Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 19, 2015 | Jun. 30, 2014 | |
Document Information [Line Items] | |||
Entity Registrant Name | AMERICAN EQUITY INVESTMENT LIFE HOLDING CO | ||
Entity Central Index Key | 1039828 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,759,747,273 | ||
Entity Common Stock, Shares Outstanding | 76,877,428 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fixed maturity securities: | ||
Available for sale, at fair value (amortized cost: 2014 - $30,205,046; 2013 - $26,527,730) | $32,445,202 | $26,610,447 |
Held for investment, at amortized cost (fair value: 2014 - $75,838; 2013 - $60,840) | 76,432 | 76,255 |
Equity securities, available for sale, at fair value (cost: 2014 - $7,509; 2013 - $7,503) | 7,805 | 7,778 |
Mortgage loans on real estate | 2,434,580 | 2,581,082 |
Derivative instruments | 731,113 | 856,050 |
Other investments | 286,726 | 215,042 |
Total investments | 35,981,858 | 30,346,654 |
Cash and cash equivalents | 701,514 | 897,529 |
Coinsurance deposits | 3,044,342 | 2,999,618 |
Accrued investment income | 326,559 | 301,641 |
Deferred policy acquisition costs | 2,058,556 | 2,426,652 |
Deferred sales inducements | 1,587,257 | 1,875,880 |
Deferred income taxes | 0 | 301,856 |
Income taxes recoverable | 9,252 | 0 |
Other assets | 280,396 | 471,669 |
Total assets | 43,989,734 | 39,621,499 |
Liabilities: | ||
Policy benefit reserves | 39,802,861 | 35,789,655 |
Other policy funds and contract claims | 365,819 | 418,033 |
Notes payable | 421,679 | 549,958 |
Subordinated debentures | 246,243 | 246,050 |
Deferred income taxes | 3,895 | 0 |
Income taxes payable | 0 | 10,153 |
Other liabilities | 1,009,361 | 1,222,963 |
Total liabilities | 41,849,858 | 38,236,812 |
Stockholders' equity: | ||
Preferred stock, par value $1 per share, 2,000,000 shares authorized, 2014 and 2013 - no shares issued and outstanding | 0 | 0 |
Common stock, par value $1 per share, 200,000,000 shares authorized; issued and outstanding: 2014 - 76,062,407 shares (excluding 4,126,167 treasury shares); 2013 - 70,535,404 shares (excluding 4,876,735 treasury shares) | 76,062 | 70,535 |
Additional paid-in capital | 513,218 | 550,400 |
Unallocated common stock held by ESOP; 2013 - 58,618 shares | 0 | -631 |
Accumulated other comprehensive income | 721,401 | 46,196 |
Retained earnings | 829,195 | 718,187 |
Total stockholders' equity | 2,139,876 | 1,384,687 |
Total liabilities and stockholders' equity | $43,989,734 | $39,621,499 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Investments: | ||
Available for sale, at fair value, amortized cost | $30,205,046 | $26,527,730 |
Held for investment, at amortized cost, fair value | 75,838 | 60,840 |
Equity securities, available for sale, at fair value, cost | $7,509 | $7,503 |
Stockholders' equity: | ||
Preferred stock, par value (dollars per share) | $1 | $1 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (dollars per share) | $1 | $1 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 76,062,407 | 70,535,404 |
Common stock, shares outstanding | 76,062,407 | 70,535,404 |
Common stock, shares held in treasury | 4,126,167 | 4,876,735 |
Unallocated common stock, shares held by ESOP | 0 | 58,618 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenues: | ||||||
Premiums and other considerations | $32,623 | $45,347 | $76,675 | |||
Annuity product charges | 118,990 | 103,591 | 89,006 | |||
Net investment income | 1,531,667 | 1,383,927 | 1,286,923 | |||
Change in fair value of derivatives | 504,825 | 1,076,015 | 221,138 | |||
Net realized gains (losses) on investments, excluding other than temporary impairment (OTTI) losses | -4,003 | 40,561 | -6,454 | |||
OTTI losses on investments: | ||||||
Total OTTI losses | 0 | -4,964 | -5,411 | |||
Portion of OTTI losses recognized from other comprehensive income | -2,627 | -1,270 | -9,521 | |||
Net OTTI losses recognized in operations | -2,627 | -6,234 | -14,932 | |||
Loss on extinguishment of debt | -12,502 | -32,515 | 0 | |||
Total revenues | 2,168,973 | 2,610,692 | 1,652,356 | |||
Benefits and expenses: | ||||||
Insurance policy benefits and change in future policy benefits | 41,815 | 53,071 | 81,481 | |||
Interest sensitive and index product benefits | 1,473,700 | 1,272,867 | 808,479 | |||
Amortization of deferred sales inducements | 131,419 | 253,113 | 87,157 | |||
Change in fair value of embedded derivatives | 32,321 | 133,968 | 286,899 | |||
Interest expense on notes payable | 36,370 | 38,870 | 28,479 | |||
Interest expense on subordinated debentures | 12,122 | 12,088 | 13,458 | |||
Amortization of deferred policy acquisition costs | 163,578 | 365,468 | 164,919 | |||
Other operating costs and expenses | 81,584 | 91,915 | 95,495 | |||
Total benefits and expenses | 1,972,909 | 2,221,360 | 1,566,367 | |||
Income before income taxes | 196,064 | 389,332 | 85,989 | |||
Income tax expense | 70,041 | 136,049 | 28,191 | |||
Net income | $126,023 | $253,283 | $57,798 | |||
Earnings per common share | $1.69 | $3.86 | $0.94 | |||
Earnings per common share - assuming dilution | $1.58 | $3.38 | $0.89 | |||
Weighted average common shares outstanding: earnings per common share | 74,431,087 | [1] | 65,543,895 | [1] | 61,258,825 | [1] |
Weighted average common shares outstanding: earnings per common share - assuming dilution | 79,893,600 | 75,040,646 | 65,675,651 | |||
[1] | Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Net income | $126,023 | $253,283 | $57,798 | |||
Other comprehensive income (loss): | ||||||
Change in net unrealized investment gains/losses (1) | 1,038,604 | [1] | -1,001,943 | [1] | 358,894 | [1] |
Noncredit component of OTTI losses (1) | 1,265 | [1] | 586 | [1] | 4,571 | [1] |
Reclassification of unrealized investment gains/losses to net income (1) | -1,092 | [1] | 15,802 | [1] | -10,267 | [1] |
Other comprehensive income (loss) before income tax | 1,038,777 | -985,555 | 353,198 | |||
Income tax effect related to other comprehensive income (loss) | -363,572 | 344,944 | -123,620 | |||
Other comprehensive income (loss) | 675,205 | -640,611 | 229,578 | |||
Comprehensive income (loss) | $801,228 | ($387,328) | $287,376 | |||
[1] | Net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs. |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Unallocated Common Stock Held by ESOP [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] |
In Thousands, unless otherwise specified | ||||||
Stockholders' equity at beginning of period at Dec. 31, 2011 | $1,408,679 | $57,837 | $468,281 | ($3,620) | $457,229 | $428,952 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 57,798 | 57,798 | ||||
Other comprehensive income (loss) | 229,578 | 229,578 | ||||
Conversion of subordinated debentures | 19,591 | 2,564 | 17,027 | |||
Allocation of common stock by ESOP, including excess income tax benefits | 1,085 | 48 | 1,037 | |||
Share-based compensation, including excess income tax benefits | 6,904 | 6,904 | ||||
Issuance of common stock under compensation plans, including excess income tax benefits | 5,805 | 1,350 | 4,455 | |||
Dividends on common stock | -9,203 | -9,203 | ||||
Stockholders' equity at end of period at Dec. 31, 2012 | 1,720,237 | 61,751 | 496,715 | -2,583 | 686,807 | 477,547 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 253,283 | 253,283 | ||||
Other comprehensive income (loss) | -640,611 | -640,611 | ||||
Allocation of common stock by ESOP, including excess income tax benefits | 3,390 | 1,438 | 1,952 | |||
Share-based compensation, including excess income tax benefits | 13,624 | 13,624 | ||||
Issuance of common stock under compensation plans, including excess income tax benefits | 32,735 | 3,295 | 29,440 | |||
Extinguishment of convertible senior notes, net of tax, including shares of common stock issued upon conversion | 62,663 | 5,489 | 57,174 | |||
Warrants reclassified to embedded derivative liability to be settled in cash | -47,991 | -47,991 | ||||
Dividends on common stock | -12,643 | -12,643 | ||||
Stockholders' equity at end of period at Dec. 31, 2013 | 1,384,687 | 70,535 | 550,400 | -631 | 46,196 | 718,187 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 126,023 | 126,023 | ||||
Other comprehensive income (loss) | 675,205 | 675,205 | ||||
Allocation of common stock by ESOP, including excess income tax benefits | 1,352 | 721 | 631 | |||
Share-based compensation, including excess income tax benefits | 7,705 | 7,705 | ||||
Issuance of common stock under compensation plans, including excess income tax benefits | 14,705 | 1,568 | 13,137 | |||
Extinguishment of convertible senior notes, net of tax, including shares of common stock issued upon conversion | -3,529 | 3,959 | -7,488 | |||
Warrants reclassified to embedded derivative liability to be settled in cash | -51,257 | -51,257 | ||||
Dividends on common stock | -15,015 | -15,015 | ||||
Stockholders' equity at end of period at Dec. 31, 2014 | $2,139,876 | $76,062 | $513,218 | $0 | $721,401 | $829,195 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholders' Equity (Parentheticals) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Stockholders' Equity [Abstract] | |||
Conversion of subordinated debentures | $0 | $0 | $20,770 |
Shares of common stock allocated by ESOP, including excess income tax benefits | 58,618 | 181,181 | 96,294 |
Shares of common stock issued under compensation plans, including excess income tax benefits | 1,567,607 | 3,294,995 | 1,349,914 |
Shares of common stock issued upon extinguishment of convertible senior notes | 3,959,396 | 5,489,808 | |
Dividends on common stock (per share amount) | $0.20 | $0.18 | $0.15 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $126,023 | $253,283 | $57,798 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Interest sensitive and index product benefits | 1,473,700 | 1,272,867 | 808,479 |
Amortization of deferred sales inducements | 131,419 | 253,113 | 87,157 |
Annuity product charges | -118,990 | -103,591 | -89,006 |
Change in fair value of embedded derivatives | 32,321 | 133,968 | 286,899 |
Increase in traditional life and accident and health insurance reserves | 2,385 | 14,997 | 35,758 |
Policy acquisition costs deferred | -426,882 | -425,800 | -403,411 |
Amortization of deferred policy acquisition costs | 163,578 | 365,468 | 164,919 |
Provision for depreciation and other amortization | 9,490 | 18,375 | 18,404 |
Amortization of discounts and premiums on investments | -14,960 | 6,861 | -69,828 |
Loss on extinguishment of debt | 12,502 | 32,515 | 0 |
Realized gains/losses on investments and net OTTI losses recognized in operations | 6,630 | -34,327 | 21,386 |
Change in fair value of derivatives | -506,328 | -1,076,015 | -221,138 |
Deferred income taxes (benefits) | -46,504 | 3,013 | -52,336 |
Share-based compensation | 3,544 | 10,476 | 6,552 |
Change in accrued investment income | -24,918 | -39,808 | -32,896 |
Change in income taxes recoverable/payable | -19,405 | 5,397 | 13,197 |
Change in other assets | -2,771 | 1,113 | -7,090 |
Change in other policy funds and contract claims | -60,931 | -47,445 | 55,158 |
Change in collateral held for derivatives | 27,839 | 236,702 | 99,242 |
Change in other liabilities | -51,008 | -11,435 | 5,927 |
Other | -8,948 | -7,059 | -857 |
Net cash provided by operating activities | 707,786 | 862,668 | 784,314 |
Sales, maturities, or repayments of investments: | |||
Fixed maturity securitiesbavailable for sale | 1,490,906 | 3,456,719 | 3,298,623 |
Fixed maturity securitiesbheld for investment | 0 | 0 | 2,618,207 |
Equity securitiesbavailable for sale | 0 | 46,674 | 13,604 |
Mortgage loans on real estate | 453,937 | 539,240 | 543,211 |
Derivative instruments | 1,169,874 | 971,432 | 483,362 |
Other investments | 23,165 | 24,050 | 33,601 |
Acquisitions of investments: | |||
Fixed maturity securitiesbavailable for sale | -5,191,781 | -7,962,150 | -8,266,692 |
Mortgage loans on real estate | -327,654 | -505,953 | -386,507 |
Derivative instruments | -492,296 | -419,345 | -379,592 |
Other investments | -72,548 | -29,015 | -86,569 |
Purchases of property, furniture and equipment | -1,352 | -948 | -738 |
Net cash used in investing activities | -2,947,749 | -3,879,296 | -2,129,490 |
Financing activities | |||
Receipts credited to annuity and single premium universal life policyholder account balances | 4,160,005 | 4,160,346 | 3,782,275 |
Coinsurance deposits | 109,184 | 25,729 | 4,885 |
Return of annuity policyholder account balances | -2,025,203 | -1,763,913 | -1,575,340 |
Financing fees incurred and deferred | -100 | -11,942 | 0 |
Proceeds from notes payable | 0 | 415,000 | 0 |
Repayment of notes payable | -219,094 | -234,154 | 0 |
Net proceeds from settlement of notes hedge and warrants | 16,558 | 22,170 | 0 |
Repayment of subordinated debentures | 0 | 0 | -1,141 |
Excess tax benefits realized from share-based compensation plans | 5,184 | 4,043 | 481 |
Proceeds from issuance of common stock | 13,681 | 31,764 | 5,741 |
Change in checks in excess of cash balance | -1,252 | 9,212 | 1,071 |
Dividends paid | -15,015 | -12,643 | -9,203 |
Net cash provided by (used in) financing activities | 2,043,948 | 2,645,612 | 2,208,769 |
Increase (decrease) in cash and cash equivalents | -196,015 | -371,016 | 863,593 |
Cash and cash equivalents at beginning of year | 897,529 | 1,268,545 | 404,952 |
Cash and cash equivalents at end of year | 701,514 | 897,529 | 1,268,545 |
Cash paid during the year for: | |||
Interest expense | 42,989 | 25,608 | 27,666 |
Cash paid during period for income taxes: | |||
Income taxes | 132,754 | 128,225 | 67,450 |
Income tax refunds received | 0 | 0 | 512 |
Non-cash operating activity: | |||
Deferral of sales inducements | 330,079 | 337,787 | 306,659 |
Non-cash investing and financing activities: | |||
Real estate acquired in satisfaction of mortgage loans | 14,555 | 8,217 | 26,324 |
Conversion of subordinated debentures | 0 | 0 | 20,770 |
Common stock issued in extinguishment of debt | $95,993 | $117,463 | $0 |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Significant Accounting Policies | Significant Accounting Policies | ||||||||||||
Nature of Operations | |||||||||||||
American Equity Investment Life Holding Company ("we", "us", "our" or "parent company"), through its wholly-owned subsidiaries, American Equity Investment Life Insurance Company ("American Equity Life"), American Equity Investment Life Insurance Company of New York ("American Equity Life of New York") and Eagle Life Insurance Company ("Eagle Life"), is licensed to sell insurance products in 50 states and the District of Columbia at December 31, 2014. We operate solely in the insurance business. | |||||||||||||
We primarily market fixed index and fixed rate annuities and to a lesser extent, life insurance. Premiums and annuity deposits (net of coinsurance) collected in 2014, 2013 and 2012, by product type were as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
Product Type | 2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | |||||||||||||
Fixed index annuities | $ | 3,911,109 | $ | 3,864,990 | $ | 3,430,436 | |||||||
Annual reset fixed rate annuities | 56,647 | 71,162 | 98,190 | ||||||||||
Multi-year fixed rate annuities | 21,125 | 41,578 | 49,915 | ||||||||||
Single premium immediate annuities (SPIA) | 24,580 | 52,142 | 164,657 | ||||||||||
Life insurance | 10,810 | 10,556 | 12,877 | ||||||||||
$ | 4,024,271 | $ | 4,040,428 | $ | 3,756,075 | ||||||||
Agents contracted with us through two national marketing organizations which market our products accounted for more than 10% of the annuity deposits and insurance premium collections during 2014, each representing 10% individually, of the annuity deposits and insurance premiums collected. Agents contracted with us through one national marketing organization accounted for more than 10% of the annuity deposits and insurance premium collections during 2013 representing 11% of the annuity deposits and insurance premiums collected. Agents contracted with us through three national marketing organizations accounted for more than 10% of the annuity deposits and insurance premium collections during 2012 representing 12%, 11% and 10% individually, of the annuity deposits and insurance premiums collected. | |||||||||||||
Consolidation and Basis of Presentation | |||||||||||||
The consolidated financial statements include our accounts and our wholly-owned subsidiaries: American Equity Life, American Equity Life of New York, Eagle Life, AERL, L.C., American Equity Capital, Inc., American Equity Investment Properties, L.C., American Equity Advisors, Inc. and American Equity Investment Service Company. All significant intercompany accounts and transactions have been eliminated. | |||||||||||||
Estimates and Assumptions | |||||||||||||
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are utilized in the calculation of deferred policy acquisition costs, deferred sales inducements, policy benefit reserves, valuation of derivatives, including embedded derivatives on index annuity reserves, contingent convertible senior notes, valuation of investments, other than temporary impairment of investments, allowances for loan losses on mortgage loans and valuation allowances on deferred tax assets. A description of each critical estimate is incorporated within the discussion of the related accounting policies which follow. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized. | |||||||||||||
Investments | |||||||||||||
Fixed maturity securities (bonds and redeemable preferred stocks maturing more than one year after issuance) that may be sold prior to maturity are classified as available for sale. Available for sale securities are reported at fair value and unrealized gains and losses, if any, on these securities are included directly in a separate component of stockholders' equity, net of income taxes and certain adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements. Fair values, as reported herein, of fixed maturity and equity securities are based on quoted market prices in active markets when available, or for those fixed maturity securities not actively traded, yield data and other factors relating to instruments or securities with similar characteristics are used. See Note 2 for more information on the determination of fair value. Premiums and discounts are amortized/accrued using methods which result in a constant yield over the securities' expected lives. Amortization/accrual of premiums and discounts on residential and commercial mortgage backed securities incorporate prepayment assumptions to estimate the securities' expected lives. Interest income is recognized as earned. | |||||||||||||
Fixed maturity securities that we have the positive intent and ability to hold to maturity are classified as held for investment. Such securities may, at times, be called prior to maturity. Held for investment securities are reported at cost adjusted for amortization of premiums and discounts. Changes in the fair value of these securities, except for declines that are other than temporary, are not reflected in our consolidated financial statements. | |||||||||||||
Equity securities are classified as available for sale and are reported at fair value. Unrealized gains and losses are included directly in a separate component of stockholders' equity, net of income taxes and certain adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements. Dividends are recognized when declared. | |||||||||||||
The carrying amounts of our impaired investments in fixed maturity and equity securities are adjusted for declines in value that are other than temporary. Other than temporary impairment losses are reported as a component of revenues in the consolidated statements of operations, which presents the amount of noncredit impairment losses for certain fixed maturity securities that is reported in accumulated other comprehensive income (loss). See Note 3 for further discussion of other than temporary impairment losses. | |||||||||||||
Deterioration in credit quality of the companies or assets backing our investment securities, deterioration in the condition of the financial services industry, imbalances in liquidity recurring in the marketplace or declines in real estate values may further affect the fair value of these investment securities and increase the potential that certain unrealized losses will be recognized as other than temporary impairments in the future. | |||||||||||||
Mortgage loans on real estate are reported at cost, adjusted for amortization of premiums and accrual of discounts. Interest income is recorded when earned; however, interest ceases to accrue for loans on which interest is more than 90 days past due based upon contractual terms and/or when the collection of interest is not considered probable. We evaluate the mortgage loan portfolio for the establishment of a loan loss allowance by specific identification of impaired loans and the measurement of an estimated loss, if any, for each impaired loan identified and an analysis of the mortgage loan portfolio for the need of a general loan allowance for probable losses on all loans. If we determine that the value of any specific mortgage loan is impaired, the carrying amount of the mortgage loan will be reduced to its fair value, based upon the present value of expected future cash flows from the loan discounted at the loan's contractual interest rate, or the fair value of the underlying collateral, less costs to sell. The amount of the general loan allowance, if any, is based upon our evaluation of the probability of collection, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. The carrying value of impaired loans is reduced by the establishment of an allowance for loan losses, changes to which are recognized as realized gains or losses on investments. Interest income on impaired loans is recorded on a cash basis. | |||||||||||||
Other invested assets include company owned life insurance, real estate, limited partnerships accounted for using the equity method and policy loans. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the end of the reporting period, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Policy loans are stated at current unpaid principal balances. | |||||||||||||
Real estate owned is reported at cost less accumulated depreciation. Cost is determined at the time ownership is acquired in satisfaction of mortgage loans and is the lower of the carrying value of the mortgage loan or fair value of the real estate less its estimated cost to sell. Buildings and improvements are depreciated using the straight-line method over their estimated useful lives. Impairment losses on real estate owned are recognized when there are indicators of impairment present and the expected future undiscounted cash flows are not sufficient to recover the real estate's carrying value. Any impairment losses are reported as realized losses and are part of net income. | |||||||||||||
Derivative Instruments | |||||||||||||
Our derivative instruments include call options used to fund fixed index annuity credits, interest rate swap and caps used to manage interest rate risk associated with the floating rate component on certain of our subordinated debentures, call options to hedge the conversion spread on our convertible senior notes (see Note 9) and certain other derivative instruments embedded in other contracts. All of our derivative instruments are recognized in the balance sheet at fair value and changes in fair value are recognized immediately in operations. See Note 5 for more information on derivative instruments. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||||||
We also consider reverse repurchase agreements, which typically have an initial maturity of 6 weeks or less, to be cash equivalents. Amounts advanced under these agreements represent short-term loans that carry a fixed rate of interest. Borrowers under these agreements are required to post collateral that is investment grade debt securities with fair value in excess of the amount advanced. | |||||||||||||
Book Overdrafts | |||||||||||||
Under our cash management system, checks issued but not yet presented to banks frequently result in overdraft balances for accounting purposes and are classified as Other liabilities on our consolidated balance sheets. We report the changes in the amount of the overdraft balance as a financing activity in our consolidated statement of cash flows as Change in checks in excess of cash balance. | |||||||||||||
Deferred Policy Acquisition Costs and Deferred Sales Inducements | |||||||||||||
To the extent recoverable from future policy revenues and gross profits, certain costs that are incremental or directly related to the successful production of new business are not expensed when incurred but instead are capitalized as deferred policy acquisition costs or deferred sales inducements. Deferred policy acquisition costs and deferred sales inducements are subject to loss recognition testing on a quarterly basis or when an event occurs that may warrant loss recognition. Deferred policy acquisition costs consist primarily of commissions and certain costs of policy issuance. Deferred sales inducements consist of premium and interest bonuses credited to policyholder account balances. | |||||||||||||
For annuity products, these capitalized costs are being amortized generally in proportion to expected gross profits from investment spreads, including the cost of hedging the fixed indexed annuity obligations, and, to a lesser extent, from product charges and mortality and expense margins. That amortization is adjusted retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of net realized gains on investments and net OTTI losses recognized in operations) to be realized from a group of products are revised. Deferred policy acquisition costs and deferred sales inducements are also adjusted for the change in amortization that would have occurred if available for sale fixed maturity securities and equity securities had been sold at their aggregate fair value at the end of the reporting period and the proceeds reinvested at current yields. The impact of this adjustment is included in accumulated other comprehensive income within consolidated stockholders' equity, net of applicable taxes. See Note 6 for more information on deferred policy acquisition costs and deferred sales inducements. | |||||||||||||
Policy Benefit Reserves | |||||||||||||
Policy benefit reserves for fixed index annuities with returns linked to the performance of a specified market index are equal to the sum of the fair value of the embedded derivatives and the host (or guaranteed) component of the contracts. The host value is established at inception of the contract and accreted over the policy's life at a constant rate of interest. Future policy benefit reserves for fixed index annuities earning a fixed rate of interest and other deferred annuity products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. For the years ended December 31, 2014, 2013 and 2012, interest crediting rates for these products ranged from 1.20% to 4.50%. These rates include interest bonuses capitalized as deferred sales inducements. | |||||||||||||
Policy benefit reserves are not reduced for amounts ceded under coinsurance agreements which are reported as coinsurance deposits on our consolidated balance sheets. See Note 7 for more information on reinsurance. | |||||||||||||
The liability for future policy benefits for traditional life insurance is based on net level premium reserves, including assumptions as to interest, mortality, and other assumptions underlying the guaranteed policy cash values. Reserve interest assumptions are level and range from 3.00% to 5.50%. Policy benefit claims are charged to expense in the period that the claims are incurred. | |||||||||||||
Deferred Income Taxes | |||||||||||||
Deferred income tax assets or liabilities are computed based on the temporary differences between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based on the changes in the asset or liability from period to period. Deferred income tax assets are subject to ongoing evaluation of whether such assets will more likely than not be realized. The realization of deferred income tax assets primarily depends on generating future taxable income during the periods in which temporary differences become deductible. Deferred income tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. In making such a determination, all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations, is considered. The realization of deferred income tax assets related to unrealized losses on available for sale fixed maturity securities is also based upon our intent and ability to hold those securities for a period of time sufficient to allow for a recovery in fair value and not realize the unrealized loss. | |||||||||||||
Recognition of Premium Revenues and Costs | |||||||||||||
Revenues for annuity products include surrender and living income benefit rider charges assessed against policyholder account balances during the period. Interest sensitive and index product benefits related to annuity products include interest credited or index credits to policyholder account balances. In addition, the change in fair value of embedded derivatives within fixed index annuity contracts is included in benefits and expenses. | |||||||||||||
Considerations from immediate annuities with life contingencies are recognized as revenue when the policy is issued. | |||||||||||||
Traditional life insurance premiums are recognized as revenues over the premium-paying period. Certain group policies include provisions for annual experience refunds of premiums equal to net premiums received less an administrative fee and less claims incurred. Such amounts (2014 - $1.7 million; 2013 - $1.1 million; and 2012 - $1.1 million) are reported as a reduction of traditional life insurance premiums in the consolidated statements of operations. Future policy benefits are recognized as expenses over the life of the policy by means of the provision for future policy benefits. | |||||||||||||
All insurance-related revenues, including the change in the fair value of derivatives for call options related to the business ceded under coinsurance agreements (see Note 7), benefits, losses and expenses are reported net of reinsurance ceded. | |||||||||||||
Other Comprehensive Income (Loss) | |||||||||||||
Other comprehensive income (loss) includes all changes in stockholders' equity during a period except those resulting from investments by and distributions to stockholders. Other comprehensive income (loss) excludes net realized investment gains (losses) included in net income which merely represent transfers from unrealized to realized gains and losses. | |||||||||||||
Adopted Accounting Pronouncements | |||||||||||||
In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that expands the disclosure requirements related to other comprehensive income (loss). A reporting entity is now required to provide information about the amounts reclassified out of accumulated other comprehensive income (loss) by component. In addition, a reporting entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. This ASU became effective for interim and annual periods beginning after December 15, 2012. We adopted this ASU on January 1, 2013. | |||||||||||||
New Accounting Pronouncements | |||||||||||||
In June 2014, the FASB issued an ASU that requires that a performance target in a share based payment arrangement that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This ASU will be effective for us on January 1, 2016, and early adoption is permitted, but it is not expected to have a material impact on our consolidated financial statements. |
Fair_Values_of_Financial_Instr
Fair Values of Financial Instruments | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Values of Financial Instruments | Fair Values of Financial Instruments | |||||||||||||||
The following sets forth a comparison of the carrying amounts and fair values of our financial instruments: | ||||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Amount | Amount | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale | $ | 32,445,202 | $ | 32,445,202 | $ | 26,610,447 | $ | 26,610,447 | ||||||||
Held for investment | 76,432 | 75,838 | 76,255 | 60,840 | ||||||||||||
Equity securities, available for sale | 7,805 | 7,805 | 7,778 | 7,778 | ||||||||||||
Mortgage loans on real estate | 2,434,580 | 2,493,901 | 2,581,082 | 2,615,410 | ||||||||||||
Derivative instruments | 731,113 | 731,113 | 856,050 | 856,050 | ||||||||||||
Other investments | 266,488 | 273,004 | 192,198 | 193,343 | ||||||||||||
Cash and cash equivalents | 701,514 | 701,514 | 897,529 | 897,529 | ||||||||||||
Coinsurance deposits | 3,044,342 | 2,698,552 | 2,999,618 | 2,669,432 | ||||||||||||
Interest rate caps | 2,778 | 2,778 | 6,103 | 6,103 | ||||||||||||
Interest rate swap | — | — | 712 | 712 | ||||||||||||
2015 notes hedges | 30,291 | 30,291 | 107,041 | 107,041 | ||||||||||||
Counterparty collateral | 206,096 | 206,096 | 315,824 | 315,824 | ||||||||||||
Liabilities | ||||||||||||||||
Policy benefit reserves | 39,463,987 | 33,078,978 | 35,453,166 | 29,670,827 | ||||||||||||
Single premium immediate annuity (SPIA) benefit reserves | 365,440 | 377,654 | 417,625 | 430,835 | ||||||||||||
Notes payable | 421,679 | 503,349 | 549,958 | 699,435 | ||||||||||||
Subordinated debentures | 246,243 | 244,437 | 246,050 | 234,959 | ||||||||||||
2015 notes embedded conversion derivative | 30,291 | 30,291 | 107,041 | 107,041 | ||||||||||||
Interest rate swap | 2,644 | 2,644 | — | — | ||||||||||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The objective of a fair value measurement is to determine that price for each financial instrument at each measurement date. We meet this objective using various methods of valuation that include market, income and cost approaches. | ||||||||||||||||
We categorize our financial instruments into three levels of fair value hierarchy based on the priority of inputs used in determining fair value. The hierarchy defines the highest priority inputs (Level 1) as quoted prices in active markets for identical assets or liabilities. The lowest priority inputs (Level 3) are our own assumptions about what a market participant would use in determining fair value such as estimated future cash flows. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. We categorize financial assets and liabilities recorded at fair value in the consolidated balance sheets as follows: | ||||||||||||||||
Level 1— | Quoted prices are available in active markets for identical financial instruments as of the reporting date. We do not adjust the quoted price for these financial instruments, even in situations where we hold a large position and a sale could reasonably impact the quoted price. | |||||||||||||||
Level 2— | Quoted prices in active markets for similar financial instruments, quoted prices for identical or similar financial instruments in markets that are not active; and models and other valuation methodologies using inputs other than quoted prices that are observable. | |||||||||||||||
Level 3— | Models and other valuation methodologies using significant inputs that are unobservable for financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in Level 3 are securities for which no market activity or data exists and for which we used discounted expected future cash flows with our own assumptions about what a market participant would use in determining fair value. | |||||||||||||||
Transfers of securities among the levels occur at times and depend on the type of inputs used to determine fair value of each security. There were no transfers between levels during 2014 and 2013. | ||||||||||||||||
Our assets and liabilities which are measured at fair value on a recurring basis as of December 31, 2014 and 2013 are presented below based on the fair value hierarchy levels: | ||||||||||||||||
Total | Quoted | Significant | Significant | |||||||||||||
Fair Value | Prices | Other | Unobservable | |||||||||||||
in Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | ||||||||||||||
(Level 1) | (Level 2) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale: | ||||||||||||||||
United States Government full faith and credit | $ | 138,460 | $ | 4,255 | $ | 134,205 | $ | — | ||||||||
United States Government sponsored agencies | 1,393,890 | — | 1,393,890 | — | ||||||||||||
United States municipalities, states and territories | 3,723,309 | — | 3,723,309 | — | ||||||||||||
Foreign government obligations | 193,803 | — | 193,803 | — | ||||||||||||
Corporate securities | 21,490,292 | 11 | 21,490,281 | — | ||||||||||||
Residential mortgage backed securities | 1,751,345 | — | 1,750,970 | 375 | ||||||||||||
Commercial mortgage backed securities | 2,807,620 | — | 2,807,620 | — | ||||||||||||
Other asset backed securities | 946,483 | — | 946,483 | — | ||||||||||||
Equity securities, available for sale: finance, insurance and real estate | 7,805 | — | 7,805 | — | ||||||||||||
Derivative instruments | 731,113 | — | 731,113 | — | ||||||||||||
Cash and cash equivalents | 701,514 | 701,514 | — | — | ||||||||||||
Interest rate caps | 2,778 | — | 2,778 | — | ||||||||||||
2015 notes hedges | 30,291 | — | 30,291 | — | ||||||||||||
Counterparty collateral | 206,096 | — | 206,096 | — | ||||||||||||
$ | 34,124,799 | $ | 705,780 | $ | 33,418,644 | $ | 375 | |||||||||
Liabilities | ||||||||||||||||
2015 notes embedded conversion derivative | $ | 30,291 | $ | — | $ | 30,291 | $ | — | ||||||||
Interest rate swap | 2,644 | — | 2,644 | — | ||||||||||||
Fixed index annuities—embedded derivatives | 5,574,653 | — | — | 5,574,653 | ||||||||||||
$ | 5,607,588 | $ | — | $ | 32,935 | $ | 5,574,653 | |||||||||
December 31, 2013 | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale: | ||||||||||||||||
United States Government full faith and credit | $ | 42,925 | $ | 4,805 | $ | 38,120 | $ | — | ||||||||
United States Government sponsored agencies | 1,194,289 | — | 1,194,289 | — | ||||||||||||
United States municipalities, states and territories | 3,306,743 | — | 3,306,743 | — | ||||||||||||
Foreign government obligations | 91,557 | — | 91,557 | — | ||||||||||||
Corporate securities | 17,233,037 | 20 | 17,233,017 | — | ||||||||||||
Residential mortgage backed securities | 1,971,960 | — | 1,970,584 | 1,376 | ||||||||||||
Commercial mortgage backed securities | 1,735,460 | — | 1,735,460 | — | ||||||||||||
Other asset backed securities | 1,034,476 | 359 | 1,034,117 | — | ||||||||||||
Equity securities, available for sale: finance, insurance and real estate | 7,778 | — | 7,778 | — | ||||||||||||
Derivative instruments | 856,050 | — | 856,050 | — | ||||||||||||
Cash and cash equivalents | 897,529 | 897,529 | — | — | ||||||||||||
Interest rate caps | 6,103 | — | 6,103 | — | ||||||||||||
Interest rate swap | 712 | — | 712 | — | ||||||||||||
2015 notes hedges | 107,041 | — | 107,041 | — | ||||||||||||
Counterparty collateral | 315,824 | — | 315,824 | — | ||||||||||||
$ | 28,801,484 | $ | 902,713 | $ | 27,897,395 | $ | 1,376 | |||||||||
Liabilities | ||||||||||||||||
2015 notes embedded conversion derivative | $ | 107,041 | $ | — | $ | 107,041 | $ | — | ||||||||
Fixed index annuities—embedded derivatives | 4,406,163 | — | — | 4,406,163 | ||||||||||||
$ | 4,513,204 | $ | — | $ | 107,041 | $ | 4,406,163 | |||||||||
The following methods and assumptions were used in estimating the fair values of financial instruments during the periods presented in these consolidated financial statements. | ||||||||||||||||
Fixed maturity securities and equity securities | ||||||||||||||||
The fair values of fixed maturity securities and equity securities in an active and orderly market are determined by utilizing independent pricing services. The independent pricing services incorporate a variety of observable market data in their valuation techniques, including: | ||||||||||||||||
• | reported trading prices, | |||||||||||||||
• | benchmark yields, | |||||||||||||||
• | broker-dealer quotes, | |||||||||||||||
• | benchmark securities, | |||||||||||||||
• | bids and offers, | |||||||||||||||
• | credit ratings, | |||||||||||||||
• | relative credit information, and | |||||||||||||||
• | other reference data. | |||||||||||||||
The independent pricing services also take into account perceived market movements and sector news, as well as a security's terms and conditions, including any features specific to that issue that may influence risk and marketability. Depending on the security, the priority of the use of observable market inputs may change as some observable market inputs may not be relevant or additional inputs may be necessary. | ||||||||||||||||
The independent pricing services provide quoted market prices when available. Quoted prices are not always available due to market inactivity. When quoted market prices are not available, the third parties use yield data and other factors relating to instruments or securities with similar characteristics to determine fair value for securities that are not actively traded. We generally obtain one value from our primary external pricing service. In situations where a price is not available from this service, we may obtain further quotes or prices from additional parties as needed. In addition, for our callable United States Government sponsored agencies we obtain multiple broker quotes and take the average of the broker prices received. Market indices of similar rated asset class spreads are considered for valuations and broker indications of similar securities are compared. Inputs used by the broker include market information, such as yield data and other factors relating to instruments or securities with similar characteristics. Valuations and quotes obtained from third party commercial pricing services are non-binding and do not represent quotes on which one may execute the disposition of the assets. | ||||||||||||||||
We validate external valuations at least quarterly through a combination of procedures that include the evaluation of methodologies used by the pricing services, analytical reviews and performance analysis of the prices against trends, and maintenance of a securities watch list. Additionally, as needed we utilize discounted cash flow models or perform independent valuations on a case-by-case basis using inputs and assumptions similar to those used by the pricing services. Although we do identify differences from time to time as a result of these validation procedures, we did not make any significant adjustments as of December 31, 2014 and 2013. | ||||||||||||||||
Mortgage loans on real estate | ||||||||||||||||
Mortgage loans on real estate are not measured at fair value on a recurring basis. The fair values of mortgage loans on real estate are calculated using discounted expected cash flows using current competitive market interest rates currently being offered for similar loans. The fair values of impaired mortgage loans on real estate that we have considered to be collateral dependent are based on the fair value of the real estate collateral (based on appraised values) less estimated costs to sell. The inputs utilized to determine fair value of all mortgage loans are unobservable market data (competitive market interest rates and appraised property values); therefore, fair value of mortgage loans falls into Level 3 in the fair value hierarchy. | ||||||||||||||||
Derivative instruments | ||||||||||||||||
The fair values of derivative instruments, primarily call options, are based upon the amount of cash that we will receive to settle each derivative instrument on the reporting date. These amounts are determined by our investment team using industry accepted valuation models and are adjusted for the nonperformance risk of each counterparty net of any collateral held. Inputs include market volatility and risk free interest rates and are used in income valuation techniques in arriving at a fair value for each option contract. The nonperformance risk for each counterparty is based upon its credit default swap rate. We have no performance obligations related to the call options purchased to fund our fixed index annuity policy liabilities. | ||||||||||||||||
Other investments | ||||||||||||||||
None of the financial instruments included in other investments are measured at fair value on a recurring basis. Financial instruments included in other investments are policy loans, equity method investments and company owned life insurance (COLI). We have not attempted to determine the fair values associated with our policy loans, as we believe any differences between carrying value and the fair values afforded these instruments are immaterial to our consolidated financial position and, accordingly, the cost to provide such disclosure does not justify the benefit to be derived. The fair value of our equity method investments qualify as Level 3 fair values and were determined by calculating the present value of future cash flows discounted by a risk free rate, a risk spread and a liquidity discount. The risk spread and liquidity discount are rates determined by our investment professionals and are unobservable market inputs. The fair value of our COLI approximates the cash surrender value of the policies and whose fair values fall within Level 2 of the fair value hierarchy. | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||
Amounts reported in the consolidated balance sheets for these instruments are reported at their historical cost which approximates fair value due to the nature of the assets assigned to this category. | ||||||||||||||||
Interest rate caps and swap | ||||||||||||||||
The fair values of our pay fixed/receive variable interest rate swap and interest rate caps are obtained from third parties and are determined by discounting expected future cash flows using projected LIBOR rates for the term of the swap and caps. | ||||||||||||||||
2015 notes hedges | ||||||||||||||||
The fair value of these call options has been determined by a third party who applies market observable data such as our common stock price, its dividend yield and its volatility, as well as the time to expiration of the call options to determine a fair value of the buy side of these options. | ||||||||||||||||
Counterparty collateral | ||||||||||||||||
Amounts reported in other assets of the consolidated balance sheets for these instruments are reported at their historical cost which approximates fair value due to the nature of the assets assigned to this category. | ||||||||||||||||
Policy benefit reserves, coinsurance deposits and SPIA benefit reserves | ||||||||||||||||
The fair values of the liabilities under contracts not involving significant mortality or morbidity risks (principally deferred annuities), are stated at the cost we would incur to extinguish the liability (i.e., the cash surrender value) as these contracts are generally issued without an annuitization date. The coinsurance deposits related to the annuity benefit reserves have fair values determined in a similar fashion. For period-certain annuity benefit contracts, the fair value is determined by discounting the benefits at the interest rates currently in effect for newly purchased immediate annuity contracts. We are not required to and have not estimated the fair value of the liabilities under contracts that involve significant mortality or morbidity risks, as these liabilities fall within the definition of insurance contracts that are exceptions from financial instruments that require disclosures of fair value. Policy benefit reserves, coinsurance deposits and SPIA benefit reserves are not measured at fair value on a recurring basis. All of the fair values presented within these categories fall within Level 3 of the fair value hierarchy as most of the inputs are unobservable market data. | ||||||||||||||||
Notes payable | ||||||||||||||||
The fair values of our senior unsecured notes and convertible senior notes are based upon pricing matrices developed by a third party pricing service when quoted market prices are not available and are categorized as Level 2 within the fair value hierarchy. Notes payable are not remeasured at fair value on a recurring basis. | ||||||||||||||||
Subordinated debentures | ||||||||||||||||
Fair values for subordinated debentures are estimated using discounted cash flow calculations based principally on observable inputs including our incremental borrowing rates, which reflect our credit rating, for similar types of borrowings with maturities consistent with those remaining for the debt being valued. These fair values are categorized as Level 2 within the fair value hierarchy. Subordinated debentures are not measured at fair value on a recurring basis. | ||||||||||||||||
2015 notes embedded conversion derivative | ||||||||||||||||
The fair value of this embedded derivative is determined by pricing the call options that hedge this potential liability. The terms of the conversion option are identical to the 2015 notes hedges and the method of determining fair value of the call options is based upon observable market data. | ||||||||||||||||
Fixed index annuities - embedded derivatives | ||||||||||||||||
We estimate the fair value of the embedded derivative component of our fixed index annuity policy benefit reserves at each valuation date by (i) projecting policy contract values and minimum guaranteed contract values over the expected lives of the contracts and (ii) discounting the excess of the projected contract value amounts at the applicable risk free interest rates adjusted for our nonperformance risk related to those liabilities. The projections of policy contract values are based on our best estimate assumptions for future policy growth and future policy decrements. Our best estimate assumptions for future policy growth include assumptions for the expected index credit on the next policy anniversary date which are derived from the fair values of the underlying call options purchased to fund such index credits and the expected costs of annual call options we will purchase in the future to fund index credits beyond the next policy anniversary. The projections of minimum guaranteed contract values include the same best estimate assumptions for policy decrements as were used to project policy contract values. | ||||||||||||||||
The following tables provide a reconciliation of the beginning and ending balances for our Level 3 assets and liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2014 and 2013: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Available for sale securities | ||||||||||||||||
Beginning balance | $ | 1,376 | $ | 1,812 | ||||||||||||
Principal returned | (285 | ) | (864 | ) | ||||||||||||
Amortization of premium/accretion of discount | (262 | ) | 152 | |||||||||||||
Total gains (losses) (realized/unrealized): | ||||||||||||||||
Included in other comprehensive income (loss) | 109 | 276 | ||||||||||||||
Included in operations | (563 | ) | — | |||||||||||||
Ending balance | $ | 375 | $ | 1,376 | ||||||||||||
The Level 3 assets included in the table above are not material to our financial position, results of operations or cash flows, and it is management's opinion that the sensitivity of the inputs used in determining the fair value of these assets is not material as well. | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Fixed index annuities—embedded derivatives | ||||||||||||||||
Beginning balance | $ | 4,406,163 | $ | 3,337,556 | ||||||||||||
Premiums less benefits | 1,700,827 | 1,485,109 | ||||||||||||||
Change in fair value, net | (532,337 | ) | (416,502 | ) | ||||||||||||
Ending balance | $ | 5,574,653 | $ | 4,406,163 | ||||||||||||
Change in fair value, net for each period in our embedded derivatives are included in change in fair value of embedded derivatives in the consolidated statements of operations. | ||||||||||||||||
Certain derivatives embedded in our fixed index annuity contracts are our most significant financial instrument measured at fair value that are categorized as Level 3 in the fair value hierarchy. The contractual obligations for future annual index credits within our fixed index annuity contracts are treated as a "series of embedded derivatives" over the expected life of the applicable contracts. We estimate the fair value of these embedded derivatives at each valuation date by the method described above under fixed index annuities - embedded derivatives. The projections of minimum guaranteed contract values include the same best estimate assumptions for policy decrements as were used to project policy contract values. | ||||||||||||||||
The most sensitive assumption in determining policy liabilities for fixed index annuities is the rates used to discount the excess projected contract values. As indicated above, the discount rate reflects our nonperformance risk. If the discount rates used to discount the excess projected contract values at December 31, 2014, were to increase by 100 basis points, the fair value of the embedded derivatives would decrease by $377.0 million recorded through operations as a decrease in the change in fair value of embedded derivatives and there would be a corresponding decrease of $225.0 million to our combined balance for deferred policy acquisition costs and deferred sales inducements recorded through operations as an increase in amortization of deferred policy acquisition costs and deferred sales inducements. A decrease by 100 basis points in the discount rate used to discount the excess projected contract values would increase the fair value of the embedded derivatives by $421.9 million recorded through operations as an increase in the change in fair value of embedded derivatives and there would be a corresponding increase of $244.2 million to our combined balance for deferred policy acquisition costs and deferred sales inducements recorded through operations as a decrease in amortization of deferred policy acquisition costs and deferred sales inducements. |
Investments
Investments | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||
Investments | Investments | |||||||||||||||||||||||
At December 31, 2014 and 2013, the amortized cost and fair value of fixed maturity securities and equity securities were as follows: | ||||||||||||||||||||||||
Amortized | Gross | Gross | Fair Value | |||||||||||||||||||||
Cost | Unrealized | Unrealized | ||||||||||||||||||||||
Gains | Losses | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 137,710 | $ | 765 | $ | (15 | ) | $ | 138,460 | |||||||||||||||
United States Government sponsored agencies | 1,364,424 | 43,399 | (13,933 | ) | 1,393,890 | |||||||||||||||||||
United States municipalities, states and territories | 3,293,551 | 430,469 | (711 | ) | 3,723,309 | |||||||||||||||||||
Foreign government obligations | 181,128 | 16,628 | (3,953 | ) | 193,803 | |||||||||||||||||||
Corporate securities | 19,984,747 | 1,628,941 | (123,396 | ) | 21,490,292 | |||||||||||||||||||
Residential mortgage backed securities | 1,616,846 | 136,704 | (2,205 | ) | 1,751,345 | |||||||||||||||||||
Commercial mortgage backed securities | 2,720,294 | 90,649 | (3,323 | ) | 2,807,620 | |||||||||||||||||||
Other asset backed securities | 906,346 | 48,022 | (7,885 | ) | 946,483 | |||||||||||||||||||
$ | 30,205,046 | $ | 2,395,577 | $ | (155,421 | ) | $ | 32,445,202 | ||||||||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security | $ | 76,432 | $ | — | $ | (594 | ) | $ | 75,838 | |||||||||||||||
Equity securities, available for sale: | ||||||||||||||||||||||||
Finance, insurance and real estate | $ | 7,509 | $ | 296 | $ | — | $ | 7,805 | ||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 44,852 | $ | 367 | $ | (2,294 | ) | $ | 42,925 | |||||||||||||||
United States Government sponsored agencies | 1,313,776 | 1,875 | (121,362 | ) | 1,194,289 | |||||||||||||||||||
United States municipalities, states and territories | 3,181,032 | 164,785 | (39,074 | ) | 3,306,743 | |||||||||||||||||||
Foreign government obligations | 86,112 | 8,907 | (3,462 | ) | 91,557 | |||||||||||||||||||
Corporate securities | 17,142,118 | 606,948 | (516,029 | ) | 17,233,037 | |||||||||||||||||||
Residential mortgage backed securities | 1,895,913 | 119,230 | (43,183 | ) | 1,971,960 | |||||||||||||||||||
Commercial mortgage backed securities | 1,821,988 | 3,287 | (89,815 | ) | 1,735,460 | |||||||||||||||||||
Other asset backed securities | 1,041,939 | 23,300 | (30,763 | ) | 1,034,476 | |||||||||||||||||||
$ | 26,527,730 | $ | 928,699 | $ | (845,982 | ) | $ | 26,610,447 | ||||||||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security | $ | 76,255 | $ | — | $ | (15,415 | ) | $ | 60,840 | |||||||||||||||
Equity securities, available for sale: | ||||||||||||||||||||||||
Finance, insurance and real estate | $ | 7,503 | $ | 275 | $ | — | $ | 7,778 | ||||||||||||||||
At December 31, 2014, 33% of our fixed income securities have call features, of which 0.6% ($0.2 billion) were subject to call redemption and another 4% ($1.2 billion) will become subject to call redemption during 2015. | ||||||||||||||||||||||||
The amortized cost and fair value of fixed maturity securities at December 31, 2014, by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines. | ||||||||||||||||||||||||
Available for sale | Held for investment | |||||||||||||||||||||||
Amortized | Fair Value | Amortized | Fair Value | |||||||||||||||||||||
Cost | Cost | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Due in one year or less | $ | 65,783 | $ | 67,404 | $ | — | $ | — | ||||||||||||||||
Due after one year through five years | 1,483,940 | 1,638,259 | — | — | ||||||||||||||||||||
Due after five years through ten years | 8,523,008 | 8,738,123 | — | — | ||||||||||||||||||||
Due after ten years through twenty years | 7,251,089 | 7,914,212 | — | — | ||||||||||||||||||||
Due after twenty years | 7,637,740 | 8,581,756 | 76,432 | 75,838 | ||||||||||||||||||||
24,961,560 | 26,939,754 | 76,432 | 75,838 | |||||||||||||||||||||
Residential mortgage backed securities | 1,616,846 | 1,751,345 | — | — | ||||||||||||||||||||
Commercial mortgage backed securities | 2,720,294 | 2,807,620 | — | — | ||||||||||||||||||||
Other asset backed securities | 906,346 | 946,483 | — | — | ||||||||||||||||||||
$ | 30,205,046 | $ | 32,445,202 | $ | 76,432 | $ | 75,838 | |||||||||||||||||
Net unrealized gains on available for sale fixed maturity securities and equity securities reported as a separate component of stockholders' equity were comprised of the following: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Net unrealized gains on available for sale fixed maturity securities and equity securities | $ | 2,240,452 | $ | 82,992 | ||||||||||||||||||||
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements | (1,165,271 | ) | (46,588 | ) | ||||||||||||||||||||
Deferred income tax valuation allowance reversal | 22,534 | 22,534 | ||||||||||||||||||||||
Deferred income tax expense | (376,314 | ) | (12,742 | ) | ||||||||||||||||||||
Net unrealized gains reported as accumulated other comprehensive income | $ | 721,401 | $ | 46,196 | ||||||||||||||||||||
The National Association of Insurance Commissioners ("NAIC") assigns designations to fixed maturity securities. These designations range from Class 1 (highest quality) to Class 6 (lowest quality). In general, securities are assigned a designation based upon the ratings they are given by the Nationally Recognized Statistical Rating Organizations ("NRSRO's"). The NAIC designations are utilized by insurers in preparing their annual statutory statements. NAIC Class 1 and 2 designations are considered "investment grade" while NAIC Class 3 through 6 designations are considered "non-investment grade." Based on the NAIC designations, we had 98% of our fixed maturity portfolio rated investment grade at both December 31, 2014 and 2013. | ||||||||||||||||||||||||
The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
NAIC | Amortized | Fair | Amortized | Fair | ||||||||||||||||||||
Designation | Cost | Value | Cost | Value | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
1 | $ | 19,223,151 | $ | 20,941,634 | $ | 16,394,654 | $ | 16,531,250 | ||||||||||||||||
2 | 10,432,593 | 10,981,618 | 9,630,251 | 9,598,399 | ||||||||||||||||||||
3 | 602,191 | 583,313 | 502,822 | 474,165 | ||||||||||||||||||||
4 | 22,888 | 14,089 | 74,493 | 66,078 | ||||||||||||||||||||
5 | — | — | — | — | ||||||||||||||||||||
6 | 655 | 386 | 1,765 | 1,395 | ||||||||||||||||||||
$ | 30,281,478 | $ | 32,521,040 | $ | 26,603,985 | $ | 26,671,287 | |||||||||||||||||
The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 402 and 1,047 securities, respectively) have been in a continuous unrealized loss position, at December 31, 2014 and 2013: | ||||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | — | $ | — | $ | 498 | $ | (15 | ) | $ | 498 | $ | (15 | ) | ||||||||||
United States Government sponsored agencies | — | — | 610,339 | (13,933 | ) | 610,339 | (13,933 | ) | ||||||||||||||||
United States municipalities, states and territories | — | — | 27,947 | (711 | ) | 27,947 | (711 | ) | ||||||||||||||||
Foreign government obligations | 14,194 | (1,068 | ) | 11,542 | (2,885 | ) | 25,736 | (3,953 | ) | |||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance, insurance and real estate | 253,439 | (2,586 | ) | 399,874 | (16,277 | ) | 653,313 | (18,863 | ) | |||||||||||||||
Manufacturing, construction and mining | 1,078,089 | (35,151 | ) | 694,088 | (35,926 | ) | 1,772,177 | (71,077 | ) | |||||||||||||||
Utilities and related sectors | 373,952 | (8,185 | ) | 344,313 | (10,153 | ) | 718,265 | (18,338 | ) | |||||||||||||||
Wholesale/retail trade | 88,766 | (2,290 | ) | 99,427 | (3,122 | ) | 188,193 | (5,412 | ) | |||||||||||||||
Services, media and other | 131,940 | (1,567 | ) | 277,296 | (8,139 | ) | 409,236 | (9,706 | ) | |||||||||||||||
Residential mortgage backed securities | 22,115 | (1,219 | ) | 20,427 | (986 | ) | 42,542 | (2,205 | ) | |||||||||||||||
Commercial mortgage backed securities | 241,637 | (1,344 | ) | 187,241 | (1,979 | ) | 428,878 | (3,323 | ) | |||||||||||||||
Other asset backed securities | 142,094 | (3,519 | ) | 58,958 | (4,366 | ) | 201,052 | (7,885 | ) | |||||||||||||||
$ | 2,346,226 | $ | (56,929 | ) | $ | 2,731,950 | $ | (98,492 | ) | $ | 5,078,176 | $ | (155,421 | ) | ||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security: | ||||||||||||||||||||||||
Insurance | $ | — | $ | — | $ | 75,838 | $ | (594 | ) | $ | 75,838 | $ | (594 | ) | ||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 32,969 | $ | (2,294 | ) | $ | — | $ | — | $ | 32,969 | $ | (2,294 | ) | ||||||||||
United States Government sponsored agencies | 692,320 | (88,671 | ) | 467,309 | (32,691 | ) | 1,159,629 | (121,362 | ) | |||||||||||||||
United States municipalities, states and territories | 614,056 | (39,074 | ) | — | — | 614,056 | (39,074 | ) | ||||||||||||||||
Foreign government obligations | 26,298 | (3,462 | ) | — | — | 26,298 | (3,462 | ) | ||||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance, insurance and real estate | 1,690,846 | (92,426 | ) | 153,037 | (12,873 | ) | 1,843,883 | (105,299 | ) | |||||||||||||||
Manufacturing, construction and mining | 3,370,775 | (191,245 | ) | 93,608 | (16,088 | ) | 3,464,383 | (207,333 | ) | |||||||||||||||
Utilities and related sectors | 1,829,868 | (102,758 | ) | 83,550 | (11,547 | ) | 1,913,418 | (114,305 | ) | |||||||||||||||
Wholesale/retail trade | 428,407 | (25,189 | ) | 17,687 | (1,992 | ) | 446,094 | (27,181 | ) | |||||||||||||||
Services, media and other | 834,699 | (51,508 | ) | 107,242 | (10,403 | ) | 941,941 | (61,911 | ) | |||||||||||||||
Residential mortgage backed securities | 309,599 | (41,080 | ) | 31,739 | (2,103 | ) | 341,338 | (43,183 | ) | |||||||||||||||
Commercial mortgage backed securities | 1,450,143 | (83,814 | ) | 51,099 | (6,001 | ) | 1,501,242 | (89,815 | ) | |||||||||||||||
Other asset backed securities | 356,018 | (20,426 | ) | 92,372 | (10,337 | ) | 448,390 | (30,763 | ) | |||||||||||||||
$ | 11,635,998 | $ | (741,947 | ) | $ | 1,097,643 | $ | (104,035 | ) | $ | 12,733,641 | $ | (845,982 | ) | ||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security: | ||||||||||||||||||||||||
Insurance | $ | — | $ | — | $ | 60,840 | $ | (15,415 | ) | $ | 60,840 | $ | (15,415 | ) | ||||||||||
Based on the results of our process for evaluating available for sale securities in unrealized loss positions for other-than-temporary-impairments, which is discussed in detail later in this footnote, we have determined that the unrealized losses on the securities in the preceding table are temporary. The unrealized losses at December 31, 2014 are principally related to timing of the purchases of these securities, which carry less yield than those available at December 31, 2014. In addition, a number of securities have seen their credit spreads remain wide due to issuer or industry specific news while some financial and industrial sector credit spreads remain wide due to continued economic uncertainty and concerns of economic instability. | ||||||||||||||||||||||||
At December 31, 2014, we had no exposure to sub-prime residential mortgage backed securities. All of our residential mortgage backed securities are pools of first-lien residential mortgage loans. Substantially all of the securities that we own are in the most senior tranche of the securitization in which they are structured and are not subordinated to any other tranche. Our "Alt-A" residential mortgage backed securities are comprised of 34 securities with a total amortized cost basis of $244.3 million and a fair value of $270.0 million. Despite recent improvements in the capital markets, the fair values of RMBS with weaker borrower characteristics continue at prices below amortized cost. For the RMBS that are in an unrealized loss position, the prices will likely remain below our cost basis until the housing market is able to absorb current and future foreclosures. | ||||||||||||||||||||||||
Approximately 78% and 95% of the unrealized losses on fixed maturity securities shown in the above table for December 31, 2014 and 2013, respectively, are on securities that are rated investment grade, defined as being the highest two NAIC designations. All of the fixed maturity securities with unrealized losses are current with respect to the payment of principal and interest. | ||||||||||||||||||||||||
Changes in net unrealized gains/losses on investments for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities held for investment carried at amortized cost | $ | 14,821 | $ | (848 | ) | $ | (14,783 | ) | ||||||||||||||||
Investments carried at fair value: | ||||||||||||||||||||||||
Fixed maturity securities, available for sale | $ | 2,157,439 | $ | (2,132,392 | ) | $ | 731,279 | |||||||||||||||||
Equity securities, available for sale | 21 | (8,549 | ) | 4,417 | ||||||||||||||||||||
2,157,460 | (2,140,941 | ) | 735,696 | |||||||||||||||||||||
Adjustment for effect on other balance sheet accounts: | ||||||||||||||||||||||||
Deferred policy acquisition costs and deferred sales inducements | (1,118,683 | ) | 1,155,386 | (382,498 | ) | |||||||||||||||||||
Deferred income tax asset/liability | (363,572 | ) | 344,944 | (123,620 | ) | |||||||||||||||||||
(1,482,255 | ) | 1,500,330 | (506,118 | ) | ||||||||||||||||||||
Change in net unrealized gains/losses on investments carried at fair value | $ | 675,205 | $ | (640,611 | ) | $ | 229,578 | |||||||||||||||||
Components of net investment income are as follows: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities | $ | 1,394,301 | $ | 1,229,486 | $ | 1,112,296 | ||||||||||||||||||
Equity securities | 404 | 1,586 | 3,090 | |||||||||||||||||||||
Mortgage loans on real estate | 143,998 | 159,769 | 176,354 | |||||||||||||||||||||
Cash and cash equivalents | 286 | 775 | 2,243 | |||||||||||||||||||||
Other | 6,903 | 5,711 | 6,348 | |||||||||||||||||||||
1,545,892 | 1,397,327 | 1,300,331 | ||||||||||||||||||||||
Less investment expenses | (14,225 | ) | (13,400 | ) | (13,408 | ) | ||||||||||||||||||
Net investment income | $ | 1,531,667 | $ | 1,383,927 | $ | 1,286,923 | ||||||||||||||||||
Proceeds from sales of available for sale securities for the years ended December 31, 2014, 2013 and 2012 were $0.2 billion, $1.5 billion and $0.5 billion, respectively. Scheduled principal repayments, calls and tenders for available for sale fixed maturity securities for the years ended December 31, 2014, 2013 and 2012 were $1.3 billion, $2.1 billion and $2.8 billion, respectively. Calls of held for investment fixed maturity securities for the year ended December 31, 2012 were $2.6 billion. | ||||||||||||||||||||||||
Realized gains and losses on sales are determined on the basis of specific identification of investments based on the trade date. Net realized gains (losses) on investments, excluding net OTTI losses are as follows: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Available for sale fixed maturity securities: | ||||||||||||||||||||||||
Gross realized gains | $ | 3,273 | $ | 39,079 | $ | 10,906 | ||||||||||||||||||
Gross realized losses | (1,006 | ) | (6,170 | ) | (562 | ) | ||||||||||||||||||
2,267 | 32,909 | 10,344 | ||||||||||||||||||||||
Available for sale equity securities: | ||||||||||||||||||||||||
Gross realized gains | — | 9,571 | 562 | |||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||
Gain on sale of real estate | 2,454 | 2,144 | 5,149 | |||||||||||||||||||||
Loss on sale of real estate | (231 | ) | (1,317 | ) | — | |||||||||||||||||||
Impairment losses on real estate | (2,441 | ) | (1,195 | ) | (5,677 | ) | ||||||||||||||||||
(218 | ) | (368 | ) | (528 | ) | |||||||||||||||||||
Mortgage loans on real estate: | ||||||||||||||||||||||||
Increase in allowance for credit losses | (6,052 | ) | (5,621 | ) | (16,832 | ) | ||||||||||||||||||
Recovery of specific allowance | — | 4,070 | — | |||||||||||||||||||||
(6,052 | ) | (1,551 | ) | (16,832 | ) | |||||||||||||||||||
$ | (4,003 | ) | $ | 40,561 | $ | (6,454 | ) | |||||||||||||||||
Losses on available for sale fixed maturity securities in 2014, 2013 and 2012 were realized primarily due to strategies to reposition the fixed maturity security portfolio that result in improved net investment income, risk or duration profiles as they pertain to our asset liability management. Two corporate issues were sold at a loss in 2013 due to the our long-term fundamental concern with the issuer's ability to meet its future financial obligations. | ||||||||||||||||||||||||
The following table summarizes the carrying value of our fixed maturity securities, mortgage loans on real estate and real estate owned that have been non-income producing for 12 consecutive months: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities, available for sale | $ | 11 | $ | 20 | ||||||||||||||||||||
Mortgage loans on real estate | — | 3,511 | ||||||||||||||||||||||
Real estate owned | 868 | — | ||||||||||||||||||||||
$ | 879 | $ | 3,531 | |||||||||||||||||||||
We review and analyze all investments on an ongoing basis for changes in market interest rates and credit deterioration. This review process includes analyzing our ability to recover the amortized cost basis of each investment that has a fair value that is materially lower than its amortized cost and requires a high degree of management judgment and involves uncertainty. The evaluation of securities for other than temporary impairments is a quantitative and qualitative process, which is subject to risks and uncertainties. | ||||||||||||||||||||||||
We have a policy and process to identify securities that could potentially have impairments that are other than temporary. This process involves monitoring market events and other items that could impact issuers. The evaluation includes but is not limited to such factors as: | ||||||||||||||||||||||||
• | the length of time and the extent to which the fair value has been less than amortized cost or cost; | |||||||||||||||||||||||
• | whether the issuer is current on all payments and all contractual payments have been made as agreed; | |||||||||||||||||||||||
• | the remaining payment terms and the financial condition and near-term prospects of the issuer; | |||||||||||||||||||||||
• | the lack of ability to refinance due to liquidity problems in the credit market; | |||||||||||||||||||||||
• | the fair value of any underlying collateral; | |||||||||||||||||||||||
• | the existence of any credit protection available; | |||||||||||||||||||||||
• | our intent to sell and whether it is more likely than not we would be required to sell prior to recovery for debt securities; | |||||||||||||||||||||||
• | our assessment in the case of equity securities including perpetual preferred stocks with credit deterioration that the security cannot recover to cost in a reasonable period of time; | |||||||||||||||||||||||
• | our intent and ability to retain equity securities for a period of time sufficient to allow for recovery; | |||||||||||||||||||||||
• | consideration of rating agency actions; and | |||||||||||||||||||||||
• | changes in estimated cash flows of mortgage and asset backed securities. | |||||||||||||||||||||||
We determine whether other than temporary impairment losses should be recognized for debt and equity securities by assessing all facts and circumstances surrounding each security. Where the decline in fair value of debt securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and we anticipate recovery of all contractual or expected cash flows, we do not consider these investments to be other than temporarily impaired because we do not intend to sell these investments and it is not more likely than not we will be required to sell these investments before a recovery of amortized cost, which may be maturity. For equity securities, we recognize an impairment charge in the period in which we do not have the intent and ability to hold the securities until recovery of cost or we determine that the security will not recover to book value within a reasonable period of time. We determine what constitutes a reasonable period of time on a security-by-security basis by considering all the evidence available to us, including the magnitude of any unrealized loss and its duration. | ||||||||||||||||||||||||
Other than temporary impairment losses on equity securities are recognized in operations. If we intend to sell a debt security or if it is more likely than not that we will be required to sell a debt security before recovery of its amortized cost basis, other than temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in operations. | ||||||||||||||||||||||||
If we do not intend to sell and it is not more likely than not we will be required to sell the debt security but also do not expect to recover the entire amortized cost basis of the security, an impairment loss would be recognized in operations in the amount of the expected credit loss. We determine the amount of expected credit loss by calculating the present value of the cash flows expected to be collected discounted at each security's acquisition yield based on our consideration of whether the security was of high credit quality at the time of acquisition. The difference between the present value of expected future cash flows and the amortized cost basis of the security is the amount of credit loss recognized in operations. The remaining amount of the other than temporary impairment is recognized in other comprehensive income (loss). | ||||||||||||||||||||||||
The determination of the credit loss component of a mortgage backed security is based on a number of factors. The primary consideration in this evaluation process is the issuer's ability to meet current and future interest and principal payments as contractually stated at time of purchase. Our review of these securities includes an analysis of the cash flow modeling under various default scenarios considering independent third party benchmarks, the seniority of the specific tranche within the structure of the security, the composition of the collateral and the actual default, loss severity and prepayment experience exhibited. With the input of third party assumptions for default projections, loss severity and prepayment expectations, we evaluate the cash flow projections to determine whether the security is performing in accordance with its contractual obligation. | ||||||||||||||||||||||||
We utilize the models from a leading structured product software specialist serving institutional investors. These models incorporate each security's seniority and cash flow structure. In circumstances where the analysis implies a potential for principal loss at some point in the future, we use the "best estimate" cash flow projection discounted at the security's effective yield at acquisition to determine the amount of our potential credit loss associated with this security. The discounted expected future cash flows equates to our expected recovery value. Any shortfall of the expected recovery when compared to the amortized cost of the security will be recorded as the credit loss component of the other than temporary impairment. | ||||||||||||||||||||||||
The cash flow modeling is performed on a security-by-security basis and incorporates actual cash flows on the residential mortgage backed securities through the current period, as well as the projection of remaining cash flows using a number of assumptions including default rates, prepayment rates and loss severity rates. The default curves we use are tailored to the Prime or Alt-A residential mortgage backed securities that we own, which assume lower default rates and loss severity for Prime securities versus Alt-A securities. These default curves are scaled higher or lower depending on factors such as current underlying mortgage loan performance, rating agency loss projections, loan to value ratios, geographic diversity, as well as other appropriate considerations. | ||||||||||||||||||||||||
The following table presents the range of significant assumptions used to determine the credit loss component of other than temporary impairments we have recognized on residential mortgage backed securities for the years ended December 31, 2014 and 2013, which are all senior level tranches within the structure of the securities: | ||||||||||||||||||||||||
Discount Rate | Default Rate | Loss Severity | ||||||||||||||||||||||
Sector | Vintage | Min | Max | Min | Max | Min | Max | |||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
Prime | 2005 | 7.5 | % | 7.5 | % | 15 | % | 15 | % | 50 | % | 50 | % | |||||||||||
2006 | 6.5 | % | 7.4 | % | 11 | % | 15 | % | 40 | % | 50 | % | ||||||||||||
2007 | 7 | % | 7 | % | 14 | % | 14 | % | 55 | % | 55 | % | ||||||||||||
Alt-A | 2005 | 5.6 | % | 6.4 | % | 87 | % | 91 | % | 2 | % | 2 | % | |||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
Prime | 2003 | 5.1 | % | 5.1 | % | 2 | % | 2 | % | 30 | % | 30 | % | |||||||||||
2005 | 6.5 | % | 7.7 | % | 8 | % | 18 | % | 50 | % | 65 | % | ||||||||||||
2006 | 5.8 | % | 6.9 | % | 9 | % | 16 | % | 45 | % | 50 | % | ||||||||||||
2007 | 6.2 | % | 6.7 | % | 11 | % | 25 | % | 40 | % | 60 | % | ||||||||||||
2008 | 6.6 | % | 6.6 | % | 16 | % | 16 | % | 45 | % | 45 | % | ||||||||||||
2009 | 6.8 | % | 6.8 | % | 17 | % | 17 | % | 60 | % | 60 | % | ||||||||||||
Alt-A | 2005 | 5.6 | % | 8.7 | % | 13 | % | 81 | % | 2 | % | 65 | % | |||||||||||
2007 | 6.2 | % | 6.9 | % | 38 | % | 52 | % | 60 | % | 65 | % | ||||||||||||
The determination of the credit loss component of a corporate bond (including redeemable preferred stocks) is based on the underlying financial performance of the issuer and their ability to meet their contractual obligations. Considerations in our evaluation include, but are not limited to, credit rating changes, financial statement and ratio analysis, changes in management, significant changes in credit spreads, breaches of financial covenants and a review of the economic outlook for the industry and markets in which they trade. In circumstances where an issuer appears unlikely to meet its future obligation, or the security's price decline is deemed other than temporary, an estimate of credit loss is determined. Credit loss is calculated using default probabilities as derived from the credit default swaps markets in conjunction with recovery rates derived from independent third party analysis or a best estimate of credit loss. This credit loss rate is then incorporated into a present value calculation based on an expected principal loss in the future discounted at the yield at the date of purchase and compared to amortized cost to determine the amount of credit loss associated with the security. | ||||||||||||||||||||||||
In addition, for debt securities which we do not intend to sell and it is not more likely than not we will be required to sell, but our intent changes due to changes or events that could not have been reasonably anticipated, an other than temporary impairment charge is recognized. Once an impairment charge has been recorded, we then continue to review the other than temporarily impaired securities for appropriate valuation on an ongoing basis. Unrealized losses may be recognized in future periods through a charge to earnings, should we later conclude that the decline in fair value below amortized cost is other than temporary pursuant to our accounting policy described above. The use of different methodologies and assumptions to determine the fair value of investments and the timing and amount of impairments may have a material effect on the amounts presented in our consolidated financial statements. | ||||||||||||||||||||||||
The following table summarizes other than temporary impairments by asset type: | ||||||||||||||||||||||||
Number | Total | Portion of | Net OTTI | |||||||||||||||||||||
of Securities | OTTI Losses | OTTI Losses | Losses | |||||||||||||||||||||
Recognized from | Recognized | |||||||||||||||||||||||
Other | in Operations | |||||||||||||||||||||||
Comprehensive | ||||||||||||||||||||||||
Income | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Residential mortgage backed securities | 7 | $ | — | $ | (2,627 | ) | $ | (2,627 | ) | |||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
United States Government sponsored agencies | 2 | $ | (2,775 | ) | $ | — | $ | (2,775 | ) | |||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Industrial | 1 | (1,761 | ) | — | (1,761 | ) | ||||||||||||||||||
Residential mortgage backed securities | 6 | — | (1,270 | ) | (1,270 | ) | ||||||||||||||||||
Equity security, available for sale: | ||||||||||||||||||||||||
Industrial | 1 | (428 | ) | — | (428 | ) | ||||||||||||||||||
10 | $ | (4,964 | ) | $ | (1,270 | ) | $ | (6,234 | ) | |||||||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance | 1 | $ | (1,765 | ) | $ | — | $ | (1,765 | ) | |||||||||||||||
Retail | 1 | (622 | ) | — | (622 | ) | ||||||||||||||||||
Residential mortgage backed securities | 39 | (3,024 | ) | (9,521 | ) | (12,545 | ) | |||||||||||||||||
41 | $ | (5,411 | ) | $ | (9,521 | ) | $ | (14,932 | ) | |||||||||||||||
The cumulative portion of other than temporary impairments determined to be credit losses which have been recognized in operations for debt securities are summarized as follows: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Cumulative credit loss at beginning of year | $ | (125,960 | ) | $ | (134,027 | ) | ||||||||||||||||||
Credit losses on securities for which OTTI has not previously been recognized | — | (4,536 | ) | |||||||||||||||||||||
Additional credit losses on securities for which OTTI has previously been recognized | (2,627 | ) | (1,270 | ) | ||||||||||||||||||||
Accumulated losses on securities that were disposed of during the period | 1,537 | 13,873 | ||||||||||||||||||||||
Cumulative credit loss at end of year | $ | (127,050 | ) | $ | (125,960 | ) | ||||||||||||||||||
The following table summarizes the cumulative noncredit portion of OTTI and the change in fair value since recognition of OTTI, both of which were recognized in other comprehensive income, by major type of security, for securities that are part of our investment portfolio at December 31, 2014 and 2013: | ||||||||||||||||||||||||
Amortized Cost | OTTI Recognized in Other Comprehensive Income | Change in Fair Value Since OTTI was Recognized | Fair Value | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities | $ | — | $ | — | $ | 11 | $ | 11 | ||||||||||||||||
Residential mortgage backed securities | 569,508 | (173,494 | ) | 215,625 | 611,639 | |||||||||||||||||||
$ | 569,508 | $ | (173,494 | ) | $ | 215,636 | $ | 611,650 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities | $ | — | $ | — | $ | 20 | $ | 20 | ||||||||||||||||
Residential mortgage backed securities | 679,265 | (176,334 | ) | 216,061 | 718,992 | |||||||||||||||||||
$ | 679,265 | $ | (176,334 | ) | $ | 216,081 | $ | 719,012 | ||||||||||||||||
At December 31, 2014 and 2013, fixed maturity securities and short-term investments with an amortized cost of $32.6 billion and $31.7 billion, respectively, were on deposit with state agencies to meet regulatory requirements. There are no restrictions on these assets. | ||||||||||||||||||||||||
At December 31, 2014 and 2013, we had no investment in any person or its affiliates (other than bonds issued by agencies of the United States Government) that exceeded 10% of stockholders' equity. |
Mortgage_Loans_on_Real_Estate
Mortgage Loans on Real Estate | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Mortgage Loans on Real Estate [Abstract] | ||||||||||||||||||||||||||||
Mortgage Loans on Real Estate | Mortgage Loans on Real Estate | |||||||||||||||||||||||||||
Our mortgage loan portfolio, summarized in the following table, totaled $2.4 billion and $2.6 billion at December 31, 2014 and 2013, respectively, with commitments outstanding of $61.3 million at December 31, 2014. | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Principal outstanding | $ | 2,457,721 | $ | 2,607,698 | ||||||||||||||||||||||||
Loan loss allowance | (22,633 | ) | (26,047 | ) | ||||||||||||||||||||||||
Deferred prepayment fees | (508 | ) | (569 | ) | ||||||||||||||||||||||||
Carrying value | $ | 2,434,580 | $ | 2,581,082 | ||||||||||||||||||||||||
The portfolio consists of commercial mortgage loans collateralized by the related properties and diversified as to property type, location and loan size. Our mortgage lending policies establish limits on the amount that can be loaned to one borrower and other criteria to attempt to reduce the risk of default. The mortgage loan portfolio is summarized by geographic region and property type as follows: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
Principal | Percent | Principal | Percent | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Geographic distribution | ||||||||||||||||||||||||||||
East | $ | 701,638 | 28.5 | % | $ | 765,717 | 29.4 | % | ||||||||||||||||||||
Middle Atlantic | 166,249 | 6.8 | % | 156,489 | 6 | % | ||||||||||||||||||||||
Mountain | 279,075 | 11.4 | % | 356,246 | 13.7 | % | ||||||||||||||||||||||
New England | 12,280 | 0.5 | % | 21,324 | 0.8 | % | ||||||||||||||||||||||
Pacific | 302,307 | 12.3 | % | 317,431 | 12.2 | % | ||||||||||||||||||||||
South Atlantic | 471,849 | 19.2 | % | 483,852 | 18.5 | % | ||||||||||||||||||||||
West North Central | 349,028 | 14.2 | % | 351,794 | 13.5 | % | ||||||||||||||||||||||
West South Central | 175,295 | 7.1 | % | 154,845 | 5.9 | % | ||||||||||||||||||||||
$ | 2,457,721 | 100 | % | $ | 2,607,698 | 100 | % | |||||||||||||||||||||
Property type distribution | ||||||||||||||||||||||||||||
Office | $ | 484,585 | 19.7 | % | $ | 590,414 | 22.6 | % | ||||||||||||||||||||
Medical Office | 88,275 | 3.6 | % | 125,703 | 4.8 | % | ||||||||||||||||||||||
Retail | 711,775 | 29 | % | 711,364 | 27.3 | % | ||||||||||||||||||||||
Industrial/Warehouse | 649,425 | 26.4 | % | 673,449 | 25.8 | % | ||||||||||||||||||||||
Hotel | 30,640 | 1.3 | % | 61,574 | 2.4 | % | ||||||||||||||||||||||
Apartment | 335,087 | 13.6 | % | 291,823 | 11.2 | % | ||||||||||||||||||||||
Mixed use/other | 157,934 | 6.4 | % | 153,371 | 5.9 | % | ||||||||||||||||||||||
$ | 2,457,721 | 100 | % | $ | 2,607,698 | 100 | % | |||||||||||||||||||||
Our financing receivables currently consist of one portfolio segment which is our commercial mortgage loan portfolio. These are mortgage loans with collateral consisting of commercial real estate and borrowers consisting mostly of limited liability partnerships or limited liability corporations. | ||||||||||||||||||||||||||||
We evaluate our mortgage loan portfolio for the establishment of a loan loss allowance by specific identification of impaired loans and the measurement of an estimated loss for each individual loan identified. A mortgage loan is impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. If we determine that the value of any specific mortgage loan is impaired, the carrying amount of the mortgage loan will be reduced to its fair value, based upon the present value of expected future cash flows from the loan discounted at the loan's effective interest rate, or the fair value of the underlying collateral less estimated costs to sell. | ||||||||||||||||||||||||||||
In addition, we analyze the mortgage loan portfolio for the need of a general loan allowance for probable losses on all other loans on a quantitative and qualitative basis. The amount of the general loan allowance is based upon management's evaluation of the collectability of the loan portfolio, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. | ||||||||||||||||||||||||||||
We rate each of the mortgage loans in our portfolio based on factors such as historical operating performance, loan to value ratio and economic outlook, among others. We calculate a loss factor to apply to each rating based on historical losses we have recognized in our mortgage loan portfolio. We apply the loss factors to the total principal outstanding within each rating category to determine an appropriate estimate of the general loan loss allowance. We also assess the portfolio qualitatively and apply a loss rate to all loans without a specific allowance based on management's assessment of economic conditions, and we apply an additional amount of loss allowance to a group of loans that we have identified as having higher risk of loss. | ||||||||||||||||||||||||||||
The following table presents a rollforward of our specific and general valuation allowances for mortgage loans on real estate: | ||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Specific | General | Specific | General | Specific | General | |||||||||||||||||||||||
Allowance | Allowance | Allowance | Allowance | Allowance | Allowance | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Beginning allowance balance | $ | (16,847 | ) | $ | (9,200 | ) | $ | (23,134 | ) | $ | (11,100 | ) | $ | (23,664 | ) | $ | (9,300 | ) | ||||||||||
Charge-offs | 9,211 | — | 9,738 | — | 15,562 | — | ||||||||||||||||||||||
Recoveries | 255 | — | 4,070 | — | — | — | ||||||||||||||||||||||
Change in provision for credit losses | (4,952 | ) | (1,100 | ) | (7,521 | ) | 1,900 | (15,032 | ) | (1,800 | ) | |||||||||||||||||
Ending allowance balance | $ | (12,333 | ) | $ | (10,300 | ) | $ | (16,847 | ) | $ | (9,200 | ) | $ | (23,134 | ) | $ | (11,100 | ) | ||||||||||
The specific allowance represents the total credit loss allowances on loans which are individually evaluated for impairment. The general allowance is for the group of loans discussed above which are collectively evaluated for impairment. The following table presents the total outstanding principal of loans evaluated for impairment by basis of impairment method: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 29,116 | $ | 47,018 | 53,110 | |||||||||||||||||||||||
Collectively evaluated for impairment | 2,428,605 | 2,560,680 | 2,605,773 | |||||||||||||||||||||||||
Total loans evaluated for impairment | $ | 2,457,721 | $ | 2,607,698 | 2,658,883 | |||||||||||||||||||||||
Charge-offs include allowances that have been established on loans that were satisfied by taking ownership of the collateral. When the property is taken it is recorded at the lower of the mortgage loan's carrying value or the property's fair value as a component of other investments and the mortgage loan is recorded as fully paid, with any allowance for credit loss that has been established charged off. Fair value of the real estate is determined by third party appraisal. Recoveries are situations where we have received a payment from the borrower in an amount greater than the carrying value of the loan (principal outstanding less specific allowance). | ||||||||||||||||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, seven, five and thirteen mortgage loans, respectively, were satisfied by taking ownership of the real estate serving as collateral. The following table summarizes the activity in the real estate owned, included in Other investments, which was obtained in satisfaction of mortgage loans on real estate: | ||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Real estate owned at beginning of period | $ | 22,844 | $ | 33,172 | $ | 36,821 | ||||||||||||||||||||||
Real estate acquired in satisfaction of mortgage loans | 14,555 | 8,217 | 26,324 | |||||||||||||||||||||||||
Additions | — | 626 | 398 | |||||||||||||||||||||||||
Sales | (14,134 | ) | (17,358 | ) | (23,825 | ) | ||||||||||||||||||||||
Impairments | (2,441 | ) | (1,195 | ) | (5,677 | ) | ||||||||||||||||||||||
Depreciation | (586 | ) | (618 | ) | (869 | ) | ||||||||||||||||||||||
Real estate owned at end of period | $ | 20,238 | $ | 22,844 | $ | 33,172 | ||||||||||||||||||||||
We analyze credit risk of our mortgage loans by analyzing all available evidence on loans that are delinquent and loans that are in a workout period. | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Credit Exposure--By Payment Activity | ||||||||||||||||||||||||||||
Performing | $ | 2,451,760 | 2,593,276 | |||||||||||||||||||||||||
In workout | — | 6,248 | ||||||||||||||||||||||||||
Delinquent | — | — | ||||||||||||||||||||||||||
Collateral dependent | 5,961 | 8,174 | ||||||||||||||||||||||||||
$ | 2,457,721 | $ | 2,607,698 | |||||||||||||||||||||||||
The loans that are categorized as "in workout" consist of loans that we have agreed to lower or no mortgage payments for a period of time while the borrowers address cash flow and/or operational issues. The key features of these workouts have been determined on a loan-by-loan basis. Most of these loans are in a period of low cash flow due to tenants vacating their space or tenants requesting rent relief during difficult economic periods. Generally, we have allowed the borrower a six month interest only period and in some cases a twelve month period of interest only. Interest only workout loans are expected to return to their regular debt service payments after the interest only period. Interest only loans that are not fully amortizing will have a larger balance at their balloon date than originally contracted. Fully amortizing loans that are in interest only periods will have larger debt service payments for their remaining term due to lost principal payments during the interest only period. In limited circumstances we have allowed borrowers to pay the principal portion of their loan payment into an escrow account that can be used for capital and tenant improvements for a period of not more than twelve months. In these situations new loan amortization schedules are calculated based on the principal not collected during this twelve month workout period and larger payments are collected for the remaining term of each loan. In all cases, the original interest rate and maturity date have not been modified, and we have not forgiven any principal amounts. | ||||||||||||||||||||||||||||
Mortgage loans are considered delinquent when they become 60 days past due. When loans become 90 days past due, become collateral dependent or enter a period with no debt service payments required we place them on non-accrual status and discontinue recognizing interest income. If payments are received on a delinquent loan, interest income is recognized to the extent it would have been recognized if normal principal and interest would have been received timely. If the payments are received to bring a delinquent loan back to current we will resume accruing interest income on that loan. Outstanding principal of loans in a non-accrual status at December 31, 2014 and 2013 totaled $6.0 million and $8.2 million, respectively. | ||||||||||||||||||||||||||||
We define collateral dependent loans as those mortgage loans for which we will depend on the value of the collateral real estate to satisfy the outstanding principal of the loan. | ||||||||||||||||||||||||||||
All of our commercial mortgage loans depend on the cash flow of the borrower to be at a sufficient level to service the principal and interest payments as they come due. In general, cash inflows of the borrowers are generated by collecting monthly rent from tenants occupying space within the borrowers' properties. Our borrowers face collateral risks such as tenants going out of business, tenants struggling to make rent payments as they become due, and tenants canceling leases and moving to other locations. We have a number of loans where the real estate is occupied by a single tenant. Our borrowers sometimes face both a reduction in cash flow on their mortgage property as well as a reduction in the fair value of the real estate collateral. If borrowers are unable to replace lost rent revenue and increases in the fair value of their property do not materialize we could potentially incur more losses than what we have allowed for in our specific and general loan loss allowances. | ||||||||||||||||||||||||||||
Aging of financing receivables is summarized in the following table, with loans in a "workout" period as of the reporting date considered current if payments are current in accordance with agreed upon terms: | ||||||||||||||||||||||||||||
30 - 59 Days | 60 - 89 Days | 90 Days | Total | Current | Collateral | Total | ||||||||||||||||||||||
and Over | Past Due | Dependent | Financing | |||||||||||||||||||||||||
Receivables | Receivables | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Commercial Mortgage Loans | ||||||||||||||||||||||||||||
31-Dec-14 | $ | — | $ | — | $ | — | $ | — | $ | 2,451,760 | $ | 5,961 | $ | 2,457,721 | ||||||||||||||
31-Dec-13 | $ | — | $ | — | $ | — | $ | — | $ | 2,599,524 | $ | 8,174 | $ | 2,607,698 | ||||||||||||||
Financing receivables summarized in the following two tables represent all loans that we are either not currently collecting, or those we feel it is probable we will not collect all amounts due according to the contractual terms of the loan agreements (all loans that we have worked with the borrower to alleviate short-term cash flow issues, loans delinquent for more than 60 days at the reporting date, loans we have determined to be collateral dependent and loans that we have recorded specific impairments on that we feel may continue to have performance issues). | ||||||||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 16,783 | $ | 29,116 | $ | (12,333 | ) | |||||||||||||||||||||
Mortgage loans with no related allowance | 2,656 | 2,656 | — | |||||||||||||||||||||||||
$ | 19,439 | $ | 31,772 | $ | (12,333 | ) | ||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 30,171 | $ | 47,018 | $ | (16,847 | ) | |||||||||||||||||||||
Mortgage loans with no related allowance | 3,264 | 3,264 | — | |||||||||||||||||||||||||
$ | 33,435 | $ | 50,282 | $ | (16,847 | ) | ||||||||||||||||||||||
Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 18,465 | $ | 1,797 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 2,656 | 43 | ||||||||||||||||||||||||||
$ | 21,121 | $ | 1,840 | |||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 33,772 | $ | 2,094 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 3,264 | 138 | ||||||||||||||||||||||||||
$ | 37,036 | $ | 2,232 | |||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 37,480 | $ | 1,946 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 27,696 | 1,664 | ||||||||||||||||||||||||||
$ | 65,176 | $ | 3,610 | |||||||||||||||||||||||||
A Troubled Debt Restructuring ("TDR") is a situation where we have granted a concession to a borrower for economic or legal reasons related to the borrower's financial difficulties that we would not otherwise consider. A mortgage loan that has been granted new terms, including workout terms as described previously, would be considered a TDR if it meets conditions that would indicate a borrower is experiencing financial difficulty and the new terms constitute a concession on our part. We analyze all loans where we have agreed to workout terms and all loans that we have refinanced to determine if they meet the definition of a TDR. We consider the following factors in determining whether or not a borrower is experiencing financial difficulty: | ||||||||||||||||||||||||||||
• | borrower is in default, | |||||||||||||||||||||||||||
• | borrower has declared bankruptcy, | |||||||||||||||||||||||||||
• | there is growing concern about the borrower's ability to continue as a going concern, | |||||||||||||||||||||||||||
• | borrower has insufficient cash flows to service debt, | |||||||||||||||||||||||||||
• | borrower's inability to obtain funds from other sources, and | |||||||||||||||||||||||||||
• | there is a breach of financial covenants by the borrower. | |||||||||||||||||||||||||||
If the borrower is determined to be in financial difficulty, we consider the following conditions to determine if the borrower was granted a concession: | ||||||||||||||||||||||||||||
• | assets used to satisfy debt are less than our recorded investment, | |||||||||||||||||||||||||||
• | interest rate is modified, | |||||||||||||||||||||||||||
• | maturity date extension at an interest rate less than market rate, | |||||||||||||||||||||||||||
• | capitalization of interest, | |||||||||||||||||||||||||||
• | delaying principal and/or interest for a period of three months or more, and | |||||||||||||||||||||||||||
• | partial forgiveness of the balance or charge-off. | |||||||||||||||||||||||||||
Mortgage loan workouts, refinances or restructures that are classified as TDRs are individually evaluated and measured for impairment. A summary of mortgage loans on commercial real estate with outstanding principal at December 31, 2014 and 2013 that we determined to be TDRs are as follows: | ||||||||||||||||||||||||||||
Geographic Region | Number of | Principal | Specific Loan | Net | ||||||||||||||||||||||||
TDRs | Balance | Loss Allowance | Carrying | |||||||||||||||||||||||||
Outstanding | Amount | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Year ended December 31, 2014: | ||||||||||||||||||||||||||||
South Atlantic | 7 | $ | 14,475 | $ | (4,244 | ) | $ | 10,231 | ||||||||||||||||||||
East North Central | 1 | 2,177 | (467 | ) | 1,710 | |||||||||||||||||||||||
West North Central | 1 | 1,881 | (1,047 | ) | 834 | |||||||||||||||||||||||
9 | $ | 18,533 | $ | (5,758 | ) | $ | 12,775 | |||||||||||||||||||||
Year ended December 31, 2013: | ||||||||||||||||||||||||||||
East | 1 | $ | 3,712 | $ | (949 | ) | $ | 2,763 | ||||||||||||||||||||
Mountain | 7 | 22,140 | (329 | ) | 21,811 | |||||||||||||||||||||||
South Atlantic | 7 | 13,930 | (4,177 | ) | 9,753 | |||||||||||||||||||||||
East North Central | 1 | 2,219 | (467 | ) | 1,752 | |||||||||||||||||||||||
West North Central | 1 | 1,938 | (475 | ) | 1,463 | |||||||||||||||||||||||
West South Central | 1 | 1,714 | (256 | ) | 1,458 | |||||||||||||||||||||||
18 | $ | 45,653 | $ | (6,653 | ) | $ | 39,000 | |||||||||||||||||||||
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||
Derivative Instruments | Derivative Instruments | ||||||||||||||||||||
We recognize all derivative instruments as assets or liabilities in the consolidated balance sheets at fair value. None of our derivatives qualify for hedge accounting, thus, any change in the fair value of the derivatives is recognized immediately in the consolidated statements of operations. The fair value of our derivative instruments, including derivative instruments embedded in fixed index annuity contracts and derivative instruments embedded in a convertible debt issue, presented in the consolidated balance sheets are as follows: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||
Call options | $ | 731,113 | $ | 856,050 | |||||||||||||||||
Other assets | |||||||||||||||||||||
2015 notes hedges | 30,291 | 107,041 | |||||||||||||||||||
Interest rate caps | 2,778 | 6,103 | |||||||||||||||||||
Interest rate swap | — | 712 | |||||||||||||||||||
$ | 764,182 | $ | 969,906 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||
Policy benefit reserves—annuity products | |||||||||||||||||||||
Fixed index annuities—embedded derivatives | $ | 5,574,653 | $ | 4,406,163 | |||||||||||||||||
Other liabilities | |||||||||||||||||||||
2015 notes embedded conversion derivative (see Note 9) | 30,291 | 107,041 | |||||||||||||||||||
Interest rate swap | 2,644 | — | |||||||||||||||||||
$ | 5,607,588 | $ | 4,513,204 | ||||||||||||||||||
The changes in fair value of derivatives included in the consolidated statements of operations are as follows: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Change in fair value of derivatives: | |||||||||||||||||||||
Call options | $ | 521,947 | $ | 932,003 | $ | 228,610 | |||||||||||||||
2015 notes hedges | (8,934 | ) | 145,751 | (2,488 | ) | ||||||||||||||||
2015 warrants | — | (9,568 | ) | — | |||||||||||||||||
Interest rate swap | (4,863 | ) | 4,973 | (4,261 | ) | ||||||||||||||||
Interest rate caps | (3,325 | ) | 2,856 | (723 | ) | ||||||||||||||||
$ | 504,825 | $ | 1,076,015 | $ | 221,138 | ||||||||||||||||
Change in fair value of embedded derivatives: | |||||||||||||||||||||
Fixed index annuities—embedded derivatives | $ | 47,548 | $ | (8,006 | ) | $ | 289,387 | ||||||||||||||
2015 notes embedded conversion derivative (see Note 9) | (19,036 | ) | 141,974 | (2,488 | ) | ||||||||||||||||
2029 notes embedded conversion derivative (see Note 9) | 3,809 | — | — | ||||||||||||||||||
$ | 32,321 | $ | 133,968 | $ | 286,899 | ||||||||||||||||
We have fixed index annuity products that guarantee the return of principal to the policyholder and credit interest based on a percentage of the gain in a specified market index. When fixed index annuity deposits are received, a portion of the deposit is used to purchase derivatives consisting of call options on the applicable market indices to fund the index credits due to fixed index annuity policyholders. Substantially all such call options are one year options purchased to match the funding requirements of the underlying policies. The call options are marked to fair value with the change in fair value included as a component of revenues. The change in fair value of derivatives includes the gains or losses recognized at the expiration of the option term or upon early termination and the changes in fair value for open positions. On the respective anniversary dates of the index policies, the index used to compute the annual index credit is reset and we purchase new one-year call options to fund the next annual index credit. We manage the cost of these purchases through the terms of our fixed index annuities, which permit us to change caps, participation rates, and/or asset fees, subject to guaranteed minimums on each policy's anniversary date. By adjusting caps, participation rates, or asset fees, we can generally manage option costs except in cases where the contractual features would prevent further modifications. | |||||||||||||||||||||
Our strategy attempts to mitigate any potential risk of loss under these agreements through a regular monitoring process which evaluates the program's effectiveness. We do not purchase call options that would require payment or collateral to another institution and our call options do not contain counterparty credit-risk-related contingent features. We are exposed to risk of loss in the event of nonperformance by the counterparties and, accordingly, we purchase our option contracts from multiple counterparties and evaluate the creditworthiness of all counterparties prior to purchase of the contracts. All of these options have been purchased from nationally recognized financial institutions with a Standard and Poor's credit rating of A- or higher at the time of purchase and the maximum credit exposure to any single counterparty is subject to concentration limits. We also have credit support agreements that allow us to request the counterparty to provide collateral to us when the fair value of our exposure to the counterparty exceeds specified amounts. | |||||||||||||||||||||
The notional amount and fair value of our call options by counterparty and each counterparty's current credit rating are as follows: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Counterparty | Credit Rating (S&P) | Credit Rating (Moody's) | Notional | Fair Value | Notional | Fair Value | |||||||||||||||
Amount | Amount | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Bank of America | A | A2 | $ | 2,114,812 | $ | 62,932 | $ | 1,683,911 | $ | 73,836 | |||||||||||
Barclays | A | A2 | 4,083,259 | 135,609 | 2,396,839 | 113,513 | |||||||||||||||
BNP Paribas | A+ | A1 | 1,321,136 | 42,644 | 1,382,661 | 38,849 | |||||||||||||||
Citibank, N.A. | A | A2 | 3,190,204 | 96,759 | 1,536,547 | 72,310 | |||||||||||||||
Credit Suisse | A | A1 | 2,354,811 | 75,381 | 4,060,352 | 193,304 | |||||||||||||||
Deutsche Bank | A | A3 | 2,682,960 | 64,028 | 747,587 | 41,074 | |||||||||||||||
HSBC | AA- | A1 | 38,599 | 1,767 | 200,011 | 10,518 | |||||||||||||||
J.P. Morgan | A+ | Aa3 | 401,804 | 13,488 | 786,429 | 36,863 | |||||||||||||||
Morgan Stanley | A- | Baa2 | 2,605,687 | 77,106 | 3,546,487 | 150,437 | |||||||||||||||
Royal Bank of Canada | AA- | Aa3 | 1,364,362 | 41,717 | 714,941 | 25,140 | |||||||||||||||
SunTrust | BBB+ | A3 | 248,622 | 5,405 | — | — | |||||||||||||||
Wells Fargo | AA- | Aa3 | 3,550,188 | 114,277 | 2,221,874 | 100,206 | |||||||||||||||
$ | 23,956,444 | $ | 731,113 | $ | 19,277,639 | $ | 856,050 | ||||||||||||||
As of December 31, 2014 and 2013, we held $743.0 million and $818.2 million, respectively, of cash and cash equivalents and other securities from counterparties for derivative collateral, which is included in other liabilities on our consolidated balance sheets. This derivative collateral limits the maximum amount of economic loss due to credit risk that we would incur if parties to the call options failed completely to perform according to the terms of the contracts to $47.4 million and $71.7 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
The future annual index credits on our fixed index annuities are treated as a "series of embedded derivatives" over the expected life of the applicable contract. We do not purchase call options to fund the index liabilities which may arise after the next policy anniversary date. We must value both the call options and the related forward embedded options in the policies at fair value. During the year ended December 31, 2014, we revised future period assumptions for lapse rates and the expected costs of annual call options used in determining fixed index annuity embedded derivatives. These revisions decreased the change in fair value of embedded derivatives for the year ended December 31, 2014 by $62.6 million, which after related adjustments to deferred sales inducements and deferred policy acquisition costs and income taxes, increased net income by $14.8 million. | |||||||||||||||||||||
We entered into an interest rate swap and interest rate caps to manage interest rate risk associated with the floating rate component on certain of our subordinated debentures. See Note 10 for more information on our subordinated debentures. The terms of the interest rate swap provide that we pay a fixed rate of interest and receive a floating rate of interest. The terms of the interest rate caps limit the three month London Interbank Offered Rate ("LIBOR") to 2.50%. The interest rate swap and caps are not effective hedges under accounting guidance for derivative instruments and hedging activities. Therefore, we record the interest rate swap and caps at fair value and any net cash payments received or paid are included in the change in fair value of derivatives in the consolidated statements of operations. | |||||||||||||||||||||
Details regarding the interest rate swap are as follows: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Maturity Date | Notional | Receive Rate | Pay Rate | Counterparty | Fair Value | Fair Value | |||||||||||||||
Amount | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
15-Mar-21 | $ | 85,500 | LIBOR | 2.42% | SunTrust | $ | (2,644 | ) | $ | 712 | |||||||||||
Details regarding the interest rate caps are as follows: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Maturity Date | Notional Amount | Floating Rate | Cap Rate | Counterparty | Fair Value | Fair Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
7-Jul-21 | $ | 40,000 | LIBOR | 2.50% | SunTrust | $ | 1,398 | $ | 3,073 | ||||||||||||
8-Jul-21 | 12,000 | LIBOR | 2.50% | SunTrust | 420 | 923 | |||||||||||||||
29-Jul-21 | 27,000 | LIBOR | 2.50% | SunTrust | 960 | 2,107 | |||||||||||||||
$ | 79,000 | $ | 2,778 | $ | 6,103 | ||||||||||||||||
The interest rate swap converts floating rates to fixed rates for seven years which began in March 2014. The interest rate caps cap our interest rates for seven years which began in July 2014. | |||||||||||||||||||||
In September 2010, concurrently with the issuance of $200.0 million principal amount of 3.50% Convertible Senior Notes due September 15, 2015 (the "2015 notes"), we entered into hedge transactions (the "2015 notes hedges") with two counterparties whereby we would receive the cash equivalent of the conversion spread on 16.0 million shares of our common stock based upon a strike price of $12.50 per share, subject to certain conversion rate adjustments in the 2015 notes. The number of shares and strike price of the 2015 notes hedges are subject to adjustment based on dividends we pay subsequent to their purchase. The 2015 notes hedges expire on September 15, 2015, and must be settled in cash. The 2015 notes hedges are accounted for as derivative assets and are included in other assets in our consolidated balance sheets. The 2015 notes hedges and 2015 notes embedded conversion derivative are adjusted to fair value each reporting period and unrealized gains and losses are reflected in our consolidated statements of operations. | |||||||||||||||||||||
In separate transactions, we sold warrants (the "2015 warrants") to the 2015 notes hedges counterparties for the purchase of up to 16.0 million shares of our common stock at a price of $16.00 per share. We received $15.6 million in cash proceeds from the sale of the 2015 warrants, which was recorded as an increase in additional paid-in capital. The number of shares and strike price of the warrants are subject to adjustment based on dividends we pay subsequent to selling the warrants. The warrants expire on various dates from December 2015 through March 2016 and are intended to be settled in net shares. Changes in the fair value of these warrants will not be recognized in our consolidated financial statements as long as the instruments remain classified as equity. | |||||||||||||||||||||
In 2014, we entered into five separate partial unwind agreements with the counterparties to the 2015 notes hedges and the 2015 warrants to coincide with the extinguishment of a portion of our 2015 notes (see Note 9) whereby we agreed to settle the related 2015 notes hedges and the 2015 warrants and received net cash from the counterparties totaling $16.6 million. The agreements to settle the 2015 warrants in cash required us to reclassify $51.3 million from equity to a derivative liability which represented the fair value of the 2015 warrants committed to the unwind on the day that we entered into the agreements. The fair value of these warrants did not change after reclassification as they were settled in cash at the time the agreements were executed. | |||||||||||||||||||||
In 2013, we entered into three separate partial unwind agreements with the counterparties to the 2015 notes hedges and the 2015 warrants to coincide with the extinguishment of a portion of our 2015 notes (see Note 9) whereby we agreed to settle the related 2015 notes hedges and the 2015 warrants and received net cash from the counterparties totaling $22.2 million. The agreements to settle the 2015 warrants in cash required us to reclassify $48.0 million from equity to a derivative liability which represented the fair value of the 2015 warrants committed to the unwind on the day that we entered into the unwind agreements. Subsequent to the reclassification, we were required to recognize any change in fair value of the 2015 warrants committed to the unwind agreements through net income. | |||||||||||||||||||||
At December 31, 2014, as a result of the partial unwind transactions and cash dividend adjustments, we had 2015 notes hedges and 2015 warrants outstanding on 1.8 million shares of our common stock at strike prices of $12.25 and $15.68 per share, respectively. | |||||||||||||||||||||
The average price of our common stock has exceeded the strike price of the 2015 warrants in each quarter of 2014 and the last two quarters of 2013 and the dilutive effect of the 2015 warrants has been included in diluted earnings per share for the years ended December 31, 2014 and 2013. The 2015 warrants were not dilutive for the year ended December 31, 2012. |
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs and Deferred Sales Inducements | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Deferred Policy Acquisition Costs and Deferred Sales Inducements [Abstract] | ||||||||||||
Deferred Policy Acquisition Costs and Deferred Sales Inducements | Deferred Policy Acquisition Costs and Deferred Sales Inducements | |||||||||||
Policy acquisition costs deferred and amortized are as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balance at beginning of year | $ | 2,426,652 | $ | 1,709,799 | $ | 1,683,857 | ||||||
Costs deferred during the year: | ||||||||||||
Commissions | 421,802 | 420,378 | 399,001 | |||||||||
Policy issue costs | 5,080 | 5,422 | 4,410 | |||||||||
Amortization | (163,578 | ) | (365,468 | ) | (164,919 | ) | ||||||
Effect of net unrealized gains/losses | (631,400 | ) | 656,521 | (212,550 | ) | |||||||
Balance at end of year | $ | 2,058,556 | $ | 2,426,652 | $ | 1,709,799 | ||||||
Sales inducements deferred and amortized are as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balance at beginning of year | $ | 1,875,880 | $ | 1,292,341 | $ | 1,242,787 | ||||||
Costs deferred during the year | 330,079 | 337,787 | 306,659 | |||||||||
Amortization | (131,419 | ) | (253,113 | ) | (87,157 | ) | ||||||
Effect of net unrealized gains/losses | (487,283 | ) | 498,865 | (169,948 | ) | |||||||
Balance at end of year | $ | 1,587,257 | $ | 1,875,880 | $ | 1,292,341 | ||||||
We periodically revise the key assumptions used in the calculation of amortization of deferred policy acquisition costs and deferred sales inducements retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of realized investment gains and losses) to be realized from a group of products are revised. The unlocking adjustment in 2014 decreased amortization of deferred policy acquisition costs by $35.5 million and amortization of deferred sales inducements by $12.6 million and included the impact of account balance true ups as of September 30, 2014 and adjustment to future period assumptions for interest margins, surrenders and certain expenses. The unlocking adjustment in 2013 decreased amortization of deferred policy acquisition costs by $18.5 million and amortization for deferred sales inducements by $11.1 million and included the impact of account balance true-ups and adjustment to future period assumptions for surrenders and certain expenses. The unlocking adjustment in 2012 increased amortization of deferred policy acquisition costs by $3.7 million and decreased amortization for deferred sales inducements by $0.2 million. |
Reinsurance_and_Policy_Provisi
Reinsurance and Policy Provisions | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||
Reinsurance and Policy Provisions | Reinsurance and Policy Provisions | |||||||||||
Coinsurance | ||||||||||||
We have two coinsurance agreements with EquiTrust Life Insurance Company ("EquiTrust"), covering 70% of certain of American Equity Life's fixed index and fixed rate annuities issued from August 1, 2001 through December 31, 2001, 40% of those contracts issued during 2002 and 2003 and 20% of those contracts issued from January 1, 2004 to July 31, 2004. The business reinsured under these agreements may not be recaptured. Coinsurance deposits (aggregate policy benefit reserves transferred to EquiTrust under these agreements) were $0.9 billion and $0.9 billion at December 31, 2014 and 2013, respectively. We remain liable to policyholders with respect to the policy liabilities ceded to EquiTrust should EquiTrust fail to meet the obligations it has coinsured. None of the coinsurance deposits with EquiTrust are deemed by management to be uncollectible. The balance due under these agreements to EquiTrust was $15.2 million and $20.7 million at December 31, 2014 and 2013, respectively, and represents the fair value of call options held by us to fund index credits related to the ceded business net of cash due to or from EquiTrust related to monthly settlements of policy activity and other expenses. | ||||||||||||
We have three coinsurance agreements with Athene Life Re Ltd. ("Athene"), an unauthorized life reinsurer domiciled in Bermuda. One agreement cedes 20% of certain of American Equity Life's fixed index annuities issued from January 1, 2009 through March 31, 2010. The business reinsured under this agreement is not eligible for recapture until the end of the month following seven years after the date of issuance of the policy. The second agreement cedes 80% of American Equity Life's multi-year rate guaranteed annuities issued from July 1, 2009 through December 31, 2013 and 80% of Eagle Life's multi-year rate guaranteed annuities issued from November 20, 2013 through December 31, 2013. The business reinsured under this agreement may not be recaptured. The third agreement cedes 80% of American Equity Life's and Eagle Life's multi-year rate guaranteed annuities issued on or after January 1, 2014, and 80% of Eagle Life's fixed index annuities. The reinsurance agreement specifies that the coinsurance percentage for Eagle Life's fixed index annuities decreases to 50% for policies issued between January 1, 2016 and December 31, 2018, and to 20% for policies issued on or after January 1, 2019. The business reinsured under this agreement may not be recaptured. Coinsurance deposits (aggregate policy benefit reserves transferred to Athene under these agreements) were $2.2 billion and $2.1 billion at December 31, 2014 and 2013, respectively. American Equity Life is an intermediary for reinsurance of the Eagle Life's business ceded to Athene. American Equity Life and Eagle Life remain liable to policyholders with respect to the policy liabilities ceded to Athene should Athene fail to meet the obligations it has coinsured. The annuity deposits that have been ceded to Athene are held in trusts and American Equity Life is named as the sole beneficiary of the trusts. The assets in the trusts are required to remain at a value that is sufficient to support the current balance of policy benefit liabilities of the ceded business on a statutory basis. If the value of the trust accounts would ever reach a point where it is less than the amount of the ceded policy benefit liabilities on a statutory basis, Athene is required to either establish a letter of credit or deposit securities in the trusts for the amount of any shortfall. None of the coinsurance deposits with Athene are deemed by management to be uncollectible. The balance due under these agreements to Athene was $21.9 million and $27.3 million at December 31, 2014 and 2013, respectively, and represents the fair value of call options held by us to fund index credits related to the ceded business net of cash due from Athene related to monthly settlements of policy activity. | ||||||||||||
Amounts ceded to EquiTrust and Athene under these agreements are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
Annuity product charges | $ | 5,956 | $ | 6,551 | $ | 6,796 | ||||||
Change in fair value of derivatives | 31,076 | 60,876 | 17,106 | |||||||||
$ | 37,032 | $ | 67,427 | $ | 23,902 | |||||||
Interest sensitive and index product benefits | $ | 122,666 | $ | 117,934 | $ | 94,113 | ||||||
Change in fair value of embedded derivatives | 35,820 | 2,898 | 9,373 | |||||||||
Other operating costs and expenses | 9,241 | 9,926 | 9,333 | |||||||||
$ | 167,727 | $ | 130,758 | $ | 112,819 | |||||||
Consolidated Statements of Cash Flows | ||||||||||||
Annuity deposits | $ | (171,124 | ) | $ | (182,616 | ) | $ | (203,552 | ) | |||
Cash payments to policyholders | 280,308 | 208,345 | 208,437 | |||||||||
$ | 109,184 | $ | 25,729 | $ | 4,885 | |||||||
Financing Arrangements | ||||||||||||
We have two reinsurance transactions with Hannover Life Reassurance Company of America ("Hannover"), which are treated as reinsurance under statutory accounting practices and as financing arrangements under GAAP. The statutory surplus benefits under these agreements are eliminated under GAAP and the associated charges are recorded as risk charges and included in other operating costs and expenses in the consolidated statements of operations. The transactions became effective March 31, 2011 (the "2011 Hannover Transaction") and July 1, 2013 (the "2013 Hannover Transaction"). | ||||||||||||
The 2011 Hannover Transaction is a coinsurance and yearly renewable term reinsurance agreement for statutory purposes and provided $49.2 million in net pretax statutory surplus benefit at inception in 2011. The 2011 Hannover Transaction terminates on March 31, 2016, and the statutory surplus benefit is reduced over a five year period and is eliminated upon termination. Pursuant to the terms of this agreement, pretax statutory surplus was reduced by $10.8 million, $11.3 million and $11.8 million in 2014, 2013 and 2012, respectively, and is expected to be reduced as follows: 2015—$10.3 million and 2016—$2.5 million. These amounts include risk charges equal to 1.25% of the pretax statutory surplus benefit as of the end of each calendar quarter. Risk charges attributable to this agreement were $0.8 million, $1.3 million and $1.8 million during 2014, 2013 and 2012, respectively. | ||||||||||||
The 2013 Hannover Transaction is a yearly renewable term reinsurance agreement for statutory purposes covering 45.6% of waived surrender charges related to penalty free withdrawals, deaths and lifetime income benefit rider payments as well as lifetime income benefit rider payments in excess of policy fund values on certain business. We may recapture the risks reinsured under this agreement as of the end of any quarter after June 30, 2016. However, the agreement, as amended, makes it punitive to us if we do not recapture the business ceded no later than the first quarter of 2018. The reserve credit recorded on a statutory basis by American Equity Life was $322.5 million and $288.2 million at December 31, 2014 and 2013, respectively. We pay quarterly reinsurance premiums under this agreement with an experience refund calculated on a quarterly basis and a risk charge equal to 1.25% of the pretax statutory surplus benefit as of the end of each calendar quarter. Risk charges attributable to the 2013 Hannover Transaction were $15.7 million and $7.0 million during 2014 and 2013. | ||||||||||||
The 2013 Hannover Transaction replaces a similar reinsurance agreement with Hannover that was entered into in 2005 (the "2005 Hannover Agreement") which was recaptured simultaneously with entering into the 2013 Hannover Transaction. The 2005 Hannover Agreement was a yearly renewable term reinsurance agreement for statutory purposes covering 47% of waived surrender charges related to penalty free withdrawals and deaths on certain business. Risk charges attributable to the 2005 Hannover Transaction were $5.4 million and $9.9 million during 2013 and 2012, respectively. | ||||||||||||
Prior to its recapture in 2013, we had a coinsurance and yearly renewable term reinsurance agreement for statutory purposes that provided $29.5 million in net pretax statutory surplus benefit at inception in 2008 (the "2008 Hannover Transaction"). Pursuant to the terms of this agreement, pretax statutory surplus was reduced by $6.9 million and $6.8 million in 2013 and 2012, respectively. These amounts include risk charges equal to 1.25% of the pretax statutory surplus benefit as of the end of each calendar quarter. Risk charges attributable to the 2008 Hannover Transaction were $0.1 million and $0.5 million during 2013 and 2012, respectively. | ||||||||||||
Indemnity Reinsurance | ||||||||||||
In the normal course of business, we seek to limit our exposure to loss on any single insured and to recover a portion of benefits paid under our annuity, life and accident and health insurance products by ceding reinsurance to other insurance enterprises or reinsurers. Reinsurance contracts do not relieve us of our obligations to our policyholders. To the extent that reinsuring companies are later unable to meet obligations under reinsurance agreements, our life insurance subsidiaries would be liable for these obligations, and payment of these obligations could result in losses to us. To limit the possibility of such losses, we evaluate the financial condition of our reinsurers, and monitor concentrations of credit risk. No allowance for uncollectible amounts has been established against our asset for amounts receivable from other insurance companies as none of the receivables are deemed by management to be uncollectible. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
We file consolidated federal income tax returns that include all of our wholly-owned subsidiaries, except for 2009–2013 when Eagle Life filed a separate federal income tax return under applicable federal income tax guidelines. Our income tax expense as presented in the consolidated financial statements is summarized as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Consolidated statements of operations: | ||||||||||||
Current income taxes | $ | 116,545 | $ | 133,036 | $ | 80,527 | ||||||
Deferred income taxes (benefits) | (46,504 | ) | 3,013 | (52,336 | ) | |||||||
Total income tax expense included in consolidated statements of operations | 70,041 | 136,049 | 28,191 | |||||||||
Stockholders' equity: | ||||||||||||
Expense (benefit) relating to: | ||||||||||||
Change in net unrealized investment losses | 363,572 | (344,944 | ) | 123,620 | ||||||||
Share-based compensation | (5,716 | ) | (4,043 | ) | (392 | ) | ||||||
Extinguishment of convertible debt | (9,284 | ) | (4,546 | ) | — | |||||||
Total income tax expense (benefit) included in consolidated financial statements | $ | 418,613 | $ | (217,484 | ) | $ | 151,419 | |||||
Income tax expense in the consolidated statements of operations differed from the amount computed at the applicable statutory federal income tax rate of 35% as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Income before income taxes | $ | 196,064 | $ | 389,332 | $ | 85,989 | ||||||
Income tax expense on income before income taxes | $ | 68,622 | $ | 136,266 | $ | 30,096 | ||||||
Tax effect of: | ||||||||||||
Tax exempt net investment income | (3,669 | ) | (2,657 | ) | (1,876 | ) | ||||||
Extinguishment of convertible debt | 4,202 | 2,695 | — | |||||||||
Other | 886 | (255 | ) | (29 | ) | |||||||
Income tax expense | $ | 70,041 | $ | 136,049 | $ | 28,191 | ||||||
Effective tax rate | 35.7 | % | 34.9 | % | 32.8 | % | ||||||
Deferred income tax assets or liabilities are established for temporary differences between the financial reporting amounts and tax bases of assets and liabilities that will result in deductible or taxable amounts, respectively, in future years. The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2014 and 2013, are as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
Deferred income tax assets: | ||||||||||||
Policy benefit reserves | $ | 2,052,968 | $ | 1,875,516 | ||||||||
Other than temporary impairments | 753 | 901 | ||||||||||
Investment income items | — | 2,121 | ||||||||||
Amounts due reinsurer | 680 | 7,366 | ||||||||||
Other policyholder funds | 7,765 | 9,200 | ||||||||||
Litigation settlement accrual | 7,100 | 7,420 | ||||||||||
Deferred compensation | 10,565 | 13,430 | ||||||||||
Convertible senior notes | 12,281 | 34,818 | ||||||||||
Net operating loss carryforwards | 17,694 | 24,179 | ||||||||||
Other | 11,685 | 8,835 | ||||||||||
Gross deferred tax assets | 2,121,491 | 1,983,786 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Deferred policy acquisition costs and deferred sales inducements | (1,637,607 | ) | (1,475,403 | ) | ||||||||
Net unrealized gains on available for sale fixed maturity and equity securities | (376,314 | ) | (12,742 | ) | ||||||||
Derivative instruments | (94,038 | ) | (193,067 | ) | ||||||||
Investment income items | (14,842 | ) | — | |||||||||
Other | (2,585 | ) | (718 | ) | ||||||||
Gross deferred tax liabilities | (2,125,386 | ) | (1,681,930 | ) | ||||||||
Net deferred income tax (liability) asset | $ | (3,895 | ) | $ | 301,856 | |||||||
Included in the deferred income taxes is the expected income tax benefit attributable to unrealized losses on available for sale fixed maturity securities. There is no valuation allowance provided for the deferred income tax asset attributable to unrealized losses on available for sale fixed maturity securities. Management expects that the passage of time will result in the reversal of these unrealized losses due to the fair value increasing as these securities near maturity. We have the intent and ability to hold these securities to maturity, because we generate adequate cash flow from new business to fund all foreseeable cash flow needs and do not believe it would be necessary to liquidate these securities at a loss to meet cash flow needs. | ||||||||||||
Realization of our deferred income tax assets is more likely than not based on expectations as to our future taxable income and considering all other available evidence, both positive and negative. Therefore, no valuation allowance against deferred income tax assets has been established as of December 31, 2014 and 2013. | ||||||||||||
There were no material income tax contingencies requiring recognition in our consolidated financial statements as of December 31, 2014. We are no longer subject to income tax examinations by tax authorities for years prior to 2010. | ||||||||||||
At December 31, 2014, we had non-life net operating loss carryforwards for federal income tax purposes totaling $28.1 million which expire beginning in 2018 through 2033. |
Notes_Payable_and_Amounts_Due_
Notes Payable and Amounts Due Under Repurchase Agreements | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes Payable [Abstract] | ||||||||||||
Notes Payable and Amounts Due Under Repurchase Agreements | Notes Payable and Amounts Due Under Repurchase Agreements | |||||||||||
On July 17, 2013, we issued $400 million aggregate principal amount of senior unsecured notes due 2021 which bear interest at 6.625% per year and will mature on July 15, 2021. The initial transaction fees and expenses totaling $9.0 million were capitalized as deferred financing costs and are being amortized over the term of the notes due 2021 using the effective interest method. We used $15 million of the net proceeds from the issuance to repay the entire amount outstanding under our revolving credit facility and the remainder of the net proceeds was used to pay the cash consideration portion of the convertible notes tender, exchange offers and redemption discussed below. | ||||||||||||
In September 2010, we issued $200.0 million principal amount of 2015 notes. The 2015 notes have a coupon interest rate of 3.5% per year, mature on September 15, 2015, and are intended to be settled in cash; however, in certain limited circumstances we have the discretion to settle in shares of our common stock or a combination of cash and shares of our common stock. Contractual interest payable on the 2015 notes began accruing in September 2010 and is payable semi-annually in arrears each March 15th and September 15th. The initial transaction fees and expenses totaling $6.8 million were capitalized as deferred financing costs and are being amortized over the term of the 2015 notes using the effective interest method. | ||||||||||||
Upon occurrence of any of the conditions described below, holders may convert their 2015 notes at the applicable conversion rate at any time prior to June 15, 2015. On or after June 15, 2015 through the maturity date of September 15, 2015, holders may convert each of their 2015 notes at the applicable conversion rate regardless of the following conditions: | ||||||||||||
• | during the 5 business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; | |||||||||||
• | during any calendar quarter commencing after December 31, 2010, the Notes may be converted if the last reported price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day. The “last reported sale price” means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the New York Stock Exchange; or | |||||||||||
• | upon the occurrence of specified corporate transactions. | |||||||||||
The initial conversion rate for the 2015 notes was 80 shares of our common stock per $1,000 principal amount of 2015 notes, equivalent to a conversion price of approximately $12.50 per share of our common stock, with the amount due on conversion. Upon conversion, a holder will receive the sum of the daily settlement amounts, calculated on a proportionate basis for each day, during a specified observation period following the conversion date. The conversion rate for the 2015 notes was adjusted to 80.9486 shares in December 2012, equivalent to a conversion price of approximately $12.35 per share. The conversion rate and conversion price have not been adjusted for cash dividends paid in December 2013 and December 2014 because the adjustments created by these cash dividend payments have been carried forward because they do not change the conversion rate by at least 1%. | ||||||||||||
If a fundamental change, as defined in the indenture, occurs prior to maturity and our stock price is at least $10.00 per share at that time, the conversion rate will increase by an additional amount of up to 20 shares of our common stock per $1,000 principal amount of 2015 notes, which amount would be paid to each holder that elects to convert its 2015 notes at that time. | ||||||||||||
The conversion option of the 2015 notes (the "2015 notes embedded conversion derivative") is an embedded derivative that requires bifurcation from the 2015 notes and is accounted for as a derivative liability, which is included in Other liabilities in our Consolidated Balance Sheets. The fair value of the 2015 notes embedded conversion derivative at the time of issuance of the 2015 notes was $37.0 million, and was recorded as the original debt discount for purposes of accounting for the debt component of the 2015 notes. This discount is being recognized as interest expense using the effective interest method over the term of the 2015 notes. | ||||||||||||
In December 2009, we issued $115.8 million of contingent convertible senior notes due December 15, 2029 (the "2029 notes"), of which $15.6 million was assigned to the equity component (net of income tax of $11.0 million). The 2029 notes had a coupon interest rate of 5.25% per annum. Interest was payable semi-annually in arrears on June 6 and December 6 of each year. | ||||||||||||
Our convertible notes are senior unsecured obligations and rank equally in right of payment with all existing and future senior indebtedness and senior to any existing and future subordinated indebtedness. Our convertible notes effectively rank junior in right of payment to any existing and future secured indebtedness to the extent of the value of the assets securing such secured indebtedness. Our convertible notes are structurally subordinated to all liabilities of our subsidiaries. | ||||||||||||
We are required to include the dilutive effect of the 2029 notes in our diluted earnings per share calculation. Because these notes include a mandatory cash settlement feature for the principal amount, incremental dilutive shares will only exist when the fair value of our common stock at the end of the reporting period exceeds the conversion price per share. The conversion premium of the 2029 notes was dilutive and the effect has been included in diluted earnings per share for the years ended December 31, 2014, 2013 and 2012. The 2015 notes are excluded from the dilutive effect in our diluted earnings per share calculation as they are intended to be settled only in cash. | ||||||||||||
In 2014, we extinguished $69.6 million principal amount of our 2015 notes and $36.2 million principal amount of our 2029 notes pursuant to private exchange offers with holders of our outstanding convertible debt instruments. Total consideration paid to holders of the 2015 notes consisted of $82.9 million in cash and $48.2 million in shares of our common stock (2,115,055 shares). Total consideration paid to holders of the 2029 notes consisted of $66.7 million in cash and $23.2 million in shares of our common stock (946,793 shares). Total consideration paid to the holders of the 2015 notes and 2029 notes excludes the accrued interest through the settlement date that was also paid. The carrying value of the convertible notes at extinguishment was $66.0 million and $34.6 million for the 2015 notes and the 2029 notes, respectively, and losses net of tax of $4.8 million for the 2015 notes and $2.5 million for the 2029 notes were recognized. | ||||||||||||
Also in 2014, we issued a notice of mandatory redemption of all of the 2029 notes that were outstanding at the time the notice was issued and amended the terms of the indenture governing the 2029 notes to provide the holders with the option of receiving the conversion value of their notes entirely in cash rather than cash for the principal amount and net shares for the portion of the conversion value that exceeds the principal amount. As a result of this mandatory redemption and the change in terms, $32.1 million principal amount of the 2029 notes was converted into $69.4 million in cash and $24.6 million in shares of our common stock (897,548 shares). The amendment to the conversion terms resulted in a reclassification of the fair value of the conversion premium for the 2029 notes from equity to an embedded conversion derivative liability. The fair value of the conversion premium on the date of reclassification was $58.1 million. We applied fair value accounting to the embedded derivative liability from the date of reclassification to the dates of settlement of the conversions of the 2029 notes and recognized as expense the $3.8 million increase in the fair value of the embedded conversion derivative liability. | ||||||||||||
In 2013, we extinguished $108.0 million principal amount of our 2015 notes and $47.5 million principal amount of our 2029 notes pursuant to public and private exchange offers with holders of our outstanding convertible debt instruments. Total consideration paid to holders of the 2015 notes consisted of $116.1 million in cash and $79.2 million in shares of our common stock (3,643,402 shares). Total consideration paid to holders of the 2029 notes consisted of $74.8 million in cash and $34.9 million in shares of our common stock (1,629,677 shares). Total consideration paid to the holders of the 2015 notes and 2029 notes excludes the accrued interest through the settlement date that was also paid. The carrying value of the convertible notes at extinguishment was $99.6 million and $44.5 million for the 2015 notes and 2029 notes, respectively, and losses net of tax of $15.2 million for the 2015 notes and $5.2 million for the 2029 notes were recognized. | ||||||||||||
The convertible senior notes included in notes payable are accounted for separately as a liability component and an equity component in the consolidated balance sheets. The liability component and equity component are as follows: | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
September | September | December | ||||||||||
2015 Notes | 2015 Notes | 2029 Notes | ||||||||||
(Dollars in thousands) | ||||||||||||
Notes payable: | ||||||||||||
Principal amount of liability component | $ | 22,377 | $ | 91,951 | $ | 68,373 | ||||||
Unamortized discount | (698 | ) | (6,623 | ) | (3,743 | ) | ||||||
Net carrying amount of liability component | $ | 21,679 | $ | 85,328 | $ | 64,630 | ||||||
Additional paid-in capital: | ||||||||||||
Carrying amount of equity component | $ | 15,586 | ||||||||||
Amount by which the if-converted value exceeds principal | $ | 30,497 | $ | 104,403 | $ | 113,169 | ||||||
The discount is being amortized over the expected lives of the notes, which was December 15, 2014 for the 2029 notes and is September 15, 2015 for the 2015 notes. The effective interest rates during the discount amortization periods are 8.9% and 11.9% on the 2015 notes and 2029 notes, respectively. The interest cost recognized in operations for the convertible notes, inclusive of the coupon and amortization of the discount and debt issue costs was $9.0 million, $26.4 million, and $28.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
We have a $140 million unsecured revolving line of credit agreement with five banks that terminates on November 22, 2017. The interest rate is floating at a rate based on our election that will be equal to the alternate base rate (as defined in the credit agreement) plus the applicable margin or the adjusted LIBOR rate (as defined in the credit agreement) plus the applicable margin. We also pay a commitment fee based on the available unused portion of the credit facility. The applicable margin and commitment fee rate are based on our credit rating and can change throughout the period of the credit facility. Based upon our current credit rating, the applicable margin is 1.00% for alternate base rate borrowings and 2.00% for adjusted LIBOR rate borrowings, and the commitment fee is 0.35%. Under this agreement, we are required to maintain a minimum risk-based capital ratio at American Equity Life of 275%, a maximum ratio of adjusted debt to total adjusted capital of 0.35, and a minimum level of statutory surplus at American Equity Life equal to the sum of 1) 80% of statutory surplus at September 30, 2013, 2) 50% of the statutory net income for each fiscal quarter ending after September 30, 2013, and 3) 50% of all capital contributed to American Equity Life after September 30, 2013. The agreement contains an accordion feature that allows us, on up to three occasions and subject to credit availability, to increase the credit facility by an additional $50 million in the aggregate. We also have the ability to extend the maturity date by an additional one year past the initial maturity date of November 22, 2017 with the consent of the extending banks. There are currently no guarantors of the credit facility, but certain of our subsidiaries must guarantee our obligations under the credit agreement if such subsidiaries guarantee other material amounts of our debt. No amounts were outstanding at December 31, 2014 and 2013. As of December 31, 2014, $518.2 million is unrestricted and could be distributed to shareholders and still be in compliance with all covenants under this credit agreement. | ||||||||||||
As part of our investment strategy, we enter into securities repurchase agreements (short-term collateralized borrowings). The maximum amount borrowed during 2014 and 2013 was $138.7 million and $258.6 million, respectively. When we do borrow cash on these repurchase agreements, we pledge collateral in the form of debt securities with fair values approximately equal to the amount due and we use the cash to purchase debt securities ahead of the time we collect the cash from selling annuity policies to avoid a lag between the investment of funds and the obligation to credit interest to policyholders. We earn investment income on the securities purchased with these borrowings at a rate in excess of the cost of these borrowings. Such borrowings averaged $9.2 million and $68.3 million for the years ended December 31, 2014 and 2013. We had no borrowings under repurchase agreements during 2012. The weighted average interest rate on amounts due under repurchase agreements was 0.19% and 0.20% for the years ended December 31, 2014 and 2013. |
Subordinated_Debentures
Subordinated Debentures | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Subordinated Borrowings [Abstract] | |||||||||||||
Subordinated Debentures | Subordinated Debentures | ||||||||||||
Our wholly-owned subsidiary trusts (which are not consolidated) have issued fixed rate and floating rate trust preferred securities and have used the proceeds from these offerings to purchase subordinated debentures from us. We also issued subordinated debentures to the trusts in exchange for all of the common securities of each trust. The sole assets of the trusts are the subordinated debentures and any interest accrued thereon. The interest payment dates on the subordinated debentures correspond to the distribution dates on the trust preferred securities issued by the trusts. The trust preferred securities mature simultaneously with the subordinated debentures. Our obligations under the subordinated debentures and related agreements provide a full and unconditional guarantee of payments due under the trust preferred securities. All subordinated debentures are callable by us at any time, except for the Trust II subordinated debt obligations. | |||||||||||||
Following is a summary of subordinated debt obligations to the trusts at December 31, 2014 and 2013: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | Interest Rate | Due Date | ||||||||||
(Dollars in thousands) | |||||||||||||
American Equity Capital Trust II | $ | 76,633 | $ | 76,440 | 5% | June 1, 2047 | |||||||
American Equity Capital Trust III | 27,840 | 27,840 | *LIBOR + | 3.90% | April 29, 2034 | ||||||||
American Equity Capital Trust IV | 12,372 | 12,372 | *LIBOR + | 4.00% | January 8, 2034 | ||||||||
American Equity Capital Trust VII | 10,830 | 10,830 | *LIBOR + | 3.75% | December 14, 2034 | ||||||||
American Equity Capital Trust VIII | 20,620 | 20,620 | *LIBOR + | 3.75% | December 15, 2034 | ||||||||
American Equity Capital Trust IX | 15,470 | 15,470 | *LIBOR + | 3.65% | June 15, 2035 | ||||||||
American Equity Capital Trust X | 20,620 | 20,620 | *LIBOR + | 3.65% | September 15, 2035 | ||||||||
American Equity Capital Trust XI | 20,620 | 20,620 | *LIBOR + | 3.65% | December 15, 2035 | ||||||||
American Equity Capital Trust XII | 41,238 | 41,238 | *LIBOR + | 3.50% | April 7, 2036 | ||||||||
$ | 246,243 | $ | 246,050 | ||||||||||
*—three month London Interbank Offered Rate | |||||||||||||
The principal amount of the subordinated debentures issued by us to American Equity Capital Trust II ("Trust II") is $100.0 million. These debentures were assigned a fair value of $74.7 million at the date of issue (based upon an effective yield-to-maturity of 6.8%). The difference between the fair value at the date of issue and the principal amount is being accreted over the life of the debentures. The trust preferred securities issued by Trust II were issued to Iowa Farm Bureau Federation, which owns more than 50% of the voting capital stock of FBL Financial Group, Inc. ("FBL"). The consideration received by Trust II in connection with the issuance of its trust preferred securities consisted of fixed income securities of equal value which were issued by FBL. |
Retirement_and_Sharebased_Comp
Retirement and Share-based Compensation Plans | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Retirement and Share-based Compensation Plans | Retirement and Share-based Compensation Plans | ||||||||||||||||||
We have adopted a contributory defined contribution plan which is qualified under Section 401(k) of the Internal Revenue Code. The plan covers substantially all of our full-time employees subject to minimum eligibility requirements. Employees can contribute a percentage of their annual salary (up to a maximum contribution of $17,500 in 2014, $17,500 in 2013 and $17,000 in 2012) to the plan. We contribute an additional amount, subject to limitations, based on the voluntary contribution of the employee. Further, the plan provides for additional employer contributions based on the discretion of the Board of Directors. Plan contributions charged to expense were $423,000, $391,000 and $370,000 for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||
We have deferred compensation arrangements with certain officers, directors, and consultants, whereby these individuals agreed to take our common stock at a future date in lieu of cash payments at the time of service. The common stock is to be issued in conjunction with a "trigger event," as that term is defined in the individual agreements. At December 31, 2014 and 2013, these individuals have earned, and we have reserved for future issuance, 362,287 and 356,897 shares of common stock, respectively, pursuant to these arrangements. We have incurred expense of $127,000, $162,000 and $200,000 for the years ended December 31, 2014, 2013 and 2012, respectively, under these arrangements. | |||||||||||||||||||
We have deferred compensation agreements with certain officers whereby these individuals may defer certain salary and bonus compensation which is deposited into the American Equity Officer Rabbi Trust (Officer Rabbi Trust). The amounts deferred for certain employees are invested in assets at the direction of the employee. The assets of the Officer Rabbi Trust are included in our assets and a corresponding deferred compensation liability is recorded. The deferred compensation liability is recorded at the fair market value of the assets in the Officer Rabbi Trust with the change in fair value included as a component of compensation expense. The deferred compensation liability related to these agreements was $3.9 million and $3.1 million at December 31, 2014 and 2013, respectively. The Officer Rabbi Trust held 102,551 shares and 103,551 shares of our common stock at December 31, 2014 and 2013, respectively, which are treated as treasury shares. | |||||||||||||||||||
During 1997, we established the American Equity Investment NMO Deferred Compensation Plan ("NMO Deferred Compensation Plan") whereby agents can earn common stock in addition to their normal commissions. The NMO Deferred Compensation Plan was effective until December 31, 2006 at which time it was suspended. Awards were calculated using formulas determined annually by our Board of Directors. These shares are being distributed at the end of the vesting and deferral period of nine years. We recognize commission expense and an increase to additional paid-in capital as share-based compensation when the awards vest. All outstanding shares issued under this plan were fully vested at December 31, 2010. At December 31, 2014 and 2013, the total number of undistributed vested shares under the NMO Deferred Compensation Plan was 543,120 and 892,688, respectively. These shares are included in the computation of earnings per share and earnings per share—assuming dilution. | |||||||||||||||||||
We have a Rabbi Trust, the NMO Deferred Compensation Trust (the "NMO Trust"), which has purchased shares of our common stock to fund the amount of vested shares under the NMO Deferred Compensation Plan. The common stock held in the NMO Trust is treated as treasury stock. The NMO Trust distributed 349,568, 249,644 and 489,216 shares during 2014, 2013 and 2012, respectively. The number of shares held by the NMO Trust at December 31, 2014 and 2013, was 543,120 and 892,688, respectively. | |||||||||||||||||||
The following table summarizes compensation expense recognized for employees, directors and consultants as a result of share-based compensation: | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
ESOP | $ | 2,486 | $ | 3,464 | $ | 1,112 | |||||||||||||
2009 Employee Incentive Plan | 1,306 | 1,294 | 1,558 | ||||||||||||||||
2013 Director Equity and Incentive Plan | 603 | 380 | — | ||||||||||||||||
2011 Director Stock Option Plan | 186 | 304 | 912 | ||||||||||||||||
$ | 4,581 | $ | 5,442 | $ | 3,582 | ||||||||||||||
We established the American Equity Investment Employee Stock Ownership Plan ("ESOP") effective July 1, 2007. The principal purpose of the ESOP is to provide each eligible employee with an equity interest in us. Employees become eligible once they have completed a minimum of six months of service. Employees become 100% vested after two years of service. Our contribution to the ESOP is determined by the Board of Directors. | |||||||||||||||||||
In August 2007, we issued a loan to the ESOP in the amount of $7.0 million to purchase 650,000 shares of our common stock from David J. Noble, our Executive Chairman. The loan was to be repaid over a period of 20 years with annual interest payments due on December 31 of each year. However, this loan was repaid in full as of December 31, 2014. The loan is eliminated in the consolidated financial statements. The shares purchased by the ESOP were pledged as collateral for this debt and were reported as unallocated common stock held by the ESOP, a contra-equity account in stockholders' equity. When shares were committed for release, the shares become outstanding for earnings per share computations. For each plan year in which a payment or prepayment of principal or interest was made, we released from the pledge the number of shares determined under the principal and interest method. Dividends on allocated ESOP shares were recorded as a reduction in retained earnings and were credited to employee accounts. Dividends on unallocated shares held by the ESOP were used to repay indebtedness. | |||||||||||||||||||
During 2010, we established the American Equity Investment Life Holding Company Short-Term Performance Incentive Plan. Under this plan, certain members of our senior management may receive incentive awards comprised of a cash component and a restricted stock component. In April 2013, the Short-Term Performance Incentive Plan was amended and restated to provide for only cash bonuses for awards made with respect to 2013 and following years. Shares of restricted stock received were granted pursuant to the 2009 Employee Incentive Plan and vest on the date three years following the date the Committee approved the payment of the incentive award provided that the participant remains employed by us. Compensation expense is recognized over the three year vesting period. Shares vested immediately for participants 65 years of age with 10 years of service with us, and compensation expense under this plan for these participants was recognized upon approval of the incentive award by the compensation committee. During 2013 and 2012, we issued 33,489 and 51,810 shares of common stock (23,681 and 37,369 shares were restricted stock), respectively. | |||||||||||||||||||
During 2013, we established a long-term performance incentive plan utilizing restricted stock units granted pursuant to the 2009 Employee Incentive Plan. During 2014 and 2013, we granted 54,718 and 78,260 restricted stock units under this plan, respectively. Vesting is tied to threshold and target performance goals for the three year period ending December 31, 2016 and December 31, 2015, respectively. Fifty percent of the restricted stock units will vest if we meet threshold goals and 100% of the restricted stock units will vest if we meet target performance goals. Compensation expense is recognized over the three year vesting period based on the likelihood of meeting threshold and target goals. Restricted stock units that ultimately vest are payable in an equal number of shares of our common stock. Restricted stock units are accounted for as equity awards and the estimated fair value of restricted stock units is based upon the closing price of our common stock on the date of grant. | |||||||||||||||||||
During 2014 and 2013, we issued 18,239 and 26,087 (14,869 and 20,889 shares were restricted stock), respectively, shares of common stock under the 2009 Employee Incentive Plan to certain employees. These shares will vest on the date three years following the grant date provided the participant remains employed with us. Compensation expense is recognized over the three year vesting period. Shares vest immediately for participants over 65 years of age with 10 years of service with us. | |||||||||||||||||||
In 2013, we adopted the 2013 Director Equity and Incentive Plan which authorized the grant of options, stock appreciation rights, restricted stock awards and restricted stock units convertible into or based upon our common stock of up to 250,000 shares to our Directors. During 2014 and 2013, we issued 24,000 and 40,000 shares of common stock, respectively, all of which are restricted stock, and which vest one year from the grant date provided the individual remains a Director during that time period. At December 31, 2014, we had 186,000 shares of common stock available for future grant under the 2013 Director and Equity Incentive Plan. | |||||||||||||||||||
Our 1996 Stock Option Plan, 2000 Employee Stock Option Plan, 2000 Directors Stock Option Plan and 2011 Director Stock Option Plan authorized grants of options to officers, directors and employees for an aggregate of up to 3,475,000 shares of our common stock. All options granted under these plans have ten year terms and a six month or three year vesting period after which they become fully exercisable immediately. At December 31, 2014, we had 18,000 shares of common stock available for future grant under the 2011 Director Stock Option Plan. In 2009, we adopted the 2009 Employee Incentive Plan which authorizes the grant of options, stock appreciation rights, restricted stock awards and restricted stock units convertible into or based upon our common stock up to 2,500,000 shares. All options granted under this plan have six or ten year terms and a three year vesting period after which they become fully exercisable immediately. At December 31, 2014, we had 1,623,928 shares of common stock available for future grant under the 2009 Employee Incentive Plan. | |||||||||||||||||||
The fair value for each stock option granted to officers, directors and employees during the year ended December 31, 2012 was estimated at the date of grant using a Black-Scholes option valuation model with the following assumptions: | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2012 | |||||||||||||||||||
Directors and Retirement Eligible Employees | Non-Retirement Eligible Employees | ||||||||||||||||||
Average risk-free interest rate | 0.76 | % | 1.36 | % | |||||||||||||||
Dividend yield | 1.1 | % | 1.3 | % | |||||||||||||||
Average expected life (years) | 5 | 8 | |||||||||||||||||
Volatility | 62.5 | % | 50.9 | % | |||||||||||||||
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. We use the historical realized volatility of our stock for the expected volatility assumption within the valuation model. For options granted since 2007, the weighted average expected term for the majority of our options were calculated using average historical behavior. | |||||||||||||||||||
During 2014 we established the 2014 Independent Insurance Agent Restricted Stock and Restricted Stock Unit Plan. Under this plan, agents of American Equity Life may receive grants of restricted stock and restricted stock units based upon their individual sales. The plan authorizes grants of up to 1,000,000 shares of our common stock. We recognize commission expense and an increase to additional paid-in capital as share-based compensation equal to the fair value of the restricted stock and restricted stock units as they are earned. | |||||||||||||||||||
In January 2015, American Equity Life's agents were granted 27,985 shares of restricted stock and 221,489 restricted stock units based on their production during 2014, and we recorded commission expense (capitalized as deferred policy acquisition costs) of $1.9 million in 2014. The restricted stock was granted to retirement eligible individuals and vested immediately upon grant. 20% of the restricted stock units will vest one year from the grant date if the agent is in good standing with American Equity Life at that date.The remaining 80% of the restricted stock units granted will vest based on the agent's individual sales and continued service as an independent agent to American Equity Life over a period of time not to exceed five years. | |||||||||||||||||||
During 2007, 2010 and 2012 we established Independent Insurance Agent Stock Option plans. Under these plans, agents of American Equity Life may receive grants of options to acquire shares of our common stock based upon their individual sales. The plans authorize grants of options to agents for an aggregate of up to 8,000,000 shares of our common stock. We recognize commission expense and an increase to additional paid-in capital as share-based compensation equal to the fair value of the options as they are earned. | |||||||||||||||||||
The fair value for each stock option granted to agents during the years ended December 31, 2013 and 2012 was estimated using a Black-Scholes option valuation model until the grant date, at which time the options are included as permanent equity, with the following assumptions: | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
Average risk-free interest rate | 1.21 | % | 0.51 | % | |||||||||||||||
Dividend yield | 0.7 | % | 1.2 | % | |||||||||||||||
Average expected life (years) | 3.75 | 3.75 | |||||||||||||||||
Volatility | 31.2 | % | 41.1 | % | |||||||||||||||
American Equity Life's agents earned 1,284,950 options during 2013, which were granted in January 2014, and we recorded commission expense (capitalized as deferred policy acquisition costs) of $8.1 million in 2013. American Equity Life's agents earned 1,125,100 options during 2012, which were granted in January 2013, and we recorded commission expense (capitalized as deferred policy acquisition costs) of $3.9 million in 2012. All options granted have seven year terms and a six month vesting period after which they become exercisable immediately. | |||||||||||||||||||
Changes in the number of stock options outstanding during the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||||
Number of | Weighted-Average | Total | |||||||||||||||||
Shares | Exercise Price | Exercise | |||||||||||||||||
per Share | Price | ||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Outstanding at January 1, 2012 | 4,844,850 | $ | 10.13 | $ | 49,097 | ||||||||||||||
Granted | 1,558,900 | 10.4 | 16,216 | ||||||||||||||||
Canceled | (28,050 | ) | 8.97 | (251 | ) | ||||||||||||||
Exercised | (643,250 | ) | 8.93 | (5,741 | ) | ||||||||||||||
Outstanding at December 31, 2012 | 5,732,450 | 10.35 | 59,321 | ||||||||||||||||
Granted | 1,210,950 | 13.13 | 15,899 | ||||||||||||||||
Canceled | (29,400 | ) | 9.96 | (293 | ) | ||||||||||||||
Exercised | (2,937,275 | ) | 10.81 | (31,756 | ) | ||||||||||||||
Outstanding at December 31, 2013 | 3,976,725 | 10.86 | 43,171 | ||||||||||||||||
Granted | 1,277,650 | 24.79 | 31,673 | ||||||||||||||||
Canceled | (35,400 | ) | 11.64 | (412 | ) | ||||||||||||||
Exercised | (1,174,800 | ) | 11.64 | (13,672 | ) | ||||||||||||||
Outstanding at December 31, 2014 | 4,044,175 | 15.02 | $ | 60,760 | |||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2014: | |||||||||||||||||||
Stock Options Outstanding | Stock Options Vested | ||||||||||||||||||
Range of Exercise Prices | Number of | Remaining | Weighted-Average | Number of | Remaining | Weighted-Average | |||||||||||||
Awards | Life (yrs) | Exercise Price | Awards | Life (yrs) | Exercise Price | ||||||||||||||
Per Share | Per Share | ||||||||||||||||||
$5.07 - $8.02 | 506,000 | 2.73 | $ | 7.39 | 506,000 | 2.73 | $ | 7.39 | |||||||||||
$9.27 - $11.35 | 1,220,550 | 3.94 | 10.23 | 1,136,550 | 3.69 | 10.21 | |||||||||||||
$11.87 - $24.79 | 2,317,625 | 5.23 | 19.22 | 2,297,625 | 5.18 | 19.22 | |||||||||||||
$5.07 - $24.79 | 4,044,175 | 4.53 | 15.02 | 3,940,175 | 4.43 | 15.1 | |||||||||||||
The aggregate intrinsic value for stock options outstanding and vested awards was $57.3 million and $50.0 million, respectively, at December 31, 2014. For the years ended December 31, 2014, 2013 and 2012, the total intrinsic value of options exercised by officers, directors and employees was $5.4 million, $10.4 million and $0.9 million, respectively. Intrinsic value for stock options is calculated as the difference between the exercise price of the underlying awards and the price of our common stock as of the reporting date. Cash received from stock options exercised for the years ended December 31, 2014, 2013 and 2012 was $13.7 million, $31.8 million and $5.7 million, respectively. The tax benefit realized for the tax deduction from the exercise of stock options by officers, directors, employees and agents for the years ended December 31, 2014, 2013 and 2012, was $1.0 million, $1.0 million and $0.1 million, respectively. |
Statutory_Financial_Informatio
Statutory Financial Information and Dividend Restrictions | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Statutory Financial Information and Dividend Restrictions [Abstract] | ||||||||||||
Statutory Financial Information and Dividend Restrictions | Statutory Financial Information and Dividend Restrictions | |||||||||||
Statutory accounting practices prescribed or permitted by regulatory authorities for our life insurance subsidiaries differ from GAAP. Net income for our primary life insurance subsidiary as determined in accordance with statutory accounting practices was as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
American Equity Life | $ | 340,000 | $ | 205,202 | $ | 82,039 | ||||||
Statutory capital and surplus for our primary life insurance subsidiary was as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
American Equity Life | $ | 2,172,455 | $ | 1,870,728 | ||||||||
American Equity Life is domiciled in the state of Iowa and is regulated by the Iowa Insurance Division. Life insurance companies are subject to the National Association of Insurance Commissioners ("NAIC") risk-based capital (RBC) requirements which are intended to be used by insurance regulators as an early warning tool to identify deteriorating or weakly capitalized insurance companies for the purpose of initiating regulatory action. Calculations using the NAIC formula indicated that American Equity Life's ratio of total adjusted capital to the highest level of required capital at which regulatory action might be initiated (Company Action Level) is as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
Total adjusted capital | $ | 2,327,335 | $ | 1,995,658 | ||||||||
Company Action Level RBC | 625,373 | 580,085 | ||||||||||
Ratio of adjusted capital to Company Action Level RBC | 372 | % | 344 | % | ||||||||
Prior approval of regulatory authorities is required for the payment of dividends to the parent company by American Equity Life which exceed an annual limitation. American Equity Life may pay dividends without prior approval, unless such payments, together with all other such payments within the preceding twelve months, exceed the greater of (1) net gain from operations before net realized capital gains/losses for the preceding calendar year or, (2) 10% of the American Equity Life's capital and surplus at the preceding year-end. The amount of dividends permitted to be paid by American Equity Life to its parent company without prior approval of regulatory authorities is $343.3 million as of December 31, 2014. No dividends were paid by any of our insurance subsidiaries for any of the years presented in these financial statements. | ||||||||||||
The Parent Company relies on its subsidiaries for cash flow, which has primarily been in the form of investment management fees and/or dividends. Retained earnings in our consolidated financial statements primarily represent undistributed earnings of American Equity Life. As such, our ability to pay dividends is limited by the regulatory restriction placed upon insurance companies as described above. In addition, American Equity Life retains funds to allow for sufficient capital for growth. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
We lease our home office space and certain equipment under various operating leases. Rent expense for the years ended December 31, 2014, 2013 and 2012 totaled $2.5 million, $2.3 million and $2.0 million, respectively. At December 31, 2014, the aggregate future minimum lease payments are $18.4 million. The following represents payments due by period for operating lease obligations as of December 31, 2014 (dollars in thousands): | ||||
Year Ending December 31: | ||||
2015 | $ | 2,323 | ||
2016 | 1,718 | |||
2017 | 1,473 | |||
2018 | 1,398 | |||
2019 | 1,377 | |||
2020 and thereafter | 10,102 | |||
We are occasionally involved in litigation, both as a defendant and as a plaintiff. In addition, state regulatory bodies, such as state insurance departments, the SEC, FINRA, the Department of Labor, and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, the Employee Retirement Income Security Act of 1974, as amended, and laws governing the activities of broker-dealers. | ||||
In accordance with applicable accounting guidelines, we establish an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. As a litigation or regulatory matter is developing we, in conjunction with outside counsel, evaluate on an ongoing basis whether the matter presents a loss contingency that meets conditions indicating the need for accrual and/or disclosure, and if not the matter will continue to be monitored for further developments. If and when the loss contingency related to litigation or regulatory matters is deemed to be both probable and estimable, we will establish an accrued liability with respect to that matter and will continue to monitor the matter for further developments that may affect the amount of the accrued liability. | ||||
In recent years, companies in the life insurance and annuity business have faced litigation, including class action lawsuits, alleging improper product design, improper sales practices and similar claims. We were a defendant in a purported class action, McCormack, et al. v. American Equity Investment Life Insurance Company, et al., in the United States District Court for the Central District of California, Western Division and Anagnostis v. American Equity, et al., coordinated in the Central District, entitled, In Re: American Equity Annuity Practices and Sales Litigation (complaint filed September 7, 2005) (the "Los Angeles Case"), involving allegations of improper sales practices and similar claims. | ||||
The Los Angeles Case was a consolidated action involving several lawsuits filed by putative class members seeking class action status for a national class of purchasers of annuities issued by us. On July 30, 2013, the parties entered into a settlement agreement and stipulated to certification of the case as a class action for settlement purposes only. Notice of the terms of the settlement was mailed to the members of the class on October 7, 2013 and settlement claim forms were due from members of the class on or before December 6, 2013. On January 27, 2014, a hearing was held regarding the fairness of the settlement. On January 29, 2014, the District Court signed a final order approving the settlement and finding the settlement is fair and represents a complete resolution of all claims asserted on behalf of the class. On January 30, 2014, a final judgment was entered dismissing the case on the merits and with prejudice. On February 28, 2014, a member of the class filed an appeal of the District Court's approval of the terms of the settlement agreement with the United States Court of Appeals for the Ninth Circuit. | ||||
We recorded an estimated litigation liability of $17.5 million during the third quarter of 2012 related to the Los Angeles Case. We increased our estimated litigation liability for this matter to $21.2 million during the fourth quarter of 2013 following the passage of the deadline for submission of claims by class members in the lawsuit and based upon information available at that time. However, we decreased the liability by $2.3 million in the first quarter of 2014 as additional information became available concerning the nature and magnitude of the claims received. In addition, during the first quarter of 2014, we paid $7.8 million in legal fees to the plaintiffs' counsel. The estimated litigation liability at December 31, 2014 is $11.1 million. While review of the claim forms has been stayed due to the appeal and it is difficult to predict the amount of the liabilities that will ultimately result from the completion of the claims process, the $11.1 million litigation liability represents our best estimate of probable loss with respect to this litigation. In light of the inherent uncertainties involved in the matter described above, there can be no assurance that such litigation, or any other pending or future litigation, will not have a material adverse effect on our business, financial condition, or results of operations. | ||||
In addition to our commitments to fund mortgage loans, we have unfunded commitments at December 31, 2014 to limited partnerships of $30.6 million and to secured bank loans of $5.7 million. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | Earnings Per Share | |||||||||||
The following table sets forth the computation of earnings per common share and earnings per common share—assuming dilution: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Numerator: | ||||||||||||
Net income—numerator for earnings per common share | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
Interest on convertible subordinated debentures (net of income tax benefit) | — | — | 517 | |||||||||
Numerator for earnings per common share—assuming dilution | $ | 126,023 | $ | 253,283 | $ | 58,315 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding (1) | 74,431,087 | 65,543,895 | 61,258,825 | |||||||||
Effect of dilutive securities: | ||||||||||||
Convertible subordinated debentures | — | — | 1,348,447 | |||||||||
Convertible senior notes | 2,657,158 | 7,088,149 | 2,515,067 | |||||||||
2015 warrants | 1,559,646 | 1,184,549 | — | |||||||||
Stock options and deferred compensation agreements | 1,178,783 | 1,224,053 | 553,312 | |||||||||
Restricted stock and restricted stock units | 66,926 | — | — | |||||||||
Denominator for earnings per common share—assuming dilution | 79,893,600 | 75,040,646 | 65,675,651 | |||||||||
Earnings per common share | $ | 1.69 | $ | 3.86 | $ | 0.94 | ||||||
Earnings per common share—assuming dilution | $ | 1.58 | $ | 3.38 | $ | 0.89 | ||||||
-1 | Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP. | |||||||||||
Options to purchase shares of our common stock that were outstanding during the respective periods indicated but were not included in the computation of diluted earnings per share because the options' exercise price was greater than the average market price of the common shares are as follows: | ||||||||||||
Period | Number of | Range of | ||||||||||
Shares | Exercise Prices | |||||||||||
Minimum | Maximum | |||||||||||
Year ended December 31, 2014 | 1,215,450 | $24.79 | $24.79 | |||||||||
Year ended December 31, 2013 | — | — | — | |||||||||
Year ended December 31, 2012 | 1,522,100 | $11.35 | $14.34 |
Quarterly_Financial_Informatio
Quarterly Financial Information (Unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) | |||||||||||||||
Unaudited quarterly results of operations are summarized below. | ||||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
2014 | ||||||||||||||||
Premiums and product charges | $ | 32,603 | $ | 38,370 | $ | 38,001 | $ | 42,639 | ||||||||
Net investment income | 370,005 | 370,882 | 386,931 | 403,849 | ||||||||||||
Change in fair value of derivatives | 48,493 | 270,883 | 39,218 | 146,231 | ||||||||||||
Net realized gains (losses) on investments, excluding OTTI losses | (714 | ) | (2,230 | ) | (3,190 | ) | 2,131 | |||||||||
Net OTTI losses recognized in operations | (905 | ) | (594 | ) | (564 | ) | (564 | ) | ||||||||
Loss on extinguishment of debt | (3,977 | ) | (6,574 | ) | — | (1,951 | ) | |||||||||
Total revenues | 445,505 | 670,737 | 460,396 | 592,335 | ||||||||||||
Net income (loss) | (9,753 | ) | 36,744 | 67,815 | 31,217 | |||||||||||
Earnings (loss) per common share | (0.13 | ) | 0.49 | 0.9 | 0.41 | |||||||||||
Earnings (loss) per common share—assuming dilution | (0.13 | ) | 0.46 | 0.85 | 0.39 | |||||||||||
2013 | ||||||||||||||||
Premiums and product charges | $ | 34,565 | $ | 35,062 | $ | 36,325 | $ | 42,986 | ||||||||
Net investment income | 329,690 | 336,143 | 354,147 | 363,947 | ||||||||||||
Change in fair value of derivatives | 373,962 | 64,040 | 193,028 | 444,985 | ||||||||||||
Net realized gains (losses) on investments, excluding OTTI losses | 10,585 | 15,689 | (2,077 | ) | 16,364 | |||||||||||
Net OTTI losses recognized in operations | (3,237 | ) | (2,775 | ) | (222 | ) | — | |||||||||
Loss on extinguishment of debt | — | (589 | ) | (938 | ) | (30,988 | ) | |||||||||
Total revenues | 745,565 | 447,570 | 580,263 | 837,294 | ||||||||||||
Net income | 26,031 | 120,113 | 56,181 | 50,958 | ||||||||||||
Earnings per common share | 0.41 | 1.87 | 0.86 | 0.73 | ||||||||||||
Earnings per common share—assuming dilution | 0.38 | 1.71 | 0.75 | 0.64 | ||||||||||||
Earnings (loss) per common share for each quarter is computed independently of earnings (loss) per common share for the year. As a result, the sum of the quarterly earnings (loss) per common share amounts may not equal the earnings (loss) per common share for the year. | ||||||||||||||||
The differences between the change in fair value of derivatives for each quarter primarily correspond to the performance of the indices upon which our call options are based. The comparability of net income (loss) is impacted by the application of fair value accounting to our fixed index annuity business is as follows: | ||||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
2014 | $ | 42,297 | $ | (2,232 | ) | $ | (5,017 | ) | $ | 15,862 | ||||||
2013 | 10,973 | (80,658 | ) | (5,601 | ) | (23,418 | ) | |||||||||
Schedule_I_Summary_of_Investme
Schedule I - Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||||||||||||
Schedule I - Summary of Investments - Other Than Investments in Related Parties | Schedule I—Summary of Investments— | ||||||||||||
Other Than Investments in Related Parties | |||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | |||||||||||||
31-Dec-14 | |||||||||||||
Column A | Column B | Column C | Column D | ||||||||||
Type of Investment | Amortized | Fair | Amount at | ||||||||||
Cost (1) | Value | which shown | |||||||||||
in the balance | |||||||||||||
sheet | |||||||||||||
(Dollars in thousands) | |||||||||||||
Fixed maturity securities: | |||||||||||||
Available for sale: | |||||||||||||
United States Government full faith and credit | $ | 137,710 | $ | 138,460 | $ | 138,460 | |||||||
United States Government sponsored agencies | 1,364,424 | 1,393,890 | 1,393,890 | ||||||||||
United States municipalities, states and territories | 3,293,551 | 3,723,309 | 3,723,309 | ||||||||||
Foreign government obligations | 181,128 | 193,803 | 193,803 | ||||||||||
Corporate securities | 19,984,747 | 21,490,292 | 21,490,292 | ||||||||||
Residential mortgage backed securities | 1,616,846 | 1,751,345 | 1,751,345 | ||||||||||
Commercial mortgage backed securities | 2,720,294 | 2,807,620 | 2,807,620 | ||||||||||
Other asset backed securities | 906,346 | 946,483 | 946,483 | ||||||||||
30,205,046 | 32,445,202 | 32,445,202 | |||||||||||
Held for investment: | |||||||||||||
Corporate security | 76,432 | 75,838 | 76,432 | ||||||||||
Total fixed maturity securities | 30,281,478 | 32,521,040 | 32,521,634 | ||||||||||
Equity securities, available for sale: | |||||||||||||
Common stocks | 7,509 | 7,805 | 7,805 | ||||||||||
Total equity securities | 7,509 | 7,805 | 7,805 | ||||||||||
Mortgage loans on real estate | 2,434,580 | 2,493,901 | 2,434,580 | ||||||||||
Derivative instruments | 259,413 | 731,113 | 731,113 | ||||||||||
Other investments | 286,726 | 286,726 | |||||||||||
Total investments | $ | 33,269,706 | $ | 35,981,858 | |||||||||
-1 | On the basis of cost adjusted for other than temporary impairments, repayments and amortization of premiums and accrual of discounts for fixed maturity securities and short-term investments, original cost for derivative instruments and unpaid principal balance less allowance for credit losses for mortgage loans. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_II_Condensed_Financia
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Schedule II - Condensed Financial Information of Registrant | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 61,139 | $ | 252,541 | ||||||||
Equity securities of subsidiary trusts | 7,409 | 7,403 | ||||||||||
Receivable from subsidiaries | 221 | 1,158 | ||||||||||
Deferred income taxes | 20,612 | 15,734 | ||||||||||
Federal income tax recoverable, including amount from subsidiaries | 10,430 | 11,551 | ||||||||||
Other assets, including 2015 notes hedges | 47,308 | 131,424 | ||||||||||
147,119 | 419,811 | |||||||||||
Investment in and advances to subsidiaries | 2,708,085 | 1,889,648 | ||||||||||
Total assets | $ | 2,855,204 | $ | 2,309,459 | ||||||||
Liabilities and Stockholders' Equity | ||||||||||||
Liabilities: | ||||||||||||
Notes payable | $ | 421,679 | $ | 549,958 | ||||||||
Subordinated debentures payable to subsidiary trusts | 246,243 | 246,050 | ||||||||||
Other liabilities, including 2015 notes embedded derivative | 47,406 | 128,764 | ||||||||||
Total liabilities | 715,328 | 924,772 | ||||||||||
Stockholders' equity: | ||||||||||||
Common stock | 76,062 | 70,535 | ||||||||||
Additional paid-in capital | 513,218 | 550,400 | ||||||||||
Unallocated common stock held by ESOP | — | (631 | ) | |||||||||
Accumulated other comprehensive income | 721,401 | 46,196 | ||||||||||
Retained earnings | 829,195 | 718,187 | ||||||||||
Total stockholders' equity | 2,139,876 | 1,384,687 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,855,204 | $ | 2,309,459 | ||||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenues: | ||||||||||||
Net investment income | $ | 130 | $ | 130 | $ | 565 | ||||||
Dividends from subsidiary trusts | 360 | 361 | 403 | |||||||||
Investment advisory fees | 58,044 | 44,469 | 36,178 | |||||||||
Surplus note interest from subsidiary | 4,080 | 4,080 | 4,080 | |||||||||
Change in fair value of derivatives | (17,122 | ) | 144,012 | (7,472 | ) | |||||||
Loss on extinguishment of debt | (12,502 | ) | (32,515 | ) | — | |||||||
Total revenues | 32,990 | 160,537 | 33,754 | |||||||||
Expenses: | ||||||||||||
Change in fair value of embedded derivatives | (15,227 | ) | 141,974 | (2,488 | ) | |||||||
Interest expense on notes payable | 36,370 | 38,870 | 28,479 | |||||||||
Interest expense on subordinated debentures issued to subsidiary trusts | 12,122 | 12,088 | 13,458 | |||||||||
Other operating costs and expenses | 7,928 | 8,163 | 8,228 | |||||||||
Total expenses | 41,193 | 201,095 | 47,677 | |||||||||
Loss before income taxes and equity in undistributed income of subsidiaries | (8,203 | ) | (40,558 | ) | (13,923 | ) | ||||||
Income tax expense (benefit) | 664 | (13,880 | ) | (5,944 | ) | |||||||
Loss before equity in undistributed income of subsidiaries | (8,867 | ) | (26,678 | ) | (7,979 | ) | ||||||
Equity in undistributed income of subsidiaries | 134,890 | 279,961 | 65,777 | |||||||||
Net income | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Operating activities | ||||||||||||
Net income | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Change in fair value of 2015 notes embedded conversion derivative | (15,227 | ) | 141,974 | (2,488 | ) | |||||||
Provision for depreciation and amortization | 2,081 | 2,831 | 2,382 | |||||||||
Accrual of discount on equity security | (6 | ) | (5 | ) | (5 | ) | ||||||
Equity in undistributed income of subsidiaries | (134,890 | ) | (279,961 | ) | (65,777 | ) | ||||||
Accrual of discount on contingent convertible notes | 4,417 | 12,417 | 12,261 | |||||||||
Change in fair value of derivatives | 15,619 | (144,012 | ) | 7,472 | ||||||||
Loss on extinguishment of debt | 12,502 | 32,515 | — | |||||||||
Accrual of discount on debenture issued to subsidiary trust | 193 | 181 | 169 | |||||||||
Share-based compensation | 1,141 | 1,407 | 1,348 | |||||||||
ESOP compensation | 82 | 110 | 45 | |||||||||
Deferred income taxes (benefits) | 6,439 | (5,202 | ) | (2,838 | ) | |||||||
Other | (2,235 | ) | (3,608 | ) | — | |||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivable from subsidiaries | 2,208 | 995 | 1,205 | |||||||||
Federal income tax recoverable | 1,121 | 62 | (2,745 | ) | ||||||||
Other assets | 378 | (1,945 | ) | (549 | ) | |||||||
Other liabilities | (7,256 | ) | 20,131 | (4,528 | ) | |||||||
Net cash provided by operating activities | 12,590 | 31,173 | 3,750 | |||||||||
Investing activities | ||||||||||||
Net cash used in investing activities | — | — | — | |||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Financing activities | ||||||||||||
Financing fees incurred and deferred | $ | (100 | ) | $ | (11,942 | ) | $ | — | ||||
Proceeds from notes payable | — | 415,000 | — | |||||||||
Repayments of notes payable | (219,094 | ) | (234,154 | ) | — | |||||||
Net proceeds from settlement of notes hedge and warrants | 16,558 | 22,170 | — | |||||||||
Repayment of subordinated debentures | — | — | (1,141 | ) | ||||||||
Excess tax benefits realized from share-based compensation plans | 184 | 159 | 6 | |||||||||
Proceeds from issuance of common stock | 13,681 | 31,764 | 5,370 | |||||||||
Dividends paid | (15,221 | ) | (12,849 | ) | (9,374 | ) | ||||||
Net cash provided by (used in) financing activities | (203,992 | ) | 210,148 | (5,139 | ) | |||||||
Increase (decrease) in cash and cash equivalents | (191,402 | ) | 241,321 | (1,389 | ) | |||||||
Cash and cash equivalents at beginning of year | 252,541 | 11,220 | 12,609 | |||||||||
Cash and cash equivalents at end of year | $ | 61,139 | $ | 252,541 | $ | 11,220 | ||||||
Supplemental disclosures of cash flow information | ||||||||||||
Cash paid during the year for: | ||||||||||||
Interest on notes payable | $ | 31,206 | $ | 13,758 | $ | 14,564 | ||||||
Interest on subordinated debentures | 11,765 | 11,850 | 13,102 | |||||||||
Non-cash financing activity: | ||||||||||||
Conversion of subordinated debentures | — | — | 20,770 | |||||||||
Common stock issued in extinguishment of debt | 95,993 | 117,463 | — | |||||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||
1. Basis of Presentation | ||||||||||||
The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of American Equity Investment Life Holding Company (Parent Company). | ||||||||||||
In the Parent Company financial statements, its investment in and advances to subsidiaries are stated at cost plus equity in undistributed income (losses) of subsidiaries since the date of acquisition and net unrealized gains/losses on the subsidiaries' fixed maturity securities classified as "available for sale" and equity securities. | ||||||||||||
See Notes 9 and 10 to the consolidated financial statements for a description of the Parent Company's notes payable and subordinated debentures payable to subsidiary trusts. |
Schedule_III_Supplementary_Ins
Schedule III - Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Supplementary Insurance Information [Abstract] | |||||||||||||||||||||
Schedule III - Supplementary Insurance Information | Schedule III—Supplementary Insurance Information | ||||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||
Deferred policy | Future policy | Unearned | Other policy | ||||||||||||||||||
acquisition | benefits, | premiums | claims and | ||||||||||||||||||
costs | losses, claims | benefits | |||||||||||||||||||
and loss | payable | ||||||||||||||||||||
expenses | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
As of December 31, 2014: | $ | 2,058,556 | $ | 39,802,861 | $ | — | $ | 365,819 | |||||||||||||
Life insurance | |||||||||||||||||||||
As of December 31, 2013: | $ | 2,426,652 | $ | 35,789,655 | $ | — | $ | 418,033 | |||||||||||||
Life insurance | |||||||||||||||||||||
As of December 31, 2012: | $ | 1,709,799 | $ | 31,773,988 | $ | — | $ | 455,752 | |||||||||||||
Life insurance | |||||||||||||||||||||
Column A | Column F | Column G | Column H | Column I | Column J | ||||||||||||||||
Premium | Net | Benefits, | Amortization | Other | |||||||||||||||||
revenue | investment | claims, | of deferred | operating | |||||||||||||||||
income | losses and | policy | expenses | ||||||||||||||||||
settlement | acquisition | ||||||||||||||||||||
expenses | costs | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
For the year ended December 31, 2014: | $ | 151,613 | $ | 1,531,667 | $ | 1,679,255 | $ | 163,578 | $ | 130,076 | |||||||||||
Life insurance | |||||||||||||||||||||
For the year ended December 31, 2013: | $ | 148,938 | $ | 1,383,927 | $ | 1,713,019 | $ | 365,468 | $ | 142,873 | |||||||||||
Life insurance | |||||||||||||||||||||
For the year ended December 31, 2012: | $ | 165,681 | $ | 1,286,923 | $ | 1,264,016 | $ | 164,919 | $ | 137,432 | |||||||||||
Life insurance | |||||||||||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_IV_Reinsurance
Schedule IV - Reinsurance | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | ||||||||||||||||||||
Schedule IV - Reinsurance | Schedule IV—Reinsurance | |||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | ||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | |||||||||||||||
Gross amount | Ceded to | Assumed | Net amount | Percent of | ||||||||||||||||
other | from | amount | ||||||||||||||||||
companies | other | assumed | ||||||||||||||||||
companies | to net | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,171,426 | $ | 11,548 | $ | 56,509 | $ | 2,216,387 | 2.55 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 124,946 | $ | 5,956 | $ | — | $ | 118,990 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 32,308 | 336 | 651 | 32,623 | 2 | % | ||||||||||||||
$ | 157,254 | $ | 6,292 | $ | 651 | $ | 151,613 | 0.43 | % | |||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,250,112 | $ | 13,521 | $ | 57,976 | $ | 2,294,567 | 2.53 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 110,142 | $ | 6,551 | $ | — | $ | 103,591 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 45,057 | 328 | 618 | 45,347 | 1.36 | % | ||||||||||||||
$ | 155,199 | $ | 6,879 | $ | 618 | $ | 148,938 | 0.41 | % | |||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,350,473 | $ | 4,742 | $ | 61,488 | $ | 2,407,219 | 2.55 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 95,802 | $ | 6,796 | $ | — | $ | 89,006 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 76,323 | 364 | 716 | 76,675 | 0.93 | % | ||||||||||||||
$ | 172,125 | $ | 7,160 | $ | 716 | $ | 165,681 | 0.43 | % | |||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_V_Valuation_and_Quali
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||
Schedule V - Valuation and Qualifying Accounts | Schedule V—Valuation and Qualifying Accounts | |||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | ||||||||||||||||||||
Balance | Charged to Costs | Translation | Write-offs/ | Balance | ||||||||||||||||
January 1, | and Expenses | Adjustment | Payments/Other | December 31, | ||||||||||||||||
(Dollars in thousands | ||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (26,047 | ) | $ | (6,052 | ) | $ | — | $ | 9,466 | $ | (22,633 | ) | |||||||
Year ended December 31, 2013 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (34,234 | ) | $ | (5,621 | ) | $ | — | $ | 13,808 | $ | (26,047 | ) | |||||||
Year ended December 31, 2012 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (32,964 | ) | $ | (16,832 | ) | $ | — | $ | 15,562 | $ | (34,234 | ) | |||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Consolidation and Basis of Presentation, Policy | Consolidation and Basis of Presentation | |
The consolidated financial statements include our accounts and our wholly-owned subsidiaries: American Equity Life, American Equity Life of New York, Eagle Life, AERL, L.C., American Equity Capital, Inc., American Equity Investment Properties, L.C., American Equity Advisors, Inc. and American Equity Investment Service Company. All significant intercompany accounts and transactions have been eliminated. | ||
Estimates and Assumptions, Policy | Estimates and Assumptions | |
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are utilized in the calculation of deferred policy acquisition costs, deferred sales inducements, policy benefit reserves, valuation of derivatives, including embedded derivatives on index annuity reserves, contingent convertible senior notes, valuation of investments, other than temporary impairment of investments, allowances for loan losses on mortgage loans and valuation allowances on deferred tax assets. A description of each critical estimate is incorporated within the discussion of the related accounting policies which follow. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized. | ||
Investments, Policy | Investments | |
Fixed maturity securities (bonds and redeemable preferred stocks maturing more than one year after issuance) that may be sold prior to maturity are classified as available for sale. Available for sale securities are reported at fair value and unrealized gains and losses, if any, on these securities are included directly in a separate component of stockholders' equity, net of income taxes and certain adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements. Fair values, as reported herein, of fixed maturity and equity securities are based on quoted market prices in active markets when available, or for those fixed maturity securities not actively traded, yield data and other factors relating to instruments or securities with similar characteristics are used. See Note 2 for more information on the determination of fair value. Premiums and discounts are amortized/accrued using methods which result in a constant yield over the securities' expected lives. Amortization/accrual of premiums and discounts on residential and commercial mortgage backed securities incorporate prepayment assumptions to estimate the securities' expected lives. Interest income is recognized as earned. | ||
Fixed maturity securities that we have the positive intent and ability to hold to maturity are classified as held for investment. Such securities may, at times, be called prior to maturity. Held for investment securities are reported at cost adjusted for amortization of premiums and discounts. Changes in the fair value of these securities, except for declines that are other than temporary, are not reflected in our consolidated financial statements. | ||
Equity securities are classified as available for sale and are reported at fair value. Unrealized gains and losses are included directly in a separate component of stockholders' equity, net of income taxes and certain adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements. Dividends are recognized when declared. | ||
The carrying amounts of our impaired investments in fixed maturity and equity securities are adjusted for declines in value that are other than temporary. Other than temporary impairment losses are reported as a component of revenues in the consolidated statements of operations, which presents the amount of noncredit impairment losses for certain fixed maturity securities that is reported in accumulated other comprehensive income (loss). See Note 3 for further discussion of other than temporary impairment losses. | ||
Deterioration in credit quality of the companies or assets backing our investment securities, deterioration in the condition of the financial services industry, imbalances in liquidity recurring in the marketplace or declines in real estate values may further affect the fair value of these investment securities and increase the potential that certain unrealized losses will be recognized as other than temporary impairments in the future. | ||
Mortgage loans on real estate are reported at cost, adjusted for amortization of premiums and accrual of discounts. Interest income is recorded when earned; however, interest ceases to accrue for loans on which interest is more than 90 days past due based upon contractual terms and/or when the collection of interest is not considered probable. We evaluate the mortgage loan portfolio for the establishment of a loan loss allowance by specific identification of impaired loans and the measurement of an estimated loss, if any, for each impaired loan identified and an analysis of the mortgage loan portfolio for the need of a general loan allowance for probable losses on all loans. If we determine that the value of any specific mortgage loan is impaired, the carrying amount of the mortgage loan will be reduced to its fair value, based upon the present value of expected future cash flows from the loan discounted at the loan's contractual interest rate, or the fair value of the underlying collateral, less costs to sell. The amount of the general loan allowance, if any, is based upon our evaluation of the probability of collection, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. The carrying value of impaired loans is reduced by the establishment of an allowance for loan losses, changes to which are recognized as realized gains or losses on investments. Interest income on impaired loans is recorded on a cash basis. | ||
Other invested assets include company owned life insurance, real estate, limited partnerships accounted for using the equity method and policy loans. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the end of the reporting period, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Policy loans are stated at current unpaid principal balances. | ||
Real estate owned is reported at cost less accumulated depreciation. Cost is determined at the time ownership is acquired in satisfaction of mortgage loans and is the lower of the carrying value of the mortgage loan or fair value of the real estate less its estimated cost to sell. Buildings and improvements are depreciated using the straight-line method over their estimated useful lives. Impairment losses on real estate owned are recognized when there are indicators of impairment present and the expected future undiscounted cash flows are not sufficient to recover the real estate's carrying value. Any impairment losses are reported as realized losses and are part of net income. | ||
Derivative Instruments, Policy | Derivative Instruments | |
Our derivative instruments include call options used to fund fixed index annuity credits, interest rate swap and caps used to manage interest rate risk associated with the floating rate component on certain of our subordinated debentures, call options to hedge the conversion spread on our convertible senior notes (see Note 9) and certain other derivative instruments embedded in other contracts. All of our derivative instruments are recognized in the balance sheet at fair value and changes in fair value are recognized immediately in operations. See Note 5 for more information on derivative instruments. | ||
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents | |
We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. | ||
We also consider reverse repurchase agreements, which typically have an initial maturity of 6 weeks or less, to be cash equivalents. Amounts advanced under these agreements represent short-term loans that carry a fixed rate of interest. Borrowers under these agreements are required to post collateral that is investment grade debt securities with fair value in excess of the amount advanced. | ||
Book Overdrafts | ||
Under our cash management system, checks issued but not yet presented to banks frequently result in overdraft balances for accounting purposes and are classified as Other liabilities on our consolidated balance sheets. We report the changes in the amount of the overdraft balance as a financing activity in our consolidated statement of cash flows as Change in checks in excess of cash balance. | ||
Deferred Policy Acquisition Costs and Deferred Sales Inducements, Policy | Deferred Policy Acquisition Costs and Deferred Sales Inducements | |
To the extent recoverable from future policy revenues and gross profits, certain costs that are incremental or directly related to the successful production of new business are not expensed when incurred but instead are capitalized as deferred policy acquisition costs or deferred sales inducements. Deferred policy acquisition costs and deferred sales inducements are subject to loss recognition testing on a quarterly basis or when an event occurs that may warrant loss recognition. Deferred policy acquisition costs consist primarily of commissions and certain costs of policy issuance. Deferred sales inducements consist of premium and interest bonuses credited to policyholder account balances. | ||
For annuity products, these capitalized costs are being amortized generally in proportion to expected gross profits from investment spreads, including the cost of hedging the fixed indexed annuity obligations, and, to a lesser extent, from product charges and mortality and expense margins. That amortization is adjusted retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of net realized gains on investments and net OTTI losses recognized in operations) to be realized from a group of products are revised. Deferred policy acquisition costs and deferred sales inducements are also adjusted for the change in amortization that would have occurred if available for sale fixed maturity securities and equity securities had been sold at their aggregate fair value at the end of the reporting period and the proceeds reinvested at current yields. The impact of this adjustment is included in accumulated other comprehensive income within consolidated stockholders' equity, net of applicable taxes. See Note 6 for more information on deferred policy acquisition costs and deferred sales inducements. | ||
Policy Benefit Reserves, Policy | Policy Benefit Reserves | |
Policy benefit reserves for fixed index annuities with returns linked to the performance of a specified market index are equal to the sum of the fair value of the embedded derivatives and the host (or guaranteed) component of the contracts. The host value is established at inception of the contract and accreted over the policy's life at a constant rate of interest. Future policy benefit reserves for fixed index annuities earning a fixed rate of interest and other deferred annuity products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. For the years ended December 31, 2014, 2013 and 2012, interest crediting rates for these products ranged from 1.20% to 4.50%. These rates include interest bonuses capitalized as deferred sales inducements. | ||
Policy benefit reserves are not reduced for amounts ceded under coinsurance agreements which are reported as coinsurance deposits on our consolidated balance sheets. See Note 7 for more information on reinsurance. | ||
The liability for future policy benefits for traditional life insurance is based on net level premium reserves, including assumptions as to interest, mortality, and other assumptions underlying the guaranteed policy cash values. Reserve interest assumptions are level and range from 3.00% to 5.50%. Policy benefit claims are charged to expense in the period that the claims are incurred. | ||
Deferred Income Taxes, Policy | Deferred Income Taxes | |
Deferred income tax assets or liabilities are computed based on the temporary differences between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based on the changes in the asset or liability from period to period. Deferred income tax assets are subject to ongoing evaluation of whether such assets will more likely than not be realized. The realization of deferred income tax assets primarily depends on generating future taxable income during the periods in which temporary differences become deductible. Deferred income tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. In making such a determination, all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations, is considered. The realization of deferred income tax assets related to unrealized losses on available for sale fixed maturity securities is also based upon our intent and ability to hold those securities for a period of time sufficient to allow for a recovery in fair value and not realize the unrealized loss. | ||
Recognition of Premium Revenues and Costs, Policy | Recognition of Premium Revenues and Costs | |
Revenues for annuity products include surrender and living income benefit rider charges assessed against policyholder account balances during the period. Interest sensitive and index product benefits related to annuity products include interest credited or index credits to policyholder account balances. In addition, the change in fair value of embedded derivatives within fixed index annuity contracts is included in benefits and expenses. | ||
Considerations from immediate annuities with life contingencies are recognized as revenue when the policy is issued. | ||
Traditional life insurance premiums are recognized as revenues over the premium-paying period. Certain group policies include provisions for annual experience refunds of premiums equal to net premiums received less an administrative fee and less claims incurred. Such amounts (2014 - $1.7 million; 2013 - $1.1 million; and 2012 - $1.1 million) are reported as a reduction of traditional life insurance premiums in the consolidated statements of operations. Future policy benefits are recognized as expenses over the life of the policy by means of the provision for future policy benefits. | ||
All insurance-related revenues, including the change in the fair value of derivatives for call options related to the business ceded under coinsurance agreements (see Note 7), benefits, losses and expenses are reported net of reinsurance ceded. | ||
Other Comprehensive Income, Policy | Other Comprehensive Income (Loss) | |
Other comprehensive income (loss) includes all changes in stockholders' equity during a period except those resulting from investments by and distributions to stockholders. Other comprehensive income (loss) excludes net realized investment gains (losses) included in net income which merely represent transfers from unrealized to realized gains and losses. | ||
Adopted Accounting Pronouncements, Policy | Adopted Accounting Pronouncements | |
In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that expands the disclosure requirements related to other comprehensive income (loss). A reporting entity is now required to provide information about the amounts reclassified out of accumulated other comprehensive income (loss) by component. In addition, a reporting entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. This ASU became effective for interim and annual periods beginning after December 15, 2012. We adopted this ASU on January 1, 2013. | ||
Fair Value of Financial Instruments, Policy | Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The objective of a fair value measurement is to determine that price for each financial instrument at each measurement date. We meet this objective using various methods of valuation that include market, income and cost approaches. | |
We categorize our financial instruments into three levels of fair value hierarchy based on the priority of inputs used in determining fair value. The hierarchy defines the highest priority inputs (Level 1) as quoted prices in active markets for identical assets or liabilities. The lowest priority inputs (Level 3) are our own assumptions about what a market participant would use in determining fair value such as estimated future cash flows. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. We categorize financial assets and liabilities recorded at fair value in the consolidated balance sheets as follows: | ||
Level 1— | Quoted prices are available in active markets for identical financial instruments as of the reporting date. We do not adjust the quoted price for these financial instruments, even in situations where we hold a large position and a sale could reasonably impact the quoted price. | |
Level 2— | Quoted prices in active markets for similar financial instruments, quoted prices for identical or similar financial instruments in markets that are not active; and models and other valuation methodologies using inputs other than quoted prices that are observable. | |
Level 3— | Models and other valuation methodologies using significant inputs that are unobservable for financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in Level 3 are securities for which no market activity or data exists and for which we used discounted expected future cash flows with our own assumptions about what a market participant would use in determining fair value. | |
Investments, Other Than Temporary Impairment, Policy | We review and analyze all investments on an ongoing basis for changes in market interest rates and credit deterioration. This review process includes analyzing our ability to recover the amortized cost basis of each investment that has a fair value that is materially lower than its amortized cost and requires a high degree of management judgment and involves uncertainty. The evaluation of securities for other than temporary impairments is a quantitative and qualitative process, which is subject to risks and uncertainties. | |
We have a policy and process to identify securities that could potentially have impairments that are other than temporary. This process involves monitoring market events and other items that could impact issuers. The evaluation includes but is not limited to such factors as: | ||
• | the length of time and the extent to which the fair value has been less than amortized cost or cost; | |
• | whether the issuer is current on all payments and all contractual payments have been made as agreed; | |
• | the remaining payment terms and the financial condition and near-term prospects of the issuer; | |
• | the lack of ability to refinance due to liquidity problems in the credit market; | |
• | the fair value of any underlying collateral; | |
• | the existence of any credit protection available; | |
• | our intent to sell and whether it is more likely than not we would be required to sell prior to recovery for debt securities; | |
• | our assessment in the case of equity securities including perpetual preferred stocks with credit deterioration that the security cannot recover to cost in a reasonable period of time; | |
• | our intent and ability to retain equity securities for a period of time sufficient to allow for recovery; | |
• | consideration of rating agency actions; and | |
• | changes in estimated cash flows of mortgage and asset backed securities. | |
We determine whether other than temporary impairment losses should be recognized for debt and equity securities by assessing all facts and circumstances surrounding each security. Where the decline in fair value of debt securities is attributable to changes in market interest rates or to factors such as market volatility, liquidity and spread widening, and we anticipate recovery of all contractual or expected cash flows, we do not consider these investments to be other than temporarily impaired because we do not intend to sell these investments and it is not more likely than not we will be required to sell these investments before a recovery of amortized cost, which may be maturity. For equity securities, we recognize an impairment charge in the period in which we do not have the intent and ability to hold the securities until recovery of cost or we determine that the security will not recover to book value within a reasonable period of time. We determine what constitutes a reasonable period of time on a security-by-security basis by considering all the evidence available to us, including the magnitude of any unrealized loss and its duration. | ||
Other than temporary impairment losses on equity securities are recognized in operations. If we intend to sell a debt security or if it is more likely than not that we will be required to sell a debt security before recovery of its amortized cost basis, other than temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in operations. | ||
If we do not intend to sell and it is not more likely than not we will be required to sell the debt security but also do not expect to recover the entire amortized cost basis of the security, an impairment loss would be recognized in operations in the amount of the expected credit loss. We determine the amount of expected credit loss by calculating the present value of the cash flows expected to be collected discounted at each security's acquisition yield based on our consideration of whether the security was of high credit quality at the time of acquisition. The difference between the present value of expected future cash flows and the amortized cost basis of the security is the amount of credit loss recognized in operations. The remaining amount of the other than temporary impairment is recognized in other comprehensive income (loss). | ||
The determination of the credit loss component of a mortgage backed security is based on a number of factors. The primary consideration in this evaluation process is the issuer's ability to meet current and future interest and principal payments as contractually stated at time of purchase. Our review of these securities includes an analysis of the cash flow modeling under various default scenarios considering independent third party benchmarks, the seniority of the specific tranche within the structure of the security, the composition of the collateral and the actual default, loss severity and prepayment experience exhibited. With the input of third party assumptions for default projections, loss severity and prepayment expectations, we evaluate the cash flow projections to determine whether the security is performing in accordance with its contractual obligation. | ||
We utilize the models from a leading structured product software specialist serving institutional investors. These models incorporate each security's seniority and cash flow structure. In circumstances where the analysis implies a potential for principal loss at some point in the future, we use the "best estimate" cash flow projection discounted at the security's effective yield at acquisition to determine the amount of our potential credit loss associated with this security. The discounted expected future cash flows equates to our expected recovery value. Any shortfall of the expected recovery when compared to the amortized cost of the security will be recorded as the credit loss component of the other than temporary impairment. | ||
The cash flow modeling is performed on a security-by-security basis and incorporates actual cash flows on the residential mortgage backed securities through the current period, as well as the projection of remaining cash flows using a number of assumptions including default rates, prepayment rates and loss severity rates. The default curves we use are tailored to the Prime or Alt-A residential mortgage backed securities that we own, which assume lower default rates and loss severity for Prime securities versus Alt-A securities. These default curves are scaled higher or lower depending on factors such as current underlying mortgage loan performance, rating agency loss projections, loan to value ratios, geographic diversity, as well as other appropriate considerations. | ||
The determination of the credit loss component of a corporate bond (including redeemable preferred stocks) is based on the underlying financial performance of the issuer and their ability to meet their contractual obligations. Considerations in our evaluation include, but are not limited to, credit rating changes, financial statement and ratio analysis, changes in management, significant changes in credit spreads, breaches of financial covenants and a review of the economic outlook for the industry and markets in which they trade. In circumstances where an issuer appears unlikely to meet its future obligation, or the security's price decline is deemed other than temporary, an estimate of credit loss is determined. Credit loss is calculated using default probabilities as derived from the credit default swaps markets in conjunction with recovery rates derived from independent third party analysis or a best estimate of credit loss. This credit loss rate is then incorporated into a present value calculation based on an expected principal loss in the future discounted at the yield at the date of purchase and compared to amortized cost to determine the amount of credit loss associated with the security. | ||
In addition, for debt securities which we do not intend to sell and it is not more likely than not we will be required to sell, but our intent changes due to changes or events that could not have been reasonably anticipated, an other than temporary impairment charge is recognized. Once an impairment charge has been recorded, we then continue to review the other than temporarily impaired securities for appropriate valuation on an ongoing basis. Unrealized losses may be recognized in future periods through a charge to earnings, should we later conclude that the decline in fair value below amortized cost is other than temporary pursuant to our accounting policy described above. The use of different methodologies and assumptions to determine the fair value of investments and the timing and amount of impairments may have a material effect on the amounts presented in our consolidated financial statements. | ||
Mortgage Loans on Real Estate, Allowance for Loan Losses, Policy | We evaluate our mortgage loan portfolio for the establishment of a loan loss allowance by specific identification of impaired loans and the measurement of an estimated loss for each individual loan identified. A mortgage loan is impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. If we determine that the value of any specific mortgage loan is impaired, the carrying amount of the mortgage loan will be reduced to its fair value, based upon the present value of expected future cash flows from the loan discounted at the loan's effective interest rate, or the fair value of the underlying collateral less estimated costs to sell. | |
In addition, we analyze the mortgage loan portfolio for the need of a general loan allowance for probable losses on all other loans on a quantitative and qualitative basis. The amount of the general loan allowance is based upon management's evaluation of the collectability of the loan portfolio, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. | ||
We rate each of the mortgage loans in our portfolio based on factors such as historical operating performance, loan to value ratio and economic outlook, among others. We calculate a loss factor to apply to each rating based on historical losses we have recognized in our mortgage loan portfolio. We apply the loss factors to the total principal outstanding within each rating category to determine an appropriate estimate of the general loan loss allowance. We also assess the portfolio qualitatively and apply a loss rate to all loans without a specific allowance based on management's assessment of economic conditions, and we apply an additional amount of loss allowance to a group of loans that we have identified as having higher risk of loss. | ||
Mortgage Loans on Real Estate, Real Estate Acquired Through Foreclosure, Policy | Charge-offs include allowances that have been established on loans that were satisfied by taking ownership of the collateral. When the property is taken it is recorded at the lower of the mortgage loan's carrying value or the property's fair value as a component of other investments and the mortgage loan is recorded as fully paid, with any allowance for credit loss that has been established charged off. Fair value of the real estate is determined by third party appraisal. Recoveries are situations where we have received a payment from the borrower in an amount greater than the carrying value of the loan (principal outstanding less specific allowance). | |
Mortgage Loans on Real Estate, Non-Accrual Loan Status, Policy | The loans that are categorized as "in workout" consist of loans that we have agreed to lower or no mortgage payments for a period of time while the borrowers address cash flow and/or operational issues. The key features of these workouts have been determined on a loan-by-loan basis. Most of these loans are in a period of low cash flow due to tenants vacating their space or tenants requesting rent relief during difficult economic periods. Generally, we have allowed the borrower a six month interest only period and in some cases a twelve month period of interest only. Interest only workout loans are expected to return to their regular debt service payments after the interest only period. Interest only loans that are not fully amortizing will have a larger balance at their balloon date than originally contracted. Fully amortizing loans that are in interest only periods will have larger debt service payments for their remaining term due to lost principal payments during the interest only period. In limited circumstances we have allowed borrowers to pay the principal portion of their loan payment into an escrow account that can be used for capital and tenant improvements for a period of not more than twelve months. In these situations new loan amortization schedules are calculated based on the principal not collected during this twelve month workout period and larger payments are collected for the remaining term of each loan. In all cases, the original interest rate and maturity date have not been modified, and we have not forgiven any principal amounts. | |
Mortgage loans are considered delinquent when they become 60 days past due. When loans become 90 days past due, become collateral dependent or enter a period with no debt service payments required we place them on non-accrual status and discontinue recognizing interest income. If payments are received on a delinquent loan, interest income is recognized to the extent it would have been recognized if normal principal and interest would have been received timely. If the payments are received to bring a delinquent loan back to current we will resume accruing interest income on that loan. | ||
Mortgage Loans on Real Estate, Troubled Debt Restructuring, Policy | A Troubled Debt Restructuring ("TDR") is a situation where we have granted a concession to a borrower for economic or legal reasons related to the borrower's financial difficulties that we would not otherwise consider. A mortgage loan that has been granted new terms, including workout terms as described previously, would be considered a TDR if it meets conditions that would indicate a borrower is experiencing financial difficulty and the new terms constitute a concession on our part. We analyze all loans where we have agreed to workout terms and all loans that we have refinanced to determine if they meet the definition of a TDR. We consider the following factors in determining whether or not a borrower is experiencing financial difficulty: | |
• | borrower is in default, | |
• | borrower has declared bankruptcy, | |
• | there is growing concern about the borrower's ability to continue as a going concern, | |
• | borrower has insufficient cash flows to service debt, | |
• | borrower's inability to obtain funds from other sources, and | |
• | there is a breach of financial covenants by the borrower. | |
If the borrower is determined to be in financial difficulty, we consider the following conditions to determine if the borrower was granted a concession: | ||
• | assets used to satisfy debt are less than our recorded investment, | |
• | interest rate is modified, | |
• | maturity date extension at an interest rate less than market rate, | |
• | capitalization of interest, | |
• | delaying principal and/or interest for a period of three months or more, and | |
• | partial forgiveness of the balance or charge-off. | |
Mortgage loan workouts, refinances or restructures that are classified as TDRs are individually evaluated and measured for impairment. | ||
Commitments and Contingencies, Policy | In accordance with applicable accounting guidelines, we establish an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. As a litigation or regulatory matter is developing we, in conjunction with outside counsel, evaluate on an ongoing basis whether the matter presents a loss contingency that meets conditions indicating the need for accrual and/or disclosure, and if not the matter will continue to be monitored for further developments. If and when the loss contingency related to litigation or regulatory matters is deemed to be both probable and estimable, we will establish an accrued liability with respect to that matter and will continue to monitor the matter for further developments that may affect the amount of the accrued liability. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Premiums and Annuity Deposits, Net of Coinsurance, By Product Type | Premiums and annuity deposits (net of coinsurance) collected in 2014, 2013 and 2012, by product type were as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
Product Type | 2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | |||||||||||||
Fixed index annuities | $ | 3,911,109 | $ | 3,864,990 | $ | 3,430,436 | |||||||
Annual reset fixed rate annuities | 56,647 | 71,162 | 98,190 | ||||||||||
Multi-year fixed rate annuities | 21,125 | 41,578 | 49,915 | ||||||||||
Single premium immediate annuities (SPIA) | 24,580 | 52,142 | 164,657 | ||||||||||
Life insurance | 10,810 | 10,556 | 12,877 | ||||||||||
$ | 4,024,271 | $ | 4,040,428 | $ | 3,756,075 | ||||||||
Fair_Values_of_Financial_Instr1
Fair Values of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Carrying Amounts and Fair Values of Financial Instruments | The following sets forth a comparison of the carrying amounts and fair values of our financial instruments: | |||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Carrying | Fair Value | Carrying | Fair Value | |||||||||||||
Amount | Amount | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale | $ | 32,445,202 | $ | 32,445,202 | $ | 26,610,447 | $ | 26,610,447 | ||||||||
Held for investment | 76,432 | 75,838 | 76,255 | 60,840 | ||||||||||||
Equity securities, available for sale | 7,805 | 7,805 | 7,778 | 7,778 | ||||||||||||
Mortgage loans on real estate | 2,434,580 | 2,493,901 | 2,581,082 | 2,615,410 | ||||||||||||
Derivative instruments | 731,113 | 731,113 | 856,050 | 856,050 | ||||||||||||
Other investments | 266,488 | 273,004 | 192,198 | 193,343 | ||||||||||||
Cash and cash equivalents | 701,514 | 701,514 | 897,529 | 897,529 | ||||||||||||
Coinsurance deposits | 3,044,342 | 2,698,552 | 2,999,618 | 2,669,432 | ||||||||||||
Interest rate caps | 2,778 | 2,778 | 6,103 | 6,103 | ||||||||||||
Interest rate swap | — | — | 712 | 712 | ||||||||||||
2015 notes hedges | 30,291 | 30,291 | 107,041 | 107,041 | ||||||||||||
Counterparty collateral | 206,096 | 206,096 | 315,824 | 315,824 | ||||||||||||
Liabilities | ||||||||||||||||
Policy benefit reserves | 39,463,987 | 33,078,978 | 35,453,166 | 29,670,827 | ||||||||||||
Single premium immediate annuity (SPIA) benefit reserves | 365,440 | 377,654 | 417,625 | 430,835 | ||||||||||||
Notes payable | 421,679 | 503,349 | 549,958 | 699,435 | ||||||||||||
Subordinated debentures | 246,243 | 244,437 | 246,050 | 234,959 | ||||||||||||
2015 notes embedded conversion derivative | 30,291 | 30,291 | 107,041 | 107,041 | ||||||||||||
Interest rate swap | 2,644 | 2,644 | — | — | ||||||||||||
Assets and Liabilities Measured on a Recurring Basis by Fair Value Hierarchy | Our assets and liabilities which are measured at fair value on a recurring basis as of December 31, 2014 and 2013 are presented below based on the fair value hierarchy levels: | |||||||||||||||
Total | Quoted | Significant | Significant | |||||||||||||
Fair Value | Prices | Other | Unobservable | |||||||||||||
in Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | ||||||||||||||
(Level 1) | (Level 2) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale: | ||||||||||||||||
United States Government full faith and credit | $ | 138,460 | $ | 4,255 | $ | 134,205 | $ | — | ||||||||
United States Government sponsored agencies | 1,393,890 | — | 1,393,890 | — | ||||||||||||
United States municipalities, states and territories | 3,723,309 | — | 3,723,309 | — | ||||||||||||
Foreign government obligations | 193,803 | — | 193,803 | — | ||||||||||||
Corporate securities | 21,490,292 | 11 | 21,490,281 | — | ||||||||||||
Residential mortgage backed securities | 1,751,345 | — | 1,750,970 | 375 | ||||||||||||
Commercial mortgage backed securities | 2,807,620 | — | 2,807,620 | — | ||||||||||||
Other asset backed securities | 946,483 | — | 946,483 | — | ||||||||||||
Equity securities, available for sale: finance, insurance and real estate | 7,805 | — | 7,805 | — | ||||||||||||
Derivative instruments | 731,113 | — | 731,113 | — | ||||||||||||
Cash and cash equivalents | 701,514 | 701,514 | — | — | ||||||||||||
Interest rate caps | 2,778 | — | 2,778 | — | ||||||||||||
2015 notes hedges | 30,291 | — | 30,291 | — | ||||||||||||
Counterparty collateral | 206,096 | — | 206,096 | — | ||||||||||||
$ | 34,124,799 | $ | 705,780 | $ | 33,418,644 | $ | 375 | |||||||||
Liabilities | ||||||||||||||||
2015 notes embedded conversion derivative | $ | 30,291 | $ | — | $ | 30,291 | $ | — | ||||||||
Interest rate swap | 2,644 | — | 2,644 | — | ||||||||||||
Fixed index annuities—embedded derivatives | 5,574,653 | — | — | 5,574,653 | ||||||||||||
$ | 5,607,588 | $ | — | $ | 32,935 | $ | 5,574,653 | |||||||||
December 31, 2013 | ||||||||||||||||
Assets | ||||||||||||||||
Fixed maturity securities: | ||||||||||||||||
Available for sale: | ||||||||||||||||
United States Government full faith and credit | $ | 42,925 | $ | 4,805 | $ | 38,120 | $ | — | ||||||||
United States Government sponsored agencies | 1,194,289 | — | 1,194,289 | — | ||||||||||||
United States municipalities, states and territories | 3,306,743 | — | 3,306,743 | — | ||||||||||||
Foreign government obligations | 91,557 | — | 91,557 | — | ||||||||||||
Corporate securities | 17,233,037 | 20 | 17,233,017 | — | ||||||||||||
Residential mortgage backed securities | 1,971,960 | — | 1,970,584 | 1,376 | ||||||||||||
Commercial mortgage backed securities | 1,735,460 | — | 1,735,460 | — | ||||||||||||
Other asset backed securities | 1,034,476 | 359 | 1,034,117 | — | ||||||||||||
Equity securities, available for sale: finance, insurance and real estate | 7,778 | — | 7,778 | — | ||||||||||||
Derivative instruments | 856,050 | — | 856,050 | — | ||||||||||||
Cash and cash equivalents | 897,529 | 897,529 | — | — | ||||||||||||
Interest rate caps | 6,103 | — | 6,103 | — | ||||||||||||
Interest rate swap | 712 | — | 712 | — | ||||||||||||
2015 notes hedges | 107,041 | — | 107,041 | — | ||||||||||||
Counterparty collateral | 315,824 | — | 315,824 | — | ||||||||||||
$ | 28,801,484 | $ | 902,713 | $ | 27,897,395 | $ | 1,376 | |||||||||
Liabilities | ||||||||||||||||
2015 notes embedded conversion derivative | $ | 107,041 | $ | — | $ | 107,041 | $ | — | ||||||||
Fixed index annuities—embedded derivatives | 4,406,163 | — | — | 4,406,163 | ||||||||||||
$ | 4,513,204 | $ | — | $ | 107,041 | $ | 4,406,163 | |||||||||
Assets Measured at Fair Value on Recurring Basis, Level 3 Reconciliation | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Available for sale securities | ||||||||||||||||
Beginning balance | $ | 1,376 | $ | 1,812 | ||||||||||||
Principal returned | (285 | ) | (864 | ) | ||||||||||||
Amortization of premium/accretion of discount | (262 | ) | 152 | |||||||||||||
Total gains (losses) (realized/unrealized): | ||||||||||||||||
Included in other comprehensive income (loss) | 109 | 276 | ||||||||||||||
Included in operations | (563 | ) | — | |||||||||||||
Ending balance | $ | 375 | $ | 1,376 | ||||||||||||
Liabilities Measured at Fair Value on Recurring Basis, Level 3 Reconciliation | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Fixed index annuities—embedded derivatives | ||||||||||||||||
Beginning balance | $ | 4,406,163 | $ | 3,337,556 | ||||||||||||
Premiums less benefits | 1,700,827 | 1,485,109 | ||||||||||||||
Change in fair value, net | (532,337 | ) | (416,502 | ) | ||||||||||||
Ending balance | $ | 5,574,653 | $ | 4,406,163 | ||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||
Schedule of Fixed Maturity and Equity Securites | At December 31, 2014 and 2013, the amortized cost and fair value of fixed maturity securities and equity securities were as follows: | |||||||||||||||||||||||
Amortized | Gross | Gross | Fair Value | |||||||||||||||||||||
Cost | Unrealized | Unrealized | ||||||||||||||||||||||
Gains | Losses | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 137,710 | $ | 765 | $ | (15 | ) | $ | 138,460 | |||||||||||||||
United States Government sponsored agencies | 1,364,424 | 43,399 | (13,933 | ) | 1,393,890 | |||||||||||||||||||
United States municipalities, states and territories | 3,293,551 | 430,469 | (711 | ) | 3,723,309 | |||||||||||||||||||
Foreign government obligations | 181,128 | 16,628 | (3,953 | ) | 193,803 | |||||||||||||||||||
Corporate securities | 19,984,747 | 1,628,941 | (123,396 | ) | 21,490,292 | |||||||||||||||||||
Residential mortgage backed securities | 1,616,846 | 136,704 | (2,205 | ) | 1,751,345 | |||||||||||||||||||
Commercial mortgage backed securities | 2,720,294 | 90,649 | (3,323 | ) | 2,807,620 | |||||||||||||||||||
Other asset backed securities | 906,346 | 48,022 | (7,885 | ) | 946,483 | |||||||||||||||||||
$ | 30,205,046 | $ | 2,395,577 | $ | (155,421 | ) | $ | 32,445,202 | ||||||||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security | $ | 76,432 | $ | — | $ | (594 | ) | $ | 75,838 | |||||||||||||||
Equity securities, available for sale: | ||||||||||||||||||||||||
Finance, insurance and real estate | $ | 7,509 | $ | 296 | $ | — | $ | 7,805 | ||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 44,852 | $ | 367 | $ | (2,294 | ) | $ | 42,925 | |||||||||||||||
United States Government sponsored agencies | 1,313,776 | 1,875 | (121,362 | ) | 1,194,289 | |||||||||||||||||||
United States municipalities, states and territories | 3,181,032 | 164,785 | (39,074 | ) | 3,306,743 | |||||||||||||||||||
Foreign government obligations | 86,112 | 8,907 | (3,462 | ) | 91,557 | |||||||||||||||||||
Corporate securities | 17,142,118 | 606,948 | (516,029 | ) | 17,233,037 | |||||||||||||||||||
Residential mortgage backed securities | 1,895,913 | 119,230 | (43,183 | ) | 1,971,960 | |||||||||||||||||||
Commercial mortgage backed securities | 1,821,988 | 3,287 | (89,815 | ) | 1,735,460 | |||||||||||||||||||
Other asset backed securities | 1,041,939 | 23,300 | (30,763 | ) | 1,034,476 | |||||||||||||||||||
$ | 26,527,730 | $ | 928,699 | $ | (845,982 | ) | $ | 26,610,447 | ||||||||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security | $ | 76,255 | $ | — | $ | (15,415 | ) | $ | 60,840 | |||||||||||||||
Equity securities, available for sale: | ||||||||||||||||||||||||
Finance, insurance and real estate | $ | 7,503 | $ | 275 | $ | — | $ | 7,778 | ||||||||||||||||
Schedule of Fixed Maturity Securities by Contractual Maturity Date | The amortized cost and fair value of fixed maturity securities at December 31, 2014, by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines. | |||||||||||||||||||||||
Available for sale | Held for investment | |||||||||||||||||||||||
Amortized | Fair Value | Amortized | Fair Value | |||||||||||||||||||||
Cost | Cost | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Due in one year or less | $ | 65,783 | $ | 67,404 | $ | — | $ | — | ||||||||||||||||
Due after one year through five years | 1,483,940 | 1,638,259 | — | — | ||||||||||||||||||||
Due after five years through ten years | 8,523,008 | 8,738,123 | — | — | ||||||||||||||||||||
Due after ten years through twenty years | 7,251,089 | 7,914,212 | — | — | ||||||||||||||||||||
Due after twenty years | 7,637,740 | 8,581,756 | 76,432 | 75,838 | ||||||||||||||||||||
24,961,560 | 26,939,754 | 76,432 | 75,838 | |||||||||||||||||||||
Residential mortgage backed securities | 1,616,846 | 1,751,345 | — | — | ||||||||||||||||||||
Commercial mortgage backed securities | 2,720,294 | 2,807,620 | — | — | ||||||||||||||||||||
Other asset backed securities | 906,346 | 946,483 | — | — | ||||||||||||||||||||
$ | 30,205,046 | $ | 32,445,202 | $ | 76,432 | $ | 75,838 | |||||||||||||||||
Schedule of Components of Net Unrealized Gains on Availabe For Sale Fixed Maturity and Equity Securities Reported as Separate Component of Stockholders' Equity | Net unrealized gains on available for sale fixed maturity securities and equity securities reported as a separate component of stockholders' equity were comprised of the following: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Net unrealized gains on available for sale fixed maturity securities and equity securities | $ | 2,240,452 | $ | 82,992 | ||||||||||||||||||||
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements | (1,165,271 | ) | (46,588 | ) | ||||||||||||||||||||
Deferred income tax valuation allowance reversal | 22,534 | 22,534 | ||||||||||||||||||||||
Deferred income tax expense | (376,314 | ) | (12,742 | ) | ||||||||||||||||||||
Net unrealized gains reported as accumulated other comprehensive income | $ | 721,401 | $ | 46,196 | ||||||||||||||||||||
Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation | The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
NAIC | Amortized | Fair | Amortized | Fair | ||||||||||||||||||||
Designation | Cost | Value | Cost | Value | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
1 | $ | 19,223,151 | $ | 20,941,634 | $ | 16,394,654 | $ | 16,531,250 | ||||||||||||||||
2 | 10,432,593 | 10,981,618 | 9,630,251 | 9,598,399 | ||||||||||||||||||||
3 | 602,191 | 583,313 | 502,822 | 474,165 | ||||||||||||||||||||
4 | 22,888 | 14,089 | 74,493 | 66,078 | ||||||||||||||||||||
5 | — | — | — | — | ||||||||||||||||||||
6 | 655 | 386 | 1,765 | 1,395 | ||||||||||||||||||||
$ | 30,281,478 | $ | 32,521,040 | $ | 26,603,985 | $ | 26,671,287 | |||||||||||||||||
Schedule of Gross Unrealized Losses on Investments, By Category and Length of Time | The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 402 and 1,047 securities, respectively) have been in a continuous unrealized loss position, at December 31, 2014 and 2013: | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | — | $ | — | $ | 498 | $ | (15 | ) | $ | 498 | $ | (15 | ) | ||||||||||
United States Government sponsored agencies | — | — | 610,339 | (13,933 | ) | 610,339 | (13,933 | ) | ||||||||||||||||
United States municipalities, states and territories | — | — | 27,947 | (711 | ) | 27,947 | (711 | ) | ||||||||||||||||
Foreign government obligations | 14,194 | (1,068 | ) | 11,542 | (2,885 | ) | 25,736 | (3,953 | ) | |||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance, insurance and real estate | 253,439 | (2,586 | ) | 399,874 | (16,277 | ) | 653,313 | (18,863 | ) | |||||||||||||||
Manufacturing, construction and mining | 1,078,089 | (35,151 | ) | 694,088 | (35,926 | ) | 1,772,177 | (71,077 | ) | |||||||||||||||
Utilities and related sectors | 373,952 | (8,185 | ) | 344,313 | (10,153 | ) | 718,265 | (18,338 | ) | |||||||||||||||
Wholesale/retail trade | 88,766 | (2,290 | ) | 99,427 | (3,122 | ) | 188,193 | (5,412 | ) | |||||||||||||||
Services, media and other | 131,940 | (1,567 | ) | 277,296 | (8,139 | ) | 409,236 | (9,706 | ) | |||||||||||||||
Residential mortgage backed securities | 22,115 | (1,219 | ) | 20,427 | (986 | ) | 42,542 | (2,205 | ) | |||||||||||||||
Commercial mortgage backed securities | 241,637 | (1,344 | ) | 187,241 | (1,979 | ) | 428,878 | (3,323 | ) | |||||||||||||||
Other asset backed securities | 142,094 | (3,519 | ) | 58,958 | (4,366 | ) | 201,052 | (7,885 | ) | |||||||||||||||
$ | 2,346,226 | $ | (56,929 | ) | $ | 2,731,950 | $ | (98,492 | ) | $ | 5,078,176 | $ | (155,421 | ) | ||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security: | ||||||||||||||||||||||||
Insurance | $ | — | $ | — | $ | 75,838 | $ | (594 | ) | $ | 75,838 | $ | (594 | ) | ||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
United States Government full faith and credit | $ | 32,969 | $ | (2,294 | ) | $ | — | $ | — | $ | 32,969 | $ | (2,294 | ) | ||||||||||
United States Government sponsored agencies | 692,320 | (88,671 | ) | 467,309 | (32,691 | ) | 1,159,629 | (121,362 | ) | |||||||||||||||
United States municipalities, states and territories | 614,056 | (39,074 | ) | — | — | 614,056 | (39,074 | ) | ||||||||||||||||
Foreign government obligations | 26,298 | (3,462 | ) | — | — | 26,298 | (3,462 | ) | ||||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance, insurance and real estate | 1,690,846 | (92,426 | ) | 153,037 | (12,873 | ) | 1,843,883 | (105,299 | ) | |||||||||||||||
Manufacturing, construction and mining | 3,370,775 | (191,245 | ) | 93,608 | (16,088 | ) | 3,464,383 | (207,333 | ) | |||||||||||||||
Utilities and related sectors | 1,829,868 | (102,758 | ) | 83,550 | (11,547 | ) | 1,913,418 | (114,305 | ) | |||||||||||||||
Wholesale/retail trade | 428,407 | (25,189 | ) | 17,687 | (1,992 | ) | 446,094 | (27,181 | ) | |||||||||||||||
Services, media and other | 834,699 | (51,508 | ) | 107,242 | (10,403 | ) | 941,941 | (61,911 | ) | |||||||||||||||
Residential mortgage backed securities | 309,599 | (41,080 | ) | 31,739 | (2,103 | ) | 341,338 | (43,183 | ) | |||||||||||||||
Commercial mortgage backed securities | 1,450,143 | (83,814 | ) | 51,099 | (6,001 | ) | 1,501,242 | (89,815 | ) | |||||||||||||||
Other asset backed securities | 356,018 | (20,426 | ) | 92,372 | (10,337 | ) | 448,390 | (30,763 | ) | |||||||||||||||
$ | 11,635,998 | $ | (741,947 | ) | $ | 1,097,643 | $ | (104,035 | ) | $ | 12,733,641 | $ | (845,982 | ) | ||||||||||
Held for investment: | ||||||||||||||||||||||||
Corporate security: | ||||||||||||||||||||||||
Insurance | $ | — | $ | — | $ | 60,840 | $ | (15,415 | ) | $ | 60,840 | $ | (15,415 | ) | ||||||||||
Schedule of Changes in Net Unrealized Gains/Losses on Investments | Changes in net unrealized gains/losses on investments for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities held for investment carried at amortized cost | $ | 14,821 | $ | (848 | ) | $ | (14,783 | ) | ||||||||||||||||
Investments carried at fair value: | ||||||||||||||||||||||||
Fixed maturity securities, available for sale | $ | 2,157,439 | $ | (2,132,392 | ) | $ | 731,279 | |||||||||||||||||
Equity securities, available for sale | 21 | (8,549 | ) | 4,417 | ||||||||||||||||||||
2,157,460 | (2,140,941 | ) | 735,696 | |||||||||||||||||||||
Adjustment for effect on other balance sheet accounts: | ||||||||||||||||||||||||
Deferred policy acquisition costs and deferred sales inducements | (1,118,683 | ) | 1,155,386 | (382,498 | ) | |||||||||||||||||||
Deferred income tax asset/liability | (363,572 | ) | 344,944 | (123,620 | ) | |||||||||||||||||||
(1,482,255 | ) | 1,500,330 | (506,118 | ) | ||||||||||||||||||||
Change in net unrealized gains/losses on investments carried at fair value | $ | 675,205 | $ | (640,611 | ) | $ | 229,578 | |||||||||||||||||
Components of Net Investment Income | Components of net investment income are as follows: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities | $ | 1,394,301 | $ | 1,229,486 | $ | 1,112,296 | ||||||||||||||||||
Equity securities | 404 | 1,586 | 3,090 | |||||||||||||||||||||
Mortgage loans on real estate | 143,998 | 159,769 | 176,354 | |||||||||||||||||||||
Cash and cash equivalents | 286 | 775 | 2,243 | |||||||||||||||||||||
Other | 6,903 | 5,711 | 6,348 | |||||||||||||||||||||
1,545,892 | 1,397,327 | 1,300,331 | ||||||||||||||||||||||
Less investment expenses | (14,225 | ) | (13,400 | ) | (13,408 | ) | ||||||||||||||||||
Net investment income | $ | 1,531,667 | $ | 1,383,927 | $ | 1,286,923 | ||||||||||||||||||
Net Realized Gains (Losses) on Investments | Net realized gains (losses) on investments, excluding net OTTI losses are as follows: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Available for sale fixed maturity securities: | ||||||||||||||||||||||||
Gross realized gains | $ | 3,273 | $ | 39,079 | $ | 10,906 | ||||||||||||||||||
Gross realized losses | (1,006 | ) | (6,170 | ) | (562 | ) | ||||||||||||||||||
2,267 | 32,909 | 10,344 | ||||||||||||||||||||||
Available for sale equity securities: | ||||||||||||||||||||||||
Gross realized gains | — | 9,571 | 562 | |||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||
Gain on sale of real estate | 2,454 | 2,144 | 5,149 | |||||||||||||||||||||
Loss on sale of real estate | (231 | ) | (1,317 | ) | — | |||||||||||||||||||
Impairment losses on real estate | (2,441 | ) | (1,195 | ) | (5,677 | ) | ||||||||||||||||||
(218 | ) | (368 | ) | (528 | ) | |||||||||||||||||||
Mortgage loans on real estate: | ||||||||||||||||||||||||
Increase in allowance for credit losses | (6,052 | ) | (5,621 | ) | (16,832 | ) | ||||||||||||||||||
Recovery of specific allowance | — | 4,070 | — | |||||||||||||||||||||
(6,052 | ) | (1,551 | ) | (16,832 | ) | |||||||||||||||||||
$ | (4,003 | ) | $ | 40,561 | $ | (6,454 | ) | |||||||||||||||||
Non-Income Producing Investments | The following table summarizes the carrying value of our fixed maturity securities, mortgage loans on real estate and real estate owned that have been non-income producing for 12 consecutive months: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Fixed maturity securities, available for sale | $ | 11 | $ | 20 | ||||||||||||||||||||
Mortgage loans on real estate | — | 3,511 | ||||||||||||||||||||||
Real estate owned | 868 | — | ||||||||||||||||||||||
$ | 879 | $ | 3,531 | |||||||||||||||||||||
Significant Assumptions Used to Determine the Credit Loss Component of Other Than Temporary Impairment on Residential Mortgage Backed Securities | The following table presents the range of significant assumptions used to determine the credit loss component of other than temporary impairments we have recognized on residential mortgage backed securities for the years ended December 31, 2014 and 2013, which are all senior level tranches within the structure of the securities: | |||||||||||||||||||||||
Discount Rate | Default Rate | Loss Severity | ||||||||||||||||||||||
Sector | Vintage | Min | Max | Min | Max | Min | Max | |||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
Prime | 2005 | 7.5 | % | 7.5 | % | 15 | % | 15 | % | 50 | % | 50 | % | |||||||||||
2006 | 6.5 | % | 7.4 | % | 11 | % | 15 | % | 40 | % | 50 | % | ||||||||||||
2007 | 7 | % | 7 | % | 14 | % | 14 | % | 55 | % | 55 | % | ||||||||||||
Alt-A | 2005 | 5.6 | % | 6.4 | % | 87 | % | 91 | % | 2 | % | 2 | % | |||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
Prime | 2003 | 5.1 | % | 5.1 | % | 2 | % | 2 | % | 30 | % | 30 | % | |||||||||||
2005 | 6.5 | % | 7.7 | % | 8 | % | 18 | % | 50 | % | 65 | % | ||||||||||||
2006 | 5.8 | % | 6.9 | % | 9 | % | 16 | % | 45 | % | 50 | % | ||||||||||||
2007 | 6.2 | % | 6.7 | % | 11 | % | 25 | % | 40 | % | 60 | % | ||||||||||||
2008 | 6.6 | % | 6.6 | % | 16 | % | 16 | % | 45 | % | 45 | % | ||||||||||||
2009 | 6.8 | % | 6.8 | % | 17 | % | 17 | % | 60 | % | 60 | % | ||||||||||||
Alt-A | 2005 | 5.6 | % | 8.7 | % | 13 | % | 81 | % | 2 | % | 65 | % | |||||||||||
2007 | 6.2 | % | 6.9 | % | 38 | % | 52 | % | 60 | % | 65 | % | ||||||||||||
Other Than Temporary Impairment by Asset Type | The following table summarizes other than temporary impairments by asset type: | |||||||||||||||||||||||
Number | Total | Portion of | Net OTTI | |||||||||||||||||||||
of Securities | OTTI Losses | OTTI Losses | Losses | |||||||||||||||||||||
Recognized from | Recognized | |||||||||||||||||||||||
Other | in Operations | |||||||||||||||||||||||
Comprehensive | ||||||||||||||||||||||||
Income | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Residential mortgage backed securities | 7 | $ | — | $ | (2,627 | ) | $ | (2,627 | ) | |||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
United States Government sponsored agencies | 2 | $ | (2,775 | ) | $ | — | $ | (2,775 | ) | |||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Industrial | 1 | (1,761 | ) | — | (1,761 | ) | ||||||||||||||||||
Residential mortgage backed securities | 6 | — | (1,270 | ) | (1,270 | ) | ||||||||||||||||||
Equity security, available for sale: | ||||||||||||||||||||||||
Industrial | 1 | (428 | ) | — | (428 | ) | ||||||||||||||||||
10 | $ | (4,964 | ) | $ | (1,270 | ) | $ | (6,234 | ) | |||||||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities: | ||||||||||||||||||||||||
Finance | 1 | $ | (1,765 | ) | $ | — | $ | (1,765 | ) | |||||||||||||||
Retail | 1 | (622 | ) | — | (622 | ) | ||||||||||||||||||
Residential mortgage backed securities | 39 | (3,024 | ) | (9,521 | ) | (12,545 | ) | |||||||||||||||||
41 | $ | (5,411 | ) | $ | (9,521 | ) | $ | (14,932 | ) | |||||||||||||||
Other Than Temporary Impairment, Credit Losses Recognized in Earnings | The cumulative portion of other than temporary impairments determined to be credit losses which have been recognized in operations for debt securities are summarized as follows: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Cumulative credit loss at beginning of year | $ | (125,960 | ) | $ | (134,027 | ) | ||||||||||||||||||
Credit losses on securities for which OTTI has not previously been recognized | — | (4,536 | ) | |||||||||||||||||||||
Additional credit losses on securities for which OTTI has previously been recognized | (2,627 | ) | (1,270 | ) | ||||||||||||||||||||
Accumulated losses on securities that were disposed of during the period | 1,537 | 13,873 | ||||||||||||||||||||||
Cumulative credit loss at end of year | $ | (127,050 | ) | $ | (125,960 | ) | ||||||||||||||||||
Schedule of Other Than Temporary Impairment Losses, Investments | The following table summarizes the cumulative noncredit portion of OTTI and the change in fair value since recognition of OTTI, both of which were recognized in other comprehensive income, by major type of security, for securities that are part of our investment portfolio at December 31, 2014 and 2013: | |||||||||||||||||||||||
Amortized Cost | OTTI Recognized in Other Comprehensive Income | Change in Fair Value Since OTTI was Recognized | Fair Value | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities | $ | — | $ | — | $ | 11 | $ | 11 | ||||||||||||||||
Residential mortgage backed securities | 569,508 | (173,494 | ) | 215,625 | 611,639 | |||||||||||||||||||
$ | 569,508 | $ | (173,494 | ) | $ | 215,636 | $ | 611,650 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturity securities, available for sale: | ||||||||||||||||||||||||
Corporate securities | $ | — | $ | — | $ | 20 | $ | 20 | ||||||||||||||||
Residential mortgage backed securities | 679,265 | (176,334 | ) | 216,061 | 718,992 | |||||||||||||||||||
$ | 679,265 | $ | (176,334 | ) | $ | 216,081 | $ | 719,012 | ||||||||||||||||
Mortgage_Loans_on_Real_Estate_
Mortgage Loans on Real Estate (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Mortgage Loans on Real Estate [Abstract] | ||||||||||||||||||||||||||||
Summary of Mortgage Loan Portfolio | Our mortgage loan portfolio, summarized in the following table, totaled $2.4 billion and $2.6 billion at December 31, 2014 and 2013, respectively, with commitments outstanding of $61.3 million at December 31, 2014. | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Principal outstanding | $ | 2,457,721 | $ | 2,607,698 | ||||||||||||||||||||||||
Loan loss allowance | (22,633 | ) | (26,047 | ) | ||||||||||||||||||||||||
Deferred prepayment fees | (508 | ) | (569 | ) | ||||||||||||||||||||||||
Carrying value | $ | 2,434,580 | $ | 2,581,082 | ||||||||||||||||||||||||
Mortgage Loan Portfolio Summarized by Geographic Region and Property Type | The portfolio consists of commercial mortgage loans collateralized by the related properties and diversified as to property type, location and loan size. Our mortgage lending policies establish limits on the amount that can be loaned to one borrower and other criteria to attempt to reduce the risk of default. The mortgage loan portfolio is summarized by geographic region and property type as follows: | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
Principal | Percent | Principal | Percent | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Geographic distribution | ||||||||||||||||||||||||||||
East | $ | 701,638 | 28.5 | % | $ | 765,717 | 29.4 | % | ||||||||||||||||||||
Middle Atlantic | 166,249 | 6.8 | % | 156,489 | 6 | % | ||||||||||||||||||||||
Mountain | 279,075 | 11.4 | % | 356,246 | 13.7 | % | ||||||||||||||||||||||
New England | 12,280 | 0.5 | % | 21,324 | 0.8 | % | ||||||||||||||||||||||
Pacific | 302,307 | 12.3 | % | 317,431 | 12.2 | % | ||||||||||||||||||||||
South Atlantic | 471,849 | 19.2 | % | 483,852 | 18.5 | % | ||||||||||||||||||||||
West North Central | 349,028 | 14.2 | % | 351,794 | 13.5 | % | ||||||||||||||||||||||
West South Central | 175,295 | 7.1 | % | 154,845 | 5.9 | % | ||||||||||||||||||||||
$ | 2,457,721 | 100 | % | $ | 2,607,698 | 100 | % | |||||||||||||||||||||
Property type distribution | ||||||||||||||||||||||||||||
Office | $ | 484,585 | 19.7 | % | $ | 590,414 | 22.6 | % | ||||||||||||||||||||
Medical Office | 88,275 | 3.6 | % | 125,703 | 4.8 | % | ||||||||||||||||||||||
Retail | 711,775 | 29 | % | 711,364 | 27.3 | % | ||||||||||||||||||||||
Industrial/Warehouse | 649,425 | 26.4 | % | 673,449 | 25.8 | % | ||||||||||||||||||||||
Hotel | 30,640 | 1.3 | % | 61,574 | 2.4 | % | ||||||||||||||||||||||
Apartment | 335,087 | 13.6 | % | 291,823 | 11.2 | % | ||||||||||||||||||||||
Mixed use/other | 157,934 | 6.4 | % | 153,371 | 5.9 | % | ||||||||||||||||||||||
$ | 2,457,721 | 100 | % | $ | 2,607,698 | 100 | % | |||||||||||||||||||||
Rollforward of Allowance For Credit Losses | The following table presents a rollforward of our specific and general valuation allowances for mortgage loans on real estate: | |||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
Specific | General | Specific | General | Specific | General | |||||||||||||||||||||||
Allowance | Allowance | Allowance | Allowance | Allowance | Allowance | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Beginning allowance balance | $ | (16,847 | ) | $ | (9,200 | ) | $ | (23,134 | ) | $ | (11,100 | ) | $ | (23,664 | ) | $ | (9,300 | ) | ||||||||||
Charge-offs | 9,211 | — | 9,738 | — | 15,562 | — | ||||||||||||||||||||||
Recoveries | 255 | — | 4,070 | — | — | — | ||||||||||||||||||||||
Change in provision for credit losses | (4,952 | ) | (1,100 | ) | (7,521 | ) | 1,900 | (15,032 | ) | (1,800 | ) | |||||||||||||||||
Ending allowance balance | $ | (12,333 | ) | $ | (10,300 | ) | $ | (16,847 | ) | $ | (9,200 | ) | $ | (23,134 | ) | $ | (11,100 | ) | ||||||||||
Impaired Mortgage Loans on Real Estate by Basis of Impairment | The following table presents the total outstanding principal of loans evaluated for impairment by basis of impairment method: | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 29,116 | $ | 47,018 | 53,110 | |||||||||||||||||||||||
Collectively evaluated for impairment | 2,428,605 | 2,560,680 | 2,605,773 | |||||||||||||||||||||||||
Total loans evaluated for impairment | $ | 2,457,721 | $ | 2,607,698 | 2,658,883 | |||||||||||||||||||||||
Real Estate Acquired Via Foreclosure or Deed In Lieu | The following table summarizes the activity in the real estate owned, included in Other investments, which was obtained in satisfaction of mortgage loans on real estate: | |||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Real estate owned at beginning of period | $ | 22,844 | $ | 33,172 | $ | 36,821 | ||||||||||||||||||||||
Real estate acquired in satisfaction of mortgage loans | 14,555 | 8,217 | 26,324 | |||||||||||||||||||||||||
Additions | — | 626 | 398 | |||||||||||||||||||||||||
Sales | (14,134 | ) | (17,358 | ) | (23,825 | ) | ||||||||||||||||||||||
Impairments | (2,441 | ) | (1,195 | ) | (5,677 | ) | ||||||||||||||||||||||
Depreciation | (586 | ) | (618 | ) | (869 | ) | ||||||||||||||||||||||
Real estate owned at end of period | $ | 20,238 | $ | 22,844 | $ | 33,172 | ||||||||||||||||||||||
Mortgage Loans By Credit Quality Indicator | We analyze credit risk of our mortgage loans by analyzing all available evidence on loans that are delinquent and loans that are in a workout period. | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Credit Exposure--By Payment Activity | ||||||||||||||||||||||||||||
Performing | $ | 2,451,760 | 2,593,276 | |||||||||||||||||||||||||
In workout | — | 6,248 | ||||||||||||||||||||||||||
Delinquent | — | — | ||||||||||||||||||||||||||
Collateral dependent | 5,961 | 8,174 | ||||||||||||||||||||||||||
$ | 2,457,721 | $ | 2,607,698 | |||||||||||||||||||||||||
Aging of Financing Receivables | Aging of financing receivables is summarized in the following table, with loans in a "workout" period as of the reporting date considered current if payments are current in accordance with agreed upon terms: | |||||||||||||||||||||||||||
30 - 59 Days | 60 - 89 Days | 90 Days | Total | Current | Collateral | Total | ||||||||||||||||||||||
and Over | Past Due | Dependent | Financing | |||||||||||||||||||||||||
Receivables | Receivables | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Commercial Mortgage Loans | ||||||||||||||||||||||||||||
31-Dec-14 | $ | — | $ | — | $ | — | $ | — | $ | 2,451,760 | $ | 5,961 | $ | 2,457,721 | ||||||||||||||
31-Dec-13 | $ | — | $ | — | $ | — | $ | — | $ | 2,599,524 | $ | 8,174 | $ | 2,607,698 | ||||||||||||||
Impaired Financing Receivables | Financing receivables summarized in the following two tables represent all loans that we are either not currently collecting, or those we feel it is probable we will not collect all amounts due according to the contractual terms of the loan agreements (all loans that we have worked with the borrower to alleviate short-term cash flow issues, loans delinquent for more than 60 days at the reporting date, loans we have determined to be collateral dependent and loans that we have recorded specific impairments on that we feel may continue to have performance issues). | |||||||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 16,783 | $ | 29,116 | $ | (12,333 | ) | |||||||||||||||||||||
Mortgage loans with no related allowance | 2,656 | 2,656 | — | |||||||||||||||||||||||||
$ | 19,439 | $ | 31,772 | $ | (12,333 | ) | ||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 30,171 | $ | 47,018 | $ | (16,847 | ) | |||||||||||||||||||||
Mortgage loans with no related allowance | 3,264 | 3,264 | — | |||||||||||||||||||||||||
$ | 33,435 | $ | 50,282 | $ | (16,847 | ) | ||||||||||||||||||||||
Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 18,465 | $ | 1,797 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 2,656 | 43 | ||||||||||||||||||||||||||
$ | 21,121 | $ | 1,840 | |||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 33,772 | $ | 2,094 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 3,264 | 138 | ||||||||||||||||||||||||||
$ | 37,036 | $ | 2,232 | |||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||
Mortgage loans with an allowance | $ | 37,480 | $ | 1,946 | ||||||||||||||||||||||||
Mortgage loans with no related allowance | 27,696 | 1,664 | ||||||||||||||||||||||||||
$ | 65,176 | $ | 3,610 | |||||||||||||||||||||||||
Troubled Debt Restructurings on Financing Receivables | A summary of mortgage loans on commercial real estate with outstanding principal at December 31, 2014 and 2013 that we determined to be TDRs are as follows: | |||||||||||||||||||||||||||
Geographic Region | Number of | Principal | Specific Loan | Net | ||||||||||||||||||||||||
TDRs | Balance | Loss Allowance | Carrying | |||||||||||||||||||||||||
Outstanding | Amount | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Year ended December 31, 2014: | ||||||||||||||||||||||||||||
South Atlantic | 7 | $ | 14,475 | $ | (4,244 | ) | $ | 10,231 | ||||||||||||||||||||
East North Central | 1 | 2,177 | (467 | ) | 1,710 | |||||||||||||||||||||||
West North Central | 1 | 1,881 | (1,047 | ) | 834 | |||||||||||||||||||||||
9 | $ | 18,533 | $ | (5,758 | ) | $ | 12,775 | |||||||||||||||||||||
Year ended December 31, 2013: | ||||||||||||||||||||||||||||
East | 1 | $ | 3,712 | $ | (949 | ) | $ | 2,763 | ||||||||||||||||||||
Mountain | 7 | 22,140 | (329 | ) | 21,811 | |||||||||||||||||||||||
South Atlantic | 7 | 13,930 | (4,177 | ) | 9,753 | |||||||||||||||||||||||
East North Central | 1 | 2,219 | (467 | ) | 1,752 | |||||||||||||||||||||||
West North Central | 1 | 1,938 | (475 | ) | 1,463 | |||||||||||||||||||||||
West South Central | 1 | 1,714 | (256 | ) | 1,458 | |||||||||||||||||||||||
18 | $ | 45,653 | $ | (6,653 | ) | $ | 39,000 | |||||||||||||||||||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||
Fair Value of Derivative Instruments as Presented in the Consolidated Balance Sheets | The fair value of our derivative instruments, including derivative instruments embedded in fixed index annuity contracts and derivative instruments embedded in a convertible debt issue, presented in the consolidated balance sheets are as follows: | ||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||
Call options | $ | 731,113 | $ | 856,050 | |||||||||||||||||
Other assets | |||||||||||||||||||||
2015 notes hedges | 30,291 | 107,041 | |||||||||||||||||||
Interest rate caps | 2,778 | 6,103 | |||||||||||||||||||
Interest rate swap | — | 712 | |||||||||||||||||||
$ | 764,182 | $ | 969,906 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||
Policy benefit reserves—annuity products | |||||||||||||||||||||
Fixed index annuities—embedded derivatives | $ | 5,574,653 | $ | 4,406,163 | |||||||||||||||||
Other liabilities | |||||||||||||||||||||
2015 notes embedded conversion derivative (see Note 9) | 30,291 | 107,041 | |||||||||||||||||||
Interest rate swap | 2,644 | — | |||||||||||||||||||
$ | 5,607,588 | $ | 4,513,204 | ||||||||||||||||||
Schedule of Changes in Fair Value of Derivative Instruments | The changes in fair value of derivatives included in the consolidated statements of operations are as follows: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Change in fair value of derivatives: | |||||||||||||||||||||
Call options | $ | 521,947 | $ | 932,003 | $ | 228,610 | |||||||||||||||
2015 notes hedges | (8,934 | ) | 145,751 | (2,488 | ) | ||||||||||||||||
2015 warrants | — | (9,568 | ) | — | |||||||||||||||||
Interest rate swap | (4,863 | ) | 4,973 | (4,261 | ) | ||||||||||||||||
Interest rate caps | (3,325 | ) | 2,856 | (723 | ) | ||||||||||||||||
$ | 504,825 | $ | 1,076,015 | $ | 221,138 | ||||||||||||||||
Change in fair value of embedded derivatives: | |||||||||||||||||||||
Fixed index annuities—embedded derivatives | $ | 47,548 | $ | (8,006 | ) | $ | 289,387 | ||||||||||||||
2015 notes embedded conversion derivative (see Note 9) | (19,036 | ) | 141,974 | (2,488 | ) | ||||||||||||||||
2029 notes embedded conversion derivative (see Note 9) | 3,809 | — | — | ||||||||||||||||||
$ | 32,321 | $ | 133,968 | $ | 286,899 | ||||||||||||||||
Schedule of Call Options by Counterparty | The notional amount and fair value of our call options by counterparty and each counterparty's current credit rating are as follows: | ||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Counterparty | Credit Rating (S&P) | Credit Rating (Moody's) | Notional | Fair Value | Notional | Fair Value | |||||||||||||||
Amount | Amount | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Bank of America | A | A2 | $ | 2,114,812 | $ | 62,932 | $ | 1,683,911 | $ | 73,836 | |||||||||||
Barclays | A | A2 | 4,083,259 | 135,609 | 2,396,839 | 113,513 | |||||||||||||||
BNP Paribas | A+ | A1 | 1,321,136 | 42,644 | 1,382,661 | 38,849 | |||||||||||||||
Citibank, N.A. | A | A2 | 3,190,204 | 96,759 | 1,536,547 | 72,310 | |||||||||||||||
Credit Suisse | A | A1 | 2,354,811 | 75,381 | 4,060,352 | 193,304 | |||||||||||||||
Deutsche Bank | A | A3 | 2,682,960 | 64,028 | 747,587 | 41,074 | |||||||||||||||
HSBC | AA- | A1 | 38,599 | 1,767 | 200,011 | 10,518 | |||||||||||||||
J.P. Morgan | A+ | Aa3 | 401,804 | 13,488 | 786,429 | 36,863 | |||||||||||||||
Morgan Stanley | A- | Baa2 | 2,605,687 | 77,106 | 3,546,487 | 150,437 | |||||||||||||||
Royal Bank of Canada | AA- | Aa3 | 1,364,362 | 41,717 | 714,941 | 25,140 | |||||||||||||||
SunTrust | BBB+ | A3 | 248,622 | 5,405 | — | — | |||||||||||||||
Wells Fargo | AA- | Aa3 | 3,550,188 | 114,277 | 2,221,874 | 100,206 | |||||||||||||||
$ | 23,956,444 | $ | 731,113 | $ | 19,277,639 | $ | 856,050 | ||||||||||||||
Schedule of Interest Rate Derivatives | Details regarding the interest rate swap are as follows: | ||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Maturity Date | Notional | Receive Rate | Pay Rate | Counterparty | Fair Value | Fair Value | |||||||||||||||
Amount | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
15-Mar-21 | $ | 85,500 | LIBOR | 2.42% | SunTrust | $ | (2,644 | ) | $ | 712 | |||||||||||
Details regarding the interest rate caps are as follows: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Maturity Date | Notional Amount | Floating Rate | Cap Rate | Counterparty | Fair Value | Fair Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
7-Jul-21 | $ | 40,000 | LIBOR | 2.50% | SunTrust | $ | 1,398 | $ | 3,073 | ||||||||||||
8-Jul-21 | 12,000 | LIBOR | 2.50% | SunTrust | 420 | 923 | |||||||||||||||
29-Jul-21 | 27,000 | LIBOR | 2.50% | SunTrust | 960 | 2,107 | |||||||||||||||
$ | 79,000 | $ | 2,778 | $ | 6,103 | ||||||||||||||||
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Costs and Deferred Sales Inducements (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Deferred Policy Acquisition Costs and Deferred Sales Inducements [Abstract] | ||||||||||||
Deferred Policy Acquisition Costs | Policy acquisition costs deferred and amortized are as follows: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balance at beginning of year | $ | 2,426,652 | $ | 1,709,799 | $ | 1,683,857 | ||||||
Costs deferred during the year: | ||||||||||||
Commissions | 421,802 | 420,378 | 399,001 | |||||||||
Policy issue costs | 5,080 | 5,422 | 4,410 | |||||||||
Amortization | (163,578 | ) | (365,468 | ) | (164,919 | ) | ||||||
Effect of net unrealized gains/losses | (631,400 | ) | 656,521 | (212,550 | ) | |||||||
Balance at end of year | $ | 2,058,556 | $ | 2,426,652 | $ | 1,709,799 | ||||||
Deferred Sales Inducements | Sales inducements deferred and amortized are as follows: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balance at beginning of year | $ | 1,875,880 | $ | 1,292,341 | $ | 1,242,787 | ||||||
Costs deferred during the year | 330,079 | 337,787 | 306,659 | |||||||||
Amortization | (131,419 | ) | (253,113 | ) | (87,157 | ) | ||||||
Effect of net unrealized gains/losses | (487,283 | ) | 498,865 | (169,948 | ) | |||||||
Balance at end of year | $ | 1,587,257 | $ | 1,875,880 | $ | 1,292,341 | ||||||
Reinsurance_and_Policy_Provisi1
Reinsurance and Policy Provisions (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||
Amounts Ceded to EquiTrust and Athene, Impact on Consolidated Statements of Operations and Cash Flows | Amounts ceded to EquiTrust and Athene under these agreements are as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
Annuity product charges | $ | 5,956 | $ | 6,551 | $ | 6,796 | ||||||
Change in fair value of derivatives | 31,076 | 60,876 | 17,106 | |||||||||
$ | 37,032 | $ | 67,427 | $ | 23,902 | |||||||
Interest sensitive and index product benefits | $ | 122,666 | $ | 117,934 | $ | 94,113 | ||||||
Change in fair value of embedded derivatives | 35,820 | 2,898 | 9,373 | |||||||||
Other operating costs and expenses | 9,241 | 9,926 | 9,333 | |||||||||
$ | 167,727 | $ | 130,758 | $ | 112,819 | |||||||
Consolidated Statements of Cash Flows | ||||||||||||
Annuity deposits | $ | (171,124 | ) | $ | (182,616 | ) | $ | (203,552 | ) | |||
Cash payments to policyholders | 280,308 | 208,345 | 208,437 | |||||||||
$ | 109,184 | $ | 25,729 | $ | 4,885 | |||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of Income Tax Expense | Our income tax expense as presented in the consolidated financial statements is summarized as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Consolidated statements of operations: | ||||||||||||
Current income taxes | $ | 116,545 | $ | 133,036 | $ | 80,527 | ||||||
Deferred income taxes (benefits) | (46,504 | ) | 3,013 | (52,336 | ) | |||||||
Total income tax expense included in consolidated statements of operations | 70,041 | 136,049 | 28,191 | |||||||||
Stockholders' equity: | ||||||||||||
Expense (benefit) relating to: | ||||||||||||
Change in net unrealized investment losses | 363,572 | (344,944 | ) | 123,620 | ||||||||
Share-based compensation | (5,716 | ) | (4,043 | ) | (392 | ) | ||||||
Extinguishment of convertible debt | (9,284 | ) | (4,546 | ) | — | |||||||
Total income tax expense (benefit) included in consolidated financial statements | $ | 418,613 | $ | (217,484 | ) | $ | 151,419 | |||||
Effective Income Tax Rate Reconciliation | Income tax expense in the consolidated statements of operations differed from the amount computed at the applicable statutory federal income tax rate of 35% as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
Income before income taxes | $ | 196,064 | $ | 389,332 | $ | 85,989 | ||||||
Income tax expense on income before income taxes | $ | 68,622 | $ | 136,266 | $ | 30,096 | ||||||
Tax effect of: | ||||||||||||
Tax exempt net investment income | (3,669 | ) | (2,657 | ) | (1,876 | ) | ||||||
Extinguishment of convertible debt | 4,202 | 2,695 | — | |||||||||
Other | 886 | (255 | ) | (29 | ) | |||||||
Income tax expense | $ | 70,041 | $ | 136,049 | $ | 28,191 | ||||||
Effective tax rate | 35.7 | % | 34.9 | % | 32.8 | % | ||||||
Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2014 and 2013, are as follows: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
Deferred income tax assets: | ||||||||||||
Policy benefit reserves | $ | 2,052,968 | $ | 1,875,516 | ||||||||
Other than temporary impairments | 753 | 901 | ||||||||||
Investment income items | — | 2,121 | ||||||||||
Amounts due reinsurer | 680 | 7,366 | ||||||||||
Other policyholder funds | 7,765 | 9,200 | ||||||||||
Litigation settlement accrual | 7,100 | 7,420 | ||||||||||
Deferred compensation | 10,565 | 13,430 | ||||||||||
Convertible senior notes | 12,281 | 34,818 | ||||||||||
Net operating loss carryforwards | 17,694 | 24,179 | ||||||||||
Other | 11,685 | 8,835 | ||||||||||
Gross deferred tax assets | 2,121,491 | 1,983,786 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Deferred policy acquisition costs and deferred sales inducements | (1,637,607 | ) | (1,475,403 | ) | ||||||||
Net unrealized gains on available for sale fixed maturity and equity securities | (376,314 | ) | (12,742 | ) | ||||||||
Derivative instruments | (94,038 | ) | (193,067 | ) | ||||||||
Investment income items | (14,842 | ) | — | |||||||||
Other | (2,585 | ) | (718 | ) | ||||||||
Gross deferred tax liabilities | (2,125,386 | ) | (1,681,930 | ) | ||||||||
Net deferred income tax (liability) asset | $ | (3,895 | ) | $ | 301,856 | |||||||
Notes_Payable_and_Amounts_Due_1
Notes Payable and Amounts Due Under Repurchase Agreements (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Notes Payable [Abstract] | ||||||||||||
Liability and Equity Components of Convertible Senior Notes | The convertible senior notes included in notes payable are accounted for separately as a liability component and an equity component in the consolidated balance sheets. The liability component and equity component are as follows: | |||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
September | September | December | ||||||||||
2015 Notes | 2015 Notes | 2029 Notes | ||||||||||
(Dollars in thousands) | ||||||||||||
Notes payable: | ||||||||||||
Principal amount of liability component | $ | 22,377 | $ | 91,951 | $ | 68,373 | ||||||
Unamortized discount | (698 | ) | (6,623 | ) | (3,743 | ) | ||||||
Net carrying amount of liability component | $ | 21,679 | $ | 85,328 | $ | 64,630 | ||||||
Additional paid-in capital: | ||||||||||||
Carrying amount of equity component | $ | 15,586 | ||||||||||
Amount by which the if-converted value exceeds principal | $ | 30,497 | $ | 104,403 | $ | 113,169 | ||||||
Subordinated_Debentures_Tables
Subordinated Debentures (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Subordinated Borrowings [Abstract] | |||||||||||||
Summary of Subordinated Debt Obligations to the Trusts | Following is a summary of subordinated debt obligations to the trusts at December 31, 2014 and 2013: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | Interest Rate | Due Date | ||||||||||
(Dollars in thousands) | |||||||||||||
American Equity Capital Trust II | $ | 76,633 | $ | 76,440 | 5% | June 1, 2047 | |||||||
American Equity Capital Trust III | 27,840 | 27,840 | *LIBOR + | 3.90% | April 29, 2034 | ||||||||
American Equity Capital Trust IV | 12,372 | 12,372 | *LIBOR + | 4.00% | January 8, 2034 | ||||||||
American Equity Capital Trust VII | 10,830 | 10,830 | *LIBOR + | 3.75% | December 14, 2034 | ||||||||
American Equity Capital Trust VIII | 20,620 | 20,620 | *LIBOR + | 3.75% | December 15, 2034 | ||||||||
American Equity Capital Trust IX | 15,470 | 15,470 | *LIBOR + | 3.65% | June 15, 2035 | ||||||||
American Equity Capital Trust X | 20,620 | 20,620 | *LIBOR + | 3.65% | September 15, 2035 | ||||||||
American Equity Capital Trust XI | 20,620 | 20,620 | *LIBOR + | 3.65% | December 15, 2035 | ||||||||
American Equity Capital Trust XII | 41,238 | 41,238 | *LIBOR + | 3.50% | April 7, 2036 | ||||||||
$ | 246,243 | $ | 246,050 | ||||||||||
*—three month London Interbank Offered Rate |
Retirement_and_Sharebased_Comp1
Retirement and Share-based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Share-based Compensation Expense By Plan | The following table summarizes compensation expense recognized for employees, directors and consultants as a result of share-based compensation: | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
ESOP | $ | 2,486 | $ | 3,464 | $ | 1,112 | |||||||||||||
2009 Employee Incentive Plan | 1,306 | 1,294 | 1,558 | ||||||||||||||||
2013 Director Equity and Incentive Plan | 603 | 380 | — | ||||||||||||||||
2011 Director Stock Option Plan | 186 | 304 | 912 | ||||||||||||||||
$ | 4,581 | $ | 5,442 | $ | 3,582 | ||||||||||||||
Valuation Assumptions of Stock Options Granted | The fair value for each stock option granted to officers, directors and employees during the year ended December 31, 2012 was estimated at the date of grant using a Black-Scholes option valuation model with the following assumptions: | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2012 | |||||||||||||||||||
Directors and Retirement Eligible Employees | Non-Retirement Eligible Employees | ||||||||||||||||||
Average risk-free interest rate | 0.76 | % | 1.36 | % | |||||||||||||||
Dividend yield | 1.1 | % | 1.3 | % | |||||||||||||||
Average expected life (years) | 5 | 8 | |||||||||||||||||
Volatility | 62.5 | % | 50.9 | % | |||||||||||||||
The fair value for each stock option granted to agents during the years ended December 31, 2013 and 2012 was estimated using a Black-Scholes option valuation model until the grant date, at which time the options are included as permanent equity, with the following assumptions: | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
Average risk-free interest rate | 1.21 | % | 0.51 | % | |||||||||||||||
Dividend yield | 0.7 | % | 1.2 | % | |||||||||||||||
Average expected life (years) | 3.75 | 3.75 | |||||||||||||||||
Volatility | 31.2 | % | 41.1 | % | |||||||||||||||
Schedule of Stock Options Outstanding | Changes in the number of stock options outstanding during the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||||
Number of | Weighted-Average | Total | |||||||||||||||||
Shares | Exercise Price | Exercise | |||||||||||||||||
per Share | Price | ||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Outstanding at January 1, 2012 | 4,844,850 | $ | 10.13 | $ | 49,097 | ||||||||||||||
Granted | 1,558,900 | 10.4 | 16,216 | ||||||||||||||||
Canceled | (28,050 | ) | 8.97 | (251 | ) | ||||||||||||||
Exercised | (643,250 | ) | 8.93 | (5,741 | ) | ||||||||||||||
Outstanding at December 31, 2012 | 5,732,450 | 10.35 | 59,321 | ||||||||||||||||
Granted | 1,210,950 | 13.13 | 15,899 | ||||||||||||||||
Canceled | (29,400 | ) | 9.96 | (293 | ) | ||||||||||||||
Exercised | (2,937,275 | ) | 10.81 | (31,756 | ) | ||||||||||||||
Outstanding at December 31, 2013 | 3,976,725 | 10.86 | 43,171 | ||||||||||||||||
Granted | 1,277,650 | 24.79 | 31,673 | ||||||||||||||||
Canceled | (35,400 | ) | 11.64 | (412 | ) | ||||||||||||||
Exercised | (1,174,800 | ) | 11.64 | (13,672 | ) | ||||||||||||||
Outstanding at December 31, 2014 | 4,044,175 | 15.02 | $ | 60,760 | |||||||||||||||
Schedule of Stock Options Outstanding, By Exercise Price Range | The following table summarizes information about stock options outstanding at December 31, 2014: | ||||||||||||||||||
Stock Options Outstanding | Stock Options Vested | ||||||||||||||||||
Range of Exercise Prices | Number of | Remaining | Weighted-Average | Number of | Remaining | Weighted-Average | |||||||||||||
Awards | Life (yrs) | Exercise Price | Awards | Life (yrs) | Exercise Price | ||||||||||||||
Per Share | Per Share | ||||||||||||||||||
$5.07 - $8.02 | 506,000 | 2.73 | $ | 7.39 | 506,000 | 2.73 | $ | 7.39 | |||||||||||
$9.27 - $11.35 | 1,220,550 | 3.94 | 10.23 | 1,136,550 | 3.69 | 10.21 | |||||||||||||
$11.87 - $24.79 | 2,317,625 | 5.23 | 19.22 | 2,297,625 | 5.18 | 19.22 | |||||||||||||
$5.07 - $24.79 | 4,044,175 | 4.53 | 15.02 | 3,940,175 | 4.43 | 15.1 | |||||||||||||
Statutory_Financial_Informatio1
Statutory Financial Information and Dividend Restrictions (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Statutory Financial Information and Dividend Restrictions [Abstract] | ||||||||||||
Statutory Accounting Practices Disclosure | Calculations using the NAIC formula indicated that American Equity Life's ratio of total adjusted capital to the highest level of required capital at which regulatory action might be initiated (Company Action Level) is as follows: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
Total adjusted capital | $ | 2,327,335 | $ | 1,995,658 | ||||||||
Company Action Level RBC | 625,373 | 580,085 | ||||||||||
Ratio of adjusted capital to Company Action Level RBC | 372 | % | 344 | % | ||||||||
Net income for our primary life insurance subsidiary as determined in accordance with statutory accounting practices was as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands) | ||||||||||||
American Equity Life | $ | 340,000 | $ | 205,202 | $ | 82,039 | ||||||
Statutory capital and surplus for our primary life insurance subsidiary was as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(Dollars in thousands) | ||||||||||||
American Equity Life | $ | 2,172,455 | $ | 1,870,728 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following represents payments due by period for operating lease obligations as of December 31, 2014 (dollars in thousands): | |||
Year Ending December 31: | ||||
2015 | $ | 2,323 | ||
2016 | 1,718 | |||
2017 | 1,473 | |||
2018 | 1,398 | |||
2019 | 1,377 | |||
2020 and thereafter | 10,102 | |||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of earnings per common share and earnings per common share—assuming dilution: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Numerator: | ||||||||||||
Net income—numerator for earnings per common share | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
Interest on convertible subordinated debentures (net of income tax benefit) | — | — | 517 | |||||||||
Numerator for earnings per common share—assuming dilution | $ | 126,023 | $ | 253,283 | $ | 58,315 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding (1) | 74,431,087 | 65,543,895 | 61,258,825 | |||||||||
Effect of dilutive securities: | ||||||||||||
Convertible subordinated debentures | — | — | 1,348,447 | |||||||||
Convertible senior notes | 2,657,158 | 7,088,149 | 2,515,067 | |||||||||
2015 warrants | 1,559,646 | 1,184,549 | — | |||||||||
Stock options and deferred compensation agreements | 1,178,783 | 1,224,053 | 553,312 | |||||||||
Restricted stock and restricted stock units | 66,926 | — | — | |||||||||
Denominator for earnings per common share—assuming dilution | 79,893,600 | 75,040,646 | 65,675,651 | |||||||||
Earnings per common share | $ | 1.69 | $ | 3.86 | $ | 0.94 | ||||||
Earnings per common share—assuming dilution | $ | 1.58 | $ | 3.38 | $ | 0.89 | ||||||
-1 | Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP. | |||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Options to purchase shares of our common stock that were outstanding during the respective periods indicated but were not included in the computation of diluted earnings per share because the options' exercise price was greater than the average market price of the common shares are as follows: | |||||||||||
Period | Number of | Range of | ||||||||||
Shares | Exercise Prices | |||||||||||
Minimum | Maximum | |||||||||||
Year ended December 31, 2014 | 1,215,450 | $24.79 | $24.79 | |||||||||
Year ended December 31, 2013 | — | — | — | |||||||||
Year ended December 31, 2012 | 1,522,100 | $11.35 | $14.34 |
Quarterly_Financial_Informatio1
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Schedule of Quarterly Financial Information | Unaudited quarterly results of operations are summarized below. | |||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
2014 | ||||||||||||||||
Premiums and product charges | $ | 32,603 | $ | 38,370 | $ | 38,001 | $ | 42,639 | ||||||||
Net investment income | 370,005 | 370,882 | 386,931 | 403,849 | ||||||||||||
Change in fair value of derivatives | 48,493 | 270,883 | 39,218 | 146,231 | ||||||||||||
Net realized gains (losses) on investments, excluding OTTI losses | (714 | ) | (2,230 | ) | (3,190 | ) | 2,131 | |||||||||
Net OTTI losses recognized in operations | (905 | ) | (594 | ) | (564 | ) | (564 | ) | ||||||||
Loss on extinguishment of debt | (3,977 | ) | (6,574 | ) | — | (1,951 | ) | |||||||||
Total revenues | 445,505 | 670,737 | 460,396 | 592,335 | ||||||||||||
Net income (loss) | (9,753 | ) | 36,744 | 67,815 | 31,217 | |||||||||||
Earnings (loss) per common share | (0.13 | ) | 0.49 | 0.9 | 0.41 | |||||||||||
Earnings (loss) per common share—assuming dilution | (0.13 | ) | 0.46 | 0.85 | 0.39 | |||||||||||
2013 | ||||||||||||||||
Premiums and product charges | $ | 34,565 | $ | 35,062 | $ | 36,325 | $ | 42,986 | ||||||||
Net investment income | 329,690 | 336,143 | 354,147 | 363,947 | ||||||||||||
Change in fair value of derivatives | 373,962 | 64,040 | 193,028 | 444,985 | ||||||||||||
Net realized gains (losses) on investments, excluding OTTI losses | 10,585 | 15,689 | (2,077 | ) | 16,364 | |||||||||||
Net OTTI losses recognized in operations | (3,237 | ) | (2,775 | ) | (222 | ) | — | |||||||||
Loss on extinguishment of debt | — | (589 | ) | (938 | ) | (30,988 | ) | |||||||||
Total revenues | 745,565 | 447,570 | 580,263 | 837,294 | ||||||||||||
Net income | 26,031 | 120,113 | 56,181 | 50,958 | ||||||||||||
Earnings per common share | 0.41 | 1.87 | 0.86 | 0.73 | ||||||||||||
Earnings per common share—assuming dilution | 0.38 | 1.71 | 0.75 | 0.64 | ||||||||||||
Comparability of Net Income, Impact of Fair Value Accounting to Fixed Index Annuity Business | The differences between the change in fair value of derivatives for each quarter primarily correspond to the performance of the indices upon which our call options are based. The comparability of net income (loss) is impacted by the application of fair value accounting to our fixed index annuity business is as follows: | |||||||||||||||
Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
2014 | $ | 42,297 | $ | (2,232 | ) | $ | (5,017 | ) | $ | 15,862 | ||||||
2013 | 10,973 | (80,658 | ) | (5,601 | ) | (23,418 | ) | |||||||||
Schedule_I_Summary_of_Investme1
Schedule I - Summary of Investments - Other Than Investments in Related Parties (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||||||||||||
Summary of Investments - Other Than Investments in Related Parties | Schedule I—Summary of Investments— | ||||||||||||
Other Than Investments in Related Parties | |||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | |||||||||||||
31-Dec-14 | |||||||||||||
Column A | Column B | Column C | Column D | ||||||||||
Type of Investment | Amortized | Fair | Amount at | ||||||||||
Cost (1) | Value | which shown | |||||||||||
in the balance | |||||||||||||
sheet | |||||||||||||
(Dollars in thousands) | |||||||||||||
Fixed maturity securities: | |||||||||||||
Available for sale: | |||||||||||||
United States Government full faith and credit | $ | 137,710 | $ | 138,460 | $ | 138,460 | |||||||
United States Government sponsored agencies | 1,364,424 | 1,393,890 | 1,393,890 | ||||||||||
United States municipalities, states and territories | 3,293,551 | 3,723,309 | 3,723,309 | ||||||||||
Foreign government obligations | 181,128 | 193,803 | 193,803 | ||||||||||
Corporate securities | 19,984,747 | 21,490,292 | 21,490,292 | ||||||||||
Residential mortgage backed securities | 1,616,846 | 1,751,345 | 1,751,345 | ||||||||||
Commercial mortgage backed securities | 2,720,294 | 2,807,620 | 2,807,620 | ||||||||||
Other asset backed securities | 906,346 | 946,483 | 946,483 | ||||||||||
30,205,046 | 32,445,202 | 32,445,202 | |||||||||||
Held for investment: | |||||||||||||
Corporate security | 76,432 | 75,838 | 76,432 | ||||||||||
Total fixed maturity securities | 30,281,478 | 32,521,040 | 32,521,634 | ||||||||||
Equity securities, available for sale: | |||||||||||||
Common stocks | 7,509 | 7,805 | 7,805 | ||||||||||
Total equity securities | 7,509 | 7,805 | 7,805 | ||||||||||
Mortgage loans on real estate | 2,434,580 | 2,493,901 | 2,434,580 | ||||||||||
Derivative instruments | 259,413 | 731,113 | 731,113 | ||||||||||
Other investments | 286,726 | 286,726 | |||||||||||
Total investments | $ | 33,269,706 | $ | 35,981,858 | |||||||||
-1 | On the basis of cost adjusted for other than temporary impairments, repayments and amortization of premiums and accrual of discounts for fixed maturity securities and short-term investments, original cost for derivative instruments and unpaid principal balance less allowance for credit losses for mortgage loans. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_II_Condensed_Financia1
Schedule II - Condensed Financial Information of Registrant (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Condensed Balance Sheets | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 61,139 | $ | 252,541 | ||||||||
Equity securities of subsidiary trusts | 7,409 | 7,403 | ||||||||||
Receivable from subsidiaries | 221 | 1,158 | ||||||||||
Deferred income taxes | 20,612 | 15,734 | ||||||||||
Federal income tax recoverable, including amount from subsidiaries | 10,430 | 11,551 | ||||||||||
Other assets, including 2015 notes hedges | 47,308 | 131,424 | ||||||||||
147,119 | 419,811 | |||||||||||
Investment in and advances to subsidiaries | 2,708,085 | 1,889,648 | ||||||||||
Total assets | $ | 2,855,204 | $ | 2,309,459 | ||||||||
Liabilities and Stockholders' Equity | ||||||||||||
Liabilities: | ||||||||||||
Notes payable | $ | 421,679 | $ | 549,958 | ||||||||
Subordinated debentures payable to subsidiary trusts | 246,243 | 246,050 | ||||||||||
Other liabilities, including 2015 notes embedded derivative | 47,406 | 128,764 | ||||||||||
Total liabilities | 715,328 | 924,772 | ||||||||||
Stockholders' equity: | ||||||||||||
Common stock | 76,062 | 70,535 | ||||||||||
Additional paid-in capital | 513,218 | 550,400 | ||||||||||
Unallocated common stock held by ESOP | — | (631 | ) | |||||||||
Accumulated other comprehensive income | 721,401 | 46,196 | ||||||||||
Retained earnings | 829,195 | 718,187 | ||||||||||
Total stockholders' equity | 2,139,876 | 1,384,687 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,855,204 | $ | 2,309,459 | ||||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||
Condensed Statements of Operations | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenues: | ||||||||||||
Net investment income | $ | 130 | $ | 130 | $ | 565 | ||||||
Dividends from subsidiary trusts | 360 | 361 | 403 | |||||||||
Investment advisory fees | 58,044 | 44,469 | 36,178 | |||||||||
Surplus note interest from subsidiary | 4,080 | 4,080 | 4,080 | |||||||||
Change in fair value of derivatives | (17,122 | ) | 144,012 | (7,472 | ) | |||||||
Loss on extinguishment of debt | (12,502 | ) | (32,515 | ) | — | |||||||
Total revenues | 32,990 | 160,537 | 33,754 | |||||||||
Expenses: | ||||||||||||
Change in fair value of embedded derivatives | (15,227 | ) | 141,974 | (2,488 | ) | |||||||
Interest expense on notes payable | 36,370 | 38,870 | 28,479 | |||||||||
Interest expense on subordinated debentures issued to subsidiary trusts | 12,122 | 12,088 | 13,458 | |||||||||
Other operating costs and expenses | 7,928 | 8,163 | 8,228 | |||||||||
Total expenses | 41,193 | 201,095 | 47,677 | |||||||||
Loss before income taxes and equity in undistributed income of subsidiaries | (8,203 | ) | (40,558 | ) | (13,923 | ) | ||||||
Income tax expense (benefit) | 664 | (13,880 | ) | (5,944 | ) | |||||||
Loss before equity in undistributed income of subsidiaries | (8,867 | ) | (26,678 | ) | (7,979 | ) | ||||||
Equity in undistributed income of subsidiaries | 134,890 | 279,961 | 65,777 | |||||||||
Net income | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||
Condensed Statements of Cash Flows | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Operating activities | ||||||||||||
Net income | $ | 126,023 | $ | 253,283 | $ | 57,798 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Change in fair value of 2015 notes embedded conversion derivative | (15,227 | ) | 141,974 | (2,488 | ) | |||||||
Provision for depreciation and amortization | 2,081 | 2,831 | 2,382 | |||||||||
Accrual of discount on equity security | (6 | ) | (5 | ) | (5 | ) | ||||||
Equity in undistributed income of subsidiaries | (134,890 | ) | (279,961 | ) | (65,777 | ) | ||||||
Accrual of discount on contingent convertible notes | 4,417 | 12,417 | 12,261 | |||||||||
Change in fair value of derivatives | 15,619 | (144,012 | ) | 7,472 | ||||||||
Loss on extinguishment of debt | 12,502 | 32,515 | — | |||||||||
Accrual of discount on debenture issued to subsidiary trust | 193 | 181 | 169 | |||||||||
Share-based compensation | 1,141 | 1,407 | 1,348 | |||||||||
ESOP compensation | 82 | 110 | 45 | |||||||||
Deferred income taxes (benefits) | 6,439 | (5,202 | ) | (2,838 | ) | |||||||
Other | (2,235 | ) | (3,608 | ) | — | |||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivable from subsidiaries | 2,208 | 995 | 1,205 | |||||||||
Federal income tax recoverable | 1,121 | 62 | (2,745 | ) | ||||||||
Other assets | 378 | (1,945 | ) | (549 | ) | |||||||
Other liabilities | (7,256 | ) | 20,131 | (4,528 | ) | |||||||
Net cash provided by operating activities | 12,590 | 31,173 | 3,750 | |||||||||
Investing activities | ||||||||||||
Net cash used in investing activities | — | — | — | |||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Financing activities | ||||||||||||
Financing fees incurred and deferred | $ | (100 | ) | $ | (11,942 | ) | $ | — | ||||
Proceeds from notes payable | — | 415,000 | — | |||||||||
Repayments of notes payable | (219,094 | ) | (234,154 | ) | — | |||||||
Net proceeds from settlement of notes hedge and warrants | 16,558 | 22,170 | — | |||||||||
Repayment of subordinated debentures | — | — | (1,141 | ) | ||||||||
Excess tax benefits realized from share-based compensation plans | 184 | 159 | 6 | |||||||||
Proceeds from issuance of common stock | 13,681 | 31,764 | 5,370 | |||||||||
Dividends paid | (15,221 | ) | (12,849 | ) | (9,374 | ) | ||||||
Net cash provided by (used in) financing activities | (203,992 | ) | 210,148 | (5,139 | ) | |||||||
Increase (decrease) in cash and cash equivalents | (191,402 | ) | 241,321 | (1,389 | ) | |||||||
Cash and cash equivalents at beginning of year | 252,541 | 11,220 | 12,609 | |||||||||
Cash and cash equivalents at end of year | $ | 61,139 | $ | 252,541 | $ | 11,220 | ||||||
Supplemental disclosures of cash flow information | ||||||||||||
Cash paid during the year for: | ||||||||||||
Interest on notes payable | $ | 31,206 | $ | 13,758 | $ | 14,564 | ||||||
Interest on subordinated debentures | 11,765 | 11,850 | 13,102 | |||||||||
Non-cash financing activity: | ||||||||||||
Conversion of subordinated debentures | — | — | 20,770 | |||||||||
Common stock issued in extinguishment of debt | 95,993 | 117,463 | — | |||||||||
See accompanying note to condensed financial statements. | ||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_III_Supplementary_Ins1
Schedule III - Supplementary Insurance Information (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Supplementary Insurance Information [Abstract] | |||||||||||||||||||||
Supplemental Insurance Information | Schedule III—Supplementary Insurance Information | ||||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||
Deferred policy | Future policy | Unearned | Other policy | ||||||||||||||||||
acquisition | benefits, | premiums | claims and | ||||||||||||||||||
costs | losses, claims | benefits | |||||||||||||||||||
and loss | payable | ||||||||||||||||||||
expenses | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
As of December 31, 2014: | $ | 2,058,556 | $ | 39,802,861 | $ | — | $ | 365,819 | |||||||||||||
Life insurance | |||||||||||||||||||||
As of December 31, 2013: | $ | 2,426,652 | $ | 35,789,655 | $ | — | $ | 418,033 | |||||||||||||
Life insurance | |||||||||||||||||||||
As of December 31, 2012: | $ | 1,709,799 | $ | 31,773,988 | $ | — | $ | 455,752 | |||||||||||||
Life insurance | |||||||||||||||||||||
Column A | Column F | Column G | Column H | Column I | Column J | ||||||||||||||||
Premium | Net | Benefits, | Amortization | Other | |||||||||||||||||
revenue | investment | claims, | of deferred | operating | |||||||||||||||||
income | losses and | policy | expenses | ||||||||||||||||||
settlement | acquisition | ||||||||||||||||||||
expenses | costs | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
For the year ended December 31, 2014: | $ | 151,613 | $ | 1,531,667 | $ | 1,679,255 | $ | 163,578 | $ | 130,076 | |||||||||||
Life insurance | |||||||||||||||||||||
For the year ended December 31, 2013: | $ | 148,938 | $ | 1,383,927 | $ | 1,713,019 | $ | 365,468 | $ | 142,873 | |||||||||||
Life insurance | |||||||||||||||||||||
For the year ended December 31, 2012: | $ | 165,681 | $ | 1,286,923 | $ | 1,264,016 | $ | 164,919 | $ | 137,432 | |||||||||||
Life insurance | |||||||||||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_IV_Reinsurance_Tables
Schedule IV - Reinsurance (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | ||||||||||||||||||||
Supplemental Schedule of Reinsurance | Schedule IV—Reinsurance | |||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | ||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | |||||||||||||||
Gross amount | Ceded to | Assumed | Net amount | Percent of | ||||||||||||||||
other | from | amount | ||||||||||||||||||
companies | other | assumed | ||||||||||||||||||
companies | to net | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,171,426 | $ | 11,548 | $ | 56,509 | $ | 2,216,387 | 2.55 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 124,946 | $ | 5,956 | $ | — | $ | 118,990 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 32,308 | 336 | 651 | 32,623 | 2 | % | ||||||||||||||
$ | 157,254 | $ | 6,292 | $ | 651 | $ | 151,613 | 0.43 | % | |||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,250,112 | $ | 13,521 | $ | 57,976 | $ | 2,294,567 | 2.53 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 110,142 | $ | 6,551 | $ | — | $ | 103,591 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 45,057 | 328 | 618 | 45,347 | 1.36 | % | ||||||||||||||
$ | 155,199 | $ | 6,879 | $ | 618 | $ | 148,938 | 0.41 | % | |||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||
Life insurance in force, at end of year | $ | 2,350,473 | $ | 4,742 | $ | 61,488 | $ | 2,407,219 | 2.55 | % | ||||||||||
Insurance premiums and other considerations: | ||||||||||||||||||||
Annuity product charges | $ | 95,802 | $ | 6,796 | $ | — | $ | 89,006 | — | |||||||||||
Traditional life, accident and health insurance, and life contingent immediate annuity premiums | 76,323 | 364 | 716 | 76,675 | 0.93 | % | ||||||||||||||
$ | 172,125 | $ | 7,160 | $ | 716 | $ | 165,681 | 0.43 | % | |||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule_V_Valuation_and_Quali1
Schedule V - Valuation and Qualifying Accounts (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||
Valuation and Qualifying Accounts | Schedule V—Valuation and Qualifying Accounts | |||||||||||||||||||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY | ||||||||||||||||||||
Balance | Charged to Costs | Translation | Write-offs/ | Balance | ||||||||||||||||
January 1, | and Expenses | Adjustment | Payments/Other | December 31, | ||||||||||||||||
(Dollars in thousands | ||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (26,047 | ) | $ | (6,052 | ) | $ | — | $ | 9,466 | $ | (22,633 | ) | |||||||
Year ended December 31, 2013 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (34,234 | ) | $ | (5,621 | ) | $ | — | $ | 13,808 | $ | (26,047 | ) | |||||||
Year ended December 31, 2012 | ||||||||||||||||||||
Valuation allowance on mortgage loans | $ | (32,964 | ) | $ | (16,832 | ) | $ | — | $ | 15,562 | $ | (34,234 | ) | |||||||
See accompanying Report of Independent Registered Public Accounting Firm. |
Significant_Accounting_Policie3
Significant Accounting Policies (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
NMOs | NMOs | NMOs | |
states | |||
Accounting Policies [Abstract] | |||
Number of states in which entity is licensed to sell insurance products | 50 | ||
Number of days past due, non-accrual status | 90 days | ||
Provision for annual experience refunds of premiums | $1.70 | $1.10 | $1.10 |
Statement [Line Items] | |||
National marketing organizations, number of organizations accounting for more than 10% of annuity deposits and insurance premium collections | 2 | 1 | 3 |
Minimum [Member] | |||
Statement [Line Items] | |||
Interest crediting rate, range for fixed index annuities | 1.20% | 1.20% | 1.20% |
Reserve interest assumptions, range | 3.00% | ||
Maximum [Member] | |||
Statement [Line Items] | |||
Interest crediting rate, range for fixed index annuities | 4.50% | 4.50% | 4.50% |
Reserve interest assumptions, range | 5.50% | ||
Cash and Cash Equivalents [Member] | |||
Statement [Line Items] | |||
Investment maturity period (less than) | 3 months | ||
Repurchase Agreements [Member] | |||
Statement [Line Items] | |||
Investment maturity period (less than) | 42 days | ||
National Marketing Organization, Greater than 10%, NMO 1 [Member] | |||
Statement [Line Items] | |||
National marketing organizations, percent of annuity deposits and insurance premiums collected individually | 10.00% | 11.00% | 12.00% |
National Marketing Organization, Greater than 10%, NMO 2 [Member] | |||
Statement [Line Items] | |||
National marketing organizations, percent of annuity deposits and insurance premiums collected individually | 10.00% | 11.00% | |
National Marketing Organization, Greater than 10%, NMO 3 [Member] | |||
Statement [Line Items] | |||
National marketing organizations, percent of annuity deposits and insurance premiums collected individually | 10.00% |
Significant_Accounting_Policie4
Significant Accounting Policies (Premiums and Annuity Deposits, By Product Type) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Product Information [Line Items] | |||
Fixed index annuities | $3,911,109 | $3,864,990 | $3,430,436 |
Annual reset fixed rate annuities | 56,647 | 71,162 | 98,190 |
Multi-year fixed rate annuities | 21,125 | 41,578 | 49,915 |
Single premium immediate annuities (SPIA) | 24,580 | 52,142 | 164,657 |
Life insurance | 10,810 | 10,556 | 12,877 |
Premiums and annuity deposits, net of coinsurance | $4,024,271 | $4,040,428 | $3,756,075 |
Fair_Values_of_Financial_Instr2
Fair Values of Financial Instruments (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Level 1 to Level 2 transfers, amount | $0 | $0 |
Liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 |
Assets, Level 2 to Level 1 transfers, amount | 0 | 0 |
Liabilities, Level 2 to Level 1 transfers, amount | 0 | 0 |
Assets, transfers into Level 3, amount | 0 | 0 |
Liabilities, transfers into Level 3, amount | 0 | 0 |
Assets, transfers out of Level 3, amount | 0 | 0 |
Liabilities, transfers out of Level 3, amount | 0 | 0 |
Other investments | 286,726,000 | 215,042,000 |
Fair Value, Sensitivity, Increase in Discount Rate by 10 Percent [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, sensitivity, discount rate adjustment (basis points) | 100 | |
Fixed index annuities embedded derivative, adjustment due to change in discount rate | -377,000,000 | |
Deferred policy acquisition costs and deferred sales inducements, combined balance, adjustment due to change in discount rate | -225,000,000 | |
Fair Value, Sensitivity, Decrease in Discount Rate by 10 Percent [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, sensitivity, discount rate adjustment (basis points) | 100 | |
Fixed index annuities embedded derivative, adjustment due to change in discount rate | 421,900,000 | |
Deferred policy acquisition costs and deferred sales inducements, combined balance, adjustment due to change in discount rate | 244,200,000 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other investments | $0 |
Fair_Values_of_Financial_Instr3
Fair Values of Financial Instruments (Carrying Amounts and Fair Values of Financial Instruments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Held for investment, fair value | $75,838 | $60,840 |
Other investments | 286,726 | 215,042 |
Coinsurance deposits | 3,044,342 | 2,999,618 |
Liabilities | ||
Policy benefit reserves | 39,802,861 | 35,789,655 |
Carrying Amount [Member] | ||
Assets | ||
Mortgage loans on real estate | 2,434,580 | 2,581,082 |
Derivative assets | 731,113 | 856,050 |
Other investments | 266,488 | 192,198 |
Cash and cash equivalents | 701,514 | 897,529 |
Coinsurance deposits | 3,044,342 | 2,999,618 |
2015 notes hedges | 30,291 | 107,041 |
Counterparty collateral | 206,096 | 315,824 |
Liabilities | ||
Policy benefit reserves | 39,463,987 | 35,453,166 |
Single premium immediate annuity (SPIA) benefit reserves | 365,440 | 417,625 |
Notes payable | 421,679 | 549,958 |
Subordinated debentures | 246,243 | 246,050 |
2015 notes embedded conversion derivative | 30,291 | 107,041 |
Carrying Amount [Member] | Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 2,778 | 6,103 |
Carrying Amount [Member] | Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | 712 |
Liabilities | ||
Interest rate derivative liabilities | 2,644 | 0 |
Carrying Amount [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 32,445,202 | 26,610,447 |
Held for investment, fair value | 76,432 | 76,255 |
Carrying Amount [Member] | Equity Securities [Member] | ||
Assets | ||
Available for sale securities | 7,805 | 7,778 |
Fair Value [Member] | ||
Assets | ||
Mortgage loans on real estate | 2,493,901 | 2,615,410 |
Derivative assets | 731,113 | 856,050 |
Other investments | 273,004 | 193,343 |
Cash and cash equivalents | 701,514 | 897,529 |
Coinsurance deposits | 2,698,552 | 2,669,432 |
2015 notes hedges | 30,291 | 107,041 |
Counterparty collateral | 206,096 | 315,824 |
Liabilities | ||
Policy benefit reserves | 33,078,978 | 29,670,827 |
Single premium immediate annuity (SPIA) benefit reserves | 377,654 | 430,835 |
Notes payable | 503,349 | 699,435 |
Subordinated debentures | 244,437 | 234,959 |
2015 notes embedded conversion derivative | 30,291 | 107,041 |
Fair Value [Member] | Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 2,778 | 6,103 |
Fair Value [Member] | Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | 712 |
Liabilities | ||
Interest rate derivative liabilities | 2,644 | 0 |
Fair Value [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 32,445,202 | 26,610,447 |
Held for investment, fair value | 75,838 | 60,840 |
Fair Value [Member] | Equity Securities [Member] | ||
Assets | ||
Available for sale securities | $7,805 | $7,778 |
Fair_Values_of_Financial_Instr4
Fair Values of Financial Instruments (Assets and Liabilities Measured on a Recurring Basis by Fair Value Hierarchy) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Derivative assets | $731,113 | $856,050 |
Cash and cash equivalents | 701,514 | 897,529 |
2015 notes hedges | 30,291 | 107,041 |
Counterparty collateral | 206,096 | 315,824 |
Assets | 34,124,799 | 28,801,484 |
Liabilities | ||
2015 notes embedded conversion derivative | 30,291 | 107,041 |
Fixed index annuities - embedded derivatives | 5,574,653 | 4,406,163 |
Liabilities | 5,607,588 | 4,513,204 |
Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 2,778 | 6,103 |
Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 712 | |
Liabilities | ||
Interest rate derivative liabilities | 2,644 | |
Equity Securities [Member] | ||
Assets | ||
Available for sale securities | 7,805 | 7,778 |
United States Government Full Faith and Credit [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 138,460 | 42,925 |
United States Government Sponsored Agencies [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 1,393,890 | 1,194,289 |
United States Municipalities, States and Territories [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 3,723,309 | 3,306,743 |
Foreign Government Obligations [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 193,803 | 91,557 |
Corporate Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 21,490,292 | 17,233,037 |
Residential Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 1,751,345 | 1,971,960 |
Commercial Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 2,807,620 | 1,735,460 |
Other Asset Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 946,483 | 1,034,476 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Assets | ||
Derivative assets | 0 | 0 |
Cash and cash equivalents | 701,514 | 897,529 |
2015 notes hedges | 0 | 0 |
Counterparty collateral | 0 | 0 |
Assets | 705,780 | 902,713 |
Liabilities | ||
2015 notes embedded conversion derivative | 0 | 0 |
Fixed index annuities - embedded derivatives | 0 | 0 |
Liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | |
Liabilities | ||
Interest rate derivative liabilities | 0 | |
Quoted Prices in Active Markets (Level 1) [Member] | Equity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | United States Government Full Faith and Credit [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 4,255 | 4,805 |
Quoted Prices in Active Markets (Level 1) [Member] | United States Government Sponsored Agencies [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | United States Municipalities, States and Territories [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Foreign Government Obligations [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Corporate Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 11 | 20 |
Quoted Prices in Active Markets (Level 1) [Member] | Residential Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Commercial Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) [Member] | Other Asset Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 359 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Derivative assets | 731,113 | 856,050 |
Cash and cash equivalents | 0 | 0 |
2015 notes hedges | 30,291 | 107,041 |
Counterparty collateral | 206,096 | 315,824 |
Assets | 33,418,644 | 27,897,395 |
Liabilities | ||
2015 notes embedded conversion derivative | 30,291 | 107,041 |
Fixed index annuities - embedded derivatives | 0 | 0 |
Liabilities | 32,935 | 107,041 |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 2,778 | 6,103 |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 712 | |
Liabilities | ||
Interest rate derivative liabilities | 2,644 | |
Significant Other Observable Inputs (Level 2) [Member] | Equity Securities [Member] | ||
Assets | ||
Available for sale securities | 7,805 | 7,778 |
Significant Other Observable Inputs (Level 2) [Member] | United States Government Full Faith and Credit [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 134,205 | 38,120 |
Significant Other Observable Inputs (Level 2) [Member] | United States Government Sponsored Agencies [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 1,393,890 | 1,194,289 |
Significant Other Observable Inputs (Level 2) [Member] | United States Municipalities, States and Territories [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 3,723,309 | 3,306,743 |
Significant Other Observable Inputs (Level 2) [Member] | Foreign Government Obligations [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 193,803 | 91,557 |
Significant Other Observable Inputs (Level 2) [Member] | Corporate Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 21,490,281 | 17,233,017 |
Significant Other Observable Inputs (Level 2) [Member] | Residential Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 1,750,970 | 1,970,584 |
Significant Other Observable Inputs (Level 2) [Member] | Commercial Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 2,807,620 | 1,735,460 |
Significant Other Observable Inputs (Level 2) [Member] | Other Asset Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 946,483 | 1,034,117 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Derivative assets | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
2015 notes hedges | 0 | 0 |
Counterparty collateral | 0 | 0 |
Assets | 375 | 1,376 |
Liabilities | ||
2015 notes embedded conversion derivative | 0 | 0 |
Fixed index annuities - embedded derivatives | 5,574,653 | 4,406,163 |
Liabilities | 5,574,653 | 4,406,163 |
Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Caps [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Swap [Member] | ||
Assets | ||
Interest rate derivative assets | 0 | |
Liabilities | ||
Interest rate derivative liabilities | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | United States Government Full Faith and Credit [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | United States Government Sponsored Agencies [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | United States Municipalities, States and Territories [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Foreign Government Obligations [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Corporate Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Residential Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 375 | 1,376 |
Significant Unobservable Inputs (Level 3) [Member] | Commercial Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Other Asset Backed Securities [Member] | Fixed Maturity Securities [Member] | ||
Assets | ||
Available for sale securities | $0 | $0 |
Fair_Values_of_Financial_Instr5
Fair Values of Financial Instruments (Reconciliation of Beginning and Ending Balances of Level 3 Assets) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $1,376 | $1,812 |
Principal returned | -285 | -864 |
Amortization of premium/accretion of discount | -262 | 152 |
Total gains (losses) (realized/unrealized): included in other comprehensive income (loss) | 109 | 276 |
Total gains (losses) (realized/unrealized): included in operations | -563 | 0 |
Ending balance | $375 | $1,376 |
Fair_Values_of_Financial_Instr6
Fair Values of Financial Instruments (Reconciliation of Beginning and Ending Balances of Level 3 Liabilities) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $4,406,163 | $3,337,556 |
Premiums less benefits | 1,700,827 | 1,485,109 |
Change in fair value, net | -532,337 | -416,502 |
Ending balance | $5,574,653 | $4,406,163 |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Securities | Securities | ||
Investments [Abstract] | |||
Fixed income securities with call features, percentage | 33.00% | ||
Fixed income securities with call features, currently callable, percentage | 0.60% | ||
Fixed income securities with call features, currently callable, amount | $200,000,000 | ||
Fixed income securities with call features, callable during next 12 months, percentage | 4.00% | ||
Fixed income securities with call features, callable during next 12 months, amount | 1,200,000,000 | ||
Percentage of fixed maturity portfolio rated investment grade based on NAIC designations | 98.00% | 98.00% | |
Number of individual securities with unrealized losses | 402 | 1,047 | |
Percentage of unrealized losses on fixed maturity securities where securities are rated investment grade | 78.00% | 95.00% | |
Assets held by insurance regulators | 32,600,000,000 | 31,700,000,000 | |
Investment Holdings [Line Items] | |||
Available for sale, amortized cost | 30,205,046,000 | 26,527,730,000 | |
Principal repayments, calls and tenders of available for sale securities | 1,490,906,000 | 3,456,719,000 | 3,298,623,000 |
Calls of held for investment fixed maturity securities | 0 | 0 | 2,618,207,000 |
Stockholders' Equity, Total [Member] | |||
Investment Holdings [Line Items] | |||
Threshold for disclosure percentage | 10.00% | ||
Investment Type Concentration Risk [Member] | |||
Investment Holdings [Line Items] | |||
Fair value, concentration of risk, investments | 0 | 0 | |
Fixed Maturity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Principal repayments, calls and tenders of available for sale securities | 1,300,000,000 | 2,100,000,000 | 2,800,000,000 |
Calls of held for investment fixed maturity securities | 2,600,000,000 | ||
Available For Sale [Member] | |||
Investment Holdings [Line Items] | |||
Proceeds from sales of available for sale securities | 200,000,000 | 1,500,000,000 | 500,000,000 |
Available For Sale [Member] | Fixed Maturity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Available for sale securities, fair value | 32,445,202,000 | 26,610,447,000 | |
Available For Sale [Member] | Equity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Available for sale securities, fair value | 7,805,000 | 7,778,000 | |
Residential Mortgage Backed Securities [Member] | Alt-A Sector [Member] | |||
Investment Holdings [Line Items] | |||
Number of securities in unrealized loss position | 34 | ||
Available for sale, amortized cost | 244,300,000 | ||
Available for sale securities, fair value | 270,000,000 | ||
Residential Mortgage Backed Securities [Member] | Available For Sale [Member] | Fixed Maturity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Available for sale securities, fair value | $1,751,345,000 | $1,971,960,000 |
Investments_Schedule_of_Fixed_
Investments (Schedule of Fixed Maturity and Equity Securities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Held for investment, amortized cost | $76,432 | $76,255 |
Held for investment, fair value | 75,838 | 60,840 |
Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 30,205,046 | 26,527,730 |
Available for sale securities, gross unrealized gains | 2,395,577 | 928,699 |
Available for sale securities, gross unrealized losses | -155,421 | -845,982 |
Available for sale securities, fair value | 32,445,202 | 26,610,447 |
Equity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 7,509 | 7,503 |
Available for sale securities, gross unrealized gains | 296 | 275 |
Available for sale securities, gross unrealized losses | 0 | 0 |
Available for sale securities, fair value | 7,805 | 7,778 |
United States Government Full Faith and Credit [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 137,710 | 44,852 |
Available for sale securities, gross unrealized gains | 765 | 367 |
Available for sale securities, gross unrealized losses | -15 | -2,294 |
Available for sale securities, fair value | 138,460 | 42,925 |
United States Government Sponsored Agencies [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 1,364,424 | 1,313,776 |
Available for sale securities, gross unrealized gains | 43,399 | 1,875 |
Available for sale securities, gross unrealized losses | -13,933 | -121,362 |
Available for sale securities, fair value | 1,393,890 | 1,194,289 |
United States Municipalities, States and Territories [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 3,293,551 | 3,181,032 |
Available for sale securities, gross unrealized gains | 430,469 | 164,785 |
Available for sale securities, gross unrealized losses | -711 | -39,074 |
Available for sale securities, fair value | 3,723,309 | 3,306,743 |
Foreign Government Obligations [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 181,128 | 86,112 |
Available for sale securities, gross unrealized gains | 16,628 | 8,907 |
Available for sale securities, gross unrealized losses | -3,953 | -3,462 |
Available for sale securities, fair value | 193,803 | 91,557 |
Corporate Securities [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 19,984,747 | 17,142,118 |
Available for sale securities, gross unrealized gains | 1,628,941 | 606,948 |
Available for sale securities, gross unrealized losses | -123,396 | -516,029 |
Available for sale securities, fair value | 21,490,292 | 17,233,037 |
Corporate Securities [Member] | Fixed Maturity Securities [Member] | Held For Investment [Member] | ||
Investment Holdings [Line Items] | ||
Held for investment, amortized cost | 76,432 | 76,255 |
Held for investment, gross unrealized gains | 0 | 0 |
Held for investment, gross unrealized losses | -594 | -15,415 |
Held for investment, fair value | 75,838 | 60,840 |
Residential Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 1,616,846 | 1,895,913 |
Available for sale securities, gross unrealized gains | 136,704 | 119,230 |
Available for sale securities, gross unrealized losses | -2,205 | -43,183 |
Available for sale securities, fair value | 1,751,345 | 1,971,960 |
Commercial Mortgage Backed Securities [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 2,720,294 | 1,821,988 |
Available for sale securities, gross unrealized gains | 90,649 | 3,287 |
Available for sale securities, gross unrealized losses | -3,323 | -89,815 |
Available for sale securities, fair value | 2,807,620 | 1,735,460 |
Other Asset Backed Securities [Member] | Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Investment Holdings [Line Items] | ||
Available for sale securities, amortized cost | 906,346 | 1,041,939 |
Available for sale securities, gross unrealized gains | 48,022 | 23,300 |
Available for sale securities, gross unrealized losses | -7,885 | -30,763 |
Available for sale securities, fair value | $946,483 | $1,034,476 |
Investments_Fixed_Maturity_Sec
Investments (Fixed Maturity Securities by Contractual Maturity) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||
Available for sale, due in one year or less, amortized cost | $65,783 | |
Available for sale, due after one year through five years, amortized cost | 1,483,940 | |
Available for sale, due after five years through ten years, amortized cost | 8,523,008 | |
Available for sale, due after ten years through twenty years, amortized cost | 7,251,089 | |
Available for sale, due after twenty years, amortized cost | 7,637,740 | |
Available for sale, securities with a single maturity date, amortized cost | 24,961,560 | |
Available for sale, amortized cost | 30,205,046 | 26,527,730 |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Available for sale, due in one year or less, fair value | 67,404 | |
Available for sale, due after one year through five years, fair value | 1,638,259 | |
Available for sale, due after five years through ten years, fair value | 8,738,123 | |
Available for sale, due after ten years through twenty years, fair value | 7,914,212 | |
Available for sale, due after twenty years, fair value | 8,581,756 | |
Available for sale, securities with a single maturity date, fair value | 26,939,754 | |
Available for sale, fair value | 32,445,202 | 26,610,447 |
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount [Abstract] | ||
Held for investment, due in one year or less, amortized cost | 0 | |
Held for investment, due after one year through five years, amortized cost | 0 | |
Held for investment, due after five years through ten years, amortized cost | 0 | |
Held for investment, due after ten years through twenty years, amortized cost | 0 | |
Held for investment, due after twenty years, amortized cost | 76,432 | |
Held for investment, securities with a single maturity date, amortized cost | 76,432 | |
Held for investment, amortized cost | 76,432 | 76,255 |
Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract] | ||
Held for investment, due in one year or less, fair value | 0 | |
Held for investment, due after one year through five years, fair value | 0 | |
Held for investment, due after five years through ten years, fair value | 0 | |
Held for investment, due after ten years through twenty years, fair value | 0 | |
Held for investment, due after twenty years, fair value | 75,838 | |
Held for investment, securities with a single maturity date, fair value | 75,838 | |
Held for investment, fair value | 75,838 | 60,840 |
Residential Mortgage Backed Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||
Available for sale, securities without a single maturity date, amortized cost | 1,616,846 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Available for sale, securities without a single maturity date, fair value | 1,751,345 | |
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount [Abstract] | ||
Held for investment, securities without a single maturity date, amortized cost | 0 | |
Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract] | ||
Held for investment, securities without a single maturity date, fair value | 0 | |
Commercial Mortgage Backed Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||
Available for sale, securities without a single maturity date, amortized cost | 2,720,294 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Available for sale, securities without a single maturity date, fair value | 2,807,620 | |
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount [Abstract] | ||
Held for investment, securities without a single maturity date, amortized cost | 0 | |
Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract] | ||
Held for investment, securities without a single maturity date, fair value | 0 | |
Other Asset Backed Securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||
Available for sale, securities without a single maturity date, amortized cost | 906,346 | |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Available for sale, securities without a single maturity date, fair value | 946,483 | |
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount [Abstract] | ||
Held for investment, securities without a single maturity date, amortized cost | 0 | |
Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract] | ||
Held for investment, securities without a single maturity date, fair value | $0 |
Investments_Net_Unrealized_Gai
Investments (Net Unrealized Gains on Available for Sale Fixed Maturity and Equity Securities Reported as a Seperate Component of Stockholders' Equity) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments [Abstract] | ||
Net unrealized gains on available for sale fixed maturity securities and equity securities | $2,240,452 | $82,992 |
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements | -1,165,271 | -46,588 |
Deferred income tax valuation allowance reversal | 22,534 | 22,534 |
Deferred income tax expense | -376,314 | -12,742 |
Net unrealized gains reported as accumulated other comprehensive income | $721,401 | $46,196 |
Investments_Credit_Quality_of_
Investments (Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Amortized cost | $30,281,478 | $26,603,985 |
Fair value | 32,521,040 | 26,671,287 |
NAIC, Class 1 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 19,223,151 | 16,394,654 |
Fair value | 20,941,634 | 16,531,250 |
NAIC, Class 2 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 10,432,593 | 9,630,251 |
Fair value | 10,981,618 | 9,598,399 |
NAIC, Class 3 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 602,191 | 502,822 |
Fair value | 583,313 | 474,165 |
NAIC, Class 4 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 22,888 | 74,493 |
Fair value | 14,089 | 66,078 |
NAIC, Class 5 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 0 | 0 |
Fair value | 0 | 0 |
NAIC, Class 6 Designation [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 655 | 1,765 |
Fair value | $386 | $1,395 |
Investments_Gross_Unrealized_L
Investments (Gross Unrealized Losses on Investments, By Category and Length of Time) (Details) (Fixed Maturity Securities [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | $2,346,226 | $11,635,998 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -56,929 | -741,947 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 2,731,950 | 1,097,643 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -98,492 | -104,035 |
Available for sale, continuous unrealized loss position, total, fair value | 5,078,176 | 12,733,641 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -155,421 | -845,982 |
United States Government Full Faith and Credit [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 0 | 32,969 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | 0 | -2,294 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 498 | 0 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -15 | 0 |
Available for sale, continuous unrealized loss position, total, fair value | 498 | 32,969 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -15 | -2,294 |
United States Government Sponsored Agencies [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 0 | 692,320 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | 0 | -88,671 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 610,339 | 467,309 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -13,933 | -32,691 |
Available for sale, continuous unrealized loss position, total, fair value | 610,339 | 1,159,629 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -13,933 | -121,362 |
United States Municipalities, States and Territories [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 0 | 614,056 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | 0 | -39,074 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 27,947 | 0 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -711 | 0 |
Available for sale, continuous unrealized loss position, total, fair value | 27,947 | 614,056 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -711 | -39,074 |
Foreign Government Obligations [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 14,194 | 26,298 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -1,068 | -3,462 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 11,542 | 0 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -2,885 | 0 |
Available for sale, continuous unrealized loss position, total, fair value | 25,736 | 26,298 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -3,953 | -3,462 |
Corporate Securities [Member] | Finance, Insurance and Real Estate [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 253,439 | 1,690,846 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -2,586 | -92,426 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 399,874 | 153,037 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -16,277 | -12,873 |
Available for sale, continuous unrealized loss position, total, fair value | 653,313 | 1,843,883 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -18,863 | -105,299 |
Corporate Securities [Member] | Manufacturing, Construction and Mining [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 1,078,089 | 3,370,775 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -35,151 | -191,245 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 694,088 | 93,608 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -35,926 | -16,088 |
Available for sale, continuous unrealized loss position, total, fair value | 1,772,177 | 3,464,383 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -71,077 | -207,333 |
Corporate Securities [Member] | Utilities and Related Sectors [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 373,952 | 1,829,868 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -8,185 | -102,758 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 344,313 | 83,550 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -10,153 | -11,547 |
Available for sale, continuous unrealized loss position, total, fair value | 718,265 | 1,913,418 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -18,338 | -114,305 |
Corporate Securities [Member] | Wholesale/Retail Trade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 88,766 | 428,407 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -2,290 | -25,189 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 99,427 | 17,687 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -3,122 | -1,992 |
Available for sale, continuous unrealized loss position, total, fair value | 188,193 | 446,094 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -5,412 | -27,181 |
Corporate Securities [Member] | Services, Media and Other [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 131,940 | 834,699 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -1,567 | -51,508 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 277,296 | 107,242 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -8,139 | -10,403 |
Available for sale, continuous unrealized loss position, total, fair value | 409,236 | 941,941 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -9,706 | -61,911 |
Corporate Securities [Member] | Insurance [Member] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract] | ||
Held for investment, continuous unrealized loss position, less than 12 months, fair value | 0 | 0 |
Held for investment, continuous unrealized loss position, less than 12 months, unrealized losses | 0 | 0 |
Held for investment, continuous unrealized loss position, 12 months or more, fair value | 75,838 | 60,840 |
Held for investment, continuous unrealized loss position, 12 months or more, unrealized losses | -594 | -15,415 |
Held for investment, continuous unrealized loss position, total, fair value | 75,838 | 60,840 |
Held for investment, continuous unrealized loss position, total, unrealized losses | 594 | 15,415 |
Residential Mortgage Backed Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 22,115 | 309,599 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -1,219 | -41,080 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 20,427 | 31,739 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -986 | -2,103 |
Available for sale, continuous unrealized loss position, total, fair value | 42,542 | 341,338 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -2,205 | -43,183 |
Commercial Mortgage Backed Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 241,637 | 1,450,143 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -1,344 | -83,814 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 187,241 | 51,099 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -1,979 | -6,001 |
Available for sale, continuous unrealized loss position, total, fair value | 428,878 | 1,501,242 |
Available for sale, continuous unrealized loss position, total, unrealized losses | -3,323 | -89,815 |
Other Asset Backed Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Available for sale, continuous unrealized loss position, less than 12 months, fair value | 142,094 | 356,018 |
Available for sale, continuous unrealized loss position, less than 12 months, unrealized losses | -3,519 | -20,426 |
Available for sale, continuous unrealized loss position, 12 months or more, fair value | 58,958 | 92,372 |
Available for sale, continuous unrealized loss position, 12 months or more, unrealized losses | -4,366 | -10,337 |
Available for sale, continuous unrealized loss position, total, fair value | 201,052 | 448,390 |
Available for sale, continuous unrealized loss position, total, unrealized losses | ($7,885) | ($30,763) |
Investments_Changes_in_Net_Unr
Investments (Changes in Net Unrealized Gains/Losses on Investments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investment Holdings [Line Items] | |||
Fixed maturity securities held for investment carried at amortized cost | $14,821 | ($848) | ($14,783) |
Investments carried at fair value | 2,157,460 | -2,140,941 | 735,696 |
Adjustment for effect on other balance sheet accounts: | |||
Deferred policy acquisition costs and deferred sales inducements | -1,118,683 | 1,155,386 | -382,498 |
Deferred income tax asset/liability | -363,572 | 344,944 | -123,620 |
Total adjustment for effect on other balance sheet accounts | -1,482,255 | 1,500,330 | -506,118 |
Change in net unrealized gains/losses on investments carried at fair value | 675,205 | -640,611 | 229,578 |
Fixed Maturity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Investments carried at fair value | 2,157,439 | -2,132,392 | 731,279 |
Equity Securities [Member] | |||
Investment Holdings [Line Items] | |||
Investments carried at fair value | $21 | ($8,549) | $4,417 |
Investments_Components_of_Net_
Investments (Components of Net Investment Income) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | $1,545,892 | $1,397,327 | $1,300,331 | ||||||||
Less investment expenses | -14,225 | -13,400 | -13,408 | ||||||||
Net investment income | 403,849 | 386,931 | 370,882 | 370,005 | 363,947 | 354,147 | 336,143 | 329,690 | 1,531,667 | 1,383,927 | 1,286,923 |
Fixed Maturity Securities [Member] | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | 1,394,301 | 1,229,486 | 1,112,296 | ||||||||
Equity Securities [Member] | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | 404 | 1,586 | 3,090 | ||||||||
Mortgage Loans on Real Estate [Member] | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | 143,998 | 159,769 | 176,354 | ||||||||
Cash and Cash Equivalents [Member] | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | 286 | 775 | 2,243 | ||||||||
Other [Member] | |||||||||||
Net Investment Income [Line Items] | |||||||||||
Investment income, gross | $6,903 | $5,711 | $6,348 |
Investments_Net_Realized_Gains
Investments (Net Realized Gains (Losses) on Invesments) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gain (Loss) on Investments [Line Items] | |||||||||||
Net realized gains (losses) on investments, excluding other than temporary impairment (OTTI) losses | $2,131 | ($3,190) | ($2,230) | ($714) | $16,364 | ($2,077) | $15,689 | $10,585 | ($4,003) | $40,561 | ($6,454) |
Fixed Maturity Securities [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Available for sale securities: gross realized gains | 3,273 | 39,079 | 10,906 | ||||||||
Available for sale securities: gross realized losses | -1,006 | -6,170 | -562 | ||||||||
Available for sale securities: gross realized gains (losses), excluding other than temporary impairments | 2,267 | 32,909 | 10,344 | ||||||||
Equity Securities [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Available for sale securities: gross realized gains | 0 | 9,571 | 562 | ||||||||
Other Investments [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other investments: gain on sale of real estate | 2,454 | 2,144 | 5,149 | ||||||||
Other investments: loss on sale of real estate | -231 | -1,317 | 0 | ||||||||
Other investments: impairment losses on real estate | -2,441 | -1,195 | -5,677 | ||||||||
Gain (loss) on other investments | -218 | -368 | -528 | ||||||||
Mortgage Loans on Real Estate [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Mortgage loans on real estate: increase in allowance for credit losses | -6,052 | -5,621 | -16,832 | ||||||||
Mortgage loans on real estate: recovery of specific allowance | 0 | 4,070 | 0 | ||||||||
Mortgage loans on real estate: change in allowance for provision and recoveries | ($6,052) | ($1,551) | ($16,832) |
Investments_NonIncome_Producin
Investments (Non-Income Producing Investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Non-income producing investments | $879 | $3,531 |
Fixed Maturity Securities [Member] | ||
Investment Holdings [Line Items] | ||
Non-income producing investments | 11 | 20 |
Mortgage Loans on Real Estate [Member] | ||
Investment Holdings [Line Items] | ||
Non-income producing investments | 0 | 3,511 |
Real Estate Owned [Member] | ||
Investment Holdings [Line Items] | ||
Non-income producing investments | $868 | $0 |
Investments_Significant_Assump
Investments (Significant Assumptions Used to Determine the Credit Loss Component of Other Than Temporary Impariment on Residential Mortgage Backed Securities) (Details) (Residential Mortgage Backed Securities [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Prime Sector [Member] | Vintage Year 2003 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 5.10% | |
Default rate | 2.00% | |
Loss severity | 30.00% | |
Prime Sector [Member] | Vintage Year 2003 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 5.10% | |
Default rate | 2.00% | |
Loss severity | 30.00% | |
Prime Sector [Member] | Vintage Year 2005 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 7.50% | 6.50% |
Default rate | 15.00% | 8.00% |
Loss severity | 50.00% | 50.00% |
Prime Sector [Member] | Vintage Year 2005 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 7.50% | 7.70% |
Default rate | 15.00% | 18.00% |
Loss severity | 50.00% | 65.00% |
Prime Sector [Member] | Vintage Year 2006 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.50% | 5.80% |
Default rate | 11.00% | 9.00% |
Loss severity | 40.00% | 45.00% |
Prime Sector [Member] | Vintage Year 2006 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 7.40% | 6.90% |
Default rate | 15.00% | 16.00% |
Loss severity | 50.00% | 50.00% |
Prime Sector [Member] | Vintage Year 2007 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 7.00% | 6.20% |
Default rate | 14.00% | 11.00% |
Loss severity | 55.00% | 40.00% |
Prime Sector [Member] | Vintage Year 2007 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 7.00% | 6.70% |
Default rate | 14.00% | 25.00% |
Loss severity | 55.00% | 60.00% |
Prime Sector [Member] | Vintage Year 2008 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.60% | |
Default rate | 16.00% | |
Loss severity | 45.00% | |
Prime Sector [Member] | Vintage Year 2008 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.60% | |
Default rate | 16.00% | |
Loss severity | 45.00% | |
Prime Sector [Member] | Vintage Year 2009 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.80% | |
Default rate | 17.00% | |
Loss severity | 60.00% | |
Prime Sector [Member] | Vintage Year 2009 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.80% | |
Default rate | 17.00% | |
Loss severity | 60.00% | |
Alt-A Sector [Member] | Vintage Year 2005 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 5.60% | 5.60% |
Default rate | 87.00% | 13.00% |
Loss severity | 2.00% | 2.00% |
Alt-A Sector [Member] | Vintage Year 2005 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.40% | 8.70% |
Default rate | 91.00% | 81.00% |
Loss severity | 2.00% | 65.00% |
Alt-A Sector [Member] | Vintage Year 2007 [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.20% | |
Default rate | 38.00% | |
Loss severity | 60.00% | |
Alt-A Sector [Member] | Vintage Year 2007 [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rate | 6.90% | |
Default rate | 52.00% | |
Loss severity | 65.00% |
Investments_Other_Than_Tempora
Investments (Other Than Temporary Impairment by Asset Type) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Securities | Securities | ||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 10 | 41 | |||||||||
Total OTTI losses | $0 | ($4,964) | ($5,411) | ||||||||
Portion of OTTI losses recognized from other comprehensive income | -2,627 | -1,270 | -9,521 | ||||||||
Net OTTI losses recognized in operations | -564 | -564 | -594 | -905 | 0 | -222 | -2,775 | -3,237 | -2,627 | -6,234 | -14,932 |
Residential Mortgage Backed Securities [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 7 | 6 | 39 | ||||||||
Total OTTI losses | 0 | 0 | -3,024 | ||||||||
Portion of OTTI losses recognized from other comprehensive income | -2,627 | -1,270 | -9,521 | ||||||||
Net OTTI losses recognized in operations | -2,627 | -1,270 | -12,545 | ||||||||
United States Government Sponsored Agencies [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 2 | ||||||||||
Total OTTI losses | -2,775 | ||||||||||
Portion of OTTI losses recognized from other comprehensive income | 0 | ||||||||||
Net OTTI losses recognized in operations | -2,775 | ||||||||||
Corporate Securities [Member] | Industrial [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 1 | ||||||||||
Total OTTI losses | -1,761 | ||||||||||
Portion of OTTI losses recognized from other comprehensive income | 0 | ||||||||||
Net OTTI losses recognized in operations | -1,761 | ||||||||||
Corporate Securities [Member] | Finance [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 1 | ||||||||||
Total OTTI losses | -1,765 | ||||||||||
Portion of OTTI losses recognized from other comprehensive income | 0 | ||||||||||
Net OTTI losses recognized in operations | -1,765 | ||||||||||
Corporate Securities [Member] | Retail [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 1 | ||||||||||
Total OTTI losses | -622 | ||||||||||
Portion of OTTI losses recognized from other comprehensive income | 0 | ||||||||||
Net OTTI losses recognized in operations | -622 | ||||||||||
Equity Securities [Member] | Industrial [Member] | |||||||||||
Gain (Loss) on Investments [Line Items] | |||||||||||
Other than temporary impairment, number of securities | 1 | ||||||||||
Total OTTI losses | -428 | ||||||||||
Portion of OTTI losses recognized from other comprehensive income | 0 | ||||||||||
Net OTTI losses recognized in operations | ($428) |
Investments_Other_Than_Tempora1
Investments (Other Than Temporary Impairment, Credit Losses Recognized in Earnings) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Cumulative credit loss at beginning of year | ($125,960) | ($134,027) |
Credit losses on securities for which OTTI has not previously been recognized | 0 | -4,536 |
Additional credit losses on securities for which OTTI has previously been recognized | -2,627 | -1,270 |
Accumulated losses on securities that were disposed of during the period | 1,537 | 13,873 |
Cumulative credit loss at end of year | ($127,050) | ($125,960) |
Investments_Schedule_of_Other_
Investments (Schedule of Other Than Temporary Impairment Losses, Investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment Holdings [Line Items] | ||
Amortized cost | $569,508 | $679,265 |
OTTI recognized in other comprehensive income | -173,494 | -176,334 |
Change in fair value since OTTI was recognized | 215,636 | 216,081 |
Fair value | 611,650 | 719,012 |
Fixed Maturity Securities [Member] | Corporate Securities [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 0 | 0 |
OTTI recognized in other comprehensive income | 0 | 0 |
Change in fair value since OTTI was recognized | 11 | 20 |
Fair value | 11 | 20 |
Fixed Maturity Securities [Member] | Residential Mortgage Backed Securities [Member] | ||
Investment Holdings [Line Items] | ||
Amortized cost | 569,508 | 679,265 |
OTTI recognized in other comprehensive income | -173,494 | -176,334 |
Change in fair value since OTTI was recognized | 215,625 | 216,061 |
Fair value | $611,639 | $718,992 |
Mortgage_Loans_on_Real_Estate_1
Mortgage Loans on Real Estate (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
loans | loans | loans | |
portfolio_segment | |||
Mortgage Loans on Real Estate [Abstract] | |||
Mortgage loans on real estate | $2,434,580,000 | $2,581,082,000 | |
Commitments outstanding | 61,300,000 | ||
Number of portfolio segments that make up financing receivables | 1 | ||
Number of loans satisfied by foreclosure | 7 | 5 | 13 |
Impaired mortgage loans, workout terms, interest only payments, six month terms | 6 months | ||
Impaired mortgage loans, workout terms, interest only payments, twelve month terms | 12 months | ||
Impaired mortgage loans, workout terms, cash flow sweep, number of months | 12 months | ||
Number of days past due, delinquent status | 60 days | ||
Number of days past due, non-accrual status | 90 days | ||
Outstanding principal of non-accrual loans | $6,000,000 | $8,200,000 |
Mortgage_Loans_on_Real_Estate_2
Mortgage Loans on Real Estate (Summary of Mortgage Loan Portfolio) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Mortgage Loans on Real Estate [Abstract] | |||
Principal outstanding | $2,457,721 | $2,607,698 | $2,658,883 |
Loan loss allowance | -22,633 | -26,047 | |
Deferred prepayment fees | -508 | -569 | |
Mortgage loans on real estate | $2,434,580 | $2,581,082 |
Mortgage_Loans_on_Real_Estate_3
Mortgage Loans on Real Estate (Mortgage Loan Portfolio Summarized by Geographic Region and Property Type) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | $2,457,721 | $2,607,698 | $2,658,883 |
Percent | 100.00% | 100.00% | |
Office [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 484,585 | 590,414 | |
Percent | 19.70% | 22.60% | |
Medical Office [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 88,275 | 125,703 | |
Percent | 3.60% | 4.80% | |
Retail [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 711,775 | 711,364 | |
Percent | 29.00% | 27.30% | |
Industrial/Warehouse [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 649,425 | 673,449 | |
Percent | 26.40% | 25.80% | |
Hotel [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 30,640 | 61,574 | |
Percent | 1.30% | 2.40% | |
Apartment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 335,087 | 291,823 | |
Percent | 13.60% | 11.20% | |
Mixed Use/Other [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 157,934 | 153,371 | |
Percent | 6.40% | 5.90% | |
East [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 701,638 | 765,717 | |
Percent | 28.50% | 29.40% | |
Middle Atlantic [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 166,249 | 156,489 | |
Percent | 6.80% | 6.00% | |
Mountain [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 279,075 | 356,246 | |
Percent | 11.40% | 13.70% | |
New England [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 12,280 | 21,324 | |
Percent | 0.50% | 0.80% | |
Pacific [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 302,307 | 317,431 | |
Percent | 12.30% | 12.20% | |
South Atlantic [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 471,849 | 483,852 | |
Percent | 19.20% | 18.50% | |
West North Central [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | 349,028 | 351,794 | |
Percent | 14.20% | 13.50% | |
West South Central [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal outstanding | $175,295 | $154,845 | |
Percent | 7.10% | 5.90% |
Mortgage_Loans_on_Real_Estate_4
Mortgage Loans on Real Estate (Rollforward of Allowance for Loan Losses) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Ending allowance balance | ($22,633) | ($26,047) | |
Specific Allowance [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning allowance balance | -16,847 | -23,134 | -23,664 |
Charge-offs | 9,211 | 9,738 | 15,562 |
Recoveries | 255 | 4,070 | 0 |
Change in provision for credit losses | -4,952 | -7,521 | -15,032 |
Ending allowance balance | -12,333 | -16,847 | -23,134 |
General Allowance [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning allowance balance | -9,200 | -11,100 | -9,300 |
Charge-offs | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Change in provision for credit losses | -1,100 | 1,900 | -1,800 |
Ending allowance balance | ($10,300) | ($9,200) | ($11,100) |
Mortgage_Loans_on_Real_Estate_5
Mortgage Loans on Real Estate (Impaired Mortgage Loans on Real Estate By Basis of Impairment) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Mortgage Loans on Real Estate [Abstract] | |||
Individually evaluated for impairment | $29,116 | $47,018 | $53,110 |
Collectively evaluated for impairment | 2,428,605 | 2,560,680 | 2,605,773 |
Principal outstanding | $2,457,721 | $2,607,698 | $2,658,883 |
Mortgage_Loans_on_Real_Estate_6
Mortgage Loans on Real Estate (Real Estate Owned) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Mortgage Loans on Real Estate [Abstract] | |||
Real estate owned at beginning of period | $22,844 | $33,172 | $36,821 |
Real estate acquired in satisfaction of mortgage loans | 14,555 | 8,217 | 26,324 |
Additions | 0 | 626 | 398 |
Sales | -14,134 | -17,358 | -23,825 |
Impairments | -2,441 | -1,195 | -5,677 |
Depreciation | -586 | -618 | -869 |
Real estate owned at end of period | $20,238 | $22,844 | $33,172 |
Mortgage_Loans_on_Real_Estate_7
Mortgage Loans on Real Estate (Mortgage Loans by Credit Quality Indicator) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Mortgage Loans on Real Estate [Abstract] | |||
Performing | $2,451,760 | $2,593,276 | |
In workout | 0 | 6,248 | |
Delinquent | 0 | 0 | |
Collateral dependent | 5,961 | 8,174 | |
Principal outstanding | $2,457,721 | $2,607,698 | $2,658,883 |
Mortgage_Loans_on_Real_Estate_8
Mortgage Loans on Real Estate (Aging of Financing Receivables) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Mortgage Loans on Real Estate [Abstract] | |||
30 to 59 days | $0 | $0 | |
60 to 89 days | 0 | 0 | |
90 days and over | 0 | 0 | |
Total past due | 0 | 0 | |
Current | 2,451,760 | 2,599,524 | |
Collateral dependent receivables | 5,961 | 8,174 | |
Principal outstanding | $2,457,721 | $2,607,698 | $2,658,883 |
Mortgage_Loans_on_Real_Estate_9
Mortgage Loans on Real Estate (Impaired Financing Receivables) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Financing Receivable, Impaired [Line Items] | |||
Mortgage loans with an allowance, recorded investment | $16,783 | $30,171 | |
Mortgage loans with no related allowance, recorded investment | 2,656 | 3,264 | |
Impaired mortgage loans, recorded investment | 19,439 | 33,435 | |
Mortgage loans with an allowance, unpaid principal balance | 29,116 | 47,018 | |
Mortgage loans with no related allowance, unpaid principal balance | 2,656 | 3,264 | |
Impaired mortgage loans, unpaid principal balance | 31,772 | 50,282 | |
Mortgage loans with an allowance, related allowance | -12,333 | -16,847 | |
Mortgage loans with an allowance, average recorded investment | 18,465 | 33,772 | 37,480 |
Mortgage loans with no related allowance, average recorded investment | 2,656 | 3,264 | 27,696 |
Impaired mortgage loans, average recorded investment | 21,121 | 37,036 | 65,176 |
Mortgage loans with an allowance, interest income recognized | 1,797 | 2,094 | 1,946 |
Mortgage loans with no related allowance, interest income recognized | 43 | 138 | 1,664 |
Impaired mortgage loans, interest income recognized | $1,840 | $2,232 | $3,610 |
Recovered_Sheet1
Mortgage Loans on Real Estate (Troubled Debt Restructurings) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
loans | loans | |
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 9 | 18 |
Principal balance outstanding | $18,533 | $45,653 |
Specific loan loss allowance | -5,758 | -6,653 |
Net carrying amount | 12,775 | 39,000 |
East [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 1 | |
Principal balance outstanding | 3,712 | |
Specific loan loss allowance | -949 | |
Net carrying amount | 2,763 | |
Mountain [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 7 | |
Principal balance outstanding | 22,140 | |
Specific loan loss allowance | -329 | |
Net carrying amount | 21,811 | |
South Atlantic [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 7 | 7 |
Principal balance outstanding | 14,475 | 13,930 |
Specific loan loss allowance | -4,244 | -4,177 |
Net carrying amount | 10,231 | 9,753 |
East North Central [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 1 | 1 |
Principal balance outstanding | 2,177 | 2,219 |
Specific loan loss allowance | -467 | -467 |
Net carrying amount | 1,710 | 1,752 |
West North Central [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 1 | 1 |
Principal balance outstanding | 1,881 | 1,938 |
Specific loan loss allowance | -1,047 | -475 |
Net carrying amount | 834 | 1,463 |
West South Central [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDRs | 1 | |
Principal balance outstanding | 1,714 | |
Specific loan loss allowance | -256 | |
Net carrying amount | $1,458 |
Derivative_Instruments_Narrati
Derivative Instruments (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2010 |
partial_unwind_agreement | partial_unwind_agreement | partial_unwind_agreement | partial_unwind_agreement | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||
Credit risk, maximum exposure | $47,400,000 | $71,700,000 | ||||||||||
Number of partial unwind agreements | 5 | 3 | 5 | 3 | ||||||||
Net cash received from counterparties for settlement of call options and warrants | 16,600,000 | 22,200,000 | ||||||||||
Warrants reclassified from equity to a derivative liability, at fair value | -51,257,000 | -47,991,000 | ||||||||||
Derivative [Line Items] | ||||||||||||
Derivative collateral | 743,000,000 | 818,200,000 | 743,000,000 | 818,200,000 | ||||||||
Change in fair value of embedded derivatives | -32,321,000 | -133,968,000 | -286,899,000 | |||||||||
Net income | 31,217,000 | 67,815,000 | 36,744,000 | -9,753,000 | 50,958,000 | 56,181,000 | 120,113,000 | 26,031,000 | 126,023,000 | 253,283,000 | 57,798,000 | |
2015 Notes Hedges [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Number of counterparties | 2 | |||||||||||
Conversion spread, shares of common stock | 1.8 | 1.8 | 16 | |||||||||
Derivative asset, strike price | $12.25 | $12.25 | $12.50 | |||||||||
2015 Warrants [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Number of securities called by warrants | 16 | |||||||||||
Warrants, exercise price | $15.68 | $16 | ||||||||||
Proceeds from issuance of warrants | 15,600,000 | |||||||||||
September 2015 Notes [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Principal amount of convertible senior notes payable at issuance | 200,000,000 | |||||||||||
Interest rate | 3.50% | 3.50% | ||||||||||
SunTrust [Member] | Not Designated as Hedging Instrument [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative instruments, interest rate swaps and caps, duration | 7 years | |||||||||||
SunTrust [Member] | Three Month London Interbank Offered Rate (LIBOR) [Member] | Not Designated as Hedging Instrument [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Cap rate | 2.50% | 2.50% | ||||||||||
Change in Assumptions for Fair Value [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Change in fair value of embedded derivatives | -62,600,000 | |||||||||||
Net income | $14,800,000 | |||||||||||
Call Options [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Investment maturity period | 1 year |
Derivative_Instruments_Fair_Va
Derivative Instruments (Fair Value of Derivative Instruments as Presented in the Consolidated Balance Sheets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $731,113 | $856,050 |
Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 764,182 | 969,906 |
Derivative liabilities | 5,607,588 | 4,513,204 |
Call Options [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 731,113 | 856,050 |
2015 Notes Hedges [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 30,291 | 107,041 |
Interest Rate Caps [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2,778 | 6,103 |
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 712 |
Derivative liabilities | 2,644 | 0 |
Fixed Index Annuities - Embedded Derivatives [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 5,574,653 | 4,406,163 |
2015 Notes Embedded Conversion Derivative [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $30,291 | $107,041 |
Derivative_Instruments_Change_
Derivative Instruments (Change in Fair Value of Derivative Instruments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | $504,825 | $1,076,015 | $221,138 |
Change in fair value of embedded derivatives | 32,321 | 133,968 | 286,899 |
Call Options [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | 521,947 | 932,003 | 228,610 |
2015 Notes Hedges [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | -8,934 | 145,751 | -2,488 |
2015 Warrants [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | 0 | -9,568 | 0 |
Interest Rate Swap [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | -4,863 | 4,973 | -4,261 |
Interest Rate Caps [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of derivatives | -3,325 | 2,856 | -723 |
Fixed Index Annuities - Embedded Derivatives [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of embedded derivatives | 47,548 | -8,006 | 289,387 |
2015 Notes Embedded Conversion Derivative [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of embedded derivatives | -19,036 | 141,974 | -2,488 |
2029 Notes Embedded Conversion Derivative [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Change in fair value of embedded derivatives | $3,809 | $0 | $0 |
Derivative_Instruments_Schedul
Derivative Instruments (Schedule of Call Options by Counterparty) (Details) (Call Options [Member], Not Designated as Hedging Instrument [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ||
Notional amount | $23,956,444 | $19,277,639 |
Fair value | 731,113 | 856,050 |
Bank of America [Member] | ||
Derivative [Line Items] | ||
Notional amount | 2,114,812 | 1,683,911 |
Fair value | 62,932 | 73,836 |
Barclays [Member] | ||
Derivative [Line Items] | ||
Notional amount | 4,083,259 | 2,396,839 |
Fair value | 135,609 | 113,513 |
BNP Paribas [Member] | ||
Derivative [Line Items] | ||
Notional amount | 1,321,136 | 1,382,661 |
Fair value | 42,644 | 38,849 |
Citibank, N.A. [Member] | ||
Derivative [Line Items] | ||
Notional amount | 3,190,204 | 1,536,547 |
Fair value | 96,759 | 72,310 |
Credit Suisse [Member] | ||
Derivative [Line Items] | ||
Notional amount | 2,354,811 | 4,060,352 |
Fair value | 75,381 | 193,304 |
Deutsche Bank [Member] | ||
Derivative [Line Items] | ||
Notional amount | 2,682,960 | 747,587 |
Fair value | 64,028 | 41,074 |
HSBC [Member] | ||
Derivative [Line Items] | ||
Notional amount | 38,599 | 200,011 |
Fair value | 1,767 | 10,518 |
J.P. Morgan [Member] | ||
Derivative [Line Items] | ||
Notional amount | 401,804 | 786,429 |
Fair value | 13,488 | 36,863 |
Morgan Stanley [Member] | ||
Derivative [Line Items] | ||
Notional amount | 2,605,687 | 3,546,487 |
Fair value | 77,106 | 150,437 |
Royal Bank of Canada [Member] | ||
Derivative [Line Items] | ||
Notional amount | 1,364,362 | 714,941 |
Fair value | 41,717 | 25,140 |
SunTrust [Member] | ||
Derivative [Line Items] | ||
Notional amount | 248,622 | 0 |
Fair value | 5,405 | 0 |
Wells Fargo [Member] | ||
Derivative [Line Items] | ||
Notional amount | 3,550,188 | 2,221,874 |
Fair value | $114,277 | $100,206 |
Derivative_Instruments_Interes
Derivative Instruments (Interest Rate Swaps) (Details) (Interest Rate Swap [Member], Interest Rate Swaps, Maturity Date, March 15, 2021, 2.415% [Member], SunTrust [Member], Not Designated as Hedging Instrument [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Interest Rate Swap [Member] | Interest Rate Swaps, Maturity Date, March 15, 2021, 2.415% [Member] | SunTrust [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Notional amount | $85,500 | |
Pay rate | 2.42% | |
Derivative liabilities | -2,644 | |
Derivative assets | $712 |
Derivative_Instruments_Interes1
Derivative Instruments (Interest Rate Caps) (Details) (Interest Rate Caps [Member], SunTrust [Member], Not Designated as Hedging Instrument [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ||
Notional amount | $79,000 | |
Derivative assets | 2,778 | 6,103 |
Interest Rate Caps, Maturity Date, July 7, 2021, 2.50% [Member] | ||
Derivative [Line Items] | ||
Notional amount | 40,000 | |
Cap rate | 2.50% | |
Derivative assets | 1,398 | 3,073 |
Interest Rate Caps, Maturity Date, July 8, 2021, 2.50% [Member] | ||
Derivative [Line Items] | ||
Notional amount | 12,000 | |
Cap rate | 2.50% | |
Derivative assets | 420 | 923 |
Interest Rate Caps, Maturity Date, July 29, 2021, 2.50% [Member] | ||
Derivative [Line Items] | ||
Notional amount | 27,000 | |
Cap rate | 2.50% | |
Derivative assets | $960 | $2,107 |
Deferred_Policy_Acquisition_Co2
Deferred Policy Acquisition Costs and Deferred Sales Inducements (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Policy Acquisition Costs and Deferred Sales Inducements [Abstract] | |||
Deferred policy acquisition costs, increase (decrease) in amortization due to unlocking adjustment | ($35.50) | ($18.50) | $3.70 |
Deferred sales inducements, increase (decrease) in amortization due to unlocking adjustment | ($12.60) | ($11.10) | ($0.20) |
Deferred_Policy_Acquisition_Co3
Deferred Policy Acquisition Costs and Deferred Sales Inducements (Deferred Policy Acquisition Costs) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Balance at beginning of year | $2,426,652 | $1,709,799 | $1,683,857 |
Costs deferred during the year: commissions | 421,802 | 420,378 | 399,001 |
Costs deferred during the year: policy issue costs | 5,080 | 5,422 | 4,410 |
Amortization | -163,578 | -365,468 | -164,919 |
Effect of net unrealized gains/losses | -631,400 | 656,521 | -212,550 |
Balance at end of year | $2,058,556 | $2,426,652 | $1,709,799 |
Deferred_Policy_Acquisition_Co4
Deferred Policy Acquisition Costs and Deferred Sales Inducements (Deferred Sales Inducements) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement in Deferred Sales Inducements [Roll Forward] | |||
Balance at beginning of year | $1,875,880 | $1,292,341 | $1,242,787 |
Costs deferred during the year | 330,079 | 337,787 | 306,659 |
Amortization | -131,419 | -253,113 | -87,157 |
Effect of net unrealized gains/losses | -487,283 | 498,865 | -169,948 |
Balance at end of year | $1,587,257 | $1,875,880 | $1,292,341 |
Reinsurance_and_Policy_Provisi2
Reinsurance and Policy Provisions (Equitrust Coinsurance Agreements) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Ceded Credit Risk [Line Items] | ||
Coinsurance deposits | 3,044,342,000 | $2,999,618,000 |
Equitrust Coinsurance Agreements, All Periods [Member] | ||
Ceded Credit Risk [Line Items] | ||
Number of coinsurance agreements | 2 | |
Coinsurance deposits | 900,000,000 | 900,000,000 |
Reinsurance payable | 15,200,000 | $20,700,000 |
Equitrust Coinsurance Agreement, August 1, 2001 to December 31, 2001 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 70.00% | |
Equitrust Coinsurance Agreement, January 1, 2002 to December 31, 2003 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 40.00% | |
Equitrust Coinsurance Agreement, January 1, 2004 to July 31, 2004 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 20.00% |
Reinsurance_and_Policy_Provisi3
Reinsurance and Policy Provisions (Athene Coinsurance Agreements) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Years | ||
Ceded Credit Risk [Line Items] | ||
Coinsurance deposits | 3,044,342,000 | $2,999,618,000 |
Athene Coinsurance Agreements, All Periods [Member] | ||
Ceded Credit Risk [Line Items] | ||
Number of coinsurance agreements | 3 | |
Coinsurance deposits | 2,200,000,000 | 2,100,000,000 |
Reinsurance payable | 21,900,000 | $27,300,000 |
Fixed Index Annuities [Member] | Athene, 1st Coinsurance Agreement, January 1, 2009 to March 31, 2010 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 20.00% | |
Years until eligibility for recapture | 7 | |
Fixed Index Annuities [Member] | Eagle Life [Member] | Athene, 3rd Coinsurance Agreement, January 1, 2014 to December 31, 2015 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 80.00% | |
Fixed Index Annuities [Member] | Eagle Life [Member] | Athene, 3rd Coinsurance Agreement, January 1, 2016 to December 31, 2018 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 50.00% | |
Fixed Index Annuities [Member] | Eagle Life [Member] | Athene, 3rd Coinsurance Agreement, January 1, 2019 Going Forward [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 20.00% | |
Multi-Year Rate Guaranteed Annuities [Member] | American Equity Life [Member] | Athene, 2nd Coinsurance Agreement, July 1, 2009 to December 31, 2013 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 80.00% | |
Multi-Year Rate Guaranteed Annuities [Member] | American Equity Life [Member] | Athene, 3rd Coinsurance Agreement, January 1, 2014 Going Forward [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 80.00% | |
Multi-Year Rate Guaranteed Annuities [Member] | Eagle Life [Member] | Athene, 2nd Coinsurance Agreement, November 20, 2013 to December 31, 2013 [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 80.00% | |
Multi-Year Rate Guaranteed Annuities [Member] | Eagle Life [Member] | Athene, 3rd Coinsurance Agreement, January 1, 2014 Going Forward [Member] | ||
Ceded Credit Risk [Line Items] | ||
Coninsurance percentage on certain annuities | 80.00% |
Reinsurance_and_Policy_Provisi4
Reinsurance and Policy Provisions (Amounts Ceded to Equitrust and Athene, Impact on Consolidated Statements of Operations and Consolidated Statements of Cash Flows) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Effects of Reinsurance [Line Items] | |||
Annuity product charges | $118,990 | $103,591 | $89,006 |
Change in fair value of derivatives | 504,825 | 1,076,015 | 221,138 |
Interest sensitive and index product benefits | 1,473,700 | 1,272,867 | 808,479 |
Change in fair value of embedded derivatives | 32,321 | 133,968 | 286,899 |
Other operating costs and expenses | 81,584 | 91,915 | 95,495 |
Coinsurance deposits | 109,184 | 25,729 | 4,885 |
Coinsurance Agreements, EquiTrust and Athene [Member] | |||
Effects of Reinsurance [Line Items] | |||
Annuity product charges | 5,956 | 6,551 | 6,796 |
Change in fair value of derivatives | 31,076 | 60,876 | 17,106 |
Coinsurance, revenues included in consolidated statement of operations | 37,032 | 67,427 | 23,902 |
Interest sensitive and index product benefits | 122,666 | 117,934 | 94,113 |
Change in fair value of embedded derivatives | 35,820 | 2,898 | 9,373 |
Other operating costs and expenses | 9,241 | 9,926 | 9,333 |
Coinsurance, benefits and expenses included in the consolidated statement of operations | 167,727 | 130,758 | 112,819 |
Annuity deposits | -171,124 | -182,616 | -203,552 |
Cash payments to policyholders | 280,308 | 208,345 | 208,437 |
Coinsurance deposits | $109,184 | $25,729 | $4,885 |
Reinsurance_and_Policy_Provisi5
Reinsurance and Policy Provisions (Hannover Financing Arrangements) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Hannover Reinsurance Agreement, All Agreements [Member] | |||
Ceded Credit Risk [Line Items] | |||
Number of reinsurance agreements | 2 | ||
2011 Hannover Reinsurance Agreement [Member] | |||
Ceded Credit Risk [Line Items] | |||
Net pretax statutory surplus benefit | $49.20 | ||
Statutory surplus benefit reduction, duration (years) | 5 years | ||
Reduction in pretax statutory surplus, current period | 10.8 | 11.3 | 11.8 |
Reduction in pretax statutory surplus, due in one year | 10.3 | ||
Reduction in pretax statutory surplus, due in two years | 2.5 | ||
Risk charge rate | 1.25% | ||
Risk charges | 0.8 | 1.3 | 1.8 |
2013 Hannover Reinsurance Agreement [Member] | |||
Ceded Credit Risk [Line Items] | |||
Risk charge rate | 1.25% | ||
Risk charges | 15.7 | 7 | |
Waived surrender charges on penalty free withdrawals and deaths on certain business, percentage | 45.60% | ||
Reserve credit | 322.5 | 288.2 | |
2005 Hannover Reinsurance Agreement [Member] | |||
Ceded Credit Risk [Line Items] | |||
Risk charges | 5.4 | 9.9 | |
Waived surrender charges on penalty free withdrawals and deaths on certain business, percentage | 47.00% | ||
2008 Hannover Reinsurance Agreement [Member] | |||
Ceded Credit Risk [Line Items] | |||
Net pretax statutory surplus benefit | 29.5 | ||
Reduction in pretax statutory surplus, current period | 6.9 | 6.8 | |
Risk charge rate | 1.25% | ||
Risk charges | $0.10 | $0.50 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 35.00% | |
Statement [Line Items] | ||
Deferred tax assets, valuation allowance | $0 | $0 |
Non-Life Subsidiaries [Member] | Internal Revenue Service (IRS) [Member] | ||
Statement [Line Items] | ||
Non-life net operating loss carryforwards | 28,100,000 | |
Deferred Tax Asset, Valuation Allowance, Unrealized Losses on Available For Sale Fixed Maturity Securities [Member] | ||
Statement [Line Items] | ||
Deferred tax assets, valuation allowance | $0 |
Income_Taxes_Components_of_Inc
Income Taxes (Components of Income Tax Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated statements of operations: | |||
Current income taxes | $116,545 | $133,036 | $80,527 |
Deferred income taxes (benefits) | -46,504 | 3,013 | -52,336 |
Total income tax expense included in consolidated statements of operations | 70,041 | 136,049 | 28,191 |
Stockholders' equity: | |||
Expense (benefit) relating to: change in net unrealized investment losses | 363,572 | -344,944 | 123,620 |
Expense (benefit) relating to: share-based compensation | -5,716 | -4,043 | -392 |
Expense (benefit) relating to: extinguishment of convertible debt | -9,284 | -4,546 | 0 |
Total income tax expense (benefit) included in consolidated financial statements | $418,613 | ($217,484) | $151,419 |
Income_Taxes_Effective_Income_
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Income before income taxes | $196,064 | $389,332 | $85,989 |
Income tax expense on income before income taxes | 68,622 | 136,266 | 30,096 |
Tax effect of: tax exempt net investment income | -3,669 | -2,657 | -1,876 |
Tax effect of: extinguishment of convertible debt | 4,202 | 2,695 | 0 |
Tax effect of: other | 886 | -255 | -29 |
Total income tax expense included in consolidated statements of operations | $70,041 | $136,049 | $28,191 |
Effective tax rate | 35.70% | 34.90% | 32.80% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred income tax assets: | ||
Policy benefit reserves | $2,052,968 | $1,875,516 |
Other than temporary impairments | 753 | 901 |
Investment income items | 0 | 2,121 |
Amounts due reinsurer | 680 | 7,366 |
Other policyholder funds | 7,765 | 9,200 |
Litigation settlement accrual | 7,100 | 7,420 |
Deferred compensation | 10,565 | 13,430 |
Convertible senior notes | 12,281 | 34,818 |
Net operating loss carryforwards | 17,694 | 24,179 |
Other | 11,685 | 8,835 |
Gross deferred tax assets | 2,121,491 | 1,983,786 |
Deferred income tax liabilities: | ||
Deferred policy acquisition costs and deferred sales inducements | -1,637,607 | -1,475,403 |
Net unrealized gains on available for sale fixed maturity and equity securities | -376,314 | -12,742 |
Derivative instruments | -94,038 | -193,067 |
Investment income items | -14,842 | 0 |
Other | -2,585 | -718 |
Gross deferred tax liabilities | -2,125,386 | -1,681,930 |
Net deferred income tax (liability) asset | ($3,895) | $301,856 |
Notes_Payable_and_Amounts_Due_2
Notes Payable and Amounts Due Under Repurchase Agreements (Liability and Equity Components of Convertible Senior Notes) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
September 2015 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of liability component | $22,377 | $91,951 |
Unamortized discount | -698 | -6,623 |
Net carrying amount of liability component | 21,679 | 85,328 |
Amount by which the if-converted value exceeds principal | 30,497 | 104,403 |
December 2029 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of liability component | 68,373 | |
Unamortized discount | -3,743 | |
Net carrying amount of liability component | 64,630 | |
Carrying amount of equity component | 15,586 | |
Amount by which the if-converted value exceeds principal | $113,169 |
Notes_Payable_and_Amounts_Due_3
Notes Payable and Amounts Due Under Repurchase Agreements (2021 Notes Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Jul. 17, 2013 | |
2011 Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of line of credit | $15,000,000 | ||
July 2021 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 400,000,000 | ||
Interest rate | 6.63% | ||
Deferred financing costs | $9,000,000 |
Notes_Payable_and_Amounts_Due_4
Notes Payable and Amounts Due Under Repurchase Agreements (2015 Notes, 2015 Notes Hedges and 2015 Warrants Narrative) (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Sep. 30, 2010 | |
Debt Instrument [Line Items] | |||||
Interest expense on convertible notes | $36,370,000 | $38,870,000 | $28,479,000 | ||
Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense on convertible notes | 9,000,000 | 26,400,000 | 28,500,000 | ||
2015 Notes Embedded Conversion Derivative [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative, liability, fair value at issuance | 37,000,000 | ||||
September 2015 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount of convertible senior notes payable at issuance | 200,000,000 | ||||
Interest rate | 3.50% | ||||
Deferred financing costs | 6,800,000 | ||||
Debt instrument, number of days holders may convert | 5 days | ||||
Debt instrument, measurement period of convertible senior notes | 10 days | ||||
Debt instrument, face amount | 1,000 | ||||
Product of last reported common stock sale price and conversion rate | 98.00% | ||||
Debt instrument, number of days to measure stock value against conversion value | 20 days | ||||
Debt instrument, consecutive trading day period to determine convertibility | 30 days | ||||
Stock price must exceed conversion price to allow conversion | 130.00% | ||||
Debt instrument, convertible, number of equity instruments, shares | 80.9486 | 80 | |||
Debt instrument, convertible, conversion price | $12.35 | $12.50 | |||
Debt instrument, convertible, fundamental change stock price floor | $10 | ||||
Debt instrument, convertible, conversion rate increase upon fundamental change | 20 | ||||
Extinguishment of debt, amount | 108,000,000 | ||||
Extinguishment of debt, cash paid | 116,100,000 | ||||
Extinguishment of debt, cash paid for shares of common stock | 79,200,000 | ||||
Extinguishment of debt, shares issued | 3,643,402 | ||||
Extinguishment of debt, carrying value at extinguishment | 99,600,000 | ||||
Extinguishment of debt, gain (loss), net of tax | -15,200,000 | ||||
Interest rate, effective percentage | 8.90% | ||||
September 2015 Notes [Member] | Private Exchange Offers [Member] | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | 69,600,000 | ||||
Extinguishment of debt, cash paid | 82,900,000 | ||||
Extinguishment of debt, cash paid for shares of common stock | 48,200,000 | ||||
Extinguishment of debt, shares issued | 2,115,055 | ||||
Extinguishment of debt, carrying value at extinguishment | 66,000,000 | ||||
Extinguishment of debt, gain (loss), net of tax | ($4,800,000) | ||||
September 2015 Notes [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, threshold for adjustment of conversion rate and conversion price | 1.00% |
Notes_Payable_and_Amounts_Due_5
Notes Payable and Amounts Due Under Repurchase Agreements (2029 Notes Narrative) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | ||||
Change in fair value of embedded derivatives | ($32,321,000) | ($133,968,000) | ($286,899,000) | |
Interest expense on convertible notes | 36,370,000 | 38,870,000 | 28,479,000 | |
Convertible Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense on convertible notes | 9,000,000 | 26,400,000 | 28,500,000 | |
2029 Notes Embedded Conversion Derivative [Member] | ||||
Debt Instrument [Line Items] | ||||
Change in fair value of embedded derivatives | -3,809,000 | 0 | 0 | |
Mandatory Redemption [Member] | 2029 Notes Embedded Conversion Derivative [Member] | ||||
Debt Instrument [Line Items] | ||||
Change in fair value of embedded derivatives | -3,800,000 | |||
December 2029 Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount of convertible senior notes payable at issuance | 115,800,000 | |||
Adjustments to additional paid in capital, equity component of convertible debt | 15,600,000 | |||
Deferred income tax liability, equity component of convertible debt | 11,000,000 | |||
Interest rate | 5.25% | |||
Extinguishment of debt, amount | 47,500,000 | |||
Extinguishment of debt, cash paid | 74,800,000 | |||
Extinguishment of debt, cash paid for shares of common stock | 34,900,000 | |||
Extinguishment of debt, shares issued | 1,629,677 | |||
Extinguishment of debt, carrying value at extinguishment | 44,500,000 | |||
Extinguishment of debt, gain (loss), net of tax | -5,200,000 | |||
Interest rate, effective percentage | 11.90% | |||
December 2029 Notes [Member] | Private Exchange Offers [Member] | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt, amount | 36,200,000 | |||
Extinguishment of debt, cash paid | 66,700,000 | |||
Extinguishment of debt, cash paid for shares of common stock | 23,200,000 | |||
Extinguishment of debt, shares issued | 946,793 | |||
Extinguishment of debt, carrying value at extinguishment | 34,600,000 | |||
Extinguishment of debt, gain (loss), net of tax | -2,500,000 | |||
December 2029 Notes [Member] | Mandatory Redemption [Member] | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt, amount | 32,100,000 | |||
Extinguishment of debt, cash paid | 69,400,000 | |||
Extinguishment of debt, cash paid for shares of common stock | 24,600,000 | |||
Extinguishment of debt, shares issued | 897,548 | |||
Equity reclassified to an embedded derivative liability | $58,100,000 |
Notes_Payable_and_Amounts_Due_6
Notes Payable and Amounts Due Under Repurchase Agreements (Line of Credit Narrative) (Details) (2013 Line of Credit [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
occasions | ||
banks | ||
guarantor | ||
2013 Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $140,000,000 | |
Line of credit, number of banks in agreement | 5 | |
Line of credit, interest rate, floating, applicable margin | 1.00% | |
Line of credit, interest rate, floating, adjusted LIBOR | 2.00% | |
Line of credit, unused capacity, commitment fee percentage | 0.35% | |
Minimum risk-based capital ratio | 275.00% | |
Maximum debt to capital ratio | 0.35 | |
Minimum capital to be retained | 80.00% | |
Minimum portion of net income to be retained | 50.00% | |
Minimum capital contributions to be retained | 50.00% | |
Line of credit, number of occasions borrowing capacity can be increased | 3 | |
Line of credit, additional borrowing capacity, aggregate amount | 50,000,000 | |
Line of credit, duration of maturity date extension available, years | 1 year | |
Line of credit, number of guarantors | 0 | |
Line of credit, amount outstanding | 0 | 0 |
Cash in excess of amount required by covenants | $518,200,000 |
Notes_Payable_and_Amounts_Due_7
Notes Payable and Amounts Due Under Repurchase Agreements (Repurchase Agreements Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes Payable [Abstract] | |||
Repurchase agreement, maximum amount borrowed | $138.70 | $258.60 | $0 |
Repurchase agreement, average borrowings | $9.20 | $68.30 | |
Repurchase agreement, weighted average interest rate | 0.19% | 0.20% |
Subordinated_Debentures_Narrat
Subordinated Debentures (Narrative) (Details) (American Equity Capital Trust II [Member], USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
American Equity Capital Trust II [Member] | |
Subordinated Borrowing [Line Items] | |
Subordinated debentures, principal amount | $100 |
Subordinated debentures, fair value at issuance | $74.70 |
Interest rate, effective percentage | 6.80% |
Ownership percentage, Iowa Farm Bureau Federation | 50.00% |
Subordinated_Debentures_Summar
Subordinated Debentures (Summary of Subordinated Debt Obligations to the Trusts) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | $246,243 | $246,050 | |
American Equity Capital Trust II [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 76,633 | 76,440 | |
Interest rate | 5.00% | ||
Subordinated borrowing, due date | 1-Jun-47 | ||
American Equity Capital Trust III [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 27,840 | 27,840 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.90% | ||
Subordinated borrowing, due date | 29-Apr-34 | ||
American Equity Capital Trust IV [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 12,372 | 12,372 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 4.00% | ||
Subordinated borrowing, due date | 8-Jan-34 | ||
American Equity Capital Trust VII [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 10,830 | 10,830 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.75% | ||
Subordinated borrowing, due date | 14-Dec-34 | ||
American Equity Capital Trust VIII [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 20,620 | 20,620 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.75% | ||
Subordinated borrowing, due date | 15-Dec-34 | ||
American Equity Capital Trust IX [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 15,470 | 15,470 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.65% | ||
Subordinated borrowing, due date | 15-Jun-35 | ||
American Equity Capital Trust X [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 20,620 | 20,620 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.65% | ||
Subordinated borrowing, due date | 15-Sep-35 | ||
American Equity Capital Trust XI [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | 20,620 | 20,620 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.65% | ||
Subordinated borrowing, due date | 15-Dec-35 | ||
American Equity Capital Trust XII [Member] | |||
Subordinated Borrowing [Line Items] | |||
Subordinated debentures | $41,238 | $41,238 | |
Description of variable rate basis | *LIBOR + | [1] | |
Basis spread on variable rate | 3.50% | ||
Subordinated borrowing, due date | 7-Apr-36 | ||
[1] | three month London Interbank Offered Rate |
Retirement_and_Sharebased_Comp2
Retirement and Share-based Compensation Plans (Defined Contribution Plan) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Defined contribution plan, maximum annual employee contribution | $17,500 | $17,500 | $17,000 |
Defined contribution plan, employer plan contributions | $423,000 | $391,000 | $370,000 |
Retirement_and_Sharebased_Comp3
Retirement and Share-based Compensation Plans (Deferred Compensation Arrangements) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred Compensation Plans, Certain Officers, Directors and Consultants [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Shares earned and reserved for future issuance | 362,287 | 356,897 | |
Share-based compensation expense | $127,000 | $162,000 | $200,000 |
Deferred Compensation Plans, Officer Rabbi Trust [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation liability | $3,900,000 | $3,100,000 | |
Shares held | 102,551 | 103,551 | |
Deferred Compensation Plans, NMO Deferred Compensation Plan [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Award vesting period | 9 years | ||
Undistributed vested shares | 543,120 | 892,688 | |
Deferred Compensation Plans, NMO Trust [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Shares held | 543,120 | 892,688 | |
Shares distributed | 349,568 | 249,644 | 489,216 |
Retirement_and_Sharebased_Comp4
Retirement and Share-based Compensation Plans (Share-based Compensation Expense By Plan) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESOP, compensation expense | $2,486 | $3,464 | $1,112 |
Compensation expense | 4,581 | 5,442 | 3,582 |
2009 Employee Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 1,306 | 1,294 | 1,558 |
2013 Director Equity And Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 603 | 380 | 0 |
2011 Director Stock Option Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $186 | $304 | $912 |
Retirement_and_Sharebased_Comp5
Retirement and Share-based Compensation Plans (Employee Stock Ownership Plan) (Details) (USD $) | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
ESOP, requisite service period | 6 months |
ESOP, vesting percentage | 100.00% |
ESOP, vesting period | 2 years |
ESOP, employer loan amount | $7 |
ESOP, shares purchased with ESOP employer loan | 650,000 |
ESOP, debt structure, employer loan, duration | 20 years |
Retirement_and_Sharebased_Comp6
Retirement and Share-based Compensation Plans (Incentive Plans) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Short-Term Performance Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Participant age for full vesting | 65 years | ||
Requisite service period for full vesting | 10 years | ||
Shares issued in period | 33,489 | 51,810 | |
Short-Term Performance Incentive Plan [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued in period | 23,681 | 37,369 | |
2009 Employee Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Participant age for full vesting | 65 years | ||
Requisite service period for full vesting | 10 years | ||
Shares issued in period | 18,239 | 26,087 | |
Number of shares authorized | 2,500,000 | ||
Number of shares available for future grant | 1,623,928 | ||
Duration of award | 10 years | ||
2009 Employee Incentive Plan [Member] | March 2010 Option Grant [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Duration of award | 6 years | ||
2009 Employee Incentive Plan [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued in period | 14,869 | 20,889 | |
2009 Employee Incentive Plan [Member] | Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Equity instruments granted | 54,718 | 78,260 | |
Duration used to measure performance and threshold goals | 3 years | ||
2009 Employee Incentive Plan [Member] | Restricted Stock Units [Member] | Threshold Goals, Vesting Percentage [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 50.00% | ||
2009 Employee Incentive Plan [Member] | Restricted Stock Units [Member] | Target Performance Goals, Vesting Percentage [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 100.00% | ||
2013 Director Equity And Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Shares issued in period | 24,000 | 40,000 | |
Number of shares authorized | 250,000 | ||
Number of shares available for future grant | 186,000 |
Retirement_and_Sharebased_Comp7
Retirement and Share-based Compensation Plans (Stock Option Plans) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, intrinsic value | $57.30 | ||
Options vested and expected to vest, intrinsic value | 50 | ||
Proceeds from stock options exercised | 13.7 | 31.8 | 5.7 |
Tax benefit from stock options exercised | 1 | 1 | 0.1 |
Stock Option Plans, 1996 Stock Option Plan, 2000 Employee Stock Option Plan, 2000 Directors Stock Option Plan, 2011 Directors Stock Option Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 3,475,000 | ||
Duration of award | 10 years | ||
Stock Option Plans, 1996 Stock Option Plan, 2000 Employee Stock Option Plan, 2000 Directors Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 6 months | ||
Stock Option Plans, 2011 Director Stock Option Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Number of shares available for future grant | 18,000 | ||
Stock Option Plans, Independent Insurance Agent Stock Option Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 8,000,000 | ||
Duration of award | 7 years | ||
Award vesting period | 6 months | ||
Options, grants in period, net of forfeitures | 1,284,950 | 1,125,100 | |
Commission expense | 8.1 | 3.9 | |
Stock Option Plans, All Stock Option Plans For Officers, Directors And Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options exercised in period, total intrinsic value | $5.40 | $10.40 | $0.90 |
Retirement_and_Sharebased_Comp8
Retirement and Share-based Compensation Plans (Valuation Assumptions of Stock Options Granted to Officers, Directors and Employees) (Details) (Stock Option Plans, All Stock Option Plans For Officers, Directors And Employees [Member]) | 12 Months Ended |
Dec. 31, 2012 | |
Directors and Retirement Eligible Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free interest rate | 0.76% |
Dividend yield | 1.10% |
Average expected life (years) | 5 years |
Volatility | 62.50% |
Non-Retirement Eligible Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average risk-free interest rate | 1.36% |
Dividend yield | 1.30% |
Average expected life (years) | 8 years |
Volatility | 50.90% |
Retirement_and_Sharebased_Comp9
Retirement and Share-based Compensation Plans (2014 Independent Insurance Agent Restricted Stock and Restricted Stock Unit Plan) (Details) (2014 Independent Insurance Agent Restricted Stock and Restricted Stock Unit Plan [Member], USD $) | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 1,000,000 |
Commission expense | $1.90 |
Share-based Compensation Award, Tranche One [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting rights, percentage | 20.00% |
Award vesting period | 1 year |
Share-based Compensation Award, Tranche Two [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting rights, percentage | 80.00% |
Maximum [Member] | Share-based Compensation Award, Tranche Two [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 5 years |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments granted | 27,985 |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments granted | 221,489 |
Recovered_Sheet2
Retirement and Share-based Compensation Plans (Valuation Assumptions of Stock Options Granted to Agents) (Details) (Stock Option Plans, Independent Insurance Agent Stock Option Plans [Member]) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Option Plans, Independent Insurance Agent Stock Option Plans [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free interest rate | 1.21% | 0.51% |
Dividend yield | 0.70% | 1.20% |
Average expected life (years) | 3 years 9 months | 3 years 9 months |
Volatility | 31.20% | 41.10% |
Recovered_Sheet3
Retirement and Share-based Compensation Plans (Changes in the Number of Stock Options Outstanding) (Details) (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Outstanding, number of shares | 4,044,175 | 3,976,725 | 5,732,450 | 4,844,850 |
Outstanding, weighted-average exercise price per share | $15.02 | $10.86 | $10.35 | $10.13 |
Outstanding, total exercise price | $60,760 | $43,171 | $59,321 | $49,097 |
Granted, number of shares | 1,277,650 | 1,210,950 | 1,558,900 | |
Granted, weighted-average exercise price per share | $24.79 | $13.13 | $10.40 | |
Granted, total exercise price | 31,673 | 15,899 | 16,216 | |
Canceled, number of shares | -35,400 | -29,400 | -28,050 | |
Canceled, weighted-average exercise price per share | $11.64 | $9.96 | $8.97 | |
Canceled, total exercise price | -412 | -293 | -251 | |
Exercised, number of shares | -1,174,800 | -2,937,275 | -643,250 | |
Exercised, weighted-average exercise price per share | $11.64 | $10.81 | $8.93 | |
Exercised, total exercise price | ($13,672) | ($31,756) | ($5,741) |
Recovered_Sheet4
Retirement and Share-based Compensation Plans (Schedule of Stock Options Outstanding, By Exercise Price Range) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Stock options outstanding, number of awards | 4,044,175 | 3,976,725 | 5,732,450 | 4,844,850 |
Stock options outstanding, weighted-average exercise price per share | $15.02 | $10.86 | $10.35 | $10.13 |
Exercise Price Range I [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit | $5.07 | |||
Exercise price range, upper range limit | $8.02 | |||
Stock options outstanding, number of awards | 506,000 | |||
Stock options outstanding, remaining life (yrs) | 2 years 8 months 23 days | |||
Stock options outstanding, weighted-average exercise price per share | $7.39 | |||
Stock options vested, number of awards | 506,000 | |||
Stock options vested, remaining life (yrs) | 2 years 8 months 23 days | |||
Stock options vested, weighted-average exercise price per share | $7.39 | |||
Exercise Price Range II [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit | $9.27 | |||
Exercise price range, upper range limit | $11.35 | |||
Stock options outstanding, number of awards | 1,220,550 | |||
Stock options outstanding, remaining life (yrs) | 3 years 11 months 9 days | |||
Stock options outstanding, weighted-average exercise price per share | $10.23 | |||
Stock options vested, number of awards | 1,136,550 | |||
Stock options vested, remaining life (yrs) | 3 years 8 months 9 days | |||
Stock options vested, weighted-average exercise price per share | $10.21 | |||
Exercise Price Range III [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit | $11.87 | |||
Exercise price range, upper range limit | $24.79 | |||
Stock options outstanding, number of awards | 2,317,625 | |||
Stock options outstanding, remaining life (yrs) | 5 years 2 months 24 days | |||
Stock options outstanding, weighted-average exercise price per share | $19.22 | |||
Stock options vested, number of awards | 2,297,625 | |||
Stock options vested, remaining life (yrs) | 5 years 2 months 5 days | |||
Stock options vested, weighted-average exercise price per share | $19.22 | |||
Exercise Price Range, All Options [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price range, lower range limit | $5.07 | |||
Exercise price range, upper range limit | $24.79 | |||
Stock options outstanding, number of awards | 4,044,175 | |||
Stock options outstanding, remaining life (yrs) | 4 years 6 months 12 days | |||
Stock options outstanding, weighted-average exercise price per share | $15.02 | |||
Stock options vested, number of awards | 3,940,175 | |||
Stock options vested, remaining life (yrs) | 4 years 5 months 6 days | |||
Stock options vested, weighted-average exercise price per share | $15.10 |
Statutory_Financial_Informatio2
Statutory Financial Information and Dividend Restrictions (Narrative and Statutory Accounting Practices Tables) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statutory Financial Information and Dividend Restrictions [Abstract] | |||
American Equity Life, statutory net income | $340,000,000 | $205,202,000 | $82,039,000 |
American Equity Life, statutory capital and surplus balance | 2,172,455,000 | 1,870,728,000 | |
Total adjusted capital | 2,327,335,000 | 1,995,658,000 | |
Company Action Level RBC | 625,373,000 | 580,085,000 | |
Ratio of adjusted capital to Company Action Level RBC | 372.00% | 344.00% | |
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments [Abstract] | |||
Statutory amount available for dividend payments without regulatory approval | 343,300,000 | ||
Dividends paid by insurance subsidiaries | $0 | $0 | $0 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Narrative and Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
2015 | $2,323,000 | ||||
2016 | 1,718,000 | ||||
2017 | 1,473,000 | ||||
2018 | 1,398,000 | ||||
2019 | 1,377,000 | ||||
2020 and thereafter | 10,102,000 | ||||
Rent expense | 2,500,000 | 2,300,000 | 2,000,000 | ||
Aggregate future minimum lease payments due | 18,400,000 | ||||
Estimated litigation liability | 11,100,000 | 21,200,000 | 17,500,000 | ||
Change in estimated litigation liability | -2,300,000 | ||||
Legal fees paid | 7,800,000 | ||||
Unfunded commitments to limited partnerships | 30,600,000 | ||||
Unfunded commitments to secured bank loans | $5,700,000 |
Earnings_Per_Share_Schedule_of
Earnings Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||||||||
Net income | $31,217 | $67,815 | $36,744 | ($9,753) | $50,958 | $56,181 | $120,113 | $26,031 | $126,023 | $253,283 | $57,798 | |||
Interest on convertible subordinated debentures (net of income tax benefit) | 0 | 0 | 517 | |||||||||||
Numerator for earnings per common sharebassuming dilution | $126,023 | $253,283 | $58,315 | |||||||||||
Weighted average common shares outstanding (shares) | 74,431,087 | [1] | 65,543,895 | [1] | 61,258,825 | [1] | ||||||||
Effect of dilutive securities: 2015 warrants (shares) | 1,559,646 | 1,184,549 | 0 | |||||||||||
Denominator for earnings per common share - assuming dilution (shares) | 79,893,600 | 75,040,646 | 65,675,651 | |||||||||||
Earnings per common share | $0.41 | $0.90 | $0.49 | ($0.13) | $0.73 | $0.86 | $1.87 | $0.41 | $1.69 | $3.86 | $0.94 | |||
Earnings per common share - assuming dilution | $0.39 | $0.85 | $0.46 | ($0.13) | $0.64 | $0.75 | $1.71 | $0.38 | $1.58 | $3.38 | $0.89 | |||
Stock Options And Deferred Compensation Agreements [Member] | ||||||||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||||||||
Effect of dilutive securities: share-based payment agreements (shares) | 1,178,783 | 1,224,053 | 553,312 | |||||||||||
Restricted Stock And Restricted Stock Units [Member] | ||||||||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||||||||
Effect of dilutive securities: share-based payment agreements (shares) | 66,926 | 0 | 0 | |||||||||||
Convertible Subordinated Debentures [Member] | ||||||||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||||||||
Effect of dilutive securities: conversion of debt securities (shares) | 0 | 0 | 1,348,447 | |||||||||||
Convertible Senior Notes [Member] | ||||||||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||||||||
Effect of dilutive securities: conversion of debt securities (shares) | 2,657,158 | 7,088,149 | 2,515,067 | |||||||||||
[1] | Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP. |
Earnings_Per_Share_Schedule_of1
Earnings Per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) (Stock Option [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares | 1,215,450 | 0 | 1,522,100 |
Minimum [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Range of exercise prices | 24.79 | 0 | 11.35 |
Maximum [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Range of exercise prices | 24.79 | 0 | 14.34 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Unaudited) (Schedule of Quarterly Financial Information) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Premiums and product charges | $42,639 | $38,001 | $38,370 | $32,603 | $42,986 | $36,325 | $35,062 | $34,565 | |||
Net investment income | 403,849 | 386,931 | 370,882 | 370,005 | 363,947 | 354,147 | 336,143 | 329,690 | 1,531,667 | 1,383,927 | 1,286,923 |
Change in fair value of derivatives | 146,231 | 39,218 | 270,883 | 48,493 | 444,985 | 193,028 | 64,040 | 373,962 | 504,825 | 1,076,015 | 221,138 |
Net realized gains (losses) on investments, excluding other than temporary impairment (OTTI) losses | 2,131 | -3,190 | -2,230 | -714 | 16,364 | -2,077 | 15,689 | 10,585 | -4,003 | 40,561 | -6,454 |
Net OTTI losses recognized in operations | -564 | -564 | -594 | -905 | 0 | -222 | -2,775 | -3,237 | -2,627 | -6,234 | -14,932 |
Loss on extinguishment of debt | -1,951 | 0 | -6,574 | -3,977 | -30,988 | -938 | -589 | 0 | -12,502 | -32,515 | 0 |
Total revenues | 592,335 | 460,396 | 670,737 | 445,505 | 837,294 | 580,263 | 447,570 | 745,565 | 2,168,973 | 2,610,692 | 1,652,356 |
Net income (loss) | $31,217 | $67,815 | $36,744 | ($9,753) | $50,958 | $56,181 | $120,113 | $26,031 | $126,023 | $253,283 | $57,798 |
Earnings (loss) per common share | $0.41 | $0.90 | $0.49 | ($0.13) | $0.73 | $0.86 | $1.87 | $0.41 | $1.69 | $3.86 | $0.94 |
Earnings (loss) per common sharebassuming dilution | $0.39 | $0.85 | $0.46 | ($0.13) | $0.64 | $0.75 | $1.71 | $0.38 | $1.58 | $3.38 | $0.89 |
Quarterly_Financial_Informatio3
Quarterly Financial Information (Unaudited) (Comparability of Net Income, Impact of Fair Value Accounting to Fixed Index Annuity Business) (Details) (USD $) | 3 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 |
Quarterly Financial Information Disclosure [Abstract] | ||||||||
Fixed index annuity derivatives, fair value accounting impact on comparability of net income | $15,862 | ($5,017) | ($2,232) | $42,297 | ($23,418) | ($5,601) | ($80,658) | $10,973 |
Schedule_I_Summary_of_Investme2
Schedule I - Summary of Investments - Other Than Investments in Related Parties (Details) (USD $) | Dec. 31, 2014 | |
In Thousands, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | $33,269,706 | [1] |
Amount at which shown in the balance sheet | 35,981,858 | |
Fixed Maturity Securities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 30,281,478 | [1] |
Fair value | 32,521,040 | |
Amount at which shown in the balance sheet | 32,521,634 | |
Fixed Maturity Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 30,205,046 | [1] |
Fair value | 32,445,202 | |
Amount at which shown in the balance sheet | 32,445,202 | |
United States Government Full Faith and Credit [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 137,710 | [1] |
Fair value | 138,460 | |
Amount at which shown in the balance sheet | 138,460 | |
United States Government Sponsored Agencies [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 1,364,424 | [1] |
Fair value | 1,393,890 | |
Amount at which shown in the balance sheet | 1,393,890 | |
United States Municipalities, States and Territories [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 3,293,551 | [1] |
Fair value | 3,723,309 | |
Amount at which shown in the balance sheet | 3,723,309 | |
Foreign Government Obligations [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 181,128 | [1] |
Fair value | 193,803 | |
Amount at which shown in the balance sheet | 193,803 | |
Corporate Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 19,984,747 | [1] |
Fair value | 21,490,292 | |
Amount at which shown in the balance sheet | 21,490,292 | |
Corporate Securities [Member] | Held For Investment [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 76,432 | [1] |
Fair value | 75,838 | |
Amount at which shown in the balance sheet | 76,432 | |
Residential Mortgage Backed Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 1,616,846 | [1] |
Fair value | 1,751,345 | |
Amount at which shown in the balance sheet | 1,751,345 | |
Commercial Mortgage Backed Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 2,720,294 | [1] |
Fair value | 2,807,620 | |
Amount at which shown in the balance sheet | 2,807,620 | |
Other Asset Backed Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 906,346 | [1] |
Fair value | 946,483 | |
Amount at which shown in the balance sheet | 946,483 | |
Equity Securities [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 7,509 | [1] |
Fair value | 7,805 | |
Amount at which shown in the balance sheet | 7,805 | |
Common Stocks [Member] | Available For Sale [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 7,509 | [1] |
Fair value | 7,805 | |
Amount at which shown in the balance sheet | 7,805 | |
Mortgage Loans on Real Estate [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 2,434,580 | [1] |
Fair value | 2,493,901 | |
Amount at which shown in the balance sheet | 2,434,580 | |
Derivative Instruments [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 259,413 | [1] |
Fair value | 731,113 | |
Amount at which shown in the balance sheet | 731,113 | |
Other Investments [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized cost | 286,726 | [1] |
Amount at which shown in the balance sheet | $286,726 | |
[1] | On the basis of cost adjusted for other than temporary impairments, repayments and amortization of premiums and accrual of discounts for fixed maturity securities and short-term investments, original cost for derivative instruments and unpaid principal balance less allowance for credit losses for mortgage loans. |
Schedule_II_Condensed_Financia2
Schedule II - Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $701,514 | $897,529 | $1,268,545 | $404,952 |
Deferred income taxes | 0 | 301,856 | ||
Other assets, including 2015 notes hedges | 280,396 | 471,669 | ||
Total assets | 43,989,734 | 39,621,499 | ||
Liabilities: | ||||
Notes payable | 421,679 | 549,958 | ||
Other liabilities, including 2015 notes embedded derivative | 1,009,361 | 1,222,963 | ||
Total liabilities | 41,849,858 | 38,236,812 | ||
Stockholders' equity: | ||||
Common stock | 76,062 | 70,535 | ||
Additional paid-in capital | 513,218 | 550,400 | ||
Unallocated common stock held by ESOP | 0 | -631 | ||
Accumulated other comprehensive income | 721,401 | 46,196 | ||
Retained earnings | 829,195 | 718,187 | ||
Total stockholders' equity | 2,139,876 | 1,384,687 | 1,720,237 | 1,408,679 |
Total liabilities and stockholders' equity | 43,989,734 | 39,621,499 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash and cash equivalents | 61,139 | 252,541 | 11,220 | 12,609 |
Equity securities of subsidiary trusts | 7,409 | 7,403 | ||
Receivable from subsidiaries | 221 | 1,158 | ||
Deferred income taxes | 20,612 | 15,734 | ||
Federal income tax recoverable, including amount from subsidiaries | 10,430 | 11,551 | ||
Other assets, including 2015 notes hedges | 47,308 | 131,424 | ||
Total assets, excluding investment in and advances to subsidiaries | 147,119 | 419,811 | ||
Investment in and advances to subsidiaries | 2,708,085 | 1,889,648 | ||
Total assets | 2,855,204 | 2,309,459 | ||
Liabilities: | ||||
Notes payable | 421,679 | 549,958 | ||
Subordinated debentures payable to subsidiary trusts | 246,243 | 246,050 | ||
Other liabilities, including 2015 notes embedded derivative | 47,406 | 128,764 | ||
Total liabilities | 715,328 | 924,772 | ||
Stockholders' equity: | ||||
Common stock | 76,062 | 70,535 | ||
Additional paid-in capital | 513,218 | 550,400 | ||
Unallocated common stock held by ESOP | 0 | -631 | ||
Accumulated other comprehensive income | 721,401 | 46,196 | ||
Retained earnings | 829,195 | 718,187 | ||
Total stockholders' equity | 2,139,876 | 1,384,687 | ||
Total liabilities and stockholders' equity | $2,855,204 | $2,309,459 |
Schedule_II_Condensed_Financia3
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Operations) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||||||||||
Net investment income | $403,849 | $386,931 | $370,882 | $370,005 | $363,947 | $354,147 | $336,143 | $329,690 | $1,531,667 | $1,383,927 | $1,286,923 |
Change in fair value of derivatives | 146,231 | 39,218 | 270,883 | 48,493 | 444,985 | 193,028 | 64,040 | 373,962 | 504,825 | 1,076,015 | 221,138 |
Loss on extinguishment of debt | -12,502 | -32,515 | 0 | ||||||||
Total revenues | 592,335 | 460,396 | 670,737 | 445,505 | 837,294 | 580,263 | 447,570 | 745,565 | 2,168,973 | 2,610,692 | 1,652,356 |
Expenses: | |||||||||||
Change in fair value of embedded derivatives | 32,321 | 133,968 | 286,899 | ||||||||
Interest expense on notes payable | 36,370 | 38,870 | 28,479 | ||||||||
Interest expense on subordinated debentures issued to subsidiary trusts | 12,122 | 12,088 | 13,458 | ||||||||
Other operating costs and expenses | 81,584 | 91,915 | 95,495 | ||||||||
Total benefits and expenses | 1,972,909 | 2,221,360 | 1,566,367 | ||||||||
Income tax expense (benefit) | 70,041 | 136,049 | 28,191 | ||||||||
Net income | 31,217 | 67,815 | 36,744 | -9,753 | 50,958 | 56,181 | 120,113 | 26,031 | 126,023 | 253,283 | 57,798 |
Parent Company [Member] | |||||||||||
Revenues: | |||||||||||
Net investment income | 130 | 130 | 565 | ||||||||
Dividends from subsidiary trusts | 360 | 361 | 403 | ||||||||
Investment advisory fees | 58,044 | 44,469 | 36,178 | ||||||||
Surplus note interest from subsidiary | 4,080 | 4,080 | 4,080 | ||||||||
Change in fair value of derivatives | -17,122 | 144,012 | -7,472 | ||||||||
Loss on extinguishment of debt | -12,502 | -32,515 | 0 | ||||||||
Total revenues | 32,990 | 160,537 | 33,754 | ||||||||
Expenses: | |||||||||||
Change in fair value of embedded derivatives | -15,227 | 141,974 | -2,488 | ||||||||
Interest expense on notes payable | 36,370 | 38,870 | 28,479 | ||||||||
Interest expense on subordinated debentures issued to subsidiary trusts | 12,122 | 12,088 | 13,458 | ||||||||
Other operating costs and expenses | 7,928 | 8,163 | 8,228 | ||||||||
Total benefits and expenses | 41,193 | 201,095 | 47,677 | ||||||||
Loss before income taxes and equity in undistributed income of subsidiaries | -8,203 | -40,558 | -13,923 | ||||||||
Income tax expense (benefit) | 664 | -13,880 | -5,944 | ||||||||
Loss before equity in undistributed income of subsidiaries | -8,867 | -26,678 | -7,979 | ||||||||
Equity in undistributed income of subsidiaries | 134,890 | 279,961 | 65,777 | ||||||||
Net income | $126,023 | $253,283 | $57,798 |
Schedule_II_Condensed_Financia4
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Cash Flows) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $126,023 | $253,283 | $57,798 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Change in fair value of 2015 notes embedded conversion derivative | 32,321 | 133,968 | 286,899 |
Provision for depreciation and amortization | 9,490 | 18,375 | 18,404 |
Change in fair value of derivatives | -506,328 | -1,076,015 | -221,138 |
Loss on extinguishment of debt | 12,502 | 32,515 | 0 |
Share-based compensation | 3,544 | 10,476 | 6,552 |
ESOP compensation | 2,486 | 3,464 | 1,112 |
Deferred income taxes (benefits) | -46,504 | 3,013 | -52,336 |
Other | -8,948 | -7,059 | -857 |
Changes in operating assets and liabilities: | |||
Other assets | -2,771 | 1,113 | -7,090 |
Other liabilities | -51,008 | -11,435 | 5,927 |
Net cash provided by operating activities | 707,786 | 862,668 | 784,314 |
Investing activities | |||
Net cash used in investing activities | -2,947,749 | -3,879,296 | -2,129,490 |
Financing activities | |||
Financing fees incurred and deferred | -100 | -11,942 | 0 |
Repayment of notes payable | -219,094 | -234,154 | 0 |
Net proceeds from settlement of notes hedge and warrants | 16,558 | 22,170 | 0 |
Repayment of subordinated debentures | 0 | 0 | -1,141 |
Excess tax benefits realized from share-based compensation plans | 5,184 | 4,043 | 481 |
Proceeds from issuance of common stock | 13,681 | 31,764 | 5,741 |
Dividends paid | -15,015 | -12,643 | -9,203 |
Net cash provided by (used in) financing activities | 2,043,948 | 2,645,612 | 2,208,769 |
Increase (decrease) in cash and cash equivalents | -196,015 | -371,016 | 863,593 |
Cash and cash equivalents at beginning of year | 897,529 | 1,268,545 | 404,952 |
Cash and cash equivalents at end of year | 701,514 | 897,529 | 1,268,545 |
Cash paid during the year for: | |||
Interest paid | 42,989 | 25,608 | 27,666 |
Non-cash financing activity: | |||
Conversion of subordinated debentures | 0 | 0 | 20,770 |
Common stock issued in extinguishment of debt | 95,993 | 117,463 | 0 |
Parent Company [Member] | |||
Operating activities | |||
Net income | 126,023 | 253,283 | 57,798 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Change in fair value of 2015 notes embedded conversion derivative | -15,227 | 141,974 | -2,488 |
Provision for depreciation and amortization | 2,081 | 2,831 | 2,382 |
Accrual of discount on equity security | -6 | -5 | -5 |
Equity in undistributed income of subsidiaries | -134,890 | -279,961 | -65,777 |
Accrual of discount on contingent convertible notes | 4,417 | 12,417 | 12,261 |
Change in fair value of derivatives | 15,619 | -144,012 | 7,472 |
Loss on extinguishment of debt | 12,502 | 32,515 | 0 |
Accrual of discount on debenture issued to subsidiary trust | 193 | 181 | 169 |
Share-based compensation | 1,141 | 1,407 | 1,348 |
ESOP compensation | 82 | 110 | 45 |
Deferred income taxes (benefits) | 6,439 | -5,202 | -2,838 |
Other | -2,235 | -3,608 | 0 |
Changes in operating assets and liabilities: | |||
Receivable from subsidiaries | 2,208 | 995 | 1,205 |
Federal income tax recoverable | 1,121 | 62 | -2,745 |
Other assets | 378 | -1,945 | -549 |
Other liabilities | -7,256 | 20,131 | -4,528 |
Net cash provided by operating activities | 12,590 | 31,173 | 3,750 |
Investing activities | |||
Net cash used in investing activities | 0 | 0 | 0 |
Financing activities | |||
Financing fees incurred and deferred | -100 | -11,942 | 0 |
Proceeds from notes payable | 0 | 415,000 | 0 |
Repayment of notes payable | -219,094 | -234,154 | 0 |
Net proceeds from settlement of notes hedge and warrants | 16,558 | 22,170 | 0 |
Repayment of subordinated debentures | 0 | 0 | -1,141 |
Excess tax benefits realized from share-based compensation plans | 184 | 159 | 6 |
Proceeds from issuance of common stock | 13,681 | 31,764 | 5,370 |
Dividends paid | -15,221 | -12,849 | -9,374 |
Net cash provided by (used in) financing activities | -203,992 | 210,148 | -5,139 |
Increase (decrease) in cash and cash equivalents | -191,402 | 241,321 | -1,389 |
Cash and cash equivalents at beginning of year | 252,541 | 11,220 | 12,609 |
Cash and cash equivalents at end of year | 61,139 | 252,541 | 11,220 |
Non-cash financing activity: | |||
Conversion of subordinated debentures | 0 | 0 | 20,770 |
Common stock issued in extinguishment of debt | 95,993 | 117,463 | 0 |
Parent Company [Member] | Convertible Senior Notes [Member] | |||
Cash paid during the year for: | |||
Interest paid | 31,206 | 13,758 | 14,564 |
Parent Company [Member] | Convertible Subordinated Debentures [Member] | |||
Cash paid during the year for: | |||
Interest paid | $11,765 | $11,850 | $13,102 |
Schedule_III_Supplementary_Ins2
Schedule III - Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information [Abstract] | |||
Deferred policy acquisition costs | $2,058,556 | $2,426,652 | $1,709,799 |
Future policy benefits, losses, claims and loss expenses | 39,802,861 | 35,789,655 | 31,773,988 |
Unearned premiums | 0 | 0 | 0 |
Other policy claims and benefits payable | 365,819 | 418,033 | 455,752 |
Premium revenue | 151,613 | 148,938 | 165,681 |
Net investment income | 1,531,667 | 1,383,927 | 1,286,923 |
Benefits, claims, losses and settlement expenses | 1,679,255 | 1,713,019 | 1,264,016 |
Amortization of deferred policy acquisition costs | 163,578 | 365,468 | 164,919 |
Other operating expenses | $130,076 | $142,873 | $137,432 |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amount, life insurance in force | $2,171,426 | $2,250,112 | $2,350,473 |
Ceded to other companies, life insurance in force | 11,548 | 13,521 | 4,742 |
Assumed from other companies, life insurance in force | 56,509 | 57,976 | 61,488 |
Net amount, life insurance in force | 2,216,387 | 2,294,567 | 2,407,219 |
Net amount, insurance premiums and other considerations | 32,623 | 45,347 | 76,675 |
Percent of amount assumed to net, life insurance in force | 2.55% | 2.53% | 2.55% |
Insurance Premiums and Other Considerations [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amount, insurance premiums and other considerations | 157,254 | 155,199 | 172,125 |
Ceded to other companies, insurance premiums and other considerations | 6,292 | 6,879 | 7,160 |
Assumed from other companies, insurance premiums and other considerations | 651 | 618 | 716 |
Net amount, insurance premiums and other considerations | 151,613 | 148,938 | 165,681 |
Percent of amount assumed to net, insurance premiums and other considerations | 0.43% | 0.41% | 0.43% |
Annuity Product Charges [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amount, insurance premiums and other considerations | 124,946 | 110,142 | 95,802 |
Ceded to other companies, insurance premiums and other considerations | 5,956 | 6,551 | 6,796 |
Assumed from other companies, insurance premiums and other considerations | 0 | 0 | 0 |
Net amount, insurance premiums and other considerations | 118,990 | 103,591 | 89,006 |
Percent of amount assumed to net, insurance premiums and other considerations | 0.00% | 0.00% | 0.00% |
Traditional Life, Accident and Health Insurance, and Life Contingent Immediate Annuity Premiums [Member] | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||
Gross amount, insurance premiums and other considerations | 32,308 | 45,057 | 76,323 |
Ceded to other companies, insurance premiums and other considerations | 336 | 328 | 364 |
Assumed from other companies, insurance premiums and other considerations | 651 | 618 | 716 |
Net amount, insurance premiums and other considerations | $32,623 | $45,347 | $76,675 |
Percent of amount assumed to net, insurance premiums and other considerations | 2.00% | 1.36% | 0.93% |
Schedule_V_Valuation_and_Quali2
Schedule V - Valuation and Qualifying Accounts (Details) (Valuation Allowance on Mortgage Loans [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Valuation Allowance on Mortgage Loans [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | ($26,047) | ($34,234) | ($32,964) |
Charged to costs and expenses | -6,052 | -5,621 | -16,832 |
Translation adjustment | 0 | 0 | 0 |
Write-offs/payments/other | 9,466 | 13,808 | 15,562 |
Ending balance | ($22,633) | ($26,047) | ($34,234) |