | 0 | ||
Affiliated Entity | PAD | ||||||
Related Party Transaction [Line Items] | ||||||
Commissions and fees | 9,000,000 | 12,000,000 | 18,000,000 | 29,000,000 | ||
Affiliated Entity | ASTISI and PGIM Investments | ||||||
Related Party Transaction [Line Items] | ||||||
Asset administration fees | 9,000,000 | 8,000,000 | 18,000,000 | 16,000,000 | ||
Affiliated Entity | PGIM | ||||||
Related Party Transaction [Line Items] | ||||||
Net investment income | 700,000 | 700,000 | 1,400,000 | 1,300,000 | ||
Affiliated Entity | PGIM Investments, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Asset administration fees | 2,000,000 | 1,000,000 | 4,000,000 | 3,000,000 | ||
Prudential Financial Joint Ventures | ||||||
Related Party Transaction [Line Items] | ||||||
Other invested assets | 43,000,000 | 43,000,000 | 41,000,000 | |||
Net investment income | 700,000 | 2,000,000 | 1,500,000 | 300,000 | ||
Prudential Insurance and Prudential Financial | ||||||
Related Party Transaction [Line Items] | ||||||
Life Insurance, Corporate or Bank Owned, amount | 3,305,000,000 | 3,305,000,000 | $ 3,071,000,000 | |||
Fees related to Life Insurance, Corporate or Bank Owned, amount | $ 7,000,000 | $ 6,000,000 | $ 14,000,000 | $ 14,000,000 | ||
Mortality risk retained for COLI policies | 10.00% | 10.00% | ||||
Maximum COLI Mortality Risk | $ 100,000 | $ 100,000 |
Related Party Transactions (Aff
Related Party Transactions (Affiliated Notes Receivable) (Details) - Affiliated Entity - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Total long-term notes receivable - affiliated | $ 798 | $ 815 |
U.S. Dollar fixed rate notes | ||
Related Party Transaction [Line Items] | ||
Total long-term notes receivable - affiliated | $ 798 | $ 815 |
U.S. Dollar fixed rate notes | Minimum | ||
Related Party Transaction [Line Items] | ||
Interest Rates | 0.00% | |
U.S. Dollar fixed rate notes | Maximum | ||
Related Party Transaction [Line Items] | ||
Interest Rates | 14.85% |
Related Party Transactions (A_2
Related Party Transactions (Affiliated Asset Transfer) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Related Party Transaction [Line Items] | ||||
Realized investment gains (losses), net | $ (16,444) | $ (7,512) | $ (612) | $ 5,553 |
Affiliated Entity | Prudential Insurance April 2020 Purchase | ||||
Related Party Transaction [Line Items] | ||||
Fair Value | 3,485 | 3,485 | ||
Book Value | 3,320 | 3,320 | ||
APIC, Net of Tax Increase/(Decrease) | $ (130) | (130) | ||
Realized investment gains (losses), net | $ 0 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Commitments and Contingent Liabilities [Line Items] | |||||
Litigation and regulatory matters loss contingency, range of possible loss, maximum (less than) | $ 10 | $ 10 | |||
Commitments | Commercial Mortgage Loans | |||||
Commitments and Contingent Liabilities [Line Items] | |||||
Total outstanding mortgage loan commitments | 3 | 3 | $ 0 | ||
Allowance for credit losses | 0 | 0 | 0 | ||
Change in allowance for credit losses | 0 | $ 0 | 0 | $ 0 | |
Commitments | Investments | |||||
Commitments and Contingent Liabilities [Line Items] | |||||
Commitments to Purchase Investment (excluding Commercial Mortgage Loans) | 64 | 64 | $ 74 | ||
Purchase Commitment | |||||
Commitments and Contingent Liabilities [Line Items] | |||||
Change in allowance for credit losses | $ 0 | $ 0 | $ 0 | $ 0 |