Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2019 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 000-55522 | ||
Entity Registrant Name | NATIONAL WESTERN LIFE GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-3339380 | ||
Entity Address, Address Line One | 10801 N. Mopac Expy Bldg 3 | ||
Entity Address, City or Town | Austin, | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78759 | ||
City Area Code | (512) | ||
Local Phone Number | 836-1010 | ||
Title of 12(b) Security | Class A Common Stock, $0.01 par value | ||
Trading Symbol | NWLI | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 585,477,905 | ||
Documents Incorporated by Reference | Documents incorporated by reference: Portions of the registrant’s definitive proxy statement for the annual meeting of shareholders to be held June 19, 2020, which will be filed within 120 days after December 31, 2019 , are incorporated by reference into Part III of this report. | ||
Entity Central Index Key | 0001635984 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,436,020 | ||
Class B | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 200,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments: | ||
Debt securities held to maturity, at amortized cost (fair value: $7,407,703 and $7,228,268) | $ 7,106,245 | $ 7,285,254 |
Debt securities available for sale, at fair value (amortized cost: $3,206,120 and $3,008,624) | 3,356,945 | 2,946,059 |
Mortgage loans, net of allowance for possible losses ($675 and $675) | 272,422 | 203,180 |
Policy loans | 80,008 | 54,724 |
Derivatives, index options | 157,588 | 14,684 |
Equity securities, at fair value (cost: $16,894 and $14,329) | 23,594 | 17,491 |
Other long-term investments | 62,090 | 56,851 |
Total investments | 11,058,892 | 10,578,243 |
Cash and cash equivalents | 253,525 | 131,976 |
Deferred policy acquisition costs | 723,972 | 841,704 |
Deferred sales inducements | 104,359 | 133,714 |
Value of business acquired | 138,071 | 0 |
Accrued investment income | 93,298 | 96,338 |
Federal income tax receivable | 0 | 17,934 |
Other assets | 181,330 | 131,782 |
Total assets | 12,553,447 | 11,931,691 |
Future policy benefits: | ||
Universal life and annuity contracts | 9,288,280 | 9,608,850 |
Traditional life reserves | 838,738 | 135,436 |
Other policyholder liabilities | 127,607 | 135,694 |
Deferred Federal income tax liability | 39,907 | 39,384 |
Federal income tax payable | 3,748 | 0 |
Other liabilities | 126,924 | 111,550 |
Total liabilities | 10,425,204 | 10,030,914 |
COMMITMENTS AND CONTINGENCIES (Notes 5, 14, and 17) | ||
Common stock: | ||
Additional paid-in capital | 41,716 | 41,716 |
Accumulated other comprehensive income (loss) | 60,108 | (37,015) |
Retained earnings | 2,026,383 | 1,896,040 |
Total stockholders' equity | 2,128,243 | 1,900,777 |
Total liabilities and stockholders' equity | 12,553,447 | 11,931,691 |
Class A | ||
Common stock: | ||
Common stock, value outstanding | 34 | 34 |
Class B | ||
Common stock: | ||
Common stock, value outstanding | $ 2 | $ 2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments: | ||
Debt securities held to maturity, fair value | $ 7,407,703 | $ 7,228,268 |
Debt securities available for sale, amortized cost | 3,206,120 | 3,008,624 |
Mortgage loans-allowance for possible losses | 675 | 675 |
Equity securities, cost | $ 16,894 | $ 14,329 |
Class A | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 3,436,020 | 3,436,020 |
Common stock, shares outstanding | 3,436,020 | 3,436,020 |
Class B | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Premiums and other revenue: | |||
Universal life and annuity contract charges | $ 149,721 | $ 155,205 | $ 159,968 |
Traditional life premiums | 90,248 | 18,291 | 18,962 |
Net investment income | 555,492 | 349,077 | 659,685 |
Other revenues | 17,486 | 20,603 | 21,070 |
Net realized investment gains (losses): | |||
Total other-than-temporary impairment (“OTTI”) (losses) recoveries | (7,838) | 12 | 487 |
Portion of OTTI losses recognized in other comprehensive income | (9) | (12) | (599) |
Total other-than-temporary impairment (“OTTI”) (losses) recoveries | (7,847) | 0 | (112) |
Other net investment gains | 14,088 | 8,423 | 14,875 |
Total net realized investment gains (losses) | 6,241 | 8,423 | 14,763 |
Total revenues | 819,188 | 551,599 | 874,448 |
Benefits and expenses: | |||
Life and other policy benefits | 137,342 | 65,297 | 71,485 |
Amortization of deferred policy acquisition costs and value of business acquired | 116,802 | 114,771 | 114,387 |
Universal life and annuity contract interest | 295,330 | 136,055 | 437,019 |
Other operating expenses | 104,558 | 93,969 | 107,002 |
Total benefits and expenses | 654,032 | 410,092 | 729,893 |
Earnings before Federal income taxes | 165,156 | 141,507 | 144,555 |
Federal income taxes | 33,540 | 24,749 | 34,134 |
Net earnings | 131,616 | 116,758 | 110,421 |
Class A | |||
Benefits and expenses: | |||
Net earnings | $ 127,894 | $ 113,456 | $ 107,298 |
Basic Earnings Per Share: | |||
Earnings Per Share, Basic (in dollars per share) | $ 37.22 | $ 33.02 | $ 31.23 |
Diluted Earnings Per Share: | |||
Earnings Per Share, Diluted (in dollars per share) | $ 37.22 | $ 33.02 | $ 31.23 |
Class B | |||
Benefits and expenses: | |||
Net earnings | $ 3,722 | $ 3,302 | $ 3,123 |
Basic Earnings Per Share: | |||
Earnings Per Share, Basic (in dollars per share) | $ 18.61 | $ 16.51 | $ 15.61 |
Diluted Earnings Per Share: | |||
Earnings Per Share, Diluted (in dollars per share) | $ 18.61 | $ 16.51 | $ 15.61 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 131,616 | $ 116,758 | $ 110,421 |
Unrealized gains (losses) on securities: | |||
Net unrealized holding gains (losses) arising during period | 96,954 | (56,818) | 8,288 |
Net unrealized liquidity gains (losses) | 3 | 2 | 195 |
Reclassification adjustment for net amounts included in net earnings | 3,997 | (2,718) | (3,403) |
Net unrealized gains (losses) on securities | 100,954 | (59,534) | 5,080 |
Foreign currency translation adjustments | 524 | 1,354 | (9) |
Benefit plans: | |||
Amortization of net prior service cost and net gain (loss) | (4,355) | 11,298 | (3,873) |
Other comprehensive income (loss) | 97,123 | (46,882) | 1,198 |
Comprehensive income (loss) | $ 228,739 | $ 69,876 | $ 111,619 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Unrealized gains (losses) on non-impaired securities | Unrealized losses on impaired held to maturity securities | Unrealized losses on impaired available for sale securities | Foreign currency translation adjustments | Benefit plan liability adjustment | Retained earnings |
Stockholders’ equity, beginning of period at Dec. 31, 2016 | $ 36 | $ 41,716 | $ 22,813 | $ (203) | $ (1) | $ 2,661 | $ (14,718) | $ 1,669,524 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares exercised under stock option plan | 0 | 0 | ||||||||
Change in unrealized gains (losses) during period | $ 8,288 | 4,885 | ||||||||
Amortization | (242) | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 631 | |||||||||
Additional credit loss on previously impaired securities | 0 | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 0 | |||||||||
Change in shadow deferred policy acquisition costs | (194) | 0 | ||||||||
Recoveries, net of tax | 0 | |||||||||
Change in translation adjustments during period | (9) | (9) | ||||||||
Amortization of net prior service cost and net gain, net of tax | (3,873) | (3,873) | ||||||||
Net earnings | 110,421 | 110,421 | ||||||||
Stockholder dividends | (1,273) | |||||||||
Stockholders’ equity, end of period at Dec. 31, 2017 | 1,832,174 | 36 | 41,716 | $ 14,281 | 33,664 | (10) | (1) | 3,223 | (22,595) | 1,776,141 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares exercised under stock option plan | 0 | 0 | ||||||||
Change in unrealized gains (losses) during period | (56,818) | (59,536) | ||||||||
Amortization | 9 | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 0 | |||||||||
Additional credit loss on previously impaired securities | 0 | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 0 | |||||||||
Change in shadow deferred policy acquisition costs | (6) | (1) | ||||||||
Recoveries, net of tax | 0 | |||||||||
Change in translation adjustments during period | 1,354 | 1,354 | ||||||||
Amortization of net prior service cost and net gain, net of tax | 11,298 | 11,298 | ||||||||
Net earnings | 116,758 | 116,758 | ||||||||
Stockholder dividends | (1,273) | |||||||||
Stockholders’ equity, end of period at Dec. 31, 2018 | 1,900,777 | 36 | 41,716 | (37,015) | (30,286) | (7) | (2) | 4,577 | (11,297) | 1,896,040 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares exercised under stock option plan | 0 | 0 | ||||||||
Change in unrealized gains (losses) during period | 96,954 | 100,951 | ||||||||
Amortization | 7 | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 0 | |||||||||
Additional credit loss on previously impaired securities | 0 | |||||||||
Other-than-temporary impairments, non-credit, net of tax | 0 | |||||||||
Change in shadow deferred policy acquisition costs | (4) | 0 | ||||||||
Recoveries, net of tax | 0 | |||||||||
Change in translation adjustments during period | 524 | 524 | ||||||||
Amortization of net prior service cost and net gain, net of tax | (4,355) | (4,355) | ||||||||
Net earnings | 131,616 | 131,616 | ||||||||
Stockholder dividends | (1,273) | |||||||||
Stockholders’ equity, end of period at Dec. 31, 2019 | $ 2,128,243 | $ 36 | $ 41,716 | $ 60,108 | $ 70,665 | $ (4) | $ (2) | $ 5,101 | $ (15,652) | $ 2,026,383 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net earnings | $ 131,616,000 | $ 116,758,000 | $ 110,421,000 |
Adjustments to reconcile net earnings/(loss) to cash provided by operating activities: | |||
Universal life and annuity contract interest | 295,330,000 | 136,055,000 | 437,019,000 |
Surrender charges and other policy revenues | (32,909,000) | (37,138,000) | (42,061,000) |
Realized (gains) losses on investments | (6,241,000) | (8,423,000) | (14,763,000) |
Accretion/amortization of discounts and premiums, investments | 2,264,000 | (424,000) | (281,000) |
Depreciation and amortization | 11,270,000 | 11,825,000 | 10,005,000 |
(Increase) decrease in value of equity securities | (4,051,000) | 1,789,000 | 0 |
(Increase) decrease in value of derivatives | (123,207,000) | 80,004,000 | (222,875,000) |
(Increase) decrease in deferred policy acquisition and sales inducement costs, and value of business acquired | 69,176,000 | 43,479,000 | 21,554,000 |
(Increase) decrease in accrued investment income | 9,157,000 | 480,000 | 2,427,000 |
(Increase) decrease in other assets | (12,341,000) | (6,068,000) | (6,769,000) |
Increase (decrease) in liabilities for future policy benefits | 13,758,000 | (12,474,000) | 7,694,000 |
(Decrease) increase in other policyholder liabilities | (21,955,000) | 7,685,000 | (15,382,000) |
(Decrease) increase in Federal income tax liability | 21,580,000 | (20,635,000) | 1,912,000 |
Increase (decrease) in deferred Federal income tax | (25,294,000) | 26,438,000 | (40,227,000) |
(Decrease) increase in other liabilities | 876,000 | (12,728,000) | 27,456,000 |
Net cash provided by operating activities | 329,029,000 | 326,623,000 | 276,130,000 |
Proceeds from sales of: | |||
Debt securities held to maturity | 0 | 0 | 0 |
Debt securities available for sale | 87,298,000 | 28,098,000 | 22,184,000 |
Other investments | 36,345,000 | 6,460,000 | 10,008,000 |
Proceeds from maturities and redemptions of: | |||
Debt securities held to maturity | 700,759,000 | 437,311,000 | 490,841,000 |
Debt securities available for sale | 295,026,000 | 195,874,000 | 288,208,000 |
Derivatives, index options | 52,768,000 | 191,031,000 | 219,865,000 |
Property and equipment | 0 | 8,000 | 3,024,000 |
Purchases of: | |||
Debt securities held to maturity | (257,928,000) | (472,224,000) | (570,716,000) |
Debt securities available for sale | (187,570,000) | (264,999,000) | (291,427,000) |
Equity securities | (1,342,000) | (2,442,000) | (1,160,000) |
Derivatives, index options | (77,381,000) | (86,692,000) | (75,330,000) |
Other investments | (7,315,000) | (8,314,000) | (331,000) |
Property and equipment | (2,844,000) | (3,138,000) | (9,116,000) |
Payment to acquire businesses, net of cash acquired | (189,121,000) | 0 | 0 |
Principal payments on mortgage loans | 47,755,000 | 35,159,000 | 25,901,000 |
Cost of mortgage loans acquired | (121,420,000) | (29,884,000) | (59,448,000) |
(Increase) decrease in policy loans | 2,844,000 | 1,681,000 | 2,294,000 |
Net cash provided by (used in) investing activities | 377,874,000 | 27,929,000 | 54,797,000 |
Cash flows from financing activities: | |||
Dividends on common stock | (1,273,000) | (1,273,000) | (1,273,000) |
Deposits to account balances for universal life and annuity contracts | 405,236,000 | 560,583,000 | 728,873,000 |
Return of account balances on universal life and annuity contracts | (989,980,000) | (1,001,224,000) | (892,135,000) |
Borrowings under line of credit agreement | 75,000,000 | 0 | 0 |
Principal payments on line of credit borrowings | (75,000,000) | 0 | 0 |
Net cash provided by (used in) financing activities | (586,017,000) | (441,914,000) | (164,535,000) |
Effect of foreign exchange | 663,000 | 1,714,000 | (15,000) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 121,549,000 | (85,648,000) | 166,377,000 |
Cash, cash equivalents, and restricted cash at beginning of year | 131,976,000 | 217,624,000 | 51,247,000 |
Cash, cash equivalents, and restricted cash at end of year | 253,525,000 | 131,976,000 | 217,624,000 |
Cash paid during the year for: | |||
Interest | 271,000 | 40,000 | 40,000 |
Income taxes | 37,153,000 | 19,202,000 | 72,449,000 |
Noncash operating activities: | |||
Net deferral and amortization of sales inducements | (17,195,000) | (12,753,000) | (10,650,000) |
Noncash investing activities: | |||
Contingent consideration to acquire businesses | 4,076,000 | 0 | 0 |
Exchange of debt securities available for sale for equity securities | 2,452,000 | 0 | 0 |
Exchange of debt securities available for sale | $ 782,000 | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation National Western Life Insurance Company ("National Western" or "NWLIC") became a wholly owned subsidiary of National Western Life Group, Inc. ("NWLGI") effective October 1, 2015 under a previously announced holding company reorganization. As a result of the reorganization, NWLGI replaced National Western as the publicly held company. The accompanying Consolidated Financial Statements include the accounts of NWLGI and its wholly owned subsidiaries: National Western, Regent Care San Marcos Holdings, LLC, NWL Services, Inc., and N.I.S. Financial Services, Inc. ("NIS"). National Western's wholly owned subsidiaries include The Westcap Corporation, NWL Financial, Inc., NWLSM, Inc., Braker P III, LLC, and Ozark National Life Insurance Company ("Ozark National"). The eleven month results of operations for Ozark National and NIS subsequent to their acquisition effective January 31, 2019 are included in the Company's consolidated results for the year ended December 31, 2019. All significant intercorporate transactions and accounts have been eliminated in consolidation. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in the accompanying Consolidated Financial Statements include (1) liabilities for future policy benefits, (2) valuation of derivative instruments, (3) recoverability and amortization of deferred policy acquisition costs ("DPAC"), deferred sales inducements ("DSI") and the value of business acquired ("VOBA"), (4) valuation allowances for deferred tax assets, (5) goodwill, (6) other-than-temporary impairment losses on debt securities, (7) commitments and contingencies, and (8) valuation allowances for mortgage loans and real estate. During the year ended December 31, 2019, the Company incorporated accounting estimates for business combinations, value of business acquired, and fair value measurement as a result of the acquisition of Ozark National and NIS. The table below shows the unrealized gains and losses on available-for-sale securities that were reclassified out of accumulated other comprehensive income for the years ended December 31, 2019 , 2018 and 2017 . Affected Line Item In the Consolidated Statements of Earnings Amount Reclassified from Accumulated Other Comprehensive Income Years Ended December 31, 2019 2018 2017 (In thousands) Other net investment gains (losses) $ 2,787 3,441 5,348 Net OTTI losses recognized in earnings (7,847 ) — (112 ) Earnings before Federal income taxes (5,060 ) 3,441 5,236 Federal income taxes (1,063 ) 723 1,833 Net earnings $ (3,997 ) 2,718 3,403 National Western and Ozark National also file financial statements with insurance regulatory authorities which are prepared on the basis of statutory accounting practices prescribed or permitted by the Colorado Division of Insurance and Missouri Department of Commerce and Insurance, respectively, which are significantly different from Consolidated Financial Statements prepared in accordance with GAAP. These differences are described in detail in Note (9) Statutory Information . Certain amounts in the prior year Consolidated Financial Statements have been reclassified to conform to the current year financial statement presentation. Investments Fixed Maturities and Equity Securities Investments in debt securities the Company purchases with the intent to hold to maturity are classified as securities held to maturity. The Company has the ability to hold the securities until maturity, as it would be unlikely that forced sales of securities would be required, prior to maturity, to cover payments of liabilities. As a result, securities held to maturity are carried at amortized cost less declines in fair value that are deemed other-than-temporary. Investments in debt securities that are not classified as securities held to maturity are reported as securities available for sale. Securities available for sale are reported in the accompanying Consolidated Financial Statements at fair value. Valuation changes resulting from changes in the fair value of the securities are reflected as a component of Stockholders' Equity in accumulated other comprehensive income (loss). These unrealized gains or losses in stockholders' equity are reported net of taxes and adjustments to deferred policy acquisition costs. Transfers of securities between categories are recorded at fair value at the date of transfer. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. For mortgage-backed and asset-backed securities, the effective interest method is used based on anticipated prepayments and the estimated economic life of the securities. When estimates of prepayments change, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in the securities is adjusted to the amount that would have existed had the new effective yield been applied at the time of acquisition (retrospective method). This adjustment is reflected in net investment income. For loan-backed securities not meeting the definition of "highly rated", the prospective method is evaluated and, if materially different from the retrospective method, utilized to account for these securities. The retrospective adjustment method has been used to value all loan-backed and structured securities included in the accompanying Consolidated Financial Statements. Quarterly the Company reviews its investment portfolio for market value changes to identify changes caused by issuer credit deterioration, changes in market interest rates and changes in economic conditions. If this review indicates a decline in fair value that is other-than-temporary, the Company’s carrying amount in the investment is reduced to its estimated fair value as an other-than-temporary impairment ("OTTI"). In accordance with GAAP guidance the estimated credit versus non-credit components of the OTTI are bifurcated. The credit component is recorded in earnings and results in the establishment of a new cost basis for the security. The non-credit component is reclassified as unrealized loss in other comprehensive income. The Company would not recognize impairment of securities due to changing of interest rates or market dislocations unless the Company had the intent to sell the securities prior to recovery or maturity. The Company considers a number of factors in determining whether the impairment is other-than-temporary. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline in fair value, 4) the intent and ability to hold the investment until recovery, 5) the time period during which the decline has occurred, 6) an economic analysis of the issuer’s industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security-by-security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered. Beginning in 2018, equity securities, common and non-redeemable preferred stocks are reported at fair value with unrealized gains and losses included in the Consolidated Statement of Earnings. Prior to 2018, these securities were designated as available for sale and reported at fair value with the change in unrealized gains and losses included in accumulated other comprehensive income. Derivatives Fixed-index products combine features associated with traditional fixed annuities and universal life contracts, with the option to have interest rates linked in part to an underlying equity index. The equity return component of such policy contracts is identified separately and accounted for in future policy benefits as embedded derivatives on the Consolidated Balance Sheets. The remaining portions of these policy contracts are considered the host contracts and are recorded separately within future policy benefits as fixed annuity or universal life contracts. The host contracts are accounted for under debt instrument type accounting. The host contracts are recorded as discounted debt instruments that are accreted, using the effective yield method, to their minimum account values at their projected maturities or termination dates. The Company purchases over-the-counter index options, which are derivative financial instruments, to hedge the equity return component of its index annuity and life products. The amounts which may be credited to policyholders are linked, in part, to the returns of the underlying index. The index options act as hedges to match closely the returns on the underlying index. Cash is exchanged upon purchase of the index options and no principal or interest payments are made by either party during the option periods. Upon maturity or expiration of the options, cash is paid to the Company based on the underlying index performance and terms of the contract. As a result, amounts credited to policyholders' account balances are substantially offset by changes in the value of the options. The Company does not elect hedge accounting relative to derivative instruments. The derivatives are reported at their fair value in the accompanying Consolidated Financial Statements. Changes in the values of the index options and changes in the policyholder liabilities are both reflected in the Consolidated Statement of Earnings. Any gains or losses from the sale or expiration of the options, as well as period-to-period changes in values, are reflected as net investment income in the Consolidated Statement of Earnings. Any changes relative to the embedded derivatives associated with policy contracts are reflected in contract interest in the Consolidated Statement of Earnings. Although there is credit risk in the event of nonperformance by counterparties to the index options, the Company does not expect any counterparties to fail to meet their obligations, given their high credit ratings. In addition, credit support agreements are in place with all counterparties for option holdings in excess of specific limits, which further reduces the Company's credit exposure. At December 31, 2019 and 2018 , the fair value of index options owned by the Company totaled $157.6 million and $14.7 million , respectively. Of these amounts, $80.7 million and $(72.3) million represent unrealized gains and losses on the options held at December 31, 2019 and 2018 , respectively. Mortgage Loans and Other Long-term Investments Mortgage loans and other long-term investments are stated at cost, less unamortized discounts, deferred fees, and allowances for possible losses. Policy loans are stated at their aggregate unpaid balances. Real estate is stated at the lower of cost or fair value less estimated costs to sell. Impaired loans are those loans where it is probable that all amounts due according to contractual terms of the loan agreement will not be collected. The Company has identified these loans through its normal loan review procedures. Impaired loans include: 1) nonaccrual loans, 2) loans which are 90 days or more past due, unless they are well secured and are in the process of collection, and 3) other loans which management believes are impaired. Impaired loans are measured based on: 1) the present value of expected future cash flows discounted at the loan's effective interest rate, 2) the loan's observable market price, or 3) the fair value of the collateral if the loan is collateral dependent. When the Company has loans considered impaired substantially all are measured at the fair value of the collateral. In limited cases, the Company may use other methods to determine the level of impairment of a loan if such loan is not collateral dependent. Mortgage loans are placed on non-accrual status if there are concerns regarding the collectability of future payments. Interest income on non-performing loans is generally recognized on a cash basis. Once mortgage loans are classified as nonaccrual loans, the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan has been restructured such that the collection of interest is considered likely. Accrued Investment Income The accrual of investment income on invested assets is discontinued when it is determined that it is probable that the income will not be collected. Realized Gains and Losses on Investments Realized gains and losses for securities available for sale and securities held to maturity are included in earnings and are derived using the specific identification method for determining the cost of securities sold or called. Prepayment penalty fees received from issuers that call their securities before maturity are excluded from the calculation of realized gain or loss and are included as a component of investment income. After an OTTI write down of fixed maturities with a credit-only impairment, the cost basis is not adjusted for subsequent recoveries in fair value. For fixed maturities for which a reasonable estimate of future cash flows are available after a write down, the discount or reduced premium recorded, based on the new cost basis, is amortized over the remaining life of the security. Amortization in this instance is computed using the prospective method and the current estimate of the amount and timing of future cash flows. Fair Values Fair values of equity securities are based on quoted market prices in active markets when available. Fair values of fixed maturities are based on market prices in the fixed income markets. Fair values of derivative investments are based on the latest counterparty model market prices. Items not readily marketable are generally at values that are representative of the fair values of comparable issues. Fair values for all securities are reviewed for reasonableness by considering overall market conditions and values for similar securities. See Note (4) Fair Values of Financial Instruments for more information on fair value policies, including assumptions and the amount of securities priced using the valuation models. Cash and Cash Equivalents For purposes of the Consolidated Statements of Cash Flows, the Company considers all short-term investments with a maturity at the date of purchase of three months or less to be cash equivalents. Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired Deferred policy acquisition costs ("DPAC") include certain costs of successfully acquiring new insurance business, including commissions and other expenses related directly to the production of new business, to the extent recoverable from future policy revenues and gross profits (indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expenses as incurred). Also included are premium bonuses and bonus interest credited to contracts during the first contract year only. These deferred sales inducements ("DSI") are also deferrable to the extent recoverable. For interest sensitive universal life and annuity products, these costs are amortized in relation to the present value of expected gross margins or gross profits on these policies. For nonparticipating traditional life products, these costs are amortized over the premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. Such anticipated premium revenues are estimated using the same assumptions used for computing liabilities for future policy benefits. The Company evaluates the recoverability of deferred policy acquisition and sales inducement costs on a quarterly basis. In this evaluation, the Company considers estimated future gross profits or future premiums, as applicable for the type of contract. The Company also considers expected mortality, interest earned and credited rates, persistency, and expenses. In accordance with GAAP guidance, the Company must also write off deferred policy acquisition costs and unearned revenue liabilities upon internal replacement of certain contracts as well as annuitizations of deferred annuities. All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing deferred policy acquisition costs, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing deferred policy acquisition costs, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract . Amortization of DPAC and DSI is reviewed each year and adjusted retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of investment gains and losses) to be realized from a group of products are revised. The value of insurance in force business acquired ("VOBA") is a purchase accounting convention for life insurance companies in business combinations based upon an actuarial determination of the difference between the fair value of policy liabilities acquired and the same policyholder liabilities measured in accordance with the acquiring company's accounting policies. The difference, referred to as VOBA, is an intangible asset subject to periodic amortization. It represents the portion of the purchase price allocated to the value of the rights to receive future cash flows from the business in force at the acquisition date. The Company will perform recoverability testing of value business acquired beginning in 2020. Refer to Note (7) Business Combinations for more information. Other Assets Other assets include property and equipment, primarily comprised of capitalized software costs, furniture and equipment and leasehold improvements, which are reported at cost less allowances for depreciation and amortization. Costs incurred in the preliminary stages of developing internal-use software as well as costs incurred post-implementation for maintenance are expensed. Capitalization of internal-use software costs occurs after management has authorized the project and it is probable that the software will be used as intended. Amortization of software costs begins after the software has been placed in production. Depreciation and amortization expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from 7 to 39 years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease. Capitalized software, property, and equipment had a carrying value of $153.6 million at December 31, 2019 and $161.2 million at December 31, 2018 , and accumulated depreciation and amortization of $62.5 million at December 31, 2019 and $59.5 million at December 31, 2018. Depreciation and amortization expense for capitalized software, furniture and equipment, and leasehold improvements was $10.7 million , $11.1 million , and $9.2 million in 2019, 2018, and 2017, respectively. Other assets at December 31, 2019 also include goodwill of $13.9 million related to the excess of the amounts paid to acquire companies over the fair value of other net tangible and intangible assets acquired. It represents the future economic benefits arising from assets acquired and liabilities assumed that could not be individually identified. Goodwill is not amortized but is subject to annual impairment analysis at the same time each year or more frequently if indicators are present. The Company will annually review its goodwill balance beginning in the second quarter of 2020 to determine if indicators suggest an impairment may have occurred and would suggest the value has declined below the carrying value of goodwill. Refer to Note (7) Business Combinations for further information concerning the determination of goodwill. Other assets at December 31, 2019 further include $8.9 million of identifiable intangible assets acquired in a business combination. These intangible assets include trademarks and trade names, internally developed software, and various insurance licenses. Identifiable intangible assets are being amortized using a straight-line method over their estimated useful lives. Future Policy Benefits Under GAAP, the liability for future policy benefits on traditional products has been calculated using assumptions as to future mortality (based on the 1965-1970, 1975-1980, and 2001 Select and Ultimate mortality tables), interest ranging from 3.25% to 8.00% , and withdrawals based on Company experience. For universal life and annuity contracts, the liability for future policy benefits represents the account balance. Fixed-index products combine features associated with traditional fixed annuities and universal life contracts, with the option to have interest rates linked in part to an equity index. In accordance with GAAP guidance , the equity return component of such policy contracts must be identified separately and accounted for as embedded derivatives. The remaining portions of these policy contracts are considered the host contracts and are recorded separately as fixed annuity or universal life contracts. The host contracts are accounted for under GAAP guidance provisions that require debt instrument type accounting. The host contracts are recorded as discounted debt instruments that are accreted, using the effective yield method, to their minimum account values at their projected maturities or termination dates. The embedded derivatives are recorded at fair value. The fair value of the embedded derivative component of policy benefit reserves is estimated at each valuation date by (a) projecting policy and contract values and minimum guaranteed values over the expected lives of the policies and contracts and (b) discounting the excess of the projected value amounts at the applicable risk free interest rates adjusted for nonperformance risk related to those liabilities. The projections of policy and contract values are based upon best estimate assumptions for future policy growth and future policy decrements. Best estimate assumptions for future policy growth includes 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 cost options purchased 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. Other Policy Claims and Benefits Unearned revenue reserves are maintained that reflect the unamortized balance of charges assessed to interest sensitive contract holders which serve as compensation for services to be performed over future periods (policy premium loads). These charges have been deferred and are being recognized in income over the period benefited using the same assumptions and factors used to amortize deferred acquisition costs. Stock Compensation The Company accounts for its share-based compensation for GAAP reporting using liability accounting, and measures compensation cost using the fair value method at each reporting date. For stock options and stock appreciation rights, fair value is determined using an option pricing model that takes into account various information and assumptions including the Company's stock price, volatility, option price, vesting dates, exercise dates and projected lapses. Deferred Income Taxes Federal income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance for deferred tax assets is provided if all or some portion of the deferred tax asset may not be realized. An increase or decrease in a valuation allowance that results from a change in circumstances that affects the realizability of the related deferred tax asset is included in income in the period the change occurs. Recognition of Premiums, Contract Revenues and Costs Premiums on traditional life insurance products are recognized as revenues as they become due from policyholders. Benefits and expenses are matched with premiums in arriving at profits by providing for policy benefits over the lives of the policies and by amortizing costs over premium-paying periods of the policies. Revenues for interest sensitive universal life and annuity products consist of policy charges for the cost of insurance asset charges, administration charges, amortization of policy initiation fees and surrender charges assessed against policyholder account balances. The timing of revenue recognition as it relates to these charges and fees is determined based on the nature of such charges and fees. Policy charges for the cost of insurance, asset charges and policy administration charges are assessed on a daily or monthly basis and are recognized as revenue when assessed and earned. Certain policy initiation fees that represent compensation for services to be provided in the future are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are determined based upon contractual terms and are recognized upon surrender of a contract. Policy benefits and claims charged to expense include interest amounts credited to policyholder account balances and benefit claims incurred in excess of policyholder account balances during the period. Amortization of DPAC, DSI, and VOBA balances are recognized as expense over the life of the policy. All insurance-related revenues, benefits and expenses are reported net of reinsurance ceded. The cost of reinsurance ceded is recognized over the contract periods of the reinsurance agreements. Comprehensive Income Comprehensive income includes net income, as well as other comprehensive income items not recognized through net income. Other comprehensive income includes unrealized gains and losses on available-for-sale securities as well as the underfunded obligations for certain retirement and postretirement benefit plans. These items are included in accumulated other comprehensive income, net of tax and other offsets, in stockholders’ equity. The changes in unrealized gains and losses reported in our Statement of Comprehensive Income (Loss), excludes net investment gains and losses included in net income that represent transfers from unrealized to realized gains and losses. These transfers are further discussed in Note (3) Investments . The components of the underfunded obligation for certain retirement and postretirement benefit plans are provided in Note (14) Pension and Other Postretirement Plans . Use of Estimates The preparation of 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, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. For example, significant estimates and assumptions are utilized in the valuation of investments, determination of other-than-temporary impairments of investments, recoverability and amortization of deferred acquisition costs and value of business acquired, calculation of policyholder liabilities and accruals and determination of pension expense. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized, which could have a material impact on the Consolidated Financial Statements. Accounting Standards and Changes in Accounting Recent accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-12 Financial Services-Insurance (Topic 944) - Targeted Improvements to the Accounting for Long-Duration Contracts . This update is aimed at improving the Codification as it relates to long-duration contracts which will improve the timeliness of recognizing changes in the liability for future policy benefits, simplify accounting for certain market-based options, simplify the amortization of deferred acquisition costs, and improve the effectiveness of required disclosures. Amendments include the following: A. Require insurance entity to (1) review and update assumptions used to measure cash flows at least annually (with changes recognized in net income) and (2) update discount rate assumption at each reporting date (with changes recognized in other comprehensive income). B. Require insurance entity to measure all market risk benefits associated with deposit (i.e. account balance) contracts at fair value, with change in fair value attributable to change in instrument-specific credit risk recognized in other comprehensive income. C. Simplify amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins and require those balances be amortized on constant level basis over expected term of related contract. Deferred acquisition costs are required to be written off for unexpected contract terminations but are not subject to impairment test. D. Require insurance entity to add disclosures of disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs. Insurance entity must also disclose information about significant inputs, judgments, assumptions, and methods used in measurement, including changes in those inputs, judgments, and assumptions, and the effect of those changes on measurement. These updates are required to be applied retrospectively to the earliest period presented in the financial statements for periods beginning after December 15, 2021, with early adoption permitted. The Company has performed a preliminary gap analysis and created a roadmap for its implementation of this standard by the effective date. The Company is still evaluating the impact of the new guidance on its Consolidated Financial Statements. In June 2016, the FASB released ASU 2016-13, Financial Instruments-Credit Losses , which revises the credit loss recognition criteria for certain financial assets measured at amortized cost. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model (“CECL”). The objective of the CECL model is for the reporting entity to recognize its estimate of current expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The amendments in this Update add |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS (A) Investment Income The major components of net investment income are as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Gross investment income: Debt and equity securities $ 403,372 399,645 409,401 Mortgage loans 12,595 12,066 11,045 Policy loans 3,539 3,185 3,485 Derivative gains (losses) 123,207 (80,004 ) 222,875 Short term investments 2,974 2,249 1,012 Other investment income 13,057 13,289 13,137 Total investment income 558,744 350,430 660,955 Less investment expenses 3,252 1,353 1,270 Net investment income $ 555,492 349,077 659,685 (B) Mortgage Loans and Real Estate A financing receivable is a contractual right to receive money on demand or on fixed or determinable dates that is recognized as an asset in a company’s statement of financial position. The Company’s mortgage, participation and mezzanine loans on real estate are the only financing receivables included in the Consolidated Balance Sheets. In general, the Company originates loans on high quality, income-producing properties such as shopping centers, freestanding retail stores, office buildings, industrial and sales or service facilities, selected apartment buildings, hotels, and health care facilities. The location of these properties is typically in major metropolitan areas that offer a potential for property value appreciation. Credit and default risk is minimized through strict underwriting guidelines and diversification of underlying property types and geographic locations. In addition to being secured by the property, mortgage loans with leases on the underlying property are often guaranteed by the lease payments and also by the borrower. This approach has proven to result in quality mortgage loans with few defaults. Mortgage loan interest income is recognized on an accrual basis with any premium or discount amortized over the life of the loan. Prepayment and late fees are recorded on the date of collection. The Company targets a minimum specified yield on mortgage loan investments determined by reference to currently available debt security instrument yields plus a desired amount of incremental basis points. During the past several years, the low interest rate environment, coupled with a competitive marketplace, resulted in fewer loan opportunities being available that met the Company's required rate of return. Mortgage loans originated by the Company totaled $121.4 million and $29.9 million for the years 2019 and 2018 , respectively. Loans in foreclosure, loans considered impaired or loans past due 90 days or more are placed on a non-accrual status. If a mortgage loan is determined to be on non-accrual status, the mortgage loan does not accrue any income into the Consolidated Statements of Earnings. The loan is independently monitored and evaluated as to potential impairment or foreclosure. If delinquent payments are made and the loan is brought current, then the Company returns the loan to active status and accrues income accordingly. The Company has no loans past due 90 days which are accruing interest. The Company held net investments in mortgage loans, after allowances for possible losses, totaling $272.4 million and $203.2 million at December 31, 2019 and 2018 , respectively. The diversification of the portfolio by geographic region, property type, and loan-to-value ratio was as follows: December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Geographic Region: West South Central $ 191,089 70.0 $ 116,205 57.0 East North Central 17,248 6.3 20,944 10.3 South Atlantic 35,698 13.1 29,829 14.6 East South Central 8,063 2.9 13,801 6.8 West North Central 12,505 4.6 12,751 6.3 Pacific 6,436 2.4 6,626 3.2 Middle Atlantic 2,058 0.7 2,138 1.0 Mountain — — 1,561 0.8 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Property Type: Retail $ 91,790 33.6 $ 96,075 47.1 Office 95,362 34.9 71,194 34.9 Hotel 8,997 3.3 14,454 7.1 Land/Lots 4,829 1.8 3,498 1.7 Apartments 30,000 11.0 — — All other 42,119 15.4 18,634 9.2 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Loan-to-Value Ratio (1): Less than 50% $ 52,778 19.3 $ 66,371 32.6 50% to 60% 56,929 20.8 22,610 11.1 60% to 70% 117,377 43.0 102,857 50.4 70% to 80% 46,013 16.9 6,642 3.3 80% to 90% — — 5,375 2.6 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 (1) Loan-to-Value Ratio using the most recent appraised value. Appraisals are required at the time of funding and may be updated if a material change occurs from the original loan agreement. All mortgage loans are analyzed quarterly in order to monitor the financial quality of these assets. Based on ongoing monitoring, mortgage loans with a likelihood of becoming delinquent are identified and placed on an internal “watch list.” Among the criteria that would indicate a potential problem are: major tenant vacancies or bankruptcies, late payments, and loan relief/restructuring requests. The mortgage loan portfolio is analyzed for the need for a valuation allowance on any loan that is on the internal watch list, in the process of foreclosure, or that currently has a valuation allowance. Mortgage loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When it is determined that a loan is impaired, a loss is recognized for the difference between the carrying amount of the mortgage loan and the estimated value reduced by the cost to sell. Estimated value is typically based on the loan’s observable market price or the fair value of the collateral less cost to sell. Impairments and changes in the valuation allowance are reported in net realized capital gains (losses) in the Consolidated Statements of Earnings. The Company recognized no impairment losses for the years ended December 31, 2019 , 2018 or 2017 . The current mortgage loan valuation allowance represents a general valuation allowance established for the Company's mortgage loan portfolio based upon the Company's loss experience over an extended period of time and is not specifically identified to individual loans. Impairments are based on information which indicated that the Company may not collect all amounts in accordance with the mortgage agreement. While the Company closely monitors its mortgage loan portfolio, future changes in economic conditions can result in impairments beyond those currently identified. The following table represents the mortgage loan allowance for the years ended December 31, 2019 and 2018 : 2019 2018 (In thousands) Balance, beginning of period $ 675 650 Provision — 25 Releases — — Balance, end of period $ 675 675 The Company does not recognize interest income on loans past due 90 days or more. The Company had no mortgage loans past due six months or more at December 31, 2019 , 2018 and 2017 . There was no interest income not recognized in 2019 , 2018 or 2017 . The contractual maturities of mortgage loan principal balances at December 31, 2019 and 2018 were as follows: December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Principal Balance by Contractual Maturity: Due in one year or less $ 497 0.2 $ 23,839 11.7 Due after one year through five years 34,306 12.5 39,391 19.3 Due after five years through ten years 142,477 52.1 134,574 65.8 Due after ten years through fifteen years 96,359 35.2 6,642 3.2 Due after fifteen years — — — — Totals $ 273,639 100.0 $ 204,446 100.0 The Company's direct investments in real estate investments are not a significant portion of its total investment portfolio. These investments totaled approximately $34.6 million at December 31, 2019 and $35.7 million at December 31, 2018 , and consist primarily of income-producing properties which are being operated by a wholly owned subsidiary of National Western. Included in the amount at December 31, 2019 is a surface parking property owned by Ozark National which it contracts. The value of this real estate investment was appraised at $4.3 million at January 31, 2019 as part of the purchase accounting done as of that date. The Company’s real estate holdings are reflected in other long-term investments in the accompanying Consolidated Financial Statements. The Company records real estate at the lower of cost or fair value less estimated cost to sell, which is determined on an individual asset basis. The Company recognized operating income on these properties of approximately $2.9 million , $2.2 million and $2.9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The Company had real estate investments that were non-income producing for the preceding twelve months totaling $0.4 million , $5.2 million and $0.1 million at December 31, 2019 , 2018 and 2017 , respectively. The balance at December 31, 2018 includes the Company's former home office facility which was held for sale and sold during 2019. Net real estate gains for the year ended December 31, 2019 primarily pertain to the Company's sale of its nursing home operations in Reno, Nevada and San Marcos, Texas as well as a property sold located in Austin, Texas. The sale of the Reno nursing home was completed effective February 1, 2019 and a gain of $5.7 million was realized on the sale of the land and building associated with the operation. The sale of the San Marcos nursing home was concluded effective May 1, 2019 and the Company recorded a loss of $(2.0) million associated with the sale of the land and building of this operation. The sale of the Company's prior home office was completed in the second quarter with a realized gain on the sale of $3.2 million . The net realized investment gain in 2018 was on a sale of previously occupied home office property located in Austin, Texas adjoining the property sold in 2019. The net realized investment gains in 2017 were on disposed properties located in Austin, Texas and Dallas, Texas. (C) Debt Securities The table below presents amortized costs and fair values of debt securities held to maturity at December 31, 2019 . Debt Securities Held to Maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: U.S. agencies $ 100,910 1,686 — 102,596 U.S. Treasury 3,782 140 — 3,922 States and political subdivisions 431,433 19,440 (84 ) 450,789 Foreign governments 1,144 55 — 1,199 Public utilities 888,444 36,638 (83 ) 924,999 Corporate 4,607,826 212,281 (718 ) 4,819,389 Commercial mortgage-backed 3,032 52 — 3,084 Residential mortgage-backed 1,066,899 32,706 (716 ) 1,098,889 Asset-backed 2,775 62 (1 ) 2,836 Totals $ 7,106,245 303,060 (1,602 ) 7,407,703 The table below presents amortized costs and fair values of debt securities available for sale at December 31, 2019 . Debt Securities Available for Sale Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: States and political subdivisions $ 98,037 4,495 (3 ) 102,529 Foreign governments 9,983 203 — 10,186 Public utilities 67,895 3,476 — 71,371 Corporate 2,921,431 141,705 (2,479 ) 3,060,657 Commercial mortgage-backed 28,871 1,071 — 29,942 Residential mortgage-backed 12,815 1,077 (117 ) 13,775 Asset-backed 67,088 1,397 — 68,485 Totals $ 3,206,120 153,424 (2,599 ) 3,356,945 The table below presents amortized costs and fair values of debt securities held to maturity at December 31, 2018 . Debt Securities Held to Maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: U.S. Treasury $ 1,341 116 — 1,457 States and political subdivisions 457,404 9,764 (2,376 ) 464,792 Public utilities 930,629 5,928 (12,944 ) 923,613 Corporate 4,715,775 27,652 (87,043 ) 4,656,384 Residential mortgage-backed 1,176,216 13,771 (11,932 ) 1,178,055 Asset-backed 3,889 88 (10 ) 3,967 Totals $ 7,285,254 57,319 (114,305 ) 7,228,268 The table below presents amortized costs and fair values of debt securities available for sale at December 31, 2018 . Debt Securities Available for Sale Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: States and political subdivisions $ 570 — (4 ) 566 Foreign governments 9,974 30 — 10,004 Public utilities 82,943 1,045 (517 ) 83,471 Corporate 2,893,221 15,473 (79,638 ) 2,829,056 Residential mortgage-backed 15,947 937 (84 ) 16,800 Asset-backed 5,969 193 — 6,162 Totals $ 3,008,624 17,678 (80,243 ) 2,946,059 The Company's investment policy is to invest in high quality securities with the primary intention of holding these securities until the stated maturity. As such, the portfolio has exposure to interest rate risk, which is the risk that funds are invested today at a market interest rate and in the future interest rates rise causing the current market price on that investment to be lower. This risk is not a significant factor relative to the Company's buy and hold portfolio, since the intention is to receive the stated interest rate and principal at maturity to match liability requirements to policyholders. The Company manages these risks, for example, by purchasing mortgage-backed securities types that have more predictable cash flow patterns. In addition, the Company is exposed to credit risk which is continually monitored. Credit risk is the risk that an issuer of a security will not be able to fulfill their obligations relative to a security payment schedule and maturity date. The Company reviewed pertinent information for all issuers in an unrealized loss position at December 31, 2019 including market pricing history, credit ratings, analyst reports, as well as data provided by the issuers themselves. The Company then made a determination on each specific issuer relating to whether an other-than-temporary impairment existed. For the securities that have not been impaired at December 31, 2019 , the Company intends to hold these securities until recovery in fair value and expects to receive all amounts due relative to principal and interest. The Company held below investment grade debt securities totaling $83.7 million and $94.2 million at December 31, 2019 and 2018 , respectively. These amounts represent 0.8% and 0.9% of total invested assets for December 31, 2019 and 2018 , respectively. Below investment grade holdings are the result of credit rating downgrades subsequent to purchase, as the Company only invests in high quality securities with ratings quoted as investment grade. Below investment grade securities generally have greater default risk than higher rated corporate debt. The issuers of these securities are usually more sensitive to adverse industry or economic conditions than are investment grade issuers. For the year ended December 31, 2019 , the Company recorded net realized gains totaling $6.2 million related to the disposition of investment securities. The net realized gains included $7.8 million for other-than-temporary impairment write-downs on investments. For the years ended December 2018 and 2017 , the Company recorded net realized gains totaling $8.4 million and $14.8 million , respectively, related to disposition of securities. Debt securities balances at December 31, 2019 include Ozark National holdings of $307.2 million in held to maturity and $415.7 million in available for sale. As part of the acquisition effective January 31, 2019 the Company employed purchase accounting procedures in accordance with GAAP which revalued the acquired investment portfolio to their fair values as of the date of the acquisition. These fair values became the book values for Ozark National from that point going forward. Accordingly, unrealized gains and losses for the Ozark National debt securities represent the changes subsequent to the purchase accounting book values established at January 31, 2019. The following table shows the gross unrealized losses and fair values of the Company's held to maturity investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2019 . Debt Securities Held to Maturity Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 5,013 (33 ) 1,712 (51 ) 6,725 (84 ) Public utilities 2,345 (83 ) — — 2,345 (83 ) Corporate bonds 31,419 (337 ) 17,191 (381 ) 48,610 (718 ) Residential mortgage-backed 25,859 (63 ) 43,498 (653 ) 69,357 (716 ) Asset-backed 1,349 (1 ) — — 1,349 (1 ) Total $ 65,985 (517 ) 62,401 (1,085 ) 128,386 (1,602 ) The following table shows the gross unrealized losses and fair values of the Company's available for sale investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2019 . Debt Securities Available For Sale Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 470 (3 ) — — 470 (3 ) Public utilities — — — — — — Corporate bonds 40,080 (105 ) 28,582 (2,374 ) 68,662 (2,479 ) Residential mortgage-backed — — 710 (117 ) 710 (117 ) Total $ 40,550 (108 ) 29,292 (2,491 ) 69,842 (2,599 ) The Company does not consider securities to be other-than-temporarily impaired where the market decline is attributable to factors such as market volatility, liquidity, spread widening and credit quality where it is anticipated that a recovery of all amounts due under the contractual terms of the security will occur and the Company has the intent and ability to hold until recovery or maturity. Based on its review, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2019 . The Company monitors the investment portfolio on an ongoing basis for any changes in issuer facts and circumstances that could result in future impairments. The following table shows the gross unrealized losses and fair values of the Company's held to maturity investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2018 . Debt Securities Held to Maturity Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 88,253 (2,124 ) 10,645 (252 ) 98,898 (2,376 ) Public utilities 396,980 (8,371 ) 98,632 (4,573 ) 495,612 (12,944 ) Corporate bonds 2,144,969 (55,125 ) 650,401 (31,918 ) 2,795,370 (87,043 ) Residential mortgage-backed 202,986 (2,032 ) 311,374 (9,900 ) 514,360 (11,932 ) Asset-backed — — 1,976 (10 ) 1,976 (10 ) Total $ 2,833,188 (67,652 ) 1,073,028 (46,653 ) 3,906,216 (114,305 ) The following table shows the gross unrealized losses and fair values of the Company's available for sale investments by investment category, and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2018 . Debt Securities Available For Sale Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 566 (4 ) — — 566 (4 ) Public utilities 38,903 (517 ) — — 38,903 (517 ) Corporate bonds 1,468,953 (44,575 ) 442,798 (35,063 ) 1,911,751 (79,638 ) Residential mortgage-backed — — 878 (84 ) 878 (84 ) Total $ 1,508,422 (45,096 ) 443,676 (35,147 ) 1,952,098 (80,243 ) Unrealized losses decreased in 2019 from 2018 amounts primarily as a result of a decrease in market interest rate levels during 2019. The Company does not consider these investments to be other-than-temporarily impaired because the Company does not intend to sell these securities before recovery in fair value and expects to receive all amounts due relative to principal and interest. The amortized cost and fair value of investments in debt securities at December 31, 2019 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Due in 1 year or less $ 161,688 163,644 535,438 542,601 Due after 1 year through 5 years 1,195,519 1,239,173 2,909,434 3,011,492 Due after 5 years through 10 years 1,479,253 1,558,118 2,007,066 2,122,184 Due after 10 years 260,886 283,808 581,601 626,617 3,097,346 3,244,743 6,033,539 6,302,894 Mortgage and asset-backed securities 108,774 112,202 1,072,706 1,104,809 Total $ 3,206,120 3,356,945 7,106,245 7,407,703 The Company uses the specific identification method in computing realized gains and losses. The table below details the nature of realized gains and losses, excluding impairments, during the year. Years Ended December 31, 2019 2018 2017 (In thousands) Available for sale debt securities: Realized gains on disposal $ 3,798 3,447 5,208 Realized losses on disposal (1,011 ) (6 ) (7 ) Held to maturity debt securities: Realized gains on redemption 4,390 3,208 6,944 Realized losses on redemption — — (74 ) Equity securities realized gains — — 147 Real estate 6,911 1,799 2,657 Mortgage loans — (25 ) — Other — — — Totals $ 14,088 8,423 14,875 No sales were made out of the held to maturity portfolio in 2019, 2018 or 2017. Except for the total U.S. government agency mortgage-backed securities held, the Company had no other investments in any entity in excess of 10.0% of stockholders' equity at December 31, 2019 or 2018 . The table below presents net impairment losses recognized in earnings for the periods indicated. Years Ended December 31, 2019 2018 2017 (In thousands) Total other-than-temporary impairment recoveries (losses) on debt securities $ (7,838 ) 12 599 Portion recognized in comprehensive income (9 ) (12 ) (599 ) Net impairment losses on debt securities recognized in earnings (7,847 ) — — Equity securities impairments — — (112 ) Totals $ (7,847 ) — (112 ) For the years ended December 31, 2019 , 2018 , and 2017 , the Company recovered $0.0 million , $0.0 million , and $0.6 million , respectively, on previously impaired asset-backed securities. The credit component of asset-backed securities impairments were determined as the difference between amortized cost and the present value of the cash flows expected to be received, discounted at the original yield. The significant inputs used to project cash flows on asset-backed securities are estimated future prepayment rates, default rates and default loss severity. Effective January 1, 2018, changes in the fair value of equity securities are recorded directly in the Consolidated Statements of Earnings as a component of net investment income and are therefore no longer subject to impairment adjustments. The table below presents a roll forward of credit losses on securities for which the Company also recorded non-credit other-than-temporary impairments in other comprehensive loss. Year Ended Year Ended December 31, 2019 December 31, 2018 (In thousands) Beginning balance, cumulative credit losses related to other-than-temporary impairments $ 627 627 Reductions for securities disposed during current period — — Additions for OTTI where credit losses have been previously recognized — — Ending balance, cumulative credit losses related to other-than-temporary impairments $ 627 627 (D) Net Unrealized Gains (Losses) Net unrealized gains (losses) on investment securities included in stockholders' equity at December 31, 2019 and 2018 , are as follows: December 31, 2019 2018 (In thousands) Gross unrealized gains $ 153,417 17,678 Gross unrealized losses (2,603 ) (80,263 ) Adjustments for: Deferred policy acquisition costs and sales inducements (61,372 ) 24,237 Deferred Federal income tax expense (18,783 ) 8,053 70,659 (30,295 ) Net unrealized gains related to securities transferred to held to maturity — — Net unrealized gains (losses) on investment securities $ 70,659 (30,295 ) (E) Transfer of Securities There were no |
Derivative Investments
Derivative Investments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Investments | DERIVATIVE INVESTMENTS Fixed-index products provide traditional fixed annuities and universal life contracts with the option to have credited interest rates linked in part to an underlying equity index or a combination of equity indices. The equity return component of such policy contracts is identified separately and accounted for in future policy benefits as embedded derivatives on the Consolidated Balance Sheets. The remaining portions of these policy contracts are considered the host contracts and are recorded separately as fixed annuity or universal life contracts. The host contracts are accounted for under debt instrument type accounting in which future policy benefits are recorded as discounted debt instruments that are accreted, using the effective yield method, to their minimum account values at their projected maturities or termination dates. The Company purchases over-the-counter index options, which are derivative financial instruments, to hedge the equity return component of its fixed-index annuity and life products. The index options act as hedges to match closely the returns on the underlying index or indices. The amounts which may be credited to policyholders are linked, in part, to the returns of the underlying index or indices. As a result, changes to policyholders' liabilities are substantially offset by changes in the value of the options. Cash is exchanged upon purchase of the index options and no principal or interest payments are made by either party during the option periods. Upon maturity or expiration of the options, cash may be paid to the Company depending on the performance of the underlying index or indices and terms of the contract. The Company does not elect hedge accounting relative to these derivative instruments. The index options are reported at fair value in the accompanying Consolidated Financial Statements. The changes in the values of the index options and the changes in the policyholder liabilities are both reflected in the Consolidated Statements of Earnings. Any changes relative to the embedded derivatives associated with policy contracts are reflected in contract interest in the Consolidated Statements of Earnings. Any gains or losses from the sale or expiration of the options, as well as period-to-period changes in values, are reflected as net investment income in the Consolidated Statements of Earnings. Although there is credit risk in the event of nonperformance by counterparties to the index options, the Company does not expect any of its counterparties to fail to meet their obligations, given their high credit ratings. In addition, credit support agreements are in place with all counterparties for option holdings in excess of specific limits, which may further reduce the Company's credit exposure. The tables below present the fair value of derivative instruments. December 31, 2019 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) (In thousands) Derivatives not designated as hedging instruments Equity index options Derivatives, Index Options $ 157,588 Fixed-index products Universal Life and Annuity Contracts $ 155,902 Total $ 157,588 $ 155,902 December 31, 2018 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) (In thousands) Derivatives not designated as hedging instruments Equity index options Derivatives, Index Options $ 14,684 Fixed-index products Universal Life and Annuity Contracts $ 44,781 Total $ 14,684 $ 44,781 The table below presents the effect of derivative instruments in the Consolidated Statements of Earnings for the years ended December 31, 2019 , 2018 and 2017 . Amount of Gain or (Loss) Recognized In Income on Derivatives Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized In Income on Derivatives 2019 2018 2017 (In thousands) Equity index options Net investment income (loss) $ 123,207 (80,004 ) 222,875 Fixed-index products Universal life and annuity contract interest (91,424 ) 66,335 (237,281 ) $ 31,783 (13,669 ) (14,406 ) The embedded derivative liability, the change of which is recorded in universal life and annuity contract interest in the Consolidated Statements of Earnings, includes projected interest credits that are offset by the expected collectability by the Company of asset management fees on fixed-index products. The anticipated asset management fees assumed to be collected increases or decreases based upon the most recent performance of index options and adds to or reduces the offset applied to the embedded derivative liability (increasing or decreasing contract interest expense). In the years ended December 31, 2019 , 2018 , and 2017 , the change in the embedded derivative liability due to the expected collectability of asset management fees increased/(decreased) contract interest expense by $(33.6) million , $17.6 million , and $6.9 million , respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | FAIR VALUES OF FINANCIAL INSTRUMENTS For financial instruments the FASB provides guidance which defines fair value, establishes a framework for measuring fair value under GAAP, and requires additional disclosures about fair value measurements. In compliance with this GAAP guidance, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded at fair value on the Consolidated Balance Sheets are categorized as follows: Level 1: Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. These generally provide the most reliable evidence and are used to measure fair value whenever available. The Company's Level 1 assets are equity securities and an alternative asset that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets. Level 2: Fair value is based upon significant inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable for substantially the full term of the asset or liability through corroboration with observable market data as of the reporting date. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, model-derived valuations whose inputs are observable or whose significant value drivers are observable and other observable inputs. The Company’s Level 2 assets include fixed maturity debt securities (corporate and private bonds, government or agency securities, asset-backed and mortgage-backed securities). Valuations are generally obtained from third party pricing services for identical or comparable assets or determined through use of valuation methodologies using observable market inputs. Level 3: Fair value is based on significant unobservable inputs which reflect the entity’s or third party pricing service’s assumptions about the assumptions market participants would use in pricing an asset or liability. The Company’s Level 3 assets are over-the-counter derivative contracts and the Company’s Level 3 liabilities consist of share-based compensation obligations and certain product-related embedded derivatives and contingent consideration in the acquisition of businesses. Valuations are estimated based on non-binding broker prices or internally developed valuation models or methodologies, discounted cash flow models and other similar techniques. The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of the date indicated. December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Debt securities, available for sale $ 3,356,945 — 3,356,945 — Equity securities 23,594 23,594 — — Derivatives, index options 157,588 — — 157,588 Other invested assets 2 2 — — Total assets $ 3,538,129 23,596 3,356,945 157,588 Policyholder account balances (a) $ 155,902 — — 155,902 Other liabilities (b) 15,301 — — 15,301 Total liabilities $ 171,203 — — 171,203 December 31, 2018 Total Level 1 Level 2 Level 3 (In thousands) Debt securities, available for sale $ 2,946,059 — 2,946,059 — Equity securities, available for sale 17,491 17,491 — — Derivatives, index options 14,684 — — 14,684 Total assets $ 2,978,234 17,491 2,946,059 14,684 Policyholder account balances (a) $ 44,781 — — 44,781 Other liabilities 11,923 — — 11,923 Total liabilities $ 56,704 — — 56,704 (a) Represents the fair value of certain product-related embedded derivatives that were recorded at fair value. (b) Represents the liability for share-based compensation and contingent consideration for businesses acquired. The following table provides additional information about fair value measurements for which significant unobservable (Level 3) inputs were utilized to determine fair value. Year Ended December 31, 2019 Debt Securities, Available For Sale Equity Securities Derivatives, Index Options Total Assets Other Liabilities (In thousands) Beginning balance, January 1, 2019 $ — — 14,684 14,684 56,704 Total realized and unrealized gains (losses): Included in net income — — 123,207 123,207 94,106 Included in other comprehensive income (loss) — — — — — Purchases, sales, issuances and settlements, net: Purchases — — 76,928 76,928 76,928 Sales — — — — — Issuances — — — — 3,815 Settlements — — (57,231 ) (57,231 ) (60,350 ) Transfers into (out of) Level 3 — — — — — Balance at end of period $ — — 157,588 157,588 171,203 Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: Net investment income $ — — 80,724 80,724 — Benefits and expenses — — — — 83,406 Total $ — — 80,724 80,724 83,406 Year Ended December 31, 2018 Debt Securities, Available For Sale Equity Securities, Available For Sale Derivatives, Index Options Total Assets Other Liabilities (In thousands) Beginning balance, January 1, 2018 $ — — 194,731 194,731 226,401 Total realized and unrealized gains (losses): Included in net income — — (80,004 ) (80,004 ) (65,046 ) Included in other comprehensive income (loss) — — — — — Purchases, sales, issuances and settlements, net: Purchases — — 86,953 86,953 86,953 Sales — — — — — Issuances — — — — 74 Settlements — — (186,996 ) (186,996 ) (191,678 ) Transfers into (out of) Level 3 — — — — — Balance at end of period $ — — 14,684 14,684 56,704 Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: Net investment income $ — — (72,269 ) (72,269 ) — Benefits and expenses — — — — (70,980 ) Total $ — — (72,269 ) (72,269 ) (70,980 ) The following tables show the fair value (in thousands), valuation techniques and significant unobservable inputs for the financial instruments categorized as Level 3. December 31, 2019 Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (In thousands) Assets: Derivatives, index options $ 157,588 Broker prices Implied volatility 13.1% - 19.9% (15.25%) Total assets $ 157,588 Liabilities: Policyholder account balances $ 155,902 Deterministic cash flow model Projected option cost 0.0% - 17.55% (3.14%) Share based compensation 11,225 Black Scholes Expected term 1.9 to 10 years Expected volatility 22.2% Contingent consideration on businesses acquired 4,076 Probabilistic Method Discount rate 10% Projected renewal premium $57.2 - $82.4 million ($71.9) Total liabilities $ 171,203 December 31, 2018 Fair Value Valuation Technique Unobservable Input (In thousands) Derivatives, index options $ 14,684 Broker prices Implied volatility Inputs from broker proprietary models Total assets $ 14,684 Policyholder account balances $ 44,781 Deterministic cash flow model Projected option cost Other liabilities 11,923 Black Scholes Expected term Forfeiture assumptions Total liabilities $ 56,704 Realized gains (losses) on debt securities assets are reported in the Consolidated Statements of Earnings as net investment gains (losses) with liabilities reported as expenses. Unrealized gains (losses) on available for sale debt securities are reported as other comprehensive income (loss) within stockholders’ equity of the Consolidated Balance Sheets. Effective January 1, 2018, the change in fair value of equity securities is reported in the Condensed Consolidated Statement of Earnings as a component of net investment income. The fair value hierarchy classifications are reviewed each reporting period. Reclassification of certain financial assets and liabilities may result based on changes in the observability of valuation attributes. Reclassifications are reported as transfers into and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. GAAP defines fair value, establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. Fair value is based on an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The objective of a fair value measurement is to determine that price for each financial instrument at each measurement date. GAAP also establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a variety of factors including the type of instrument and the characteristics of instruments. Financial instruments with readily available active quoted prices or those for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. It is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measures. The following methods and assumptions were used in estimating the fair value of financial instruments and liabilities during the periods presented in the Consolidated Financial Statements. Fixed maturity securities. Fair values for debt securities are based on quoted market prices, where available. For securities not actively traded, fair values are estimated using values obtained from various independent pricing services with any adjustments based upon observable data. In the cases where prices are unavailable for these sources, values are estimated by discounting expected future cash flows using a current market rate applicable to the yield, credit quality, and maturity of the investments. Equity securities. Fair values for equity securities are based upon quoted market prices, where available. For equity securities that are not actively traded, estimated values are based on values of comparable issues or audited financial statements of the issuer. Cash and cash equivalents. The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values due to the relatively short time between the purchase of the instrument and its expected repayment or maturity. Mortgage and other loans. The fair values of performing mortgage and other loans are estimated by discounting scheduled cash flows through the scheduled maturities of the loans, using interest rates currently being offered for similar loans to borrowers with similar credit ratings. Fair values for significant nonperforming loans are based on recent internal or external appraisals. If appraisals are not available, estimated cash flows are discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information. Policy Loans. Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are collateralized by the cash surrender value of the underlying insurance policy. Derivatives. Fair values for index (call) options are based on counterparty market prices. The counterparties use market standard valuation methodologies incorporating market inputs for volatility and risk free interest rates in arriving at a fair value for each option contract. Prices are monitored for reasonableness by the Company using analytical tools. There are no performance obligations related to the call options purchased to hedge the Company’s fixed-index life and annuity policy liabilities. Life interest in Libbie Shearn Moody Trust. The fair value of the life interest asset is determined annually based on assumptions as to future distributions from the Trust over the life expectancy of Robert L. Moody, Sr., Chairman Emeritus of the Board of Directors of NWLGI. These estimated cash flows are discounted at a rate consistent with uncertainties relating to the amount and timing of future cash distributions subject to the maximum amount to be received by the Company from life insurance proceeds in the event of Mr. Moody's death. The carrying value or cost basis of the life interest asset is amortized ratably over the remaining expected life of Mr. Moody, updated for changes in expected mortality. Annuity and supplemental contracts. Fair values for the Company's insurance contracts other than annuity contracts are not required to be disclosed. This includes the Company's traditional and universal life products. Fair values for immediate annuities without mortality features are based on the discounted future estimated cash flows using current market interest rates for similar maturities. Fair values for deferred annuities, including fixed-index annuities, are determined using estimated projected future cash flows discounted at the rate that would be required to transfer the liability in an orderly transaction. The fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk, which minimizes exposure to changing interest rates through the matching of investment maturities with amounts due under insurance and annuity contracts. Contingent consideration. The fair value of contingent consideration in the acquisition of businesses is valued using a probabilistic method that includes a discounted projection of renewal premiums. The Company utilizes independent third-party pricing services to determine the majority of its fair values of investment securities. The independent pricing services provide quoted market prices when available or otherwise incorporate a variety of observable market data in their valuation techniques including reported trading prices, broker-dealer quotes, bids and offers, benchmark securities, benchmark yields, credit ratings, and other reference data. The Company reviews prices received from service providers for unusual fluctuations to ensure that the prices represent a reasonable estimate of fair value but generally accepts the price identified from the primary pricing service. When quoted market prices in active markets are unavailable, the Company determines fair values using various valuation techniques and models based on a range of observable market inputs including pricing models, quoted market price of publicly traded securities with similar duration and yield, time value, yield curve, prepayment speeds, default rates and discounted cash flow. In most cases, these estimates are determined based on independent third party valuation information, and the amounts are disclosed in Level 2 of the fair value hierarchy. Generally, the Company obtains a single price or quote per instrument from independent third parties to assist in establishing the fair value of these investments. Fair value measurements for investment securities where there exists limited or no observable data are calculated using the Company’s own estimates based on current interest rates, credit spreads, liquidity premium or discount, the economic and competitive environment, unique characteristics of the security and other pertinent factors. These estimates are derived a number of ways including, but not limited to, pricing provided by brokers where the price indicates reliability as to value, fair values of comparable securities incorporating a spread adjustment (for maturity differences, credit quality, liquidity, and collateralization), discounted cash flow models and margin spreads, bond yield curves, and observable market prices and exchange transaction information not provided by external pricing services. The resulting prices may not be realized in an actual sale or immediate settlement and there may be inherent weaknesses in any calculation technique. In addition, changes in underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. The following table presents, by pricing source and fair value hierarchy level, the Company’s assets that are measured at fair value on a recurring basis: December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Fixed maturities, available for sale: Priced by third-party vendors $ 3,356,945 — 3,356,945 — Priced internally — — — — Subtotal 3,356,945 — 3,356,945 — Equity securities: Priced by third-party vendors 23,594 23,594 — — Priced internally — — — — Subtotal 23,594 23,594 — — Derivatives, index options: Priced by third-party vendors 157,588 — — 157,588 Priced internally — — — — Subtotal 157,588 — — 157,588 Other invested assets: Priced by third-party vendors 2 2 — — Priced internally — — — — Subtotal 2 2 — — Total $ 3,538,129 23,596 3,356,945 157,588 Percent of total 100.0 % 0.7 % 94.8 % 4.5 % The carrying amounts and fair values of the Company's financial instruments are as follows: December 31, 2019 Fair Value Hierarchy Level Carrying Values Fair Values Level 1 Level 2 Level 3 (In thousands) ASSETS Debt securities held to maturity $ 7,106,245 7,407,703 — 7,407,703 — Debt securities available for sale 3,356,945 3,356,945 — 3,356,945 — Cash and cash equivalents 253,524 253,524 253,524 — — Mortgage loans 272,422 270,931 — — 270,931 Real estate 34,588 57,204 — — 57,204 Policy loans 80,008 123,650 — — 123,650 Other loans 13,547 13,698 — — 13,698 Derivatives, index options 157,588 157,588 — — 157,588 Equity securities 23,594 23,594 23,594 — — Life interest in Libbie Shearn Moody Trust 9,230 12,775 — — 12,775 Other invested assets 197 16,182 2 — 16,180 LIABILITIES Deferred annuity contracts $ 6,999,880 5,916,399 — — 5,916,399 Immediate annuity and supplemental contracts 400,465 422,931 — — 422,931 Contingent consideration on businesses acquired 4,076 4,076 — — 4,076 December 31, 2018 Fair Value Hierarchy Level Carrying Values Fair Values Level 1 Level 2 Level 3 (In thousands) ASSETS Investments in debt and equity securities: Securities held to maturity $ 7,285,254 7,228,268 — 7,226,362 1,906 Securities available for sale 2,946,059 2,946,059 — 2,946,059 — Cash and cash equivalents 131,976 131,976 131,976 — — Mortgage loans 203,180 202,762 — — 202,762 Real Estate 35,692 53,504 — — 53,504 Policy loans 54,724 90,802 — — 90,802 Other loans 12,272 12,709 — — 12,709 Derivatives, index options 14,684 14,684 — — 14,684 Equity Securities 17,491 17,491 17,491 — — Life interest in Libbie Shearn Moody Trust 8,692 12,775 — — 12,775 Other invested assets 195 14,478 — — 14,478 LIABILITIES Deferred annuity contracts $ 7,455,642 6,403,007 — — 6,403,007 Immediate annuity and supplemental contracts 407,413 415,726 — — 415,726 Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE National Western reinsures the risk on any one life in excess of $500,000 . Total life insurance in force was $17.1 billion and $18.6 billion at December 31, 2019 and 2018 , respectively. Of these amounts, life insurance in force totaling $3.7 billion and $4.0 billion was ceded to reinsurance companies on a yearly renewable term basis at December 31, 2019 and 2018 , respectively. In accordance with the reinsurance contracts, reinsurance receivables, including amounts related to claims incurred but not reported and liabilities for future policy benefits, totaled $20.7 million and $1.1 million at December 31, 2019 and 2018 , respectively. Premiums and contract revenues were reduced by $21.1 million , $20.8 million and $20.3 million for reinsurance premiums ceded during 2019 , 2018 and 2017 , respectively. Benefit expenses were reduced by $22.0 million , $31.2 million and $7.5 million , for reinsurance recoveries during 2019 , 2018 and 2017 , respectively. Ozark National generally reinsures the risk on any one life in excess of $200,000 . Total life insurance in force was $6.2 billion at December 31, 2019 . Of this amount, life insurance in force totaling $0.5 billion was ceded to reinsurance companies at December 31, 2019 . In accordance with the reinsurance contracts, reinsurance receivables, including amounts related to claims incurred but not reported and liabilities for future policy benefits, totaled $21.7 million at December 31, 2019 . Premiums and contract revenues were reduced by $2.5 million for reinsurance premiums ceded during 2019 . Benefit expenses were reduced by $2.2 million for reinsurance recoveries during 2019 . A contingent liability exists with respect to reinsurance, as the Company remains liable if the reinsurance companies are unable to perform and meet their obligations under the existing agreements. The Company does not assume reinsurance but Ozark National maintains a closed block of assumed reinsurance. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired | DEFERRED POLICY ACQUISITION COSTS, DEFERRED SALES INDUCEMENTS, AND VALUE OF BUSINESS ACQUIRED A summary of information related to DPAC is provided in the following table: Years Ended December 31, 2019 2018 2017 (In thousands) Balance, beginning of year $ 841,704 819,511 835,194 Deferrals 64,824 84,094 103,521 Amortization, net of interest: Amortization, excluding unlocking, net of interest (117,748 ) (115,721 ) (126,244 ) Unlocking 8,643 950 11,857 Adjustments related to unrealized gains (losses) (73,451 ) 52,870 (4,817 ) Balance, end of year $ 723,972 841,704 819,511 A summary of information related to DSI is provided in the following table: Years Ended December 31, 2019 2018 2017 (In thousands) Balance, beginning of year $ 133,714 135,570 147,111 Deferrals 3,160 7,546 17,901 Amortization, net of interest: Amortization, excluding unlocking, net of interest (19,714 ) (21,569 ) (24,264 ) Unlocking (641 ) 1,270 (4,288 ) Adjustments related to unrealized gains (losses) (12,160 ) 10,897 (890 ) Balance, end of year $ 104,359 133,714 135,570 Changes in VOBA were as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Balance as of January 31, 2019 $ 145,768 — — Amortization: Amortization, excluding unlocking (7,697 ) — — Balance as of end-of-year $ 138,071 — — Estimated future amortization of VOBA, net of interest (in thousands), as of December 31, 2019 , was as follows: 2020 $ 6,944 2021 $ 6,591 2022 $ 6,285 2023 $ 6,010 2024 $ 5,773 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Effective January 31, 2019, the Company acquired Ozark National and NIS following the receipt of regulatory approvals. NWLGI and National Western paid cash in an aggregate amount of approximately $205.4 million in exchange for all of the outstanding stock of Ozark National (wholly owned by National Western) and NIS (wholly owned by NWLGI). In addition to the cash price paid, National Western has a contingent liability for an "earn-out payment" based upon the subsequent persistency of Ozark National's acquired in force business achieving thresholds as specified in the Stock Purchase Agreement ("Agreement"). The earn-out payment to the seller per the Agreement has a maximum limit of $5.0 million . Using a probabilistic method for valuing contingent consideration, the Company at January 31, 2019 recorded an initial liability of $3.7 million representing the estimated fair value of the additional consideration estimated to be paid as part of the acquisition. The contingent consideration is revalued during the earn-out term using the same probabilistic method and had a fair value of $4.1 million as of December 31, 2019. The change in fair value during the year ended December 31, 2019 was recorded through Other operating expenses. In addition to the purchase price, the Company incurred $3.3 million of acquisition-related costs in 2019, and an additional $1.0 million in acquisition-related costs during the year ended December 31, 2018. In accordance with GAAP, these costs are included in Other operating expenses in the Consolidated Statements of Earnings and are not considered a part of the purchase price. The acquisition has been accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . Purchase accounting, as defined by ASC 805, requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values shown below were determined based on management’s best estimates, employing fair valuation methodologies commonly utilized in preparing financial statements in accordance with GAAP, and are subject to revision for one year following the acquisition date. The excess of the purchase price paid above net tangible assets acquired has been assigned to identifiable intangible assets and goodwill. The following table presents the fair values of the net assets acquired as of January 31, 2019. January 31, 2019 Assets Fair value (In thousands) Debt securities held to maturity $ 261,059 Debt securities available for sale 400,719 Policy loans 28,128 Real estate 4,600 Cash and cash equivalents 16,275 Accrued investment income 6,116 Value of business acquired 145,768 Reinsurance recoverables 21,895 Other intangible assets 9,600 Other assets acquired 12,075 Total assets acquired 906,235 Liabilities Traditional life reserves 691,297 Other policyholder liabilities 13,867 Other liabilities acquired 5,840 711,004 Net identifiable assets acquired 195,231 Goodwill 13,864 Net assets acquired $ 209,095 The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the acquisition above. Debt securities - The fair value of debt securities acquired was calculated using a market approach that utilizes prices and other relevant information generated by market transactions involving identical or comparable securities as provided by third party pricing services. Policy loans - The fair value of policy loans acquired was calculated using a present value calculation of discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flows were discounted using current risk-free interest rates consistent with fair value calculations used for National Western’s policy loans. Real estate - The fair value of the investment real estate acquired was determined using the sales comparison approach which compares market information for similar properties based on relevant, market-derived elements of comparison. Cash and cash equivalents - The fair value of cash and cash equivalents acquired approximated their carrying values at the time of acquisition. Other assets acquired -The fair value of certain receivables, guaranty assessment assets, and reinsurance recoverable were determined to approximate their carrying values at the time of acquisition. The fair value of tangible home office property acquired was determined using mostly a sales comparison approach which compares market information for similar properties based on relevant, market-derived elements of comparison. Goodwill and Specifically Identifiable Intangible Assets Goodwill The changes in the carrying amount of goodwill (in thousands) were as follows: Year Ended December 31, 2019 (In thousands) Gross goodwill as of beginning of year $ — Goodwill resulting from business acquisition 13,864 Gross goodwill, before impairments 13,864 Accumulated impairment as of beginning of year — Current year impairments — Net goodwill as of end of year $ 13,864 The Company will evaluate goodwill annually for impairment beginning in the second quarter of 2020. Identifiable Intangible Assets The following table presents the fair value of identifiable intangible assets acquired at January 31, 2019. Fair Value Weighted-Average Amortization Period (In thousands) Trademarks/trade names $ 2,800 15 Internally developed software 3,800 7 Insurance licenses 3,000 NA $ 9,600 The value of trademarks was estimated using the relief from royalty method, based on the assumption that in lieu of ownership, an organization would be willing to pay a royalty in order to receive the related benefits of using the brand. The value of insurance licenses was estimated using the market approach to value, based on values paid for licenses in recent shell company transactions. The value of internally developed software was estimated using the replacement cost method. Trademarks, trade names and internally developed software are amortized using a straight-line method over their estimated useful lives. These intangibles assets will be evaluated for impairment if indicators of impairment arise. Insurance licenses were determined to have an indefinite useful life. The Company will evaluate the useful life of the insurance licenses at each reporting period to determine whether the useful life remains indefinite. The Company will evaluate the insurance licenses at least annually for impairment. The gross carrying amounts and accumulated amortization for each specifically identifiable intangible asset were as follows. December 31, 2019 Gross Carrying Amount Accumulated Amortization (In thousands) Trademarks/trade names $ 2,800 (171 ) Internally developed software 3,800 (498 ) Insurance licenses (1) 3,000 — $ 9,600 (669 ) (1) No amortization recorded as the intangible asset has indefinite life. As of December 31, 2019, expected amortization expenses relating to purchased intangible assets for each of the next 5 years and thereafter is as follows: Expected Amortization (In thousands) 2020 $ 730 2021 730 2022 730 2023 730 2024 730 Thereafter 2,281 $ 5,931 Financial Information Ozark National and NIS combined total revenues of $106.2 million and net earnings of $17.1 million for the eleven months subsequent to January 31, 2019 have been included in the Consolidated Statements of Earnings for the year ended December 31, 2019. These results for segment reporting purposes have been combined in the Acquired Businesses segment. The following unaudited comparative pro forma total revenues and net earnings represent Consolidated Results of Operations for the Company which assume amounts estimated had the acquisition of Ozark National and NIS been effective January 1, 2018. Pro forma results of operations include estimated revenue and net earnings of the acquired businesses for each period, as well as the amortization of identifiable intangible assets and fair value adjustments of acquired invested assets and traditional life insurance reserves as proxy to illustrate comparative yearly performance. The proxy was determined by using the ratio of the 2019 results of operations and the number of months since acquisition. Years Ended December 31, 2019 2018 (In thousands) Total revenues $ 828,846 667,392 Net earnings $ 133,175 134,858 |
Segment and Other Operating Inf
Segment and Other Operating Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Other Operating Information | SEGMENT AND OTHER OPERATING INFORMATION (A) Operating Segment Information The Company defines its reportable operating segments as domestic life insurance, international life insurance, annuities, and acquired businesses. These segments are organized based on product types, geographic marketing areas, and business groupings. Ozark National and NIS have been combined into the segment "Acquired Businesses" given its inter-related marketing and sales approach which consists of a coordinated sale of a non-participating whole life insurance product (Ozark National) and a mutual fund investment product (NIS). In accordance with GAAP guidance for segment reporting, the Company excludes or segregates realized investment gains and losses. A summary of segment information is provided below. Domestic Life Insurance International Life Insurance Annuities Acquired Businesses All Others Totals (In thousands) 2019: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements, and value of business acquired $ 127,557 209,858 486,553 142,434 — 966,402 Total segment assets 1,399,818 1,153,105 8,198,730 978,243 362,900 12,092,796 Future policy benefits 1,198,103 870,461 7,351,941 706,513 — 10,127,018 Other policyholder liabilities 18,016 14,903 80,002 14,686 — 127,607 Condensed Income Statements: Premiums and contract charges $ 45,709 99,417 20,317 74,526 — 239,969 Net investment income 77,672 47,004 380,357 22,593 27,866 555,492 Other revenues 313 86 (34 ) 8,445 8,676 17,486 Total revenues 123,694 146,507 400,640 105,564 36,542 812,947 Life and other policy benefits 18,948 17,064 41,487 59,843 — 137,342 Amortization of deferred policy acquisition costs, and value of business acquired 11,797 17,593 79,064 8,348 — 116,802 Universal life and annuity contract interest 69,849 48,561 176,920 — — 295,330 Other operating expenses 20,376 19,447 35,699 17,056 11,980 104,558 Federal income taxes (benefit) 561 9,024 13,888 3,700 5,056 32,229 Total expenses 121,531 111,689 347,058 88,947 17,036 686,261 Segment earnings (loss) $ 2,163 34,818 53,582 16,617 19,506 126,686 Domestic Life Insurance International Life Insurance Annuities All Others Totals (In thousands) 2018: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements $ 122,661 243,518 609,239 — 975,418 Total segment assets 1,215,864 1,211,036 8,791,463 370,118 11,588,481 Future policy benefits 1,039,150 894,891 7,810,245 — 9,744,286 Other policyholder liabilities 17,439 20,381 97,874 — 135,694 Condensed Income Statements: Premiums and contract charges $ 40,879 108,923 23,694 — 173,496 Net investment income 23,579 22,603 276,123 26,772 349,077 Other revenues 19 87 66 20,431 20,603 Total revenues 64,477 131,613 299,883 47,203 543,176 Life and other policy benefits 21,688 22,333 21,276 — 65,297 Amortization of deferred policy acquisition costs 11,539 24,358 78,874 — 114,771 Universal life and annuity contract interest 8,826 24,590 102,639 — 136,055 Other operating expenses 20,731 19,593 32,584 21,061 93,969 Federal income taxes (benefit) 292 7,035 11,139 4,514 22,980 Total expenses 63,076 97,909 246,512 25,575 433,072 Segment earnings (loss) $ 1,401 33,704 53,371 21,628 110,104 Domestic Life Insurance International Life Insurance Annuities All Others Totals (In thousands) 2017: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements $ 101,253 250,128 603,700 — 955,081 Total segment assets 1,106,410 1,236,733 9,269,956 398,597 12,011,696 Future policy benefits 950,884 915,384 8,232,216 — 10,098,484 Other policyholder liabilities 13,643 11,318 103,048 — 128,009 Condensed Income Statements: Premiums and contract charges $ 37,387 120,852 20,691 — 178,930 Net investment income 73,866 68,399 490,706 26,714 659,685 Other revenues 46 83 109 20,832 21,070 Total revenues 111,299 189,334 511,506 47,546 859,685 Life and other policy benefits 18,565 23,981 28,939 — 71,485 Amortization of deferred policy acquisition costs 10,377 (1,473 ) 105,483 — 114,387 Universal life and annuity contract interest 59,865 54,502 322,652 — 437,019 Other operating expenses 18,842 36,341 32,021 19,798 107,002 Federal income taxes (benefit) 815 16,958 5,002 6,192 28,967 Total expenses 108,464 130,309 494,097 25,990 758,860 Segment earnings (loss) $ 2,835 59,025 17,409 21,556 100,825 Reconciliations of segment information to the Company's Consolidated Financial Statements are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Premiums and Other Revenue : Premiums and contract charges $ 239,969 173,496 178,930 Net investment income 555,492 349,077 659,685 Other revenues 17,486 20,603 21,070 Realized gains (losses) on investments 6,241 8,423 14,763 Total consolidated premiums and other revenue $ 819,188 551,599 874,448 Years Ended December 31, 2019 2018 2017 (In thousands) Federal Income Taxes : Total segment Federal income taxes $ 32,229 22,980 28,967 Taxes on realized gains (losses) on investments 1,311 1,769 5,167 Total taxes on consolidated net earnings $ 33,540 24,749 34,134 Years Ended December 31, 2019 2018 2017 (In thousands) Net Earnings : Total segment earnings $ 126,686 110,104 100,825 Realized gains (losses) on investments, net of taxes 4,930 6,654 9,596 Total consolidated net earnings $ 131,616 116,758 110,421 December 31, 2019 2018 2017 (In thousands) Assets : Total segment assets $ 12,092,796 11,588,481 12,011,696 Other unallocated assets 460,651 343,210 213,398 Total consolidated assets $ 12,553,447 11,931,691 12,225,094 (B) Geographic Information A portion of the Company's premiums and contract revenues are from international policies with residents of countries other than the United States. Premiums and contract revenues detailed by country are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) United States $ 156,330 82,614 74,937 Brazil 24,975 27,280 33,024 Taiwan 12,054 14,414 16,105 Venezuela 11,763 12,864 14,844 Peru 10,127 10,969 11,714 Chile 8,122 8,769 9,201 Other foreign countries 40,217 37,346 39,417 Revenues, excluding reinsurance premiums 263,588 194,256 199,242 Reinsurance premiums (23,619 ) (20,760 ) (20,312 ) Total premiums and contract revenues $ 239,969 173,496 178,930 Premiums and contract revenues are attributed to countries based on the location of the policyholder. The Company has no significant assets, other than certain limited financial instruments, located in countries other than the United States. (C) Major Agency Relationships A portion exceeding 10% of National Western's annual annuity sales has been sold through one or more of its top independent marketing agencies in recent years. Business from three top agencies accounted for approximately 17% , 13% and 12% , respectively, of annuity sales in 2019 . In 2019, one domestic independent marketing agency exceeded 10% of total Domestic Life sales accounting for 46% . Ozark National did not have a single distributor accounting for 10% or more of its sales in 2019. |
Statutory Information (Notes)
Statutory Information (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Statutory Information | STATUTORY INFORMATION Domiciled in Colorado, National Western prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the Colorado Division of Insurance, while Ozark National, domiciled in Missouri, follows the accounting practices prescribed or permitted by the Missouri Department of Commerce and Insurance. These insurance departments have adopted the provisions of the National Association of Insurance Commissioners' ("NAIC") Statutory Accounting Practices (“SSAP”) as the basis for its statutory accounting practices. The following are major differences between GAAP and SSAP. 1. The Company accounts for universal life and annuity contracts based on the provisions of GAAP. The basic difference between GAAP and SSAP with respect to certain long-duration contracts is that deposits for universal life and annuity contracts are not reflected as revenues, and surrenders and certain other benefit payments are not reflected as expenses. Only contracts with no insurance risk qualify for such treatment under statutory accounting practices. For all other contracts, SSAP does reflect such items as revenues and expenses. A summary of direct premiums and deposits collected is provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Annuity deposits $ 264,667 411,208 608,799 Universal life insurance deposits 266,600 278,971 254,960 Traditional life and other premiums 95,695 21,561 22,624 Totals $ 626,962 711,740 886,383 2. SSAP requires commissions and related acquisition costs to be expensed as incurred, whereas under GAAP these items are deferred and amortized. 3. For SSAP, liabilities for future policy benefits for life insurance policies are calculated by the net level premium method or the commissioners reserve valuation method. Future policy benefit liabilities for annuities are calculated based on the continuous commissioners annuity reserve valuation method and provisions of Actuarial Guidelines 33 and 35. 4. Deferred Federal income taxes are provided for temporary differences which are recognized in the Consolidated Financial Statements in a different period than for Federal income tax purposes. Deferred taxes are also recognized under SSAP; however, there are limitations as to the amount of deferred tax assets that may be reported as admitted assets. The change in the deferred taxes is recorded directly in surplus, rather than as a component of income tax expense. 5. For SSAP, debt securities are recorded at amortized cost, except for securities in or near default, which are reported at fair value. Under GAAP, debt securities are carried at amortized cost or fair value based on their classification as either held to maturity or available for sale. 6. Investments in subsidiaries are recorded as affiliated common stock investments at their respective SSAP investment value under statutory accounting, whereas the financial statements of the subsidiaries have been consolidated with those of the Company under GAAP. 7. The asset valuation reserve and interest maintenance reserve, which are investment valuation reserves prescribed by SSAP, have been eliminated, as they are not required under GAAP. 8. The table below provides the National Western and Ozark National net gain from operations, net income, unassigned surplus (retained earnings) and capital and surplus (stockholders' equity), on the statutory basis used to report to regulatory authorities for the years ended December 31. 2019 2018 2017 (In thousands) National Western Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 209,139 27,359 197,597 Net income $ 151,316 31,296 126,932 Unassigned surplus $ 1,485,424 1,374,963 1,330,491 Capital and surplus $ 1,529,487 1,419,026 1,374,554 Ozark National Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 22,870 — — Net income $ (854 ) — — Unassigned surplus $ 29,452 — — Capital and surplus $ 58,404 — — |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share of common stock are computed by dividing net income available to each class of common stockholders on an as if distributed basis by the weighted-average number of common shares outstanding for the period. Diluted earnings per share, by definition, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock, that then shared in the distributed earnings of each class of common stock. U.S. GAAP requires a two-class presentation for the Company’s two classes of common stock (Note (13) Information Regarding Controlling Stockholder ). The Company currently has no share-based compensation awards outstanding that could be redeemed for shares of common stock. Net income for the periods shown below is allocated between Class A shares and Class B shares based upon (1) the proportionate number of shares issued and outstanding as of the end of the period, and (2) the per share dividend rights of the two classes under the Company's Restated Certificate of Incorporation (the Class B dividend per share is equal to one-half the Class A dividend per share). Years Ended December 31, 2019 2018 2017 Class A Class B Class A Class B Class A Class B (In thousands except per share amounts) Numerator for Basic and Diluted Earnings Per Share: Net earnings $ 131,616 116,758 110,421 Dividends – Class A shares (1,237 ) (1,237 ) (1,237 ) Dividends – Class B shares (36 ) (36 ) (36 ) Undistributed earnings $ 130,343 115,485 109,148 Allocation of net earnings: Dividends $ 1,237 36 1,237 36 1,237 36 Allocation of undistributed earnings 126,657 3,686 112,219 3,266 106,061 3,087 Net earnings $ 127,894 3,722 113,456 3,302 107,298 3,123 Denominator: Basic earnings per share - weighted-average shares 3,436 200 3,436 200 3,436 200 Effect of dilutive stock options — — — — — — Diluted earnings per share - adjusted weighted-average shares for assumed conversions 3,436 200 3,436 200 3,436 200 Basic earnings per share $ 37.22 18.61 33.02 16.51 31.23 15.61 Diluted earnings per share $ 37.22 18.61 33.02 16.51 31.23 15.61 |
Comprehensive Income
Comprehensive Income | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Comprehensive Income | COMPREHENSIVE INCOME GAAP guidance requires that all items recognized under accounting standards as components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. This guidance requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income (loss) separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. This guidance affects the Company's reporting presentation of certain items such as foreign currency translation adjustments, unrealized gains and losses on investment securities, and benefit plan liabilities. These items are reflected as components of other comprehensive income (loss), net of taxes, as reported in the accompanying Consolidated Financial Statements. During the year ended December 31, 2017, the Company remeasured its deferred tax assets and liabilities as a consequence of the Tax Act (see Notes 1 and 5) lowering the federal corporate income tax rate from 35% to 21% . This tax remeasurement was recorded in the Company's Consolidated Statements of Earnings, including taxes associated with components of other comprehensive income (loss). Recognizing the outcome of "stranding" deferred taxes in Accumulated Other Comprehensive Income ("AOCI"), the FASB released guidance permitting the reclassification of stranded tax effects from AOCI to retained earnings. Adoption of this guidance by the Company at December 31, 2017 resulted in a one-time income tax benefit of $2.5 million to other comprehensive income (loss). Components of other comprehensive income (loss) for 2019 , 2018 and 2017 and the related tax effect are detailed below. Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2019: Unrealized gains on securities, net of effects of deferred costs of $(85,609): Net unrealized holding gains (losses) arising during the period $ 122,726 (25,772 ) 96,954 Unrealized liquidity losses 4 (1 ) 3 Reclassification adjustment for net gains included in net earnings 5,060 (1,063 ) 3,997 Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities 127,790 (26,836 ) 100,954 Foreign currency translation adjustments 663 (139 ) 524 Benefit plan liability adjustment (5,513 ) 1,158 (4,355 ) Other comprehensive income (loss) $ 122,940 (25,817 ) 97,123 Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2018: Unrealized gains on securities, net of effects of deferred costs of $63,816: Net unrealized holding gains (losses) arising during the period $ (71,921 ) 15,103 (56,818 ) Unrealized liquidity losses 3 (1 ) 2 Reclassification adjustment for net gains included in net earnings (3,441 ) 723 (2,718 ) Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities (75,359 ) 15,825 (59,534 ) Foreign currency translation adjustments 1,714 (360 ) 1,354 Benefit plan liability adjustment 14,301 (3,003 ) 11,298 Other comprehensive income (loss) $ (59,344 ) 12,462 (46,882 ) Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2017: Unrealized gains on securities, net of effects of deferred costs of $(5,670): Net unrealized holding gains (losses) arising during the period $ 12,752 (4,464 ) 8,288 Unrealized liquidity losses 300 (105 ) 195 Reclassification adjustment for net gains included in net earnings (5,236 ) 1,833 (3,403 ) Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities 7,816 (2,736 ) 5,080 Foreign currency translation adjustments (14 ) 5 (9 ) Benefit plan liability adjustment (5,958 ) 2,085 (3,873 ) Other comprehensive income (loss) $ 1,844 (646 ) 1,198 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY (A) Changes in Common Stock Shares Outstanding Changes in shares of common stock outstanding are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Common stock shares outstanding: Shares outstanding at beginning of year 3,636 3,636 3,636 Shares exercised under stock option plan — — — Shares outstanding at end of year 3,636 3,636 3,636 (B) Dividend Restrictions National Western is restricted by state insurance laws as to dividend amounts which may be paid to stockholders without prior approval from the Colorado Division of Insurance. The restrictions are based on the lesser of statutory earnings from operations, excluding capital gains, or 10% of statutory surplus as of the previous year-end. Under these guidelines, the maximum dividend payment which may be made without prior approval in 2020 is $152.8 million . As the sole owner of NWLIC, all dividends declared by National Western are payable entirely to NWLGI and are eliminated in consolidation. Ozark National is similarly restricted under the state insurance laws of Missouri as to dividend amounts which may be paid to stockholders without prior approval to the greater of 10% of the statutory surplus from the preceding year-end or the company's net gain from operations, excluding capital gains, from the prior calendar year. Based upon this restriction, the maximum dividend payment which may be made in 2020 without prior approval is $17.2 million . As part of the Stock Purchase Agreement dated October 3, 2018, by and between NWLIC and Ozark National's previous owner, the Missouri Department of Commerce and Insurance granted approval for an extraordinary dividend of $102.7 million to be paid to the prior owner concurrent with the closing of the transaction effective January 31, 2019. Going forward, all dividends declared by Ozark National are payable entirely to NWLIC as the sole owner and are eliminated in consolidation. On October 18, 2019, the Board of Directors of NWLGI declared a cash dividend to stockholders on record as of November 6, 2019 which was paid December 2, 2019. The dividends approved were $0.36 per common share to Class A stockholders and $0.18 per common share to Class B stockholders. A dividend in the same amounts per share on Class A and Class B shares was declared in October 2018 and paid in December of 2018. In the first quarter of 2019, National Western declared and paid a $32.0 million dividend to NWLGI, the proceeds of which were used as part of the cash purchase of NIS. In the third quarter of 2019, National Western declared a $4.0 million ordinary cash dividend to NWLGI which was paid out in October 2019. During 2018, the Board of Directors of National Western declared ordinary cash dividends totaling $6.0 million which were paid to NWLGI during that year. Dividends paid from National Western to NWLGI are eliminated in consolidation. (C) Regulatory Capital Requirements The Colorado Division of Insurance and Missouri Department of Commerce and Insurance impose minimum risk-based capital requirements on insurance companies that were developed by the National Association of Insurance Commissioners ("NAIC"). The formulas for determining the amount of risk-based capital ("RBC") specify various weighting factors that are applied to statutory financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of a company's regulatory total adjusted capital to its authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. National Western's current authorized control level RBC of $145.9 million is significantly below its regulatory total adjusted capital of $1.6 billion . In addition, Ozark National's regulatory total adjusted capital of $61.3 million is also materially greater than its current authorized control level RBC of $6.6 million . (D) Share-Based Payments Effective June 20, 2008, the Company's shareholders approved a 2008 Incentive Plan (“2008 Plan”) which provided for the grant of any or all of the following types of awards to eligible employees: (1) stock options, including incentive stock options and nonqualified stock options; (2) stock appreciation rights ("SARs"), in tandem with stock options or freestanding; (3) restricted stock or restricted stock units; and (4) performance awards. The number of shares of Class A, $1.00 par value, common stock which were allowed to be issued under the plan, or as to which SARs or other awards were allowed to be granted, could not exceed 300,000 . This plan was assumed by NWLGI from National Western pursuant to the terms of the holding company reorganization in 2015. On June 15, 2016, stockholders of NWLGI approved an amended and restated 2008 Plan ("Incentive Plan"), which extended the term of the 2008 Plan for ten years from the date of stockholder approval. The Incentive Plan includes additional provisions, most notably regarding the definition of performance objectives which could be used in the issuance of the fourth type of award noted above (performance awards). All of the employees of the Company and its subsidiaries are eligible to participate in the current Incentive Plan. In addition, directors of the Company are eligible to receive the same types of awards as employees except that they are not eligible to receive incentive stock options. Company directors, including members of the Compensation and Stock Option Committee, are eligible for nondiscretionary stock options. At the end of 2018, all stock options granted under the 2008 Plan had been exercised, forfeited, or expired. Employee SARs granted prior to 2016 vest 20% annually following three years of service following the grant date. Employee SARs granted in 2016 and forward vest 33.3% annually following one year of service from the date of the grant. Directors' SAR grants vest 20% annually following one year of service from the date of grant. Effective during August 2008, the Company adopted and implemented a limited stock buy-back program with respect to the 2008 Plan which provided stock option holders the additional alternative of selling shares acquired through the exercise of options directly back to the Company. Option holders could elect to sell such acquired shares back to the Company at any time within ninety (90) days after the exercise of options at the prevailing market price as of the date of notice of election. The buy-back program did not alter the terms and conditions of the 2008 Plan. This plan was assumed as well by NWLGI from National Western pursuant to the terms of the holding company reorganization. There are currently no stock options issued and outstanding. The Incentive Plan allows for certain other share or unit awards which are solely paid out in cash based on the value of the Company's shares, or changes therein, as well as the financial performance of the Company under pre-determined target performance metrics. Certain awards, such as restricted stock units ("RSUs") provide solely for cash settlement based upon the market price of the Company's Class A common shares, often referred to as "phantom stock-based awards" in equity compensation plans. Unlike share-settled awards, which have a fixed grant-date fair value, the fair value of unsettled or unvested liability awards is remeasured at the end of each reporting period based on the change in fair value of a share. The liability and corresponding expense are adjusted accordingly until the award is settled. For employees, the vesting period for RSUs is 100% at the end of three years from the grant date. RSUs granted prior to 2019 are payable in cash at the vesting date equal to the closing price of the Company's Class A common share on the three years anniversary date. RSUs granted in 2019 are payable in cash at the three years vesting date equal to the 20 -day moving average closing price of the Company's Class A common share at that time. Other awards may involve performance share units ("PSUs") which are units granted at a specified dollar amount per unit, typically linked to the Company's Class A common share price, that are subsequently multiplied by an attained performance factor to derive the number of PSUs to be paid as cash compensation at the vesting date. PSUs also vest three years from the date of grant. For PSUs, the performance period begins the first day of the calendar year for which the PSUs are granted and runs three calendar years. At that time, the three-year performance outcome will be measured against the pre-defined target amounts to determine the number of PSUs earned as compensation. PSUs granted prior to 2019 are payable at the closing price of the Company’s Class A common shares on the vesting date. PSUs granted in 2019 are payable at the 20 -day moving average closing price of the Company’s Class A common share at the vesting date. PSU awards covering the three year measurement period ended December 31, 2018 were paid out in the first quarter of 2019. The performance factor during the measurement period used to determine compensation payouts was 93.86% of the pre-defined metric target. Directors of the Company are eligible to receive RSUs under the Incentive Plan. Unlike RSUs granted to officers, the RSUs granted to directors vest one year from the date of grant. RSUs granted prior to 2019 are payable in cash at the vesting date equal to the closing price of the Company's Class A common share at that time. RSUs granted in 2019 are payable in cash at the vesting date equal to the 20 -day moving average closing price of the Company’s Class A common share at that time. The following table shows all grants issued to officers and directors for the twelve months ended December 31, 2019 and 2018 . 2018 grants were made based upon closing market price per Class A common share at the grant date. 2019 grants were made based upon the 20 -day moving average closing market price per Class A common share at the grant date. Twelve Months Ended December 31, 2019 December 31, 2018 Officers Directors Officers Directors SARs 20,380 — 12,590 — RSUs 4,195 2,580 3,149 1,980 PSUs 6,427 — 5,070 — The increase in the number of units awarded in the year ended December 31, 2019 as compared to the prior year primarily reflects the decrease in grant price from $303.77 in 2018 to $252.91 in 2019. The Company uses the current fair value method to measure compensation cost for awards granted under the share-based plans. As of December 31, 2019 and 2018 , the liability balance was $11.2 million and $11.9 million , respectively. A summary of awards by type and related activity is detailed below. Options Outstanding Shares Available For Grant Shares Weighted-Average Exercise Price Stock Options: Balance at January 1, 2019 291,000 — $ — Exercised — — $ — Forfeited — — $ — Expired — — $ — Stock options granted — — $ — Balance at December 31, 2019 291,000 — $ — Liability Awards Other Share/Unit Awards: SARs RSUs PSUs Balance at January 1, 2019 89,443 13,170 19,122 Exercised (928 ) (5,031 ) (5,426 ) Forfeited (1,378 ) (562 ) (1,015 ) Granted 20,380 6,775 6,427 Balance at December 31, 2019 107,517 14,352 19,108 SARs, RSUs, and PSUs shown as forfeited in the above tables represent vested and unvested awards not exercised by plan participants upon their termination from the Company in accordance with the expiration provisions of the awards. The total intrinsic value of share-based compensation exercised was $3.1 million , $4.7 million , and $1.8 million for the years ended December 31, 2019 , 2018 , and 2017 respectively. The total share-based compensation paid was $3.1 million , $4.7 million , and $1.8 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. The total fair value of SARs, RSUs, and PSUs vested during the years ended December 31, 2019 , 2018 , and 2017 was $4.4 million , $3.1 million , and $2.7 million , respectively. No cash amounts were received from the exercise of stock options under the Plans during the periods reported on. The following table summarizes information about SARs outstanding at December 31, 2019 . SARs Outstanding Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Exercise prices: 132.56 19,318 1.9 years 19,318 210.22 24,450 3.8 years 20,350 216.48 11,521 5.9 years 11,521 311.16 10,162 7.0 years 6,842 310.55 203 7.3 years 135 334.34 9,557 7.8 years 6,449 303.77 11,926 8.7 years 4,208 252.91 20,380 10.0 years — Totals 107,517 68,823 Aggregate intrinsic value (in thousands) $ 6,662 $ 5,557 The aggregate intrinsic value in the table above is based on the closing stock price of $290.88 per share on December 31, 2019 . In estimating the fair value of SARs outstanding at December 31, 2019 and 2018, the Company employed the Black-Scholes option pricing model with assumptions as detailed below. December 31, 2019 December 31, 2018 Expected term 1.9 to 10.0 years 3.0 to 10.0 years Expected volatility weighted-average 22.19 % 22.14 % Expected dividend yield 0.12 % 0.12 % Risk-free rate weighted-average 1.61 % 2.58 % The Company reviewed the contractual term relative to the SARs as well as perceived future behavior patterns of exercise. Volatility is based on the Company’s historical volatility over the expected term of the SARs by expected exercise date. The pre-tax compensation expense/(benefit) recognized in the Consolidated Financial Statements related to these plans was $2.4 million , $1.4 million and $5.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The related tax (benefit)/expense recognized was $(0.5) million , $(0.3) million and $(1.8) million for the years ended December 31, 2019 , 2018 and 2017 , respectively. For the years ended December 31, 2019 , 2018 and 2017 , the total pre-tax compensation expense related to nonvested share-based awards not yet recognized was $8.0 million , $7.1 million and $7.8 million , respectively. The December 31, 2019 amount is expected to be recognized over a weighted-average period of 1.6 years. The Company recognizes compensation cost over the graded vesting periods. |
Information Regarding Controlli
Information Regarding Controlling Stockholder | 12 Months Ended |
Dec. 31, 2019 | |
Information Regarding Controlling Stockholder [Abstract] | |
Information Regarding Controlling Stockholder | INFORMATION REGARDING CONTROLLING STOCKHOLDER The Robert L. Moody Revocable Trust (the "Moody Revocable Trust") beneficially owns 99.0% of the total outstanding shares of the Company's Class B common stock and 33.7% of the Class A common stock as of December 31, 2019 . Holders of the Company's Class A common stock elect one-third of the Board of Directors of the Company, and holders of the Class B common stock elect the remainder. Any cash or in-kind dividends paid on each share of Class B common stock are to be only one-half of the cash or in-kind dividends paid on each share of Class A common stock. Also, in the event of liquidation of the Company, the Class A stockholders shall first receive the par value of their shares; then the Class B stockholders shall receive the par value of their shares; and the remaining net assets of the Company shall be divided between the stockholders of both Class A and Class B common stock, based on the number of shares held. |
Pension and Other Postretiremen
Pension and Other Postretirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Plans | PENSION AND OTHER POSTRETIREMENT PLANS (A) Defined Benefit Pension Plans National Western sponsors a qualified defined benefit pension plan covering employees enrolled prior to 2008. The plan provides benefits based on the participants' years of service and compensation. The company makes annual contributions to the plan that comply with the minimum funding provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On October 19, 2007, National Western’s Board of Directors approved an amendment to freeze the Pension Plan as of December 31, 2007. The freeze ceased future benefit accruals to all participants and closed the Plan to any new participants. In addition, all participants became immediately 100% vested in their accrued benefits as of that date. As participants are no longer earning credit for service, future qualified defined benefit plan expense is projected to be minimal. The plan was amended in 2018 to increase the maximum pension value that may be distributed in a lump sum and to decrease the commencement age for in-service distributions by participants. Fair values of plan assets and liabilities are measured as of December 31 for each year. A detail of plan disclosures is provided below. Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 21,938 24,659 Service cost 96 111 Interest cost 839 899 Plan amendments — (1,396 ) Actuarial (gain) loss 1,398 494 Benefits paid (1,582 ) (2,829 ) Projected benefit obligations at end of year 22,689 21,938 Changes in plan assets: Fair value of plan assets at beginning of year 16,169 19,312 Actual return on plan assets 3,356 (414 ) Contributions 569 100 Benefits paid (1,582 ) (2,829 ) Fair value of plan assets at end of year 18,512 16,169 Funded status at end of year $ (4,177 ) (5,769 ) The service cost shown above for each year represents plan expenses expected to be paid out of plan assets. Under the clarified rules of the Pension Protection Act, plan expenses paid from plan assets are to be included in the plan's service cost component. The Projected Benefit Obligation changed in 2019 due to the following: • An experience gain of approximately $157,000 due to census demographics. • An experience gain of approximately $610,000 due to the change in mortality. • An experience gain of approximately $16,000 due to the difference in expected and actual benefit payments. • An experience loss of approximately $2,181,000 due to the decrease in the discount rate from 4.0% to 3.0% . The Projected Benefit Obligation changed in 2018 due to the following: • An experience loss of approximately $60,000 due to census demographics. • An experience loss of approximately $1,312,000 due to the difference in expected and actual benefit payments. • An experience gain of approximately $878,000 due to the increase in the discount rate and the change to the mortality improvement scale. December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (4,177 ) (5,769 ) Net amount recognized $ (4,177 ) (5,769 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 6,903 8,435 Prior service cost — — Net amount recognized $ 6,903 8,435 The accumulated benefit obligation was $22.7 million and $21.9 million at December 31, 2019 and 2018 , respectively. Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit costs: Interest cost $ 839 899 957 Service cost 96 111 106 Expected return on plan assets (1,086 ) (1,300 ) (1,227 ) Amortization of prior service cost — — — Amortization of net loss (gain) 660 524 638 Net periodic benefit cost 509 234 474 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) (872 ) 812 Amortization of prior service cost — — Amortization of net loss (gain) (660 ) (524 ) Total recognized in other comprehensive income (1,532 ) 288 Total recognized in net periodic benefit cost and other comprehensive income $ (1,023 ) 522 The components of net periodic benefit cost including service cost are reported in Other operating expenses in the Consolidated Statement of Earnings. Assumptions December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Rate of compensation increase n/a n/a December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase n/a n/a n/a The assumed long-term rate of return on plan assets is generally set at the rate expected to be earned based on the long-term investment policy of the plan and the various classes of invested funds, based on the input of the plan’s investment advisors and consulting actuary and the plan’s historic rate of return. As of December 31, 2019 , the plan’s average 10 -year returns were 9.02% . In setting the annual discount rate assumption, the Pension Committee designated by National Western's Board of Directors reviews current 10 year and 30 year corporate bond yields, the current spread to treasuries, and their relative change during the past twelve months. It also considers the present value of the projected benefit payment stream based on the Citigroup Pension Discount Curve and market data observations provided by independent consultants. In setting the annual portfolio rate of return assumption, the Pension Committee considers the Plan’s actual long-term performance, the portfolio’s current allocation and individual investment holdings, the Committee’s and the investment manager’s expectations for future long term investment strategy and expected performance, and the advice of consultants knowledgeable about overall market expectations and benchmark rates of return used by comparable companies. Plan Assets As discussed in Note (4), Fair Values of Financial Instruments , GAAP defines fair value and establishes a framework for measuring fair value of financial assets. Using this guidance, the Company has categorized its pension plan assets into a three level hierarchy, based on the priority of inputs to the valuation process. The fair value hierarchy classifications are reviewed annually. Reclassification of certain financial assets and liabilities may result based on changes in the observability of valuation attributes. The following tables set forth the Company’s pension plan assets within the fair value hierarchy as of December 31, 2019 and 2018 . December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Cash and cash equivalents $ 756 756 — — Equity securities Domestic 11,853 11,853 — — International 172 172 — — Debt securities Corporate bonds 5,729 5,729 — Other investments 2 2 — — Total $ 18,512 12,783 5,729 — December 31, 2018 Total Level 1 Level 2 Level 3 (In thousands) Cash and cash equivalents $ 209 209 — — Equity securities Domestic 9,909 9,909 — — International 193 193 — — Debt securities Corporate bonds 5,858 5,858 — Total $ 16,169 10,311 5,858 — Investment securities. Fair values for investments in debt and equity securities are based on quoted market prices, where available. For securities not actively traded, fair values are estimated using values obtained from various independent pricing services. In cases where prices are unavailable from these sources, values are estimated by discounting expected future cash flows using a current market rate applicable to the yield, credit quality, and maturity of the investments. Cash and cash equivalents. Carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. The plan’s weighted-average asset allocations by asset category have been as follows: December 31, 2019 2018 2017 Asset Category: Equity securities 65% 63% 64% Debt securities 31% 36% 33% Cash and cash equivalents 4% 1% 3% Total 100% 100% 100% The Company has established and maintains an investment policy statement for the assets held in the plan's trust. The investment strategies are of a long-term nature and are designed to meet the following objectives: ensure that funds are available to pay benefits as they become due set forth an investment structure detailing permitted assets and expected allocation ranges among classes ensure that plan assets are managed in accordance with ERISA The pension plan is a highly diversified portfolio. The 96% of pension assets not invested in cash is allocated among 209 different investments, with no single credit representing more than 4.0% of the fair value of the portfolio. The investment policy statement sets forth the following acceptable ranges for each asset's class. Acceptable Range Asset Category: Equity securities 55-70% Debt securities 30-40% Cash and cash equivalents 0-15% Deviations from these ranges are permitted if such deviations are consistent with the duty of prudence under ERISA. Investments in natural resources, venture capital, precious metals, futures and options, real estate, and other vehicles that do not have readily available objective valuations are not permitted. Short sales, use of margin or leverage, and investment in commodities and art objects are also prohibited. The investment policy statement is reviewed annually to ensure that the objectives are met considering any changes in benefit plan design, market conditions, or other material considerations. Contributions At present, National Western expects to contribute $1,107,000 to the plan during 2020 which amount includes a $500,000 voluntary contribution. Additional amounts may be contributed at NWLIC's discretion. The plan’s funding status is reviewed periodically throughout the year by National Western’s Pension Plan Committee. NWLIC intends to contribute at least the minimum amounts necessary for tax compliance and to maintain an Adjusted Funding Target Attainment Percentage ("AFTAP") of over 80% to meet the Pension Protection Act Plan’s threshold. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 1,655 2021 1,547 2022 1,543 2023 1,505 2024 1,441 2025-2029 6,811 National Western also sponsors three non-qualified defined benefit pension plans. The first plan covers certain senior officers and provides benefits based on the participants' years of service and compensation. The primary pension obligations and administrative responsibilities of the plan are maintained by a pension administration firm, which is a subsidiary of American National Insurance Company ("ANICO"), a related party. ANICO has guaranteed the payment of pension obligations under the plan. However, National Western has a contingent liability with respect to the plan should these entities be unable to meet their obligations under the existing agreements. Also, NWLIC has a contingent liability with respect to the plan in the event that a plan participant continues employment with National Western beyond age seventy, the aggregate average annual participant salary increases exceed 10% per year, or any additional employees become eligible to participate in the plan. If any of these conditions are met, National Western would be responsible for any additional pension obligations resulting from these items. Amendments were made to this plan to allow an additional employee to participate and to change the benefit formula for the then Chairman of NWLIC. As previously mentioned, these additional obligations are a liability to National Western. Effective December 31, 2004, this plan was frozen with respect to the continued accrual of benefits of the then Chairman and the then President of NWLIC in order to comply with law changes under the American Jobs Creation Act of 2004 ("Act"). Effective July 1, 2005, National Western established a second non-qualified defined benefit plan for the benefit of the then Chairman of NWLIC. This plan is intended to provide for post-2004 benefit accruals that mirror and supplement the pre-2005 benefit accruals under the previously discussed non-qualified plan, while complying with the requirements of the Act. Effective November 1, 2005, National Western established a third non-qualified defined benefit plan for the benefit of the then President of NWLIC. This plan is intended to provide for post-2004 benefit accruals that supplement the pre-2005 benefit accruals under the first non-qualified plan as previously discussed, while complying with the requirements of the Act. Ozark National and NIS have no defined benefit plans. A detail of plan disclosures related to the amendments of the original plan and the additional two plans is provided below: Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 22,275 36,914 Service cost 502 361 Interest cost 1,025 852 Actuarial (gain) loss 7,438 (13,870 ) Benefits paid (1,982 ) (1,982 ) Projected benefit obligations at end of year 29,258 22,275 Change in plan assets: Fair value of plan assets at beginning of year — — Contributions 1,982 1,982 Benefits paid (1,982 ) (1,982 ) Fair value of plan assets at end of year — — Funded status at end of year $ (29,258 ) (22,275 ) The Projected Benefit Obligation changed in 2019 due to the following: • An experience loss of approximately $4,332,000 due to increases in actual compensation more than the actuarial assumption. • An experience gain of approximately $295,000 due to the change in mortality. • An experience loss of approximately $3,401,000 due to the decrease in the discount rate from 4.0% to 3.0% . The Projected Benefit Obligation changed in 2018 due to the following: • An experience gain of approximately $13,216,000 due to the difference in actual compensation and the actuarial assumption. • An experience gain of approximately $654,000 due to the increase in the discount rate and the change to the mortality improvement scale. December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (29,258 ) (22,275 ) Net amount recognized $ (29,258 ) (22,275 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 10,521 4,475 Prior service cost 464 522 Net amount recognized $ 10,985 4,997 The accumulated benefit obligation was $19.8 million and $18.1 million at December 31, 2019 and 2018 , respectively. Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit cost: Service cost $ 502 361 818 Interest cost 1,025 852 1,387 Amortization of prior service cost 59 59 59 Amortization of net loss (gain) 1,391 704 3,274 Net periodic benefit cost 2,977 1,976 5,538 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) 7,438 (13,870 ) Amortization of prior service cost (59 ) (59 ) Amortization of net loss (gain) (1,391 ) (704 ) Total recognized in other comprehensive income 5,988 (14,633 ) Total recognized in net periodic benefit cost and other comprehensive income $ 8,965 (12,657 ) The components of net periodic benefit cost including service cost are reported in Other operating expenses in the Consolidated Statement of Earnings. Assumptions December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Rate of compensation increase 8.00 % 8.00 % December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit costs: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets n/a n/a n/a Rate of compensation increase 8.00 % 8.00 % 8.00 % The plan is unfunded and therefore no assumption has been made related to the expected long-term return on plan assets. Plan Assets The plan is unfunded and therefore had no assets at December 31, 2019 or 2018 . Contributions National Western expects to contribute approximately $2.0 million to the plan in 2020 . Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 1,982 2021 1,982 2022 1,982 2023 1,982 2024 1,982 2025-2029 7,357 (B) Defined Contribution Pension Plans In addition to the defined benefit pension plans, National Western sponsors a qualified 401(k) plan for substantially all employees and a non-qualified deferred compensation plan primarily for senior officers. National Western made annual contributions to the 401(k) plan in 2019 , 2018 , and 2017 of up to four percent of each employee's compensation, based on the employee's personal level of salary deferrals to the plan. All contributions are subject to a vesting schedule based on the employee's years of service. For the years ended December 31, 2019 , 2018 and 2017 , NWLIC contributions totaled $664,000 , $615,000 and $549,000 , respectively. The non-qualified deferred compensation plan sponsored by National Western was established to allow eligible employees to defer the payment of a percentage of their compensation and to provide for additional company contributions. Contributions are subject to a vesting schedule based on the employee's years of service. For the years ended December 31, 2019 , 2018 and 2017 , contributions totaled $97,000 , $127,000 , and $119,000 , respectively. Ozark sponsors a qualified 401(k) plan for substantially all employees of Ozark and NIS. Employer match is discretionary, and contributions are subject to a graded vesting schedule. Expense related to this plan totaled $176,000 for Ozark and $30,000 for NIS for the eleven months in the year ended December 31, 2019 . Ozark also sponsors a non-qualified, unfunded retirement plan covering certain members of executive staff. The plan is funded solely through discretionary employer contributions. Expense related to this plan totaled $45,000 for the eleven months in the year ended December 31, 2019 . (C) Postretirement Employment Plans Other Than Pension National Western sponsors a health care plan that was amended in 2004 to provide postretirement benefits to certain fully-vested individuals. The plan is unfunded. A December 31 measurement date is used for the plan. A detail of plan disclosures related to the plan is provided below: Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 4,230 3,774 Interest cost 198 158 Actuarial (gain) loss 1,354 298 Benefits paid — — Projected benefit obligations at end of year 5,782 4,230 Changes in plan assets: Fair value of plan assets at beginning of year — — Contributions — — Benefits paid — — Fair value of plan assets at end of year — — Funded status at end of year $ (5,782 ) (4,230 ) The Projected Benefit Obligation changed in 2019 due to the following: • An experience loss of approximately $784,000 due to the claims/healthcare cost trend experience. • An experience gain of approximately $283,000 due to the change in mortality. • An experience gain of approximately $121,000 due to the difference in actual and expected benefit payments. • An experience loss of approximately $974,000 due to the decrease in the discount rate from 4.0% to 3.0% . The Projected Benefit Obligation changed in 2018 due to the following: • An experience loss of approximately $515,000 due to the claims/healthcare cost trend experience. • An experience gain of approximately $96,000 due to the difference in expected and actual benefit payments. • An experience gain of approximately $121,000 due to the increase in the discount rate and the change to the mortality improvement scale. December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (5,782 ) (4,230 ) Net amount recognized $ (5,782 ) (4,230 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 1,925 816 Prior service cost — 51 Net amount recognized $ 1,925 867 The accumulated benefit obligation was $5.8 million and $4.2 million at December 31, 2019 and 2018 , respectively. Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit cost: Interest cost $ 198 158 139 Amortization of prior service cost 52 103 103 Amortization of net loss (gain) 244 151 41 Net periodic benefit cost 494 412 283 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) 1,354 298 Amortization of prior service cost (52 ) (103 ) Amortization of net loss (gain) (244 ) (151 ) Total recognized in other comprehensive income 1,058 44 Total recognized in net periodic benefit cost and other comprehensive income $ 1,552 456 Ozark National and NIS do not offer postretirement employment benefits. The components of net periodic benefit cost including service cost are reported in Other operating expenses in the Consolidated Statement of Earnings. Assumptions December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Expected long-term return on plan assets n/a n/a December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit costs: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets n/a n/a n/a For measurement purposes, a 8.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2020 , decreasing annually by 0.5% until reaching an ultimate rate of 5% . Plan Assets The plans are unfunded and therefore had no assets at December 31, 2019 and 2018 . Contributions The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 128 2021 134 2022 139 2023 142 2024 145 2025-2029 969 |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal Income Taxes | FEDERAL INCOME TAXES Total Federal income taxes were allocated as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Taxes (benefits) on earnings from continuing operations: Current $ 58,834 (1,697 ) 74,361 Deferred (25,294 ) 26,446 (23,129 ) Remeasurement of deferred taxes due to Tax Act — — (17,098 ) Taxes on earnings 33,540 24,749 34,134 Taxes (benefits) on components of stockholders' equity: Net unrealized gains and losses on securities available for sale 26,836 (15,870 ) 2,736 Foreign currency translation adjustments 139 360 (5 ) Change in benefit plan liability (1,158 ) 3,003 (2,085 ) Total Federal income taxes (benefit) $ 59,357 12,242 34,780 On December 22, 2017, the United States Congress enacted the Tax Cuts and Jobs Act ("Tax Act"). See Note (1) for further discussion. Among other things, the Tax Act reduced the federal corporate income tax rate from 35% to 21% effective in 2018. As a result of the change in the federal corporate income tax rate the Company was required to remeasure its deferred tax assets and liabilities at December 31, 2017 using the new corporate rate. This produced a one-time income tax benefit, with a corresponding decrease to the net deferred tax liability, of $17.1 million . As a consequence of the Tax Act, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , in February 2018 which provided the option for reclassification of certain stranded tax effects from accumulated other comprehensive income ("AOCI") to retained earnings. The Company elected to early adopt this standard as of December 31, 2017. Included in the remeasurement of deferred tax assets and liabilities producing the one-time income tax benefit discussed above were stranded taxes included in AOCI of $2.5 million . The provisions for Federal income taxes attributable to earnings from continuing operations vary from amounts computed by applying the statutory income tax rate to income statement earnings before Federal income taxes due to differences between the financial statement reporting and income tax treatment of certain items. These differences and the corresponding tax effects are as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Income tax expense at statutory rate (21% in 2019 and 2018, and 35% in 2017) $ 34,683 29,716 50,594 Dividend received deduction (493 ) (820 ) (1,099 ) Tax exempt interest (1,564 ) (1,416 ) (2,276 ) Non deductible salary expense 294 54 — Adjustments pertaining to prior tax years 459 (3,071 ) 895 Nondeductible insurance 96 96 160 Nondeductible expenses 117 198 178 Remeasurement of deferred taxes due to Tax Act — — (17,098 ) Excess premium liability — — 2,870 Other, net (52 ) (8 ) (90 ) Taxes on earnings from continuing operations $ 33,540 24,749 34,134 The Company's policy is to record changes to deferred taxes for rate changes in the period when changes in tax laws have been enacted. Included in the 2018 adjustments pertaining to prior tax years is $0.5 million related to the writedown of deferred taxes due to the rate change in the Tax Act adjusted in the tax return. As described above there was a net decrease to the net deferred tax liability of $17.1 million recorded for the year ended December 31, 2017 caused by the rate change in the Tax Act. There were no deferred tax changes attributable to enacted tax rate changes for the years ended December 31, 2017 . The excess premium liability provision represents the nondeductible tax effect of an $8.2 million loss contingency recorded by the Company at December 31, 2017 related to excess premiums on certain of its policies. The Company generally expects its effective tax rate to be less than the current statutory rate due to recurring permanent differences that reduce tax expense, principally tax exempt interest income and the dividend received deduction. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are presented below. December 31, 2019 2018 (In thousands) Deferred tax assets: Future policy benefits, excess of financial accounting liabilities over tax liabilities $ 190,230 189,100 Investment securities write-downs for financial accounting purposes 293 311 Benefit plan liabilities 9,259 7,444 Real estate, principally due to adjustments for financial accounting purposes — 16 Accrued operating expenses recorded for financial accounting purposes not currently tax deductible 3,658 4,426 Accrued and unearned investment income recognized for tax purposes and deferred for financial accounting purposes 101 109 Net unrealized losses on debt securities available for sale — 7,390 Other 636 74 Total gross deferred tax assets 204,177 208,870 Deferred tax liabilities: Deferred policy acquisition costs, sales inducement costs, and VOBA, principally expensed for tax purposes (154,873 ) (170,940 ) Tax reform reserve adjustment (52,432 ) (61,170 ) Debt securities, principally due to deferred market discount for tax (8,051 ) (7,370 ) Real estate, principally due to adjustments for financial accounting purposes (45 ) — Net unrealized gains on securities available for sale (20,188 ) — Foreign currency translation adjustments (1,356 ) (1,217 ) Fixed assets, due to different depreciation bases (6,177 ) (7,546 ) Other (962 ) (11 ) Total gross deferred tax liabilities (244,084 ) (248,254 ) Net deferred tax liabilities $ (39,907 ) (39,384 ) Beginning January 1, 2018, the Tax Act imposed a limitation on life insurance tax reserves based upon the greater of net surrender value or 92.81% of the reserve method prescribed by the National Association of Insurance Commissioners which covers such contract as of the date the reserve is determined. The Company recognized the provisional tax impacts related to the change in the methodology employed to calculate tax reserves. As a result, the Company recorded a deferred tax asset and offsetting deferred tax liability of $83.9 million in the Consolidated Financial Statements for the year ended December 31, 2017. The amount recorded by the Company was considered provisional as the Company did not have the information currently available in appropriate detail to analyze and calculate the amount required under the change in methodology. Following additional guidance and software updates provided during 2018, the Company performed additional analysis and determined that the correct deferred tax liability as of December 31, 2017 approximated $69.9 million . This amount was incorporated into the measurement of net deferred tax liabilities as of December 31, 2018. The total tax reserve adjustment of $332.9 million resulting from the limitation imposed under the Tax Act is being recognized as an increase of $41.6 million in taxable income per year through the year 2025. At the statutory rate of 21% , this results in additional tax of $8.7 million per year. There were no valuation allowances for deferred tax assets at December 31, 2019 and 2018 . In assessing deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is primarily dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and available tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. In accordance with GAAP, the Company assessed whether it had any significant uncertain tax positions related to open examination or other IRS issues and determined that there were none. Accordingly, no reserve for uncertain tax positions has been recorded. Should a provision for any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company's policy to accrue for such in its income tax accounts. There were no such accruals as of December 31, 2019 or 2018 . The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2015. The Company's federal income tax return is consolidated with the entities listed below. • National Western Life Group, Inc. (NWLGI) • National Western Life Insurance Company (NWLIC, a subsidiary of NWLGI) • The Westcap Corporation (subsidiary of NWLIC) • Braker P III, LLC (subsidiary of NWLIC) • NWL Financial, Inc. (subsidiary of NWLIC) • NWLSM, Inc. (subsidiary of NWLIC) • NWL Services, Inc. (subsidiary of NWLGI) • Regent Care Operations General Partner, Inc. (subsidiary of NWL Services, Inc.) • Regent Care Operations Limited Partner, Inc. (subsidiary of NWL Services, Inc.) • Regent Care General Partner, Inc. (subsidiary of NWL Services, Inc.) • Regent Care Limited Partner, Inc. (subsidiary of NWL Services, Inc.) Ozark National will not be consolidated with NWLGI for federal tax filings until it has been a member of the affiliated group for five full years, per section 1504(c)(2) of the Internal Revenue Code. NIS is a member of the affiliated group starting with the federal tax return filing for the year ended December 31, 2019. Allocation of the consolidated Federal income tax liability amongst the Company and its consolidated subsidiaries is based on separate return calculations pursuant to the "wait-and-see" method as described in sections 1.1552-1(a)(1) and 1.1502-33(d)(2) of the current Treasury Regulations. Under this method, consolidated group members are not given current credit for net losses until future net taxable income is generated to realize such credits. |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Debt [Abstract] | |
Short-Term Borrowings | SHORT-TERM BORROWINGS National Western has available a $75 million bank line of credit (with Moody National Bank, its custodian bank and a related party) primarily for cash management purposes. The line of credit facility was increased from $40 million effective October 1, 2018. The Company is required to maintain a collateral security deposit in trust with the sponsoring bank having a fair value equal to 110% of the line of credit. The Company had no outstanding borrowings under the line of credit at December 31, 2019 or 2018 . The Company maintained assets having an amortized value of $84.5 million (fair value of $87.1 million ) on deposit with the lender at December 31, 2019 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES (A) Legal Proceedings In the normal course of business, the Company is involved or may become involved in various legal actions in which claims for alleged economic and punitive damages have been or may be asserted, some for substantial amounts. In recent years, carriers offering life insurance and annuity products have faced litigation, including class action lawsuits, alleging improper product design, improper sales practices, and similar claims. As previously disclosed, the Company has been a defendant in prior years in such class action lawsuits. Given the uncertainty involved in these types of actions, the ability to make a reliable evaluation of the likelihood of an unfavorable outcome or an estimate of the amount of or range of potential loss is endemic to the particular circumstances and evolving developments of each individual matter on its own merits. National Western was the named defendant in the case of Damaris Maldonado Vinas, et al. vs. National Western Life Insurance , in which the plaintiffs, after National Western had paid the death benefits to the beneficiary (Francisco Iglesias-Alvarez) upon the annuitant’s (Carlos Iglesias-Alvarez) death, sought to annul two annuity policies issued by National Western at the behest of Carlos Iglesias-Alvarez and which named Francisco Iglesias-Alvarez as their beneficiary. On March 31, 2016, the United States District Court for the District of Puerto Rico (the "Court") issued its Opinion and Order on the pending Motions for Summary Judgment submitted by the parties, and therein denied National Western’s motion and granted plaintiffs’ motion voiding the two annuities and requesting a refund of the premiums paid ( $2.9 million ). National Western vigorously defended the case and believed that the Court’s Opinion and Order was contrary to applicable law. As such, National Western filed a Motion for Reconsideration of Opinion and Order and Corresponding Judgment with the Court on April 27, 2016, which the Court denied on May 5, 2016. National Western filed a Notice of Appeal on June 10, 2016, filed its Appeal Brief on September 12, 2016, and oral arguments with the U.S. Court of Appeals for the First Circuit were held on March 9, 2017. On June 29, 2017, the Court of Appeals vacated the district court's judgment and remanded to the district court to determine whether it is nevertheless equitable for the case to proceed without Francisco Iglesias-Alvarez. Plaintiffs filed a Motion in Support of Determination in Equity and Good Conscience That Action Should Proceed Among Existing Parties Under Fed.R.Civ.P. 19(B) on September 14, 2017, and National Western filed its Opposition to Plaintiffs' Motion on October 27, 2017. On April 2, 2018 the Court asked the parties for additional briefing regarding the Court's jurisdiction over Francisco Iglesias-Alvarez, which the parties filed on April 30, 2018. On May 14, 2018, National Western filed its Opposition to Plaintiffs' Brief. Plaintiffs filed a Motion to Strike on May 22, 2018, which National Western opposed on June 4, 2018. On August 6, 2018, the Court issued an Opinion and Order dismissing plaintiffs’ case without prejudice and plaintiffs filed a Notice of Appeal to the First Circuit Court of Appeals on September 4, 2018. The case settled in December of 2018, without an admission of liability by either party, via a settlement amount less than the amount previously accrued. On September 28, 2017, a purported shareholder derivative lawsuit was filed in the 122nd District Court of Galveston County, State of Texas entitled Robert L. Moody, Jr. derivatively on behalf of National Western Life Insurance Company and National Western Life Group, Inc. v. Ross Rankin Moody, et al., naming certain current and former directors and current officers as defendants. The complaint challenged the directors’ oversight of insurance sales to non-U.S. residents and alleged that the defendants breached their fiduciary duties in the conduct of their duties as board members by failing to act (i) on an informed basis and (ii) in good faith or with the honest belief that their actions were in the best interests of the Company. The complaint sought an undetermined amount of damages, attorneys’ fees and costs, and equitable relief, including the removal of the Company’s Chairman and Chief Executive Officer and other board members and/or officers of the Company. The Company believes that the claims in the complaint were baseless and without merit, will continue to vigorously defend this lawsuit, and was awarded reimbursement of legal costs and expenses from plaintiff as detailed below. The Company believes, based on information currently available, that the final outcome of this lawsuit will not have a material adverse effect on the Company’s business, results of operations, or consolidated financial position. The companies and directors filed their respective Pleas to the Jurisdiction ("Pleas") contesting the plaintiff's standing to even pursue this action, along with their Answers, on October 27, 2017. On December 14, 2017, plaintiff filed a Response to the Pleas and on December 21, 2017, the Court heard oral argument on the Pleas. Plaintiff then filed a First Amended Petition on January 11, 2018. The companies and directors filed a Supplement to the Pleas on January 30, 2018, to which plaintiff responded on February 1, 2018, and the companies and directors replied on February 9, 2018. On May 3, 2018, the Court issued a memorandum to all attorneys of record stating that the Court would grant the defendants' Pleas and asked the attorney for defendants to prepare and submit proposed orders/judgments granting the requested relief for consideration by the Court. The defendants filed such proposed order granting the Pleas on May 7, 2018. On May 16, 2018 the Court issued an Order granting the Pleas and dismissing Robert L. Moody, Jr.’s claims with prejudice, and plaintiff then filed a Motion to Transfer Venue (“MTTV”). Defendants filed an Application for Fees, seeking to recover defendants’ legal costs and expenses from plaintiff, and a Response to the MTTV on June 8, 2018. In response plaintiff filed a Motion to Vacate, a Response to the Application for Fees, and his own Request for Attorney’s Fees on July 5, 2018. Defendants filed a Response to the Motion to Vacate and to plaintiff’s Request for Attorney’s Fees on July 11, 2018, and the Court heard oral arguments on July 16, 2018. Plaintiff filed supplemental briefing in support of his July 5, 2018 filings on July 25, 2018, and defendants filed their response to plaintiff's supplemental briefing on July 27, 2018. On August 8, 2018 the Court issued an Order denying plaintiff's Motion to Vacate. Pursuant to the Court’s instructions, on October 5, 2018, defendants filed an Order Granting Application for Expenses. Defendants then filed a Motion for Entry of Final Judgment and a Request for Submission Date on Motion for Entry of Final Judgment on October 11, 2018, which the Court set as October 30, 2018. Plaintiff filed his Objection to Proposed Final Judgment and Objection to Proposed Order on Attorneys’ Fees on October 25, 2018, to which defendants filed a response on October 30, 2018. On November 11, 2018, the Court issued its Final Judgment: ordering Plaintiff to pay the companies $1,314,054 for reasonable and necessary fees and expenses; denying Plaintiff’s Motion to Transfer Venue, and; dismissing Plaintiff’s counterclaim. Plaintiff has appealed the Court’s Final Judgment and that appeal is pending before the First District Court of Appeals in Houston, TX. In April of 2019, National Western defended a two-week jury trial in which it was alleged that it committed actionable Financial Elder Abuse in its issuance of a $100,000 equity indexed annuity to the Plaintiff in the case of Williams v Pantaleoni et al , Case No. 17CV03462, Butte County California Superior Court. The Court entered an Amended Judgment on the Jury Verdict on July 27, 2019 against National Western in the amount of $14,949 for economic damages and $2.9 million in non-economic and punitive damages. National Western vigorously disputes the verdicts and the amounts awarded, and in furtherance of such, filed a Motion for Judgment Notwithstanding Jury Verdict and a Motion for New Trial, both of which were rejected by the Court. On September 9, 2019, NWLIC filed its Notice of Appeal. On November 11, 2019, the judge awarded the Plaintiff attorney’s fees in the amount of $1.26 million . Both the Plaintiff and NWLIC have appealed this ruling. Although there can be no assurances, at the present time, the Company does not anticipate that the ultimate liability arising from such other potential, pending, or threatened legal actions will have a material adverse effect on the financial condition or operating results of the Company. Separately, Brazilian authorities commenced an investigation into possible violations of Brazilian criminal law in connection with the issuance of National Western insurance policies to Brazilian residents, and in assistance of such investigation a Commissioner appointed by the U.S. District Court for the Western District of Texas issued a subpoena in March of 2015 upon NWLIC to provide information relating to such possible violations. No conclusion can be drawn at this time as to its outcome or how such outcome may impact the Company’s business, results of operations or financial condition. National Western has been cooperating with the relevant governmental authorities in regard to this matter. (B) Financial Instruments In order to meet the financing needs of its customers in the normal course of business, the Company is a party to financial instruments with off-balance sheet risk. These financial instruments are commitments to extend credit which involve elements of credit and interest rate risk in excess of the amounts recognized in the Consolidated Balance Sheets. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amounts, assuming that the amounts are fully advanced and that collateral or other security is of no value. Commitments to extend credit are legally binding agreements to lend to a customer that generally have fixed expiration dates or other termination clauses and may require payment of a fee. Commitments do not necessarily represent future liquidity requirements, as some could expire without being drawn upon. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Company controls the credit risk of these transactions through credit approvals, limits, and monitoring procedures. The Company had $7.2 million in commitments to fund new loans and $0.3 million in commitments to extend credit relating to existing loans at December 31, 2019 . The Company evaluates each customer's creditworthiness on a case-by-case basis. (C) Guaranty Association Assessments National Western and Ozark National are subject to state guaranty association assessments in all states in which they are licensed to do business. These associations generally guarantee certain levels of benefits payable to resident policyholders of insolvent insurance companies. Many states allow premium tax credits for all or a portion of such assessments, thereby allowing potential recovery of these payments over a period of years. However, several states do not allow such credits. The Company estimates its liabilities for guaranty association assessments by using the latest information available from the National Organization of Life and Health Insurance Guaranty Associations. The Company monitors and revises its estimates for assessments as additional information becomes available which could result in changes to the estimated liabilities. As of December 31, 2019 , 2018 and 2017 , liabilities for guaranty association assessments totaled $0.2 million , $0.1 million and $0.3 million , respectively. Other operating expenses related to state guaranty association assessments were minimal for the years ended December 31, 2019 , 2018 and 2017 . (D) Leases The Company leases various computers and other office related equipment under operating leases. Rental expenses for these leases were $0.4 million , $0.4 million and $0.3 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. In October 2017, the Company entered into a lease agreement for new equipment under a capital lease. This lease will expire in December 2022. The present value of future payments capitalized amounted to $1.8 million and amortization commenced in 2018. The Company's future annual lease obligations as of December 31, 2019 are as shown below (in thousands). 2020 $ 378 2021 391 2022 404 Total minimum lease payments 1,173 Less: Interest (27 ) Present value of net minimum lease payments $ 1,146 |
Deposits with Regulatory Author
Deposits with Regulatory Authorities | 12 Months Ended |
Dec. 31, 2019 | |
Deposits with Regulatory Authorities [Abstract] | |
Deposits with Regulatory Authorities | DEPOSITS WITH REGULATORY AUTHORITIES The following assets, stated at amortized cost, were on deposit with state and other regulatory authorities, as required by law, at the end of each year. December 31, 2019 2018 (In thousands) National Western: Debt securities held to maturity $ 14,261 14,708 Debt securities available for sale 1,037 570 Short-term investments 475 475 Total National Western 15,773 15,753 Ozark National: Debt securities held to maturity 3,343 — Total Ozark National 3,343 — Total $ 19,116 15,753 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Robert L. Moody, Jr. ("Mr. Moody, Jr.") is the brother of Ross R. Moody, NWLGI's Chairman, President and Chief Executive Officer, son of Robert L. Moody, Sr., Chairman Emeritus of the Board of Directors of NWLGI, the stepson of Ann M. Moody who serves as a director of NWLGI, brother of Russell S. Moody who serves as an advisory director of NWLGI, and a half-brother of Frances A. Moody-Dahlberg who serves as a director of NWLGI. Mr. Moody, Jr. wholly owns an insurance marketing organization that maintains agency contracts with National Western pursuant to which agency commissions are paid in accordance with standard commission schedules. Mr. Moody, Jr. also maintains an independent agent contract with National Western for policies personally sold under which commissions are also paid in accordance with standard commission schedules. Commissions paid under these agency contracts aggregated approximately $131,974 and $123,675 in 2019 and 2018 , respectively. Management fees totaling $181,338 and $680,034 were paid to Regent Management Services, Limited Partnership ("RMS") for services provided to downstream nursing home subsidiaries of NWLGI in 2019 and 2018 , respectively. RMS is 1% owned by general partner RCC Management Services, Inc. ("RCC"), and 99% owned by limited partner, the Three R Trusts. RCC is 100% owned by the Three R Trusts. The Three R Trusts are four Texas trusts for the benefit of the children of Robert L. Moody, Sr. (Robert L. Moody, Jr., Ross R. Moody, Russell S. Moody, and Frances A. Moody-Dahlberg). National Western holds an investment totaling approximately 9.4% of the issued and outstanding shares of Moody Bancshares, Inc. at December 31, 2019 and the Three R Trusts owns a majority of the issued and outstanding shares. Moody Bancshares, Inc. owns 100% of the outstanding shares of Moody Bank Holding Company, Inc., which owns approximately 98% of the outstanding shares of The Moody National Bank of Galveston ("MNB"). National Western utilizes MNB for certain bank custodian services as well as for certain administrative services with respect to its defined benefit and contribution plans. Fees totaling $774,482 and $602,564 were paid to MNB with respect to these services in 2019 and 2018 , respectively. In 2018, the Company entered into an office space lease with MNB, with payments totaling $32,101 and $10,700 in 2019 and 2018 , respectively. National Western paid American National Insurance Company (“ANICO”) $713,033 and $699,950 in 2019 and 2018 , respectively, in premiums for certain company sponsored benefit plans and $2,903,053 and $2,886,920 in 2019 and 2018 , respectively, in reimbursements for claim costs for which ANICO provides third party administrative services. ANICO paid National Western $3,024,013 and $3,007,209 in 2019 and 2018 , respectively, in premiums for its company sponsored benefit plans. National Western maintains an investment agreement with American National Registered Investment Advisory, Inc., a subsidiary of ANICO, under which $45,391 and $45,540 was paid in 2019 and 2018 , respectively, for services. Robert L. Moody, Sr., serves as Chairman Emeritus and Ross R. Moody serves as Chairman of the Board of ANICO. During 2015, ANICO sold a 24.93% undivided participation in a mortgage loan to The Westcap Corporation for $20.0 million . The Westcap Corporation will receive 24.93% of all future cash receipts, which will be recognized over the life of the loan. This mortgage loan investment had a balance of $19.0 million and $19.4 million as of December 31, 2019 and 2018 , respectively, which is reflected in the Consolidated Balance Sheets. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | UNAUDITED QUARTERLY FINANCIAL DATA Quarterly results of operations for 2019 are summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands except per share data) 2019: Total revenues $ 217,909 192,685 173,166 235,428 Net earnings $ 40,198 33,696 19,989 37,733 Basic earnings per share: Class A $ 11.37 9.53 5.65 10.67 Class B $ 5.68 4.76 2.83 5.34 Diluted earnings per share: Class A $ 11.37 9.53 5.65 10.67 Class B $ 5.68 4.76 2.83 5.34 Quarterly results of operations for 2018 are summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands except per share data) 2018: Total revenues $ 109,018 174,658 225,435 42,486 Net earnings $ 26,875 32,466 35,641 21,776 Basic earnings per share: Class A $ 7.60 9.18 10.08 6.16 Class B $ 3.80 4.59 5.04 3.08 Diluted earnings per share: Class A $ 7.60 9.18 10.08 6.16 Class B $ 3.80 4.59 5.04 3.08 Quarterly revenues reflect the differences between the change in fair value of derivative investments for each quarter corresponding to the performance of the indices upon which the Company's call options are based. The comparability of revenues is impacted by the application of fair value accounting to fixed-index business as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) 2019 $ 42,003 17,828 3,296 60,080 2018 $ (44,394 ) 10,292 69,683 (115,585 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Subsequent events have been evaluated through the date of filing and no other reportable items were identified. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Schedule I - Summary of Investments Other Than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments Other Than Investment in Related Parties | Type of Investment Amortized Cost or Cost (1) Fair Value Balance Sheet Amount Fixed maturities: Debt securities held to maturity: United States government and government agencies and authorities $ 104,692 106,518 104,692 States, municipalities, and political subdivisions 431,433 450,789 431,433 Foreign governments 1,144 1,199 1,144 Public utilities 888,444 924,999 888,444 Corporate 4,607,826 4,819,389 4,607,826 Commercial mortgage-backed 3,032 3,084 3,032 Residential mortgage-backed 1,066,899 1,098,889 1,066,899 Asset-backed 2,775 2,836 2,775 Total securities held to maturity 7,106,245 7,407,703 7,106,245 Debt securities available for sale: States, municipalities, and political subdivisions 98,037 102,529 102,529 Foreign governments 9,983 10,186 10,186 Public utilities 67,895 71,371 71,371 Corporate 2,921,431 3,060,657 3,060,657 Commercial mortgage-backed 28,871 29,942 29,942 Residential mortgage-backed 12,815 13,775 13,775 Asset-backed 67,088 68,485 68,485 Total securities available for sale 3,206,120 3,356,945 3,356,945 Total fixed maturity bonds 10,312,365 10,764,648 10,463,190 Equity securities: Common stocks: Public utilities 703 1,361 1,361 Banks, trust and insurance companies 1,743 3,363 3,363 Industrial, miscellaneous, and all others 8,698 12,957 12,957 Preferred stocks 5,750 5,913 5,913 Total equity securities 16,894 23,594 23,594 Derivatives, index options 157,588 157,588 Mortgage loans on real estate 272,422 272,422 Policy loans 80,008 80,008 Other long-term investments (2) 62,090 62,090 Total investments other than investments in related parties $ 10,901,367 11,058,892 (1) Bonds and mortgages are shown at amortized cost reduced by repayments and impairments due to other than temporary declines or allowances for possible losses. Real estate is stated at costs net of accumulated depreciation. Derivatives are shown at fair value. (2) There was no real estate acquired by foreclosure included in other long-term investments. See accompanying report of Independent Registered Public Accounting Firm. |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | 2019 2018 ASSETS Investment in subsidiaries $ 2,123,182 1,896,669 Cash and cash equivalents 1,239 1,443 Federal income tax receivable 4,731 4,185 Deferred Federal income tax asset 240 — Other assets 323 353 Total assets $ 2,129,715 1,902,650 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Due to subsidiaries $ — — Deferred Federal income tax liability — 397 Other liabilities 1,472 1,476 Total liabilities 1,472 1,873 Stockholders' Equity: Common Stock: Class A - $.01 par value in 2019 and 2018; 7,500,000 shares authorized; 3,436,020 shares issued and outstanding in 2019 and 2018 34 34 Class B - $.01 par value in 2019 and 2018; 200,000 shares authorized, issued, and outstanding in 2019 and 2018 2 2 Additional paid-in capital 41,716 41,716 Accumulated other comprehensive income (loss) 60,108 (37,015 ) Retained earnings 2,026,383 1,896,040 Total stockholders’ equity 2,128,243 1,900,777 Total liabilities and stockholders' equity $ 2,129,715 1,902,650 See Notes to Condensed Financial Information of Registrant 2019 2018 2017 Revenues: Dividend income from subsidiaries $ 36,000 5,957 7,000 Total revenues 36,000 5,957 7,000 Expenses: Other operating expenses 5,358 2,617 4,199 Total expenses 5,358 2,617 4,199 Earnings/(loss) before Federal income taxes 30,642 3,340 2,801 Federal income taxes/(benefit) (1,739 ) (717 ) (1,495 ) Earnings before equity/(loss) in earnings of affiliates 32,381 4,057 4,296 Equity/(loss) in earnings of affiliates 99,235 112,701 106,125 Net earnings/(loss) $ 131,616 116,758 110,421 2019 2018 2017 Cash flows from operating activities: Net earnings/(loss) $ 131,616 116,758 110,421 Adjustments to reconcile net earnings/(loss) to cash provided by operating activities: Equity in earnings/(loss) of affiliates (99,235 ) (112,701 ) (106,125 ) Depreciation and amortization 30 30 30 Change in: Federal income tax, net (547 ) (1,166 ) (1,843 ) Deferred Federal income tax (637 ) 448 348 Due to subsidiaries, net — — (608 ) Other, net (4 ) (1,956 ) (917 ) Net cash provided by operating activities 31,223 1,413 1,306 Cash flows from investing activities: Payments to acquire businesses (30,154 ) — — Net cash provided by (used in) investing activities (30,154 ) — — Cash flows from financing activities: Dividends on common stock (1,273 ) (1,273 ) (1,273 ) Net cash provided by (used in) financing activities (1,273 ) (1,273 ) (1,273 ) Net increase (decrease) in cash and cash equivalents (204 ) 140 33 Cash and cash equivalents at the beginning of year 1,443 1,303 1,270 Cash and cash equivalents at the end of year $ 1,239 1,443 1,303 |
Schedule V - Valuation and Qual
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule V - Valuation and Qualifying Accounts | Description Balance at Beginning of Period (1) Charged to Costs and Expenses Reductions Transfers Balance at End of Period Valuation accounts deducted from applicable assets: Allowance for possible losses on mortgage loans: December 31, 2019 $ 675 — — — 675 December 31, 2018 $ 650 25 — — 675 December 31, 2017 $ 650 — — — 650 Allowance for possible losses on real estate: December 31, 2019 $ 611 — (15 ) — 596 December 31, 2018 $ 611 — — — 611 December 31, 2017 $ 611 — — — 611 Notes: (1) Amounts were recorded to realized (gains) losses on investments. See accompanying report of Independent Registered Public Accounting Firm. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation National Western Life Insurance Company ("National Western" or "NWLIC") became a wholly owned subsidiary of National Western Life Group, Inc. ("NWLGI") effective October 1, 2015 under a previously announced holding company reorganization. As a result of the reorganization, NWLGI replaced National Western as the publicly held company. The accompanying Consolidated Financial Statements include the accounts of NWLGI and its wholly owned subsidiaries: National Western, Regent Care San Marcos Holdings, LLC, NWL Services, Inc., and N.I.S. Financial Services, Inc. ("NIS"). National Western's wholly owned subsidiaries include The Westcap Corporation, NWL Financial, Inc., NWLSM, Inc., Braker P III, LLC, and Ozark National Life Insurance Company ("Ozark National"). The eleven month results of operations for Ozark National and NIS subsequent to their acquisition effective January 31, 2019 are included in the Company's consolidated results for the year ended December 31, 2019. All significant intercorporate transactions and accounts have been eliminated in consolidation. |
Basis of Presentation | National Western and Ozark National also file financial statements with insurance regulatory authorities which are prepared on the basis of statutory accounting practices prescribed or permitted by the Colorado Division of Insurance and Missouri Department of Commerce and Insurance, respectively, which are significantly different from Consolidated Financial Statements prepared in accordance with GAAP. These differences are described in detail in Note (9) Statutory Information . Certain amounts in the prior year Consolidated Financial Statements have been reclassified to conform to the current year financial statement presentation. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in the accompanying Consolidated Financial Statements include (1) liabilities for future policy benefits, (2) valuation of derivative instruments, (3) recoverability and amortization of deferred policy acquisition costs ("DPAC"), deferred sales inducements ("DSI") and the value of business acquired ("VOBA"), (4) valuation allowances for deferred tax assets, (5) goodwill, (6) other-than-temporary impairment losses on debt securities, (7) commitments and contingencies, and (8) valuation allowances for mortgage loans and real estate. During the year ended December 31, 2019, the Company incorporated accounting estimates for business combinations, value of business acquired, and fair value measurement as a result of the acquisition of Ozark National and NIS. |
Investments | Investments Fixed Maturities and Equity Securities Investments in debt securities the Company purchases with the intent to hold to maturity are classified as securities held to maturity. The Company has the ability to hold the securities until maturity, as it would be unlikely that forced sales of securities would be required, prior to maturity, to cover payments of liabilities. As a result, securities held to maturity are carried at amortized cost less declines in fair value that are deemed other-than-temporary. Investments in debt securities that are not classified as securities held to maturity are reported as securities available for sale. Securities available for sale are reported in the accompanying Consolidated Financial Statements at fair value. Valuation changes resulting from changes in the fair value of the securities are reflected as a component of Stockholders' Equity in accumulated other comprehensive income (loss). These unrealized gains or losses in stockholders' equity are reported net of taxes and adjustments to deferred policy acquisition costs. Transfers of securities between categories are recorded at fair value at the date of transfer. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. For mortgage-backed and asset-backed securities, the effective interest method is used based on anticipated prepayments and the estimated economic life of the securities. When estimates of prepayments change, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in the securities is adjusted to the amount that would have existed had the new effective yield been applied at the time of acquisition (retrospective method). This adjustment is reflected in net investment income. For loan-backed securities not meeting the definition of "highly rated", the prospective method is evaluated and, if materially different from the retrospective method, utilized to account for these securities. The retrospective adjustment method has been used to value all loan-backed and structured securities included in the accompanying Consolidated Financial Statements. Quarterly the Company reviews its investment portfolio for market value changes to identify changes caused by issuer credit deterioration, changes in market interest rates and changes in economic conditions. If this review indicates a decline in fair value that is other-than-temporary, the Company’s carrying amount in the investment is reduced to its estimated fair value as an other-than-temporary impairment ("OTTI"). In accordance with GAAP guidance the estimated credit versus non-credit components of the OTTI are bifurcated. The credit component is recorded in earnings and results in the establishment of a new cost basis for the security. The non-credit component is reclassified as unrealized loss in other comprehensive income. The Company would not recognize impairment of securities due to changing of interest rates or market dislocations unless the Company had the intent to sell the securities prior to recovery or maturity. The Company considers a number of factors in determining whether the impairment is other-than-temporary. These include, but are not limited to: 1) actions taken by rating agencies, 2) default by the issuer, 3) the significance of the decline in fair value, 4) the intent and ability to hold the investment until recovery, 5) the time period during which the decline has occurred, 6) an economic analysis of the issuer’s industry, and 7) the financial strength, liquidity, and recoverability of the issuer. Management performs a security-by-security review each quarter in evaluating the need for any other-than-temporary impairments. Although no set formula is used in this process, the investment performance, collateral position, and continued viability of the issuer are significant measures considered. Beginning in 2018, equity securities, common and non-redeemable preferred stocks are reported at fair value with unrealized gains and losses included in the Consolidated Statement of Earnings. Prior to 2018, these securities were designated as available for sale and reported at fair value with the change in unrealized gains and losses included in accumulated other comprehensive income. Derivatives Fixed-index products combine features associated with traditional fixed annuities and universal life contracts, with the option to have interest rates linked in part to an underlying equity index. The equity return component of such policy contracts is identified separately and accounted for in future policy benefits as embedded derivatives on the Consolidated Balance Sheets. The remaining portions of these policy contracts are considered the host contracts and are recorded separately within future policy benefits as fixed annuity or universal life contracts. The host contracts are accounted for under debt instrument type accounting. The host contracts are recorded as discounted debt instruments that are accreted, using the effective yield method, to their minimum account values at their projected maturities or termination dates. The Company purchases over-the-counter index options, which are derivative financial instruments, to hedge the equity return component of its index annuity and life products. The amounts which may be credited to policyholders are linked, in part, to the returns of the underlying index. The index options act as hedges to match closely the returns on the underlying index. Cash is exchanged upon purchase of the index options and no principal or interest payments are made by either party during the option periods. Upon maturity or expiration of the options, cash is paid to the Company based on the underlying index performance and terms of the contract. As a result, amounts credited to policyholders' account balances are substantially offset by changes in the value of the options. The Company does not elect hedge accounting relative to derivative instruments. The derivatives are reported at their fair value in the accompanying Consolidated Financial Statements. Changes in the values of the index options and changes in the policyholder liabilities are both reflected in the Consolidated Statement of Earnings. Any gains or losses from the sale or expiration of the options, as well as period-to-period changes in values, are reflected as net investment income in the Consolidated Statement of Earnings. Any changes relative to the embedded derivatives associated with policy contracts are reflected in contract interest in the Consolidated Statement of Earnings. Although there is credit risk in the event of nonperformance by counterparties to the index options, the Company does not expect any counterparties to fail to meet their obligations, given their high credit ratings. In addition, credit support agreements are in place with all counterparties for option holdings in excess of specific limits, which further reduces the Company's credit exposure. At December 31, 2019 and 2018 , the fair value of index options owned by the Company totaled $157.6 million and $14.7 million , respectively. Of these amounts, $80.7 million and $(72.3) million represent unrealized gains and losses on the options held at December 31, 2019 and 2018 , respectively. Mortgage Loans and Other Long-term Investments Mortgage loans and other long-term investments are stated at cost, less unamortized discounts, deferred fees, and allowances for possible losses. Policy loans are stated at their aggregate unpaid balances. Real estate is stated at the lower of cost or fair value less estimated costs to sell. Impaired loans are those loans where it is probable that all amounts due according to contractual terms of the loan agreement will not be collected. The Company has identified these loans through its normal loan review procedures. Impaired loans include: 1) nonaccrual loans, 2) loans which are 90 days or more past due, unless they are well secured and are in the process of collection, and 3) other loans which management believes are impaired. Impaired loans are measured based on: 1) the present value of expected future cash flows discounted at the loan's effective interest rate, 2) the loan's observable market price, or 3) the fair value of the collateral if the loan is collateral dependent. When the Company has loans considered impaired substantially all are measured at the fair value of the collateral. In limited cases, the Company may use other methods to determine the level of impairment of a loan if such loan is not collateral dependent. Mortgage loans are placed on non-accrual status if there are concerns regarding the collectability of future payments. Interest income on non-performing loans is generally recognized on a cash basis. Once mortgage loans are classified as nonaccrual loans, the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan has been restructured such that the collection of interest is considered likely. Accrued Investment Income The accrual of investment income on invested assets is discontinued when it is determined that it is probable that the income will not be collected. Realized Gains and Losses on Investments Realized gains and losses for securities available for sale and securities held to maturity are included in earnings and are derived using the specific identification method for determining the cost of securities sold or called. Prepayment penalty fees received from issuers that call their securities before maturity are excluded from the calculation of realized gain or loss and are included as a component of investment income. After an OTTI write down of fixed maturities with a credit-only impairment, the cost basis is not adjusted for subsequent recoveries in fair value. For fixed maturities for which a reasonable estimate of future cash flows are available after a write down, the discount or reduced premium recorded, based on the new cost basis, is amortized over the remaining life of the security. Amortization in this instance is computed using the prospective method and the current estimate of the amount and timing of future cash flows. Fair Values Fair values of equity securities are based on quoted market prices in active markets when available. Fair values of fixed maturities are based on market prices in the fixed income markets. Fair values of derivative investments are based on the latest counterparty model market prices. Items not readily marketable are generally at values that are representative of the fair values of comparable issues. Fair values for all securities are reviewed for reasonableness by considering overall market conditions and values for similar securities. See Note (4) Fair Values of Financial Instruments for more information on fair value policies, including assumptions and the amount of securities priced using the valuation models. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the Consolidated Statements of Cash Flows, the Company considers all short-term investments with a maturity at the date of purchase of three months or less to be cash equivalents. |
Deferred Policy Acquisition Costs, Deferred Sales Inducements and Value of Business Acquired | Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired Deferred policy acquisition costs ("DPAC") include certain costs of successfully acquiring new insurance business, including commissions and other expenses related directly to the production of new business, to the extent recoverable from future policy revenues and gross profits (indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expenses as incurred). Also included are premium bonuses and bonus interest credited to contracts during the first contract year only. These deferred sales inducements ("DSI") are also deferrable to the extent recoverable. For interest sensitive universal life and annuity products, these costs are amortized in relation to the present value of expected gross margins or gross profits on these policies. For nonparticipating traditional life products, these costs are amortized over the premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. Such anticipated premium revenues are estimated using the same assumptions used for computing liabilities for future policy benefits. The Company evaluates the recoverability of deferred policy acquisition and sales inducement costs on a quarterly basis. In this evaluation, the Company considers estimated future gross profits or future premiums, as applicable for the type of contract. The Company also considers expected mortality, interest earned and credited rates, persistency, and expenses. In accordance with GAAP guidance, the Company must also write off deferred policy acquisition costs and unearned revenue liabilities upon internal replacement of certain contracts as well as annuitizations of deferred annuities. All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing deferred policy acquisition costs, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing deferred policy acquisition costs, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract . Amortization of DPAC and DSI is reviewed each year and adjusted retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of investment gains and losses) to be realized from a group of products are revised. |
Other Assets | Other Assets Other assets include property and equipment, primarily comprised of capitalized software costs, furniture and equipment and leasehold improvements, which are reported at cost less allowances for depreciation and amortization. Costs incurred in the preliminary stages of developing internal-use software as well as costs incurred post-implementation for maintenance are expensed. Capitalization of internal-use software costs occurs after management has authorized the project and it is probable that the software will be used as intended. Amortization of software costs begins after the software has been placed in production. Depreciation and amortization expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from 7 to 39 years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease. Capitalized software, property, and equipment had a carrying value of $153.6 million at December 31, 2019 and $161.2 million at December 31, 2018 , and accumulated depreciation and amortization of $62.5 million at December 31, 2019 and $59.5 million at December 31, 2018. Depreciation and amortization expense for capitalized software, furniture and equipment, and leasehold improvements was $10.7 million , $11.1 million , and $9.2 million in 2019, 2018, and 2017, respectively. Other assets at December 31, 2019 also include goodwill of $13.9 million related to the excess of the amounts paid to acquire companies over the fair value of other net tangible and intangible assets acquired. It represents the future economic benefits arising from assets acquired and liabilities assumed that could not be individually identified. Goodwill is not amortized but is subject to annual impairment analysis at the same time each year or more frequently if indicators are present. The Company will annually review its goodwill balance beginning in the second quarter of 2020 to determine if indicators suggest an impairment may have occurred and would suggest the value has declined below the carrying value of goodwill. Refer to Note (7) Business Combinations for further information concerning the determination of goodwill. Other assets at December 31, 2019 further include $8.9 million |
Future Policy Benefits | Future Policy Benefits Under GAAP, the liability for future policy benefits on traditional products has been calculated using assumptions as to future mortality (based on the 1965-1970, 1975-1980, and 2001 Select and Ultimate mortality tables), interest ranging from 3.25% to 8.00% , and withdrawals based on Company experience. For universal life and annuity contracts, the liability for future policy benefits represents the account balance. Fixed-index products combine features associated with traditional fixed annuities and universal life contracts, with the option to have interest rates linked in part to an equity index. In accordance with GAAP guidance , the equity return component of such policy contracts must be identified separately and accounted for as embedded derivatives. The remaining portions of these policy contracts are considered the host contracts and are recorded separately as fixed annuity or universal life contracts. The host contracts are accounted for under GAAP guidance provisions that require debt instrument type accounting. The host contracts are recorded as discounted debt instruments that are accreted, using the effective yield method, to their minimum account values at their projected maturities or termination dates. The embedded derivatives are recorded at fair value. The fair value of the embedded derivative component of policy benefit reserves is estimated at each valuation date by (a) projecting policy and contract values and minimum guaranteed values over the expected lives of the policies and contracts and (b) discounting the excess of the projected value amounts at the applicable risk free interest rates adjusted for nonperformance risk related to those liabilities. The projections of policy and contract values are based upon best estimate assumptions for future policy growth and future policy decrements. Best estimate assumptions for future policy growth includes 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 cost options purchased 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. |
Other Policy Claims and Benefits | Other Policy Claims and Benefits Unearned revenue reserves are maintained that reflect the unamortized balance of charges assessed to interest sensitive contract holders which serve as compensation for services to be performed over future periods (policy premium loads). These charges have been deferred and are being recognized in income over the period benefited using the same assumptions and factors used to amortize deferred acquisition costs. |
Stock Compensation | Stock Compensation The Company accounts for its share-based compensation for GAAP reporting using liability accounting, and measures compensation cost using the fair value method at each reporting date. For stock options and stock appreciation rights, fair value is determined using an option pricing model that takes into account various information and assumptions including the Company's stock price, volatility, option price, vesting dates, exercise dates and projected lapses. |
Deferred Income Taxes | Deferred Income Taxes Federal income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance for deferred tax assets is provided if all or some portion of the deferred tax asset may not be realized. An increase or decrease in a valuation allowance that results from a change in circumstances that affects the realizability of the related deferred tax asset is included in income in the period the change occurs. |
Recognition of Premiums, Contract Revenues and Costs | Recognition of Premiums, Contract Revenues and Costs Premiums on traditional life insurance products are recognized as revenues as they become due from policyholders. Benefits and expenses are matched with premiums in arriving at profits by providing for policy benefits over the lives of the policies and by amortizing costs over premium-paying periods of the policies. Revenues for interest sensitive universal life and annuity products consist of policy charges for the cost of insurance asset charges, administration charges, amortization of policy initiation fees and surrender charges assessed against policyholder account balances. The timing of revenue recognition as it relates to these charges and fees is determined based on the nature of such charges and fees. Policy charges for the cost of insurance, asset charges and policy administration charges are assessed on a daily or monthly basis and are recognized as revenue when assessed and earned. Certain policy initiation fees that represent compensation for services to be provided in the future are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are determined based upon contractual terms and are recognized upon surrender of a contract. Policy benefits and claims charged to expense include interest amounts credited to policyholder account balances and benefit claims incurred in excess of policyholder account balances during the period. Amortization of DPAC, DSI, and VOBA balances are recognized as expense over the life of the policy. All insurance-related revenues, benefits and expenses are reported net of reinsurance ceded. The cost of reinsurance ceded is recognized over the contract periods of the reinsurance agreements. |
Comprehensive Income | Comprehensive Income Comprehensive income includes net income, as well as other comprehensive income items not recognized through net income. Other comprehensive income includes unrealized gains and losses on available-for-sale securities as well as the underfunded obligations for certain retirement and postretirement benefit plans. These items are included in accumulated other comprehensive income, net of tax and other offsets, in stockholders’ equity. The changes in unrealized gains and losses reported in our Statement of Comprehensive Income (Loss), excludes net investment gains and losses included in net income that represent transfers from unrealized to realized gains and losses. These transfers are further discussed in Note (3) Investments |
Use of Estimates | Use of Estimates The preparation of 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, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. For example, significant estimates and assumptions are utilized in the valuation of investments, determination of other-than-temporary impairments of investments, recoverability and amortization of deferred acquisition costs and value of business acquired, calculation of policyholder liabilities and accruals and determination of pension expense. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized, which could have a material impact on the Consolidated Financial Statements. |
Accounting Standards and Changes in Accounting | Accounting Standards and Changes in Accounting Recent accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-12 Financial Services-Insurance (Topic 944) - Targeted Improvements to the Accounting for Long-Duration Contracts . This update is aimed at improving the Codification as it relates to long-duration contracts which will improve the timeliness of recognizing changes in the liability for future policy benefits, simplify accounting for certain market-based options, simplify the amortization of deferred acquisition costs, and improve the effectiveness of required disclosures. Amendments include the following: A. Require insurance entity to (1) review and update assumptions used to measure cash flows at least annually (with changes recognized in net income) and (2) update discount rate assumption at each reporting date (with changes recognized in other comprehensive income). B. Require insurance entity to measure all market risk benefits associated with deposit (i.e. account balance) contracts at fair value, with change in fair value attributable to change in instrument-specific credit risk recognized in other comprehensive income. C. Simplify amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins and require those balances be amortized on constant level basis over expected term of related contract. Deferred acquisition costs are required to be written off for unexpected contract terminations but are not subject to impairment test. D. Require insurance entity to add disclosures of disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs. Insurance entity must also disclose information about significant inputs, judgments, assumptions, and methods used in measurement, including changes in those inputs, judgments, and assumptions, and the effect of those changes on measurement. These updates are required to be applied retrospectively to the earliest period presented in the financial statements for periods beginning after December 15, 2021, with early adoption permitted. The Company has performed a preliminary gap analysis and created a roadmap for its implementation of this standard by the effective date. The Company is still evaluating the impact of the new guidance on its Consolidated Financial Statements. In June 2016, the FASB released ASU 2016-13, Financial Instruments-Credit Losses , which revises the credit loss recognition criteria for certain financial assets measured at amortized cost. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model (“CECL”). The objective of the CECL model is for the reporting entity to recognize its estimate of current expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The amendments in this Update add clarification and correction to ASU 2016-13 around accrued interest, transfers between classifications or categories for loans and debt securities, consideration of recoveries in estimating allowances, reinsurance recoveries, consideration of prepayments and estimated costs to sell when foreclosure is probable. In November, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. The amendments in this Update add clarification and correction to ASU 2016-13 around expected recoveries for purchased financial assets with credit deterioration, transition relief for troubled debt restructurings, disclosures related to accrued interest receivables, and financial assets secured by collateral maintenance provisions. The guidance for these pronouncements is effective for interim and annual periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. Effective January 1, 2020, the Company adopted the expected loss recognition model related to mortgage loans, debt securities held to maturity and reinsurance recoverables. The Company has completed its analysis of expected credit loss and is working towards finalizing the implementation impact. Based on this analysis, the Company has estimated the impact of the new CECL model to result in an increase in the allowance credit losses of approximately $4 million to $6 million . The Company will record the adoption impact and further details in its financial statements for the quarter ending March 31, 2020. In December 2019, the FASB issued ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740) , which simplifies various aspects of the income tax accounting guidance and will be applied using different approaches depending on the specific amendment. The amendments will be effective for fiscal periods ending after December 15, 2020. Early adoption is permitted. The Company does not expect this guidance to have a material impact on the Consolidated Financial Statements and related disclosures upon adoption. Accounting pronouncements adopted In April 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The new guidance simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. The amendments will be effective for annual goodwill impairment tests occurring after December 15, 2019. The Company elected to adopt the requirements of this update in its Consolidated Financial Statements for the year ended December 31, 2019. The adoption of this amendment did not have an impact on the Company’s results of operations or financial position. In August 2018, FASB issued ASU 2018-13 F air Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure requirements for Fair Value Measurement. This update removed disclosures for 1) amount of and reasons for transfers between Level 1 and Level 2 for fair value hierarchy, 2) policy for timing of transfers between levels, 3) valuation process for Level 3 fair value measurements. This update also added disclosure requirement as follows: 1) changes in unrealized gains and losses for the period included in OCI for recurring Level 3 fair value measurements held at end of reporting period; 2) range and weighted average (or other reasonable quantitative measurement) of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments will be effective for interim periods beginning after December 15, 2019. The Company elected to adopt the requirements of this update in its Consolidated Financial Statements for the year ended December 31, 2019. The adoption of this amendment did not have an impact on the Company’s results of operations or financial position. In August 2018, FASB issued ASU 2018-14 Compensation-Retirement Benefits - Defined Benefit Plans-General (Subtopic 715-20) Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans . This update removed disclosures for 1) amounts in AOCI expected to be recognized as components of net periodic benefit cost over the next fiscal year, 2) amount and timing of plan assets expected to be returned to the employer, 3) related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, 4) the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of the net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. This update also added disclosures as follows: 1) weighted-average interest crediting rates for cash balance plans and other plans with promised crediting rates, 2) explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. Finally, this update clarified that the following information for defined benefit pension plans should be disclosed: 1) projected benefit obligation (PBO) and fair value of plan assets for plans with PBO in excess of plan assets, 2) accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments are effective for fiscal periods ending after December 31, 2020. The Company elected to adopt the requirements of this update in its Consolidated Financial Statements for the year ended December 31, 2019. The adoption of this amendment did not have an impact on the Company’s results of operations or financial position. In August 2018, the SEC released a final rule updating disclosure requirements, Disclosure Update and Simplification, which resulted in the additional interim disclosure of an analysis of changes in stockholders’ equity to be required for the current and comparative quarter and year-to-date interim periods. Registrants are required to provide an analysis of changes in each caption of stockholders’ equity and noncontrolling interests, which will be accompanied by dividends per share and in the aggregate for each class of shares. The disclosure must be presented in the form of a reconciliation, either as a separate statement or in the footnotes. The adoption of this rule in 2019 did not have a material effect on the results of operations or financial position of the Company as this information in year-to-date format was already provided. In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities , which amends the amortization period for certain purchased callable debt securities held at a premium. The amortization period for premiums is being shortened to the earliest call date. This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The adoption of this ASU in 2019 did not have a material effect on the results of operations or financial position of the Company. In January 2018, the Company adopted ASU 2017-07 Compensation-Retirement Benefits (Topic 615): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The new guidance requires that an employer that offers to its employees defined benefit pension or other postretirement benefit plans report the service cost component in the same line item or items as other compensation costs. The other components of net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item is not used, the line item used in the income statement to present the other components of net periodic benefit cost must be disclosed. In addition, the guidance allows only the service cost component to be eligible for capitalization when applicable. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements. The Company does not capitalize service costs. On February 14, 2018, the FASB released ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The update addresses certain stranded income tax effects in accumulated other comprehensive income caused by the Tax Cuts and Job Act ("Tax Act") which was passed in December 2017. Under the new FASB rules, financial statement preparers are provided the option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recorded. Companies were required to apply the new guidance for fiscal years, including interim periods within such years, starting after December 15, 2018, with early adoption permitted. The amendments were to be applied in either the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the federal corporate income tax rate from the Tax Act is recognized. The Company elected to adopt the requirements of this update in its Consolidated Financial Statements for the year ended December 31, 2017 and reported the resultant reclassification amount, $2.5 million , as a charge to Retained Earnings in the accompanying Consolidated Statements of Stockholders' Equity. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The guidance requires companies to recognize revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. As an insurance enterprise, the primary sources of revenue are excluded from this guidance, including insurance premiums, contract charges, and investment revenues. The Company has certain types of non-insurance and non-investment revenue from contracts with customers that fall under this guidance. These revenues are recognized when obligations under the terms of the contract are satisfied. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for those services. For these revenues, the performance obligation is fulfilled as services are rendered. Revenues from contracts with customers identified under Topic 606 are not material, representing 2% of Company total revenues for the year ended December 31, 2017. The guidance was effective for reporting periods beginning after December 15, 2017 and was to be applied either on a full or modified retrospective basis. The adoption of this ASU did not have a material effect on the results of operations or financial position of the Company. In January 2016, the FASB released ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value be recorded as adjustments directly to the income statement. The provisions of this update became effective for the Company beginning January 1, 2018. The prospective adoption of this update resulted in the reclassification of $4.4 million pertaining to unrealized gains, net of tax, out of Accumulated Other Comprehensive Income into Retained Earnings as a cumulative effect of a change in accounting principle, as shown in the Condensed Consolidated Statements of Changes in Stockholders' Equity. Equity securities, previously included in Securities Available for Sale are now reported as a separate line item on the Consolidated Balance Sheet. The change in fair value of equity securities, previously reported in Other Comprehensive Income, is now included in net investment income in the Condensed Consolidated Statements of Earnings. As the Company's equity securities holdings are not significant, the adoption of the requirements of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. In May 2017, the FASB released ASU 2017-09, Compensation - Stock Compensation . The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification ("ASC") Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update became effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. There was no impact to the Company’s financial position, results of operations or cash flows as the result of the adoption of this ASU. In July 2017, the FASB released ASU 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; and, Derivatives and Hedging . This update includes: (I) Accounting for Certain Financial Instruments with Down Round Features, and (II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interest with a Scope Exception. Part I of this update changes the classification analysis of certain equity-linked financial instruments with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. Part II of this update recharacterizes the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. There was no impact to the Company’s financial position, results of operations or cash flows as the result of the adoption of this ASU. In June 2018, the FASB released ASU 2018-07 Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting . This update largely aligns the accounting for share-based payment awards issued to employees and nonemployees. Previously, nonemployee stock compensation was accounted for under Subtopic 505-50 but will now fall under Topic 718. Changes to the accounting for nonemployee awards include 1) measurement based on fair value of the equity instrument at grant date, rather than previous requirement to measure based on the more reliable option of the fair value of the consideration or the fair value of the equity instrument, 2) initial measurement at grant date, rather than the earlier of the date at which commitment for performance is reached or performance is complete, and 3) when performance conditions are present, the probability of satisfying performance conditions should be considered in measurement rather than the previous requirement to measure at the lowest aggregate fair value. The amendments in the new guidance were effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal period. There was no impact to the Company’s financial position, results of operations or cash flows as the result of the adoption of this ASU. In February 2016, the FASB issued new guidance on leasing transactions (ASU 2016-02, Leases - Topic 842 ). The new guidance was effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective transition approach (subject to optional practical expedients). The new guidance requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Leases are to be classified as finance or operating leases and both types of leases are to be recognized on the balance sheet. Lessor accounting remains largely unchanged from current guidance except for certain targeted changes. The new guidance also requires new qualitative and quantitative disclosures. Early adoption is permitted. The Company elected to early adopt the requirements of this update in its Consolidated Financial Statements for the year ended December 31, 2018. There was no material impact to the Company’s financial position, results of operations or cash flows as the result of the adoption of this ASU. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future Consolidated Financial Statements. |
Significant Accounting Policies
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Unrealized Gains and Losses on Available-for-Sale Securities Reclassified out of Accumulated Other Comprehensive Income | The table below shows the unrealized gains and losses on available-for-sale securities that were reclassified out of accumulated other comprehensive income for the years ended December 31, 2019 , 2018 and 2017 . Affected Line Item In the Consolidated Statements of Earnings Amount Reclassified from Accumulated Other Comprehensive Income Years Ended December 31, 2019 2018 2017 (In thousands) Other net investment gains (losses) $ 2,787 3,441 5,348 Net OTTI losses recognized in earnings (7,847 ) — (112 ) Earnings before Federal income taxes (5,060 ) 3,441 5,236 Federal income taxes (1,063 ) 723 1,833 Net earnings $ (3,997 ) 2,718 3,403 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Components of Net Investment Income | The major components of net investment income are as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Gross investment income: Debt and equity securities $ 403,372 399,645 409,401 Mortgage loans 12,595 12,066 11,045 Policy loans 3,539 3,185 3,485 Derivative gains (losses) 123,207 (80,004 ) 222,875 Short term investments 2,974 2,249 1,012 Other investment income 13,057 13,289 13,137 Total investment income 558,744 350,430 660,955 Less investment expenses 3,252 1,353 1,270 Net investment income $ 555,492 349,077 659,685 |
Schedule of Mortgage Loans by Geographic Region | The diversification of the portfolio by geographic region, property type, and loan-to-value ratio was as follows: December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Geographic Region: West South Central $ 191,089 70.0 $ 116,205 57.0 East North Central 17,248 6.3 20,944 10.3 South Atlantic 35,698 13.1 29,829 14.6 East South Central 8,063 2.9 13,801 6.8 West North Central 12,505 4.6 12,751 6.3 Pacific 6,436 2.4 6,626 3.2 Middle Atlantic 2,058 0.7 2,138 1.0 Mountain — — 1,561 0.8 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 |
Schedule of Mortgage Loans by Property Type | December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Property Type: Retail $ 91,790 33.6 $ 96,075 47.1 Office 95,362 34.9 71,194 34.9 Hotel 8,997 3.3 14,454 7.1 Land/Lots 4,829 1.8 3,498 1.7 Apartments 30,000 11.0 — — All other 42,119 15.4 18,634 9.2 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 |
Schedule of Mortgage Loans by Loan-to-Value Ratio | December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Mortgage Loans by Loan-to-Value Ratio (1): Less than 50% $ 52,778 19.3 $ 66,371 32.6 50% to 60% 56,929 20.8 22,610 11.1 60% to 70% 117,377 43.0 102,857 50.4 70% to 80% 46,013 16.9 6,642 3.3 80% to 90% — — 5,375 2.6 Gross balance 273,097 100.0 203,855 100.0 Allowance for possible losses (675 ) (0.2 ) (675 ) (0.3 ) Totals $ 272,422 99.8 $ 203,180 99.7 (1) Loan-to-Value Ratio using the most recent appraised value. Appraisals are required at the time of funding and may be updated if a material change occurs from the original loan agreement. |
Schedule of Allowance for Mortgage Loan | The following table represents the mortgage loan allowance for the years ended December 31, 2019 and 2018 : 2019 2018 (In thousands) Balance, beginning of period $ 675 650 Provision — 25 Releases — — Balance, end of period $ 675 675 |
Schedule of Contractual Maturities of Mortgage Loan Principal Balances | The contractual maturities of mortgage loan principal balances at December 31, 2019 and 2018 were as follows: December 31, 2019 December 31, 2018 Amount % Amount % (In thousands) (In thousands) Principal Balance by Contractual Maturity: Due in one year or less $ 497 0.2 $ 23,839 11.7 Due after one year through five years 34,306 12.5 39,391 19.3 Due after five years through ten years 142,477 52.1 134,574 65.8 Due after ten years through fifteen years 96,359 35.2 6,642 3.2 Due after fifteen years — — — — Totals $ 273,639 100.0 $ 204,446 100.0 |
Schedule of Amortized Costs and Fair Values of Securities Held to Maturity | The table below presents amortized costs and fair values of debt securities held to maturity at December 31, 2018 . Debt Securities Held to Maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: U.S. Treasury $ 1,341 116 — 1,457 States and political subdivisions 457,404 9,764 (2,376 ) 464,792 Public utilities 930,629 5,928 (12,944 ) 923,613 Corporate 4,715,775 27,652 (87,043 ) 4,656,384 Residential mortgage-backed 1,176,216 13,771 (11,932 ) 1,178,055 Asset-backed 3,889 88 (10 ) 3,967 Totals $ 7,285,254 57,319 (114,305 ) 7,228,268 The table below presents amortized costs and fair values of debt securities held to maturity at December 31, 2019 . Debt Securities Held to Maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: U.S. agencies $ 100,910 1,686 — 102,596 U.S. Treasury 3,782 140 — 3,922 States and political subdivisions 431,433 19,440 (84 ) 450,789 Foreign governments 1,144 55 — 1,199 Public utilities 888,444 36,638 (83 ) 924,999 Corporate 4,607,826 212,281 (718 ) 4,819,389 Commercial mortgage-backed 3,032 52 — 3,084 Residential mortgage-backed 1,066,899 32,706 (716 ) 1,098,889 Asset-backed 2,775 62 (1 ) 2,836 Totals $ 7,106,245 303,060 (1,602 ) 7,407,703 |
Schedule of Amortized Costs and Fair Values of Securities Available for Sale | The table below presents amortized costs and fair values of debt securities available for sale at December 31, 2018 . Debt Securities Available for Sale Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: States and political subdivisions $ 570 — (4 ) 566 Foreign governments 9,974 30 — 10,004 Public utilities 82,943 1,045 (517 ) 83,471 Corporate 2,893,221 15,473 (79,638 ) 2,829,056 Residential mortgage-backed 15,947 937 (84 ) 16,800 Asset-backed 5,969 193 — 6,162 Totals $ 3,008,624 17,678 (80,243 ) 2,946,059 The table below presents amortized costs and fair values of debt securities available for sale at December 31, 2019 . Debt Securities Available for Sale Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Debt securities: States and political subdivisions $ 98,037 4,495 (3 ) 102,529 Foreign governments 9,983 203 — 10,186 Public utilities 67,895 3,476 — 71,371 Corporate 2,921,431 141,705 (2,479 ) 3,060,657 Commercial mortgage-backed 28,871 1,071 — 29,942 Residential mortgage-backed 12,815 1,077 (117 ) 13,775 Asset-backed 67,088 1,397 — 68,485 Totals $ 3,206,120 153,424 (2,599 ) 3,356,945 |
Schedule of Gross Unrealized Losses and Fair Values of Held-to-Maturity Investments, Continuous Unrealized Loss Position | The following table shows the gross unrealized losses and fair values of the Company's held to maturity investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2018 . Debt Securities Held to Maturity Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 88,253 (2,124 ) 10,645 (252 ) 98,898 (2,376 ) Public utilities 396,980 (8,371 ) 98,632 (4,573 ) 495,612 (12,944 ) Corporate bonds 2,144,969 (55,125 ) 650,401 (31,918 ) 2,795,370 (87,043 ) Residential mortgage-backed 202,986 (2,032 ) 311,374 (9,900 ) 514,360 (11,932 ) Asset-backed — — 1,976 (10 ) 1,976 (10 ) Total $ 2,833,188 (67,652 ) 1,073,028 (46,653 ) 3,906,216 (114,305 ) The following table shows the gross unrealized losses and fair values of the Company's held to maturity investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2019 . Debt Securities Held to Maturity Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 5,013 (33 ) 1,712 (51 ) 6,725 (84 ) Public utilities 2,345 (83 ) — — 2,345 (83 ) Corporate bonds 31,419 (337 ) 17,191 (381 ) 48,610 (718 ) Residential mortgage-backed 25,859 (63 ) 43,498 (653 ) 69,357 (716 ) Asset-backed 1,349 (1 ) — — 1,349 (1 ) Total $ 65,985 (517 ) 62,401 (1,085 ) 128,386 (1,602 ) |
Schedule of Gross Unrealized Losses and Fair Values of Available-for-Sale Investments, Continuous Unrealized Loss Position | The following table shows the gross unrealized losses and fair values of the Company's available for sale investments by investment category, and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2018 . Debt Securities Available For Sale Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 566 (4 ) — — 566 (4 ) Public utilities 38,903 (517 ) — — 38,903 (517 ) Corporate bonds 1,468,953 (44,575 ) 442,798 (35,063 ) 1,911,751 (79,638 ) Residential mortgage-backed — — 878 (84 ) 878 (84 ) Total $ 1,508,422 (45,096 ) 443,676 (35,147 ) 1,952,098 (80,243 ) The following table shows the gross unrealized losses and fair values of the Company's available for sale investments by investment category and length of time the individual securities have been in a continuous unrealized loss position at December 31, 2019 . Debt Securities Available For Sale Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Debt securities: States and political subdivisions $ 470 (3 ) — — 470 (3 ) Public utilities — — — — — — Corporate bonds 40,080 (105 ) 28,582 (2,374 ) 68,662 (2,479 ) Residential mortgage-backed — — 710 (117 ) 710 (117 ) Total $ 40,550 (108 ) 29,292 (2,491 ) 69,842 (2,599 ) |
Schedule of Amortized Cost and Fair Value of Investments In Debt Securities | The amortized cost and fair value of investments in debt securities at December 31, 2019 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Debt Securities Available for Sale Debt Securities Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Due in 1 year or less $ 161,688 163,644 535,438 542,601 Due after 1 year through 5 years 1,195,519 1,239,173 2,909,434 3,011,492 Due after 5 years through 10 years 1,479,253 1,558,118 2,007,066 2,122,184 Due after 10 years 260,886 283,808 581,601 626,617 3,097,346 3,244,743 6,033,539 6,302,894 Mortgage and asset-backed securities 108,774 112,202 1,072,706 1,104,809 Total $ 3,206,120 3,356,945 7,106,245 7,407,703 |
Schedule of Realized Gains (Losses) Excluding Impairments | The table below details the nature of realized gains and losses, excluding impairments, during the year. Years Ended December 31, 2019 2018 2017 (In thousands) Available for sale debt securities: Realized gains on disposal $ 3,798 3,447 5,208 Realized losses on disposal (1,011 ) (6 ) (7 ) Held to maturity debt securities: Realized gains on redemption 4,390 3,208 6,944 Realized losses on redemption — — (74 ) Equity securities realized gains — — 147 Real estate 6,911 1,799 2,657 Mortgage loans — (25 ) — Other — — — Totals $ 14,088 8,423 14,875 |
Schedule of Net Impairment Losses Recognized in Earnings | The table below presents net impairment losses recognized in earnings for the periods indicated. Years Ended December 31, 2019 2018 2017 (In thousands) Total other-than-temporary impairment recoveries (losses) on debt securities $ (7,838 ) 12 599 Portion recognized in comprehensive income (9 ) (12 ) (599 ) Net impairment losses on debt securities recognized in earnings (7,847 ) — — Equity securities impairments — — (112 ) Totals $ (7,847 ) — (112 ) The table below presents a roll forward of credit losses on securities for which the Company also recorded non-credit other-than-temporary impairments in other comprehensive loss. Year Ended Year Ended December 31, 2019 December 31, 2018 (In thousands) Beginning balance, cumulative credit losses related to other-than-temporary impairments $ 627 627 Reductions for securities disposed during current period — — Additions for OTTI where credit losses have been previously recognized — — Ending balance, cumulative credit losses related to other-than-temporary impairments $ 627 627 |
Schedule of Net Unrealized Gains (Losses) on Investment Securities | Net unrealized gains (losses) on investment securities included in stockholders' equity at December 31, 2019 and 2018 , are as follows: December 31, 2019 2018 (In thousands) Gross unrealized gains $ 153,417 17,678 Gross unrealized losses (2,603 ) (80,263 ) Adjustments for: Deferred policy acquisition costs and sales inducements (61,372 ) 24,237 Deferred Federal income tax expense (18,783 ) 8,053 70,659 (30,295 ) Net unrealized gains related to securities transferred to held to maturity — — Net unrealized gains (losses) on investment securities $ 70,659 (30,295 ) |
Derivative Investments (Tables)
Derivative Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments | The tables below present the fair value of derivative instruments. December 31, 2019 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) (In thousands) Derivatives not designated as hedging instruments Equity index options Derivatives, Index Options $ 157,588 Fixed-index products Universal Life and Annuity Contracts $ 155,902 Total $ 157,588 $ 155,902 December 31, 2018 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) (In thousands) Derivatives not designated as hedging instruments Equity index options Derivatives, Index Options $ 14,684 Fixed-index products Universal Life and Annuity Contracts $ 44,781 Total $ 14,684 $ 44,781 |
Schedule of Effect of Derivative Instruments in Consolidated Statements of Earnings | The table below presents the effect of derivative instruments in the Consolidated Statements of Earnings for the years ended December 31, 2019 , 2018 and 2017 . Amount of Gain or (Loss) Recognized In Income on Derivatives Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized In Income on Derivatives 2019 2018 2017 (In thousands) Equity index options Net investment income (loss) $ 123,207 (80,004 ) 222,875 Fixed-index products Universal life and annuity contract interest (91,424 ) 66,335 (237,281 ) $ 31,783 (13,669 ) (14,406 ) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of the date indicated. December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Debt securities, available for sale $ 3,356,945 — 3,356,945 — Equity securities 23,594 23,594 — — Derivatives, index options 157,588 — — 157,588 Other invested assets 2 2 — — Total assets $ 3,538,129 23,596 3,356,945 157,588 Policyholder account balances (a) $ 155,902 — — 155,902 Other liabilities (b) 15,301 — — 15,301 Total liabilities $ 171,203 — — 171,203 December 31, 2018 Total Level 1 Level 2 Level 3 (In thousands) Debt securities, available for sale $ 2,946,059 — 2,946,059 — Equity securities, available for sale 17,491 17,491 — — Derivatives, index options 14,684 — — 14,684 Total assets $ 2,978,234 17,491 2,946,059 14,684 Policyholder account balances (a) $ 44,781 — — 44,781 Other liabilities 11,923 — — 11,923 Total liabilities $ 56,704 — — 56,704 (a) Represents the fair value of certain product-related embedded derivatives that were recorded at fair value. (b) Represents the liability for share-based compensation and contingent consideration for businesses acquired. |
Schedule of Significant Unobservable Inputs for Fair Value Measurements | The following table provides additional information about fair value measurements for which significant unobservable (Level 3) inputs were utilized to determine fair value. Year Ended December 31, 2019 Debt Securities, Available For Sale Equity Securities Derivatives, Index Options Total Assets Other Liabilities (In thousands) Beginning balance, January 1, 2019 $ — — 14,684 14,684 56,704 Total realized and unrealized gains (losses): Included in net income — — 123,207 123,207 94,106 Included in other comprehensive income (loss) — — — — — Purchases, sales, issuances and settlements, net: Purchases — — 76,928 76,928 76,928 Sales — — — — — Issuances — — — — 3,815 Settlements — — (57,231 ) (57,231 ) (60,350 ) Transfers into (out of) Level 3 — — — — — Balance at end of period $ — — 157,588 157,588 171,203 Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: Net investment income $ — — 80,724 80,724 — Benefits and expenses — — — — 83,406 Total $ — — 80,724 80,724 83,406 Year Ended December 31, 2018 Debt Securities, Available For Sale Equity Securities, Available For Sale Derivatives, Index Options Total Assets Other Liabilities (In thousands) Beginning balance, January 1, 2018 $ — — 194,731 194,731 226,401 Total realized and unrealized gains (losses): Included in net income — — (80,004 ) (80,004 ) (65,046 ) Included in other comprehensive income (loss) — — — — — Purchases, sales, issuances and settlements, net: Purchases — — 86,953 86,953 86,953 Sales — — — — — Issuances — — — — 74 Settlements — — (186,996 ) (186,996 ) (191,678 ) Transfers into (out of) Level 3 — — — — — Balance at end of period $ — — 14,684 14,684 56,704 Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: Net investment income $ — — (72,269 ) (72,269 ) — Benefits and expenses — — — — (70,980 ) Total $ — — (72,269 ) (72,269 ) (70,980 ) |
Schedule of Fair Value, Valuation Techniques and Significant Unobservable Inputs for Financial Instruments Categorized as Level 3 | The following tables show the fair value (in thousands), valuation techniques and significant unobservable inputs for the financial instruments categorized as Level 3. December 31, 2019 Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (In thousands) Assets: Derivatives, index options $ 157,588 Broker prices Implied volatility 13.1% - 19.9% (15.25%) Total assets $ 157,588 Liabilities: Policyholder account balances $ 155,902 Deterministic cash flow model Projected option cost 0.0% - 17.55% (3.14%) Share based compensation 11,225 Black Scholes Expected term 1.9 to 10 years Expected volatility 22.2% Contingent consideration on businesses acquired 4,076 Probabilistic Method Discount rate 10% Projected renewal premium $57.2 - $82.4 million ($71.9) Total liabilities $ 171,203 December 31, 2018 Fair Value Valuation Technique Unobservable Input (In thousands) Derivatives, index options $ 14,684 Broker prices Implied volatility Inputs from broker proprietary models Total assets $ 14,684 Policyholder account balances $ 44,781 Deterministic cash flow model Projected option cost Other liabilities 11,923 Black Scholes Expected term Forfeiture assumptions Total liabilities $ 56,704 |
Schedule of Assets by Pricing Source and Fair Value Hierarchy Measured at Fair Value on Recurring Basis | The following table presents, by pricing source and fair value hierarchy level, the Company’s assets that are measured at fair value on a recurring basis: December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Fixed maturities, available for sale: Priced by third-party vendors $ 3,356,945 — 3,356,945 — Priced internally — — — — Subtotal 3,356,945 — 3,356,945 — Equity securities: Priced by third-party vendors 23,594 23,594 — — Priced internally — — — — Subtotal 23,594 23,594 — — Derivatives, index options: Priced by third-party vendors 157,588 — — 157,588 Priced internally — — — — Subtotal 157,588 — — 157,588 Other invested assets: Priced by third-party vendors 2 2 — — Priced internally — — — — Subtotal 2 2 — — Total $ 3,538,129 23,596 3,356,945 157,588 Percent of total 100.0 % 0.7 % 94.8 % 4.5 % |
Schedule of Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts and fair values of the Company's financial instruments are as follows: December 31, 2019 Fair Value Hierarchy Level Carrying Values Fair Values Level 1 Level 2 Level 3 (In thousands) ASSETS Debt securities held to maturity $ 7,106,245 7,407,703 — 7,407,703 — Debt securities available for sale 3,356,945 3,356,945 — 3,356,945 — Cash and cash equivalents 253,524 253,524 253,524 — — Mortgage loans 272,422 270,931 — — 270,931 Real estate 34,588 57,204 — — 57,204 Policy loans 80,008 123,650 — — 123,650 Other loans 13,547 13,698 — — 13,698 Derivatives, index options 157,588 157,588 — — 157,588 Equity securities 23,594 23,594 23,594 — — Life interest in Libbie Shearn Moody Trust 9,230 12,775 — — 12,775 Other invested assets 197 16,182 2 — 16,180 LIABILITIES Deferred annuity contracts $ 6,999,880 5,916,399 — — 5,916,399 Immediate annuity and supplemental contracts 400,465 422,931 — — 422,931 Contingent consideration on businesses acquired 4,076 4,076 — — 4,076 December 31, 2018 Fair Value Hierarchy Level Carrying Values Fair Values Level 1 Level 2 Level 3 (In thousands) ASSETS Investments in debt and equity securities: Securities held to maturity $ 7,285,254 7,228,268 — 7,226,362 1,906 Securities available for sale 2,946,059 2,946,059 — 2,946,059 — Cash and cash equivalents 131,976 131,976 131,976 — — Mortgage loans 203,180 202,762 — — 202,762 Real Estate 35,692 53,504 — — 53,504 Policy loans 54,724 90,802 — — 90,802 Other loans 12,272 12,709 — — 12,709 Derivatives, index options 14,684 14,684 — — 14,684 Equity Securities 17,491 17,491 17,491 — — Life interest in Libbie Shearn Moody Trust 8,692 12,775 — — 12,775 Other invested assets 195 14,478 — — 14,478 LIABILITIES Deferred annuity contracts $ 7,455,642 6,403,007 — — 6,403,007 Immediate annuity and supplemental contracts 407,413 415,726 — — 415,726 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Summary of Deferred Policy Acquisition Costs | A summary of information related to DPAC is provided in the following table: Years Ended December 31, 2019 2018 2017 (In thousands) Balance, beginning of year $ 841,704 819,511 835,194 Deferrals 64,824 84,094 103,521 Amortization, net of interest: Amortization, excluding unlocking, net of interest (117,748 ) (115,721 ) (126,244 ) Unlocking 8,643 950 11,857 Adjustments related to unrealized gains (losses) (73,451 ) 52,870 (4,817 ) Balance, end of year $ 723,972 841,704 819,511 |
Summary of Information Related to DSI | A summary of information related to DSI is provided in the following table: Years Ended December 31, 2019 2018 2017 (In thousands) Balance, beginning of year $ 133,714 135,570 147,111 Deferrals 3,160 7,546 17,901 Amortization, net of interest: Amortization, excluding unlocking, net of interest (19,714 ) (21,569 ) (24,264 ) Unlocking (641 ) 1,270 (4,288 ) Adjustments related to unrealized gains (losses) (12,160 ) 10,897 (890 ) Balance, end of year $ 104,359 133,714 135,570 |
Schedule of Changes in VOBA | Changes in VOBA were as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Balance as of January 31, 2019 $ 145,768 — — Amortization: Amortization, excluding unlocking (7,697 ) — — Balance as of end-of-year $ 138,071 — — |
Summary of Estimated Future Amortization of VOBA, Net of Interest | Estimated future amortization of VOBA, net of interest (in thousands), as of December 31, 2019 , was as follows: 2020 $ 6,944 2021 $ 6,591 2022 $ 6,285 2023 $ 6,010 2024 $ 5,773 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Net Assets Acquired | The following table presents the fair values of the net assets acquired as of January 31, 2019. January 31, 2019 Assets Fair value (In thousands) Debt securities held to maturity $ 261,059 Debt securities available for sale 400,719 Policy loans 28,128 Real estate 4,600 Cash and cash equivalents 16,275 Accrued investment income 6,116 Value of business acquired 145,768 Reinsurance recoverables 21,895 Other intangible assets 9,600 Other assets acquired 12,075 Total assets acquired 906,235 Liabilities Traditional life reserves 691,297 Other policyholder liabilities 13,867 Other liabilities acquired 5,840 711,004 Net identifiable assets acquired 195,231 Goodwill 13,864 Net assets acquired $ 209,095 |
Schedule of Change in Carrying Amount of Goodwill by Reportable Segment | The changes in the carrying amount of goodwill (in thousands) were as follows: Year Ended December 31, 2019 (In thousands) Gross goodwill as of beginning of year $ — Goodwill resulting from business acquisition 13,864 Gross goodwill, before impairments 13,864 Accumulated impairment as of beginning of year — Current year impairments — Net goodwill as of end of year $ 13,864 |
Schedule of Fair Value of Identifiable Intangible Assets Acquired | The following table presents the fair value of identifiable intangible assets acquired at January 31, 2019. Fair Value Weighted-Average Amortization Period (In thousands) Trademarks/trade names $ 2,800 15 Internally developed software 3,800 7 Insurance licenses 3,000 NA $ 9,600 |
Schedule of Indefinite-Lived Intangible Assets | The gross carrying amounts and accumulated amortization for each specifically identifiable intangible asset were as follows. December 31, 2019 Gross Carrying Amount Accumulated Amortization (In thousands) Trademarks/trade names $ 2,800 (171 ) Internally developed software 3,800 (498 ) Insurance licenses (1) 3,000 — $ 9,600 (669 ) (1) No amortization recorded as the intangible asset has indefinite life. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2019, expected amortization expenses relating to purchased intangible assets for each of the next 5 years and thereafter is as follows: Expected Amortization (In thousands) 2020 $ 730 2021 730 2022 730 2023 730 2024 730 Thereafter 2,281 $ 5,931 |
Schedule of Pro Forma Total Revenues and Net Earnings | The following unaudited comparative pro forma total revenues and net earnings represent Consolidated Results of Operations for the Company which assume amounts estimated had the acquisition of Ozark National and NIS been effective January 1, 2018. Pro forma results of operations include estimated revenue and net earnings of the acquired businesses for each period, as well as the amortization of identifiable intangible assets and fair value adjustments of acquired invested assets and traditional life insurance reserves as proxy to illustrate comparative yearly performance. The proxy was determined by using the ratio of the 2019 results of operations and the number of months since acquisition. Years Ended December 31, 2019 2018 (In thousands) Total revenues $ 828,846 667,392 Net earnings $ 133,175 134,858 |
Segment and Other Operating I_2
Segment and Other Operating Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | A summary of segment information is provided below. Domestic Life Insurance International Life Insurance Annuities Acquired Businesses All Others Totals (In thousands) 2019: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements, and value of business acquired $ 127,557 209,858 486,553 142,434 — 966,402 Total segment assets 1,399,818 1,153,105 8,198,730 978,243 362,900 12,092,796 Future policy benefits 1,198,103 870,461 7,351,941 706,513 — 10,127,018 Other policyholder liabilities 18,016 14,903 80,002 14,686 — 127,607 Condensed Income Statements: Premiums and contract charges $ 45,709 99,417 20,317 74,526 — 239,969 Net investment income 77,672 47,004 380,357 22,593 27,866 555,492 Other revenues 313 86 (34 ) 8,445 8,676 17,486 Total revenues 123,694 146,507 400,640 105,564 36,542 812,947 Life and other policy benefits 18,948 17,064 41,487 59,843 — 137,342 Amortization of deferred policy acquisition costs, and value of business acquired 11,797 17,593 79,064 8,348 — 116,802 Universal life and annuity contract interest 69,849 48,561 176,920 — — 295,330 Other operating expenses 20,376 19,447 35,699 17,056 11,980 104,558 Federal income taxes (benefit) 561 9,024 13,888 3,700 5,056 32,229 Total expenses 121,531 111,689 347,058 88,947 17,036 686,261 Segment earnings (loss) $ 2,163 34,818 53,582 16,617 19,506 126,686 Domestic Life Insurance International Life Insurance Annuities All Others Totals (In thousands) 2018: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements $ 122,661 243,518 609,239 — 975,418 Total segment assets 1,215,864 1,211,036 8,791,463 370,118 11,588,481 Future policy benefits 1,039,150 894,891 7,810,245 — 9,744,286 Other policyholder liabilities 17,439 20,381 97,874 — 135,694 Condensed Income Statements: Premiums and contract charges $ 40,879 108,923 23,694 — 173,496 Net investment income 23,579 22,603 276,123 26,772 349,077 Other revenues 19 87 66 20,431 20,603 Total revenues 64,477 131,613 299,883 47,203 543,176 Life and other policy benefits 21,688 22,333 21,276 — 65,297 Amortization of deferred policy acquisition costs 11,539 24,358 78,874 — 114,771 Universal life and annuity contract interest 8,826 24,590 102,639 — 136,055 Other operating expenses 20,731 19,593 32,584 21,061 93,969 Federal income taxes (benefit) 292 7,035 11,139 4,514 22,980 Total expenses 63,076 97,909 246,512 25,575 433,072 Segment earnings (loss) $ 1,401 33,704 53,371 21,628 110,104 Domestic Life Insurance International Life Insurance Annuities All Others Totals (In thousands) 2017: Selected Balance Sheet Items: Deferred policy acquisition costs and sales inducements $ 101,253 250,128 603,700 — 955,081 Total segment assets 1,106,410 1,236,733 9,269,956 398,597 12,011,696 Future policy benefits 950,884 915,384 8,232,216 — 10,098,484 Other policyholder liabilities 13,643 11,318 103,048 — 128,009 Condensed Income Statements: Premiums and contract charges $ 37,387 120,852 20,691 — 178,930 Net investment income 73,866 68,399 490,706 26,714 659,685 Other revenues 46 83 109 20,832 21,070 Total revenues 111,299 189,334 511,506 47,546 859,685 Life and other policy benefits 18,565 23,981 28,939 — 71,485 Amortization of deferred policy acquisition costs 10,377 (1,473 ) 105,483 — 114,387 Universal life and annuity contract interest 59,865 54,502 322,652 — 437,019 Other operating expenses 18,842 36,341 32,021 19,798 107,002 Federal income taxes (benefit) 815 16,958 5,002 6,192 28,967 Total expenses 108,464 130,309 494,097 25,990 758,860 Segment earnings (loss) $ 2,835 59,025 17,409 21,556 100,825 |
Reconciliation of Segment Federal Income Taxes to Consolidated Financial Statements | Years Ended December 31, 2019 2018 2017 (In thousands) Federal Income Taxes : Total segment Federal income taxes $ 32,229 22,980 28,967 Taxes on realized gains (losses) on investments 1,311 1,769 5,167 Total taxes on consolidated net earnings $ 33,540 24,749 34,134 |
Reconciliation of Segment Net Earnings to Consolidated Financial Statements | Years Ended December 31, 2019 2018 2017 (In thousands) Net Earnings : Total segment earnings $ 126,686 110,104 100,825 Realized gains (losses) on investments, net of taxes 4,930 6,654 9,596 Total consolidated net earnings $ 131,616 116,758 110,421 Reconciliations of segment information to the Company's Consolidated Financial Statements are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Premiums and Other Revenue : Premiums and contract charges $ 239,969 173,496 178,930 Net investment income 555,492 349,077 659,685 Other revenues 17,486 20,603 21,070 Realized gains (losses) on investments 6,241 8,423 14,763 Total consolidated premiums and other revenue $ 819,188 551,599 874,448 |
Reconciliation of Segment Assets to Consolidated Financial Statements | December 31, 2019 2018 2017 (In thousands) Assets : Total segment assets $ 12,092,796 11,588,481 12,011,696 Other unallocated assets 460,651 343,210 213,398 Total consolidated assets $ 12,553,447 11,931,691 12,225,094 |
Schedule of Premiums and Contract Revenue Detailed by Country | Premiums and contract revenues detailed by country are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) United States $ 156,330 82,614 74,937 Brazil 24,975 27,280 33,024 Taiwan 12,054 14,414 16,105 Venezuela 11,763 12,864 14,844 Peru 10,127 10,969 11,714 Chile 8,122 8,769 9,201 Other foreign countries 40,217 37,346 39,417 Revenues, excluding reinsurance premiums 263,588 194,256 199,242 Reinsurance premiums (23,619 ) (20,760 ) (20,312 ) Total premiums and contract revenues $ 239,969 173,496 178,930 |
Statutory Information (Tables)
Statutory Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Summary of Direct Premiums and Deposits Collected | A summary of direct premiums and deposits collected is provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Annuity deposits $ 264,667 411,208 608,799 Universal life insurance deposits 266,600 278,971 254,960 Traditional life and other premiums 95,695 21,561 22,624 Totals $ 626,962 711,740 886,383 |
Summary of Net Gain from Operations, Net Income, Unassigned Surplus (Retained Earnings) and Capital and Surplus (Stockholders' Equity), on Statutory Basis Used to Report Regulatory Authorities | The table below provides the National Western and Ozark National net gain from operations, net income, unassigned surplus (retained earnings) and capital and surplus (stockholders' equity), on the statutory basis used to report to regulatory authorities for the years ended December 31. 2019 2018 2017 (In thousands) National Western Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 209,139 27,359 197,597 Net income $ 151,316 31,296 126,932 Unassigned surplus $ 1,485,424 1,374,963 1,330,491 Capital and surplus $ 1,529,487 1,419,026 1,374,554 Ozark National Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 22,870 — — Net income $ (854 ) — — Unassigned surplus $ 29,452 — — Capital and surplus $ 58,404 — — The following assets, stated at amortized cost, were on deposit with state and other regulatory authorities, as required by law, at the end of each year. December 31, 2019 2018 (In thousands) National Western: Debt securities held to maturity $ 14,261 14,708 Debt securities available for sale 1,037 570 Short-term investments 475 475 Total National Western 15,773 15,753 Ozark National: Debt securities held to maturity 3,343 — Total Ozark National 3,343 — Total $ 19,116 15,753 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Net income for the periods shown below is allocated between Class A shares and Class B shares based upon (1) the proportionate number of shares issued and outstanding as of the end of the period, and (2) the per share dividend rights of the two classes under the Company's Restated Certificate of Incorporation (the Class B dividend per share is equal to one-half the Class A dividend per share). Years Ended December 31, 2019 2018 2017 Class A Class B Class A Class B Class A Class B (In thousands except per share amounts) Numerator for Basic and Diluted Earnings Per Share: Net earnings $ 131,616 116,758 110,421 Dividends – Class A shares (1,237 ) (1,237 ) (1,237 ) Dividends – Class B shares (36 ) (36 ) (36 ) Undistributed earnings $ 130,343 115,485 109,148 Allocation of net earnings: Dividends $ 1,237 36 1,237 36 1,237 36 Allocation of undistributed earnings 126,657 3,686 112,219 3,266 106,061 3,087 Net earnings $ 127,894 3,722 113,456 3,302 107,298 3,123 Denominator: Basic earnings per share - weighted-average shares 3,436 200 3,436 200 3,436 200 Effect of dilutive stock options — — — — — — Diluted earnings per share - adjusted weighted-average shares for assumed conversions 3,436 200 3,436 200 3,436 200 Basic earnings per share $ 37.22 18.61 33.02 16.51 31.23 15.61 Diluted earnings per share $ 37.22 18.61 33.02 16.51 31.23 15.61 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Components of Other Comprehensive Income (Loss) | Components of other comprehensive income (loss) for 2019 , 2018 and 2017 and the related tax effect are detailed below. Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2019: Unrealized gains on securities, net of effects of deferred costs of $(85,609): Net unrealized holding gains (losses) arising during the period $ 122,726 (25,772 ) 96,954 Unrealized liquidity losses 4 (1 ) 3 Reclassification adjustment for net gains included in net earnings 5,060 (1,063 ) 3,997 Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities 127,790 (26,836 ) 100,954 Foreign currency translation adjustments 663 (139 ) 524 Benefit plan liability adjustment (5,513 ) 1,158 (4,355 ) Other comprehensive income (loss) $ 122,940 (25,817 ) 97,123 Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2018: Unrealized gains on securities, net of effects of deferred costs of $63,816: Net unrealized holding gains (losses) arising during the period $ (71,921 ) 15,103 (56,818 ) Unrealized liquidity losses 3 (1 ) 2 Reclassification adjustment for net gains included in net earnings (3,441 ) 723 (2,718 ) Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities (75,359 ) 15,825 (59,534 ) Foreign currency translation adjustments 1,714 (360 ) 1,354 Benefit plan liability adjustment 14,301 (3,003 ) 11,298 Other comprehensive income (loss) $ (59,344 ) 12,462 (46,882 ) Amounts Before Taxes Tax (Expense) Benefit Amounts Net of Taxes (In thousands) 2017: Unrealized gains on securities, net of effects of deferred costs of $(5,670): Net unrealized holding gains (losses) arising during the period $ 12,752 (4,464 ) 8,288 Unrealized liquidity losses 300 (105 ) 195 Reclassification adjustment for net gains included in net earnings (5,236 ) 1,833 (3,403 ) Amortization of net unrealized gains (losses) related to transferred securities — — — Net unrealized gains (losses) on securities 7,816 (2,736 ) 5,080 Foreign currency translation adjustments (14 ) 5 (9 ) Benefit plan liability adjustment (5,958 ) 2,085 (3,873 ) Other comprehensive income (loss) $ 1,844 (646 ) 1,198 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Changes in Shares of Common Stock Outstanding | Changes in shares of common stock outstanding are provided below. Years Ended December 31, 2019 2018 2017 (In thousands) Common stock shares outstanding: Shares outstanding at beginning of year 3,636 3,636 3,636 Shares exercised under stock option plan — — — Shares outstanding at end of year 3,636 3,636 3,636 |
Summary of Shares Available for Grant and Stock Options Activity | A summary of awards by type and related activity is detailed below. Options Outstanding Shares Available For Grant Shares Weighted-Average Exercise Price Stock Options: Balance at January 1, 2019 291,000 — $ — Exercised — — $ — Forfeited — — $ — Expired — — $ — Stock options granted — — $ — Balance at December 31, 2019 291,000 — $ — The following table shows all grants issued to officers and directors for the twelve months ended December 31, 2019 and 2018 . 2018 grants were made based upon closing market price per Class A common share at the grant date. 2019 grants were made based upon the 20 -day moving average closing market price per Class A common share at the grant date. Twelve Months Ended December 31, 2019 December 31, 2018 Officers Directors Officers Directors SARs 20,380 — 12,590 — RSUs 4,195 2,580 3,149 1,980 PSUs 6,427 — 5,070 — |
Schedule of Other Share / Unit Awards Activity | Liability Awards Other Share/Unit Awards: SARs RSUs PSUs Balance at January 1, 2019 89,443 13,170 19,122 Exercised (928 ) (5,031 ) (5,426 ) Forfeited (1,378 ) (562 ) (1,015 ) Granted 20,380 6,775 6,427 Balance at December 31, 2019 107,517 14,352 19,108 |
Summary of Information About SARs Outstanding | The following table summarizes information about SARs outstanding at December 31, 2019 . SARs Outstanding Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Exercise prices: 132.56 19,318 1.9 years 19,318 210.22 24,450 3.8 years 20,350 216.48 11,521 5.9 years 11,521 311.16 10,162 7.0 years 6,842 310.55 203 7.3 years 135 334.34 9,557 7.8 years 6,449 303.77 11,926 8.7 years 4,208 252.91 20,380 10.0 years — Totals 107,517 68,823 Aggregate intrinsic value (in thousands) $ 6,662 $ 5,557 |
Summary of SARs / Options Outstanding Using Black-Scholes Option Pricing Model | In estimating the fair value of SARs outstanding at December 31, 2019 and 2018, the Company employed the Black-Scholes option pricing model with assumptions as detailed below. December 31, 2019 December 31, 2018 Expected term 1.9 to 10.0 years 3.0 to 10.0 years Expected volatility weighted-average 22.19 % 22.14 % Expected dividend yield 0.12 % 0.12 % Risk-free rate weighted-average 1.61 % 2.58 % |
Pension and Other Postretirem_2
Pension and Other Postretirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Obligations and Funded Status | A detail of plan disclosures is provided below. Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 21,938 24,659 Service cost 96 111 Interest cost 839 899 Plan amendments — (1,396 ) Actuarial (gain) loss 1,398 494 Benefits paid (1,582 ) (2,829 ) Projected benefit obligations at end of year 22,689 21,938 Changes in plan assets: Fair value of plan assets at beginning of year 16,169 19,312 Actual return on plan assets 3,356 (414 ) Contributions 569 100 Benefits paid (1,582 ) (2,829 ) Fair value of plan assets at end of year 18,512 16,169 Funded status at end of year $ (4,177 ) (5,769 ) Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 22,275 36,914 Service cost 502 361 Interest cost 1,025 852 Actuarial (gain) loss 7,438 (13,870 ) Benefits paid (1,982 ) (1,982 ) Projected benefit obligations at end of year 29,258 22,275 Change in plan assets: Fair value of plan assets at beginning of year — — Contributions 1,982 1,982 Benefits paid (1,982 ) (1,982 ) Fair value of plan assets at end of year — — Funded status at end of year $ (29,258 ) (22,275 ) Obligations and Funded Status December 31, 2019 2018 (In thousands) Changes in projected benefit obligations: Projected benefit obligations at beginning of year $ 4,230 3,774 Interest cost 198 158 Actuarial (gain) loss 1,354 298 Benefits paid — — Projected benefit obligations at end of year 5,782 4,230 Changes in plan assets: Fair value of plan assets at beginning of year — — Contributions — — Benefits paid — — Fair value of plan assets at end of year — — Funded status at end of year $ (5,782 ) (4,230 ) |
Schedule of Amounts Recognized in Consolidated Financial Statements and in Accumulated Other Comprehensive Income | December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (5,782 ) (4,230 ) Net amount recognized $ (5,782 ) (4,230 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 1,925 816 Prior service cost — 51 Net amount recognized $ 1,925 867 December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (29,258 ) (22,275 ) Net amount recognized $ (29,258 ) (22,275 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 10,521 4,475 Prior service cost 464 522 Net amount recognized $ 10,985 4,997 December 31, 2019 2018 (In thousands) Amounts recognized in the Company's Consolidated Financial Statements: Assets $ — — Liabilities (4,177 ) (5,769 ) Net amount recognized $ (4,177 ) (5,769 ) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $ 6,903 8,435 Prior service cost — — Net amount recognized $ 6,903 8,435 |
Schedule of Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit costs: Interest cost $ 839 899 957 Service cost 96 111 106 Expected return on plan assets (1,086 ) (1,300 ) (1,227 ) Amortization of prior service cost — — — Amortization of net loss (gain) 660 524 638 Net periodic benefit cost 509 234 474 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) (872 ) 812 Amortization of prior service cost — — Amortization of net loss (gain) (660 ) (524 ) Total recognized in other comprehensive income (1,532 ) 288 Total recognized in net periodic benefit cost and other comprehensive income $ (1,023 ) 522 Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit cost: Service cost $ 502 361 818 Interest cost 1,025 852 1,387 Amortization of prior service cost 59 59 59 Amortization of net loss (gain) 1,391 704 3,274 Net periodic benefit cost 2,977 1,976 5,538 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) 7,438 (13,870 ) Amortization of prior service cost (59 ) (59 ) Amortization of net loss (gain) (1,391 ) (704 ) Total recognized in other comprehensive income 5,988 (14,633 ) Total recognized in net periodic benefit cost and other comprehensive income $ 8,965 (12,657 ) Components of Net Periodic Benefit Cost Years Ended December 31, 2019 2018 2017 (In thousands) Components of net periodic benefit cost: Interest cost $ 198 158 139 Amortization of prior service cost 52 103 103 Amortization of net loss (gain) 244 151 41 Net periodic benefit cost 494 412 283 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net loss (gain) 1,354 298 Amortization of prior service cost (52 ) (103 ) Amortization of net loss (gain) (244 ) (151 ) Total recognized in other comprehensive income 1,058 44 Total recognized in net periodic benefit cost and other comprehensive income $ 1,552 456 |
Schedule of Assumptions Used | December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Rate of compensation increase 8.00 % 8.00 % December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit costs: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets n/a n/a n/a Rate of compensation increase 8.00 % 8.00 % 8.00 % Assumptions December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Rate of compensation increase n/a n/a December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase n/a n/a n/a |
Schedule of Allocation of Plan Assets | The following tables set forth the Company’s pension plan assets within the fair value hierarchy as of December 31, 2019 and 2018 . December 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Cash and cash equivalents $ 756 756 — — Equity securities Domestic 11,853 11,853 — — International 172 172 — — Debt securities Corporate bonds 5,729 5,729 — Other investments 2 2 — — Total $ 18,512 12,783 5,729 — |
Schedule of Pension Allocation by Type of Fund and Target Allocation | The plan’s weighted-average asset allocations by asset category have been as follows: December 31, 2019 2018 2017 Asset Category: Equity securities 65% 63% 64% Debt securities 31% 36% 33% Cash and cash equivalents 4% 1% 3% Total 100% 100% 100% |
Schedule of Acceptable Ranges for Each Asset as per Investment Policy Statement | The investment policy statement sets forth the following acceptable ranges for each asset's class. Acceptable Range Asset Category: Equity securities 55-70% Debt securities 30-40% Cash and cash equivalents 0-15% |
Schedule of Estimated Future Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 1,982 2021 1,982 2022 1,982 2023 1,982 2024 1,982 2025-2029 7,357 The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 1,655 2021 1,547 2022 1,543 2023 1,505 2024 1,441 2025-2029 6,811 |
Defined Benefit Postretirement Healthcare Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Assumptions Used | Assumptions December 31, 2019 2018 Weighted-average assumptions used to determine benefit obligations: Discount rate 3.00 % 4.00 % Expected long-term return on plan assets n/a n/a December 31, 2019 2018 2017 Weighted-average assumptions used to determine net periodic benefit costs: Discount rate 4.00 % 3.75 % 4.00 % Expected long-term return on plan assets n/a n/a n/a For measurement purposes, a 8.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2020 , decreasing annually by 0.5% until reaching an ultimate rate of 5% . |
Schedule of Estimated Future Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): 2020 $ 128 2021 134 2022 139 2023 142 2024 145 2025-2029 969 |
Federal Income Taxes (Tables)
Federal Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Total Federal Income Taxes | Total Federal income taxes were allocated as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Taxes (benefits) on earnings from continuing operations: Current $ 58,834 (1,697 ) 74,361 Deferred (25,294 ) 26,446 (23,129 ) Remeasurement of deferred taxes due to Tax Act — — (17,098 ) Taxes on earnings 33,540 24,749 34,134 Taxes (benefits) on components of stockholders' equity: Net unrealized gains and losses on securities available for sale 26,836 (15,870 ) 2,736 Foreign currency translation adjustments 139 360 (5 ) Change in benefit plan liability (1,158 ) 3,003 (2,085 ) Total Federal income taxes (benefit) $ 59,357 12,242 34,780 |
Schedule of Differences and Corresponding Tax Effects | These differences and the corresponding tax effects are as follows: Years Ended December 31, 2019 2018 2017 (In thousands) Income tax expense at statutory rate (21% in 2019 and 2018, and 35% in 2017) $ 34,683 29,716 50,594 Dividend received deduction (493 ) (820 ) (1,099 ) Tax exempt interest (1,564 ) (1,416 ) (2,276 ) Non deductible salary expense 294 54 — Adjustments pertaining to prior tax years 459 (3,071 ) 895 Nondeductible insurance 96 96 160 Nondeductible expenses 117 198 178 Remeasurement of deferred taxes due to Tax Act — — (17,098 ) Excess premium liability — — 2,870 Other, net (52 ) (8 ) (90 ) Taxes on earnings from continuing operations $ 33,540 24,749 34,134 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are presented below. December 31, 2019 2018 (In thousands) Deferred tax assets: Future policy benefits, excess of financial accounting liabilities over tax liabilities $ 190,230 189,100 Investment securities write-downs for financial accounting purposes 293 311 Benefit plan liabilities 9,259 7,444 Real estate, principally due to adjustments for financial accounting purposes — 16 Accrued operating expenses recorded for financial accounting purposes not currently tax deductible 3,658 4,426 Accrued and unearned investment income recognized for tax purposes and deferred for financial accounting purposes 101 109 Net unrealized losses on debt securities available for sale — 7,390 Other 636 74 Total gross deferred tax assets 204,177 208,870 Deferred tax liabilities: Deferred policy acquisition costs, sales inducement costs, and VOBA, principally expensed for tax purposes (154,873 ) (170,940 ) Tax reform reserve adjustment (52,432 ) (61,170 ) Debt securities, principally due to deferred market discount for tax (8,051 ) (7,370 ) Real estate, principally due to adjustments for financial accounting purposes (45 ) — Net unrealized gains on securities available for sale (20,188 ) — Foreign currency translation adjustments (1,356 ) (1,217 ) Fixed assets, due to different depreciation bases (6,177 ) (7,546 ) Other (962 ) (11 ) Total gross deferred tax liabilities (244,084 ) (248,254 ) Net deferred tax liabilities $ (39,907 ) (39,384 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Annual Lease Obligations | The Company's future annual lease obligations as of December 31, 2019 are as shown below (in thousands). 2020 $ 378 2021 391 2022 404 Total minimum lease payments 1,173 Less: Interest (27 ) Present value of net minimum lease payments $ 1,146 |
Deposits with Regulatory Auth_2
Deposits with Regulatory Authorities Deposit with Regulatory Authorities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposit with Regulatory Authorities [Abstract] | |
Summary of Assets Deposited with State and Other Regulatory Authorities | The table below provides the National Western and Ozark National net gain from operations, net income, unassigned surplus (retained earnings) and capital and surplus (stockholders' equity), on the statutory basis used to report to regulatory authorities for the years ended December 31. 2019 2018 2017 (In thousands) National Western Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 209,139 27,359 197,597 Net income $ 151,316 31,296 126,932 Unassigned surplus $ 1,485,424 1,374,963 1,330,491 Capital and surplus $ 1,529,487 1,419,026 1,374,554 Ozark National Life Insurance Company: Net gain from operations before Federal and foreign income taxes $ 22,870 — — Net income $ (854 ) — — Unassigned surplus $ 29,452 — — Capital and surplus $ 58,404 — — The following assets, stated at amortized cost, were on deposit with state and other regulatory authorities, as required by law, at the end of each year. December 31, 2019 2018 (In thousands) National Western: Debt securities held to maturity $ 14,261 14,708 Debt securities available for sale 1,037 570 Short-term investments 475 475 Total National Western 15,773 15,753 Ozark National: Debt securities held to maturity 3,343 — Total Ozark National 3,343 — Total $ 19,116 15,753 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results and Impact on Quarterly Revenues due to Differences Between the Change in Fair Value of Derivative Investments | Quarterly results of operations for 2019 are summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands except per share data) 2019: Total revenues $ 217,909 192,685 173,166 235,428 Net earnings $ 40,198 33,696 19,989 37,733 Basic earnings per share: Class A $ 11.37 9.53 5.65 10.67 Class B $ 5.68 4.76 2.83 5.34 Diluted earnings per share: Class A $ 11.37 9.53 5.65 10.67 Class B $ 5.68 4.76 2.83 5.34 Quarterly results of operations for 2018 are summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands except per share data) 2018: Total revenues $ 109,018 174,658 225,435 42,486 Net earnings $ 26,875 32,466 35,641 21,776 Basic earnings per share: Class A $ 7.60 9.18 10.08 6.16 Class B $ 3.80 4.59 5.04 3.08 Diluted earnings per share: Class A $ 7.60 9.18 10.08 6.16 Class B $ 3.80 4.59 5.04 3.08 Quarterly revenues reflect the differences between the change in fair value of derivative investments for each quarter corresponding to the performance of the indices upon which the Company's call options are based. The comparability of revenues is impacted by the application of fair value accounting to fixed-index business as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) 2019 $ 42,003 17,828 3,296 60,080 2018 $ (44,394 ) 10,292 69,683 (115,585 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Schedule of Unrealized Gains and Losses on Available-for-Sale Securities Reclassified out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other net investment gains (losses) | $ 14,088 | $ 8,423 | $ 14,875 | ||||||||
Earnings before Federal income taxes | 165,156 | 141,507 | 144,555 | ||||||||
Federal income taxes | 33,540 | 24,749 | 34,134 | ||||||||
Net earnings | $ 37,733 | $ 19,989 | $ 33,696 | $ 40,198 | $ 21,776 | $ 35,641 | $ 32,466 | $ 26,875 | 131,616 | 116,758 | 110,421 |
Accumulated Other Comprehensive Income | Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other net investment gains (losses) | 2,787 | 3,441 | 5,348 | ||||||||
Net OTTI losses recognized in earnings | (7,847) | 0 | (112) | ||||||||
Earnings before Federal income taxes | (5,060) | 3,441 | 5,236 | ||||||||
Federal income taxes | (1,063) | 723 | 1,833 | ||||||||
Net earnings | $ (3,997) | $ 2,718 | $ 3,403 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | Jan. 01, 2017 |
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Derivatives, index options | $ 157,588 | $ 14,684 | |||||
Unrealized gains (losses) on options held | 123,207 | (80,004) | $ 222,875 | ||||
Carrying value of capitalized software, property and equipment | 153,600 | 161,200 | |||||
Accumulated depreciation and amortization | 62,500 | 59,500 | |||||
Depreciation and amortization expense | 10,700 | 11,100 | 9,200 | ||||
Goodwill | 13,900 | ||||||
Identifiable intangible assets acquired in business combination | $ 8,900 | ||||||
Statutory Accounting Practices | |||||||
Reclassification to retained earnings from Tax Act | 2,500 | ||||||
Minimum | |||||||
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Estimated useful lives of assets | 7 years | ||||||
Interest rate range to calculate future mortality | 3.25% | ||||||
Maximum | |||||||
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Estimated useful lives of assets | 39 years | ||||||
Interest rate range to calculate future mortality | 8.00% | ||||||
Options Held | |||||||
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Unrealized gains (losses) on options held | $ 80,700 | (72,300) | |||||
Retained Earnings | |||||||
Statutory Accounting Practices | |||||||
Reclassification adjustment from adoption of accounting standard update | $ 0 | $ 4,414 | $ (2,531) | ||||
Accounting Standards Update 2016-13 | Minimum | Subsequent Event | |||||||
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Increase in allowance credit losses | $ 4,000 | ||||||
Accounting Standards Update 2016-13 | Maximum | Subsequent Event | |||||||
Schedule of Deferred Acquisition Costs [Line Items] | |||||||
Increase in allowance credit losses | $ 6,000 | ||||||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
Statutory Accounting Practices | |||||||
Reclassification adjustment from adoption of accounting standard update | $ 4,400 | ||||||
National Western Life Insurance Company | |||||||
Statutory Accounting Practices | |||||||
Net gain from operations before Federal and foreign income taxes | 209,139 | 27,359 | 197,597 | ||||
Net income | 151,316 | 31,296 | 126,932 | ||||
Unassigned surplus | 1,485,424 | 1,374,963 | 1,330,491 | ||||
Capital and surplus | $ 1,529,487 | $ 1,419,026 | $ 1,374,554 |
Investments (Schedule of Compon
Investments (Schedule of Components of Net Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Derivative gains (losses) | $ 60,080 | $ 3,296 | $ 17,828 | $ 42,003 | $ (115,585) | $ 69,683 | $ 10,292 | $ (44,394) | |||
Total investment income | $ 558,744 | $ 350,430 | $ 660,955 | ||||||||
Less investment expenses | 3,252 | 1,353 | 1,270 | ||||||||
Net investment income | 555,492 | 349,077 | 659,685 | ||||||||
Debt and equity securities | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Gross investment income | 403,372 | 399,645 | 409,401 | ||||||||
Mortgage loans | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Gross investment income | 12,595 | 12,066 | 11,045 | ||||||||
Policy loans | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Gross investment income | 3,539 | 3,185 | 3,485 | ||||||||
Derivative gains (losses) | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Derivative gains (losses) | 123,207 | (80,004) | 222,875 | ||||||||
Short term investments | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Gross investment income | 2,974 | 2,249 | 1,012 | ||||||||
Other investment income | |||||||||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||||||||
Gross investment income | $ 13,057 | $ 13,289 | $ 13,137 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | Jun. 07, 2019 | May 01, 2019 | Feb. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | |||||||
Loans originated during the year | $ 121,400,000 | $ 29,900,000 | |||||
Net investments in mortgage loans, after allowances for possible losses | 272,422,000 | 203,180,000 | |||||
Real estate investments | 62,090,000 | 56,851,000 | |||||
Real estate gains (losses) | 6,911,000 | 1,799,000 | $ 2,657,000 | ||||
Realized gains (losses) on investments | 6,241,000 | 8,423,000 | 14,763,000 | ||||
Debt securities, held to maturity | 7,106,245,000 | 7,285,254,000 | |||||
Debt securities available for sale | 3,356,945,000 | 2,946,059,000 | |||||
OTTI- recoveries | 0 | 0 | 600,000 | ||||
Real Estate | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate investments | 34,600,000 | 35,700,000 | |||||
Operating income recognized on real estate investment properties | 2,900,000 | 2,200,000 | 2,900,000 | ||||
Other-than Temporary Impairment Write-down on Investments | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Realized gains (losses) on investments | 7,800,000 | ||||||
Mortgage Loans | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Impairment charges | 0 | 0 | 0 | ||||
Debt Securities | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Realized gains (losses) on investments | 6,200,000 | 8,400,000 | 14,800,000 | ||||
External Credit Rating, Non Investment Grade | Debt Securities | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Debt securities below investment grade | $ 83,700,000 | $ 94,200,000 | |||||
Debt securities below investment grade, percentage of total invested assets | 0.80% | 0.90% | |||||
Non- Income Producing | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate investment | $ 400,000 | $ 5,200,000 | $ 100,000 | ||||
Nursing Home Operations in Reno, Nevada | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate gains (losses) | $ 5,700,000 | ||||||
Nursing Home Operations, San Marcos, Texas | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate gains (losses) | $ (2,000,000) | ||||||
Nursing Home Operations, Austin, Texas | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate gains (losses) | $ 3,200,000 | ||||||
Ozark National Life Insurance Company | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Debt securities, held to maturity | 307,200,000 | ||||||
Debt securities available for sale | $ 415,700,000 | ||||||
Ozark National Life Insurance Company | Real Estate | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Real estate investments | $ 4,300,000 |
Investments (Schedule of Mortga
Investments (Schedule of Mortgage Loans by Geographic Region, Property Type and Loan-to-Value Ratio) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Allowance for possible losses, amount | $ (675) | $ (675) |
Totals, amount | $ 272,422 | $ 203,180 |
Mortgage loans, percentage | 100.00% | 100.00% |
Allowance for possible losses, percentage | (0.20%) | (0.30%) |
Totals, percentage | 99.80% | 99.70% |
Less than 50% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 19.30% | 32.60% |
50% to 60% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 20.80% | 11.10% |
60% to 70% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 43.00% | 50.40% |
70% to 80% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 16.90% | 3.30% |
80% to 90% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 0.00% | 2.60% |
Retail | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 33.60% | 47.10% |
Office | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 34.90% | 34.90% |
Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 3.30% | 7.10% |
Land/Lots | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 1.80% | 1.70% |
Apartments | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 11.00% | 0.00% |
All other | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 15.40% | 9.20% |
West South Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 70.00% | 57.00% |
East North Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 6.30% | 10.30% |
South Atlantic | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 13.10% | 14.60% |
East South Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 2.90% | 6.80% |
West North Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 4.60% | 6.30% |
Pacific | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 2.40% | 3.20% |
Middle Atlantic | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 0.70% | 1.00% |
Mountain | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, percentage | 0.00% | 0.80% |
Commercial Real Estate | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | $ 273,097 | $ 203,855 |
Commercial Real Estate | Less than 50% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 52,778 | 66,371 |
Commercial Real Estate | 50% to 60% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 56,929 | 22,610 |
Commercial Real Estate | 60% to 70% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 117,377 | 102,857 |
Commercial Real Estate | 70% to 80% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 46,013 | 6,642 |
Commercial Real Estate | 80% to 90% | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 0 | 5,375 |
Commercial Real Estate | Retail | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 91,790 | 96,075 |
Commercial Real Estate | Office | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 95,362 | 71,194 |
Commercial Real Estate | Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 8,997 | 14,454 |
Commercial Real Estate | Land/Lots | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 4,829 | 3,498 |
Commercial Real Estate | Apartments | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 30,000 | 0 |
Commercial Real Estate | All other | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 42,119 | 18,634 |
Commercial Real Estate | West South Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 191,089 | 116,205 |
Commercial Real Estate | East North Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 17,248 | 20,944 |
Commercial Real Estate | South Atlantic | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 35,698 | 29,829 |
Commercial Real Estate | East South Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 8,063 | 13,801 |
Commercial Real Estate | West North Central | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 12,505 | 12,751 |
Commercial Real Estate | Pacific | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 6,436 | 6,626 |
Commercial Real Estate | Middle Atlantic | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | 2,058 | 2,138 |
Commercial Real Estate | Mountain | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans, amount | $ 0 | $ 1,561 |
Investments (Schedule of Allowa
Investments (Schedule of Allowance for Mortgage Loan) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance, beginning of period | $ 675 | $ 650 |
Provision | 0 | 25 |
Releases | 0 | 0 |
Balance, end of period | $ 675 | $ 675 |
Investments (Schedule of Contra
Investments (Schedule of Contractual Maturities of Mortgage Loan Principal Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Principal Balance by Contractual Maturity, Amount | ||
Due in one year or less | $ 535,438 | |
Due after one year through five years | 2,909,434 | |
Due after five years through ten years | 2,007,066 | |
Totals | 7,106,245 | $ 7,285,254 |
Commercial Mortgage Loans | ||
Principal Balance by Contractual Maturity, Amount | ||
Due in one year or less | 497 | 23,839 |
Due after one year through five years | 34,306 | 39,391 |
Due after five years through ten years | 142,477 | 134,574 |
Due after ten years through fifteen years | 96,359 | 6,642 |
Due after fifteen years | 0 | 0 |
Totals | $ 273,639 | $ 204,446 |
Principal Balance by Contractual Maturity, Percentage | ||
Due in one year or less | 0.20% | 11.70% |
Due after one year through five years | 12.50% | 19.30% |
Due after five years through ten years | 52.10% | 65.80% |
Due after ten years through fifteen years | 35.20% | 3.20% |
Due after fifteen years | 0.00% | 0.00% |
Totals | 100.00% | 100.00% |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Costs and Fair Values of Securities Held to Maturity and Gross Unrealized Losses and Fair Values of Held-to-Maturity Investments, Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | $ 7,106,245 | $ 7,285,254 |
Gross Unrealized Gains | 303,060 | 57,319 |
Gross Unrealized Losses | (1,602) | (114,305) |
Fair Value | 7,407,703 | 7,228,268 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 65,985 | 2,833,188 |
Less than 12 Months, Unrealized Losses | (517) | (67,652) |
12 Months or Greater, Fair Value | 62,401 | 1,073,028 |
12 Months or Greater, Unrealized Losses | (1,085) | (46,653) |
Total, Fair Value | 128,386 | 3,906,216 |
Total, Unrealized Losses | (1,602) | (114,305) |
U.S. agencies | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 100,910 | |
Gross Unrealized Gains | 1,686 | |
Gross Unrealized Losses | 0 | |
Fair Value | 102,596 | |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Total, Unrealized Losses | 0 | |
U.S. Treasury | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 3,782 | 1,341 |
Gross Unrealized Gains | 140 | 116 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3,922 | 1,457 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Total, Unrealized Losses | 0 | 0 |
States and political subdivisions | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 431,433 | 457,404 |
Gross Unrealized Gains | 19,440 | 9,764 |
Gross Unrealized Losses | (84) | (2,376) |
Fair Value | 450,789 | 464,792 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 5,013 | 88,253 |
Less than 12 Months, Unrealized Losses | (33) | (2,124) |
12 Months or Greater, Fair Value | 1,712 | 10,645 |
12 Months or Greater, Unrealized Losses | (51) | (252) |
Total, Fair Value | 6,725 | 98,898 |
Total, Unrealized Losses | (84) | (2,376) |
Foreign governments | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 1,144 | |
Gross Unrealized Gains | 55 | |
Gross Unrealized Losses | 0 | |
Fair Value | 1,199 | |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Total, Unrealized Losses | 0 | |
Public utilities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 888,444 | 930,629 |
Gross Unrealized Gains | 36,638 | 5,928 |
Gross Unrealized Losses | (83) | (12,944) |
Fair Value | 924,999 | 923,613 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 2,345 | 396,980 |
Less than 12 Months, Unrealized Losses | (83) | (8,371) |
12 Months or Greater, Fair Value | 0 | 98,632 |
12 Months or Greater, Unrealized Losses | 0 | (4,573) |
Total, Fair Value | 2,345 | 495,612 |
Total, Unrealized Losses | (83) | (12,944) |
Corporate | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 4,607,826 | 4,715,775 |
Gross Unrealized Gains | 212,281 | 27,652 |
Gross Unrealized Losses | (718) | (87,043) |
Fair Value | 4,819,389 | 4,656,384 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 31,419 | 2,144,969 |
Less than 12 Months, Unrealized Losses | (337) | (55,125) |
12 Months or Greater, Fair Value | 17,191 | 650,401 |
12 Months or Greater, Unrealized Losses | (381) | (31,918) |
Total, Fair Value | 48,610 | 2,795,370 |
Total, Unrealized Losses | (718) | (87,043) |
Commercial mortgage-backed | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 3,032 | |
Gross Unrealized Gains | 52 | |
Gross Unrealized Losses | 0 | |
Fair Value | 3,084 | |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Total, Unrealized Losses | 0 | |
Residential mortgage-backed | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 1,066,899 | 1,176,216 |
Gross Unrealized Gains | 32,706 | 13,771 |
Gross Unrealized Losses | (716) | (11,932) |
Fair Value | 1,098,889 | 1,178,055 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 25,859 | 202,986 |
Less than 12 Months, Unrealized Losses | (63) | (2,032) |
12 Months or Greater, Fair Value | 43,498 | 311,374 |
12 Months or Greater, Unrealized Losses | (653) | (9,900) |
Total, Fair Value | 69,357 | 514,360 |
Total, Unrealized Losses | (716) | (11,932) |
Asset-backed | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Totals | 2,775 | 3,889 |
Gross Unrealized Gains | 62 | 88 |
Gross Unrealized Losses | (1) | (10) |
Fair Value | 2,836 | 3,967 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 Months, Fair Value | 1,349 | 0 |
Less than 12 Months, Unrealized Losses | (1) | 0 |
12 Months or Greater, Fair Value | 0 | 1,976 |
12 Months or Greater, Unrealized Losses | 0 | (10) |
Total, Fair Value | 1,349 | 1,976 |
Total, Unrealized Losses | $ (1) | $ (10) |
Investments (Schedule of Amor_2
Investments (Schedule of Amortized Costs and Fair Values of Securities Available for Sale and Gross Unrealized Losses and Fair Values of Available-for-Sale Investments, Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt securities: | ||
Total | $ 3,206,120 | $ 3,008,624 |
Gross Unrealized Gains | 153,424 | 17,678 |
Gross Unrealized Losses | (2,599) | (80,243) |
Debt securities available for sale | 3,356,945 | 2,946,059 |
Fair Value | ||
Less than 12 Months | 40,550 | 1,508,422 |
12 Months or Greater | 29,292 | 443,676 |
Total | 69,842 | 1,952,098 |
Unrealized Losses | ||
Less than 12 Months | (108) | (45,096) |
12 Months or Greater | (2,491) | (35,147) |
Total | (2,599) | (80,243) |
States and political subdivisions | ||
Debt securities: | ||
Total | 98,037 | 570 |
Gross Unrealized Gains | 4,495 | 0 |
Gross Unrealized Losses | (3) | (4) |
Debt securities available for sale | 102,529 | 566 |
Fair Value | ||
Less than 12 Months | 470 | 566 |
12 Months or Greater | 0 | 0 |
Total | 470 | 566 |
Unrealized Losses | ||
Less than 12 Months | (3) | (4) |
12 Months or Greater | 0 | 0 |
Total | (3) | (4) |
Foreign governments | ||
Debt securities: | ||
Total | 9,983 | 9,974 |
Gross Unrealized Gains | 203 | 30 |
Gross Unrealized Losses | 0 | 0 |
Debt securities available for sale | 10,186 | 10,004 |
Public utilities | ||
Debt securities: | ||
Total | 67,895 | 82,943 |
Gross Unrealized Gains | 3,476 | 1,045 |
Gross Unrealized Losses | 0 | (517) |
Debt securities available for sale | 71,371 | 83,471 |
Fair Value | ||
Less than 12 Months | 0 | 38,903 |
12 Months or Greater | 0 | 0 |
Total | 0 | 38,903 |
Unrealized Losses | ||
Less than 12 Months | 0 | (517) |
12 Months or Greater | 0 | 0 |
Total | 0 | (517) |
Corporate | ||
Debt securities: | ||
Total | 2,921,431 | 2,893,221 |
Gross Unrealized Gains | 141,705 | 15,473 |
Gross Unrealized Losses | (2,479) | (79,638) |
Debt securities available for sale | 3,060,657 | 2,829,056 |
Fair Value | ||
Less than 12 Months | 40,080 | 1,468,953 |
12 Months or Greater | 28,582 | 442,798 |
Total | 68,662 | 1,911,751 |
Unrealized Losses | ||
Less than 12 Months | (105) | (44,575) |
12 Months or Greater | (2,374) | (35,063) |
Total | (2,479) | (79,638) |
Commercial mortgage-backed | ||
Debt securities: | ||
Total | 28,871 | |
Gross Unrealized Gains | 1,071 | |
Gross Unrealized Losses | 0 | |
Debt securities available for sale | 29,942 | |
Residential mortgage-backed | ||
Debt securities: | ||
Total | 12,815 | 15,947 |
Gross Unrealized Gains | 1,077 | 937 |
Gross Unrealized Losses | (117) | (84) |
Debt securities available for sale | 13,775 | 16,800 |
Fair Value | ||
Less than 12 Months | 0 | 0 |
12 Months or Greater | 710 | 878 |
Total | 710 | 878 |
Unrealized Losses | ||
Less than 12 Months | 0 | 0 |
12 Months or Greater | (117) | (84) |
Total | (117) | (84) |
Asset-backed | ||
Debt securities: | ||
Total | 67,088 | 5,969 |
Gross Unrealized Gains | 1,397 | 193 |
Gross Unrealized Losses | 0 | 0 |
Debt securities available for sale | $ 68,485 | $ 6,162 |
Investments (Schedule of Amor_3
Investments (Schedule of Amortized Cost and Fair Value of Investments In Debt Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities Available for Sale, Amortized Cost | ||
Due in 1 year or less | $ 161,688 | |
Due after 1 year through 5 years | 1,195,519 | |
Due after 5 years through 10 years | 1,479,253 | |
Due after 10 years | 260,886 | |
Total, excluding mortgage and asset-backed securities | 3,097,346 | |
Mortgage and asset-backed securities | 108,774 | |
Total | 3,206,120 | $ 3,008,624 |
Debt Securities Available for Sale, Fair Value | ||
Due in 1 year or less | 163,644 | |
Due after 1 year through 5 years | 1,239,173 | |
Due after 5 years through 10 years | 1,558,118 | |
Due after 10 years | 283,808 | |
Total, excluding mortgage and asset-backed securities | 3,244,743 | |
Mortgage and asset-backed securities | 112,202 | |
Total | 3,356,945 | 2,946,059 |
Debt Securities Held to Maturity, Amortized Cost | ||
Due in 1 year or less | 535,438 | |
Due after 1 year through 5 years | 2,909,434 | |
Due after 5 years through 10 years | 2,007,066 | |
Due after 10 years | 581,601 | |
Total, excluding mortgage and asset-backed securities | 6,033,539 | |
Mortgage and asset-backed securities | 1,072,706 | |
Totals | 7,106,245 | 7,285,254 |
Debt Securities Held to Maturity, Fair Value | ||
Due in 1 year or less | 542,601 | |
Due after 1 year through 5 years | 3,011,492 | |
Due after 5 years through 10 years | 2,122,184 | |
Due after 10 years | 626,617 | |
Total, excluding mortgage and asset-backed securities | 6,302,894 | |
Mortgage and asset-backed securities | 1,104,809 | |
Total | $ 7,407,703 | $ 7,228,268 |
Investments (Schedule of Realiz
Investments (Schedule of Realized Gains (Losses) Excluding Impairments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Available for sale debt securities: | |||
Realized gains on disposal | $ 3,798 | $ 3,447 | $ 5,208 |
Realized losses on disposal | (1,011) | (6) | (7) |
Held to maturity debt securities: | |||
Realized gains on redemption | 4,390 | 3,208 | 6,944 |
Realized losses on redemption | 0 | 0 | (74) |
Equity securities realized gains | 0 | 0 | 147 |
Real estate | 6,911 | 1,799 | 2,657 |
Mortgage loans | 0 | (25) | 0 |
Other | 0 | 0 | 0 |
Other net investment gains (losses) | $ 14,088 | $ 8,423 | $ 14,875 |
Investments (Schedule of Net Im
Investments (Schedule of Net Impairment Losses Recognized in Earnings) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investment [Line Items] | |||
Total other-than-temporary impairment recoveries (losses) on debt securities | $ (7,838) | $ 12 | $ 487 |
Total other-than-temporary impairment (“OTTI”) (losses) recoveries | (7,847) | 0 | (112) |
Debt Securities | |||
Investment [Line Items] | |||
Total other-than-temporary impairment recoveries (losses) on debt securities | (7,838) | 12 | 599 |
Portion recognized in comprehensive income | (9) | (12) | (599) |
Total other-than-temporary impairment (“OTTI”) (losses) recoveries | (7,847) | 0 | 0 |
Equity securities | |||
Investment [Line Items] | |||
Total other-than-temporary impairment (“OTTI”) (losses) recoveries | $ 0 | $ 0 | $ (112) |
Investments (OTTI, Credit Losse
Investments (OTTI, Credit Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-Credit Other-than-Temporary Impairment, Credit Losses Recognized in Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance, cumulative credit losses related to other-than-temporary impairments | $ 627 | $ 627 |
Reductions for securities disposed during current period | 0 | 0 |
Additions for OTTI where credit losses have been previously recognized | 0 | 0 |
Ending balance, cumulative credit losses related to other-than-temporary impairments | $ 627 | $ 627 |
Investments (Schedule of Net Un
Investments (Schedule of Net Unrealized Gains (Losses) on Investment Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross unrealized gains | $ 153,417 | $ 17,678 |
Gross unrealized losses | (2,603) | (80,263) |
Deferred policy acquisition costs and sales inducements | (61,372) | 24,237 |
Deferred Federal income tax expense | (18,783) | 8,053 |
Adjustments for deferred expense, deferred policy acquisition and sales inducement cost | 70,659 | (30,295) |
Net unrealized gains related to securities transferred to held to maturity | 0 | 0 |
Net unrealized gains (losses) on investment securities | $ 70,659 | $ (30,295) |
Derivative Investments (Schedul
Derivative Investments (Schedule of Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 157,588 | $ 14,684 |
Liability Derivatives | 155,902 | 44,781 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 157,588 | 14,684 |
Liability Derivatives | 155,902 | 44,781 |
Derivatives not designated as hedging instruments | Equity index options | Derivatives, Index Options | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 157,588 | 14,684 |
Derivatives not designated as hedging instruments | Fixed-index products | Universal Life and Annuity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 155,902 | $ 44,781 |
Derivative Investments (Sched_2
Derivative Investments (Schedule of Effect of Derivative Instruments in Consolidated Statements of Earnings) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of Gain or (Loss) Recognized In Income on Derivatives | $ 60,080 | $ 3,296 | $ 17,828 | $ 42,003 | $ (115,585) | $ 69,683 | $ 10,292 | $ (44,394) | |||
Change in the embedded derivative liability due to the expected collectability of asset management fees increased/(decreased) contract interest expense | $ (33,600) | $ 17,600 | $ 6,900 | ||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of Gain or (Loss) Recognized In Income on Derivatives | 31,783 | (13,669) | (14,406) | ||||||||
Derivatives Not Designated as Hedging Instruments | Equity index options | Net investment income (loss) | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of Gain or (Loss) Recognized In Income on Derivatives | 123,207 | (80,004) | 222,875 | ||||||||
Derivatives Not Designated as Hedging Instruments | Fixed-index products | Universal life and annuity contract interest | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of Gain or (Loss) Recognized In Income on Derivatives | $ (91,424) | $ 66,335 | $ (237,281) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | $ 3,356,945 | $ 2,946,059 |
Equity securities, available for sale | 23,594 | 17,491 |
Derivatives, index options | 157,588 | 14,684 |
Other invested assets | 2 | |
Total assets | 3,538,129 | 2,978,234 |
Policyholder account balances | 155,902 | 44,781 |
Other liabilities | 15,301 | 11,923 |
Total liabilities | $ 171,203 | 56,704 |
Percent of total | 100.00% | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | $ 0 | 0 |
Equity securities, available for sale | 23,594 | 17,491 |
Derivatives, index options | 0 | 0 |
Other invested assets | 2 | |
Total assets | 23,596 | 17,491 |
Policyholder account balances | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | $ 0 | 0 |
Percent of total | 0.70% | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | $ 3,356,945 | 2,946,059 |
Equity securities, available for sale | 0 | 0 |
Derivatives, index options | 0 | 0 |
Other invested assets | 0 | |
Total assets | 3,356,945 | 2,946,059 |
Policyholder account balances | 0 | 0 |
Other liabilities | 0 | 0 |
Total liabilities | $ 0 | 0 |
Percent of total | 94.80% | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | $ 0 | 0 |
Equity securities, available for sale | 0 | 0 |
Derivatives, index options | 157,588 | 14,684 |
Other invested assets | 0 | |
Total assets | 157,588 | 14,684 |
Policyholder account balances | 155,902 | 44,781 |
Other liabilities | 15,301 | 11,923 |
Total liabilities | $ 171,203 | $ 56,704 |
Percent of total | 4.50% | |
Priced by third-party vendors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | $ 3,356,945 | |
Equity securities, available for sale | 23,594 | |
Derivatives, index options | 157,588 | |
Other invested assets | 2 | |
Priced by third-party vendors | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 23,594 | |
Derivatives, index options | 0 | |
Other invested assets | 2 | |
Priced by third-party vendors | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 3,356,945 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 0 | |
Other invested assets | 0 | |
Priced by third-party vendors | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 157,588 | |
Other invested assets | 0 | |
Priced internally | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 0 | |
Other invested assets | 0 | |
Priced internally | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 0 | |
Other invested assets | 0 | |
Priced internally | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 0 | |
Other invested assets | 0 | |
Priced internally | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, available for sale | 0 | |
Equity securities, available for sale | 0 | |
Derivatives, index options | 0 | |
Other invested assets | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Schedule of Significant Unobservable Inputs for Fair Value Measurements) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | $ 14,684 | $ 194,731 |
Total realized and unrealized gains (losses): | ||
Included in net income | 123,207 | (80,004) |
Included in other comprehensive income (loss) | 0 | 0 |
Purchases | 76,928 | 86,953 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | (57,231) | (186,996) |
Transfers into (out of) Level 3 | 0 | 0 |
Balance at end of period | 157,588 | 14,684 |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 80,724 | (72,269) |
Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 56,704 | 226,401 |
Total realized and unrealized gains (losses): | ||
Included in net income | 94,106 | (65,046) |
Included in other comprehensive income (loss) | 0 | 0 |
Purchases | 76,928 | 86,953 |
Sales | 0 | 0 |
Issuances | 3,815 | 74 |
Settlements | (60,350) | (191,678) |
Transfers into (out of) Level 3 | 0 | 0 |
Balance at end of period | 171,203 | 56,704 |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 83,406 | (70,980) |
Debt Securities, Available For Sale | ||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 0 | 0 |
Total realized and unrealized gains (losses): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers into (out of) Level 3 | 0 | 0 |
Balance at end of period | 0 | 0 |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Equity Securities | ||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 0 | 0 |
Total realized and unrealized gains (losses): | ||
Included in net income | 0 | 0 |
Included in other comprehensive income (loss) | 0 | 0 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | 0 | 0 |
Transfers into (out of) Level 3 | 0 | 0 |
Balance at end of period | 0 | 0 |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Derivatives, Index Options | ||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 14,684 | 194,731 |
Total realized and unrealized gains (losses): | ||
Included in net income | 123,207 | (80,004) |
Included in other comprehensive income (loss) | 0 | 0 |
Purchases | 76,928 | 86,953 |
Sales | 0 | 0 |
Issuances | 0 | 0 |
Settlements | (57,231) | (186,996) |
Transfers into (out of) Level 3 | 0 | 0 |
Balance at end of period | 157,588 | 14,684 |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 80,724 | (72,269) |
Net investment income | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 80,724 | (72,269) |
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Net investment income | Debt Securities, Available For Sale | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Net investment income | Equity Securities | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Net investment income | Derivatives, Index Options | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 80,724 | (72,269) |
Benefits and expenses | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 83,406 | (70,980) |
Benefits and expenses | Debt Securities, Available For Sale | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Benefits and expenses | Equity Securities | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | 0 | 0 |
Benefits and expenses | Derivatives, Index Options | ||
Total realized and unrealized gains (losses): | ||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets/liabilities held at the end of the reporting period: | $ 0 | $ 0 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Schedule of Fair Value, Valuation Techniques and Significant Unobservable Inputs for Financial Instruments Categorized as Level 3) (Details) $ in Thousands, $ / shares in Millions | Dec. 31, 2019USD ($)$ / sharesyear | Dec. 31, 2018USD ($) |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | $ 157,588 | $ 14,684 |
Total assets | 3,538,129 | 2,978,234 |
Other liabilities | 15,301 | 11,923 |
Total liabilities | 171,203 | 56,704 |
Level 3 | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | 157,588 | 14,684 |
Total assets | 157,588 | 14,684 |
Other liabilities | 15,301 | 11,923 |
Contingent consideration on businesses acquired | 4,076 | |
Total liabilities | 171,203 | 56,704 |
Level 3 | Broker prices | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | 157,588 | 14,684 |
Level 3 | Deterministic cash flow model | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholder account balances | 155,902 | 44,781 |
Level 3 | Black Scholes | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Share based compensation | 11,225 | |
Other liabilities | $ 11,923 | |
Level 3 | Probabilistic Method | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Contingent consideration on businesses acquired | $ 4,076 | |
Implied volatility | Level 3 | Broker prices | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | 0.131 | |
Implied volatility | Level 3 | Broker prices | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | 0.199 | |
Implied volatility | Level 3 | Broker prices | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Derivatives, index options | 0.1525 | |
Projected option cost | Level 3 | Deterministic cash flow model | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholder account balances | 0 | |
Projected option cost | Level 3 | Deterministic cash flow model | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholder account balances | 0.1755 | |
Projected option cost | Level 3 | Deterministic cash flow model | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Policyholder account balances | 0.0314 | |
Expected term | Level 3 | Deterministic cash flow model | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Share based compensation | year | 1.9 | |
Expected term | Level 3 | Deterministic cash flow model | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Share based compensation | year | 10 | |
Expected volatility | Level 3 | Black Scholes | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Share based compensation | 0.222 | |
Discount rate | Level 3 | Probabilistic Method | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Contingent consideration on businesses acquired | 0.10 | |
Projected renewal premium | Level 3 | Probabilistic Method | Minimum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Contingent consideration on businesses acquired | $ / shares | 57.2 | |
Projected renewal premium | Level 3 | Probabilistic Method | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Contingent consideration on businesses acquired | $ / shares | 82.4 | |
Projected renewal premium | Level 3 | Probabilistic Method | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Contingent consideration on businesses acquired | (71,900) |
Fair Values of Financial Instru
Fair Values of Financial Instruments (Schedule of Carrying Amounts and Fair Values of Financial Instruments) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Debt securities held to maturity | $ 7,407,703,000 | $ 7,228,268,000 |
Debt securities available for sale | 3,356,945,000 | 2,946,059,000 |
Derivatives, index options | 157,588,000 | 14,684,000 |
Equity securities | 23,594,000 | 17,491,000 |
Carrying Values | ||
ASSETS | ||
Debt securities held to maturity | 7,106,245,000 | 7,285,254,000 |
Debt securities available for sale | 3,356,945,000 | 2,946,059,000 |
Cash and cash equivalents | 253,524,000 | 131,976,000 |
Mortgage loans | 272,422,000 | 203,180,000 |
Real estate | 34,588,000 | 35,692,000 |
Policy loans | 80,008,000 | 54,724,000 |
Other loans | 13,547,000 | 12,272,000 |
Derivatives, index options | 157,588,000 | 14,684,000 |
Equity securities | 23,594,000 | 17,491,000 |
Life interest in Libbie Shearn Moody Trust | 9,230,000 | 8,692,000 |
Other invested assets | 197,000 | 195,000 |
LIABILITIES | ||
Deferred annuity contracts | 6,999,880,000 | 7,455,642,000 |
Immediate annuity and supplemental contracts | 400,465,000 | 407,413,000 |
Contingent consideration on businesses acquired | 4,076,000 | |
Fair Values | ||
ASSETS | ||
Debt securities held to maturity | 7,407,703,000 | 7,228,268,000 |
Debt securities available for sale | 3,356,945,000 | 2,946,059,000 |
Cash and cash equivalents | 253,524,000 | 131,976,000 |
Mortgage loans | 270,931,000 | 202,762,000 |
Real estate | 57,204,000 | 53,504,000 |
Policy loans | 123,650,000 | 90,802,000 |
Other loans | 13,698,000 | 12,709,000 |
Derivatives, index options | 157,588,000 | 14,684,000 |
Equity securities | 23,594,000 | 17,491,000 |
Life interest in Libbie Shearn Moody Trust | 12,775,000 | 12,775,000 |
Other invested assets | 16,182,000 | 14,478,000 |
LIABILITIES | ||
Deferred annuity contracts | 5,916,399,000 | 6,403,007,000 |
Immediate annuity and supplemental contracts | 422,931,000 | 415,726,000 |
Contingent consideration on businesses acquired | 4,076,000 | |
Level 1 | ||
ASSETS | ||
Debt securities held to maturity | 0 | 0 |
Debt securities available for sale | 0 | 0 |
Cash and cash equivalents | 253,524,000 | 131,976,000 |
Mortgage loans | 0 | 0 |
Real estate | 0 | 0 |
Policy loans | 0 | 0 |
Other loans | 0 | 0 |
Derivatives, index options | 0 | 0 |
Equity securities | 23,594,000 | 17,491,000 |
Life interest in Libbie Shearn Moody Trust | 0 | 0 |
Other invested assets | 2,000 | 0 |
LIABILITIES | ||
Deferred annuity contracts | 0 | 0 |
Immediate annuity and supplemental contracts | 0 | 0 |
Contingent consideration on businesses acquired | 0 | |
Level 2 | ||
ASSETS | ||
Debt securities held to maturity | 7,407,703,000 | 7,226,362,000 |
Debt securities available for sale | 3,356,945,000 | 2,946,059,000 |
Cash and cash equivalents | 0 | 0 |
Mortgage loans | 0 | 0 |
Real estate | 0 | 0 |
Policy loans | 0 | 0 |
Other loans | 0 | 0 |
Derivatives, index options | 0 | 0 |
Equity securities | 0 | 0 |
Life interest in Libbie Shearn Moody Trust | 0 | 0 |
Other invested assets | 0 | 0 |
LIABILITIES | ||
Deferred annuity contracts | 0 | 0 |
Immediate annuity and supplemental contracts | 0 | 0 |
Contingent consideration on businesses acquired | 0 | |
Level 3 | ||
ASSETS | ||
Debt securities held to maturity | 0 | 1,906,000 |
Debt securities available for sale | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Mortgage loans | 270,931,000 | 202,762,000 |
Real estate | 57,204,000 | 53,504,000 |
Policy loans | 123,650,000 | 90,802,000 |
Other loans | 13,698,000 | 12,709,000 |
Derivatives, index options | 157,588,000 | 14,684,000 |
Equity securities | 0 | 0 |
Life interest in Libbie Shearn Moody Trust | 12,775,000 | 12,775,000 |
Other invested assets | 16,180,000 | 14,478,000 |
LIABILITIES | ||
Deferred annuity contracts | 5,916,399,000 | 6,403,007,000 |
Immediate annuity and supplemental contracts | 422,931,000 | $ 415,726,000 |
Contingent consideration on businesses acquired | $ 4,076,000 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
National Western Life Insurance Company | |||
Effects of Reinsurance [Line Items] | |||
Limit for reinsuring risk | $ 500,000 | ||
Total life insurance in force | 17,100,000,000 | $ 18,600,000,000 | |
Ceded premiums | 3,700,000,000 | 4,000,000,000 | |
Reinsurance receivable | 20,700,000 | 1,100,000 | |
Reinsurance premiums | 21,100,000 | 20,800,000 | $ 20,300,000 |
Reinsurance recoveries | 22,000,000 | $ 31,200,000 | $ 7,500,000 |
Ozark National Life Insurance Company | |||
Effects of Reinsurance [Line Items] | |||
Limit for reinsuring risk | 200,000,000 | ||
Total life insurance in force | 6,200,000,000 | ||
Ceded premiums | 500,000,000 | ||
Reinsurance receivable | 21,700,000 | ||
Reinsurance premiums | 2,500,000 | ||
Reinsurance recoveries | $ 2,200,000 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Deferred policy acquisition costs, beginning of year | $ 841,704 | $ 819,511 | $ 835,194 | |
Deferrals | 64,824 | 84,094 | 103,521 | |
Amortization, excluding unlocking, net of interest | (117,748) | (115,721) | (126,244) | |
Unlocking | 8,643 | 950 | 11,857 | |
Adjustments related to unrealized gains (losses) | (73,451) | 52,870 | (4,817) | |
Deferred policy acquisition costs, end of year | $ 723,972 | 723,972 | 841,704 | 819,511 |
Movement in Deferred Sales Inducements [Roll Forward] | ||||
Deferred sales inducements, beginning of year | 133,714 | 135,570 | 147,111 | |
Deferrals | 3,160 | 7,546 | 17,901 | |
Amortization, excluding unlocking, net of interest | (19,714) | (21,569) | (24,264) | |
Unlocking | (641) | 1,270 | (4,288) | |
Adjustments related to unrealized gains (losses) | (12,160) | 10,897 | (890) | |
Deferred sales inducements, end of year | 104,359 | 104,359 | 133,714 | $ 135,570 |
Movement Analysis Of Value Of Business Acquired [Roll Forward] | ||||
VOBA, beginning of year | 145,768 | 0 | ||
Amortization, excluding unlocking | (7,697) | |||
VOBA, end of year | 138,071 | 138,071 | $ 0 | |
Present Value of Future Insurance Profits, Amortization Expense [Abstract] | ||||
2020 | 6,944 | 6,944 | ||
2021 | 6,591 | 6,591 | ||
2022 | 6,285 | 6,285 | ||
2023 | 6,010 | 6,010 | ||
2024 | $ 5,773 | $ 5,773 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) | Jan. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Ozark National Life Insurance Company | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business | $ 205,400,000 | |||
Earn-out payment maximum | 5,000,000 | |||
Contingent consideration on businesses acquired | $ 3,700,000 | $ 4,100,000 | $ 4,100,000 | |
Acquisition-related costs | $ 3,300,000 | $ 1,000,000 | ||
Ozark National Life Insurance Company And NIS | ||||
Business Acquisition [Line Items] | ||||
Revenues of acquiree since acquisition date | 106,200,000 | |||
Net earnings of acquiree since acquisition date | $ 17,100,000 |
Business Combinations (Schedule
Business Combinations (Schedule of Fair Value of Net Assets Acquired) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 31, 2019 |
Liabilities | ||
Goodwill | $ 13,900 | |
Ozark National Life Insurance Company | ||
Assets | ||
Debt securities held to maturity | $ 261,059 | |
Debt securities available for sale | 400,719 | |
Policy loans | 28,128 | |
Policy loans | 4,600 | |
Cash and cash equivalents | 16,275 | |
Accrued investment income | 6,116 | |
Value of business acquired | 145,768 | |
Reinsurance recoverables | 21,895 | |
Other intangible assets | 9,600 | |
Other assets acquired | 12,075 | |
Total assets acquired | 906,235 | |
Liabilities | ||
Traditional life reserves | 691,297 | |
Other policyholder liabilities | 13,867 | |
Other liabilities acquired | 5,840 | |
Total liabilities acquired | 711,004 | |
Net identifiable assets acquired | 195,231 | |
Goodwill | $ 13,864 | 13,864 |
Net assets acquired | $ 209,095 |
Business Combinations (Goodwill
Business Combinations (Goodwill and Specifically Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Net goodwill as of end of year | $ 13,900 | ||
Ozark National Life Insurance Company | |||
Goodwill [Roll Forward] | |||
Gross goodwill as of beginning of year | 0 | ||
Goodwill resulting from business acquisition | 13,864 | ||
Gross goodwill, before impairments | 13,864 | ||
Accumulated impairment as of beginning of year | $ 0 | ||
Current year impairments | 0 | ||
Net goodwill as of end of year | $ 13,864 | $ 13,864 |
Business Combinations (Schedu_2
Business Combinations (Schedule of Fair Value of Identifiable Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Intangible Assets Acquired | $ 8,900 | |
Ozark National Life Insurance Company | ||
Business Acquisition [Line Items] | ||
Intangible Assets Acquired | $ 9,600 | |
Trademarks/trade names | Ozark National Life Insurance Company | ||
Business Acquisition [Line Items] | ||
Fair value, finite-lived intangible assets acquired | $ 2,800 | |
Weighted-Average Amortization Period | 15 years | |
Internally developed software | Ozark National Life Insurance Company | ||
Business Acquisition [Line Items] | ||
Fair value, finite-lived intangible assets acquired | $ 3,800 | |
Weighted-Average Amortization Period | 7 years | |
Insurance licenses | Ozark National Life Insurance Company | ||
Business Acquisition [Line Items] | ||
Fair value, indefinite lived intangible assets acquired | $ 3,000 |
Business Combinations (Gross Ca
Business Combinations (Gross Carrying Amounts and Accumulated Amortization) (Details) - Ozark National Life Insurance Company $ in Thousands | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |
Gross Carrying Amount | $ 9,600 |
Accumulated Amortization | (669) |
Trademarks and Trade Names | |
Business Acquisition [Line Items] | |
Gross Carrying Amount | 2,800 |
Accumulated Amortization | (171) |
Internally developed software | |
Business Acquisition [Line Items] | |
Gross Carrying Amount | 3,800 |
Accumulated Amortization | (498) |
Licensing Agreements | |
Business Acquisition [Line Items] | |
Gross Carrying Amount | 3,000 |
Accumulated Amortization | $ 0 |
Business Combinations (Summary
Business Combinations (Summary of Expected Amortization Expenses) (Details) - Ozark National Life Insurance Company $ in Thousands | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |
2020 | $ 730 |
2021 | 730 |
2022 | 730 |
2023 | 730 |
2024 | 730 |
Thereafter | 2,281 |
Finite-lived intangible assets, net | $ 5,931 |
Business Combinations (Schedu_3
Business Combinations (Schedule of Pro Forma Total Revenues and Net Earnings) (Details) - Ozark National Life Insurance Company And NIS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 828,846 | $ 667,392 |
Net earnings | $ 133,175 | $ 134,858 |
Segment and Other Operating I_3
Segment and Other Operating Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Total segment assets | $ 12,553,447 | $ 11,931,691 | $ 12,553,447 | $ 11,931,691 | $ 12,225,094 | ||||||
Other policyholder liabilities | 127,607 | 135,694 | 127,607 | 135,694 | |||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 239,969 | 173,496 | 178,930 | ||||||||
Net investment income | 555,492 | 349,077 | 659,685 | ||||||||
Other revenues | 17,486 | 20,603 | 21,070 | ||||||||
Realized gains (losses) on investments | 6,241 | 8,423 | 14,763 | ||||||||
Total revenues | 235,428 | $ 173,166 | $ 192,685 | $ 217,909 | 42,486 | $ 225,435 | $ 174,658 | $ 109,018 | 819,188 | 551,599 | 874,448 |
Life and other policy benefits | 137,342 | 65,297 | 71,485 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 116,802 | 114,771 | 114,387 | ||||||||
Universal life and annuity contract interest | 295,330 | 136,055 | 437,019 | ||||||||
Other operating expenses | 104,558 | 93,969 | 107,002 | ||||||||
Federal income taxes | 33,540 | 24,749 | 34,134 | ||||||||
Net earnings | 37,733 | $ 19,989 | $ 33,696 | $ 40,198 | 21,776 | $ 35,641 | $ 32,466 | $ 26,875 | 131,616 | 116,758 | 110,421 |
Revenues, excluding reinsurance premiums | 263,588 | 194,256 | 199,242 | ||||||||
Reinsurance premiums | (23,619) | (20,760) | (20,312) | ||||||||
United States | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 156,330 | 82,614 | 74,937 | ||||||||
Brazil | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 24,975 | 27,280 | 33,024 | ||||||||
Taiwan | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 12,054 | 14,414 | 16,105 | ||||||||
Taiwan | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 11,763 | 12,864 | 14,844 | ||||||||
Peru | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 10,127 | 10,969 | 11,714 | ||||||||
Chile | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 8,122 | 8,769 | 9,201 | ||||||||
Other foreign countries | |||||||||||
Condensed Income Statements: | |||||||||||
Revenues, excluding reinsurance premiums | 40,217 | 37,346 | 39,417 | ||||||||
Operating Segments | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 966,402 | 975,418 | 966,402 | 975,418 | 955,081 | ||||||
Total segment assets | 12,092,796 | 11,588,481 | 12,092,796 | 11,588,481 | 12,011,696 | ||||||
Future policy benefits | 10,127,018 | 9,744,286 | 10,127,018 | 9,744,286 | 10,098,484 | ||||||
Other policyholder liabilities | 127,607 | 135,694 | 127,607 | 135,694 | 128,009 | ||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 239,969 | 173,496 | 178,930 | ||||||||
Net investment income | 555,492 | 349,077 | 659,685 | ||||||||
Other revenues | 17,486 | 20,603 | 21,070 | ||||||||
Total revenues | 812,947 | 543,176 | 859,685 | ||||||||
Life and other policy benefits | 137,342 | 65,297 | 71,485 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 116,802 | 114,771 | 114,387 | ||||||||
Universal life and annuity contract interest | 295,330 | 136,055 | 437,019 | ||||||||
Other operating expenses | 104,558 | 93,969 | 107,002 | ||||||||
Federal income taxes (benefit) | 32,229 | 22,980 | 28,967 | ||||||||
Total expenses | 686,261 | 433,072 | 758,860 | ||||||||
Segment earnings (loss) | 126,686 | 110,104 | 100,825 | ||||||||
Operating Segments | Domestic Life Insurance | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 127,557 | 122,661 | 127,557 | 122,661 | 101,253 | ||||||
Total segment assets | 1,399,818 | 1,215,864 | 1,399,818 | 1,215,864 | 1,106,410 | ||||||
Future policy benefits | 1,198,103 | 1,039,150 | 1,198,103 | 1,039,150 | 950,884 | ||||||
Other policyholder liabilities | 18,016 | 17,439 | 18,016 | 17,439 | 13,643 | ||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 45,709 | 40,879 | 37,387 | ||||||||
Net investment income | 77,672 | 23,579 | 73,866 | ||||||||
Other revenues | 313 | 19 | 46 | ||||||||
Total revenues | 123,694 | 64,477 | 111,299 | ||||||||
Life and other policy benefits | 18,948 | 21,688 | 18,565 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 11,797 | 11,539 | 10,377 | ||||||||
Universal life and annuity contract interest | 69,849 | 8,826 | 59,865 | ||||||||
Other operating expenses | 20,376 | 20,731 | 18,842 | ||||||||
Federal income taxes (benefit) | 561 | 292 | 815 | ||||||||
Total expenses | 121,531 | 63,076 | 108,464 | ||||||||
Segment earnings (loss) | 2,163 | 1,401 | 2,835 | ||||||||
Operating Segments | International Life Insurance | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 209,858 | 243,518 | 209,858 | 243,518 | 250,128 | ||||||
Total segment assets | 1,153,105 | 1,211,036 | 1,153,105 | 1,211,036 | 1,236,733 | ||||||
Future policy benefits | 870,461 | 894,891 | 870,461 | 894,891 | 915,384 | ||||||
Other policyholder liabilities | 14,903 | 20,381 | 14,903 | 20,381 | 11,318 | ||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 99,417 | 108,923 | 120,852 | ||||||||
Net investment income | 47,004 | 22,603 | 68,399 | ||||||||
Other revenues | 86 | 87 | 83 | ||||||||
Total revenues | 146,507 | 131,613 | 189,334 | ||||||||
Life and other policy benefits | 17,064 | 22,333 | 23,981 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 17,593 | 24,358 | (1,473) | ||||||||
Universal life and annuity contract interest | 48,561 | 24,590 | 54,502 | ||||||||
Other operating expenses | 19,447 | 19,593 | 36,341 | ||||||||
Federal income taxes (benefit) | 9,024 | 7,035 | 16,958 | ||||||||
Total expenses | 111,689 | 97,909 | 130,309 | ||||||||
Segment earnings (loss) | 34,818 | 33,704 | 59,025 | ||||||||
Operating Segments | Annuities | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 486,553 | 609,239 | 486,553 | 609,239 | 603,700 | ||||||
Total segment assets | 8,198,730 | 8,791,463 | 8,198,730 | 8,791,463 | 9,269,956 | ||||||
Future policy benefits | 7,351,941 | 7,810,245 | 7,351,941 | 7,810,245 | 8,232,216 | ||||||
Other policyholder liabilities | 80,002 | 97,874 | 80,002 | 97,874 | 103,048 | ||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 20,317 | 23,694 | 20,691 | ||||||||
Net investment income | 380,357 | 276,123 | 490,706 | ||||||||
Other revenues | (34) | 66 | 109 | ||||||||
Total revenues | 400,640 | 299,883 | 511,506 | ||||||||
Life and other policy benefits | 41,487 | 21,276 | 28,939 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 79,064 | 78,874 | 105,483 | ||||||||
Universal life and annuity contract interest | 176,920 | 102,639 | 322,652 | ||||||||
Other operating expenses | 35,699 | 32,584 | 32,021 | ||||||||
Federal income taxes (benefit) | 13,888 | 11,139 | 5,002 | ||||||||
Total expenses | 347,058 | 246,512 | 494,097 | ||||||||
Segment earnings (loss) | 53,582 | 53,371 | 17,409 | ||||||||
Operating Segments | Acquired Businesses | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 142,434 | 142,434 | |||||||||
Total segment assets | 978,243 | 978,243 | |||||||||
Future policy benefits | 706,513 | 706,513 | |||||||||
Other policyholder liabilities | 14,686 | 14,686 | |||||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 74,526 | ||||||||||
Net investment income | 22,593 | ||||||||||
Other revenues | 8,445 | ||||||||||
Total revenues | 105,564 | ||||||||||
Life and other policy benefits | 59,843 | ||||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 8,348 | ||||||||||
Universal life and annuity contract interest | 0 | ||||||||||
Other operating expenses | 17,056 | ||||||||||
Federal income taxes (benefit) | 3,700 | ||||||||||
Total expenses | 88,947 | ||||||||||
Segment earnings (loss) | 16,617 | ||||||||||
Operating Segments | All Others | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Deferred policy acquisition costs and sales inducements, and value of business acquired | 0 | 0 | 0 | 0 | 0 | ||||||
Total segment assets | 362,900 | 370,118 | 362,900 | 370,118 | 398,597 | ||||||
Future policy benefits | 0 | 0 | 0 | 0 | 0 | ||||||
Other policyholder liabilities | 0 | 0 | 0 | 0 | 0 | ||||||
Condensed Income Statements: | |||||||||||
Premiums and contract charges | 0 | 0 | 0 | ||||||||
Net investment income | 27,866 | 26,772 | 26,714 | ||||||||
Other revenues | 8,676 | 20,431 | 20,832 | ||||||||
Total revenues | 36,542 | 47,203 | 47,546 | ||||||||
Life and other policy benefits | 0 | 0 | 0 | ||||||||
Amortization of deferred policy acquisition costs, and value of business acquired | 0 | 0 | 0 | ||||||||
Universal life and annuity contract interest | 0 | 0 | 0 | ||||||||
Other operating expenses | 11,980 | 21,061 | 19,798 | ||||||||
Federal income taxes (benefit) | 5,056 | 4,514 | 6,192 | ||||||||
Total expenses | 17,036 | 25,575 | 25,990 | ||||||||
Segment earnings (loss) | 19,506 | 21,628 | 21,556 | ||||||||
Segment Reconciling Items | |||||||||||
Selected Condensed Consolidated Balance Sheet Items: | |||||||||||
Total segment assets | $ 460,651 | $ 343,210 | 460,651 | 343,210 | 213,398 | ||||||
Condensed Income Statements: | |||||||||||
Taxes on realized gains (losses) on investments | 1,311 | 1,769 | 5,167 | ||||||||
Realized gains (losses) on investments, net of taxes | $ 4,930 | $ 6,654 | $ 9,596 | ||||||||
National Western Life Insurance Company | Domestic Life Insurance | |||||||||||
Condensed Income Statements: | |||||||||||
Number of customers | customer | 1 | ||||||||||
National Western Life Insurance Company | Annuities | |||||||||||
Condensed Income Statements: | |||||||||||
Number of customers | customer | 3 | ||||||||||
National Western Life Insurance Company | Agency One | Domestic Life Insurance | |||||||||||
Condensed Income Statements: | |||||||||||
Major customer, percentage of sales | 46.00% | ||||||||||
National Western Life Insurance Company | Agency One | Annuities | |||||||||||
Condensed Income Statements: | |||||||||||
Major customer, percentage of sales | 17.00% | ||||||||||
National Western Life Insurance Company | Agency Two | Annuities | |||||||||||
Condensed Income Statements: | |||||||||||
Major customer, percentage of sales | 13.00% | ||||||||||
National Western Life Insurance Company | Agency Three | Annuities | |||||||||||
Condensed Income Statements: | |||||||||||
Major customer, percentage of sales | 12.00% |
Statutory Information (Summary
Statutory Information (Summary of Premiums and Deposits Collected) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Insurance [Abstract] | |||
Annuity deposits | $ 264,667 | $ 411,208 | $ 608,799 |
Universal life insurance deposits | 266,600 | 278,971 | 254,960 |
Traditional life and other premiums | 95,695 | 21,561 | 22,624 |
Totals | $ 626,962 | $ 711,740 | $ 886,383 |
Statutory Information (Statutor
Statutory Information (Statutory Accounting Practices) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
National Western Life Insurance Company | |||
Statutory Accounting Practices [Line Items] | |||
Net gain from operations before Federal and foreign income taxes | $ 209,139 | $ 27,359 | $ 197,597 |
Net income | 151,316 | 31,296 | 126,932 |
Unassigned surplus | 1,485,424 | 1,374,963 | 1,330,491 |
Capital and surplus | 1,529,487 | 1,419,026 | 1,374,554 |
Ozark National Life Insurance Company | |||
Statutory Accounting Practices [Line Items] | |||
Net gain from operations before Federal and foreign income taxes | 22,870 | 0 | 0 |
Net income | (854) | 0 | 0 |
Unassigned surplus | 29,452 | 0 | 0 |
Capital and surplus | $ 58,404 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net earnings | $ 37,733 | $ 19,989 | $ 33,696 | $ 40,198 | $ 21,776 | $ 35,641 | $ 32,466 | $ 26,875 | $ 131,616 | $ 116,758 | $ 110,421 |
Undistributed earnings | 130,343 | 115,485 | 109,148 | ||||||||
Allocation of net earnings: | |||||||||||
Allocation of undistributed earnings | 130,343 | 115,485 | 109,148 | ||||||||
Class A | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net earnings | 127,894 | 113,456 | 107,298 | ||||||||
Dividends | (1,237) | (1,237) | (1,237) | ||||||||
Undistributed earnings | 126,657 | 112,219 | 106,061 | ||||||||
Allocation of net earnings: | |||||||||||
Dividends | 1,237 | 1,237 | 1,237 | ||||||||
Allocation of undistributed earnings | $ 126,657 | $ 112,219 | $ 106,061 | ||||||||
Denominator: | |||||||||||
Basic earnings per share - weighted-average shares (in shares) | 3,436 | 3,436 | 3,436 | ||||||||
Effect of dilutive stock options (in shares) | 0 | 0 | 0 | ||||||||
Diluted earnings per share - adjusted weighted-average shares for assumed conversions (in shares) | 3,436 | 3,436 | 3,436 | ||||||||
Basic earnings per share (in dollars per share) | $ 10.67 | $ 5.65 | $ 9.53 | $ 11.37 | $ 6.16 | $ 10.08 | $ 9.18 | $ 7.60 | $ 37.22 | $ 33.02 | $ 31.23 |
Diluted earnings per share (in dollars per share) | 10.67 | 5.65 | 9.53 | 11.37 | 6.16 | 10.08 | 9.18 | 7.60 | $ 37.22 | $ 33.02 | $ 31.23 |
Class B | |||||||||||
Numerator for Basic and Diluted Earnings Per Share: | |||||||||||
Net earnings | $ 3,722 | $ 3,302 | $ 3,123 | ||||||||
Dividends | (36) | (36) | (36) | ||||||||
Undistributed earnings | 3,686 | 3,266 | 3,087 | ||||||||
Allocation of net earnings: | |||||||||||
Dividends | 36 | 36 | 36 | ||||||||
Allocation of undistributed earnings | $ 3,686 | $ 3,266 | $ 3,087 | ||||||||
Denominator: | |||||||||||
Basic earnings per share - weighted-average shares (in shares) | 200 | 200 | 200 | ||||||||
Effect of dilutive stock options (in shares) | 0 | 0 | 0 | ||||||||
Diluted earnings per share - adjusted weighted-average shares for assumed conversions (in shares) | 200 | 200 | 200 | ||||||||
Basic earnings per share (in dollars per share) | 5.34 | 2.83 | 4.76 | 5.68 | 3.08 | 5.04 | 4.59 | 3.80 | $ 18.61 | $ 16.51 | $ 15.61 |
Diluted earnings per share (in dollars per share) | $ 5.34 | $ 2.83 | $ 4.76 | $ 5.68 | $ 3.08 | $ 5.04 | $ 4.59 | $ 3.80 | $ 18.61 | $ 16.51 | $ 15.61 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Reclassification to retained earnings from Tax Act | $ (2,500) | ||
Amounts Before Taxes | |||
Net unrealized holding gains (losses) arising during the period | $ 122,726 | $ (71,921) | 12,752 |
Unrealized liquidity losses | 4 | 3 | 300 |
Reclassification adjustment for net gains included in net earnings | 5,060 | (3,441) | (5,236) |
Amortization of net unrealized gains (losses) related to transferred securities | 0 | 0 | 0 |
Net unrealized gains (losses) on securities | 127,790 | (75,359) | 7,816 |
Foreign currency translation adjustments | 663 | 1,714 | (14) |
Benefit plan liability adjustment | (5,513) | 14,301 | (5,958) |
Other comprehensive income (loss) | 122,940 | (59,344) | 1,844 |
Tax (Expense) Benefit | |||
Net unrealized holding gains (losses) arising during the period | (25,772) | 15,103 | (4,464) |
Unrealized liquidity losses | (1) | (1) | (105) |
Reclassification adjustment for net gains included in net earnings | (1,063) | 723 | 1,833 |
Amortization of net unrealized gains (losses) related to transferred securities | 0 | 0 | 0 |
Net unrealized gains (losses) on securities | (26,836) | 15,825 | (2,736) |
Foreign currency translation adjustments | (139) | (360) | 5 |
Benefit plan liability adjustment | 1,158 | (3,003) | 2,085 |
Other comprehensive income (loss) | (25,817) | 12,462 | (646) |
Amounts Net of Taxes | |||
Net unrealized holding gains (losses) arising during the period | 96,954 | (56,818) | 8,288 |
Unrealized liquidity losses | 3 | 2 | 195 |
Reclassification adjustment for net gains included in net earnings | 3,997 | (2,718) | (3,403) |
Amortization of net unrealized gains (losses) related to transferred securities | 0 | 0 | 0 |
Net unrealized gains (losses) on securities | 100,954 | (59,534) | 5,080 |
Foreign currency translation adjustments | 524 | 1,354 | (9) |
Benefit plan liability adjustment | (4,355) | 11,298 | (3,873) |
Other comprehensive income (loss) | 97,123 | (46,882) | 1,198 |
Deferred costs | $ (85,609) | $ 63,816 | $ (5,670) |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in Shares of Common Stock Outstanding) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock shares outstanding: | |||
Stockholders’ equity, beginning of period | $ 1,900,777 | $ 1,832,174 | |
Stockholders’ equity, end of period | 2,128,243 | 1,900,777 | $ 1,832,174 |
Common Stock | |||
Common stock shares outstanding: | |||
Stockholders’ equity, beginning of period | 3,636 | 3,636 | 3,636 |
Shares exercised under stock option plan | 0 | 0 | 0 |
Stockholders’ equity, end of period | $ 3,636 | $ 3,636 | $ 3,636 |
Stockholders' Equity (Dividend
Stockholders' Equity (Dividend Restrictions) (Details) - USD ($) | Oct. 18, 2019 | Jan. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | |||||||
Extraordinary dividend paid | $ 102,700,000 | ||||||
Class A | |||||||
Class of Stock [Line Items] | |||||||
Common stock, dividends declared (in dollars per share) | $ 0.36 | ||||||
Dividends declared and paid | $ 1,237,000 | $ 1,237,000 | $ 1,237,000 | ||||
Class B | |||||||
Class of Stock [Line Items] | |||||||
Common stock, dividends declared (in dollars per share) | $ 0.18 | ||||||
Dividends declared and paid | 36,000 | 36,000 | $ 36,000 | ||||
National Western Life Insurance Company | |||||||
Class of Stock [Line Items] | |||||||
Maximum dividend payment which may be paid without prior approval | 152,800,000 | ||||||
Dividends declared and paid | $ 4,000,000 | $ 32,000,000 | |||||
National Western Life Insurance Company | Dividend Declared | |||||||
Class of Stock [Line Items] | |||||||
Dividends declared and paid | $ 6,000,000 | ||||||
Ozark National Life Insurance Company | |||||||
Class of Stock [Line Items] | |||||||
Maximum dividend payment which may be paid without prior approval | $ 17,200,000 |
Stockholders' Equity (Regulator
Stockholders' Equity (Regulatory Capital Requirements and Share-Based Payments - General Descriptions) (Details) - USD ($) | Jun. 15, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 20, 2008 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance factor used to determine compensation payout | 93.86% | ||||
Period in force | 90 days | ||||
Grant price (in dollars per share) | $ 252.91 | $ 303.77 | |||
Compensation cost, liability balance | $ 11,200,000 | $ 11,900,000 | |||
Intrinsic value of share-based compensation exercised | 3,100,000 | 4,700,000 | $ 1,800,000 | ||
Share-based compensation paid | 3,100,000 | 4,700,000 | 1,800,000 | ||
Fair value of options vested | 4,400,000 | 3,100,000 | 2,700,000 | ||
Proceeds from exercise of stock options | $ 0 | ||||
Share price (in dollars per share) | $ 290.88 | ||||
Pre-tax compensation cost (benefit) recognized | $ 2,400,000 | 1,400,000 | 5,000,000 | ||
Compensation cost (benefit), tax expense (benefit) | (500,000) | (300,000) | (1,800,000) | ||
Pre-tax compensation expense related to nonvested share-based awards not yet recognized | $ 8,000,000 | $ 7,100,000 | $ 7,800,000 | ||
Compensation cost related to nonvested options not yet recognized, weighted-average period of recognition | 1 year 7 months 6 days | ||||
Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Stock and Incentive Plan, 2008 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan extension term | 10 years | ||||
Stock and Incentive Plan, 2008 Plan | Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 1 | ||||
Share-based payments, number of shares authorized under plans | 300,000 | ||||
Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period of awards | 1 year | ||||
Colorado Division of Insurance | National Western Life Insurance Company | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Current authorized control level RBC | $ 145,900,000 | ||||
Capital and surplus | 1,600,000,000 | ||||
Colorado Division of Insurance | Ozark National Life Insurance Company | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Current authorized control level RBC | 6,600,000 | ||||
Capital and surplus | $ 61,300,000 | ||||
Employee Stock Appreciation Rights SARs Granted Before 2016 | Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual vesting percentage | 20.00% | ||||
Requisite service period of awards | 3 years | ||||
Employee Stock Appreciation Rights SARs | Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period of awards | 1 year | ||||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-base payment, performance period | 3 years | 3 years | |||
Award vesting period | 3 years | ||||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual vesting percentage | 100.00% | ||||
Requisite service period of awards | 3 years | ||||
Share-based Payment Arrangement, Tranche One | Employee Stock Appreciation Rights SARs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual vesting percentage | 33.30% | ||||
Share-based Payment Arrangement, Tranche One | Employee Stock Appreciation Rights SARs | Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual vesting percentage | 20.00% |
Stockholders' Equity (Grants Is
Stockholders' Equity (Grants Issued to Officers and Directors) (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Officers | SARs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 20,380 | 12,590 |
Officers | RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 4,195 | 3,149 |
Officers | PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 6,427 | 5,070 |
Directors | SARs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 0 | 0 |
Directors | RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 2,580 | 1,980 |
Directors | PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in the period (in shares) | 0 | 0 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Shares Available for Grant and Stock Options Activity) (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares Available For Grant | |
Beginning Balance (in shares) | 291,000 |
Exercised (in shares) | 0 |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Stock options granted (in shares) | 0 |
Ending Balance (in shares) | 291,000 |
Options Outstanding | |
Beginning Balance (in shares) | 0 |
Exercised (in shares) | 0 |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Stock options granted (in shares) | 0 |
Ending Balance (in shares) | 0 |
Options Outstanding, Weighted-Average Exercise Price | |
Beginning Balance (in dollars per share) | $ / shares | $ 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 0 |
Stock options granted (in dollars per share) | $ / shares | 0 |
Ending Balance (in dollars per share) | $ / shares | $ 0 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Other Share / Unit Awards Activity) (Details) | 12 Months Ended |
Dec. 31, 2019shares | |
SARs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning balance (in shares) | 89,443 |
Exercised (in shares) | (928) |
Forfeited (in shares) | (1,378) |
Granted (in shares) | 20,380 |
Ending balance (in shares) | 107,517 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning balance (in shares) | 19,122 |
Exercised (in shares) | (5,426) |
Forfeited (in shares) | (1,015) |
Granted (in shares) | 6,427 |
Ending balance (in shares) | 19,108 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning balance (in shares) | 13,170 |
Exercised (in shares) | (5,031) |
Forfeited (in shares) | (562) |
Granted (in shares) | 6,775 |
Ending balance (in shares) | 14,352 |
Stockholders' Equity (Share-Bas
Stockholders' Equity (Share-Based Payments - Exercise Range) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Share price (in dollars per share) | $ / shares | $ 290.88 |
Stock Appreciation Rights (SARs) | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | 107,517 |
Number Exercisable (in shares) | 68,823 |
Number Outstanding, Aggregate intrinsic value | $ | $ 6,662 |
Number Exercisable, Aggregate intrinsic value | $ | $ 5,557 |
Stock Appreciation Rights (SARs) | 132.56 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 132.56 |
Number Outstanding (in shares) | 19,318 |
Weighted-Average Remaining Contractual Life | 1 year 10 months 24 days |
Number Exercisable (in shares) | 19,318 |
Stock Appreciation Rights (SARs) | 210.22 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 210.22 |
Number Outstanding (in shares) | 24,450 |
Weighted-Average Remaining Contractual Life | 3 years 9 months 18 days |
Number Exercisable (in shares) | 20,350 |
Stock Appreciation Rights (SARs) | 216.48 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 216.48 |
Number Outstanding (in shares) | 11,521 |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days |
Number Exercisable (in shares) | 11,521 |
Stock Appreciation Rights (SARs) | 311.16 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 311.16 |
Number Outstanding (in shares) | 10,162 |
Weighted-Average Remaining Contractual Life | 7 years |
Number Exercisable (in shares) | 6,842 |
Stock Appreciation Rights (SARs) | 310.55 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 310.55 |
Number Outstanding (in shares) | 203 |
Weighted-Average Remaining Contractual Life | 7 years 3 months 18 days |
Number Exercisable (in shares) | 135 |
Stock Appreciation Rights (SARs) | 334.34 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 334.34 |
Number Outstanding (in shares) | 9,557 |
Weighted-Average Remaining Contractual Life | 7 years 9 months 18 days |
Number Exercisable (in shares) | 6,449 |
Stock Appreciation Rights (SARs) | 303.77 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 303.77 |
Number Outstanding (in shares) | 11,926 |
Weighted-Average Remaining Contractual Life | 8 years 8 months 12 days |
Number Exercisable (in shares) | 4,208 |
Stock Appreciation Rights (SARs) | 252.91 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in dollars per share) | $ / shares | $ 252.91 |
Number Outstanding (in shares) | 20,380 |
Weighted-Average Remaining Contractual Life | 10 years |
Number Exercisable (in shares) | 0 |
Stockholders' Equity (Summary_2
Stockholders' Equity (Summary of SARs / Options Outstanding Using Black-Scholes Option Pricing Model) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.12% | 0.12% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 1 year 10 months 25 days | 3 years |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 10 years | 10 years |
Weighted Average | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility weighted-average | 22.19% | 22.14% |
Risk-free rate weighted-average | 1.61% | 2.58% |
Information Regarding Control_2
Information Regarding Controlling Stockholder (Details) - Chairman of the Board of Directors | Dec. 31, 2019 |
Class B | |
Related Party Transaction [Line Items] | |
Ownership in the company | 99.00% |
Class A | |
Related Party Transaction [Line Items] | |
Ownership in the company | 33.70% |
Pension and Other Postretirem_3
Pension and Other Postretirement Plans (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)benefit_plan | Dec. 31, 2018USD ($) | Dec. 31, 2007 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Average rate of return | 9.02% | ||
Number of non-qualified defined benefit pension plan | benefit_plan | 3 | ||
Defined Benefit Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting percentage in accrued benefits from plan freeze (in percentage) | 100.00% | ||
Actuarial gain (loss) | $ (1,398) | $ (494) | |
Discount rate | 3.00% | 4.00% | |
Accumulated benefit obligation | $ 22,700 | $ 21,900 | |
Defined Benefit Pension Plans | Census Demographics | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 157 | (60) | |
Defined Benefit Pension Plans | Change in Mortality | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 610 | ||
Defined Benefit Pension Plans | Difference in Expected and Actual Benefit Payments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 16 | (1,312) | |
Defined Benefit Pension Plans | Discount rate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | (2,181) | ||
Defined Benefit Pension Plans | Increase in Discount Rate and Change to Mortality Improvement Scale | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 878 | ||
Chairman and President Non-Qualified Defined Benefit Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | $ (7,438) | $ 13,870 | |
Discount rate | 3.00% | 4.00% | |
Accumulated benefit obligation | $ 19,800 | $ 18,100 | |
Chairman and President Non-Qualified Defined Benefit Plans | Change in Mortality | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 295 | ||
Chairman and President Non-Qualified Defined Benefit Plans | Discount rate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | (3,401) | ||
Chairman and President Non-Qualified Defined Benefit Plans | Increases in Actual Compensation More Than Actuarial Assumption | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | (4,332) | 13,216 | |
Chairman and President Non-Qualified Defined Benefit Plans | Increase in Discount Rate and Change to Mortality Improvement Scale | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 654 | ||
Defined Benefit Postretirement Healthcare Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | $ (1,354) | $ (298) | |
Discount rate | 3.00% | 4.00% | |
Accumulated benefit obligation | $ 5,800 | $ 4,200 | |
Defined Benefit Postretirement Healthcare Plans | Change in Mortality | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 283 | ||
Defined Benefit Postretirement Healthcare Plans | Difference in Expected and Actual Benefit Payments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 121 | 96 | |
Defined Benefit Postretirement Healthcare Plans | Discount rate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | (974) | ||
Defined Benefit Postretirement Healthcare Plans | Increase in Discount Rate and Change to Mortality Improvement Scale | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | 121 | ||
Defined Benefit Postretirement Healthcare Plans | Claims/Healthcare Cost Trend Experience | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gain (loss) | $ (784) | $ (515) |
Pension and Other Postretirem_4
Pension and Other Postretirement Plans (Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Pension Plans | |||
Changes in projected benefit obligations: | |||
Projected benefit obligations at beginning of year | $ 21,938 | $ 24,659 | |
Service cost | 96 | 111 | $ 106 |
Interest cost | 839 | 899 | 957 |
Plan amendments | 0 | (1,396) | |
Actuarial (gain) loss | 1,398 | 494 | |
Benefits paid | (1,582) | (2,829) | |
Projected benefit obligations at end of year | 22,689 | 21,938 | 24,659 |
Changes in plan assets: | |||
Fair value of plan assets at beginning of year | 16,169 | 19,312 | |
Actual return on plan assets | 3,356 | (414) | |
Contributions | 569 | 100 | |
Benefits paid | (1,582) | (2,829) | |
Fair value of plan assets at end of year | 18,512 | 16,169 | 19,312 |
Funded status at end of year | (4,177) | (5,769) | |
Chairman and President Non-Qualified Defined Benefit Plans | |||
Changes in projected benefit obligations: | |||
Projected benefit obligations at beginning of year | 22,275 | 36,914 | |
Service cost | 502 | 361 | 818 |
Interest cost | 1,025 | 852 | 1,387 |
Actuarial (gain) loss | 7,438 | (13,870) | |
Benefits paid | (1,982) | (1,982) | |
Projected benefit obligations at end of year | 29,258 | 22,275 | 36,914 |
Changes in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Contributions | 1,982 | 1,982 | |
Benefits paid | (1,982) | (1,982) | |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status at end of year | (29,258) | (22,275) | |
Defined Benefit Postretirement Healthcare Plans | |||
Changes in projected benefit obligations: | |||
Projected benefit obligations at beginning of year | 4,230 | 3,774 | |
Interest cost | 198 | 158 | 139 |
Actuarial (gain) loss | 1,354 | 298 | |
Benefits paid | 0 | 0 | |
Projected benefit obligations at end of year | 5,782 | 4,230 | 3,774 |
Changes in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Contributions | 0 | 0 | |
Benefits paid | 0 | 0 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status at end of year | $ (5,782) | $ (4,230) |
Pension and Other Postretirem_5
Pension and Other Postretirement Plans (Amounts Recognized in Consolidated Financial Statements and Accumulated Other Comprehensive Income) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Pension Plans | ||
Amounts recognized in the Company's Consolidated Financial Statements: | ||
Assets | $ 0 | $ 0 |
Liabilities | (4,177,000) | (5,769,000) |
Net amount recognized | (4,177,000) | (5,769,000) |
Amounts recognized in accumulated other comprehensive income: | ||
Net (gain) loss | 6,903,000 | 8,435,000 |
Prior service cost | 0 | 0 |
Net amount recognized | 6,903,000 | 8,435,000 |
Accumulated benefit obligation | 22,700,000 | 21,900,000 |
Chairman and President Non-Qualified Defined Benefit Plans | ||
Amounts recognized in the Company's Consolidated Financial Statements: | ||
Assets | 0 | 0 |
Liabilities | (29,258,000) | (22,275,000) |
Net amount recognized | (29,258,000) | (22,275,000) |
Amounts recognized in accumulated other comprehensive income: | ||
Net (gain) loss | 10,521,000 | 4,475,000 |
Prior service cost | 464,000 | 522,000 |
Net amount recognized | 10,985,000 | 4,997,000 |
Accumulated benefit obligation | 19,800,000 | 18,100,000 |
Defined Benefit Postretirement Healthcare Plans | ||
Amounts recognized in the Company's Consolidated Financial Statements: | ||
Assets | 0 | 0 |
Liabilities | (5,782,000) | (4,230,000) |
Net amount recognized | (5,782,000) | (4,230,000) |
Amounts recognized in accumulated other comprehensive income: | ||
Net (gain) loss | 1,925,000 | 816,000 |
Prior service cost | 0 | 51,000 |
Net amount recognized | 1,925,000 | 867,000 |
Accumulated benefit obligation | $ 5,800,000 | $ 4,200,000 |
Pension and Other Postretirem_6
Pension and Other Postretirement Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Pension Plans | |||
Components of net periodic benefit costs: | |||
Interest cost | $ 839 | $ 899 | $ 957 |
Service cost | 96 | 111 | 106 |
Expected return on plan assets | (1,086) | (1,300) | (1,227) |
Amortization of prior service cost | 0 | 0 | 0 |
Amortization of net loss (gain) | 660 | 524 | 638 |
Net periodic benefit cost | 509 | 234 | 474 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Net loss (gain) | (872) | 812 | |
Amortization of prior service cost | 0 | 0 | 0 |
Amortization of net loss (gain) | (660) | (524) | (638) |
Total recognized in other comprehensive income | (1,532) | 288 | |
Total recognized in net periodic benefit cost and other comprehensive income | (1,023) | 522 | |
Chairman and President Non-Qualified Defined Benefit Plans | |||
Components of net periodic benefit costs: | |||
Interest cost | 1,025 | 852 | 1,387 |
Service cost | 502 | 361 | 818 |
Amortization of prior service cost | 59 | 59 | 59 |
Amortization of net loss (gain) | 1,391 | 704 | 3,274 |
Net periodic benefit cost | 2,977 | 1,976 | 5,538 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Net loss (gain) | 7,438 | (13,870) | |
Amortization of prior service cost | (59) | (59) | (59) |
Amortization of net loss (gain) | (1,391) | (704) | (3,274) |
Total recognized in other comprehensive income | 5,988 | (14,633) | |
Total recognized in net periodic benefit cost and other comprehensive income | 8,965 | (12,657) | |
Defined Benefit Postretirement Healthcare Plans | |||
Components of net periodic benefit costs: | |||
Interest cost | 198 | 158 | 139 |
Amortization of prior service cost | 52 | 103 | 103 |
Amortization of net loss (gain) | 244 | 151 | 41 |
Net periodic benefit cost | 494 | 412 | 283 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: | |||
Net loss (gain) | 1,354 | 298 | |
Amortization of prior service cost | (52) | (103) | (103) |
Amortization of net loss (gain) | (244) | (151) | $ (41) |
Total recognized in other comprehensive income | 1,058 | 44 | |
Total recognized in net periodic benefit cost and other comprehensive income | $ 1,552 | $ 456 |
Pension and Other Postretirem_7
Pension and Other Postretirement Plans (Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Pension Plans | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3.00% | 4.00% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 4.00% | 3.75% | 4.00% |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.00% |
Chairman and President Non-Qualified Defined Benefit Plans | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3.00% | 4.00% | |
Rate of compensation increase | 8.00% | 8.00% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 4.00% | 3.75% | 4.00% |
Rate of compensation increase | 8.00% | 8.00% | 8.00% |
Defined Benefit Postretirement Healthcare Plans | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3.00% | 4.00% | |
Annual rate of increase in the per capita cost of covered health care benefits (in percentage) | 8.50% | ||
Decrease in annual rate of increase in the per capita cost of covered health care benefits (in percentage) | 0.50% | ||
Ultimate annual rate of increase in the per capita cost of covered health care benefits (in percentage) | 5.00% | ||
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 4.00% | 3.75% | 4.00% |
Pension and Other Postretirem_8
Pension and Other Postretirement Plans (Plan Assets) (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)investment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Defined Benefit Pension Plans | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 18,512,000 | $ 16,169,000 | $ 19,312,000 |
Plan assets | $ 0 | $ 0 | |
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 100.00% | 100.00% | 100.00% |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |||
Percentage pension assets not invested in cash or U.S. Government agencies (in percentage) | 96.00% | ||
Number of different investments | investment | 209 | ||
Acceptable range for each asset class (in percentage) | 4.00% | ||
Defined Benefit Pension Plans | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 12,783,000 | $ 10,311,000 | |
Defined Benefit Pension Plans | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 5,729,000 | 5,858,000 | |
Defined Benefit Pension Plans | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | Cash and cash equivalents | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 756,000 | $ 209,000 | |
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 4.00% | 1.00% | 3.00% |
Defined Benefit Pension Plans | Cash and cash equivalents | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 756,000 | $ 209,000 | |
Defined Benefit Pension Plans | Cash and cash equivalents | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | Cash and cash equivalents | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 0 | $ 0 | |
Defined Benefit Pension Plans | Equity securities | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 65.00% | 63.00% | 64.00% |
Defined Benefit Pension Plans | Domestic | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 11,853,000 | $ 9,909,000 | |
Defined Benefit Pension Plans | Domestic | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 11,853,000 | 9,909,000 | |
Defined Benefit Pension Plans | Domestic | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | Domestic | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | International | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 172,000 | 193,000 | |
Defined Benefit Pension Plans | International | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 172,000 | 193,000 | |
Defined Benefit Pension Plans | International | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | International | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 0 | $ 0 | |
Defined Benefit Pension Plans | Debt securities: | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 31.00% | 36.00% | 33.00% |
Defined Benefit Pension Plans | Corporate bonds | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | $ 5,729,000 | $ 5,858,000 | |
Defined Benefit Pension Plans | Corporate bonds | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | |||
Defined Benefit Pension Plans | Corporate bonds | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 5,729,000 | 5,858,000 | |
Defined Benefit Pension Plans | Corporate bonds | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | |
Defined Benefit Pension Plans | Other investments | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 2,000 | ||
Defined Benefit Pension Plans | Other investments | Level 1 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 2,000 | ||
Defined Benefit Pension Plans | Other investments | Level 2 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | ||
Defined Benefit Pension Plans | Other investments | Level 3 | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | ||
Chairman and President Non-Qualified Defined Benefit Plans | |||
Pension plan assets within the fair value hierachy | |||
Fair value of plan assets | 0 | 0 | $ 0 |
Plan assets | $ 0 | $ 0 | |
Minimum | Cash and cash equivalents | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 0.00% | ||
Minimum | Equity securities | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 55.00% | ||
Minimum | Debt securities: | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 30.00% | ||
Maximum | Cash and cash equivalents | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 15.00% | ||
Maximum | Equity securities | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 70.00% | ||
Maximum | Debt securities: | |||
Plan’s weighted-average asset allocations by asset category | |||
Actual plan asset allocations | 40.00% |
Pension and Other Postretirem_9
Pension and Other Postretirement Plans (Contributions) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution for next fiscal year | $ 1,107,000 |
Expected voluntary contribution for next fiscal year | $ 500,000 |
Defined Benefit Pension Plans | Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Adjusted funding target attainment percentage (in percentage) | 80.00% |
Chairman and President Non-Qualified Defined Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution for next fiscal year | $ 2,000,000 |
Pension and Other Postretire_10
Pension and Other Postretirement Plans (Estimated Future Benefit Payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 1,655 |
2021 | 1,547 |
2022 | 1,543 |
2023 | 1,505 |
2024 | 1,441 |
2025-2029 | 6,811 |
Chairman and President Non-Qualified Defined Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 1,982 |
2021 | 1,982 |
2022 | 1,982 |
2023 | 1,982 |
2024 | 1,982 |
2025-2029 | 7,357 |
Defined Benefit Postretirement Healthcare Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 128 |
2021 | 134 |
2022 | 139 |
2023 | 142 |
2024 | 145 |
2025-2029 | $ 969 |
Pension and Other Postretire_11
Pension and Other Postretirement Plans (Defined Contribution Pension Plans) (Details) - USD ($) | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Additional company's matching contribution | 4.00% | 4.00% | ||
National Western Life Insurance Company | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Additional company's matching contribution | 4.00% | |||
Non-Qualified Contribution Pension Plan | National Western Life Insurance Company | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total company contribution, non-qualified deferred compensation | $ 97,000 | $ 127,000 | $ 119,000 | |
Non-Qualified Contribution Pension Plan | Ozark National Life Insurance Company | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total company contribution, non-qualified deferred compensation | $ 45,000 | |||
United States | Qualified Plan | National Western Life Insurance Company | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total company contribution, 401(k) plan | $ 664,000 | $ 615,000 | $ 549,000 | |
United States | Qualified Plan | Ozark National Life Insurance Company | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total company contribution, 401(k) plan | 176,000 | |||
United States | Qualified Plan | NIS | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total company contribution, 401(k) plan | $ 30,000 |
Federal Income Taxes (Schedule
Federal Income Taxes (Schedule of Total Federal Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Taxes (benefits) on earnings from continuing operations | |||
Current | $ 58,834 | $ (1,697) | $ 74,361 |
Deferred | (25,294) | 26,446 | (23,129) |
Remeasurement of deferred taxes due to Tax Act | 0 | 0 | (17,098) |
Taxes on earnings from continuing operations | 33,540 | 24,749 | 34,134 |
Taxes (benefits) on components of stockholders' equity | 25,817 | (12,462) | 646 |
Total Federal income taxes (benefit) | 59,357 | 12,242 | 34,780 |
Net unrealized gains and losses on securities available for sale | |||
Taxes (benefits) on earnings from continuing operations | |||
Taxes (benefits) on components of stockholders' equity | 26,836 | (15,870) | 2,736 |
Foreign currency translation adjustments | |||
Taxes (benefits) on earnings from continuing operations | |||
Taxes (benefits) on components of stockholders' equity | 139 | 360 | (5) |
Change in benefit plan liability | |||
Taxes (benefits) on earnings from continuing operations | |||
Taxes (benefits) on components of stockholders' equity | $ (1,158) | $ 3,003 | $ (2,085) |
Federal Income Taxes (Narrative
Federal Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Tax benefit remeasurement of deferred tax liability | $ 0 | $ 0 | $ 17,098,000 | |
Reclassification to retained earnings from Tax Act | 2,500,000 | |||
Remeasurement of deferred taxes due to Tax Act | (500,000) | |||
Guaranty association assessments | 8,200,000 | |||
Deferred tax liability from Tax Act | 83,900,000 | |||
Deferred tax liability from Tax Act | $ 69,900,000 | |||
Adjustment to tax reserves | $ 332,900,000 | |||
Annual adjustment to tax reserves | 41,600,000 | |||
Annual income tax expense from adjustment to tax reserves | $ 8,700,000 | |||
Valuation allowances for deferred tax assets | 0 | 0 | ||
Reserve for uncertain tax positions | 0 | |||
Accruals for interest or penalties related to unrecognized tax benefits | $ 0 | $ 0 |
Federal Income Taxes (Schedul_2
Federal Income Taxes (Schedule of Differences and Corresponding Tax Effects) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Reconciliation [Abstract] | |||
Income tax expense at statutory rate (21% in 2019 and 2018, and 35% in 2017) | $ 34,683 | $ 29,716 | $ 50,594 |
Dividend received deduction | (493) | (820) | (1,099) |
Tax exempt interest | (1,564) | (1,416) | (2,276) |
Non deductible salary expense | 294 | 54 | 0 |
Adjustments pertaining to prior tax years | 459 | (3,071) | 895 |
Nondeductible insurance | 96 | 96 | 160 |
Nondeductible expenses | 117 | 198 | 178 |
Remeasurement of deferred taxes due to Tax Act | 0 | 0 | (17,098) |
Excess premium liability | 0 | 0 | 2,870 |
Other, net | (52) | (8) | (90) |
Taxes on earnings from continuing operations | $ 33,540 | $ 24,749 | $ 34,134 |
Federal Income Taxes (Schedul_3
Federal Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Future policy benefits, excess of financial accounting liabilities over tax liabilities | $ 190,230 | $ 189,100 |
Investment securities write-downs for financial accounting purposes | 293 | 311 |
Benefit plan liabilities | 9,259 | 7,444 |
Real estate, principally due to adjustments for financial accounting purposes | 0 | 16 |
Accrued operating expenses recorded for financial accounting purposes not currently tax deductible | 3,658 | 4,426 |
Accrued and unearned investment income recognized for tax purposes and deferred for financial accounting purposes | 101 | 109 |
Net unrealized losses on debt securities available for sale | 0 | 7,390 |
Other | 636 | 74 |
Total gross deferred tax assets | 204,177 | 208,870 |
Deferred tax liabilities: | ||
Deferred policy acquisition costs, sales inducement costs, and VOBA, principally expensed for tax purposes | (154,873) | (170,940) |
Tax reform reserve adjustment | (52,432) | (61,170) |
Debt securities, principally due to deferred market discount for tax | (8,051) | (7,370) |
Real estate, principally due to adjustments for financial accounting purposes | (45) | 0 |
Net unrealized gains on securities available for sale | (20,188) | 0 |
Foreign currency translation adjustments | (1,356) | (1,217) |
Fixed assets, due to different depreciation bases | (6,177) | (7,546) |
Other | (962) | (11) |
Total gross deferred tax liabilities | (244,084) | (248,254) |
Net deferred tax liabilities | $ (39,907) | $ (39,384) |
Short-Term Borrowing (Details)
Short-Term Borrowing (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Short-term Debt [Line Items] | |||
Collateral security deposit | 110.00% | ||
Outstanding borrowings | $ 0 | $ 0 | |
Amortized value of collateralized assets | 84,500,000 | ||
Fair value of assets | 87,100,000 | ||
MNB | |||
Short-term Debt [Line Items] | |||
Bank line of credit available to the company | $ 75,000,000 | $ 40,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Nov. 11, 2019USD ($) | Jul. 27, 2019USD ($) | Nov. 11, 2018USD ($) | Dec. 31, 2019USD ($)Annuity_Policy | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 30, 2019USD ($) | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | ||||||||
Number of annuity policies | Annuity_Policy | 2 | |||||||
Guaranty association assessments | $ 8,200,000 | |||||||
Rental expense | $ 400,000 | |||||||
Rental expense | $ 400,000 | $ 300,000 | ||||||
Present value of future payments capitalized | 1,800,000 | |||||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||||
2020 | 378,000 | |||||||
2021 | 391,000 | |||||||
2022 | 404,000 | |||||||
Total minimum lease payments | 1,173,000 | |||||||
Less: Interest | (27,000) | |||||||
Present value of net minimum lease payments | 1,146,000 | |||||||
Guaranty Association Assessments | ||||||||
Loss Contingencies [Line Items] | ||||||||
Guaranty association assessments | 200,000 | $ 100,000 | $ 300,000 | |||||
Williams v Pantaleoni et al | ||||||||
Loss Contingencies [Line Items] | ||||||||
Equity indexed annuity issued | $ 100,000 | |||||||
Loss contingency, compensatory damages awarded | $ 14,949 | |||||||
Loss contingency, punitive damages awarded | $ 2,900,000 | |||||||
Loss contingency, damages sought | $ 1,260,000 | |||||||
New Loans | ||||||||
Loss Contingencies [Line Items] | ||||||||
Commitments to extend credit relating to mortgage loans | 7,200,000 | |||||||
Existing Loans | ||||||||
Loss Contingencies [Line Items] | ||||||||
Commitments to extend credit relating to mortgage loans | 300,000 | |||||||
Pending Litigation | Damaris Maldonado Vinas Et AI | ||||||||
Loss Contingencies [Line Items] | ||||||||
Guaranty association assessments | $ 2,900,000 | |||||||
Pending Litigation | National Western Life Insurance Company and National Western Life Group, Inc. v. Ross Rankin Moody et. al | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages award to plaintiff | $ 1,314,054 |
Deposit with Regulatory Authori
Deposit with Regulatory Authorities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | $ 19,116 | $ 15,753 |
National Western Life Insurance Company | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | 15,773 | 15,753 |
National Western Life Insurance Company | Debt securities held to maturity | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | 14,261 | 14,708 |
National Western Life Insurance Company | Debt securities available for sale | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | 1,037 | 570 |
National Western Life Insurance Company | Short-term investments | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | 475 | 475 |
Ozark National Life Insurance Company | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | 3,343 | 0 |
Ozark National Life Insurance Company | Debt securities held to maturity | ||
Schedule of Deposit with Regulatory Authorities [Line Items] | ||
Assets deposited with state and other regulatory authorities | $ 3,343 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Operating lease payments | $ 400,000 | ||
Mortgage loan | 272,422,000 | $ 203,180,000 | |
Robert L. Moody, Jr. | |||
Related Party Transaction [Line Items] | |||
Commission paid under agency contracts | 131,974 | 123,675 | |
MNB | |||
Related Party Transaction [Line Items] | |||
Commission and service fees expense | 774,482 | 602,564 | |
Operating lease payments | 32,101 | ||
Operating lease payments | 10,700 | ||
RMS | |||
Related Party Transaction [Line Items] | |||
Management fees | 181,338 | 680,034 | |
American National Insurance Company | |||
Related Party Transaction [Line Items] | |||
Premiums paid during the year | 713,033 | 699,950 | |
Reimbursements for claim costs | 2,903,053 | 2,886,920 | |
Premium received | 3,024,013 | 3,007,209 | |
American National Registered Investment Advisory | |||
Related Party Transaction [Line Items] | |||
Professional fees | $ 45,391 | 45,540 | |
The Company | Moody Bancshares, Inc. | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 9.40% | ||
RCC | RMS | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 1.00% | ||
Three R Trusts | RCC | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 100.00% | ||
Three R Trusts | RMS | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 99.00% | ||
Moody Bancshares, Inc. | Moody Bank Holding | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 100.00% | ||
Moody Bank Holding | MNB | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership | 98.00% | ||
The Westcap Corporation | American National Insurance Company | |||
Related Party Transaction [Line Items] | |||
Undivided participation in mortgage | 24.93% | ||
Mortgage loan | $ 19,000,000 | $ 19,400,000 | $ 20,000,000 |
Percentage of commercial mortgage | 24.93% |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 235,428 | $ 173,166 | $ 192,685 | $ 217,909 | $ 42,486 | $ 225,435 | $ 174,658 | $ 109,018 | $ 819,188 | $ 551,599 | $ 874,448 |
Net earnings | 37,733 | 19,989 | 33,696 | 40,198 | 21,776 | 35,641 | 32,466 | 26,875 | 131,616 | 116,758 | 110,421 |
Change in fair value of derivative investments | $ 60,080 | $ 3,296 | $ 17,828 | $ 42,003 | $ (115,585) | $ 69,683 | $ 10,292 | $ (44,394) | |||
Class A | |||||||||||
Net earnings | $ 127,894 | $ 113,456 | $ 107,298 | ||||||||
Basic earnings per share (in dollars per share) | $ 10.67 | $ 5.65 | $ 9.53 | $ 11.37 | $ 6.16 | $ 10.08 | $ 9.18 | $ 7.60 | $ 37.22 | $ 33.02 | $ 31.23 |
Diluted earnings per share (in dollars per share) | 10.67 | 5.65 | 9.53 | 11.37 | 6.16 | 10.08 | 9.18 | 7.60 | $ 37.22 | $ 33.02 | $ 31.23 |
Class B | |||||||||||
Net earnings | $ 3,722 | $ 3,302 | $ 3,123 | ||||||||
Basic earnings per share (in dollars per share) | 5.34 | 2.83 | 4.76 | 5.68 | 3.08 | 5.04 | 4.59 | 3.80 | $ 18.61 | $ 16.51 | $ 15.61 |
Diluted earnings per share (in dollars per share) | $ 5.34 | $ 2.83 | $ 4.76 | $ 5.68 | $ 3.08 | $ 5.04 | $ 4.59 | $ 3.80 | $ 18.61 | $ 16.51 | $ 15.61 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments Other Than Investments in Related Parties (Details) | Dec. 31, 2019USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | $ 10,901,367,000 |
Balance Sheet Amount | 11,058,892,000 |
Total fixed maturity bonds | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 10,312,365,000 |
Fair Value | 10,764,648,000 |
Balance Sheet Amount | 10,463,190,000 |
Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 16,894,000 |
Fair Value | 23,594,000 |
Balance Sheet Amount | 23,594,000 |
Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 703,000 |
Fair Value | 1,361,000 |
Balance Sheet Amount | 1,361,000 |
Banks, trust and insurance companies | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,743,000 |
Fair Value | 3,363,000 |
Balance Sheet Amount | 3,363,000 |
Industrial, miscellaneous, and all others | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 8,698,000 |
Fair Value | 12,957,000 |
Balance Sheet Amount | 12,957,000 |
Preferred stocks | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 5,750,000 |
Fair Value | 5,913,000 |
Balance Sheet Amount | 5,913,000 |
Derivatives, index options | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 157,588,000 |
Balance Sheet Amount | 157,588,000 |
Mortgage loans on real estate | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 272,422,000 |
Balance Sheet Amount | 272,422,000 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 80,008,000 |
Balance Sheet Amount | 80,008,000 |
Other long-term investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 62,090,000 |
Balance Sheet Amount | 62,090,000 |
Real estate acquired through foreclosure | 0 |
Securities held to maturity | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 7,106,245,000 |
Fair Value | 7,407,703,000 |
Balance Sheet Amount | 7,106,245,000 |
Securities held to maturity | United States government and government agencies and authorities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 104,692,000 |
Fair Value | 106,518,000 |
Balance Sheet Amount | 104,692,000 |
Securities held to maturity | States, municipalities, and political subdivisions | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 431,433,000 |
Fair Value | 450,789,000 |
Balance Sheet Amount | 431,433,000 |
Securities held to maturity | Foreign governments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,144,000 |
Fair Value | 1,199,000 |
Balance Sheet Amount | 1,144,000 |
Securities held to maturity | Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 888,444,000 |
Fair Value | 924,999,000 |
Balance Sheet Amount | 888,444,000 |
Securities held to maturity | Corporate | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 4,607,826,000 |
Fair Value | 4,819,389,000 |
Balance Sheet Amount | 4,607,826,000 |
Securities held to maturity | Commercial mortgage-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 3,032,000 |
Fair Value | 3,084,000 |
Balance Sheet Amount | 3,032,000 |
Securities held to maturity | Residential mortgage-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,066,899,000 |
Fair Value | 1,098,889,000 |
Balance Sheet Amount | 1,066,899,000 |
Securities held to maturity | Asset-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 2,775,000 |
Fair Value | 2,836,000 |
Balance Sheet Amount | 2,775,000 |
Securities available for sale | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 3,206,120,000 |
Fair Value | 3,356,945,000 |
Balance Sheet Amount | 3,356,945,000 |
Securities available for sale | States, municipalities, and political subdivisions | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 98,037,000 |
Fair Value | 102,529,000 |
Balance Sheet Amount | 102,529,000 |
Securities available for sale | Foreign governments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 9,983,000 |
Fair Value | 10,186,000 |
Balance Sheet Amount | 10,186,000 |
Securities available for sale | Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 67,895,000 |
Fair Value | 71,371,000 |
Balance Sheet Amount | 71,371,000 |
Securities available for sale | Corporate | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 2,921,431,000 |
Fair Value | 3,060,657,000 |
Balance Sheet Amount | 3,060,657,000 |
Securities available for sale | Commercial mortgage-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 28,871,000 |
Fair Value | 29,942,000 |
Balance Sheet Amount | 29,942,000 |
Securities available for sale | Residential mortgage-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 12,815,000 |
Fair Value | 13,775,000 |
Balance Sheet Amount | 13,775,000 |
Securities available for sale | Asset-backed | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 67,088,000 |
Fair Value | 68,485,000 |
Balance Sheet Amount | $ 68,485,000 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant Condensed Statements of Financial Position (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | |||
Cash and cash equivalents | $ 253,525 | $ 131,976 | |
Federal income tax receivable | 0 | 17,934 | |
Other assets | 181,330 | 131,782 | |
Total assets | 12,553,447 | 11,931,691 | $ 12,225,094 |
Liabilities: | |||
Deferred Federal income tax liability | 39,907 | 39,384 | |
Other liabilities | 126,924 | 111,550 | |
Total liabilities | 10,425,204 | 10,030,914 | |
Stockholders' Equity: | |||
Additional paid-in capital | 41,716 | 41,716 | |
Accumulated other comprehensive income (loss) | 60,108 | (37,015) | |
Retained earnings | 2,026,383 | 1,896,040 | |
Total stockholders' equity | 2,128,243 | 1,900,777 | $ 1,832,174 |
Total liabilities and stockholders' equity | 12,553,447 | 11,931,691 | |
The Company | |||
ASSETS | |||
Investment in subsidiaries | 2,123,182 | 1,896,669 | |
Cash and cash equivalents | 1,239 | 1,443 | |
Federal income tax receivable | 4,731 | 4,185 | |
Deferred Federal income tax asset | 240 | 0 | |
Other assets | 323 | 353 | |
Total assets | 2,129,715 | 1,902,650 | |
Liabilities: | |||
Due to subsidiaries | 0 | 0 | |
Deferred Federal income tax liability | 0 | 397 | |
Other liabilities | 1,472 | 1,476 | |
Total liabilities | 1,472 | 1,873 | |
Stockholders' Equity: | |||
Additional paid-in capital | 41,716 | 41,716 | |
Accumulated other comprehensive income (loss) | 60,108 | (37,015) | |
Retained earnings | 2,026,383 | 1,896,040 | |
Total stockholders' equity | 2,128,243 | 1,900,777 | |
Total liabilities and stockholders' equity | 2,129,715 | 1,902,650 | |
Class A | |||
Stockholders' Equity: | |||
Common stock, value outstanding | 34 | 34 | |
Class A | The Company | |||
Stockholders' Equity: | |||
Common stock, value outstanding | 34 | 34 | |
Class B | |||
Stockholders' Equity: | |||
Common stock, value outstanding | 2 | 2 | |
Class B | The Company | |||
Stockholders' Equity: | |||
Common stock, value outstanding | $ 2 | $ 2 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Financial Position) (Parenthetical) (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class A | ||
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 3,436,020 | 3,436,020 |
Common stock, shares outstanding | 3,436,020 | 3,436,020 |
Class B | ||
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
The Company | Class A | ||
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 3,436,020 | 3,436,020 |
Common stock, shares outstanding | 3,436,020 | 3,436,020 |
The Company | Class B | ||
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant (Condensed Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Total revenues | $ 235,428 | $ 173,166 | $ 192,685 | $ 217,909 | $ 42,486 | $ 225,435 | $ 174,658 | $ 109,018 | $ 819,188 | $ 551,599 | $ 874,448 |
Expenses: | |||||||||||
Other operating expenses | 104,558 | 93,969 | 107,002 | ||||||||
Total expenses | 654,032 | 410,092 | 729,893 | ||||||||
Federal income taxes/(benefit) | 33,540 | 24,749 | 34,134 | ||||||||
Net earnings | $ 37,733 | $ 19,989 | $ 33,696 | $ 40,198 | $ 21,776 | $ 35,641 | $ 32,466 | $ 26,875 | 131,616 | 116,758 | 110,421 |
The Company | |||||||||||
Revenues: | |||||||||||
Dividend income from subsidiaries | 36,000 | 5,957 | 7,000 | ||||||||
Total revenues | 36,000 | 5,957 | 7,000 | ||||||||
Expenses: | |||||||||||
Other operating expenses | 5,358 | 2,617 | 4,199 | ||||||||
Total expenses | 5,358 | 2,617 | 4,199 | ||||||||
Earnings/(loss) before Federal income taxes | 30,642 | 3,340 | 2,801 | ||||||||
Federal income taxes/(benefit) | (1,739) | (717) | (1,495) | ||||||||
Earnings before equity/(loss) in earnings of affiliates | 32,381 | 4,057 | 4,296 | ||||||||
Equity/(loss) in earnings of affiliates | 99,235 | 112,701 | 106,125 | ||||||||
Net earnings | $ 131,616 | $ 116,758 | $ 110,421 |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||||||||
Net earnings/(loss) | $ 37,733 | $ 19,989 | $ 33,696 | $ 40,198 | $ 21,776 | $ 35,641 | $ 32,466 | $ 26,875 | $ 131,616 | $ 116,758 | $ 110,421 |
Adjustments to reconcile net earnings/(loss) to cash provided by operating activities: | |||||||||||
Depreciation and amortization | 11,270 | 11,825 | 10,005 | ||||||||
Change in: | |||||||||||
Federal income tax, net | 21,580 | (20,635) | 1,912 | ||||||||
Deferred Federal income tax | (25,294) | 26,438 | (40,227) | ||||||||
Net cash provided by operating activities | 329,029 | 326,623 | 276,130 | ||||||||
Net cash provided by (used in) investing activities | |||||||||||
Payment to acquire businesses, net of cash acquired | (189,121) | 0 | 0 | ||||||||
Net cash provided by (used in) investing activities | 377,874 | 27,929 | 54,797 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends on common stock | (1,273) | (1,273) | (1,273) | ||||||||
Net cash provided by (used in) financing activities | (586,017) | (441,914) | (164,535) | ||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 121,549 | (85,648) | 166,377 | ||||||||
Cash, cash equivalents, and restricted cash at beginning of year | 131,976 | 217,624 | 131,976 | 217,624 | 51,247 | ||||||
Cash, cash equivalents, and restricted cash at end of year | 253,525 | 131,976 | 253,525 | 131,976 | 217,624 | ||||||
The Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings/(loss) | 131,616 | 116,758 | 110,421 | ||||||||
Adjustments to reconcile net earnings/(loss) to cash provided by operating activities: | |||||||||||
Equity in earnings/(loss) of affiliates | (99,235) | (112,701) | (106,125) | ||||||||
Depreciation and amortization | 30 | 30 | 30 | ||||||||
Change in: | |||||||||||
Federal income tax, net | (547) | (1,166) | (1,843) | ||||||||
Deferred Federal income tax | (637) | 448 | 348 | ||||||||
Due to subsidiaries, net | 0 | 0 | (608) | ||||||||
Other, net | (4) | (1,956) | (917) | ||||||||
Net cash provided by operating activities | 31,223 | 1,413 | 1,306 | ||||||||
Net cash provided by (used in) investing activities | |||||||||||
Payment to acquire businesses, net of cash acquired | (30,154) | 0 | 0 | ||||||||
Net cash provided by (used in) investing activities | (30,154) | 0 | 0 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends on common stock | (1,273) | (1,273) | (1,273) | ||||||||
Net cash provided by (used in) financing activities | (1,273) | (1,273) | (1,273) | ||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | (204) | 140 | 33 | ||||||||
Cash, cash equivalents, and restricted cash at beginning of year | $ 1,443 | $ 1,303 | 1,443 | 1,303 | 1,270 | ||||||
Cash, cash equivalents, and restricted cash at end of year | $ 1,239 | $ 1,443 | $ 1,239 | $ 1,443 | $ 1,303 |
Schedule II - Condensed Finan_6
Schedule II - Condensed Financial Information of Registrant (Basis of Presentation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Information Disclosure [Abstract] | |||
Dividend payments | $ 36 | $ 6 | $ 7 |
Schedule V - Valuation and Qu_2
Schedule V - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for possible losses on mortgage loans | |||
Allowance for possible losses on mortgage loans: | |||
Balance at Beginning of Period | $ 675 | $ 650 | $ 650 |
Charged to costs and expenses | 0 | 25 | 0 |
Reductions | 0 | 0 | 0 |
Transfers | 0 | 0 | 0 |
Balance at End of Period | 675 | 675 | 650 |
Allowance for possible losses on real estate | |||
Allowance for possible losses on mortgage loans: | |||
Balance at Beginning of Period | 611 | 611 | 611 |
Charged to costs and expenses | 0 | 0 | 0 |
Reductions | (15) | 0 | 0 |
Transfers | 0 | 0 | 0 |
Balance at End of Period | $ 596 | $ 611 | $ 611 |
Uncategorized Items - nwlgi2019
Label | Element | Value |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 571,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (4,004,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accumulated Other-than-Temporary Impairment Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (2,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (4,414,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 5,966,000 |
Accumulated Other Than Temporary Impairment Available For Sale [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |