Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 26, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | PROTECTIVE LIFE INSURANCE CO | |
Entity Central Index Key | 310,826 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Entity Current Reporting Status | Yes | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 5,000,000 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Revenues | |||||
Premiums and policy fees | $ 829,835 | $ 793,572 | $ 2,128,016 | $ 2,531,555 | |
Reinsurance ceded | (325,373) | (312,256) | (810,265) | (980,841) | |
Net of reinsurance ceded | 504,462 | 481,316 | 1,317,751 | 1,550,714 | |
Net investment income | 451,818 | 413,544 | 1,093,902 | 1,358,830 | |
Realized investment gains (losses): | |||||
Derivative financial instruments | 532 | 41,895 | 47,513 | 75,988 | |
All other investments | 24,152 | 5,309 | (132,094) | 194,644 | |
Other-than-temporary impairment losses | (1,898) | (14,906) | (28,301) | (10,194) | |
Portion recognized in other comprehensive income (before taxes) | (1,410) | 4,842 | 12,503 | 3,302 | |
Net impairment losses recognized in earnings | (3,308) | (10,064) | (15,798) | (6,892) | |
Other income | 76,132 | 74,671 | 199,311 | 215,248 | |
Total revenues | 1,053,788 | 1,006,671 | 2,510,585 | 3,388,532 | |
Benefits and expenses | |||||
Benefits and settlement expenses, net of reinsurance ceded: (three and nine months 2016 Successor - $277,383 and $851,562); (2015 Successor - $265,315 and $685,256); (2015 Predecessor - $87,830) | 732,339 | 674,815 | 1,853,631 | 2,158,007 | |
Amortization of deferred policy acquisition costs and value of business acquired | 43,705 | 8,979 | 77,363 | 95,810 | |
Other operating expenses, net of reinsurance ceded: (three and nine months 2016 Successor - $49,787 and $150,677); (2015 Successor - $51,174 and $138,013); (2015 Predecessor - $17,700) | 183,477 | 166,756 | 434,501 | 544,889 | |
Total benefits and expenses | 959,521 | 850,550 | 2,365,495 | 2,798,706 | |
Income before income tax | 94,267 | 156,121 | 145,090 | 589,826 | |
Income tax expense | 20,965 | 42,542 | 40,667 | 185,114 | |
Net income | $ 73,302 | $ 113,579 | $ 104,423 | $ 404,712 | |
Predecessor | |||||
Revenues | |||||
Premiums and policy fees | $ 260,582 | ||||
Reinsurance ceded | (91,632) | ||||
Net of reinsurance ceded | 168,950 | ||||
Net investment income | 164,605 | ||||
Realized investment gains (losses): | |||||
Derivative financial instruments | 22,031 | ||||
All other investments | 81,153 | ||||
Other-than-temporary impairment losses | (636) | ||||
Portion recognized in other comprehensive income (before taxes) | 155 | ||||
Net impairment losses recognized in earnings | (481) | ||||
Other income | 23,388 | ||||
Total revenues | 459,646 | ||||
Benefits and expenses | |||||
Benefits and settlement expenses, net of reinsurance ceded: (three and nine months 2016 Successor - $277,383 and $851,562); (2015 Successor - $265,315 and $685,256); (2015 Predecessor - $87,830) | 266,575 | ||||
Amortization of deferred policy acquisition costs and value of business acquired | 4,817 | ||||
Other operating expenses, net of reinsurance ceded: (three and nine months 2016 Successor - $49,787 and $150,677); (2015 Successor - $51,174 and $138,013); (2015 Predecessor - $17,700) | 55,407 | ||||
Total benefits and expenses | 326,799 | ||||
Income before income tax | 132,847 | ||||
Income tax expense | 44,325 | ||||
Net income | $ 88,522 |
CONSOLIDATED CONDENSED STATEME3
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Benefits and settlement expenses, reinsurance ceded | $ 277,383 | $ 265,315 | $ 685,256 | $ 851,562 | |
Other operating expenses, reinsurance ceded | $ 49,787 | $ 51,174 | $ 138,013 | $ 150,677 | |
Predecessor | |||||
Benefits and settlement expenses, reinsurance ceded | $ 87,830 | ||||
Other operating expenses, reinsurance ceded | $ 17,700 |
CONSOLIDATED CONDENSED STATEME4
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Net income | $ 73,302 | $ 113,579 | $ 104,423 | $ 404,712 | |
Other comprehensive income (loss): | |||||
Change in net unrealized gains (losses) on investments, net of income tax: (three and nine months 2016 Successor - $106,446 and $654,243); (2015 Successor - $(25,285) and $(506,797)); (2015 Predecessor - $259,616) | 197,686 | (46,958) | (941,196) | 1,215,021 | |
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and nine months 2016 Successor - $575 and $(6,035)); (2015 Successor - $3,961 and $4,664); (2015 Predecessor - $(2,244)) | 1,068 | 7,356 | 8,664 | (11,206) | |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and nine months 2016 Successor - $1,278 and $(106)); (2015 Successor - $781 and $(1,677)); (2015 Predecessor - $(131)) | 2,374 | 1,451 | (3,115) | (198) | |
Change in accumulated (loss) gain - derivatives, net of income tax: (2015 Successor - $0 and $(45)); (2015 Predecessor - $5) | 0 | 0 | (86) | 0 | |
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2015 Successor - $0 and $45); (2015 Predecessor - $13) | 0 | 0 | 86 | 0 | |
Total other comprehensive income (loss) | 201,128 | (38,151) | (935,647) | 1,203,617 | |
Total comprehensive income (loss) | $ 274,430 | $ 75,428 | $ (831,224) | $ 1,608,329 | |
Predecessor | |||||
Net income | $ 88,522 | ||||
Other comprehensive income (loss): | |||||
Change in net unrealized gains (losses) on investments, net of income tax: (three and nine months 2016 Successor - $106,446 and $654,243); (2015 Successor - $(25,285) and $(506,797)); (2015 Predecessor - $259,616) | 482,143 | ||||
Reclassification adjustment for investment amounts included in net income, net of income tax: (three and nine months 2016 Successor - $575 and $(6,035)); (2015 Successor - $3,961 and $4,664); (2015 Predecessor - $(2,244)) | (4,166) | ||||
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (three and nine months 2016 Successor - $1,278 and $(106)); (2015 Successor - $781 and $(1,677)); (2015 Predecessor - $(131)) | (243) | ||||
Change in accumulated (loss) gain - derivatives, net of income tax: (2015 Successor - $0 and $(45)); (2015 Predecessor - $5) | 9 | ||||
Reclassification adjustment for derivative amounts included in net income, net of income tax: (2015 Successor - $0 and $45); (2015 Predecessor - $13) | 23 | ||||
Total other comprehensive income (loss) | 477,766 | ||||
Total comprehensive income (loss) | $ 566,288 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Change in net unrealized gains (losses) on investments, income tax | $ 106,446 | $ (25,285) | $ (506,797) | $ 654,243 | |
Reclassification adjustment for investment amounts included in net income, income tax | 575 | 3,961 | 4,664 | (6,035) | |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | 1,278 | 781 | (1,677) | (106) | |
Change in accumulated (loss) gain - derivatives, income tax | 0 | 0 | (45) | 0 | |
Reclassification adjustment for derivative amounts included in net income, income tax | $ 0 | $ 0 | $ 45 | $ 0 | |
Predecessor | |||||
Change in net unrealized gains (losses) on investments, income tax | $ 259,616 | ||||
Reclassification adjustment for investment amounts included in net income, income tax | (2,244) | ||||
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (131) | ||||
Change in accumulated (loss) gain - derivatives, income tax | 5 | ||||
Reclassification adjustment for derivative amounts included in net income, income tax | $ 13 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Successor | ||
Assets | ||
Fixed maturities, at fair value (amortized cost: Successor 2016 - $39,592,337; 2015 - $38,389,859) | $ 39,435,064 | $ 35,507,098 |
Fixed maturities, at amortized cost (fair value: Successor 2016 - $2,894,615; 2015 - $515,000) | 2,775,230 | 593,314 |
Equity securities, at fair value (cost: Successor 2016 - $680,987; 2015 - $693,147) | 699,686 | 699,925 |
Mortgage loans (related to securitizations: Successor 2016 - $296,716; 2015 - $359,181) | 5,912,683 | 5,662,812 |
Investment real estate, net of accumulated depreciation (Successor 2016 - $209; 2015 - $133) | 8,006 | 11,118 |
Policy loans | 1,656,083 | 1,699,508 |
Other long-term investments | 950,261 | 594,036 |
Short-term investments | 168,552 | 263,837 |
Total investments | 51,605,565 | 45,031,648 |
Cash | 407,578 | 212,358 |
Accrued investment income | 493,466 | 472,694 |
Accounts and premiums receivable | 134,054 | 54,054 |
Reinsurance receivables | 5,184,940 | 5,307,556 |
Deferred policy acquisition costs and value of business acquired | 1,914,388 | 1,562,373 |
Goodwill | 732,443 | 732,443 |
Other intangibles, net of accumulated amortization (Successor 2016 - $68,854; 2015 - $37,869) | 614,147 | 645,131 |
Property and equipment, net of accumulated depreciation (Successor 2016 - $14,561; 2015 - $7,908) | 103,502 | 101,600 |
Other assets | 279,394 | 255,283 |
Income tax receivable | 70,601 | 0 |
Assets related to separate accounts | ||
Variable annuity | 13,164,747 | 12,829,188 |
Variable universal life | 868,818 | 827,610 |
Total assets | 75,573,643 | 68,031,938 |
Liabilities | ||
Future policy benefits and claims | 30,685,509 | 29,703,190 |
Unearned premiums | 678,735 | 651,205 |
Total policy liabilities and accruals | 31,364,244 | 30,354,395 |
Stable value product account balances | 3,412,041 | 2,131,822 |
Annuity account balances | 10,679,011 | 10,719,862 |
Other policyholders’ funds | 1,406,578 | 1,069,572 |
Other liabilities | 1,861,729 | 1,230,500 |
Income tax payable | 0 | 76,584 |
Deferred income taxes | 2,094,922 | 1,215,180 |
Non-recourse funding obligations | 2,978,052 | 1,951,563 |
Repurchase program borrowings | 219,457 | 438,185 |
Liabilities related to separate accounts | ||
Variable annuity | 13,164,747 | 12,829,188 |
Variable universal life | 868,818 | 827,610 |
Total liabilities | 68,049,599 | 62,844,461 |
Commitments and contingencies - Note 13 | ||
Shareowner’s equity | ||
Preferred Stock; $1 par value, shares authorized: 2,000; Liquidation preference: $2,000 | 2 | 2 |
Common Stock, $1 par value, shares authorized and issued: 2016 and 2015 - 5,000,000 | 5,000 | 5,000 |
Additional paid-in-capital | 7,422,407 | 6,274,169 |
Retained earnings | 139,409 | 154,697 |
Accumulated other comprehensive income (loss): | ||
Net unrealized gains (losses) on investments, net of income tax: (Successor 2016 - $648,208; 2015 - $(670,922)) | (42,183) | (1,245,998) |
Net unrealized gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (Successor 2016 - $(106); 2015 - $(212)) | (591) | (393) |
Total shareowner’s equity | 7,524,044 | 5,187,477 |
Total liabilities and shareowner’s equity | $ 75,573,643 | $ 68,031,938 |
CONSOLIDATED CONDENSED BALANCE7
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - Successor - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fixed maturities, amortized cost | $ 39,592,337,000 | $ 38,389,859,000 |
Fair Value | 2,894,615,000 | 515,000,000 |
Equity securities, cost | 680,987,000 | 693,147,000 |
Mortgage loans, securitizations | 296,716,000 | 359,181,000 |
Investment real estate, accumulated depreciation | 209,000 | 133,000 |
Other intangibles, accumulated amortization | 68,854,000 | 37,869,000 |
Property and equipment, accumulated depreciation | $ 14,561,000 | $ 7,908,000 |
Preferred Stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, shares authorized (in shares) | 2,000 | 2,000 |
Preferred Stock, Liquidation preference | $ 2,000 | $ 2,000 |
Common Stock, par value (in dollars per share) | $ 1 | $ 1 |
Common Stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common Stock, shares issued (in shares) | 5,000,000 | 5,000,000 |
Net unrealized gains on investments, income tax | $ 648,208,000 | $ (670,922,000) |
Net unrealized gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | $ (106,000) | $ (212,000) |
CONSOLIDATED CONDENSED STATEME8
CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - 9 months ended Sep. 30, 2016 - Successor - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2015 | $ 5,187,477 | $ 2 | $ 5,000 | $ 6,274,169 | $ 154,697 | $ (1,246,391) |
Increase (decrease) in shareowner's equity | ||||||
Net income for the nine months ended September 30, 2016 | 404,712 | 404,712 | ||||
Other comprehensive income | 1,203,617 | 1,203,617 | ||||
Comprehensive income for the nine months ended September 30, 2016 | 1,608,329 | |||||
Capital contribution | 1,148,238 | 1,148,238 | ||||
Dividends paid to the parent company | (420,000) | (420,000) | ||||
Ending Balance at Sep. 30, 2016 | $ 7,524,044 | $ 2 | $ 5,000 | $ 7,422,407 | $ 139,409 | $ (42,774) |
CONSOLIDATED CONDENSED STATEME9
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Jan. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||
Cash flows from operating activities | |||
Net income | $ 104,423 | $ 404,712 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Realized investment (gains) losses | 100,379 | (263,740) | |
Amortization of DAC and VOBA | 77,363 | 95,810 | |
Capitalization of deferred policy acquisition costs | (210,162) | (246,073) | |
Depreciation and amortization expense | 33,254 | 37,974 | |
Deferred income tax | 4,555 | 231,631 | |
Accrued income tax | 115,127 | (147,185) | |
Interest credited to universal life and investment products | 521,760 | 532,998 | |
Policy fees assessed on universal life and investment products | (756,276) | (935,702) | |
Change in reinsurance receivables | 181,899 | 122,616 | |
Change in accrued investment income and other receivables | 16,984 | (76,837) | |
Change in policy liabilities and other policyholders’ funds of traditional life and health products | (157,729) | (171,016) | |
Trading securities: | |||
Maturities and principal reductions of investments | 90,548 | 93,397 | |
Sale of investments | 107,035 | 390,412 | |
Cost of investments acquired | (174,455) | (438,886) | |
Other net change in trading securities | 66,189 | 47,879 | |
Amortization of premiums and accretion of discounts on investments and mortgage loans | 287,977 | 308,030 | |
Change in other liabilities | 23,500 | 383,921 | |
Other, net | (39,211) | (74,798) | |
Net cash provided by operating activities | 393,160 | 295,143 | |
Cash flows from investing activities | |||
Maturities and principal reductions of investments, available-for-sale | 756,207 | 984,510 | |
Sale of investments, available-for-sale | 1,152,725 | 1,541,458 | |
Cost of investments acquired, available-for-sale | (2,316,843) | (3,839,376) | |
Change in investments, held-to-maturity | (50,000) | (2,185,000) | |
Mortgage loans: | |||
New lendings | (1,101,820) | (944,025) | |
Repayments | 894,164 | 648,109 | |
Change in investment real estate, net | (59) | 2,905 | |
Change in policy loans, net | 45,470 | 43,425 | |
Change in other long-term investments, net | (76,572) | (105,972) | |
Change in short-term investments, net | 22,703 | 59,225 | |
Net unsettled security transactions | (30,877) | 52,292 | |
Purchase of property and equipment | (5,700) | (8,891) | |
Amounts received from reinsurance transaction | 0 | 325,800 | |
Net cash (used in) provided by investing activities | (710,602) | (3,425,540) | |
Cash flows from financing activities | |||
Issuance (repayment) of non-recourse funding obligations | 50,000 | 2,173,700 | |
Repurchase program borrowings | 405,718 | (218,728) | |
Dividends/Return of capital to parent company | (230,000) | (420,000) | |
Investment product deposits and change in universal life deposits | 1,951,647 | 3,509,315 | |
Investment product withdrawals | (1,720,926) | (1,718,670) | |
Other financing activities, net | 0 | 0 | |
Net cash provided by (used in) financing activities | 456,439 | 3,325,617 | |
Change in cash | 138,997 | 195,220 | |
Cash at beginning of period | 378,903 | 212,358 | |
Cash at end of period | $ 378,903 | 517,900 | $ 407,578 |
Predecessor | |||
Cash flows from operating activities | |||
Net income | 88,522 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Realized investment (gains) losses | (102,703) | ||
Amortization of DAC and VOBA | 4,817 | ||
Capitalization of deferred policy acquisition costs | (22,799) | ||
Depreciation and amortization expense | 796 | ||
Deferred income tax | 91,709 | ||
Accrued income tax | (48,469) | ||
Interest credited to universal life and investment products | 79,088 | ||
Policy fees assessed on universal life and investment products | (90,288) | ||
Change in reinsurance receivables | (98,148) | ||
Change in accrued investment income and other receivables | (1,285) | ||
Change in policy liabilities and other policyholders’ funds of traditional life and health products | 176,119 | ||
Trading securities: | |||
Maturities and principal reductions of investments | 17,946 | ||
Sale of investments | 26,422 | ||
Cost of investments acquired | (27,289) | ||
Other net change in trading securities | (26,901) | ||
Amortization of premiums and accretion of discounts on investments and mortgage loans | 3,420 | ||
Change in other liabilities | 211,031 | ||
Other, net | (133,928) | ||
Net cash provided by operating activities | 148,060 | ||
Cash flows from investing activities | |||
Maturities and principal reductions of investments, available-for-sale | 59,028 | ||
Sale of investments, available-for-sale | 200,716 | ||
Cost of investments acquired, available-for-sale | (150,030) | ||
Change in investments, held-to-maturity | 0 | ||
Mortgage loans: | |||
New lendings | (100,530) | ||
Repayments | 45,741 | ||
Change in investment real estate, net | 7 | ||
Change in policy loans, net | 6,365 | ||
Change in other long-term investments, net | (25,372) | ||
Change in short-term investments, net | (39,312) | ||
Net unsettled security transactions | 37,510 | ||
Purchase of property and equipment | (648) | ||
Amounts received from reinsurance transaction | 0 | ||
Net cash (used in) provided by investing activities | 33,475 | ||
Cash flows from financing activities | |||
Issuance (repayment) of non-recourse funding obligations | 0 | ||
Repurchase program borrowings | 0 | ||
Dividends/Return of capital to parent company | 0 | ||
Investment product deposits and change in universal life deposits | 169,233 | ||
Investment product withdrawals | (240,147) | ||
Other financing activities, net | (4) | ||
Net cash provided by (used in) financing activities | (70,918) | ||
Change in cash | 110,617 | ||
Cash at beginning of period | 268,286 | $ 378,903 | |
Cash at end of period | $ 378,903 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, and for the periods reported as “predecessor”, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, PLC and the Company remain as SEC registrants within the United States. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. In conjunction with the Merger, the Company elected to apply “pushdown” accounting by applying the guidance allowed by ASC Topic 805, Business Combinations , including the initial recognition of most of the Company’s assets and liabilities at fair value as of the acquisition date, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. The new basis of accounting will be the basis of the accounting records for assets and liabilities held at the acquisition date in the preparation of future financial statements and related disclosures after the Merger date. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three and nine months ended September 30, 2016 ( Successor Company ), are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2016 ( Successor Company ). The year-end consolidated condensed financial data included herein was derived from audited financial statements but does not include all disclosures required by GAAP within this report. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 ( Successor Company ). The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. Entities Included The consolidated condensed financial statements for the predecessor and successor periods presented in this report include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies For a full description of significant accounting policies, see Note 2 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 ( Successor Company ). There were no significant changes to the Company's accounting policies during the nine months ended September 30, 2016 (Successor Company). Accounting Pronouncements Recently Adopted Accounting Standards Update ("ASU") No. 2015-02-Consolidation-Amendments to the Consolidation Analysis. This Update makes several targeted changes to generally accepted accounting principles, including a) eliminating the presumption that a general partner should consolidate a limited partnership and b) eliminating the consolidation model specific to limited partnerships. The amendments also clarify when fees and related party relationships should be considered in the consolidation of variable interest entities. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-03-Interest-Imputation of Interest. The objective of this Update is to eliminate diversity in practice related to the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Update is effective for fiscal years beginning after December 15, 2015, and requires revised presentation of debt issuance costs in all periods presented in the financial statements. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-15 - Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The objective of this Update is to clarify the SEC Staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on the topic in ASU No. 2015-03. This Update reflects the SEC Staff’s decision to not object when an entity defers and presents debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-05 - Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The Update is effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the new standard. Accounting Pronouncements Not Yet Adopted ASU No. 2014-09-Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date , to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. Early adoption will be allowed, but not before the original effective date. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its non-insurance operations. ASU No. 2014-15-Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update will require management to assess an entity’s ability to continue as a going concern, and will require footnote disclosures in certain circumstances. Under the updated guidance, management should consider relevant conditions and evaluate whether it is probable that the entity will be unable to meet its obligations within one year after the issuance date of the financial statements. The Update is effective for annual periods ending December 31, 2016 and for annual and interim periods thereafter, with early adoption permitted. The amendments in this Update will not impact the Company’s financial position or results of operations. However, the new guidance will require a formal assessment of going concern by management based on criteria prescribed in the new guidance. The Company is prepared to comply with the revised guidance, upon adoption. ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The Company does not anticipate that the additional disclosures introduced in this Update will be material to its financial statements. ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the revised guidance. ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the revised guidance. ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new impairment model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance its estimate of the contractual cash flows not expected to be collected. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results. ASU No. 2016-15 - Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update are intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Specific transactions addressed in the new guidance include: Debt prepayment/extinguishment costs, contingent consideration payments, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investments. The Update does not introduce any new accounting or financial reporting requirements, and is effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2016-16 - Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory. The objective of this Update is to reduce complexity and diversity in practice related to certain types of intra-entity asset transfers. Under the revised guidance, entities will be required to recognize the income tax consequences of intra-entity transfers of an assets other than inventory when those transfers occur. The Update is effective for annual reporting periods beginning after December 15, 2018 and interim reporting periods beginning after December 15, 2019. The Company is currently reviewing the Update to determine whether the amendments will impact its financial position or results of operations, and whether changes are needed to its policies and processes to comply with the revised guidance. |
REINSURANCE AND FINANCING TRANS
REINSURANCE AND FINANCING TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE AND FINANCING TRANSACTIONS | REINSURANCE AND FINANCING TRANSACTIONS On January 15, 2016, the Company completed the transaction contemplated by the Master Agreement, dated September 30, 2015 (the “Master Agreement”), with Genworth Life and Annuity Insurance Company (“GLAIC”). Pursuant to the Master Agreement, effective January 1, 2016, the Company entered into a reinsurance agreement (the “Reinsurance Agreement”) under the terms of which the Company coinsures certain term life insurance business of GLAIC (the “GLAIC Block”). In connection with the reinsurance transaction, on January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18 -year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and West Coast Life Insurance Company (“WCL”), a direct wholly owned subsidiary of the Company. Steel City issued notes with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion . Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City notes for the 18 -year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. In connection with the transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City, including a guarantee of the fees to the Risk-Takers. As a result of the financing transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. Also on January 15, 2016, Golden Gate paid an extraordinary dividend of $300 million to the Company as approved by the Vermont Department of Financial Regulation. The transactions described above resulted in an increase to total assets and total liabilities of $2.8 billion . Of the $2.8 billion increase in total assets, $0.6 billion was the result of the reinsurance transaction with GLAIC which included a $280 million increase in VOBA. The remaining $2.2 billion increase to total assets and liabilities is associated with the financing transaction between Golden Gate and Steel City. The Company considered whether the Reinsurance Agreement constituted the purchase of a business for accounting and reporting purposes pursuant to ASC 805, Business Combinations. While the transaction included a continuation of the revenue-producing activities associated with the reinsured policies, it did not result in the acquisition of a market distribution system, sales force or production techniques. Based on Management’s decision not to pursue distribution opportunities or future sales related to the reinsured policies, the Company accounted for the transaction as a reinsurance agreement under ASC 944, Insurance Contracts and asset acquisition under ASC 805. Accordingly, the Company recorded the assets and liabilities acquired under the reinsurance agreement at fair value and recognized an intangible asset (value of business acquired or “VOBA”) equal to the excess of the fair value of assets acquired over liabilities assumed, measured in accordance with the Company's accounting policies for insurance and reinsurance contracts that it issues or holds pursuant to ASC 944. |
DAI-ICHI MERGER
DAI-ICHI MERGER | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
DAI-ICHI MERGER | DAI-ICHI MERGER On February 1, 2015 PLC, subsequent to required approvals from PLC’s shareholders and relevant regulatory authorities, became a wholly owned subsidiary of Dai-ichi Life as contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) with Dai-ichi Life and DL Investment (Delaware), Inc., a Delaware corporation and wholly owned subsidiary of Dai-ichi Life, which provided for the Merger of DL Investment (Delaware), Inc. with and into PLC, with PLC surviving the Merger as a wholly owned subsidiary of Dai-ichi Life. On February 1, 2015 each share of PLC’s common stock outstanding was converted into the right to receive $70 per share, without interest (the “Per Share Merger Consideration”). The aggregate cash consideration paid in connection with the Merger for the outstanding shares of common stock was approximately $5.6 billion and paid directly to the shareowners of record by Dai-ichi Life. The Merger provided Dai-ichi Life with a platform for growth in the United States, where it did not previously have a significant presence. In connection with the completion of the Merger, PLC’s previously publicly traded equity was delisted from the NYSE, although PLC and the Company remain SEC registrants for financial reporting purposes in the United States. The Merger was accounted for under the acquisition method of accounting under ASC Topic 805. In accordance with ASC Topic 805-20-30, all identifiable assets acquired and liabilities assumed were measured at fair value as of the acquisition date. On the date of the Merger, goodwill of $735.7 million represented the cost in excess of the fair value of PLC’s net assets acquired (including identifiable intangibles) in the Merger, and reflected the Company’s assembled workforce, future growth potential and other sources of value not associated with identifiable assets. During the measurement period subsequent to February 1, 2015, the Company made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. The balance of goodwill associated with the Merger as of December 31, 2015 (Successor Company) and September 30, 2016 (Successor Company) was $732.4 million . None of the goodwill is tax deductible. The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: Fair Value As of February 1, 2015 (Dollars In Thousands) Assets Fixed maturities $ 38,342,948 Equity securities 699,081 Mortgage loans 5,580,229 Investment real estate 7,456 Policy loans 1,751,872 Other long-term investments 657,346 Short-term investments 311,236 Total investments 47,350,168 Cash 378,903 Accrued investment income 483,691 Accounts and premiums receivable 104,260 Reinsurance receivables 5,538,637 Value of business acquired 1,278,064 Goodwill 735,712 Other intangibles 683,000 Property and equipment 102,736 Other assets 224,555 Income tax receivable 50,117 Assets related to separate accounts Variable annuity 12,970,587 Variable universal life 819,188 Total assets $ 70,719,618 Liabilities Future policy and benefit claims $ 30,195,397 Unearned premiums 622,278 Total policy liabilities and accruals 30,817,675 Stable value product account balances 1,932,277 Annuity account balances 10,941,661 Other policyholders’ funds 1,388,083 Other liabilities 1,533,666 Deferred income taxes 1,861,632 Non-recourse funding obligations 1,895,636 Repurchase program borrowings 50,000 Liabilities related to separate accounts Variable annuity 12,970,587 Variable universal life 819,188 Total liabilities 64,210,405 Net assets acquired $ 6,509,213 Treatment of Benefit Plans At or immediately prior to the Merger, each stock appreciation right with respect to shares of PLC’s Common Stock granted under any Stock Plan (each, a “SAR”) that were outstanding and unexercised immediately prior to the Merger and that had a base price per share of Common Stock underlying such SAR (the “Base Price”) that was less than the Per Share Merger Consideration (each such SAR, an “In-the-Money SAR”), whether or not exercisable or vested, was cancelled and converted into the right to receive an amount in cash less any applicable withholding taxes, determined by multiplying (i) the excess of the Per Share Merger Consideration over the Base Price of such In-the-Money SAR by (ii) the number of shares of Common Stock subject to such In-the-Money SAR (such amount, the “SAR Consideration”). At or immediately prior to the effective time of the Merger, each restricted stock unit with respect to a share of PLC Common Stock granted under any Stock Plan (each, a “RSU”) that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of RSUs. The number of performance shares earned for each award of performance shares granted under any Stock Plan was calculated by determining the number of performance shares that would have been paid if the subject award period had ended on the December 31 immediately preceding the Merger (based on the conditions set for payment of performance share awards for the subject award period), provided that the number of performance shares earned for each award were not less than the aggregate number of performance shares at the target performance level. Each performance share earned that was outstanding immediately prior to the Merger, whether or not vested, was cancelled and converted into the right to receive an amount in cash, without interest, less any applicable withholding taxes, determined by multiplying (i) the Per Share Merger Consideration by (ii) the number of Performance Shares. |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 9 Months Ended |
Sep. 30, 2016 | |
Closed Block Disclosure [Abstract] | |
MONY CLOSED BLOCK OF BUSINESS | MONY CLOSED BLOCK OF BUSINESS In 1998, MONY Life Insurance Company (“MONY”) converted from a mutual insurance company to a stock corporation (“demutualization”). In connection with its demutualization, an accounting mechanism known as a closed block (the “Closed Block”) was established for certain individuals’ participating policies in force as of the date of demutualization. Assets, liabilities, and earnings of the Closed Block are specifically identified to support its participating policyholders. The Company acquired the Closed Block in conjunction with the acquisition of MONY in 2013. Assets allocated to the Closed Block inure solely to the benefit of each Closed Block’s policyholders and will not revert to the benefit of MONY or the Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of MONY’s general account, any of MONY’s separate accounts or any affiliate of MONY without the approval of the Superintendent of The New York State Department of Financial Services (the “Superintendent”). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the general account. The excess of Closed Block liabilities over Closed Block assets (adjusted to exclude the impact of related amounts in accumulated other comprehensive income (loss) (“AOCI”)) at the acquisition date of October 1, 2013, represented the estimated maximum future post-tax earnings from the Closed Block that would be recognized in income from continuing operations over the period the policies and contracts in the Closed Block remain in force. In connection with the acquisition of MONY, the Company developed an actuarial calculation of the expected timing of MONY’s Closed Block’s earnings as of October 1, 2013. Pursuant to the acquisition of the Company by Dai-ichi Life, this actuarial calculation of the expected timing of MONY’s Closed Block earnings was recalculated and reset as of February 1, 2015, along with the establishment of a policyholder dividend obligation as of such date. If the actual cumulative earnings from the Closed Block are greater than the expected cumulative earnings, only the expected earnings will be recognized in the Company’s net income. Actual cumulative earnings in excess of expected cumulative earnings at any point in time are recorded as a policyholder dividend obligation because they will ultimately be paid to Closed Block policyholders as an additional policyholder dividend unless offset by future performance that is less favorable than originally expected. If a policyholder dividend obligation has been previously established and the actual Closed Block earnings in a subsequent period are less than the expected earnings for that period, the policyholder dividend obligation would be reduced (but not below zero). If, over the period the policies and contracts in the Closed Block remain in force, the actual cumulative earnings of the Closed Block are less than the expected cumulative earnings, only actual earnings would be recognized in income from continuing operations. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside the Closed Block. Many expenses related to Closed Block operations, including amortization of VOBA, are charged to operations outside of the Closed Block; accordingly, net revenues of the Closed Block do not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block. Summarized financial information for the Closed Block as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ) is as follows: Successor Company As of As of (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,913,411 $ 6,010,520 Policyholder dividend obligation 264,107 — Other liabilities 52,435 24,539 Total closed block liabilities 6,229,953 6,035,059 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,696,136 $ 4,426,090 Mortgage loans on real estate 201,078 247,162 Policy loans 717,887 746,102 Cash 79,115 34,420 Other assets 155,360 162,640 Total closed block assets 5,849,576 5,616,414 Excess of reported closed block liabilities over closed block assets 380,377 418,645 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation of $16,169 (Successor) and $(179,360) (Successor) — (18,597 ) Future earnings to be recognized from closed block assets and closed block liabilities $ 380,377 $ 400,048 Reconciliation of the policyholder dividend obligation is as follows: Successor Company Predecessor Company For The Nine Months Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ — $ 323,432 $ 366,745 Applicable to net revenue (losses) (36,707 ) (27,854 ) (1,369 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $(8,706) (Successor); $(83,000) (2015 - Successor); $47,277 (2015 - Predecessor) 300,814 (237,143 ) 135,077 Policyholder dividend obligation, end of period $ 264,107 $ 58,435 $ 500,453 Closed Block revenues and expenses were as follows: Successor Company Predecessor Company For The Three For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Premiums and other income $ 44,043 $ 46,610 $ 135,282 $ 128,279 $ 15,065 Net investment income 53,582 54,593 156,458 142,274 19,107 Net investment gains 326 167 963 3,017 568 Total revenues 97,951 101,370 292,703 273,570 34,740 Benefits and other deductions Benefits and settlement expenses 88,143 90,966 260,227 245,711 31,152 Other operating expenses 537 258 2,214 733 — Total benefits and other deductions 88,680 91,224 262,441 246,444 31,152 Net revenues before income taxes 9,271 10,146 30,262 27,126 3,588 Income tax expense 3,245 3,551 10,591 9,494 1,256 Net revenues $ 6,026 $ 6,595 $ 19,671 $ 17,632 $ 2,332 |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Net realized gains (losses) for all other investments are summarized as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,665 $ (1,304 ) $ 24,097 $ 2,398 $ 6,891 Equity securities — 51 36 72 — Impairments on corporate securities (3,308 ) (10,064 ) (6,892 ) (15,798 ) (481 ) Modco trading portfolio 23,995 8,377 178,353 (133,524 ) 73,062 Other investments (1,508 ) (1,815 ) (7,842 ) (1,040 ) 1,200 Total realized gains (losses) - investments $ 20,844 $ (4,755 ) $ 187,752 $ (147,892 ) $ 80,672 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Gross realized gains $ 3,223 $ 714 $ 31,004 $ 7,646 $ 6,920 Gross realized losses $ (4,866 ) $ (12,031 ) $ (13,763 ) $ (20,974 ) $ (469 ) Impairments losses included in gross realized losses $ (3,308 ) $ (10,064 ) $ (6,892 ) $ (15,798 ) $ (481 ) The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position. Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 167,272 $ 94,825 $ 987,048 $ 807,763 $ 172,551 Gains realized $ 3,223 $ 715 $ 31,004 $ 7,646 $ 6,920 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 7,105 $ 34,591 $ 67,688 $ 83,917 $ 435 Losses realized $ (1,558 ) $ (1,967 ) $ (6,871 ) $ (5,175 ) $ (29 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process. The amortized cost and fair value of the Company’s investments classified as available-for-sale as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) Successor Company As of September 30, 2016 (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 1,842,012 $ 49,259 $ (4,558 ) $ 1,886,713 $ — Commercial mortgage-backed securities 1,654,152 31,706 (2,632 ) 1,683,226 — Other asset-backed securities 1,202,982 14,625 (15,691 ) 1,201,916 — U.S. government-related securities 1,299,876 13,092 (1,789 ) 1,311,179 — Other government-related securities 18,350 184 (2 ) 18,532 — States, municipals, and political subdivisions 1,725,351 25,239 (23,329 ) 1,727,261 — Corporate securities 28,966,811 488,460 (731,249 ) 28,724,022 (909 ) Preferred stock 94,362 1,227 (1,815 ) 93,774 — 36,803,896 623,792 (781,065 ) 36,646,623 (909 ) Equity securities 673,709 25,454 (6,755 ) 692,408 — Short-term investments 142,870 — — 142,870 — $ 37,620,475 $ 649,246 $ (787,820 ) $ 37,481,901 $ (909 ) As of December 31, 2015 Fixed maturities: Residential mortgage-backed securities $ 1,773,099 $ 9,286 $ (17,112 ) $ 1,765,273 $ — Commercial mortgage-backed securities 1,327,288 428 (41,852 ) 1,285,864 — Other asset-backed securities 813,056 2,758 (18,763 ) 797,051 — U.S. government-related securities 1,566,260 449 (34,532 ) 1,532,177 — Other government-related securities 18,483 — (743 ) 17,740 — States, municipals, and political subdivisions 1,729,732 682 (126,814 ) 1,603,600 — Corporate securities 28,433,530 26,147 (2,681,020 ) 25,778,657 (605 ) Preferred stock 64,362 192 (1,867 ) 62,687 — 35,725,810 39,942 (2,922,703 ) 32,843,049 (605 ) Equity securities 684,888 13,255 (6,477 ) 691,666 — Short-term investments 202,110 — — 202,110 — $ 36,612,808 $ 53,197 $ (2,929,180 ) $ 33,736,825 $ (605 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. As of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), the Company had an additional $2.8 billion and $2.7 billion of fixed maturities, $7.3 million and $8.3 million of equity securities, and $25.7 million and $61.7 million of short-term investments classified as trading securities, respectively. The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of September 30, 2016 ( Successor Company ), by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Successor Company Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) (Dollars In Thousands) Due in one year or less $ 786,505 $ 787,980 $ — $ — Due after one year through five years 6,834,174 6,901,114 — — Due after five years through ten years 7,735,392 7,887,064 — — Due after ten years 21,447,825 21,070,465 2,775,230 2,894,615 $ 36,803,896 $ 36,646,623 $ 2,775,230 $ 2,894,615 The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities. Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Other-than-temporary impairments $ (1,898 ) $ (14,906 ) $ (10,194 ) $ (28,301 ) $ (636 ) Non-credit impairment losses recorded in other comprehensive income (1,410 ) 4,842 3,302 12,503 155 Net impairment losses recognized in earnings $ (3,308 ) $ (10,064 ) $ (6,892 ) $ (15,798 ) $ (481 ) There were no other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell for the three and nine months ended September 30, 2016 (Successor Company), for the three months ended September 30, 2015 (Successor Company), for the period of February 1, 2015 to September 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 964 $ 4,472 $ 22,761 $ — $ 15,463 Additions for newly impaired securities 1,721 — 4,777 4,472 — Additions for previously impaired securities 1,521 9,479 2,046 9,479 221 Reductions for previously impaired securities due to a change in expected cash flows (4 ) — (22,763 ) — — Reductions for previously impaired securities that were sold in the current period — (687 ) (2,619 ) (687 ) — Ending balance $ 4,202 $ 13,264 $ 4,202 $ 13,264 $ 15,684 The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2016 ( Successor Company ): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 86,908 $ (433 ) $ 180,768 $ (4,125 ) $ 267,676 $ (4,558 ) Commercial mortgage-backed securities 175,209 (1,162 ) 104,931 (1,470 ) 280,140 (2,632 ) Other asset-backed securities 68,039 (268 ) 465,787 (15,423 ) 533,826 (15,691 ) U.S. government-related securities 128,224 (1,789 ) 3 — 128,227 (1,789 ) Other government-related securities 1,927 (2 ) — — 1,927 (2 ) States, municipalities, and political subdivisions 239,380 (2,842 ) 561,253 (20,487 ) 800,633 (23,329 ) Corporate securities 2,769,939 (46,629 ) 10,876,293 (684,620 ) 13,646,232 (731,249 ) Preferred stock 53,040 (128 ) 19,251 (1,687 ) 72,291 (1,815 ) Equities 84,188 (989 ) 59,929 (5,766 ) 144,117 (6,755 ) $ 3,606,854 $ (54,242 ) $ 12,268,215 $ (733,578 ) $ 15,875,069 $ (787,820 ) RMBS and CMBS had gross unrealized losses greater than twelve months of $4.1 million and $1.5 million , respectively, as of September 30, 2016 (Successor Company). Factors such as the credit enhancement within the deal structure, the average life of the securities, and the performance of the underlying collateral support the recoverability of these investments. The other asset-backed securities had a gross unrealized loss greater than twelve months of $15.4 million as of September 30, 2016 (Successor Company). This category predominately includes student-loan backed auction rate securities, the underlying collateral, of which is at least 97% guaranteed by the Federal Family Education Loan Program (“FFELP”). At this time, the Company has no reason to believe that the U.S. Department of Education would not honor the FFELP guarantee, if it were necessary. The states, municipalities, and political subdivisions category had gross unrealized losses greater than twelve months of $20.5 million as of September 30, 2016 (Successor Company). These declines were related to changes in interest rates. The corporate securities category had gross unrealized losses greater than twelve months of $684.6 million as of September 30, 2016 (Successor Company). The aggregate decline in market value of these securities was deemed temporary due to positive factors supporting the recoverability of the respective investments. Positive factors considered include credit ratings, the financial health of the issuer, the continued access of the issuer to capital markets, and other pertinent information As of September 30, 2016 ( Successor Company ), the Company had a total of 1,230 positions that were in an unrealized loss position, but the Company does not consider these unrealized loss positions to be other-than-temporary. This is based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and the Company does not intend to sell or expect to be required to sell the securities before recovering the Company’s amortized cost of the securities. The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2015 ( Successor Company ): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 977,433 $ (17,112 ) $ — $ — $ 977,433 $ (17,112 ) Commercial mortgage-backed securities 1,232,495 (41,852 ) — — 1,232,495 (41,852 ) Other asset-backed securities 633,274 (18,763 ) — — 633,274 (18,763 ) U.S. government-related securities 1,291,476 (34,532 ) — — 1,291,476 (34,532 ) Other government-related securities 17,740 (743 ) — — 17,740 (743 ) States, municipalities, and political subdivisions 1,566,752 (126,814 ) — — 1,566,752 (126,814 ) Corporate securities 24,235,121 (2,681,020 ) — — 24,235,121 (2,681,020 ) Preferred stock 34,685 (1,867 ) — — 34,685 (1,867 ) Equities 248,493 (6,477 ) — — 248,493 (6,477 ) $ 30,237,469 $ (2,929,180 ) $ — $ — $ 30,237,469 $ (2,929,180 ) The book value of the Company’s investment portfolio was marked to fair value as of February 1, 2015 ( Successor Company ), in conjunction with the Dai-ichi Merger which resulted in the elimination of previously unrealized gains and losses from accumulated other comprehensive income. The level of interest rates as of February 1, 2015 ( Successor Company ) resulted in an increase in the carrying value of the Company’s investments. Since February 1, 2015 ( Successor Company ), interest rates have increased resulting in net unrealized losses in the Company’s investment portfolio. The Company does not consider these unrealized loss positions to be other-than-temporary, based on the aggregate factors discussed previously and because the Company has the ability and intent to hold these investments until the fair values recover, and does not intend to sell or expect to be required to sell the securities before recovering the Company's amortized cost of the securities. As of September 30, 2016 ( Successor Company ), the Company had securities in its available-for-sale portfolio which were rated below investment grade of $1.9 billion and had an amortized cost of $2.0 billion . In addition, included in the Company’s trading portfolio, the Company held $266.4 million of securities which were rated below investment grade. Approximately $328.6 million of the available-for-sale and trading securities that were below investment grade were not publicly traded. The change in unrealized gains (losses), net of income tax, on fixed matur ity and equity securities, classified as available-for-sale is summarized as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 294,917 $ (54,274 ) $ 1,771,567 $ (1,437,340 ) $ 669,160 Equity securities (1,691 ) 2,385 7,749 (5,152 ) 12,172 The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI Successor Company As of September 30, 2016 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 640,230 $ — $ (1,751 ) $ 638,479 $ — Steel City LLC 2,135,000 121,136 — 2,256,136 — $ 2,775,230 $ 121,136 $ (1,751 ) $ 2,894,615 $ — Amortized Gross Gross Fair Total OTTI Successor Company As of December 31, 2015 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 593,314 $ — $ (78,314 ) $ 515,000 $ — $ 593,314 $ — $ (78,314 ) $ 515,000 $ — During the three and nine months ended September 30, 2016 (Successor Company), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not record any other-than-temporary impairments on held-to-maturity securities. The Company’s held-to-maturity securi ties had $121.1 million of gross unrealized gains and $1.8 million of gross unrecognized holding losses by maturity as of September 30, 2016 ( Successor Company ). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. These held-to-maturity securities are issued by affiliates of the Company which are considered variable interest entities ("VIE's"). The Company is not the primary beneficiary of these entities and thus the securities are not eliminated in consolidation. These securities are collateralized by non-recourse funding obligations issued by captive insurance companies that are affiliates of the Company. The Company’s held-to-maturity securities had $78.3 million of gross unrecognized holding losses as of December 31, 2015 ( Successor Company ). The Company does not consider these unrecognized holding losses to be other-than-temporary based on certain positive factors associated with the securities which include credit ratings of the guarantor, financial health of the issuer and guarantor, continued access of the issuer to capital markets and other pertinent information. Variable Interest Entities The Company holds certain investments in entities in which its ownership interests could possibly be considered variable interests under Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) (excluding debt and equity securities held as trading, available for sale, or held to maturity). The Company reviews the characteristics of each of these applicable entities and compares those characteristics to applicable criteria to determine whether the entity is a variable interest entity ("VIE"). If the entity is determined to be a VIE, the Company then performs a detailed review to determine whether the interest would be considered a variable interest under the guidance. The Company then performs a qualitative review of all variable interests with the entity and determines whether the Company is the primary beneficiary. ASC 810 provides that an entity is the primary beneficiary of a VIE if the entity has 1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and 2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Based on this analysis, the Company had an interest in one wholly owned subsidiary, Red Mountain, LLC ("Red Mountain") as of September 30, 2016 (Successor Company) and December 31, 2015 (Successor Company), that was determined to be a VIE. The activity most significant to Red Mountain is the issuance of a note in connection with a financing transaction involving Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”) and the Company in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued the note to Golden Gate V. Credit enhancement on the Red Mountain Note is provided by an unrelated third party. For details of this transaction, see Note 12, Debt and Other Obligations . The Company had the power, via its 100% ownership through an affiliate, to direct the activities of the VIE, but did not have the obligation to absorb losses related to the primary risks or sources of variability to the VIE. The variability of loss would be borne primarily by the third party in its function as provider of credit enhancement on the Red Mountain Note. Accordingly, it was determined that the Company is not the primary beneficiary of the VIE. The Company’s risk of loss related to the VIE is limited to its investment of $10,000 . Additionally, the Company has guaranteed Red Mountain’s payment obligation for the credit enhancement fee to the unrelated third party provider. As of September 30, 2016 (Successor Company), no payments have been made or required related to this guarantee. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company determined the fair value of its financial instruments based on the fair value hierarchy established in FASB guidance referenced in the Fair Value Measurements and Disclosures Topic which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has adopted the provisions from the FASB guidance that is referenced in the Fair Value Measurements and Disclosures Topic for non-financial assets and liabilities (such as property and equipment, goodwill, and other intangible assets) that are required to be measured at fair value on a periodic basis. The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material. 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: Unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2: Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly. Level 2 inputs include the following: a) Quoted prices for similar assets or liabilities in active markets b) Quoted prices for identical or similar assets or liabilities in non-active markets c) Inputs other than quoted market prices that are observable d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means. • Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 ( Successor Company ): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,886,710 $ 3 $ 1,886,713 Commercial mortgage-backed securities — 1,659,667 23,559 1,683,226 Other asset-backed securities — 648,687 553,229 1,201,916 U.S. government-related securities 1,070,116 241,063 — 1,311,179 State, municipalities, and political subdivisions — 1,727,261 — 1,727,261 Other government-related securities — 18,532 — 18,532 Corporate securities — 27,970,626 753,396 28,724,022 Preferred stock 74,522 19,252 — 93,774 Total fixed maturity securities - available-for-sale 1,144,638 34,171,798 1,330,187 36,646,623 Fixed maturity securities - trading Residential mortgage-backed securities — 264,142 — 264,142 Commercial mortgage-backed securities — 157,152 — 157,152 Other asset-backed securities — 117,380 145,833 263,213 U.S. government-related securities 32,143 4,735 — 36,878 State, municipalities, and political subdivisions — 340,983 — 340,983 Other government-related securities — 60,774 — 60,774 Corporate securities — 1,655,812 5,699 1,661,511 Preferred stock 3,788 — — 3,788 Total fixed maturity securities - trading 35,931 2,600,978 151,532 2,788,441 Total fixed maturity securities 1,180,569 36,772,776 1,481,719 39,435,064 Equity securities 633,160 — 66,526 699,686 Other long-term investments (1) 316,007 270,661 87,149 673,817 Short-term investments 164,702 3,850 — 168,552 Total investments 2,294,438 37,047,287 1,635,394 40,977,119 Cash 407,578 — — 407,578 Assets related to separate accounts Variable annuity 13,164,747 — — 13,164,747 Variable universal life 868,818 — — 868,818 Total assets measured at fair value on a recurring basis $ 16,735,581 $ 37,047,287 $ 1,635,394 $ 55,418,262 Liabilities: Annuity account balances (2) $ — $ — $ 88,857 $ 88,857 Other liabilities (1) 102,318 139,766 604,827 846,911 Total liabilities measured at fair value on a recurring basis $ 102,318 $ 139,766 $ 693,684 $ 935,768 (1)Includes certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,765,270 $ 3 $ 1,765,273 Commercial mortgage-backed securities — 1,285,864 — 1,285,864 Other asset-backed securities — 210,020 587,031 797,051 U.S. government-related securities 1,054,353 477,824 — 1,532,177 State, municipalities, and political subdivisions — 1,603,600 — 1,603,600 Other government-related securities — 17,740 — 17,740 Corporate securities 83 24,876,455 902,119 25,778,657 Preferred stock 43,073 19,614 — 62,687 Total fixed maturity securities - available-for-sale 1,097,509 30,256,387 1,489,153 32,843,049 Fixed maturity securities - trading Residential mortgage-backed securities — 286,658 — 286,658 Commercial mortgage-backed securities — 146,743 — 146,743 Other asset-backed securities — 122,511 152,912 275,423 U.S. government-related securities 233,592 4,755 — 238,347 State, municipalities, and political subdivisions — 313,354 — 313,354 Other government-related securities — 58,827 — 58,827 Corporate securities — 1,322,276 18,225 1,340,501 Preferred stock 2,794 1,402 — 4,196 Total fixed maturity securities - trading 236,386 2,256,526 171,137 2,664,049 Total fixed maturity securities 1,333,895 32,512,913 1,660,290 35,507,098 Equity securities 620,358 13,063 66,504 699,925 Other long-term investments (1) 113,699 141,487 68,384 323,570 Short-term investments 261,659 2,178 — 263,837 Total investments 2,329,611 32,669,641 1,795,178 36,794,430 Cash 212,358 — — 212,358 Assets related to separate accounts Variable annuity 12,829,188 — — 12,829,188 Variable universal life 827,610 — — 827,610 Total assets measured at fair value on a recurring basis $ 16,198,767 $ 32,669,641 $ 1,795,178 $ 50,663,586 Liabilities: Annuity account balances (2) $ — $ — $ 92,512 $ 92,512 Other liabilities (1) 40,067 106,310 375,848 522,225 Total liabilities measured at fair value on a recurring basis $ 40,067 $ 106,310 $ 468,360 $ 614,737 (1)Includes certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. Determination of fair values The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines certain fair values based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s credit standing, liquidity, and where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments as listed in the above table. The fair value of fixed maturity, short-term, and equity securities is determined by management after considering one of three primary sources of information: third party pricing services, non-binding independent broker quotations, or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for non-binding prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these three pricing methods include, but are not limited to: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. Third party pricing services price approxi mately 91% of the Company’s available-for-sale and trading fixed maturity securities. Based on the typical trading volumes and the lack of quoted market prices for available-for-sale and trading fixed maturities, third party pricing services derive the majority of security prices from observable market inputs such as recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Certain securities are priced via independent non-binding broker quotations, which are considered to have no significant unobservable inputs. When using non- binding independent broker quotations, the Company obtains one quote per security, typically from the broker from which we purchased the security. A pricing matrix is used to price securities for which the Company is unable to obtain or effectively rely on either a price from a third party pricing service or an independent broker quotation. The pricing matrix used by the Company begins with current spread levels to determine the market price for the security. The credit spreads, assigned by brokers, incorporate the issuer’s credit rating, liquidity discounts, weighted- average of contracted cash flows, risk premium, if warranted, due to the issuer’s industry, and the security’s time to maturity. The Company uses credit ratings provided by nationally recognized rating agencies. For securities that are priced via non-binding independent broker quotations, the Company assesses whether prices received from independent brokers represent a reasonable estimate of fair value through an analysis using internal and external cash flow models developed based on spreads and, when available, market indices. The Company uses a market-based cash flow analysis to validate the reasonableness of prices received from independent brokers. These analytics, which are updated daily, incorporate various metrics (yield curves, credit spreads, prepayment rates, etc.) to determine the valuation of such holdings. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the analytics, the price received from the independent broker is adjusted accordingly. The Company did not adjust any quotes or prices received from brokers during the nine months ended September 30, 2016 (Successor Company). The Company has analyzed the third party pricing services’ valuation methodologies and related inputs and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs that is in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Based on this evaluation and investment class analysis, each price was classified into Level 1, 2, or 3. Most prices provided by third party pricing services are classified into Level 2 because the significant inputs used in pricing the securities are market observable and the observable inputs are corroborated by the Company. Since the matrix pricing of certain debt securities includes significant non-observable inputs, they are classified as Level 3. Asset-Backed Securities This category mainly consists of residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities (collectively referred to as asset-backed securities or “ABS”). As of September 30, 2016 ( Successor Company ), the Company held $4.7 billion of ABS classified as Level 2. These securities are priced from information provided by a third party pricing service and independent broker quotes. The third party pricing services and brokers mainly value securities using both a market and income approach to valuation. As part of this valuation process they consider the following characteristics of the item being measured to be relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, and 7) credit ratings of the securities. After reviewing these characteristics of the ABS, the third party pricing service and brokers use certain inputs to determine the value of the security. For ABS classified as Level 2, the valuation would consist of predominantly market observable inputs such as, but not limited to: 1) monthly principal and interest payments on the underlying assets, 2) average life of the security, 3) prepayment speeds, 4) credit spreads, 5) treasury and swap yield curves, and 6) discount margin. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. As of September 30, 2016 ( Successor Company ), the Company held $722.6 million of Level 3 ABS, which included $553.2 million of other asset-backed securities classified as available-for-sale and $145.8 million of other asset-backed securities classified as trading. These securities are predominantly ARS whose underlying collateral is at least 97% guaranteed by the FFELP. As a result of the ARS market collapse during 2008, the Company prices its ARS using an income approach valuation model. As part of the valuation process the Company reviews the following characteristics of the ARS in determining the relevant inputs: 1) weighted-average coupon rate, 2) weighted-average years to maturity, 3) types of underlying assets, 4) weighted-average coupon rate of the underlying assets, 5) weighted-average years to maturity of the underlying assets, 6) seniority level of the tranches owned, 7) credit ratings of the securities, 8) liquidity premium, and 9) paydown rate. C orporate Securities, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities As of September 30, 2016 ( Successor Company ), the Company classified approximately $32.0 billion of corporate securities, U.S. government-related securities, states, municipals, and political subdivisions, and other government-related securities as Level 2. The fair value of the Level 2 securities is predominantly priced by broker quotes and a third party pricing service. The Company has reviewed the valuation techniques of the brokers and third party pricing service and has determined that such techniques used Level 2 market observable inputs. The following characteristics of the securities are considered to be the primary relevant inputs to the valuation: 1) weighted- average coupon rate, 2) weighted-average years to maturity, 3) seniority, and 4) credit ratings. The Company reviews the methodologies and valuation techniques (including the ability to observe inputs) in assessing the information received from external pricing services and in consideration of the fair value presentation. The brokers and third party pricing service utilize valuation models that consist of a hybrid income and market approach to valuation. The pricing models utilize the following inputs: 1) principal and interest payments, 2) treasury yield curve, 3) credit spreads from new issue and secondary trading markets, 4) dealer quotes with adjustments for issues with early redemption features, 5) liquidity premiums present on private placements, and 6) discount margins from dealers in the new issue market. As of September 30, 2016 ( Successor Company ), the Company classified approximately $759.1 million of securities as Level 3 valuations. Level 3 securities primarily represent investments in illiquid bonds for which no price is readily available. To determine a price, the Company uses a discounted cash flow model with both observable and unobservable inputs. These inputs are entered into an industry standard pricing model to determine the final price of the security. These inputs include: 1) principal and interest payments, 2) coupon rate, 3) sector and issuer level spread over treasury, 4) underlying collateral, 5) credit ratings, 6) maturity, 7) embedded options, 8) recent new issuance, 9) comparative bond analysis, and 10) an illiquidity premium. Equities As of September 30, 2016 ( Successor Company ), the Company held approximately $66.5 million of equity securities classified as Level 2 and Level 3. Of this total, $65.7 million represents Federal Home Loan Bank (“FHLB”) stock. The Company believes that the cost of the FHLB stock approximates fair value. Other long-term investments and Other liabilities Other long-term investments and other liabilities consist entirely of free-standing and embedded derivative financial instruments. Refer to Note 8, Derivative Financial Instruments for additional information related to derivatives. Derivative financial instruments are valued using exchange prices, independent broker quotations, or pricing valuation models, which utilize market data inputs. Excluding embedded derivatives, as of September 30, 2016 ( Successor Company ), 78.1% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. The remaining derivatives were priced by pricing valuation models, which predominantly utilize observable market data inputs. Inputs used to value derivatives include, but are not limited to, interest swap rates, credit spreads, interest rate and equity market volatility indices, equity index levels, and treasury rates. The Company performs monthly analysis on derivative valuations that includes both quantitative and qualitative analyses. Derivative instruments classified as Level 1 generally include futures and options, which are traded on active exchange markets. Derivative instruments classified as Level 2 primarily include interest rate and inflation swaps, options, and swaptions. These derivative valuations are determined using independent broker quotations, which are corroborated with observable market inputs. Derivative instruments classified as Level 3 were embedded derivatives and include at least one significant non-observable input. A derivative instrument containing Level 1 and Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input. The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instruments may not be classified within the same fair value hierarchy level as the associated assets and liabilities. Therefore, the changes in fair value on derivatives reported in Level 3 may not reflect the offsetting impact of the changes in fair value of the associated assets and liabilities. The embedded derivatives are carried at fair value in “other long-term investments” and “other liabilities” on the Company’s consolidated condensed balance sheet. The changes in fair value are recorded in earnings as “Realized investment gains (losses)-Derivative financial instruments”. Refer to Note 8, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses. The fair value of the GMWB embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using multiple risk neutral stochastic equity scenarios and policyholder behavior assumptions. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The projected equity volatilities are based on a blend of historical volatility and near- term equity market implied volatilities. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the the Ruark 2015 ALB table with attained age factors varying from 91.1% - 106.6% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR plus a credit spread (to represent the Company’s non-performance risk). As a result of using significant unobservable inputs, the GMWB embedded derivative is categorized as Level 3. These assumptions are reviewed on a quarterly basis. The balance of the FIA embedded derivative is impacted by policyholder cash flows associated with the FIA product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the FIA embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from the 1994 Variable Annuity MGDB mortality table modified for company experience, with attained age factors varying from 46% - 113% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the FIA embedded derivative is categorized as Level 3. The balance of the indexed universal life (“IUL”) embedded derivative is impacted by policyholder cash flows associated with the IUL product that are allocated to the embedded derivative in addition to changes in the fair value of the embedded derivative during the reporting period. The fair value of the IUL embedded derivative is derived through the income method of valuation using a valuation model that projects future cash flows using current index values and volatility, the hedge budget used to price the product, and policyholder assumptions (both elective and non-elective). For policyholder behavior assumptions, expected lapse and withdrawal assumptions are used and updated for actual experience, as necessary. The Company assumes age-based mortality from SOA 2015 VBT Primary Tables modified with company experience, with attained age factors varying from 38% - 153% . The present value of the cash flows is determined using the discount rate curve, which is based upon LIBOR up to one year and constant maturity treasury rates plus a credit spread (to represent the Company’s non-performance risk) thereafter. Policyholder assumptions are reviewed on an annual basis. As a result of using significant unobservable inputs, the IUL embedded derivative is categorized as Level 3. The Company has assumed and ceded certain blocks of policies under modified coinsurance agreements in which the investment results of the underlying portfolios inure directly to the reinsurers. As a result, these agreements contain embedded derivatives that are reported at fair value. Changes in their fair value are reported in earnings. The investments supporting these agreements are designated as “trading securities”; therefore changes in their fair value are also reported in earnings. As of September 30, 2016 ( Successor Company ), the fair value of the embedded derivative is based upon the relationship between the statutory policy liabilities (net of policy loans) of $2.4 billion and the statutory unrealized gain (loss) of the securities of $265.6 million . As a result, changes in the fair value of the embedded derivatives are largely offset by the changes in fair value of the related investments and each are reported in earnings. The fair value of the embedded derivative is considered a Level 3 valuation due to the unobservable nature of the policy liabilities. Certain of the Company’s subsidiaries have entered into interest support, yearly renewable term (“YRT”) premium support, and portfolio maintenance agreements with PLC. These agreements meet the definition of a derivative and are accounted for at fair value and are considered Level 3 valuations. The fair value of these derivatives as of September 30, 2016 ( Successor Company ) was $50.7 million and is included in Other long-term investments. For information regarding realized gains on these derivatives please refer to Note 8, Derivative Financial Instruments . The Interest Support Agreement provides that PLC will make payments to Golden Gate II if actual investment income on certain of Golden Gate II’s asset portfolios falls below a calculated investment income amount as defined in the Interest Support Agreement. The calculated investment income amount is a level of investment income deemed to be sufficient to support certain of Golden Gate II’s obligations under a reinsurance agreement with the Company, dated July 1, 2007. The derivative is valued using an internal valuation model that assumes a conservative projection of investment income under an adverse interest rate scenario and the probability that the expectation falls below the calculated investment income amount. This derivative had a fair value of $44.5 million as of September 30, 2016 ( Successor Company ). As of September 30, 2016 (Successor Company), no payments have been triggered under this agreement, however, certain interest support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreement. As of September 30, 2016 ( Successor Company ), no payments have been triggered under this agreement. The YRT premium support agreements provide that PLC will make payments to Golden Gate and Golden Gate II in the event that YRT premium rates increase. The derivatives are valued using an internal valuation model. The valuation model is a probability weighted discounted cash flow model. The value is primarily a function of the likelihood and severity of future YRT premium increases. The fair value of these derivatives as of September 30, 2016 ( Successor Company ) was $2.7 million . As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements. The portfolio maintenance agreements provide that PLC will make payments to Golden Gate, Golden Gate V, and WCL in the event of other-than-temporary impairments on investments that exceed defined thresholds. The derivatives are valued using an internal discounted cash flow model. The significant unobservable inputs are the projected probability and severity of credit losses used to project future cash flows on the investment portfolios. The fair value of the portfolio maintenance agreements as of September 30, 2016 ( Successor Company ), was $3.6 million . As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements. The Funds Withheld derivative results from a reinsurance agreement with Shades Creek where the economic performance of certain hedging instruments held by the Company is ceded to Shades Creek. The value of the Funds Withheld derivative is directly tied to the value of the hedging instruments held in the funds withheld account. The hedging instruments predominantly consist of derivative instruments the fair values of which are classified as a Level 2 measurement; as such, the fair value of the Funds Withheld derivative has been classified as a Level 2 measurement. The fair value of the Funds Withheld derivative as of September 30, 2016 ( Successor Company ) was a liability of $112.3 million . Annuity account balances The Company records certain of its FIA reserves at fair value. The fair value is considered a Level 3 valuation. The FIA valuation model calculates the present value of future benefit cash flows less the projected future profits to quantify the net liability that is held as a reserve. This calculation is done using multiple risk neutral stochastic equity scenarios. The cash flows are discounted using LIBOR plus a credit spread. Best estimate assumptions are used for partial withdrawals, lapses, expenses and asset earned rate with a risk margin applied to each. These assumptions are reviewed at least annually as a part of the formal unlocking process. If an event were to occur within a quarter that would make the assumptions unreasonable, the assumptions would be reviewed within the quarter. The discount rate for the fixed indexed annuities is based on an upward sloping rate curve which is updated each quarter. The discount rates for September 30, 2016 ( Successor Company ), ranged from a one month rate of 0.73% , a 5 year rate of 1.99% , and a 30 year rate of 2.97% . A credit spread component is also included in the calculation to accommodate non-performance risk. Separate Accounts Separate account assets are invested in open-ended mutual funds and are included in Level 1. Valuation of Level 3 Financial Instruments The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 554,230 Discounted cash flow Liquidity premium 0.44% - 1.19% (0.70%) Paydown rate 10.90% - 11.83% (11.18%) Corporate securities 726,890 Discounted cash flow Spread over treasury 0.97% - 5.10% (2.11%) Liabilities: Embedded derivatives - GMWB (1) $ 128,877 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB Table Lapse 0.3% - 15%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.20% - 1.19% Annuity account balances (2) 88,857 Actuarial cash flow model Asset earned rate 4.02% - 5.76% Expenses $126 per polic y Withdrawal rate 2.20% Mortality 1994 MGDB table with company experience Lapse 2.2% - 33.0%, depending on duration/surrender charge period Return on assets 1.50% - 1.85% depending on duration/surrender charge period Nonperformance risk 0.20% - 1.19% Embedded derivative - FIA 141,651 Actuarial cash flow model Expenses $126 per polic y Withdrawal rate 1% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 2.0% - 40.0%, depending on on duration/surrender charge period Nonperformance risk 0.20% - 1.19% Embedded derivative - IUL 46,348 Actuarial cash flow model Mortality 38% - 153% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.20% - 1.19% (1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements. (2)Represents liabilities related to fixed indexed annuities. The chart above excludes Level 3 financial instruments that are valued using broker quotes and those which book value approximates fair value. The Company has considered all reasonably available quantitative inputs as of September 30, 2016 ( Successor Company ), but the valuation techni ques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $210.6 million of financial instruments being classifie |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Types of Derivative Instruments and Derivative Strategies The Company utilizes a risk management strategy that incorporates the use of derivative financial instruments to reduce exposure to certain risks, including but not limited to, interest rate risk, inflation risk, currency exchange risk, volatility risk, and equity market risk. These strategies are developed through the Company’s analysis of data from financial simulation models and other internal and industry sources, and are then incorporated into the Company’s risk management program. Derivative instruments expose the Company to credit and market risk and could result in material changes from period to period. The Company attempts to minimize its credit risk by entering into transactions with highly rated counterparties. The Company manages the market risk by establishing and monitoring limits as to the types and degrees of risk that may be undertaken. The Company monitors its use of derivatives in connection with its overall asset/liability management programs and risk management strategies. In addition, all derivative programs are monitored by our risk management department. Derivatives Related to Interest Rate Risk Management Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps, interest rate futures, interest rate caps, and interest rate swaptions. The Company’s inflation risk management strategy involves the use of swaps that requires the Company to pay a fixed rate and receive a floating rate that is based on changes in the Consumer Price Index (“CPI”). Derivatives Related to Risk Mitigation of Certain Annuity Contracts The Company may use the following types of derivative contracts to mitigate its exposure to certain guaranteed benefits related to VA contracts and fixed indexed annuities: • Foreign Currency Futures • Variance Swaps • Interest Rate Futures • Equity Options • Equity Futures • Credit Derivatives • Interest Rate Swaps • Interest Rate Swaptions • Volatility Futures • Volatility Options • Funds Withheld Agreement • Total Return Swaps Other Derivatives The Company and certain of its subsidiaries have derivatives with PLC. These derivatives consist of an interest support agreement, YRT premium support agreements, and portfolio maintenance agreements with PLC. The Company has a funds withheld account that consists of various derivative instruments held by us that is used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument. Accounting for Derivative Instruments The Company records its derivative financial instruments in the consolidated balance sheet in “other long-term investments” and “other liabilities” in accordance with GAAP, which requires that all derivative instruments be recognized in the balance sheet at fair value. The change in the fair value of derivative financial instruments is reported either in the statement of income or in other comprehensive income (loss), depending upon whether it qualified for and also has been properly identified as being part of a hedging relationship, and also on the type of hedging relationship that exists. For a derivative financial instrument to be accounted for as an accounting hedge, it must be identified and documented as such on the date of designation. For cash flow hedges, the effective portion of their realized gain or loss is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged item impacts earnings. Any remaining gain or loss, the ineffective portion, is recognized in current earnings. For fair value hedge derivatives, their gain or loss as well as the offsetting loss or gain attributable to the hedged risk of the hedged item is recognized in current earnings. Effectiveness of the Company’s hedge relationships is assessed on a quarterly basis. The Company reports changes in fair values of derivatives that are not part of a qualifying hedge relationship through earnings in the period of change. Changes in the fair value of derivatives that are recognized in current earnings are reported in “Realized investment gains (losses)-Derivative financial instruments”. Derivative Instruments Designated and Qualifying as Hedging Instruments Cash-Flow Hedges • In connection with the issuance of inflation-adjusted funding agreements, the Company has entered into swaps to essentially convert the floating CPI-linked interest rate on these agreements to a fixed rate. The Company pays a fixed rate on the swap and receives a floating rate primarily determined by the period’s change in the CPI. The amounts that are received on the swaps are almost equal to the amounts that are paid on the agreements. None of these positions were held as of September 30, 2016 ( Successor Company ), as these funding agreements and correlating swaps matured in June of 2015. Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments The Company uses various other derivative instruments for risk management purposes that do not qualify for hedge accounting treatment. Changes in the fair value of these derivatives are recognized in earnings during the period of change. Derivatives Related to Variable Annuity Contracts • The Company uses equity, interest rate, currency, and volatility futures to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity and interest rate markets, foreign currency levels, and overall volatility. • The Company uses equity options, variance swaps, and volatility options to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. In general, the cost of such benefits varies with the level of equity markets and overall volatility. • The Company uses interest rate swaps and interest rate swaptions to mitigate the risk related to certain guaranteed minimum benefits, including GMWB, within its VA products. • The Company markets certain VA products with a GMWB rider. The GMWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. • The Company has a funds withheld account that consists of various derivative instruments held by the Company that are used to hedge the GMWB and GMDB riders. The economic performance of derivatives in the funds withheld account is ceded to Shades Creek. The funds withheld account is accounted for as a derivative financial instrument. Derivatives Related to Fixed Annuity Contracts • The Company uses equity, futures, and options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity and overall volatility. • The Company uses equity options to mitigate the risk within its fixed indexed annuity products. In general, the cost of such benefits varies with the level of equity markets. • The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Derivatives Related to Indexed Universal Life Contracts • The Company uses equity, futures, and options to mitigate the risk within its indexed universal life products. In general, the cost of such benefits varies with the level of equity markets. • The Company markets certain IUL products. The IUL component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. Other Derivatives • The Company uses certain interest rate swaps to mitigate the price volatility of fixed maturities. None of these positions were held as of September 30, 2016 ( Successor Company ). • The Company and certain of its subsidiaries have an interest support agreement, two YRT premium support agreements, and three portfolio maintenance agreements with PLC. The Company entered into three separate portfolio maintenance agreements, two in October 2012 and one in January 2016. • The Company uses various swaps and other types of derivatives to manage risk related to other exposures. • The Company is involved in various modified coinsurance and funds withheld arrangements which contain embedded derivatives. Changes in their fair value are recorded in current period earnings. The investment portfolios that support the related modified coinsurance reserves and funds withheld arrangements had fair value changes which substantially offset the gains or losses on these embedded derivatives. The following table sets forth realized investments gains and losses for the periods shown: Realized investment gains (losses) - derivative financial instruments Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ (7,002 ) $ 12,140 $ 62,065 $ (2,091 ) $ 1,413 Equity futures - VA (41,836 ) 40,951 (66,392 ) 3,215 9,221 Currency futures - VA 934 4,000 5,888 1,428 7,778 Equity options - VA (36,482 ) 33,519 (23,410 ) 8,195 3,047 Interest rate swaptions - VA (229 ) (3,618 ) (3,212 ) (12,399 ) 9,268 Interest rate swaps - VA 14,737 101,808 221,884 (74,150 ) 122,710 Embedded derivative - GMWB 24,150 (71,296 ) (108,545 ) 10,543 (68,503 ) Funds withheld derivative 53,834 (52,872 ) 63,886 (8,301 ) (9,073 ) Total derivatives related to VA contracts 8,106 64,632 152,164 (73,560 ) 75,861 Derivatives related to FIA contracts: Embedded derivative - FIA (14,486 ) 11,328 (15,938 ) 9,035 1,769 Equity futures - FIA 2,236 709 4,269 1,016 (184 ) Volatility futures - FIA — (24 ) — 6 — Equity options - FIA 6,583 (12,099 ) 1,756 (6,499 ) (2,617 ) Total derivatives related to FIA contracts (5,667 ) (86 ) (9,913 ) 3,558 (1,032 ) Derivatives related to IUL contracts: Embedded derivative - IUL 7,136 1,287 6,302 3,082 (486 ) Equity futures - IUL 101 17 (71 ) 39 3 Equity options - IUL 1,607 (1,110 ) 1,821 (1,048 ) (115 ) Total derivatives related to IUL contracts 8,844 194 8,052 2,073 (598 ) Embedded derivative - Modco reinsurance treaties (24,187 ) (9,817 ) (105,362 ) 131,505 (68,026 ) Derivatives with PLC (1) 13,387 (12,978 ) 31,098 (16,096 ) 15,863 Other derivatives 49 (50 ) (51 ) 33 (37 ) Total realized gains (losses) - derivatives $ 532 $ 41,895 $ 75,988 $ 47,513 $ 22,031 (1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC. The following table sets forth realized investments gains and losses for the Modco trading portfolio that is included in realized investment gains (losses) — all other investments: Realized investment gains (losses) - all other investments Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Modco trading portfolio (1) $ 23,995 $ 8,377 $ 178,353 $ (133,524 ) $ 73,062 (1)The Company elected to include the use of alternate disclosures for trading activities. The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship. The Company did not have any derivatives that qualified as a cash flow hedging relationships for the three and nine months ended September 30, 2016 (Successor Company) and for the three months ended September 30, 2015 (Successor Company): Gain (Loss) on Derivatives in Cash Flow Hedging Relationship Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Effective Portion) (Effective Portion) (Ineffective Portion) Benefits and settlement expenses Realized investment gains (losses) (Dollars In Thousands) Successor Company February 1, 2015 to September 30, 2015 Inflation $ (131 ) $ (131 ) $ 73 Total $ (131 ) $ (131 ) $ 73 Predecessor Company January 1, 2015 to January 31, 2015 Inflation $ 13 $ (36 ) $ (7 ) Total $ 13 $ (36 ) $ (7 ) The table below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: Successor Company As of September 30, 2016 As of December 31, 2015 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) (Dollars In Thousands) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,640,000 $ 267,389 $ 1,435,000 $ 66,408 Derivatives with PLC (1) 2,881,274 50,687 1,619,200 18,161 Embedded derivative - Modco reinsurance treaties 64,411 2,787 64,593 1,215 Embedded derivative - GMWB 1,155,640 33,675 1,723,081 49,007 Interest rate futures 796,694 2,256 282,373 1,537 Equity futures 45,261 556 262,485 1,275 Currency futures 321,917 4,735 226,936 2,499 Equity options 3,542,544 311,158 2,198,340 179,458 Interest rate swaptions 225,000 451 225,000 3,663 Other 212 123 242 347 $ 10,672,953 $ 673,817 $ 8,037,250 $ 323,570 Other liabilities Derivatives not designated as hedging instruments: Interest rate swaps $ 70,000 $ 1,658 $ 475,000 $ 16,579 Embedded derivative - Modco reinsurance treaties 2,455,121 254,285 2,473,427 178,362 Funds withheld derivative 1,625,725 112,344 1,149,664 102,378 Embedded derivative - GMWB 2,670,968 162,543 1,834,308 67,528 Embedded derivative - FIA 1,408,469 141,651 1,110,790 100,329 Embedded derivative - IUL 90,848 46,348 57,760 29,629 Interest rate futures 480,897 7,419 793,763 1,539 Equity futures 862,034 9,504 233,412 2,599 Currency futures 81,768 447 46,692 1,115 Equity options 2,202,799 110,712 1,205,204 22,167 $ 11,948,629 $ 846,911 $ 9,380,020 $ 522,225 (1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC. During the first quarter 2016, the Company revised its methodology for estimating notional amounts associated with the YRT Support Agreements among certain of its affiliates. The Company's revised approach reflects its position that no reasonably estimable notional amounts exist for the YRT Support Agreements, which contain payment positions based on the movement of the underlying premium rates, as described in Note 7, Fair Value of Financial Instruments . Current period amounts disclosed above reflect this change in estimate, which did not impact the Company's financial position or results of operations. |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
Offsetting [Abstract] | |
OFFSETTING OF ASSETS AND LIABILITIES | OFFSETTING OF ASSETS AND LIABILITIES Certain of the Company’s derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Company and a counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached. Additionally, certain of the Company’s repurchase agreements provide for net settlement on termination of the agreement. Refer to Note 12, Debt and Other Obligations for details of the Company’s repurchase agreement programs. The tables below present the derivative instruments by assets and liabilities for the Company as of September 30, 2016 ( Successor Company ). Net Amounts Gross Gross Amounts Offset in the of Assets Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Assets Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 586,545 $ — $ 586,545 $ 114,968 $ 299,819 $ 171,758 Total derivatives, subject to a master netting arrangement or similar arrangement 586,545 — 586,545 114,968 299,819 171,758 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,787 — 2,787 — — 2,787 Embedded derivative - GMWB 33,675 — 33,675 — — 33,675 Derivatives with PLC 50,687 — 50,687 — — 50,687 Other 123 — 123 — — 123 Total derivatives, not subject to a master netting arrangement or similar arrangement 87,272 — 87,272 — — 87,272 Total derivatives 673,817 — 673,817 114,968 299,819 259,030 Total Assets $ 673,817 $ — $ 673,817 $ 114,968 $ 299,819 $ 259,030 Net Amounts Gross Gross Amounts Offset in the of Liabilities Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Liabilities Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Paid Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 129,740 $ — $ 129,740 $ 114,968 $ 14,772 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 129,740 — 129,740 114,968 14,772 — Derivatives, not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 254,285 — 254,285 — — 254,285 Funds withheld derivative 112,344 — 112,344 — — 112,344 Embedded derivative - GMWB 162,543 — 162,543 — — 162,543 Embedded derivative - FIA 141,651 — 141,651 — — 141,651 Embedded derivative - IUL 46,348 — 46,348 — — 46,348 Total derivatives, not subject to a master netting arrangement or similar arrangement 717,171 — 717,171 — — 717,171 Total derivatives 846,911 — 846,911 114,968 14,772 717,171 Repurchase agreements (1) 219,457 — 219,457 — — 219,457 Total Liabilities $ 1,066,368 $ — $ 1,066,368 $ 114,968 $ 14,772 $ 936,628 (1) Borrowings under repurchase agreements are for a term less than 90 days . The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2015 (Successor Company). Net Amounts Gross Gross Amounts Offset in the of Assets Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Assets Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 254,840 $ — $ 254,840 $ 42,382 $ 105,842 $ 106,616 Total derivatives, subject to a master netting arrangement or similar arrangement 254,840 — 254,840 42,382 105,842 106,616 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,215 — 1,215 — — 1,215 Embedded derivative - GMWB 49,007 — 49,007 — — 49,007 Derivatives with PLC 18,161 — 18,161 — — 18,161 Other 347 — 347 — — 347 Total derivatives, not subject to a master netting arrangement or similar arrangement 68,730 — 68,730 — — 68,730 Total derivatives 323,570 — 323,570 42,382 105,842 175,346 Total Assets $ 323,570 $ — $ 323,570 $ 42,382 $ 105,842 $ 175,346 Net Amounts Gross Gross Amounts Offset in the of Liabilities Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Liabilities Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Paid Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 43,999 $ — $ 43,999 $ 42,382 $ 1,617 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 43,999 — 43,999 42,382 1,617 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 178,362 — 178,362 — — 178,362 Funds withheld derivative 102,378 — 102,378 — — 102,378 Embedded derivative - GMWB 67,528 — 67,528 — — 67,528 Embedded derivative - FIA 100,329 — 100,329 — — 100,329 Embedded derivative - IUL 29,629 — 29,629 — — 29,629 Total derivatives, not subject to a master netting arrangement or similar arrangement 478,226 — 478,226 — — 478,226 Total derivatives 522,225 — 522,225 42,382 1,617 478,226 Repurchase agreements (1) 438,185 — 438,185 — — 438,185 Total Liabilities $ 960,410 $ — $ 960,410 $ 42,382 $ 1,617 $ 916,411 (1) Borrowings under repurchase agreements are for a term less than 90 days . |
MORTGAGE LOANS
MORTGAGE LOANS | 9 Months Ended |
Sep. 30, 2016 | |
MORTGAGE LOANS | |
MORTGAGE LOANS | MORTGAGE LOANS Mortgage Loans The Company invests a portion of its investment portfolio in commercial mortgage loans. As of September 30, 2016 ( Successor Company ), the Company’s mortgage loan holdings were appr oximately $5.9 billion . The Company has specialized in making loans on either credit-oriented commercial properties or credit-anchored strip shopping centers and apartments. The Company’s underwriting procedures relative to its commercial loan portfolio are based, in the Company’s view, on a conservative and disciplined approach. The Company concentrates on a small number of commercial real estate asset types associated with the necessities of life (retail, multi-family, senior living, professional office buildings, and warehouses). The Company believes that these asset types tend to weather economic downturns better than other commercial asset classes in which it has chosen not to participate. The Company believes this disciplined approach has helped to maintain a relatively low delinquency and foreclosure rate throughout its history. The majority of the Company’s mortgage loans portfolio was underwritten by the Company. From time to time, the Company may acquire loans in conjunction with an acquisition. The Company’s commercial mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and accretion of discounts is recorded using the effective yield method. Interest income, amortization of premiums and accretion of discounts and prepayment fees are reported in net investment income. As of February 1, 2015, all mortgage loans were measured at fair value. Each mortgage loan was individually analyzed to determine the fair value. Each loan was either analyzed and assigned a discount rate or given an impairment, based on whether facts and circumstances which, as of the acquisition date, indicated less than full projected collections of contractual principal and interest payments. Various market factors were considered in determining the net present value of the expected cash flow stream or underlying real estate collateral, including the characteristics of the borrower, the underlying collateral, underlying credit worthiness of the tenants, and tenant payment history. Known events and risks, such as refinancing risks, were also considered in the fair value determination. In certain cases, fair value was based on the net present value of the expected cash flow stream or the underlying value of the real estate collateral. Certain of the mortgage loans have call options that occur within the next 12 years . However, if interest rates were to significantly increase, we may be unable to exercise the call options on our existing mortgage loans commensurate with the significantly inc reased market rates. As of September 30, 2016 (Successor Company), assuming the loans are called at their next call dates, approximately $28.1 million of principal would become due for the remainder of 2016, $972.7 million in 2017 through 2021, $235.0 million in 2022 through 2026, and $11.0 million thereafter. The Company offers a type of commercial mortgage loan under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. As of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), approximately $549.2 million and $449.2 million , respectively, of the Company’s total mortgage loan principal balance have this participation feature. Cash flows received as a result of this participation feature are recorded as interest income. During the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and January 1, 2015 to January 31, 2015 ( Predecessor Company ), the Company recognized $3.3 million , $15.8 million , $3.3 million , $8.4 million , and $0.1 million , respectively, of participating mortgage loan income. As of September 30, 2016 ( Successor Company ), approximately $1.0 million of invested assets consisted of nonperforming mortgage loans, restructured mortgage loans, or mortgage loans that were foreclosed and were converted to real estate properties. The Company does not expect these investments to adversely affect its liquidity or ability to maintain proper matching of assets and liabilities. During the nine months ended September 30, 2016 (Successor Company), the Company did not enter into any mortgage loan transactions that would have been accounted for as troubled debt restructurings. If the Company had troubled debt restructurings, these transactions would include either the acceptance of assets in satisfaction of principal during the respective periods or at a future date, and were the result of agreements between the creditor and the debtor . During the nine months ended September 30, 2016 (Successor Company), the Company did not accept or agree to accept assets in satisfaction of principal. As of September 30, 2016 (Successor Company), the Company did not have any mortgage loan transactions accounted for as troubled debt restructurings. The Company’s mortgage loan portfolio consists of two categories of loans: 1) those not subject to a pooling and servicing agreement and 2) those subject to a contractual pooling and servicing agreement. As of September 30, 2016 ( Successor Company ), $1.0 million of mortgage loans not subject to a pooling and servicing agreement were nonperforming mortgage loans, restructured, or mortgage loans that were foreclosed and were converted to real estate properties. The Company foreclosed on $1.0 million of nonperforming loans not subject to a pooling and servicing agreement during the nine months ended September 30, 2016 ( Successor Company ). As of September 30, 2016 ( Successor Company ), none of the loans subject to a pooling and servicing agreement were nonperforming or restructured. The Company did not foreclose on any nonperforming loans subject to a pooling and servicing agreement during the nine months ended September 30, 2016 ( Successor Company ). As of September 30, 2016 ( Successor Company ), the Company had an allowance for mortgage loan credit losses of $3.4 million and no allowance as of December 31, 2015 (Successor Company). Due to the Company’s loss experience and nature of the loan portfolio, the Company believes that a collectively evaluated allowance would be inappropriate. The Company believes an allowance calculated through an analysis of specific loans that are believed to have a higher risk of credit impairment provides a more accurate presentation of expected losses in the portfolio and is consistent with the applicable guidance for loan impairments in ASC Subtopic 310. Since the Company uses the specific identification method for calculating the allowance, it is necessary to review the economic situation of each borrower to determine those that have higher risk of credit impairment. The Company has a team of professionals that monitors borrower conditions such as payment practices, borrower credit, operating performance, and property conditions, as well as ensuring the timely payment of property taxes and insurance. Through this monitoring process, the Company assesses the risk of each loan. When issues are identified, the severity of the issues are assessed and reviewed for possible credit impairment. If a loss is probable, an expected loss calculation is performed and an allowance is established for that loan based on the expected loss. The expected loss is calculated as the excess carrying value of a loan over either the present value of expected future cash flows discounted at the loan’s original effective interest rate, or the current estimated fair value of the loan’s underlying collateral. A loan may be subsequently charged off at such point that the Company no longer expects to receive cash payments, the present value of future expected payments of the renegotiated loan is less than the current principal balance, or at such time that the Company is party to foreclosure or bankruptcy proceedings associated with the borrower and does not expect to recover the principal balance of the loan. A charge off is recorded by eliminating the allowance against the mortgage loan and recording the renegotiated loan or the collateral property related to the loan as investment real estate on the balance sheet, which is carried at the lower of the appraised fair value of the property or the unpaid principal balance of the loan, less estimated selling costs associated with the property. Successor Company Predecessor Company As of February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ — $ — $ 5,720 Charge offs (1,950 ) (2,561 ) (861 ) Recoveries — (638 ) (2,359 ) Provision 5,396 3,199 — Ending balance $ 3,446 $ — $ 2,500 It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. For loans subject to a pooling and servicing agreement, there are certain additional restrictions and/or requirements related to workout proceedings, and as such, these loans may have different attributes and/or circumstances affecting the status of delinquency or categorization of those in nonperforming status. An analysis of the delinquent loans is shown in the following chart. Greater Successor Company 30-59 Days 60-89 Days than 90 Days Total As of September 30, 2016 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 2,894 $ — $ — $ 2,894 Number of delinquent commercial mortgage loans 2 — — 2 As of December 31, 2015 Commercial mortgage loans $ 6,002 $ 1,033 $ — $ 7,035 Number of delinquent commercial mortgage loans 6 1 — 7 The Company’s commercial mortgage loan portfolio consists of mortgage loans that are collateralized by real estate. Due to the collateralized nature of the loans, any assessment of impairment and ultimate loss given a default on the loans is based upon a consideration of the estimated fair value of the real estate. The Company limits accrued interest income on impaired loans to 90 days of interest. Once accrued interest on the impaired loan is received, interest income is recognized on a cash basis. For information regarding impaired loans, please refer to the following chart: Unpaid Average Interest Cash Basis Successor Company Recorded Principal Related Recorded Income Interest As of September 30, 2016 Investment Balance Allowance Investment Recognized Income (Dollars In Thousands) Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 10,693 11,060 3,446 3,564 352 343 As of December 31, 2015 Commercial mortgage loans: With no related allowance recorded $ 1,694 $ 1,728 $ — $ 847 $ 104 $ 117 With an allowance recorded — — — — — — As of September 30, 2016 ( Successor Company ) and December 31, 2015 (Successor Company), the Company did not carry any mortgage loans that have been modified in a troubled debt restructuring. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL As permitted by ASC Topic 805, Business Combinations , the Company measured its assets and liabilities at fair value on the date of the Merger, February 1, 2015. The purchase price in excess of the fair value of PLC’s assets and liabilities resulted in the establishment of goodwill as of the date of the Merger. As of February 1, 2015 (Successor Company), the Company was allocated an aggregate goodwill balance of $735.7 million . During the measurement period subsequent to February 1, 2015, the Company has made adjustments to provisional amounts related to certain tax balances that resulted in a decrease to goodwill of $3.3 million from the amount recorded at the Merger date. This reduction in Goodwill was applied to the Life Marketing segment's goodwill. The balance of goodwill associated with the Merger as of September 30, 2016 (Successor Company) and December 31, 2015 (Successor Company) was $732.4 million . There has been no change in the goodwill during the nine months ended September 30, 2016 (Successor Company). Accounting for goodwill requires an estimate of the future profitability of the associated lines of business to assess the recoverability of the capitalized acquisition goodwill. The Company evaluates the carrying value of goodwill at the segment (or reporting unit) level at least annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: 1) a significant adverse change in legal factors or in business climate, 2) unanticipated competition, or 3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company first determines through qualitative analysis whether relevant events and circumstances indicate that it is more likely than not that segment goodwill balances are impaired as of the testing date. If it is determined that it is more likely than not that impairment exists, the Company compares its estimate of the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The Company utilizes a fair value measurement (which includes a discounted cash flows analysis) to assess the carrying value of the reporting units in consideration of the recoverability of the goodwill balance assigned to each reporting unit as of the measurement date. The Company’s material goodwill balances are attributable to certain of its operating segments (which are each considered to be reporting units). The cash flows used to determine the fair value of the Company’s reporting units are dependent on a number of significant assumptions. The Company’s estimates, which consider a market participant view of fair value, are subject to change given the inherent uncertainty in predicting future results and cash flows, which are impacted by such things as policyholder behavior, competitor pricing, capital limitations, new product introductions, and specific industry and market conditions. The balance recognized as goodwill is not amortized, but is reviewed for impairment on an annual basis, or more frequently as events or circumstances may warrant, including those circumstances which would more likely than not reduce the fair value of the Company’s reporting units below its carrying amount. During the fourth quarter of 2015, the Company performed its annual evaluation of goodwill based on information as of September 30, 2015 (Successor Company) and determined that no adjustment to impair goodwill was necessary. During the nine months ended September 30, 2016 (Successor Company), the Company did not identify any events or circumstances which would indicate that the fair value of its operating segments would have declined below their book value, either individually or in the aggregate. Accordingly, no impairment to the Company’s goodwill balance has been recorded. |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER OBLIGATIONS | DEBT AND OTHER OBLIGATIONS In conjunction with the Merger and in accordance with ASC Topic 805, the Company adjusted the carrying value of debt to fair value as of the date of the Merger, February 1, 2015. This resulted in the Company establishing premiums and discounts on its outstanding debt, subordinated debentures and non-recourse funding obligations. The carrying value of the Company’s revolving line of credit approximates fair value due to the nature of the borrowings and the fact the Company pays a variable rate of interest that reflects current market conditions. The fair value of the Company’s senior notes, subordinated debt, non-recourse funding obligations associated with Golden Gate II Captive Insurance Company and MONY Life Insurance Company, were determined using market prices as of February 1, 2015. The fair value of the Golden Gate V non-recourse funding obligation was determined using a discounted cash flow model with inputs derived from comparable financial instruments. The premiums and discounts established as of February 1, 2015 are amortized over the expected life of the instruments using the effective interest method. The amortization of premiums and discounts are recorded as a component of interest expense and are recorded in “Other operating expenses” on the Company’s Consolidated Condensed Statements of Income. On February 2, 2015, the Company and PLC amended and restated the Credit Facility (the “Credit Facility”). Under the Credit Facility, the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion . The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.25 billion . Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s prime rate , (y) 0.50% above the Federal Funds rate , or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The initial facility fee rate was 0.15% on February 2, 2015, and was adjusted to 0.125% upon PLC’s subsequent ratings upgrade on February 2, 2015. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is February 2, 2020. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of September 30, 2016 ( Successor Company ). PLC had an outstanding balance of $385.0 million bearing interest at a rate of LIBOR plus 1.00% as September 30, 2016 ( Successor Company ). As of June 30, 2016 ( Successor Company ), the Company had used $30.0 million of borrowing capacity by executing a Letter of Credit under the Credit Facility for the benefit on an affiliated captive reinsurance subs idiary of the Company. This Letter of Credit was terminated during the period and no Letter of Credit was outstanding as of September 30, 2016 (Successor Company). Non-Recourse Funding Obligations Golden Gate Captive Insurance Company On January 15, 2016, Golden Gate Captive Insurance Company (“Golden Gate”), a Vermont special purpose financial insurance company and a wholly owned subsidiary of the Company, and Steel City, LLC (“Steel City”), a newly formed wholly owned subsidiary of PLC, entered into an 18 -year transaction to finance $2.188 billion of “XXX” reserves related to the acquired GLAIC Block and the other term life insurance business reinsured to Golden Gate by the Company and WCL, a direct wholly owned subsidiary of the Company. Steel City issued notes (the "Steel City Notes") with an aggregate initial principal amount of $2.188 billion to Golden Gate in exchange for a surplus note issued by Golden Gate with an initial principal amount of $2.188 billion . Through the structure, Hannover Life Reassurance Company of America (Bermuda) Ltd., The Canada Life Assurance Company (Barbados Branch) and Nomura Americas Re Ltd. (collectively, the “Risk-Takers”) provide credit enhancement to the Steel City Notes for the 18 -year term in exchange for credit enhancement fees. The transaction is “non-recourse” to PLC, WCL and the Company, meaning that none of these companies, other than Golden Gate, are liable to reimburse the Risk-Takers for any credit enhancement payments required to be made. As of September 30, 2016 (Successor Company), the aggregate principal balance of the Steel City Notes was $2.135 billion . In connection with this transaction, PLC has entered into certain support agreements under which it guarantees or otherwise supports certain obligations of Golden Gate or Steel City. The support agreements provide that amounts would become payable by PLC if Golden Gate’s annual general corporate expenses were higher than modeled amounts, certain reinsurance rates applicable to the subject business increase beyond modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into a separate agreement to guarantee payment of certain fee amounts in connection with the credit enhancement of the Steel City Notes. As of September 30, 2016 (Successor Company), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate had a $2.135 billion outstanding non-recourse funding obligation as of September 30, 2016 (Successor Company). This non-recourse funding obligation matures in 2034 and accrues interest at a fixed annual rate of 4.75% . Prior to this transaction Golden Gate had three series of non-recourse funding obligations with a total outstanding balance of $800 million . PLC held the entire outstanding balance of non-recourse funding obligations. Series A1 non-recourse funding obligations had a balance of $400 million and accrued interest at 7.375% , the Series A2 non-recourse funding obligations had a balance of $100 million and accrued interest at 8.00% , and the Series A3 non-recourse funding obligations had a balance of $300 million and accrued interest at 8.45% . As a result of the transaction described above, the $800 million of Golden Gate Series A Surplus Notes held by PLC were contributed to the Company and then subsequently contributed to Golden Gate, which resulted in the extinguishment of these notes. The contribution of the non-recourse funding obligations from PLC to the Company, and the subsequent contribution of the obligations by the Company to Golden Gate, was recognized based on the respective carrying value of the obligations, which was approximately $1.15 billion . This carrying value included a premium over the outstanding principal balance of the no te issuances due to the effect of purchase accounting applied as a result of the Merger on February 1, 2015. As of the transaction date, the respective carrying value of the non-recourse funding obligation asset previously held by PLC was also approximately $1.15 billion ; therefore this transaction did not result in the recognition of a gain or loss for PLC or the Company. Golden Gate II Captive Insurance Company Golden Gate II Captive Insurance Company (“Golden Gate II”), a South Carolina special purpose financial captive insurance company and wholly owned subsidiary, had $575 million of outstanding non-recourse funding obligations as of September 30, 2016 ( Successor Company ). These outstanding non-recourse funding obligations were issued to special purpose trusts, which in turn issued securities to third parties. Certain of our affiliates own a portion of these securities. As of September 30, 2016 ( Successor Company ), securities related to $58.6 million of the outstanding balance of the non-recourse funding obligations were held by external parties, securities related to $220.3 million of the non-recourse funding obligations were held by nonconsolidated affiliates, and $296.1 million were held by consolidated subsidiaries of the Company. PLC has entered into certain support agreements with Golden Gate II obligating it to make capital contributions or provide support related to certain of Golden Gate II’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate II. These support agreements provide that amounts would become payable by PLC to Golden Gate II if its annual general corporate expenses were higher than modeled amounts or if Golden Gate II’s investment income on certain investments or premium income was below certain actuarially determined amounts. As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements; however, certain support agreement obligations to Golden Gate II of approximately $1.5 million have been collateralized by PLC. Re-evaluation and, if necessary, adjustments of any support agreement collateralization amounts occur annually during the first quarter pursuant to the terms of the support agreements. There are no support agreements between the Company and Golden Gate II. During the nine months ended September 30, 2016 (Successor Company), the Company and its affiliates repurchased $11.3 million of its outstanding non-recourse funding obligations, at a discount. These repurchases did not result in a material gain or loss for the Company. During the period of February 1, 2015 to September 30, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 (Predecessor Company), the Company did not repurchase any of its outstanding non-recourse funding obligations. Golden Gate V Vermont Captive Insurance Company On October 10, 2012, Golden Gate V Vermont Captive Insurance Company (“Golden Gate V”), a Vermont special purpose financial insurance company and Red Mountain, LLC (“Red Mountain”), both wholly owned subsidiaries, entered into a 20 -year transaction to finance up to $945 million of “AXXX” reserves related to a block of universal life insurance policies with secondary guarantees issued by the Company and its subsidiary, West Coast Life Insurance Company (“WCL”). Golden Gate V issued non-recourse funding obligations to Red Mountain, and Red Mountain issued a note with an initial principal amount of $275 million , increasing to a maximum of $945 million in 2027, to Golden Gate V for deposit to a reinsurance trust supporting Golden Gate V’s obligations under a reinsurance agreement with WCL, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. Through the structure, Hannover Life Reassurance Company of America (“Hannover Re”), the ultimate risk taker in the transaction, provides credit enhancement to the Red Mountain note for the 20 -year term in exchange for a fee. The transaction is “non-recourse” to Golden Gate V, Red Mountain, WCL, PLC, and the Company, meaning that none of these companies are liable for the reimbursement of any credit enhancement payments required to be made. As of September 30, 2016 ( Successor Company ), the principal balance of the Red Mountain note was $550 million . Future scheduled capital contributions to prefund credit enhancement fees amount to approximately $134.2 million and will be paid in annual installments through 2031. In connection with the transaction, PLC has entered into certain support agreements under which PLC guarantees or otherwise supports certain obligations of Golden Gate V or Red Mountain. The support agreements provide that amounts would become payable by PLC if Golden Gate V’s annual general corporate expenses were higher than modeled amounts or in the event write-downs due to other-than-temporary impairments on assets held in certain accounts exceed defined threshold levels. Additionally, PLC has entered into separate agreements to indemnify Golden Gate V with respect to material adverse changes in non-guaranteed elements of insurance policies reinsured by Golden Gate V, and to guarantee payment of certain fee amounts in connection with the credit enhancement of the Red Mountain note. As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements. In connection with the transaction outlined above, Golden Gate V had a $550 million o utstanding non-recourse funding obligation as of September 30, 2016 ( Successor Company ). This non-recourse funding obligation matures in 2037, has scheduled increases in principal to a maximum of $945 million , and accrues interest at a fixed annual rate of 6.25% . Non-recourse funding obligations outstanding as of September 30, 2016 ( Successor Company ), on a consolidated basis, are shown in the following table: Maturity Year-to-Date Weighted-Avg Issuer Carrying Value (1) Year Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,135,000 2039 4.75 % Golden Gate II Captive Insurance Company (outstanding principal - $278,949) 227,124 2052 1.28 % Golden Gate V Vermont Captive Insurance Company (2)(3) (outstanding principal - $550,000) 613,447 2037 5.12 % MONY Life Insurance Company (3) (outstanding principal - $1,091) 2,481 2024 6.19 % Total $ 2,978,052 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company. (3) Fixed rate obligations. Letters of Credit Golden Gate III Vermont Captive Insurance Company Golden Gate III Vermont Captive Insurance Company (“Golden Gate III”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement (the “Reimbursement Agreement”) with UBS AG, Stamford Branch (“UBS”), as issuing lender. Under the original Reimbursement Agreement, dated April 23, 2010, UBS issued a letter of credit (the “LOC”) in the initial amount of $505 million to a trust for the benefit of WCL. The Reimbursement Agreement was subsequently amended and restated effective November 21, 2011 (the “First Amended and Restated Reimbursement Agreement”), to replace the existing LOC with one or more letters of credit from UBS, and to extend the maturity date from April 1, 2018, to April 1, 2022. On August 7, 2013, Golden Gate III entered into a Second Amended and Restated Reimbursement Agreement with UBS (the “Second Amended and Restated Reimbursement Agreement”), which amended and restated the First Amended and Restated Reimbursement Agreement. Under the Second and Amended and Restated Reimbursement Agreement a new LOC in an initial amount of $710 million was issued by UBS in replacement of the existing LOC issued under the First Amended and Restated Reimbursement Agreement. The term of the LOC was extended from April 1, 2022 to October 1, 2023, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $610 million to $720 million in 2016 if certain conditions had been met. On June 25, 2014, Golden Gate III entered into a Third Amended and Restated Reimbursement Agreement with UBS (the “Third Amended and Restated Reimbursement Agreement”), which amended and restated the Second Amended and Restated Reimbursement Agreement. Under the Third Amended and Restated Reimbursement Agreement, a new LOC in an initial amount of $915 million was issued by UBS in replacement of the existing LOC issued under the Second Amended and Restated Reimbursement Agreement. The term of the LOC was extended from October 1, 2023 to April 1, 2025, subject to certain conditions being satisfied including scheduled capital contributions being made to Golden Gate III by one of its affiliates. The maximum stated amount of the LOC was increased from $720 million to $935 million in 2015. The LOC is held in trust for the benefit of WCL, and supports certain obligations of Golden Gate III to WCL under an indemnity reinsurance agreement originally effective April 1, 2010, as amended and restated on November 21, 2011, and as further amended and restated on August 7, 2013 and on June 25, 2014 to include additional blocks of policies, and pursuant to which WCL cedes liabilities relating to the policies of WCL and retroc edes liabilities relating to the policies of the Company. The LOC balance reached its scheduled peak amount of $935 million in 2015 and remained at this level as of September 30, 2016 ( Successor Company ). The term of the LOC is expected to be approximately 15 years from the original issuance date. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate III are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Gol den Gate III obligating PLC to make capital contributions or provide support related to certain of Golden Gate III’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate III. Future scheduled capital contributions amount to approximately $122.5 million and will be paid in three installments with the last payment occurring in 2021, and these contributions may be subject to potential offset against dividend payments as permitted under the terms of the Third Amended and Restated Reimbursement Agreement. The support agreements provide that amounts would become payable by PLC to Golden Gate III if Golden Gate III’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate III. Pursuant to the terms of an amended and restated letter agreement with UBS, PLC has continued to guarantee the payment of fees to UBS as specified in the Third Amended and Restated Reimbursement Agreement. As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements. Golden Gate IV Vermont Captive Insurance Company Golden Gate IV Vermont Captive Insurance Company (“Golden Gate IV”), a Vermont special purpose financial insurance company and wholly owned subsidiary, is party to a Reimbursement Agreement with UBS AG, Stamford Branch, as issuing lender. Under the Reimbursement Agreement, dated December 10, 2010, UBS issued an LOC in the initial amount of $270 million to a trust for the benefit of WCL. The LOC balance, in accordance with the terms of the Reimbursement Agreement, reached its scheduled peak amount of $790 million during the second quarter of 2016 and remained at this level as of September 30, 2016 ( Successor Company ). The term of the LOC is expected to be 12 years from the original issuance date (stated maturity of December 30, 2022). The LOC was issued to support certain obligations of Golden Gate IV to WCL under an indemnity reinsurance agreement, pursuant to which WCL cedes liabilities relating to the policies of WCL and retrocedes liabilities relating to the policies of the Company. This transaction is “non-recourse” to WCL, PLC, and the Company, meaning that none of these companies other than Golden Gate IV are liable for reimbursement on a draw of the LOC. PLC has entered into certain support agreements with Golden Gate IV obligating PLC to make capital contributions or provide support related to certain of Golden Gate IV’s expenses and in certain circumstances, to collateralize certain of PLC’s obligations to Golden Gate IV. The support agreements provide that amounts would become payable by PLC to Golden Gate IV if Golden Gate IV’s annual general corporate expenses were higher than modeled amounts or if specified catastrophic losses occur during defined time periods with respect to the policies reinsured by Golden Gate IV. PLC has also entered into a separate agreement to guarantee the payments of LOC fees under the terms of the Reimbursement Agreement. As of September 30, 2016 ( Successor Company ), no payments have been made under these agreements. Repurchase Program Borrowings While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days . The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provided for net settlement in the event of default or on termination of the agreements. As of September 30, 2016 ( Successor Company ), the fair value of securities pledged under the repurchase program was $224.8 million and the repurchase obligation of $219.5 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 43 basis points). During the nine months ended September 30, 2016 (Successor Company), the maximum balance outstanding at any one point in time related to these programs was $725.0 million . The average daily balance was $453.0 million (at an average borrowing rate of 41 basis points) during the nine months ended September 30, 2016 ( Successor Company ). As of December 31, 2015 (Successor Company), the fair value of securities pledged under the repurchase program was $479.9 million and the repurchase obligation of $438.2 million was included in the Company's consolidated condensed balance sheets. During 2015 , the maximum balance outstanding at any one point in time related to these programs was $912.7 million . The average daily balance was $540.3 million and $77.4 million (at an average borrowing rate of 20 and 16 basis points) during the period of February 1, 2015 to December 31, 2015 (Successor Company) and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ). The following table provides the amount of collateral pledged for repurchase agreements, grouped by asset class, as of September 30, 2016 ( Successor Company ): Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of September 30, 2016 (Successor Company) (Dollars In Thousands) Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ — $ — $ — $ — $ — State and municipal securities — — — — — Corporate securities — — — — — Equity securities — — — — — Non-U.S. sovereign debt — — — — — Mortgage loans 224,767 — — — 224,767 Other asset-backed securities — — — — — Total borrowings $ 224,767 $ — $ — $ — $ 224,767 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Under insurance guaranty fund laws, in most states insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. In addition, from time to time, companies may be asked to contribute amounts beyond prescribed limits. Most insurance guaranty fund laws provide that an assessment may be excused or deferred if it would threaten an insurer’s own financial strength. The Company does not believe its insurance guaranty fund assessments will be materially different from amounts already provided for in the financial statements. A number of civil jury verdicts have been returned against insurers, broker-dealers and other providers of financial services involving sales, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or persons with whom the insurer does business, and other matters. Often these lawsuits have resulted in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive and non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive non-economic compensatory damages which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, companies have made material settlement payments. Public companies in general and the financial services and insurance industries in particular are also sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some companies have been the subject of law enforcement or regulatory actions or other actions resulting from such investigations. The Company, in the ordinary course of business, is involved in such matters. The Company establishes liabilities for litigation and regulatory actions when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no liability is established. For such matters, the Company may provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company reviews relevant information with respect to litigation and regulatory matters on a quarterly and annual basis and updates its established liabilities, disclosures and estimates of reasonably possible losses or range of loss based on such reviews. In 2012, the IRS proposed favorable and unfavorable adjustments to the Company’s 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS’ Appeals Division. In October 2015, Appeals accepted the Company’s earlier proposed settlement offer. In September 2015, the IRS proposed favorable and unfavorable adjustments to the Company’s 2008 through 2011 reported taxable income. The Company agreed to these adjustments. As a result, pending a routine review by Congress’ Joint Committee on Taxation, the Company expects to receive an approximate $6.2 million ne t tax refund in a future period. This refund will not materially affect the Company’s effective tax rate. Certain of the Company’s insurance subsidiaries, as well as certain other insurance companies for which the Company has coinsured blocks of life insurance and annuity policies, are under audit for compliance with the unclaimed property laws of a number of states. The audits are being conducted on behalf of the treasury departments or unclaimed property administrators in such states. The focus of the audits is on whether there have been unreported deaths, maturities, or policies that have exceeded limiting age with respect to which death benefits or other payments under life insurance or annuity policies should be treated as unclaimed property that should be escheated to the state. The Company is presently unable to estimate the reasonably possible loss or range of loss that may result from the audits due to a number of factors, including uncertainty as to the legal theory or theories that may give rise to liability, the early stages of the audits being conducted, and, with respect to one block of life insurance policies that is co-insured by a subsidiary of the Company, uncertainty as to whether the Company or other companies are responsible for the liabilities, if any, arising in connection with such policies. The Company will continue to monitor the matter for any developments that would make the loss contingency associated with the audits reasonably estimable. Certain of the Company’s subsidiaries are under a targeted multi-state examination with respect to their claims paying practices and their use of the U.S. Social Security Administration’s Death Master File or similar databases (a “Death Database”) to identify unreported deaths in their life insurance policies, annuity contracts and retained asset accounts. There is no clear basis in previously existing law for requiring a life insurer to search for unreported deaths in order to determine whether a benefit is owed, and substantial legal authority exists to support the position that the prevailing industry practice was lawful. A number of life insurers, however, have entered into settlement or consent agreements with state insurance regulators under which the life insurers agreed to implement procedures for periodically comparing their life insurance and annuity contracts and retained asset accounts against a Death Database, treating confirmed deaths as giving rise to a death benefit under their policies, locating beneficiaries and paying them the benefits and interest, escheating the benefits and interest to the state if the beneficiary could not be found, and paying penalties to the state, if required. It has been publicly reported that the life insurers have paid administrative and/or examination fees to the insurance regulators in connection with the settlement or consent agreements. The Company believes it is reasonably possible that insurance regulators could demand from the Company administrative and/or examination fees relating to the targeted multi-state examination. Based on publicly reported payments by other life insurers, the Company estimates the range of such fees to be from $0 to $4.5 million . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Expense [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Beginning with the December 31, 2015 measurement, PLC changed its method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefits by applying a spot rate approach. Historically, PLC utilized a single weighted average discount rate derived from a selected yield curve used to measure the benefit obligation as of the measurement date. Under the new spot rate approach, the actual calculation of service and interest cost will reflect an array of spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. PLC made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot rates from the selected yield curve. This new approach does not affect the measurement of the total benefit obligation. Components of the net periodic benefit cost for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ), are as follows: Successor Company Predecessor Company For The Three Months Ended September 30, 2016 For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 Defined Defined Defined Excess Defined Benefit Pension Plan Excess Benefit Plan Defined Benefit Pension Plan Excess Benefit Plan (Dollars In Thousands) (Dollars In Thousands) Service cost — benefits earned during the period $ 2,906 $ 311 $ 2,973 $ 333 $ 8,717 $ 1,102 $ 7,928 $ 888 $ 974 $ 95 Interest cost on projected benefit obligation 2,737 299 2,433 408 8,210 1,054 6,488 1,088 1,002 140 Expected return on plan assets (3,605 ) — (3,642 ) — (10,816 ) — (9,712 ) — (1,293 ) — Amortization of prior service cost — — — — — — — — (33 ) 1 Amortization of actuarial losses — 64 — — — 114 — — 668 138 Preliminary net periodic benefit cost 2,038 674 1,764 741 6,111 2,270 4,704 1,976 1,318 374 Settlement/curtailment expense — 635 — — — 2,135 — — — — Total net periodic benefit costs $ 2,038 $ 1,309 $ 1,764 $ 741 $ 6,111 $ 4,405 $ 4,704 $ 1,976 $ 1,318 $ 374 On May 5, 2016, the Board of Directors of Protective Life Corporation decided to convert the accrued benefit payable under the excess benefit plan as of March 31, 2016 to John D. Johns, PLC's Chairman and Chief Executive Officer, into a lump sum amount. On September 30, 2016, the lump sum amount was allocated to a book entry account that will be treated as though it were a deferral account under PLC’s deferred compensation plan for officers. Mr. Johns will continue to accrue benefits with respect to his continued service as an employee of PLC after March 31, 2016 in a manner that is consistent with the provisions of the excess benefit plan. The conversion event required PLC to re-measure the excess benefit plan as of May 31, 2016 and resulted in the recognition of $2.1 million in set tlement expense during the nine months ended September 30, 2016 (Successor Company). During the nine months ended September 30, 2016 (Successor Company), PLC contributed $1.9 million to its defined benefit pension plan for the 2015 plan year. PLC will make contributions in future periods as necessary to at least satisfy minimum funding requirements. PLC may also make additional contributions in future periods to maintain an adjusted funding target attainment percentage (“AFTAP”) of at least 80% and to avoid certain Pension Benefit Guaranty Corporation (“PBGC”) reporting triggers. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of September 30, 2016 ( Successor Company ), December 31, 2015 (Successor Company), and January 31, 2015 ( Predecessor Company ). Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,246,391 ) $ — $ (1,246,391 ) Other comprehensive income (loss) before reclassifications 1,215,021 — 1,215,021 Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (198 ) — (198 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (11,206 ) — (11,206 ) Net current-period other comprehensive income (loss) 1,203,617 — 1,203,617 Ending Balance, September 30, 2016 $ (42,774 ) $ — $ (42,774 ) (1) See Reclassification table below for details. (2) As of September 30, 2016 net unrealized losses reported in AOCI were offset by $47.3 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, February 1, 2015 $ — $ — $ — Other comprehensive income (loss) before reclassifications (1,263,367 ) (86 ) (1,263,453 ) Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (393 ) — (393 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 17,369 86 17,455 Net current-period other comprehensive income (loss) (1,246,391 ) — (1,246,391 ) Ending Balance, December 31, 2015 $ (1,246,391 ) $ — $ (1,246,391 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 net unrealized losses reported in AOCI were offset by $623.0 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Predecessor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2014 $ 1,483,293 $ (82 ) $ 1,483,211 Other comprehensive income (loss) before reclassifications 482,143 9 482,152 Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (243 ) — (243 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (4,166 ) 23 (4,143 ) Net current-period other comprehensive income (loss) 477,734 32 477,766 Ending Balance, January 31, 2015 $ 1,961,027 $ (50 ) $ 1,960,977 (1) See Reclassification table below for details. (2) As of January 31, 2015 net unrealized losses reported in AOCI were offset by $(492.6) million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. The following tables summarize the reclassifications amounts out of AOCI for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ). Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income For the Three Months Ended September 30, 2016 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 1,665 Realized investment gains (losses): All other investments Impairments recognized in earnings (3,308 ) Net impairment losses recognized in earnings (1,643 ) Total before tax 575 Tax (expense) or benefit $ (1,068 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income For the Nine Months Ended September 30, 2016 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 24,133 Realized investment gains (losses): All other investments Impairments recognized in earnings (6,892 ) Net impairment losses recognized in earnings 17,241 Total before tax (6,035 ) Tax (expense) or benefit $ 11,206 Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the For The Three Months Ended September 30, 2015 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ (1,253 ) Realized investment gains (losses): All other investments Impairments recognized in earnings (10,064 ) Net impairment losses recognized in earnings (11,317 ) Total before tax 3,961 Tax (expense) or benefit $ (7,356 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the February 1, 2015 to September 30, 2015 (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (131 ) Benefits and settlement expenses, net of reinsurance ceded (131 ) Total before tax 45 Tax (expense) or benefit $ (86 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 2,470 Realized investment gains (losses): All other investments Impairments recognized in earnings (15,798 ) Net impairment losses recognized in earnings (13,328 ) Total before tax 4,664 Tax (expense) or benefit $ (8,664 ) Net of tax (1) See Note 8, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Predecessor Company January 1, 2015 to January 31, 2015 Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (36 ) Benefits and settlement expenses, net of reinsurance ceded (36 ) Total before tax 13 Tax (expense) or benefit $ (23 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 6,891 Realized investment gains (losses): All other investments Impairments recognized in earnings (481 ) Net impairment losses recognized in earnings 6,410 Total before tax (2,244 ) Tax (expense) or benefit $ 4,166 Net of tax (1) See Note 8, Derivative Financial Instruments for additional information. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Company Predecessor Company As of February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Balance, beginning of period $ 8,937 $ 105,850 $ 168,076 Additions for tax positions of the current year 2,085 2,213 (5,010 ) Additions for tax positions of prior years 1,031 1,812 1,149 Reductions of tax positions of prior years: 0 Changes in judgment (687 ) (644 ) (58,365 ) Settlements during the period (1,546 ) (100,294 ) — Lapses of applicable statute of limitations — — — Balance, end of period $ 9,820 $ 8,937 $ 105,850 In 2012, the IRS proposed favorable and unfavorable adjustments to the Company's 2003 through 2007 reported taxable income. The Company protested certain unfavorable adjustments and sought resolution at the IRS' Appeals Division. In October 2015, Appeals accepted the Company's earlier proposed settlement offer. In September 2015, the IRS proposed favorable and unfavorable adjustments to the Company's 2008 through 2011 reported taxable income. The Company agreed to these adjustments. The resulting net adjustment to the Company's current income taxes for the years 2003 through 2011 will not materially affect the Company or its effective tax rate. In July 2016, the IRS proposed favorable and unfavorable adjustments to the Company's 2012 and 2013 reported taxable income. The Company agreed to these adjustments. The resulting settlement paid in September 2016 did not materially impact the Company or its effective tax rate. These agreements with the IRS are the primary cause for the reductions of unrecognized tax benefits shown in the chart above. The Company believes that in the next 12 months, none of the unrecognized tax benefits at September 30, 2016 will be reduced. In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2013. Nevertheless, certain of these pre-2013 years have pending U.S. tax refunds. Due to their size, these refunds are being reviewed by Congress' Joint Committee on Taxation. Furthermore, due to the aforementioned IRS adjustments to the Company's pre-2013 taxable income, the Company is amending certain of its 2003 through 2013 state income tax returns. Such amendments will cause such years to remain open, pending the states' acceptances of the returns. At this time, the Company believes that the Joint Committee's review of its U.S. tax refunds and the states' acceptance of its amending returns will be completed next year. The underlying statutes of limitations are expected to close in due course on or before December 31, 2017. During the nine months ended September 30, 2016 (Successor Company), the Company entered into a reinsurance transaction, as discussed in Note 3, Reinsurance and Financing Transactions . This transaction is expected to generate an operating loss on the Company’s consolidated 2016 US income tax return. The Company has evaluated its ability to carry this loss back to receive refunds of previously-paid taxes, plus utilize the remaining loss in future years. The Company expects to receive refunds for substantially all of the US income taxes that it paid in 2014 and 2015, as well as fully utilize the remaining operating loss carryforward during the carryforward period. Based on the Company’s current assessment of future taxable income, including available tax planning opportunities, the Company anticipates that it is more likely than not that it will generate sufficient taxable income to realize all of its material deferred tax assets. The Company did not record a valuation allowance against its material deferred tax assets as of September 30, 2016. The Company used its respective estimates of its annual 2016 and 2015 incomes in computing its effective income tax rates for the three and nine months ended September 30, 2016 (Successor Company), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company). The effective tax rates for the three and nine months ended September 30, 2016 (Successor Company), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 (Successor Company), and the period of January 1, 2015 to January 31, 2015 (Predecessor Company) were 22.2% , 31.4% , 27.3% , 28.0% , and 32.8% , respectively. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Company has several operating segments, each having a strategic focus. An operating segment is distinguished by products, channels of distribution, and/or other strategic distinctions. The Company periodically evaluates its operating segments, as prescribed in the ASC Segment Reporting Topic, and makes adjustments to its segment reporting as needed. There were no changes to the Company’s operating segments made or required to be made as a result of the Merger on February 1, 2015. A brief description of each segment follows. • The Life Marketing segment markets fixed universal life (“UL”), indexed universal life ("IUL"), variable universal life (“VUL”), bank-owned life insurance (“BOLI”), and level premium term insurance (“traditional”) products on a national basis primarily through networks of independent insurance agents and brokers, broker-dealers, financial institutions, independent marketing organizations, and affinity groups. • The Acquisitions segment focuses on acquiring, converting, and servicing policies acquired from other companies. The segment’s primary focus is on life insurance policies and annuity products that were sold to individuals. The level of the segment’s acquisition activity is predicated upon many factors, including available capital, operating capacity, potential return on capital, and market dynamics. Policies acquired through the Acquisitions segment are typically blocks of business where no new policies are being marketed. Therefore earnings and account values are expected to decline as the result of lapses, deaths, and other terminations of coverage unless new acquisitions are made. • The Annuities segment markets fixed and VA products. These products are primarily sold through broker-dealers, financial institutions, and independent agents and brokers. • The Stable Value Products segment sells fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, money market funds, bank trust departments, and other institutional investors. This segment also issues funding agreements to the FHLB, and markets guaranteed investment contracts (“GICs”) to 401(k) and other qualified retirement savings plans. The Company also has an unregistered funding agreement-backed notes program which provides for offers of notes to both domestic and international institutional investors. • The Asset Protection segment markets extended service contracts and credit life and disability insurance to protect consumers’ investments in automobiles and recreational vehicles. In addition, the segment markets a guaranteed asset protection (“GAP”) product. GAP coverage covers the difference between the loan pay-off amount and an asset’s actual cash value in the case of a total loss. • The Corporate and Other segment primarily consists of net investment income on assets supporting our equity capital, unallocated corporate overhead and expenses not attributable to the segments above. This segment includes earnings from several non-strategic or runoff lines of business, various investment-related transactions, the operations of several small subsidiaries, and the repurchase of non-recourse funding obligations. The Company's management and PLC's Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax operating income (loss) is the Company's measure of segment performance. Pre-tax operating income (loss) is calculated by adjusting "income (loss) before income tax," by excluding the following items: • realized gains and losses on investments and derivatives, • changes in the GMWB embedded derivatives exclusive of the portion attributable to the economic cost of the GMWB, • actual GMWB incurred claims, and • the amortization of DAC, VOBA, and certain policy liabilities that is impacted by the exclusion of these items. These items are important to understanding the overall results of operations. Pre-tax operating income (loss) is not a substitute for net income (loss), and may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax operating income (loss) enhances management's and the Board of Directors' understanding of the ongoing operations, the underlying profitability of each segment, and helps facilitate the allocation of resources. In determining the components of the pre-tax operating income (loss) for each segment, premiums and policy fees, other income, benefits and settlement expenses, and amortization of DAC and VOBA are attributed directly to each operating segment. Net investment income is allocated based on directly related assets required for transacting the business of that segment. Realized investment gains (losses) and other operating expenses are allocated to the segments in a manner that most appropriately reflects the operations of that segment. Investments and other assets are allocated based on statutory policy liabilities net of associated statutory policy assets, while DAC/VOBA and goodwill are shown in the segments to which they are attributable. There were no significant intersegment transactions during the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ). The following tables summarize financial information for the Company’s segments (Predecessor and Successor periods are not comparable): Successor Company Predecessor Company For The Three Months Ended September 30, 2016 For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Life Marketing $ 382,224 $ 358,194 $ 1,148,121 $ 960,807 $ 133,361 Acquisitions 391,017 352,141 1,269,672 974,915 139,761 Annuities 139,265 200,798 546,378 293,610 130,918 Stable Value Products 27,380 17,065 83,519 44,063 8,181 Asset Protection 79,030 77,476 229,128 204,397 24,566 Corporate and Other 34,872 997 111,714 32,793 22,859 Total revenues $ 1,053,788 $ 1,006,671 $ 3,388,532 $ 2,510,585 $ 459,646 Pre-tax Operating Income (Loss) Life Marketing $ (512 ) 18,758 37,712 $ 28,711 $ (2,271 ) Acquisitions 70,157 59,016 184,095 132,962 20,134 Annuities 43,033 37,090 135,789 108,976 11,363 Stable Value Products 14,700 12,785 44,326 28,249 4,529 Asset Protection 4,099 4,415 12,496 12,938 1,907 Corporate and Other (46,509 ) (34,557 ) (111,499 ) (84,888 ) (16,662 ) Pre-tax operating income 84,968 97,507 302,919 226,948 19,000 Realized investment (losses) gains - investments (1) (688 ) 8,586 183,343 (150,063 ) 89,414 Realized investment (losses) gains - derivatives 9,987 50,028 103,564 68,205 24,433 Income before income tax 94,267 156,121 589,826 145,090 132,847 Income tax expense (20,965 ) (42,542 ) (185,114 ) (40,667 ) (44,325 ) Net income $ 73,302 $ 113,579 $ 404,712 $ 104,423 $ 88,522 All other investment gains (losses) $ 20,844 $ (4,755 ) $ 187,752 $ (147,892 ) $ 80,672 Less: amortization related to DAC/VOBA and benefits and settlement expenses 21,532 (13,341 ) 4,409 2,171 (8,742 ) Realized investment gains (losses) - investments $ (688 ) $ 8,586 $ 183,343 $ (150,063 ) $ 89,414 Derivative financial instruments gains (losses) $ 532 $ 41,895 $ 75,988 $ 47,513 $ 22,031 Less: VA GMWB economic cost (9,455 ) (8,133 ) (27,576 ) (20,692 ) (2,402 ) Realized investment gains (losses) - derivatives $ 9,987 $ 50,028 $ 103,564 $ 68,205 $ 24,433 (1) Includes credit related other-than-temporary impairmen ts of $3.3 million , $6.9 million , $10.1 million , $15.8 million , and $0.5 million for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,171,442 $ 19,986,370 $ 20,166,335 $ 3,283,420 Deferred policy acquisition costs and value of business acquired 1,155,759 82,803 634,820 5,919 Other intangibles 305,403 37,741 186,781 8,889 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,832,878 $ 20,121,438 $ 21,324,613 $ 3,412,041 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 828,946 $ 13,876,152 $ 72,312,665 Deferred policy acquisition costs and value of business acquired 35,087 — 1,914,388 Other intangibles 75,333 — 614,147 Goodwill 67,155 — 732,443 Total assets $ 1,006,521 $ 13,876,152 $ 75,573,643 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 13,258,639 $ 19,879,988 $ 19,715,901 $ 2,006,263 Deferred policy acquisition costs and value of business acquired 1,119,515 (178,662 ) 578,742 2,357 Other intangibles 319,623 39,658 196,780 9,389 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 14,898,051 $ 19,755,508 $ 20,828,100 $ 2,131,822 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 766,294 $ 9,464,906 $ 65,091,991 Deferred policy acquisition costs and value of business acquired 40,421 — 1,562,373 Other intangibles 79,681 — 645,131 Goodwill 67,155 — 732,443 Total assets $ 953,551 $ 9,464,906 $ 68,031,938 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated the effects of events subsequent to September 30, 2016 ( Successor Company ), and through the date we filed our consolidated condensed financial statements with the United States Securities and Exchange Commission. All accounting and disclosure requirements related to subsequent events are included in our consolidated condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Protective Life Insurance Company (the “Company”), a stock life insurance company, was founded in 1907. The Company is a wholly owned subsidiary of Protective Life Corporation (“PLC”), an insurance holding company. On February 1, 2015, PLC became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (“Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into PLC (the “Merger”). Prior to February 1, 2015, and for the periods reported as “predecessor”, PLC’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, PLC and the Company remain as SEC registrants within the United States. PLC is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. In conjunction with the Merger, the Company elected to apply “pushdown” accounting by applying the guidance allowed by ASC Topic 805, Business Combinations , including the initial recognition of most of the Company’s assets and liabilities at fair value as of the acquisition date, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. The new basis of accounting will be the basis of the accounting records for assets and liabilities held at the acquisition date in the preparation of future financial statements and related disclosures after the Merger date. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim periods presented herein. Such accounting principles differ from statutory reporting practices used by insurance companies in reporting to state regulatory authorities. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting only of normal recurring items) necessary for a fair statement of the results for the interim periods presented. Operating results for the three and nine months ended September 30, 2016 ( Successor Company ), are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2016 ( Successor Company ). The year-end consolidated condensed financial data included herein was derived from audited financial statements but does not include all disclosures required by GAAP within this report. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 ( Successor Company ). The operating results of companies in the insurance industry have historically been subject to significant fluctuations due to changing competition, economic conditions, interest rates, investment performance, insurance ratings, claims, persistency, and other factors. |
Entities Included | Entities Included The consolidated condensed financial statements for the predecessor and successor periods presented in this report include the accounts of Protective Life Insurance Company and its affiliate companies in which the Company holds a majority voting or economic interest. Intercompany balances and transactions have been eliminated. |
Accounting Pronouncements Recently and Not Yet Adopted | Accounting Pronouncements Recently Adopted Accounting Standards Update ("ASU") No. 2015-02-Consolidation-Amendments to the Consolidation Analysis. This Update makes several targeted changes to generally accepted accounting principles, including a) eliminating the presumption that a general partner should consolidate a limited partnership and b) eliminating the consolidation model specific to limited partnerships. The amendments also clarify when fees and related party relationships should be considered in the consolidation of variable interest entities. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-03-Interest-Imputation of Interest. The objective of this Update is to eliminate diversity in practice related to the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Update is effective for fiscal years beginning after December 15, 2015, and requires revised presentation of debt issuance costs in all periods presented in the financial statements. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-15 - Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The objective of this Update is to clarify the SEC Staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on the topic in ASU No. 2015-03. This Update reflects the SEC Staff’s decision to not object when an entity defers and presents debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the revised guidance. ASU No. 2015-05 - Intangibles - Goodwill and Other - Internal-Use Software. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The Update is effective for annual and interim periods beginning after December 15, 2015. The Update did not impact the Company's financial position or results of operations, and the Company has revised its policies and processes to comply with the new standard. Accounting Pronouncements Not Yet Adopted ASU No. 2014-09-Revenue from Contracts with Customers (Topic 606). This Update provides for significant revisions to the recognition of revenue from contracts with customers across various industries. Under the new guidance, entities are required to apply a prescribed 5-step process to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting for revenues associated with insurance products is not within the scope of this Update. The Update was originally effective for annual and interim periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU No. 2015-14 - Revenues from Contracts with Customers: Deferral of the Effective Date , to defer the effective date of ASU No. 2014-09 by one year to annual and interim periods beginning after December 15, 2017. Early adoption will be allowed, but not before the original effective date. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its non-insurance operations. ASU No. 2014-15-Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update will require management to assess an entity’s ability to continue as a going concern, and will require footnote disclosures in certain circumstances. Under the updated guidance, management should consider relevant conditions and evaluate whether it is probable that the entity will be unable to meet its obligations within one year after the issuance date of the financial statements. The Update is effective for annual periods ending December 31, 2016 and for annual and interim periods thereafter, with early adoption permitted. The amendments in this Update will not impact the Company’s financial position or results of operations. However, the new guidance will require a formal assessment of going concern by management based on criteria prescribed in the new guidance. The Company is prepared to comply with the revised guidance, upon adoption. ASU No. 2015-09 - Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts. The amendments in this Update require additional disclosures for short-duration contracts issued by insurance entities. The additional disclosures focus on the liability for unpaid claims and claim adjustment expenses and include incurred and paid claims development information by accident year in tabular form, along with a reconciliation of this information to the statement of financial position. For accident years included in the development tables, the amendments also require disclosure of the total incurred-but-not-reported liabilities and expected development on reported claims, along with claims frequency information unless impracticable. Finally, the amendments require disclosure of the historical average annual percentage payout of incurred claims. With the exception of the current reporting period, claims development information may be presented as supplementary information. The Update is effective for annual periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The Company does not anticipate that the additional disclosures introduced in this Update will be material to its financial statements. ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most notably, the Update requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017. The Company is reviewing its policies and processes to ensure compliance with the revised guidance. ASU No. 2016-02 - Leases. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of leases. The most significant change will relate to the accounting model used by lessees. The Update will require all leases with terms greater than 12 months to be recorded on the balance sheet in the form of a lease asset and liability. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the revised guidance. ASU No. 2016-13 - Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. The amendments in this Update introduce a new impairment model for certain financial assets, including mortgage loans and reinsurance receivables. The new model will not apply to debt securities classified as available-for-sale. For assets within the scope of the new model, an entity will recognize as an allowance its estimate of the contractual cash flows not expected to be collected. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred. The Update also makes targeted changes to the current impairment model for available-for-sale debt securities, which comprise the majority of the Company’s invested assets. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption, and assessing the impact this standard will have on its operations and financial results. ASU No. 2016-15 - Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update are intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Specific transactions addressed in the new guidance include: Debt prepayment/extinguishment costs, contingent consideration payments, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investments. The Update does not introduce any new accounting or financial reporting requirements, and is effective for annual and interim periods beginning after December 15, 2018. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2016-16 - Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory. The objective of this Update is to reduce complexity and diversity in practice related to certain types of intra-entity asset transfers. Under the revised guidance, entities will be required to recognize the income tax consequences of intra-entity transfers of an assets other than inventory when those transfers occur. The Update is effective for annual reporting periods beginning after December 15, 2018 and interim reporting periods beginning after December 15, 2019. The Company is currently reviewing the Update to determine whether the amendments will impact its financial position or results of operations, and whether changes are needed to its policies and processes to comply with the revised guidance. |
DAI-ICHI MERGER (Tables)
DAI-ICHI MERGER (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Summary of Fair Values of the Net Assets Acquired | The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date: Fair Value As of February 1, 2015 (Dollars In Thousands) Assets Fixed maturities $ 38,342,948 Equity securities 699,081 Mortgage loans 5,580,229 Investment real estate 7,456 Policy loans 1,751,872 Other long-term investments 657,346 Short-term investments 311,236 Total investments 47,350,168 Cash 378,903 Accrued investment income 483,691 Accounts and premiums receivable 104,260 Reinsurance receivables 5,538,637 Value of business acquired 1,278,064 Goodwill 735,712 Other intangibles 683,000 Property and equipment 102,736 Other assets 224,555 Income tax receivable 50,117 Assets related to separate accounts Variable annuity 12,970,587 Variable universal life 819,188 Total assets $ 70,719,618 Liabilities Future policy and benefit claims $ 30,195,397 Unearned premiums 622,278 Total policy liabilities and accruals 30,817,675 Stable value product account balances 1,932,277 Annuity account balances 10,941,661 Other policyholders’ funds 1,388,083 Other liabilities 1,533,666 Deferred income taxes 1,861,632 Non-recourse funding obligations 1,895,636 Repurchase program borrowings 50,000 Liabilities related to separate accounts Variable annuity 12,970,587 Variable universal life 819,188 Total liabilities 64,210,405 Net assets acquired $ 6,509,213 |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Closed Block Disclosure [Abstract] | |
Summary of Financial Information of the Policyholder Dividend Obligation | Summarized financial information for the Closed Block as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ) is as follows: Successor Company As of As of (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,913,411 $ 6,010,520 Policyholder dividend obligation 264,107 — Other liabilities 52,435 24,539 Total closed block liabilities 6,229,953 6,035,059 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,696,136 $ 4,426,090 Mortgage loans on real estate 201,078 247,162 Policy loans 717,887 746,102 Cash 79,115 34,420 Other assets 155,360 162,640 Total closed block assets 5,849,576 5,616,414 Excess of reported closed block liabilities over closed block assets 380,377 418,645 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation of $16,169 (Successor) and $(179,360) (Successor) — (18,597 ) Future earnings to be recognized from closed block assets and closed block liabilities $ 380,377 $ 400,048 |
Schedule of Reconciliation of the Policyholder Dividend Obligation | Reconciliation of the policyholder dividend obligation is as follows: Successor Company Predecessor Company For The Nine Months Ended February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ — $ 323,432 $ 366,745 Applicable to net revenue (losses) (36,707 ) (27,854 ) (1,369 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $(8,706) (Successor); $(83,000) (2015 - Successor); $47,277 (2015 - Predecessor) 300,814 (237,143 ) 135,077 Policyholder dividend obligation, end of period $ 264,107 $ 58,435 $ 500,453 |
Schedule of Closed Block Revenues and Expenses | Closed Block revenues and expenses were as follows: Successor Company Predecessor Company For The Three For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Premiums and other income $ 44,043 $ 46,610 $ 135,282 $ 128,279 $ 15,065 Net investment income 53,582 54,593 156,458 142,274 19,107 Net investment gains 326 167 963 3,017 568 Total revenues 97,951 101,370 292,703 273,570 34,740 Benefits and other deductions Benefits and settlement expenses 88,143 90,966 260,227 245,711 31,152 Other operating expenses 537 258 2,214 733 — Total benefits and other deductions 88,680 91,224 262,441 246,444 31,152 Net revenues before income taxes 9,271 10,146 30,262 27,126 3,588 Income tax expense 3,245 3,551 10,591 9,494 1,256 Net revenues $ 6,026 $ 6,595 $ 19,671 $ 17,632 $ 2,332 |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Net Realized Investment Gains (Losses) for All Other Investments | Net realized gains (losses) for all other investments are summarized as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 1,665 $ (1,304 ) $ 24,097 $ 2,398 $ 6,891 Equity securities — 51 36 72 — Impairments on corporate securities (3,308 ) (10,064 ) (6,892 ) (15,798 ) (481 ) Modco trading portfolio 23,995 8,377 178,353 (133,524 ) 73,062 Other investments (1,508 ) (1,815 ) (7,842 ) (1,040 ) 1,200 Total realized gains (losses) - investments $ 20,844 $ (4,755 ) $ 187,752 $ (147,892 ) $ 80,672 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Gross realized gains $ 3,223 $ 714 $ 31,004 $ 7,646 $ 6,920 Gross realized losses $ (4,866 ) $ (12,031 ) $ (13,763 ) $ (20,974 ) $ (469 ) Impairments losses included in gross realized losses $ (3,308 ) $ (10,064 ) $ (6,892 ) $ (15,798 ) $ (481 ) |
Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired | The chart below summarizes the fair value (proceeds) and the gains/losses realized on securities the Company sold that were in an unrealized gain position and an unrealized loss position. Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 167,272 $ 94,825 $ 987,048 $ 807,763 $ 172,551 Gains realized $ 3,223 $ 715 $ 31,004 $ 7,646 $ 6,920 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 7,105 $ 34,591 $ 67,688 $ 83,917 $ 435 Losses realized $ (1,558 ) $ (1,967 ) $ (6,871 ) $ (5,175 ) $ (29 ) (1) The Company made the decision to exit these holdings in conjunction with its overall asset liability management process. The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2016 ( Successor Company ): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 86,908 $ (433 ) $ 180,768 $ (4,125 ) $ 267,676 $ (4,558 ) Commercial mortgage-backed securities 175,209 (1,162 ) 104,931 (1,470 ) 280,140 (2,632 ) Other asset-backed securities 68,039 (268 ) 465,787 (15,423 ) 533,826 (15,691 ) U.S. government-related securities 128,224 (1,789 ) 3 — 128,227 (1,789 ) Other government-related securities 1,927 (2 ) — — 1,927 (2 ) States, municipalities, and political subdivisions 239,380 (2,842 ) 561,253 (20,487 ) 800,633 (23,329 ) Corporate securities 2,769,939 (46,629 ) 10,876,293 (684,620 ) 13,646,232 (731,249 ) Preferred stock 53,040 (128 ) 19,251 (1,687 ) 72,291 (1,815 ) Equities 84,188 (989 ) 59,929 (5,766 ) 144,117 (6,755 ) $ 3,606,854 $ (54,242 ) $ 12,268,215 $ (733,578 ) $ 15,875,069 $ (787,820 ) |
Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale | The amortized cost and fair value of the Company’s investments classified as available-for-sale as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) Successor Company As of September 30, 2016 (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 1,842,012 $ 49,259 $ (4,558 ) $ 1,886,713 $ — Commercial mortgage-backed securities 1,654,152 31,706 (2,632 ) 1,683,226 — Other asset-backed securities 1,202,982 14,625 (15,691 ) 1,201,916 — U.S. government-related securities 1,299,876 13,092 (1,789 ) 1,311,179 — Other government-related securities 18,350 184 (2 ) 18,532 — States, municipals, and political subdivisions 1,725,351 25,239 (23,329 ) 1,727,261 — Corporate securities 28,966,811 488,460 (731,249 ) 28,724,022 (909 ) Preferred stock 94,362 1,227 (1,815 ) 93,774 — 36,803,896 623,792 (781,065 ) 36,646,623 (909 ) Equity securities 673,709 25,454 (6,755 ) 692,408 — Short-term investments 142,870 — — 142,870 — $ 37,620,475 $ 649,246 $ (787,820 ) $ 37,481,901 $ (909 ) As of December 31, 2015 Fixed maturities: Residential mortgage-backed securities $ 1,773,099 $ 9,286 $ (17,112 ) $ 1,765,273 $ — Commercial mortgage-backed securities 1,327,288 428 (41,852 ) 1,285,864 — Other asset-backed securities 813,056 2,758 (18,763 ) 797,051 — U.S. government-related securities 1,566,260 449 (34,532 ) 1,532,177 — Other government-related securities 18,483 — (743 ) 17,740 — States, municipals, and political subdivisions 1,729,732 682 (126,814 ) 1,603,600 — Corporate securities 28,433,530 26,147 (2,681,020 ) 25,778,657 (605 ) Preferred stock 64,362 192 (1,867 ) 62,687 — 35,725,810 39,942 (2,922,703 ) 32,843,049 (605 ) Equity securities 684,888 13,255 (6,477 ) 691,666 — Short-term investments 202,110 — — 202,110 — $ 36,612,808 $ 53,197 $ (2,929,180 ) $ 33,736,825 $ (605 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. |
Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity | Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment. Successor Company Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) (Dollars In Thousands) Due in one year or less $ 786,505 $ 787,980 $ — $ — Due after one year through five years 6,834,174 6,901,114 — — Due after five years through ten years 7,735,392 7,887,064 — — Due after ten years 21,447,825 21,070,465 2,775,230 2,894,615 $ 36,803,896 $ 36,646,623 $ 2,775,230 $ 2,894,615 |
Gain (Loss) on Investments | The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed maturities. Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Other-than-temporary impairments $ (1,898 ) $ (14,906 ) $ (10,194 ) $ (28,301 ) $ (636 ) Non-credit impairment losses recorded in other comprehensive income (1,410 ) 4,842 3,302 12,503 155 Net impairment losses recognized in earnings $ (3,308 ) $ (10,064 ) $ (6,892 ) $ (15,798 ) $ (481 ) |
Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss) | The following chart is a rollforward of available-for-sale credit losses on fixed maturities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (loss): Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ 964 $ 4,472 $ 22,761 $ — $ 15,463 Additions for newly impaired securities 1,721 — 4,777 4,472 — Additions for previously impaired securities 1,521 9,479 2,046 9,479 221 Reductions for previously impaired securities due to a change in expected cash flows (4 ) — (22,763 ) — — Reductions for previously impaired securities that were sold in the current period — (687 ) (2,619 ) (687 ) — Ending balance $ 4,202 $ 13,264 $ 4,202 $ 13,264 $ 15,684 |
Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale | The change in unrealized gains (losses), net of income tax, on fixed matur ity and equity securities, classified as available-for-sale is summarized as follows: Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Fixed maturities $ 294,917 $ (54,274 ) $ 1,771,567 $ (1,437,340 ) $ 669,160 Equity securities (1,691 ) 2,385 7,749 (5,152 ) 12,172 The following table includes the gross unrealized losses and fair value of the Company’s investments that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2015 ( Successor Company ): Less Than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (Dollars In Thousands) Residential mortgage-backed securities $ 977,433 $ (17,112 ) $ — $ — $ 977,433 $ (17,112 ) Commercial mortgage-backed securities 1,232,495 (41,852 ) — — 1,232,495 (41,852 ) Other asset-backed securities 633,274 (18,763 ) — — 633,274 (18,763 ) U.S. government-related securities 1,291,476 (34,532 ) — — 1,291,476 (34,532 ) Other government-related securities 17,740 (743 ) — — 17,740 (743 ) States, municipalities, and political subdivisions 1,566,752 (126,814 ) — — 1,566,752 (126,814 ) Corporate securities 24,235,121 (2,681,020 ) — — 24,235,121 (2,681,020 ) Preferred stock 34,685 (1,867 ) — — 34,685 (1,867 ) Equities 248,493 (6,477 ) — — 248,493 (6,477 ) $ 30,237,469 $ (2,929,180 ) $ — $ — $ 30,237,469 $ (2,929,180 ) |
Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity | The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of September 30, 2016 ( Successor Company ) and December 31, 2015 ( Successor Company ), are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI Successor Company As of September 30, 2016 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 640,230 $ — $ (1,751 ) $ 638,479 $ — Steel City LLC 2,135,000 121,136 — 2,256,136 — $ 2,775,230 $ 121,136 $ (1,751 ) $ 2,894,615 $ — Amortized Gross Gross Fair Total OTTI Successor Company As of December 31, 2015 (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 593,314 $ — $ (78,314 ) $ 515,000 $ — $ 593,314 $ — $ (78,314 ) $ 515,000 $ — |
FAIR VALUE OF FINANCIAL INSTR32
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 ( Successor Company ): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,886,710 $ 3 $ 1,886,713 Commercial mortgage-backed securities — 1,659,667 23,559 1,683,226 Other asset-backed securities — 648,687 553,229 1,201,916 U.S. government-related securities 1,070,116 241,063 — 1,311,179 State, municipalities, and political subdivisions — 1,727,261 — 1,727,261 Other government-related securities — 18,532 — 18,532 Corporate securities — 27,970,626 753,396 28,724,022 Preferred stock 74,522 19,252 — 93,774 Total fixed maturity securities - available-for-sale 1,144,638 34,171,798 1,330,187 36,646,623 Fixed maturity securities - trading Residential mortgage-backed securities — 264,142 — 264,142 Commercial mortgage-backed securities — 157,152 — 157,152 Other asset-backed securities — 117,380 145,833 263,213 U.S. government-related securities 32,143 4,735 — 36,878 State, municipalities, and political subdivisions — 340,983 — 340,983 Other government-related securities — 60,774 — 60,774 Corporate securities — 1,655,812 5,699 1,661,511 Preferred stock 3,788 — — 3,788 Total fixed maturity securities - trading 35,931 2,600,978 151,532 2,788,441 Total fixed maturity securities 1,180,569 36,772,776 1,481,719 39,435,064 Equity securities 633,160 — 66,526 699,686 Other long-term investments (1) 316,007 270,661 87,149 673,817 Short-term investments 164,702 3,850 — 168,552 Total investments 2,294,438 37,047,287 1,635,394 40,977,119 Cash 407,578 — — 407,578 Assets related to separate accounts Variable annuity 13,164,747 — — 13,164,747 Variable universal life 868,818 — — 868,818 Total assets measured at fair value on a recurring basis $ 16,735,581 $ 37,047,287 $ 1,635,394 $ 55,418,262 Liabilities: Annuity account balances (2) $ — $ — $ 88,857 $ 88,857 Other liabilities (1) 102,318 139,766 604,827 846,911 Total liabilities measured at fair value on a recurring basis $ 102,318 $ 139,766 $ 693,684 $ 935,768 (1)Includes certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (Successor Company): Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,765,270 $ 3 $ 1,765,273 Commercial mortgage-backed securities — 1,285,864 — 1,285,864 Other asset-backed securities — 210,020 587,031 797,051 U.S. government-related securities 1,054,353 477,824 — 1,532,177 State, municipalities, and political subdivisions — 1,603,600 — 1,603,600 Other government-related securities — 17,740 — 17,740 Corporate securities 83 24,876,455 902,119 25,778,657 Preferred stock 43,073 19,614 — 62,687 Total fixed maturity securities - available-for-sale 1,097,509 30,256,387 1,489,153 32,843,049 Fixed maturity securities - trading Residential mortgage-backed securities — 286,658 — 286,658 Commercial mortgage-backed securities — 146,743 — 146,743 Other asset-backed securities — 122,511 152,912 275,423 U.S. government-related securities 233,592 4,755 — 238,347 State, municipalities, and political subdivisions — 313,354 — 313,354 Other government-related securities — 58,827 — 58,827 Corporate securities — 1,322,276 18,225 1,340,501 Preferred stock 2,794 1,402 — 4,196 Total fixed maturity securities - trading 236,386 2,256,526 171,137 2,664,049 Total fixed maturity securities 1,333,895 32,512,913 1,660,290 35,507,098 Equity securities 620,358 13,063 66,504 699,925 Other long-term investments (1) 113,699 141,487 68,384 323,570 Short-term investments 261,659 2,178 — 263,837 Total investments 2,329,611 32,669,641 1,795,178 36,794,430 Cash 212,358 — — 212,358 Assets related to separate accounts Variable annuity 12,829,188 — — 12,829,188 Variable universal life 827,610 — — 827,610 Total assets measured at fair value on a recurring basis $ 16,198,767 $ 32,669,641 $ 1,795,178 $ 50,663,586 Liabilities: Annuity account balances (2) $ — $ — $ 92,512 $ 92,512 Other liabilities (1) 40,067 106,310 375,848 522,225 Total liabilities measured at fair value on a recurring basis $ 40,067 $ 106,310 $ 468,360 $ 614,737 (1)Includes certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. |
Schedule of Valuation Method for Material Financial Instruments Included in Level 3, as Well as the Unobservable Inputs Used in the Valuation of Those Financial Instruments | The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 587,031 Discounted cash flow Liquidity premium 0.27% - 1.49% (0.42%) Paydown rate 10.20% - 14.72% (13.11%) Corporate securities 875,810 Discounted cash flow Spread over 0.10% - 19.00% (2.61%) treasury Liabilities: Embedded derivatives - GMWB (1) $ 18,511 Actuarial cash flow model Mortality 1994 MGDB table with company experience Lapse 0.3% - 15%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.18% - 1.04% Annuity account balances (2) 92,512 Actuarial cash flow model Asset earned rate 4.53% - 5.67% Expenses $81 per policy Withdrawal rate 2.20% Mortality 1994 MGDB table with company experience Lapse 2.2% - 33.0%, depending on duration/surrender charge period Return on assets 1.50% - 1.85% depending on surrender charge period Nonperformance risk 0.18% - 1.04% Embedded derivative - FIA 100,329 Actuarial cash flow model Expenses $81.50 per policy Withdrawal rate 1.1% - 4.5% depending on duration and tax qualification Mortality 1994 MGDB table with company experience Lapse 2.5% - 40.0%, depending on duration/surrender charge period Nonperformance risk 0.18% - 1.04% Embedded derivative - IUL 29,629 Actuarial cash flow model Mortality 38% - 153% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.18% - 1.04% (1)The fair value for the GMWB embedded derivative is presented as a net liability, for the purposes of this chart. Excludes modified coinsurance arrangements. (2)Represents liabilities related to fixed indexed annuities. The following table presents the valuation method for material financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments: Successor Company Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 554,230 Discounted cash flow Liquidity premium 0.44% - 1.19% (0.70%) Paydown rate 10.90% - 11.83% (11.18%) Corporate securities 726,890 Discounted cash flow Spread over treasury 0.97% - 5.10% (2.11%) Liabilities: Embedded derivatives - GMWB (1) $ 128,877 Actuarial cash flow model Mortality 91.1% to 106.6% of Ruark 2015 ALB Table Lapse 0.3% - 15%, depending on product/duration/funded status of guarantee Utilization 99%. 10% of policies have a one-time over-utilization of 400% Nonperformance risk 0.20% - 1.19% Annuity account balances (2) 88,857 Actuarial cash flow model Asset earned rate 4.02% - 5.76% Expenses $126 per polic y Withdrawal rate 2.20% Mortality 1994 MGDB table with company experience Lapse 2.2% - 33.0%, depending on duration/surrender charge period Return on assets 1.50% - 1.85% depending on duration/surrender charge period Nonperformance risk 0.20% - 1.19% Embedded derivative - FIA 141,651 Actuarial cash flow model Expenses $126 per polic y Withdrawal rate 1% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 2.0% - 40.0%, depending on on duration/surrender charge period Nonperformance risk 0.20% - 1.19% Embedded derivative - IUL 46,348 Actuarial cash flow model Mortality 38% - 153% of 2015 VBT Primary Tables Lapse 0.5% - 10.0%, depending on duration/distribution channel and smoking class Nonperformance risk 0.20% - 1.19% (1)The fair value for the GMWB embedded derivative is presented as a net liability for the purposes of this chart. Excludes modified coinsurance arrangements. (2)Represents liabilities related to fixed indexed annuities. |
Schedule of Reconciliation of the Beginning and Ending Balances for Fair Value Measurements, for Which the Company Has Used Significant Unobservable Inputs (Level 3) | The following table presents a reconciliation of the beginning and ending balances for fair value measurements for period of January 1, 2015 to January 31, 2015 ( Predecessor Company ), for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance Earnings (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Other asset-backed securities 563,961 — — — (3,867 ) — (32 ) — — 43,205 379 603,646 — States, municipals, and political subdivisions 3,675 — — — — — — — — — — 3,675 — Corporate securities 1,325,683 — 12,282 — (23,029 ) — (7,062 ) — — — (615 ) 1,307,259 — Total fixed maturity securities - available-for-sale 1,893,322 — 12,282 — (26,896 ) — (7,094 ) — — 43,205 (236 ) 1,914,583 — Fixed maturity securities - trading Other asset-backed securities 169,461 586 — (139 ) — — (472 ) — — — 37 169,473 447 Corporate securities 24,744 602 — (196 ) — — (20 ) — — — — 25,130 406 Total fixed maturity securities - trading 194,205 1,188 — (335 ) — — (492 ) — — — 37 194,603 853 Total fixed maturity securities 2,087,527 1,188 12,282 (335 ) (26,896 ) — (7,586 ) — — 43,205 (199 ) 2,109,186 853 Equity securities 66,691 — — — — — — — — — — 66,691 — Other long-term investments (1) 44,625 16,617 — (15,166 ) — — — — — — — 46,076 1,451 Short-term investments — — — — — — — — — — — — — Total investments 2,198,843 17,805 12,282 (15,501 ) (26,896 ) — (7,586 ) — — 43,205 (199 ) 2,221,953 2,304 Total assets measured at fair value on a recurring basis $ 2,198,843 $ 17,805 $ 12,282 $ (15,501 ) $ (26,896 ) $ — $ (7,586 ) $ — $ — $ 43,205 $ (199 ) $ 2,221,953 $ 2,304 Liabilities: Annuity account balances (2) $ 97,825 $ — $ — $ (536 ) $ — $ — $ — $ 7 $ 419 $ — $ — $ 97,949 $ — Other liabilities (1) 506,343 61 — (125,995 ) — — — — — — — 632,277 (125,934 ) Total liabilities measured at fair value on a recurring basis $ 604,168 $ 61 $ — $ (126,531 ) $ — $ — $ — $ 7 $ 419 $ — $ — $ 730,226 $ (125,934 ) (1)Represents certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the nine months ended September 30, 2016 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance Earnings related to Instruments still held at the Reporting Date (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Commercial mortgage-backed securities — — 6 — — 23,559 — — — — (6 ) 23,559 — Other asset-backed securities 587,031 6,859 24,119 — (21,426 ) 9,597 (58,461 ) — — 7,457 (1,947 ) 553,229 — Corporate securities 902,119 925 40,435 (4,135 ) (10,316 ) 53,885 (107,866 ) — — (114,189 ) (7,462 ) 753,396 — Total fixed maturity securities - available-for-sale 1,489,153 7,784 64,560 (4,135 ) (31,742 ) 87,041 (166,327 ) — — (106,732 ) (9,415 ) 1,330,187 — Fixed maturity securities - trading Other asset-backed securities 152,912 5,310 — (1,013 ) — — (11,578 ) — — 172 30 145,833 4,294 Corporate securities 18,225 713 — (259 ) — 10,908 (4,071 ) — — (19,722 ) (95 ) 5,699 283 Total fixed maturity securities - trading 171,137 6,023 — (1,272 ) — 10,908 (15,649 ) — — (19,550 ) (65 ) 151,532 4,577 Total fixed maturity securities 1,660,290 13,807 64,560 (5,407 ) (31,742 ) 97,949 (181,976 ) — — (126,282 ) (9,480 ) 1,481,719 4,577 Equity securities 66,504 — — — — 22 — — — — — 66,526 — Other long-term investments (1) 68,384 46,166 — (28,830 ) — 1,429 — — — — — 87,149 17,336 Total investments 1,795,178 59,973 64,560 (34,237 ) (31,742 ) 99,400 (181,976 ) — — (126,282 ) (9,480 ) 1,635,394 21,913 Total assets measured at fair value on a recurring basis $ 1,795,178 $ 59,973 $ 64,560 $ (34,237 ) $ (31,742 ) $ 99,400 $ (181,976 ) $ — $ — $ (126,282 ) $ (9,480 ) $ 1,635,394 $ 21,913 Liabilities: Annuity account balances (2) $ 92,512 $ — $ — $ (1,831 ) $ — $ — $ — $ 529 $ 7,264 $ — $ 1,249 $ 88,857 $ — Other liabilities (1) 375,848 37,860 — (266,839 ) — — — — — — — 604,827 (228,979 ) Total liabilities measured at fair value on a recurring basis $ 468,360 $ 37,860 $ — $ (268,670 ) $ — $ — $ — $ 529 $ 7,264 $ — $ 1,249 $ 693,684 $ (228,979 ) (1)Represents certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2015 (Successor Company), for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance Earnings related to Instruments still held at the Reporting Date (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Other asset-backed securities 590,885 — — — (4,185 ) — — — — — (949 ) 585,751 — Corporate securities 1,111,431 76 5,939 (164 ) (8,800 ) 62,183 (101,161 ) — — (20,037 ) (729 ) 1,048,738 — Total fixed maturity securities - available-for-sale 1,702,319 76 5,939 (164 ) (12,985 ) 62,183 (101,161 ) — — (20,037 ) (1,678 ) 1,634,492 — Fixed maturity securities - trading Other asset-backed securities 160,594 83 — (1,640 ) — 2,000 (6,001 ) — — — 117 155,153 (1,500 ) Corporate securities 19,316 73 — (970 ) — — (56 ) — — — (44 ) 18,319 (897 ) Total fixed maturity securities - trading 179,910 156 — (2,610 ) — 2,000 (6,057 ) — — — 73 173,472 (2,397 ) Total fixed maturity securities 1,882,229 232 5,939 (2,774 ) (12,985 ) 64,183 (107,218 ) — — (20,037 ) (1,605 ) 1,807,964 (2,397 ) Equity securities 66,460 — 44 — — — — — — — — 66,504 — Other long-term investments (1) 100,519 — — (44,769 ) — — — — — — — 55,750 (44,769 ) Total investments 2,049,208 232 5,983 (47,543 ) (12,985 ) 64,183 (107,218 ) — — (20,037 ) (1,605 ) 1,930,218 (47,166 ) Total assets measured at fair value on a recurring basis $ 2,049,208 $ 232 $ 5,983 $ (47,543 ) $ (12,985 ) $ 64,183 $ (107,218 ) $ — $ — $ (20,037 ) $ (1,605 ) $ 1,930,218 $ (47,166 ) Liabilities: Annuity account balances (2) $ 95,178 $ — $ — $ (3,173 ) $ — $ — $ — $ 93 $ 3,246 $ — $ — $ 95,198 $ — Other liabilities (1) 342,945 17,329 — (58,193 ) — — — — — — — 383,809 (40,864 ) Total liabilities measured at fair value on a recurring basis $ 438,123 $ 17,329 $ — $ (61,366 ) $ — $ — $ — $ 93 $ 3,246 $ — $ — $ 479,007 $ (40,864 ) (1)Represents certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended September 30, 2016 ( Successor Company ), for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Gains (losses) included in Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance Earnings related to Instruments still held at the Reporting Date (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Commercial mortgage-backed securities — — 6 — — 23,559 — — — — (6 ) 23,559 — Other asset-backed securities 533,141 — 23,350 — (19 ) — (12 ) — — — (3,231 ) 553,229 — Corporate securities 783,143 — 9,324 — (3,335 ) 28,327 (26,001 ) — — (36,237 ) (1,825 ) 753,396 — Total fixed maturity securities - available-for-sale 1,316,287 — 32,680 — (3,354 ) 51,886 (26,013 ) — — (36,237 ) (5,062 ) 1,330,187 — Fixed maturity securities - trading Other asset-backed securities 151,964 3,260 — (71 ) — — (9,366 ) — — — 46 145,833 3,189 Corporate securities 16,587 381 — — — — — — — (11,243 ) (26 ) 5,699 42 Total fixed maturity securities - trading 168,551 3,641 — (71 ) — — (9,366 ) — — (11,243 ) 20 151,532 3,231 Total fixed maturity securities 1,484,838 3,641 32,680 (71 ) (3,354 ) 51,886 (35,379 ) — — (47,480 ) (5,042 ) 1,481,719 3,231 Equity securities 66,526 — — — — — — — — — — 66,526 — Other long-term investments (1) 62,920 25,674 — (1,445 ) — — — — — — — 87,149 24,229 Short-term investments — — — — — — — — — — — — — Total investments 1,614,284 29,315 32,680 (1,516 ) (3,354 ) 51,886 (35,379 ) — — (47,480 ) (5,042 ) 1,635,394 27,460 Total assets measured at fair value on a recurring basis $ 1,614,284 $ 29,315 $ 32,680 $ (1,516 ) $ (3,354 ) $ 51,886 $ (35,379 ) $ — $ — $ (47,480 ) $ (5,042 ) $ 1,635,394 $ 27,460 Liabilities: Annuity account balances (2) $ 88,820 $ — $ — $ (735 ) $ — $ — $ — $ 279 $ 2,226 — $ 1,249 $ 88,857 $ — Other liabilities (1) 581,046 22,275 — (46,056 ) — — — — — — — 604,827 (23,781 ) Total liabilities measured at fair value on a recurring basis $ 669,866 $ 22,275 $ — $ (46,791 ) $ — $ — $ — $ 279 $ 2,226 $ — $ 1,249 $ 693,684 $ (23,781 ) (1)Represents certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the period of February 1, 2015 to September 30, 2015 ( Successor Company ), for which the Company has used significant unobservable inputs (Level 3): Total Realized and Unrealized Gains Total Realized and Unrealized Losses Total Beginning Balance Included in Earnings Included in Other Comprehensive Income Included in Earnings Included in Other Comprehensive Income Purchases Sales Issuances Settlements Transfers in/out of Level 3 Other Ending Balance Earnings (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Other asset-backed securities 603,646 — 165 (92 ) (17,076 ) — (127 ) — — — (765 ) 585,751 — States, municipals, and political subdivisions 3,675 — — — — — (3,675 ) — — — — — — Corporate securities 1,307,259 4,367 21,558 (851 ) (33,047 ) 174,112 (356,096 ) — — (61,890 ) (6,674 ) 1,048,738 — Total fixed maturity securities - available-for-sale 1,914,583 4,367 21,723 (943 ) (50,123 ) 174,112 (359,898 ) — — (61,890 ) (7,439 ) 1,634,492 — Fixed maturity securities - trading Other asset-backed securities 169,473 4,032 — (6,813 ) — 2,000 (13,877 ) — — — 338 155,153 (6,896 ) Corporate securities 25,130 247 — (1,269 ) — — (5,640 ) — — — (149 ) 18,319 (1,546 ) Total fixed maturity securities - trading 194,603 4,279 — (8,082 ) — 2,000 (19,517 ) — — — 189 173,472 (8,442 ) Total fixed maturity securities 2,109,186 8,646 21,723 (9,025 ) (50,123 ) 176,112 (379,415 ) — — (61,890 ) (7,250 ) 1,807,964 (8,442 ) Equity securities 66,691 — 44 — — — (231 ) — — — — 66,504 — Other long-term investments (1) 64,200 40,032 — (48,482 ) — — — — — — — 55,750 (8,450 ) Short-term investments — — — — — — — — — — — — — Total investments 2,240,077 48,678 21,767 (57,507 ) (50,123 ) 176,112 (379,646 ) — — (61,890 ) (7,250 ) 1,930,218 (16,892 ) Total assets measured at fair value on a recurring basis $ 2,240,077 $ 48,678 $ 21,767 $ (57,507 ) $ (50,123 ) $ 176,112 $ (379,646 ) $ — $ — $ (61,890 ) $ (7,250 ) $ 1,930,218 $ (16,892 ) Liabilities: Annuity account balances (2) $ 98,279 $ — $ — $ (4,716 ) $ — $ — $ — $ 179 $ 7,976 $ — $ — $ 95,198 $ — Other liabilities (1) 530,118 230,183 — (83,874 ) — — — — — — — 383,809 146,309 Total liabilities measured at fair value on a recurring basis $ 628,397 $ 230,183 $ — $ (88,590 ) $ — $ — $ — $ 179 $ 7,976 $ — $ — $ 479,007 $ 146,309 (1)Represents certain freestanding and embedded derivatives. (2)Represents liabilities related to fixed indexed annuities. |
Schedule of the Carrying Amounts and Estimated Fair Value of the Company's Financial Instruments | The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows: Successor Company As of As of Fair Value Level Carrying Amounts Fair Values Carrying Amounts Fair Values (Dollars In Thousands) Assets: Mortgage loans on real estate 3 $ 5,912,683 $ 5,946,153 $ 5,662,812 $ 5,529,803 Policy loans 3 1,656,083 1,656,083 1,699,508 1,699,508 Fixed maturities, held-to-maturity (1) 3 2,775,230 2,894,615 593,314 515,000 Liabilities: Stable value product account balances 3 $ 3,412,041 $ 3,436,797 $ 2,131,822 $ 2,124,712 Annuity account balances 3 10,679,011 10,288,929 10,719,862 10,274,571 Debt: Non-recourse funding obligations (2) 3 $ 2,978,052 $ 3,093,432 $ 1,951,563 $ 1,621,773 Except as noted below, fair values were estimated using quoted market prices. (1) Securities purchased from unconsolidated affiliates, Red Mountain LLC and Steel City LLC. (2) Of this carrying amount, $2.7 billion , fair value of $2.9 billion , as of September 30, 2016 ( Successor Company ), and $500.0 million , fair value of $495.5 million , as of December 31, 2015 (Successor Company), relates to non-recourse funding obligations issued by Golden Gate and Golden Gate V. |
DERIVATIVE FINANCIAL INSTRUME33
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Realized Investments Gains and Losses | The following table sets forth realized investments gains and losses for the periods shown: Realized investment gains (losses) - derivative financial instruments Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ (7,002 ) $ 12,140 $ 62,065 $ (2,091 ) $ 1,413 Equity futures - VA (41,836 ) 40,951 (66,392 ) 3,215 9,221 Currency futures - VA 934 4,000 5,888 1,428 7,778 Equity options - VA (36,482 ) 33,519 (23,410 ) 8,195 3,047 Interest rate swaptions - VA (229 ) (3,618 ) (3,212 ) (12,399 ) 9,268 Interest rate swaps - VA 14,737 101,808 221,884 (74,150 ) 122,710 Embedded derivative - GMWB 24,150 (71,296 ) (108,545 ) 10,543 (68,503 ) Funds withheld derivative 53,834 (52,872 ) 63,886 (8,301 ) (9,073 ) Total derivatives related to VA contracts 8,106 64,632 152,164 (73,560 ) 75,861 Derivatives related to FIA contracts: Embedded derivative - FIA (14,486 ) 11,328 (15,938 ) 9,035 1,769 Equity futures - FIA 2,236 709 4,269 1,016 (184 ) Volatility futures - FIA — (24 ) — 6 — Equity options - FIA 6,583 (12,099 ) 1,756 (6,499 ) (2,617 ) Total derivatives related to FIA contracts (5,667 ) (86 ) (9,913 ) 3,558 (1,032 ) Derivatives related to IUL contracts: Embedded derivative - IUL 7,136 1,287 6,302 3,082 (486 ) Equity futures - IUL 101 17 (71 ) 39 3 Equity options - IUL 1,607 (1,110 ) 1,821 (1,048 ) (115 ) Total derivatives related to IUL contracts 8,844 194 8,052 2,073 (598 ) Embedded derivative - Modco reinsurance treaties (24,187 ) (9,817 ) (105,362 ) 131,505 (68,026 ) Derivatives with PLC (1) 13,387 (12,978 ) 31,098 (16,096 ) 15,863 Other derivatives 49 (50 ) (51 ) 33 (37 ) Total realized gains (losses) - derivatives $ 532 $ 41,895 $ 75,988 $ 47,513 $ 22,031 (1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC. |
Realized Investment Gains and Losses for the Modco Trading Portfolio that is Included in Realized Investment Gains (Losses) - All Other Investments | The following table sets forth realized investments gains and losses for the Modco trading portfolio that is included in realized investment gains (losses) — all other investments: Realized investment gains (losses) - all other investments Successor Company Predecessor Company For The Three Months Ended For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Modco trading portfolio (1) $ 23,995 $ 8,377 $ 178,353 $ (133,524 ) $ 73,062 (1)The Company elected to include the use of alternate disclosures for trading activities. |
Components of the Gain or Loss on Derivatives that Quality as a Cash Flow Hedging Relationship | The following table presents the components of the gain or loss on derivatives that qualify as a cash flow hedging relationship. The Company did not have any derivatives that qualified as a cash flow hedging relationships for the three and nine months ended September 30, 2016 (Successor Company) and for the three months ended September 30, 2015 (Successor Company): Gain (Loss) on Derivatives in Cash Flow Hedging Relationship Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Effective Portion) (Effective Portion) (Ineffective Portion) Benefits and settlement expenses Realized investment gains (losses) (Dollars In Thousands) Successor Company February 1, 2015 to September 30, 2015 Inflation $ (131 ) $ (131 ) $ 73 Total $ (131 ) $ (131 ) $ 73 Predecessor Company January 1, 2015 to January 31, 2015 Inflation $ 13 $ (36 ) $ (7 ) Total $ 13 $ (36 ) $ (7 ) |
Schedule of Information About the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and the Location in and Effect on the Consolidated Financial Statements | The table below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments and the location in and effect on the consolidated condensed financial statements for the periods presented below: Successor Company As of September 30, 2016 As of December 31, 2015 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) (Dollars In Thousands) Other long-term investments Derivatives not designated as hedging instruments: Interest rate swaps $ 1,640,000 $ 267,389 $ 1,435,000 $ 66,408 Derivatives with PLC (1) 2,881,274 50,687 1,619,200 18,161 Embedded derivative - Modco reinsurance treaties 64,411 2,787 64,593 1,215 Embedded derivative - GMWB 1,155,640 33,675 1,723,081 49,007 Interest rate futures 796,694 2,256 282,373 1,537 Equity futures 45,261 556 262,485 1,275 Currency futures 321,917 4,735 226,936 2,499 Equity options 3,542,544 311,158 2,198,340 179,458 Interest rate swaptions 225,000 451 225,000 3,663 Other 212 123 242 347 $ 10,672,953 $ 673,817 $ 8,037,250 $ 323,570 Other liabilities Derivatives not designated as hedging instruments: Interest rate swaps $ 70,000 $ 1,658 $ 475,000 $ 16,579 Embedded derivative - Modco reinsurance treaties 2,455,121 254,285 2,473,427 178,362 Funds withheld derivative 1,625,725 112,344 1,149,664 102,378 Embedded derivative - GMWB 2,670,968 162,543 1,834,308 67,528 Embedded derivative - FIA 1,408,469 141,651 1,110,790 100,329 Embedded derivative - IUL 90,848 46,348 57,760 29,629 Interest rate futures 480,897 7,419 793,763 1,539 Equity futures 862,034 9,504 233,412 2,599 Currency futures 81,768 447 46,692 1,115 Equity options 2,202,799 110,712 1,205,204 22,167 $ 11,948,629 $ 846,911 $ 9,380,020 $ 522,225 (1)These derivatives include the Interest, YRT premium support, and portfolio maintenance agreements between certain of the Company’s subsidiaries and PLC. |
OFFSETTING OF ASSETS AND LIAB34
OFFSETTING OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Offsetting [Abstract] | |
Schedule of Derivative Instruments by Assets | The tables below present the derivative instruments by assets and liabilities for the Company as of December 31, 2015 (Successor Company). Net Amounts Gross Gross Amounts Offset in the of Assets Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Assets Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 254,840 $ — $ 254,840 $ 42,382 $ 105,842 $ 106,616 Total derivatives, subject to a master netting arrangement or similar arrangement 254,840 — 254,840 42,382 105,842 106,616 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,215 — 1,215 — — 1,215 Embedded derivative - GMWB 49,007 — 49,007 — — 49,007 Derivatives with PLC 18,161 — 18,161 — — 18,161 Other 347 — 347 — — 347 Total derivatives, not subject to a master netting arrangement or similar arrangement 68,730 — 68,730 — — 68,730 Total derivatives 323,570 — 323,570 42,382 105,842 175,346 Total Assets $ 323,570 $ — $ 323,570 $ 42,382 $ 105,842 $ 175,346 The tables below present the derivative instruments by assets and liabilities for the Company as of September 30, 2016 ( Successor Company ). Net Amounts Gross Gross Amounts Offset in the of Assets Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Assets Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount (Dollars In Thousands) Offsetting of Derivative Assets Derivatives: Free-Standing derivatives $ 586,545 $ — $ 586,545 $ 114,968 $ 299,819 $ 171,758 Total derivatives, subject to a master netting arrangement or similar arrangement 586,545 — 586,545 114,968 299,819 171,758 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,787 — 2,787 — — 2,787 Embedded derivative - GMWB 33,675 — 33,675 — — 33,675 Derivatives with PLC 50,687 — 50,687 — — 50,687 Other 123 — 123 — — 123 Total derivatives, not subject to a master netting arrangement or similar arrangement 87,272 — 87,272 — — 87,272 Total derivatives 673,817 — 673,817 114,968 299,819 259,030 Total Assets $ 673,817 $ — $ 673,817 $ 114,968 $ 299,819 $ 259,030 |
Schedule of Derivative Instruments by Liabilities | Net Amounts Gross Gross Amounts Offset in the of Liabilities Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Liabilities Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Paid Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 43,999 $ — $ 43,999 $ 42,382 $ 1,617 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 43,999 — 43,999 42,382 1,617 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 178,362 — 178,362 — — 178,362 Funds withheld derivative 102,378 — 102,378 — — 102,378 Embedded derivative - GMWB 67,528 — 67,528 — — 67,528 Embedded derivative - FIA 100,329 — 100,329 — — 100,329 Embedded derivative - IUL 29,629 — 29,629 — — 29,629 Total derivatives, not subject to a master netting arrangement or similar arrangement 478,226 — 478,226 — — 478,226 Total derivatives 522,225 — 522,225 42,382 1,617 478,226 Repurchase agreements (1) 438,185 — 438,185 — — 438,185 Total Liabilities $ 960,410 $ — $ 960,410 $ 42,382 $ 1,617 $ 916,411 (1) Borrowings under repurchase agreements are for a term less than 90 days . Net Amounts Gross Gross Amounts Offset in the of Liabilities Presented in the Gross Amounts Not Offset in the Statement of Financial Position Amounts of Recognized Liabilities Statement of Financial Position Statement of Financial Position Financial Instruments Cash Collateral Paid Net Amount (Dollars In Thousands) Offsetting of Derivative Liabilities Derivatives: Free-Standing derivatives $ 129,740 $ — $ 129,740 $ 114,968 $ 14,772 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 129,740 — 129,740 114,968 14,772 — Derivatives, not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 254,285 — 254,285 — — 254,285 Funds withheld derivative 112,344 — 112,344 — — 112,344 Embedded derivative - GMWB 162,543 — 162,543 — — 162,543 Embedded derivative - FIA 141,651 — 141,651 — — 141,651 Embedded derivative - IUL 46,348 — 46,348 — — 46,348 Total derivatives, not subject to a master netting arrangement or similar arrangement 717,171 — 717,171 — — 717,171 Total derivatives 846,911 — 846,911 114,968 14,772 717,171 Repurchase agreements (1) 219,457 — 219,457 — — 219,457 Total Liabilities $ 1,066,368 $ — $ 1,066,368 $ 114,968 $ 14,772 $ 936,628 (1) Borrowings under repurchase agreements are for a term less than 90 days . |
MORTGAGE LOANS (Tables)
MORTGAGE LOANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
MORTGAGE LOANS | |
Schedule of Changes in the Allowance for Mortgage Loan Credit Losses | Successor Company Predecessor Company As of February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Beginning balance $ — $ — $ 5,720 Charge offs (1,950 ) (2,561 ) (861 ) Recoveries — (638 ) (2,359 ) Provision 5,396 3,199 — Ending balance $ 3,446 $ — $ 2,500 |
Schedule of an Analysis of the Delinquent Loans | An analysis of the delinquent loans is shown in the following chart. Greater Successor Company 30-59 Days 60-89 Days than 90 Days Total As of September 30, 2016 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 2,894 $ — $ — $ 2,894 Number of delinquent commercial mortgage loans 2 — — 2 As of December 31, 2015 Commercial mortgage loans $ 6,002 $ 1,033 $ — $ 7,035 Number of delinquent commercial mortgage loans 6 1 — 7 |
Schedule of Information Regarding Impaired Loans | For information regarding impaired loans, please refer to the following chart: Unpaid Average Interest Cash Basis Successor Company Recorded Principal Related Recorded Income Interest As of September 30, 2016 Investment Balance Allowance Investment Recognized Income (Dollars In Thousands) Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 10,693 11,060 3,446 3,564 352 343 As of December 31, 2015 Commercial mortgage loans: With no related allowance recorded $ 1,694 $ 1,728 $ — $ 847 $ 104 $ 117 With an allowance recorded — — — — — — |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Non-Recourse Funding Obligations Outstanding | Non-recourse funding obligations outstanding as of September 30, 2016 ( Successor Company ), on a consolidated basis, are shown in the following table: Maturity Year-to-Date Weighted-Avg Issuer Carrying Value (1) Year Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,135,000 2039 4.75 % Golden Gate II Captive Insurance Company (outstanding principal - $278,949) 227,124 2052 1.28 % Golden Gate V Vermont Captive Insurance Company (2)(3) (outstanding principal - $550,000) 613,447 2037 5.12 % MONY Life Insurance Company (3) (outstanding principal - $1,091) 2,481 2024 6.19 % Total $ 2,978,052 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company. (3) Fixed rate obligations. |
Schedule of Collateral Pledged for Repurchase Agreements | The following table provides the amount of collateral pledged for repurchase agreements, grouped by asset class, as of September 30, 2016 ( Successor Company ): Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of September 30, 2016 (Successor Company) (Dollars In Thousands) Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ — $ — $ — $ — $ — State and municipal securities — — — — — Corporate securities — — — — — Equity securities — — — — — Non-U.S. sovereign debt — — — — — Mortgage loans 224,767 — — — 224,767 Other asset-backed securities — — — — — Total borrowings $ 224,767 $ — $ — $ — $ 224,767 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Expense [Abstract] | |
Components of the Net Periodic Benefit Cost | Components of the net periodic benefit cost for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ), are as follows: Successor Company Predecessor Company For The Three Months Ended September 30, 2016 For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 Defined Defined Defined Excess Defined Benefit Pension Plan Excess Benefit Plan Defined Benefit Pension Plan Excess Benefit Plan (Dollars In Thousands) (Dollars In Thousands) Service cost — benefits earned during the period $ 2,906 $ 311 $ 2,973 $ 333 $ 8,717 $ 1,102 $ 7,928 $ 888 $ 974 $ 95 Interest cost on projected benefit obligation 2,737 299 2,433 408 8,210 1,054 6,488 1,088 1,002 140 Expected return on plan assets (3,605 ) — (3,642 ) — (10,816 ) — (9,712 ) — (1,293 ) — Amortization of prior service cost — — — — — — — — (33 ) 1 Amortization of actuarial losses — 64 — — — 114 — — 668 138 Preliminary net periodic benefit cost 2,038 674 1,764 741 6,111 2,270 4,704 1,976 1,318 374 Settlement/curtailment expense — 635 — — — 2,135 — — — — Total net periodic benefit costs $ 2,038 $ 1,309 $ 1,764 $ 741 $ 6,111 $ 4,405 $ 4,704 $ 1,976 $ 1,318 $ 374 |
ACCUMULATED OTHER COMPREHENSI38
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of Changes in the Accumulated Balances for Each Component of AOCI | The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) (“AOCI”) as of September 30, 2016 ( Successor Company ), December 31, 2015 (Successor Company), and January 31, 2015 ( Predecessor Company ). Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,246,391 ) $ — $ (1,246,391 ) Other comprehensive income (loss) before reclassifications 1,215,021 — 1,215,021 Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (198 ) — (198 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (11,206 ) — (11,206 ) Net current-period other comprehensive income (loss) 1,203,617 — 1,203,617 Ending Balance, September 30, 2016 $ (42,774 ) $ — $ (42,774 ) (1) See Reclassification table below for details. (2) As of September 30, 2016 net unrealized losses reported in AOCI were offset by $47.3 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Successor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, February 1, 2015 $ — $ — $ — Other comprehensive income (loss) before reclassifications (1,263,367 ) (86 ) (1,263,453 ) Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (393 ) — (393 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 17,369 86 17,455 Net current-period other comprehensive income (loss) (1,246,391 ) — (1,246,391 ) Ending Balance, December 31, 2015 $ (1,246,391 ) $ — $ (1,246,391 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 net unrealized losses reported in AOCI were offset by $623.0 million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. Changes in Accumulated Other Comprehensive Income (Loss) by Component Predecessor Company Unrealized Gains and Losses on Investments (2) Accumulated Gain and Loss Derivatives Total Accumulated Other Comprehensive Income (Loss) (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2014 $ 1,483,293 $ (82 ) $ 1,483,211 Other comprehensive income (loss) before reclassifications 482,143 9 482,152 Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (243 ) — (243 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (4,166 ) 23 (4,143 ) Net current-period other comprehensive income (loss) 477,734 32 477,766 Ending Balance, January 31, 2015 $ 1,961,027 $ (50 ) $ 1,960,977 (1) See Reclassification table below for details. (2) As of January 31, 2015 net unrealized losses reported in AOCI were offset by $(492.6) million due to the impact those net unrealized losses would have had on certain of the Company’s insurance assets and liabilities if the net unrealized losses had been recognized in net income. |
Schedule of Reclassifications Amounts Out of AOCI | The following tables summarize the reclassifications amounts out of AOCI for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 ( Successor Company ), and the period of January 1, 2015 to January 31, 2015 ( Predecessor Company ). Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income For the Three Months Ended September 30, 2016 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 1,665 Realized investment gains (losses): All other investments Impairments recognized in earnings (3,308 ) Net impairment losses recognized in earnings (1,643 ) Total before tax 575 Tax (expense) or benefit $ (1,068 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income For the Nine Months Ended September 30, 2016 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 24,133 Realized investment gains (losses): All other investments Impairments recognized in earnings (6,892 ) Net impairment losses recognized in earnings 17,241 Total before tax (6,035 ) Tax (expense) or benefit $ 11,206 Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the For The Three Months Ended September 30, 2015 (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ (1,253 ) Realized investment gains (losses): All other investments Impairments recognized in earnings (10,064 ) Net impairment losses recognized in earnings (11,317 ) Total before tax 3,961 Tax (expense) or benefit $ (7,356 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Successor Company Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the February 1, 2015 to September 30, 2015 (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (131 ) Benefits and settlement expenses, net of reinsurance ceded (131 ) Total before tax 45 Tax (expense) or benefit $ (86 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 2,470 Realized investment gains (losses): All other investments Impairments recognized in earnings (15,798 ) Net impairment losses recognized in earnings (13,328 ) Total before tax 4,664 Tax (expense) or benefit $ (8,664 ) Net of tax (1) See Note 8, Derivative Financial Instruments for additional information. Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Predecessor Company January 1, 2015 to January 31, 2015 Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (36 ) Benefits and settlement expenses, net of reinsurance ceded (36 ) Total before tax 13 Tax (expense) or benefit $ (23 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 6,891 Realized investment gains (losses): All other investments Impairments recognized in earnings (481 ) Net impairment losses recognized in earnings 6,410 Total before tax (2,244 ) Tax (expense) or benefit $ 4,166 Net of tax (1) See Note 8, Derivative Financial Instruments for additional information. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Successor Company Predecessor Company As of February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Balance, beginning of period $ 8,937 $ 105,850 $ 168,076 Additions for tax positions of the current year 2,085 2,213 (5,010 ) Additions for tax positions of prior years 1,031 1,812 1,149 Reductions of tax positions of prior years: 0 Changes in judgment (687 ) (644 ) (58,365 ) Settlements during the period (1,546 ) (100,294 ) — Lapses of applicable statute of limitations — — — Balance, end of period $ 9,820 $ 8,937 $ 105,850 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for the Company's Segments | The following tables summarize financial information for the Company’s segments (Predecessor and Successor periods are not comparable): Successor Company Predecessor Company For The Three Months Ended September 30, 2016 For The Three Months Ended September 30, 2015 For The Nine Months Ended September 30, 2016 February 1, 2015 January 1, 2015 (Dollars In Thousands) (Dollars In Thousands) Revenues Life Marketing $ 382,224 $ 358,194 $ 1,148,121 $ 960,807 $ 133,361 Acquisitions 391,017 352,141 1,269,672 974,915 139,761 Annuities 139,265 200,798 546,378 293,610 130,918 Stable Value Products 27,380 17,065 83,519 44,063 8,181 Asset Protection 79,030 77,476 229,128 204,397 24,566 Corporate and Other 34,872 997 111,714 32,793 22,859 Total revenues $ 1,053,788 $ 1,006,671 $ 3,388,532 $ 2,510,585 $ 459,646 Pre-tax Operating Income (Loss) Life Marketing $ (512 ) 18,758 37,712 $ 28,711 $ (2,271 ) Acquisitions 70,157 59,016 184,095 132,962 20,134 Annuities 43,033 37,090 135,789 108,976 11,363 Stable Value Products 14,700 12,785 44,326 28,249 4,529 Asset Protection 4,099 4,415 12,496 12,938 1,907 Corporate and Other (46,509 ) (34,557 ) (111,499 ) (84,888 ) (16,662 ) Pre-tax operating income 84,968 97,507 302,919 226,948 19,000 Realized investment (losses) gains - investments (1) (688 ) 8,586 183,343 (150,063 ) 89,414 Realized investment (losses) gains - derivatives 9,987 50,028 103,564 68,205 24,433 Income before income tax 94,267 156,121 589,826 145,090 132,847 Income tax expense (20,965 ) (42,542 ) (185,114 ) (40,667 ) (44,325 ) Net income $ 73,302 $ 113,579 $ 404,712 $ 104,423 $ 88,522 All other investment gains (losses) $ 20,844 $ (4,755 ) $ 187,752 $ (147,892 ) $ 80,672 Less: amortization related to DAC/VOBA and benefits and settlement expenses 21,532 (13,341 ) 4,409 2,171 (8,742 ) Realized investment gains (losses) - investments $ (688 ) $ 8,586 $ 183,343 $ (150,063 ) $ 89,414 Derivative financial instruments gains (losses) $ 532 $ 41,895 $ 75,988 $ 47,513 $ 22,031 Less: VA GMWB economic cost (9,455 ) (8,133 ) (27,576 ) (20,692 ) (2,402 ) Realized investment gains (losses) - derivatives $ 9,987 $ 50,028 $ 103,564 $ 68,205 $ 24,433 (1) Includes credit related other-than-temporary impairmen ts of $3.3 million , $6.9 million , $10.1 million , $15.8 million , and $0.5 million for the three and nine months ended September 30, 2016 ( Successor Company ), the three months ended September 30, 2015 (Successor Company), the period of February 1, 2015 to September 30, 2015 (Successor Company), and for the period of January 1, 2015 to January 31, 2015 (Predecessor Company), respectively. Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,171,442 $ 19,986,370 $ 20,166,335 $ 3,283,420 Deferred policy acquisition costs and value of business acquired 1,155,759 82,803 634,820 5,919 Other intangibles 305,403 37,741 186,781 8,889 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,832,878 $ 20,121,438 $ 21,324,613 $ 3,412,041 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 828,946 $ 13,876,152 $ 72,312,665 Deferred policy acquisition costs and value of business acquired 35,087 — 1,914,388 Other intangibles 75,333 — 614,147 Goodwill 67,155 — 732,443 Total assets $ 1,006,521 $ 13,876,152 $ 75,573,643 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 13,258,639 $ 19,879,988 $ 19,715,901 $ 2,006,263 Deferred policy acquisition costs and value of business acquired 1,119,515 (178,662 ) 578,742 2,357 Other intangibles 319,623 39,658 196,780 9,389 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 14,898,051 $ 19,755,508 $ 20,828,100 $ 2,131,822 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 766,294 $ 9,464,906 $ 65,091,991 Deferred policy acquisition costs and value of business acquired 40,421 — 1,562,373 Other intangibles 79,681 — 645,131 Goodwill 67,155 — 732,443 Total assets $ 953,551 $ 9,464,906 $ 68,031,938 |
REINSURANCE AND FINANCING TRA41
REINSURANCE AND FINANCING TRANSACTIONS (Details) - USD ($) | Jan. 15, 2016 | Sep. 30, 2016 |
Debt Instrument [Line Items] | ||
Increase in total assets | $ 2,800,000,000 | |
Increase in assets resulting from reinsurance transaction | 600,000,000 | |
Increase in value of business acquired | 280,000,000 | |
Increase in assets associated with financing activities | $ 2,200,000,000 | |
Golden Gate | ||
Debt Instrument [Line Items] | ||
Extraordinary dividend | $ 300,000,000 | |
Financing Arrangement with Golden Gate and Syndicate if Risk Takers | ||
Debt Instrument [Line Items] | ||
Term of financing agreement | 18 years | |
Financing capacity under the arrangement | $ 2,188,000,000 | |
Steel City Notes | Golden Gate | Surplus Notes | ||
Debt Instrument [Line Items] | ||
Amount of debt issued | 2,188,000,000 | |
Golden Gate Surplus Notes | Steel City | Surplus Notes | ||
Debt Instrument [Line Items] | ||
Amount of debt issued | 2,188,000,000 | |
Non-recourse Funding Obligations Series | Golden Gate | ||
Debt Instrument [Line Items] | ||
Outstanding non-recourse funding obligations | $ 800,000,000 |
DAI-ICHI MERGER - Additional In
DAI-ICHI MERGER - Additional Information (Details) - USD ($) | Feb. 01, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 735,700,000 | ||
Successor | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 735,700,000 | $ 732,443,000 | $ 732,443,000 |
Decrease to goodwill | 0 | ||
Protective Life Corporation | Dai-ichi Life | |||
Business Acquisition [Line Items] | |||
Per share merger consideration (in dollars per share) | $ 70 | ||
Aggregate cash consideration | $ 5,600,000,000 | ||
Goodwill | 735,712,000 | ||
Decrease to goodwill | 3,300,000 | ||
Protective Life Corporation | Dai-ichi Life | Successor | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 732,400,000 | $ 732,400,000 | |
Protective Life Insurance Company | Dai-ichi Life | |||
Business Acquisition [Line Items] | |||
Expected tax deductible goodwill | $ 0 |
DAI-ICHI MERGER - Summary of Co
DAI-ICHI MERGER - Summary of Consideration Paid and Fair Value of Assets Acquired and Liabilities Assumed (Details) $ in Thousands | Feb. 01, 2015USD ($) |
Assets | |
Goodwill | $ 735,700 |
Dai-ichi Life | Protective Life Corporation | |
Assets | |
Fixed maturities | 38,342,948 |
Equity securities | 699,081 |
Mortgage loans | 5,580,229 |
Investment real estate | 7,456 |
Policy loans | 1,751,872 |
Other long-term investments | 657,346 |
Short-term investments | 311,236 |
Total investments | 47,350,168 |
Cash | 378,903 |
Accrued investment income | 483,691 |
Accounts and premiums receivable | 104,260 |
Reinsurance receivables | 5,538,637 |
Value of business acquired | 1,278,064 |
Goodwill | 735,712 |
Other intangibles | 683,000 |
Property and equipment | 102,736 |
Other assets | 224,555 |
Income tax receivable | 50,117 |
Assets related to separate accounts | |
Variable annuity | 12,970,587 |
Variable universal life | 819,188 |
Total assets | 70,719,618 |
Liabilities | |
Future policy and benefit claims | 30,195,397 |
Unearned premiums | 622,278 |
Total policy liabilities and accruals | 30,817,675 |
Stable value product account balances | 1,932,277 |
Annuity account balances | 10,941,661 |
Other policyholders’ funds | 1,388,083 |
Other liabilities | 1,533,666 |
Deferred income taxes | 1,861,632 |
Non-recourse funding obligations | 1,895,636 |
Repurchase program borrowings | 50,000 |
Liabilities related to separate accounts | |
Variable annuity | 12,970,587 |
Variable universal life | 819,188 |
Total liabilities | 64,210,405 |
Net assets acquired | $ 6,509,213 |
MONY CLOSED BLOCK OF BUSINESS -
MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information of the Policyholder Dividend Obligation (Details) - Successor - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jan. 31, 2015 | |
Closed block liabilities | ||||
Future policy benefits, policyholders’ account balances and other policyholder liabilities | $ 5,913,411 | $ 6,010,520 | ||
Policyholder dividend obligation | 264,107 | 0 | $ 58,435 | $ 323,432 |
Other liabilities | 52,435 | 24,539 | ||
Total closed block liabilities | 6,229,953 | 6,035,059 | ||
Closed block assets | ||||
Fixed maturities, available-for-sale, at fair value | 4,696,136 | 4,426,090 | ||
Mortgage loans on real estate | 201,078 | 247,162 | ||
Policy loans | 717,887 | 746,102 | ||
Cash | 79,115 | 34,420 | ||
Other assets | 155,360 | 162,640 | ||
Total closed block assets | 5,849,576 | 5,616,414 | ||
Excess of reported closed block liabilities over closed block assets | 380,377 | 418,645 | ||
Portion of above representing accumulated other comprehensive income: | ||||
Net unrealized investment gains (losses) net of policyholder dividend obligation of $16,169 (Successor) and $(179,360) (Successor) | 0 | (18,597) | ||
Future earnings to be recognized from closed block assets and closed block liabilities | 380,377 | 400,048 | ||
Net unrealized investment gains (losses) allocated to policyholder dividend obligation, net of deferred tax benefits | $ 16,169 | $ (179,360) |
MONY CLOSED BLOCK OF BUSINESS45
MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Jan. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||
Entity Information [Line Items] | |||
Policyholder dividend obligation, beginning of period | $ 323,432 | $ 0 | |
Applicable to net revenue (losses) | (27,854) | (36,707) | |
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $(8,706) (Successor); $(83,000) (2015 - Successor); $47,277 (2015 - Predecessor) | (237,143) | 300,814 | |
Policyholder dividend obligation, end of period | $ 323,432 | 58,435 | 264,107 |
Deferred tax benefits | (83,000) | $ (8,706) | |
Predecessor | |||
Entity Information [Line Items] | |||
Policyholder dividend obligation, beginning of period | 366,745 | $ 500,453 | |
Applicable to net revenue (losses) | (1,369) | ||
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation; includes deferred tax benefits of $(8,706) (Successor); $(83,000) (2015 - Successor); $47,277 (2015 - Predecessor) | 135,077 | ||
Policyholder dividend obligation, end of period | 500,453 | ||
Deferred tax benefits | $ 47,277 |
MONY CLOSED BLOCK OF BUSINESS46
MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Revenues | |||||
Premiums and other income | $ 44,043 | $ 46,610 | $ 128,279 | $ 135,282 | |
Net investment income | 53,582 | 54,593 | 142,274 | 156,458 | |
Net investment gains | 326 | 167 | 3,017 | 963 | |
Total revenues | 97,951 | 101,370 | 273,570 | 292,703 | |
Benefits and other deductions | |||||
Benefits and settlement expenses | 88,143 | 90,966 | 245,711 | 260,227 | |
Other operating expense | 537 | 258 | 733 | 2,214 | |
Total benefits and other deductions | 88,680 | 91,224 | 246,444 | 262,441 | |
Net revenues before income taxes | 9,271 | 10,146 | 27,126 | 30,262 | |
Income tax expense | 3,245 | 3,551 | 9,494 | 10,591 | |
Net revenues | $ 6,026 | $ 6,595 | $ 17,632 | $ 19,671 | |
Predecessor | |||||
Revenues | |||||
Premiums and other income | $ 15,065 | ||||
Net investment income | 19,107 | ||||
Net investment gains | 568 | ||||
Total revenues | 34,740 | ||||
Benefits and other deductions | |||||
Benefits and settlement expenses | 31,152 | ||||
Other operating expense | 0 | ||||
Total benefits and other deductions | 31,152 | ||||
Net revenues before income taxes | 3,588 | ||||
Income tax expense | 1,256 | ||||
Net revenues | $ 2,332 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for All Other Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Investment [Line Items] | |||||
Fixed maturities | $ 1,665 | $ (1,304) | $ 2,398 | $ 24,097 | |
Equity securities | 0 | 51 | 72 | 36 | |
Impairments on fixed maturity securities | (3,308) | (10,064) | (15,798) | (6,892) | |
Modco trading portfolio | 23,995 | 8,377 | (133,524) | 178,353 | |
Other investments | (1,508) | (1,815) | (1,040) | (7,842) | |
Total realized gains (losses) - investments | $ 20,844 | $ (4,755) | $ (147,892) | $ 187,752 | |
Predecessor | |||||
Investment [Line Items] | |||||
Fixed maturities | $ 6,891 | ||||
Equity securities | 0 | ||||
Impairments on fixed maturity securities | (481) | ||||
Modco trading portfolio | 73,062 | ||||
Other investments | 1,200 | ||||
Total realized gains (losses) - investments | $ 80,672 |
INVESTMENT OPERATIONS - Schedul
INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Investment [Line Items] | |||||
Gross realized gains | $ 3,223 | $ 714 | $ 7,646 | $ 31,004 | |
Gross realized losses | (4,866) | (12,031) | (20,974) | (13,763) | |
Impairments losses included in gross realized losses | $ (3,308) | $ (10,064) | $ (15,798) | $ (6,892) | |
Predecessor | |||||
Investment [Line Items] | |||||
Gross realized gains | $ 6,920 | ||||
Gross realized losses | (469) | ||||
Impairments losses included in gross realized losses | $ (481) |
INVESTMENT OPERATIONS - Sched49
INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains/Losses Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Investment [Line Items] | |||||
Fair value (proceeds) of securities in an unrealized gain position sold | $ 167,272 | $ 94,825 | $ 807,763 | $ 987,048 | |
Gain realized on the sale of securities in an unrealized gain position | 3,223 | 715 | 7,646 | 31,004 | |
Fair value (proceeds) of securities sold in an unrealized loss position | 7,105 | 34,591 | 83,917 | 67,688 | |
Loss realized on the sale of securities in an unrealized loss position | $ (1,558) | $ (1,967) | $ (5,175) | $ (6,871) | |
Predecessor | |||||
Investment [Line Items] | |||||
Fair value (proceeds) of securities in an unrealized gain position sold | $ 172,551 | ||||
Gain realized on the sale of securities in an unrealized gain position | 6,920 | ||||
Fair value (proceeds) of securities sold in an unrealized loss position | 435 | ||||
Loss realized on the sale of securities in an unrealized loss position | $ (29) |
INVESTMENT OPERATIONS - Sched50
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - Successor - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Investment [Line Items] | ||
Amortized Cost | $ 37,620,475 | $ 36,612,808 |
Gross Unrealized Gains | 649,246 | 53,197 |
Gross Unrealized Losses | (787,820) | (2,929,180) |
Fair Value | 37,481,901 | 33,736,825 |
Total OTTI Recognized in OCI | (909) | (605) |
Residential mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,842,012 | 1,773,099 |
Gross Unrealized Gains | 49,259 | 9,286 |
Gross Unrealized Losses | (4,558) | (17,112) |
Fair Value | 1,886,713 | 1,765,273 |
Total OTTI Recognized in OCI | 0 | 0 |
Commercial mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,654,152 | 1,327,288 |
Gross Unrealized Gains | 31,706 | 428 |
Gross Unrealized Losses | (2,632) | (41,852) |
Fair Value | 1,683,226 | 1,285,864 |
Total OTTI Recognized in OCI | 0 | 0 |
Other asset-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,202,982 | 813,056 |
Gross Unrealized Gains | 14,625 | 2,758 |
Gross Unrealized Losses | (15,691) | (18,763) |
Fair Value | 1,201,916 | 797,051 |
Total OTTI Recognized in OCI | 0 | 0 |
U.S. government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,299,876 | 1,566,260 |
Gross Unrealized Gains | 13,092 | 449 |
Gross Unrealized Losses | (1,789) | (34,532) |
Fair Value | 1,311,179 | 1,532,177 |
Total OTTI Recognized in OCI | 0 | 0 |
Other government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 18,350 | 18,483 |
Gross Unrealized Gains | 184 | 0 |
Gross Unrealized Losses | (2) | (743) |
Fair Value | 18,532 | 17,740 |
Total OTTI Recognized in OCI | 0 | 0 |
States, municipals, and political subdivisions | ||
Investment [Line Items] | ||
Amortized Cost | 1,725,351 | 1,729,732 |
Gross Unrealized Gains | 25,239 | 682 |
Gross Unrealized Losses | (23,329) | (126,814) |
Fair Value | 1,727,261 | 1,603,600 |
Total OTTI Recognized in OCI | 0 | 0 |
Corporate securities | ||
Investment [Line Items] | ||
Amortized Cost | 28,966,811 | 28,433,530 |
Gross Unrealized Gains | 488,460 | 26,147 |
Gross Unrealized Losses | (731,249) | (2,681,020) |
Fair Value | 28,724,022 | 25,778,657 |
Total OTTI Recognized in OCI | (909) | (605) |
Preferred Stock | ||
Investment [Line Items] | ||
Amortized Cost | 94,362 | 64,362 |
Gross Unrealized Gains | 1,227 | 192 |
Gross Unrealized Losses | (1,815) | (1,867) |
Fair Value | 93,774 | 62,687 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 36,803,896 | 35,725,810 |
Gross Unrealized Gains | 623,792 | 39,942 |
Gross Unrealized Losses | (781,065) | (2,922,703) |
Fair Value | 36,646,623 | 32,843,049 |
Total OTTI Recognized in OCI | (909) | (605) |
Equity securities | ||
Investment [Line Items] | ||
Amortized Cost | 673,709 | 684,888 |
Gross Unrealized Gains | 25,454 | 13,255 |
Gross Unrealized Losses | (6,755) | (6,477) |
Fair Value | 692,408 | 691,666 |
Total OTTI Recognized in OCI | 0 | 0 |
Short-term investments | ||
Investment [Line Items] | ||
Amortized Cost | 142,870 | 202,110 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 142,870 | 202,110 |
Total OTTI Recognized in OCI | $ 0 | $ 0 |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | 11 Months Ended | |
Jan. 31, 2015USD ($) | Sep. 30, 2016USD ($)positionsubsidiary | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)positionsubsidiary | Dec. 31, 2015USD ($)subsidiary | |
Investment [Line Items] | ||||||
Total positions that were in an unrealized loss position | position | 1,230 | 1,230 | ||||
Red Mountain | ||||||
Investment [Line Items] | ||||||
Ownership interest through an affiliate (as a percent) | 100.00% | |||||
Investment to which risk of loss related to the VIE is limited | $ 10,000 | $ 10,000 | ||||
Successor | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 733,578,000 | 733,578,000 | $ 0 | |||
Available-for-sale securities, fair value | 37,481,901,000 | 37,481,901,000 | 33,736,825,000 | |||
Available-for-sale securities, amortized cost | 37,620,475,000 | 37,620,475,000 | 36,612,808,000 | |||
Other-than-temporary impairments on held-to-maturity securities | $ 0 | $ 0 | $ 0 | $ 0 | ||
Unrecognized Holding Loss | $ 78,300,000 | |||||
Successor | Red Mountain | ||||||
Investment [Line Items] | ||||||
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary | 1 | 1 | 1 | |||
Successor | External Credit Rating, Non Investment Grade | ||||||
Investment [Line Items] | ||||||
Trading securities | $ 266,400,000 | $ 266,400,000 | ||||
Available-for-sale securities, fair value | 1,900,000,000 | 1,900,000,000 | ||||
Available-for-sale securities, amortized cost | 2,000,000,000 | 2,000,000,000 | ||||
Securities not publicly traded | 328,600,000 | 328,600,000 | ||||
Successor | Fixed maturities | ||||||
Investment [Line Items] | ||||||
Trading securities | 2,800,000,000 | 2,800,000,000 | $ 2,700,000,000 | |||
Other-than-temporary impairments related to fixed maturities or equity securities that the entity intended to sell or expected to be required to sell | 0 | $ 0 | $ 0 | 0 | ||
Available-for-sale securities, fair value | 36,646,623,000 | 36,646,623,000 | 32,843,049,000 | |||
Available-for-sale securities, amortized cost | 36,803,896,000 | 36,803,896,000 | 35,725,810,000 | |||
Gross Unrealized Gains | 121,136,000 | 121,136,000 | 0 | |||
Gross Unrealized Losses | (1,751,000) | (1,751,000) | (78,314,000) | |||
Successor | Equity securities | ||||||
Investment [Line Items] | ||||||
Trading securities | 7,300,000 | 7,300,000 | 8,300,000 | |||
Gross unrealized loss, greater than 12 months | 5,766,000 | 5,766,000 | 0 | |||
Available-for-sale securities, fair value | 692,408,000 | 692,408,000 | 691,666,000 | |||
Available-for-sale securities, amortized cost | 673,709,000 | 673,709,000 | 684,888,000 | |||
Successor | Short-term investments | ||||||
Investment [Line Items] | ||||||
Trading securities | 25,700,000 | 25,700,000 | 61,700,000 | |||
Available-for-sale securities, fair value | 142,870,000 | 142,870,000 | 202,110,000 | |||
Available-for-sale securities, amortized cost | 142,870,000 | 142,870,000 | 202,110,000 | |||
Successor | Residential mortgage-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 4,125,000 | 4,125,000 | 0 | |||
Available-for-sale securities, fair value | 1,886,713,000 | 1,886,713,000 | 1,765,273,000 | |||
Available-for-sale securities, amortized cost | 1,842,012,000 | 1,842,012,000 | 1,773,099,000 | |||
Successor | Commercial mortgage-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 1,470,000 | 1,470,000 | 0 | |||
Available-for-sale securities, fair value | 1,683,226,000 | 1,683,226,000 | 1,285,864,000 | |||
Available-for-sale securities, amortized cost | 1,654,152,000 | 1,654,152,000 | 1,327,288,000 | |||
Successor | Other asset-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 15,423,000 | $ 15,423,000 | 0 | |||
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program | 97.00% | |||||
Available-for-sale securities, fair value | 1,201,916,000 | $ 1,201,916,000 | 797,051,000 | |||
Available-for-sale securities, amortized cost | 1,202,982,000 | 1,202,982,000 | 813,056,000 | |||
Successor | States, municipals, and political subdivisions | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 20,487,000 | 20,487,000 | 0 | |||
Available-for-sale securities, fair value | 1,727,261,000 | 1,727,261,000 | 1,603,600,000 | |||
Available-for-sale securities, amortized cost | 1,725,351,000 | 1,725,351,000 | 1,729,732,000 | |||
Successor | Corporate securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss, greater than 12 months | 684,620,000 | 684,620,000 | 0 | |||
Available-for-sale securities, fair value | 28,724,022,000 | 28,724,022,000 | 25,778,657,000 | |||
Available-for-sale securities, amortized cost | $ 28,966,811,000 | $ 28,966,811,000 | $ 28,433,530,000 | |||
Predecessor | ||||||
Investment [Line Items] | ||||||
Other-than-temporary impairments on held-to-maturity securities | $ 0 | |||||
Predecessor | Fixed maturities | ||||||
Investment [Line Items] | ||||||
Other-than-temporary impairments related to fixed maturities or equity securities that the entity intended to sell or expected to be required to sell | $ 0 |
INVESTMENT OPERATIONS - Sched52
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Held-to-maturity, Fair Value | ||
Fair Value | $ 2,894,615 | $ 515,000 |
Fixed maturities | ||
Available-for-sale, Amortized Cost | ||
Due in one year or less | 786,505 | |
Due after one year through five years | 6,834,174 | |
Due after five years through ten years | 7,735,392 | |
Due after ten years | 21,447,825 | |
Total | 36,803,896 | |
Available-for-sale, Fair Value | ||
Due in one year or less | 787,980 | |
Due after one year through five years | 6,901,114 | |
Due after five years through ten years | 7,887,064 | |
Due after ten years | 21,070,465 | |
Total | 36,646,623 | |
Held-to-maturity, Amortized Cost | ||
Due after ten years | 2,775,230 | |
Amortized Cost | 2,775,230 | 593,314 |
Held-to-maturity, Fair Value | ||
Due after ten years | 2,894,615 | |
Fair Value | $ 2,894,615 | $ 515,000 |
INVESTMENT OPERATIONS - Sched53
INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Gain (Loss) on Investments [Line Items] | |||||
Other-than-temporary impairments | $ (1,898) | $ (14,906) | $ (28,301) | $ (10,194) | |
Non-credit impairment losses recorded in other comprehensive income | (1,410) | 4,842 | 12,503 | 3,302 | |
Net impairment losses recognized in earnings | $ (3,308) | $ (10,064) | $ (15,798) | $ (6,892) | |
Predecessor | |||||
Gain (Loss) on Investments [Line Items] | |||||
Other-than-temporary impairments | $ (636) | ||||
Non-credit impairment losses recorded in other comprehensive income | 155 | ||||
Net impairment losses recognized in earnings | $ (481) |
INVESTMENT OPERATIONS - Sched54
INVESTMENT OPERATIONS - Schedule of Available-for-Sale Credit Losses on Fixed Maturities Held by the Company for Which a Portion of Other-than-Temporary Impairments were Recognized in Other Comprehensive Income (Loss) (Details) - Fixed maturities - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||||
Beginning balance | $ 964 | $ 4,472 | $ 0 | $ 22,761 | |
Additions for newly impaired securities | 1,721 | 0 | 4,472 | 4,777 | |
Additions for previously impaired securities | 1,521 | 9,479 | 9,479 | 2,046 | |
Reductions for previously impaired securities due to a change in expected cash flows | (4) | 0 | 0 | (22,763) | |
Reductions for previously impaired securities that were sold in the current period | 0 | (687) | (687) | (2,619) | |
Ending balance | $ 0 | $ 4,202 | $ 13,264 | 13,264 | $ 4,202 |
Predecessor | |||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||||
Beginning balance | 15,463 | $ 15,684 | |||
Additions for newly impaired securities | 0 | ||||
Additions for previously impaired securities | 221 | ||||
Reductions for previously impaired securities due to a change in expected cash flows | 0 | ||||
Reductions for previously impaired securities that were sold in the current period | 0 | ||||
Ending balance | $ 15,684 |
INVESTMENT OPERATIONS - Sched55
INVESTMENT OPERATIONS - Schedule of Investments' Gross Unrealized Losses and Fair Value of the Company's Investments that are Not Deemed to be Other-than-Temporarily Impaired (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value | ||
Less Than 12 Months | $ 3,606,854 | $ 30,237,469 |
12 Months or More | 12,268,215 | 0 |
Total | 15,875,069 | 30,237,469 |
Unrealized Loss | ||
Less Than 12 Months | (54,242) | (2,929,180) |
12 Months or More | (733,578) | 0 |
Total | (787,820) | (2,929,180) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 86,908 | 977,433 |
12 Months or More | 180,768 | 0 |
Total | 267,676 | 977,433 |
Unrealized Loss | ||
Less Than 12 Months | (433) | (17,112) |
12 Months or More | (4,125) | 0 |
Total | (4,558) | (17,112) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 175,209 | 1,232,495 |
12 Months or More | 104,931 | 0 |
Total | 280,140 | 1,232,495 |
Unrealized Loss | ||
Less Than 12 Months | (1,162) | (41,852) |
12 Months or More | (1,470) | 0 |
Total | (2,632) | (41,852) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 68,039 | 633,274 |
12 Months or More | 465,787 | 0 |
Total | 533,826 | 633,274 |
Unrealized Loss | ||
Less Than 12 Months | (268) | (18,763) |
12 Months or More | (15,423) | 0 |
Total | (15,691) | (18,763) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 128,224 | 1,291,476 |
12 Months or More | 3 | 0 |
Total | 128,227 | 1,291,476 |
Unrealized Loss | ||
Less Than 12 Months | (1,789) | (34,532) |
12 Months or More | 0 | 0 |
Total | (1,789) | (34,532) |
Other government-related securities | ||
Fair Value | ||
Less Than 12 Months | 1,927 | 17,740 |
12 Months or More | 0 | 0 |
Total | 1,927 | 17,740 |
Unrealized Loss | ||
Less Than 12 Months | (2) | (743) |
12 Months or More | 0 | 0 |
Total | (2) | (743) |
States, municipals, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 239,380 | 1,566,752 |
12 Months or More | 561,253 | 0 |
Total | 800,633 | 1,566,752 |
Unrealized Loss | ||
Less Than 12 Months | (2,842) | (126,814) |
12 Months or More | (20,487) | 0 |
Total | (23,329) | (126,814) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 2,769,939 | 24,235,121 |
12 Months or More | 10,876,293 | 0 |
Total | 13,646,232 | 24,235,121 |
Unrealized Loss | ||
Less Than 12 Months | (46,629) | (2,681,020) |
12 Months or More | (684,620) | 0 |
Total | (731,249) | (2,681,020) |
Preferred Stock | ||
Fair Value | ||
Less Than 12 Months | 53,040 | 34,685 |
12 Months or More | 19,251 | 0 |
Total | 72,291 | 34,685 |
Unrealized Loss | ||
Less Than 12 Months | (128) | (1,867) |
12 Months or More | (1,687) | 0 |
Total | (1,815) | (1,867) |
Equity securities | ||
Fair Value | ||
Less Than 12 Months | 84,188 | 248,493 |
12 Months or More | 59,929 | 0 |
Total | 144,117 | 248,493 |
Unrealized Loss | ||
Less Than 12 Months | (989) | (6,477) |
12 Months or More | (5,766) | 0 |
Total | $ (6,755) | $ (6,477) |
INVESTMENT OPERATIONS - Summa56
INVESTMENT OPERATIONS - Summary of Change in Unrealized Gains (Losses), Net of Income Tax, on Fixed Maturity and Equity Securities, Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | Fixed maturities | |||||
Investment Holdings [Line Items] | |||||
Change in unrealized gains (losses), net of income tax | $ 294,917 | $ (54,274) | $ (1,437,340) | $ 1,771,567 | |
Successor | Equity securities | |||||
Investment Holdings [Line Items] | |||||
Change in unrealized gains (losses), net of income tax | $ (1,691) | $ 2,385 | $ (5,152) | $ 7,749 | |
Predecessor | Fixed maturities | |||||
Investment Holdings [Line Items] | |||||
Change in unrealized gains (losses), net of income tax | $ 669,160 | ||||
Predecessor | Equity securities | |||||
Investment Holdings [Line Items] | |||||
Change in unrealized gains (losses), net of income tax | $ 12,172 |
INVESTMENT OPERATIONS - Sched57
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Investment [Line Items] | ||
Fair Value | $ 2,894,615 | $ 515,000 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 2,775,230 | 593,314 |
Gross Unrealized Gains | 121,136 | 0 |
Gross Unrealized Losses | (1,751) | (78,314) |
Fair Value | 2,894,615 | 515,000 |
Fixed maturities | Red Mountain | ||
Investment [Line Items] | ||
Amortized Cost | 640,230 | 593,314 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1,751) | (78,314) |
Fair Value | 638,479 | $ 515,000 |
Fixed maturities | Steel City | ||
Investment [Line Items] | ||
Amortized Cost | 2,135,000 | |
Gross Unrealized Gains | 121,136 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 2,256,136 |
FAIR VALUE OF FINANCIAL INSTR58
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Available-for-sale securities, fair value | $ 37,481,901 | $ 33,736,825 |
Total fixed maturity securities | 39,435,064 | 35,507,098 |
Equity securities | 699,686 | 699,925 |
Fair Value, Other long-term investments | 673,817 | 323,570 |
Short-term investments | 168,552 | 263,837 |
Assets related to separate accounts | ||
Variable annuity | 13,164,747 | 12,829,188 |
Variable universal life | 868,818 | 827,610 |
Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 36,646,623 | 32,843,049 |
Trading securities | 2,800,000 | 2,700,000 |
Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,886,713 | 1,765,273 |
Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,683,226 | 1,285,864 |
Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,201,916 | 797,051 |
States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 1,727,261 | 1,603,600 |
Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 18,532 | 17,740 |
Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 28,724,022 | 25,778,657 |
Level 3 | Other asset-backed securities | ||
Assets related to separate accounts | ||
Total assets measured at fair value on a recurring basis | 554,230 | 587,031 |
Measured at fair value on a recurring basis | ||
Assets: | ||
Total fixed maturity securities | 39,435,064 | 35,507,098 |
Equity securities | 699,686 | 699,925 |
Fair Value, Other long-term investments | 673,817 | 323,570 |
Short-term investments | 168,552 | 263,837 |
Total investments | 40,977,119 | 36,794,430 |
Cash | 407,578 | 212,358 |
Assets related to separate accounts | ||
Variable annuity | 13,164,747 | 12,829,188 |
Variable universal life | 868,818 | 827,610 |
Total assets measured at fair value on a recurring basis | 55,418,262 | 50,663,586 |
Liabilities: | ||
Annuity account balances | 88,857 | 92,512 |
Fair Value, Other Liabilities | 846,911 | 522,225 |
Total liabilities measured at fair value on a recurring basis | 935,768 | 614,737 |
Measured at fair value on a recurring basis | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 36,646,623 | 32,843,049 |
Trading securities | 2,788,441 | 2,664,049 |
Measured at fair value on a recurring basis | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,886,713 | 1,765,273 |
Trading securities | 264,142 | 286,658 |
Measured at fair value on a recurring basis | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,683,226 | 1,285,864 |
Trading securities | 157,152 | 146,743 |
Measured at fair value on a recurring basis | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,201,916 | 797,051 |
Trading securities | 263,213 | 275,423 |
Measured at fair value on a recurring basis | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,311,179 | 1,532,177 |
Trading securities | 36,878 | 238,347 |
Measured at fair value on a recurring basis | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 1,727,261 | 1,603,600 |
Trading securities | 340,983 | 313,354 |
Measured at fair value on a recurring basis | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 18,532 | 17,740 |
Trading securities | 60,774 | 58,827 |
Measured at fair value on a recurring basis | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 28,724,022 | 25,778,657 |
Trading securities | 1,661,511 | 1,340,501 |
Measured at fair value on a recurring basis | Preferred Stock | ||
Assets: | ||
Available-for-sale securities, fair value | 93,774 | 62,687 |
Trading securities | 3,788 | 4,196 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 1,180,569 | 1,333,895 |
Equity securities | 633,160 | 620,358 |
Fair Value, Other long-term investments | 316,007 | 113,699 |
Short-term investments | 164,702 | 261,659 |
Total investments | 2,294,438 | 2,329,611 |
Cash | 407,578 | 212,358 |
Assets related to separate accounts | ||
Variable annuity | 13,164,747 | 12,829,188 |
Variable universal life | 868,818 | 827,610 |
Total assets measured at fair value on a recurring basis | 16,735,581 | 16,198,767 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Fair Value, Other Liabilities | 102,318 | 40,067 |
Total liabilities measured at fair value on a recurring basis | 102,318 | 40,067 |
Measured at fair value on a recurring basis | Level 1 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,144,638 | 1,097,509 |
Trading securities | 35,931 | 236,386 |
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,070,116 | 1,054,353 |
Trading securities | 32,143 | 233,592 |
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 83 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Preferred Stock | ||
Assets: | ||
Available-for-sale securities, fair value | 74,522 | 43,073 |
Trading securities | 3,788 | 2,794 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 36,772,776 | 32,512,913 |
Equity securities | 0 | 13,063 |
Fair Value, Other long-term investments | 270,661 | 141,487 |
Short-term investments | 3,850 | 2,178 |
Total investments | 37,047,287 | 32,669,641 |
Cash | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 37,047,287 | 32,669,641 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Fair Value, Other Liabilities | 139,766 | 106,310 |
Total liabilities measured at fair value on a recurring basis | 139,766 | 106,310 |
Measured at fair value on a recurring basis | Level 2 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 34,171,798 | 30,256,387 |
Trading securities | 2,600,978 | 2,256,526 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,886,710 | 1,765,270 |
Trading securities | 264,142 | 286,658 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,659,667 | 1,285,864 |
Trading securities | 157,152 | 146,743 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 648,687 | 210,020 |
Trading securities | 117,380 | 122,511 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 241,063 | 477,824 |
Trading securities | 4,735 | 4,755 |
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 1,727,261 | 1,603,600 |
Trading securities | 340,983 | 313,354 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 18,532 | 17,740 |
Trading securities | 60,774 | 58,827 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 27,970,626 | 24,876,455 |
Trading securities | 1,655,812 | 1,322,276 |
Measured at fair value on a recurring basis | Level 2 | Preferred Stock | ||
Assets: | ||
Available-for-sale securities, fair value | 19,252 | 19,614 |
Trading securities | 0 | 1,402 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 1,481,719 | 1,660,290 |
Equity securities | 66,526 | 66,504 |
Fair Value, Other long-term investments | 87,149 | 68,384 |
Short-term investments | 0 | 0 |
Total investments | 1,635,394 | 1,795,178 |
Cash | 0 | 0 |
Assets related to separate accounts | ||
Variable annuity | 0 | 0 |
Variable universal life | 0 | 0 |
Total assets measured at fair value on a recurring basis | 1,635,394 | 1,795,178 |
Liabilities: | ||
Annuity account balances | 88,857 | 92,512 |
Fair Value, Other Liabilities | 604,827 | 375,848 |
Total liabilities measured at fair value on a recurring basis | 693,684 | 468,360 |
Measured at fair value on a recurring basis | Level 3 | Fixed maturities | ||
Assets: | ||
Available-for-sale securities, fair value | 1,330,187 | 1,489,153 |
Trading securities | 151,532 | 171,137 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 3 | 3 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 23,559 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Available-for-sale securities, fair value | 553,229 | 587,031 |
Trading securities | 145,833 | 152,912 |
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other government-related securities | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Corporate securities | ||
Assets: | ||
Available-for-sale securities, fair value | 753,396 | 902,119 |
Trading securities | 5,699 | 18,225 |
Measured at fair value on a recurring basis | Level 3 | Preferred Stock | ||
Assets: | ||
Available-for-sale securities, fair value | 0 | 0 |
Trading securities | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR59
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) | 9 Months Ended | |
Sep. 30, 2016USD ($)quoteprimary_source | Dec. 31, 2015USD ($) | |
Determination of fair values | ||
Number of primary sources of information used for determining fair value | primary_source | 1 | |
Total number of primary sources of information available for determining fair value | primary_source | 3 | |
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services | 91.00% | |
Number of independent non-binding broker quotes obtained per security | quote | 1 | |
Golden Gate II | ||
Determination of fair values | ||
Amount of collateralized support agreement obligations by PLC | $ 1,500,000 | |
Successor | ||
Determination of fair values | ||
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations | 78.10% | |
Fair Value, Other long-term investments | $ 673,817,000 | $ 323,570,000 |
Successor | Interest support, YRT premium support and portfolio maintenance agreement | ||
Determination of fair values | ||
Fair Value, Other long-term investments | 50,700,000 | |
Successor | Golden Gate II | Interest Support Agreement | ||
Determination of fair values | ||
Fair Value, Other long-term investments | 44,500,000 | |
Amount of collateralized support agreement obligations by PLC | 1,500,000 | |
Payments made under agreement | 0 | |
Successor | Golden Gate II | YRT premium support agreement | ||
Determination of fair values | ||
Fair Value, Other long-term investments | 2,700,000 | |
Payments made under agreement | 0 | |
Successor | Golden Gate V and West Coast Life | Portfolio maintenance agreements | ||
Determination of fair values | ||
Fair Value, Other long-term investments | 3,600,000 | |
Payments made under agreement | $ 0 | |
Successor | Annuity account | ||
Annuity account balances | ||
Fixed indexed annuities, discount rate for one month (as a percent) | 0.73% | |
Fixed indexed annuities, discount rate for five years (as a percent) | 1.99% | |
Fixed indexed annuities, discount rate for thirty years (as a percent) | 2.97% | |
Asset-Backed Securities | Successor | Level 3 | ||
Determination of fair values | ||
Fair Value | $ 722,600,000 | |
Asset-Backed Securities | Successor | Level 2 | ||
Determination of fair values | ||
Fair Value | $ 4,700,000,000 | |
Other asset-backed securities | Successor | ||
Determination of fair values | ||
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program | 97.00% | |
Other asset-backed securities | Successor | Level 3 | ||
Determination of fair values | ||
Underlying Collateral, Percentage guaranteed by the Federal Family Education Loan Program | 97.00% | |
Other asset-backed securities | Successor | Level 3 | Available-for-sale securities | ||
Determination of fair values | ||
Fair Value | $ 553,200,000 | |
Other asset-backed securities | Successor | Level 3 | Trading Securities | ||
Determination of fair values | ||
Fair Value | 145,800,000 | |
Corporate Bonds, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities | Successor | Level 3 | ||
Determination of fair values | ||
Fair Value | 759,100,000 | |
Corporate Bonds, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities | Successor | Level 2 | ||
Determination of fair values | ||
Fair Value | 32,000,000,000 | |
Equity securities | Successor | ||
Determination of fair values | ||
Fair Value | 66,500,000 | |
Federal Home Loan Bank stock | $ 65,700,000 | |
Embedded derivative - GMWB | ||
Determination of fair values | ||
Discount rate curve, base rate | LIBOR | |
Embedded derivative - GMWB | Level 3 | Minimum | ||
Determination of fair values | ||
Mortality (as a percent) | 91.10% | |
Embedded derivative - GMWB | Level 3 | Maximum | ||
Determination of fair values | ||
Mortality (as a percent) | 107.00% | |
Embedded derivative - FIA | ||
Determination of fair values | ||
Discount rate curve, base rate | LIBOR | |
Embedded derivative - FIA | Level 3 | Minimum | ||
Determination of fair values | ||
Mortality (as a percent) | 46.00% | |
Embedded derivative - FIA | Level 3 | Maximum | ||
Determination of fair values | ||
Mortality (as a percent) | 113.00% | |
Embedded derivative - IUL | ||
Determination of fair values | ||
Discount rate curve, base rate | LIBOR | |
Embedded derivative - IUL | Level 3 | Minimum | ||
Determination of fair values | ||
Mortality (as a percent) | 38.00% | |
Embedded derivative - IUL | Level 3 | Maximum | ||
Determination of fair values | ||
Mortality (as a percent) | 153.00% | |
Embedded derivative - Modified coinsurance agreements | Successor | ||
Determination of fair values | ||
Statutory policy liabilities (net of policy loans) | $ 2,400,000,000 | |
Embedded derivative - Modified coinsurance agreements | Successor | Trading Securities | ||
Determination of fair values | ||
Fair Value | 265,600,000 | |
Funds withheld derivative | Successor | Level 2 | ||
Determination of fair values | ||
Fair Value, Other Liabilities | $ 112,300,000 |
FAIR VALUE OF FINANCIAL INSTR60
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - Successor - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Unobservable Input | ||
Financial instruments with book value approximating to fair value | $ 66,500,000 | $ 66,500,000 |
Annuity account | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Liabilities | 88,857,000 | |
Level 3 | ||
Unobservable Input | ||
Financial instruments that are valued using broker quotes | 210,600,000 | 197,500,000 |
Level 3 | Other asset-backed securities | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Assets | 554,230,000 | 587,031,000 |
Unobservable Input | ||
Financial instruments that are valued using broker quotes | 178,400,000 | 152,900,000 |
Level 3 | Corporate securities | ||
Unobservable Input | ||
Financial instruments that are valued using broker quotes | $ 32,200,000 | $ 44,600,000 |
Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Unobservable Input | ||
Liquidity premium (as a percent) | 0.44% | 0.27% |
Paydown rate (as a percent) | 10.90% | 10.20% |
Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Unobservable Input | ||
Liquidity premium (as a percent) | 1.19% | 1.49% |
Paydown rate (as a percent) | 11.83% | 14.72% |
Level 3 | Discounted cash flow | Other asset-backed securities | Weighted Average | ||
Unobservable Input | ||
Liquidity premium (as a percent) | 0.70% | 0.42% |
Paydown rate (as a percent) | 11.18% | 13.11% |
Level 3 | Actuarial Cash Flow Model [Member] | Embedded derivative - FIA | ||
Unobservable Input | ||
Fair Value Inputs, Asset Withdrawal Rate, Percent of Required Minimum Distribution, Prior to Required Age | 1.00% | |
Fair Value Inputs, Asset Withdrawal Rate, Percent of Required Minimum Distribution, After Required Age | 100.00% | |
Level 3 | Embedded derivative - GMWB | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Liabilities | $ 128,877,000 | $ 18,511,000 |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | ||
Unobservable Input | ||
Utilization (as a percent) | 99.00% | |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Minimum | ||
Unobservable Input | ||
Lapse (as a percent) | 0.30% | |
Nonperformance risk (as a percent) | 0.18% | |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Maximum | ||
Unobservable Input | ||
Lapse (as a percent) | 15.00% | |
Nonperformance risk (as a percent) | 1.04% | |
Level 3 | Annuity account | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Liabilities | $ 92,512,000 | |
Level 3 | Annuity account | Actuarial cash flow model | ||
Unobservable Input | ||
Expenses per policy | $ 126 | $ 81 |
Withdrawal rate (as a percent) | 2.20% | 2.20% |
Level 3 | Annuity account | Actuarial cash flow model | Minimum | ||
Unobservable Input | ||
Lapse (as a percent) | 2.20% | 2.20% |
Nonperformance risk (as a percent) | 0.20% | 0.18% |
Asset earned rate (as a percent) | 4.02% | 4.53% |
Return on assets (as a percent) | 1.50% | 1.50% |
Level 3 | Annuity account | Actuarial cash flow model | Maximum | ||
Unobservable Input | ||
Lapse (as a percent) | 33.00% | 33.00% |
Nonperformance risk (as a percent) | 1.19% | 1.04% |
Asset earned rate (as a percent) | 5.76% | 5.67% |
Return on assets (as a percent) | 1.85% | 1.85% |
Level 3 | Embedded derivative - FIA | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Liabilities | $ 141,651,000 | $ 100,329,000 |
Level 3 | Embedded derivative - FIA | Actuarial cash flow model | ||
Unobservable Input | ||
Expenses per policy | $ 126 | $ 81.5 |
Level 3 | Embedded derivative - FIA | Actuarial cash flow model | Minimum | ||
Unobservable Input | ||
Lapse (as a percent) | 2.00% | 2.50% |
Nonperformance risk (as a percent) | 0.20% | 0.18% |
Withdrawal rate (as a percent) | 1.10% | |
Level 3 | Embedded derivative - FIA | Actuarial cash flow model | Maximum | ||
Unobservable Input | ||
Lapse (as a percent) | 40.00% | 40.00% |
Nonperformance risk (as a percent) | 1.19% | 1.04% |
Withdrawal rate (as a percent) | 4.50% | |
Level 3 | Embedded derivative - IUL | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Liabilities | $ 46,348,000 | $ 29,629,000 |
Level 3 | Embedded derivative - IUL | Actuarial cash flow model | Minimum | ||
Unobservable Input | ||
Lapse (as a percent) | 0.50% | 0.50% |
Nonperformance risk (as a percent) | 0.20% | 0.18% |
Mortality (as a percent) | 38.00% | 38.00% |
Level 3 | Embedded derivative - IUL | Actuarial cash flow model | Maximum | ||
Unobservable Input | ||
Lapse (as a percent) | 10.00% | 10.00% |
Nonperformance risk (as a percent) | 1.19% | 1.04% |
Mortality (as a percent) | 153.00% | 153.00% |
Level 3 | Corporate securities | ||
Valuation of Level 3 Financial Instruments | ||
Fair Value of Assets | $ 726,890,000 | $ 875,810,000 |
Level 3 | Corporate securities | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Spread over treasury (as a percent) | 0.97% | 0.10% |
Level 3 | Corporate securities | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Spread over treasury (as a percent) | 5.10% | 19.00% |
Level 3 | Corporate securities | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Spread over treasury (as a percent) | 2.11% | 2.61% |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | ||
Unobservable Input | ||
Utilization (as a percent) | 99.00% | |
Policies that have a one-time over-utilization rate of a specified amount (as a percent) | 10.00% | 10.00% |
Specified level of one-time over-utilization (as a percent) | 400.00% | 400.00% |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Minimum | ||
Unobservable Input | ||
Lapse (as a percent) | 0.30% | |
Nonperformance risk (as a percent) | 0.20% | |
Mortality (as a percent) | 91.10% | |
Level 3 | Embedded derivative - GMWB | Actuarial cash flow model | Maximum | ||
Unobservable Input | ||
Lapse (as a percent) | 15.00% | |
Nonperformance risk (as a percent) | 1.19% | |
Mortality (as a percent) | 106.60% |
FAIR VALUE OF FINANCIAL INSTR61
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Transfers | |||||
Securities transferred into Level 3 | $ 0 | $ 0 | $ 0 | $ 71,300,000 | |
Securities transferred into Level 2 from Level 3 | 47,500,000 | 20,000,000 | 61,900,000 | 197,600,000 | |
Securities transferred from Level 2 to Level 1 | 0 | 0 | 90,400,000 | 12,200,000 | |
Securities transferred out of Level 1 | 0 | 0 | 0 | 100,000 | |
Predecessor | |||||
Transfers | |||||
Securities transferred into Level 3 | $ 43,200,000 | ||||
Securities transferred into Level 2 from Level 3 | 0 | ||||
Securities transferred from Level 2 to Level 1 | 0 | ||||
Securities transferred out of Level 1 | 0 | ||||
Level 3 | Successor | |||||
Assets: | |||||
Beginning Balance | 1,614,284,000 | 2,049,208,000 | 2,240,077,000 | 1,795,178,000 | |
Total Realized and Unrealized Gains Included in Earnings | 29,315,000 | 232,000 | 48,678,000 | 59,973,000 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 32,680,000 | 5,983,000 | 21,767,000 | 64,560,000 | |
Total Realized and Unrealized Losses Included in Earnings | (1,516,000) | (47,543,000) | (57,507,000) | (34,237,000) | |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,354,000) | (12,985,000) | (50,123,000) | (31,742,000) | |
Purchases | 51,886,000 | 64,183,000 | 176,112,000 | 99,400,000 | |
Sales | (35,379,000) | (107,218,000) | (379,646,000) | (181,976,000) | |
Transfers in and/or out of Level 3 | (47,480,000) | (20,037,000) | (61,890,000) | (126,282,000) | |
Other | (5,042,000) | (1,605,000) | (7,250,000) | (9,480,000) | |
Ending Balance | 2,240,077,000 | 1,635,394,000 | 1,930,218,000 | 1,930,218,000 | 1,635,394,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 27,460,000 | (47,166,000) | (16,892,000) | 21,913,000 | |
Liabilities: | |||||
Beginning Balance | 669,866,000 | 438,123,000 | 628,397,000 | 468,360,000 | |
Total Realized and Unrealized Gains Included in Earnings | 22,275,000 | 17,329,000 | 230,183,000 | 37,860,000 | |
Total Realized and Unrealized Losses Included in Earnings | (46,791,000) | (61,366,000) | (88,590,000) | (268,670,000) | |
Issuances | 279,000 | 93,000 | 179,000 | 529,000 | |
Settlements | 2,226,000 | 3,246,000 | 7,976,000 | 7,264,000 | |
Other | 1,249,000 | ||||
Ending Balance | 628,397,000 | 693,684,000 | 479,007,000 | 479,007,000 | 693,684,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (23,781,000) | (40,864,000) | 146,309,000 | (228,979,000) | |
Level 3 | Successor | Annuity account | |||||
Liabilities: | |||||
Beginning Balance | 88,820,000 | 95,178,000 | 98,279,000 | 92,512,000 | |
Total Realized and Unrealized Losses Included in Earnings | (735,000) | (3,173,000) | (4,716,000) | (1,831,000) | |
Issuances | 279,000 | 93,000 | 179,000 | 529,000 | |
Settlements | 2,226,000 | 3,246,000 | 7,976,000 | 7,264,000 | |
Other | 1,249,000 | ||||
Ending Balance | 98,279,000 | 88,857,000 | 95,198,000 | 95,198,000 | 88,857,000 |
Level 3 | Successor | Other liabilities | |||||
Liabilities: | |||||
Beginning Balance | 581,046,000 | 342,945,000 | 530,118,000 | 375,848,000 | |
Total Realized and Unrealized Gains Included in Earnings | 22,275,000 | 17,329,000 | 230,183,000 | 37,860,000 | |
Total Realized and Unrealized Losses Included in Earnings | (46,056,000) | (58,193,000) | (83,874,000) | (266,839,000) | |
Ending Balance | 530,118,000 | 604,827,000 | 383,809,000 | 383,809,000 | 604,827,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (23,781,000) | (40,864,000) | 146,309,000 | (228,979,000) | |
Level 3 | Successor | Total investments | |||||
Assets: | |||||
Beginning Balance | 1,614,284,000 | 2,049,208,000 | 2,240,077,000 | 1,795,178,000 | |
Total Realized and Unrealized Gains Included in Earnings | 29,315,000 | 232,000 | 48,678,000 | 59,973,000 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 32,680,000 | 5,983,000 | 21,767,000 | 64,560,000 | |
Total Realized and Unrealized Losses Included in Earnings | (1,516,000) | (47,543,000) | (57,507,000) | (34,237,000) | |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,354,000) | (12,985,000) | (50,123,000) | (31,742,000) | |
Purchases | 51,886,000 | 64,183,000 | 176,112,000 | 99,400,000 | |
Sales | (35,379,000) | (107,218,000) | (379,646,000) | (181,976,000) | |
Transfers in and/or out of Level 3 | (47,480,000) | (20,037,000) | (61,890,000) | (126,282,000) | |
Other | (5,042,000) | (1,605,000) | (7,250,000) | (9,480,000) | |
Ending Balance | 2,240,077,000 | 1,635,394,000 | 1,930,218,000 | 1,930,218,000 | 1,635,394,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 27,460,000 | (47,166,000) | (16,892,000) | 21,913,000 | |
Level 3 | Successor | Fixed maturities | |||||
Assets: | |||||
Beginning Balance | 1,484,838,000 | 1,882,229,000 | 2,109,186,000 | 1,660,290,000 | |
Total Realized and Unrealized Gains Included in Earnings | 3,641,000 | 232,000 | 8,646,000 | 13,807,000 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 32,680,000 | 5,939,000 | 21,723,000 | 64,560,000 | |
Total Realized and Unrealized Losses Included in Earnings | (71,000) | (2,774,000) | (9,025,000) | (5,407,000) | |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,354,000) | (12,985,000) | (50,123,000) | (31,742,000) | |
Purchases | 51,886,000 | 64,183,000 | 176,112,000 | 97,949,000 | |
Sales | (35,379,000) | (107,218,000) | (379,415,000) | (181,976,000) | |
Transfers in and/or out of Level 3 | (47,480,000) | (20,037,000) | (61,890,000) | (126,282,000) | |
Other | (5,042,000) | (1,605,000) | (7,250,000) | (9,480,000) | |
Ending Balance | 2,109,186,000 | 1,481,719,000 | 1,807,964,000 | 1,807,964,000 | 1,481,719,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,231,000 | (2,397,000) | (8,442,000) | 4,577,000 | |
Level 3 | Successor | Fixed maturities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 1,316,287,000 | 1,702,319,000 | 1,914,583,000 | 1,489,153,000 | |
Total Realized and Unrealized Gains Included in Earnings | 76,000 | 4,367,000 | 7,784,000 | ||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 32,680,000 | 5,939,000 | 21,723,000 | 64,560,000 | |
Total Realized and Unrealized Losses Included in Earnings | (164,000) | (943,000) | (4,135,000) | ||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,354,000) | (12,985,000) | (50,123,000) | (31,742,000) | |
Purchases | 51,886,000 | 62,183,000 | 174,112,000 | 87,041,000 | |
Sales | (26,013,000) | (101,161,000) | (359,898,000) | (166,327,000) | |
Transfers in and/or out of Level 3 | (36,237,000) | (20,037,000) | (61,890,000) | (106,732,000) | |
Other | (5,062,000) | (1,678,000) | (7,439,000) | (9,415,000) | |
Ending Balance | 1,914,583,000 | 1,330,187,000 | 1,634,492,000 | 1,634,492,000 | 1,330,187,000 |
Level 3 | Successor | Fixed maturities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 168,551,000 | 179,910,000 | 194,603,000 | 171,137,000 | |
Total Realized and Unrealized Gains Included in Earnings | 3,641,000 | 156,000 | 4,279,000 | 6,023,000 | |
Total Realized and Unrealized Losses Included in Earnings | (71,000) | (2,610,000) | (8,082,000) | (1,272,000) | |
Purchases | 2,000,000 | 2,000,000 | 10,908,000 | ||
Sales | (9,366,000) | (6,057,000) | (19,517,000) | (15,649,000) | |
Transfers in and/or out of Level 3 | (11,243,000) | (19,550,000) | |||
Other | 20,000 | 73,000 | 189,000 | (65,000) | |
Ending Balance | 194,603,000 | 151,532,000 | 173,472,000 | 173,472,000 | 151,532,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,231,000 | (2,397,000) | (8,442,000) | 4,577,000 | |
Level 3 | Successor | Residential mortgage-backed securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 3,000 | 3,000 | 3,000 | 3,000 | |
Ending Balance | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 |
Level 3 | Successor | Commercial mortgage-backed securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 0 | 0 | |||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 6,000 | 6,000 | |||
Purchases | 23,559,000 | 23,559,000 | |||
Other | (6,000) | (6,000) | |||
Ending Balance | 23,559,000 | 23,559,000 | |||
Level 3 | Successor | Other asset-backed securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 533,141,000 | 590,885,000 | 603,646,000 | 587,031,000 | |
Total Realized and Unrealized Gains Included in Earnings | 6,859,000 | ||||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 23,350,000 | 165,000 | 24,119,000 | ||
Total Realized and Unrealized Losses Included in Earnings | (92,000) | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (19,000) | (4,185,000) | (17,076,000) | (21,426,000) | |
Purchases | 9,597,000 | ||||
Sales | (12,000) | (127,000) | (58,461,000) | ||
Transfers in and/or out of Level 3 | 7,457,000 | ||||
Other | (3,231,000) | (949,000) | (765,000) | (1,947,000) | |
Ending Balance | 603,646,000 | 553,229,000 | 585,751,000 | 585,751,000 | 553,229,000 |
Level 3 | Successor | Other asset-backed securities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 151,964,000 | 160,594,000 | 169,473,000 | 152,912,000 | |
Total Realized and Unrealized Gains Included in Earnings | 3,260,000 | 83,000 | 4,032,000 | 5,310,000 | |
Total Realized and Unrealized Losses Included in Earnings | (71,000) | (1,640,000) | (6,813,000) | (1,013,000) | |
Purchases | 2,000,000 | 2,000,000 | |||
Sales | (9,366,000) | (6,001,000) | (13,877,000) | (11,578,000) | |
Transfers in and/or out of Level 3 | 172,000 | ||||
Other | 46,000 | 117,000 | 338,000 | 30,000 | |
Ending Balance | 169,473,000 | 145,833,000 | 155,153,000 | 155,153,000 | 145,833,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 3,189,000 | (1,500,000) | (6,896,000) | 4,294,000 | |
Level 3 | Successor | States, municipals, and political subdivisions | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 3,675,000 | ||||
Sales | (3,675,000) | ||||
Ending Balance | 3,675,000 | ||||
Level 3 | Successor | Corporate securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 783,143,000 | 1,111,431,000 | 1,307,259,000 | 902,119,000 | |
Total Realized and Unrealized Gains Included in Earnings | 76,000 | 4,367,000 | 925,000 | ||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 9,324,000 | 5,939,000 | 21,558,000 | 40,435,000 | |
Total Realized and Unrealized Losses Included in Earnings | (164,000) | (851,000) | (4,135,000) | ||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,335,000) | (8,800,000) | (33,047,000) | (10,316,000) | |
Purchases | 28,327,000 | 62,183,000 | 174,112,000 | 53,885,000 | |
Sales | (26,001,000) | (101,161,000) | (356,096,000) | (107,866,000) | |
Transfers in and/or out of Level 3 | (36,237,000) | (20,037,000) | (61,890,000) | (114,189,000) | |
Other | (1,825,000) | (729,000) | (6,674,000) | (7,462,000) | |
Ending Balance | 1,307,259,000 | 753,396,000 | 1,048,738,000 | 1,048,738,000 | 753,396,000 |
Level 3 | Successor | Corporate securities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 16,587,000 | 19,316,000 | 25,130,000 | 18,225,000 | |
Total Realized and Unrealized Gains Included in Earnings | 381,000 | 73,000 | 247,000 | 713,000 | |
Total Realized and Unrealized Losses Included in Earnings | (970,000) | (1,269,000) | (259,000) | ||
Purchases | 10,908,000 | ||||
Sales | (56,000) | (5,640,000) | (4,071,000) | ||
Transfers in and/or out of Level 3 | (11,243,000) | (19,722,000) | |||
Other | (26,000) | (44,000) | (149,000) | (95,000) | |
Ending Balance | 25,130,000 | 5,699,000 | 18,319,000 | 18,319,000 | 5,699,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 42,000 | (897,000) | (1,546,000) | 283,000 | |
Level 3 | Successor | Equity securities | |||||
Assets: | |||||
Beginning Balance | 66,526,000 | 66,460,000 | 66,691,000 | 66,504,000 | |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 44,000 | 44,000 | |||
Purchases | 22,000 | ||||
Sales | (231,000) | ||||
Ending Balance | 66,691,000 | 66,526,000 | 66,504,000 | 66,504,000 | 66,526,000 |
Level 3 | Successor | Other long-term investments. | |||||
Assets: | |||||
Beginning Balance | 62,920,000 | 100,519,000 | 64,200,000 | 68,384,000 | |
Total Realized and Unrealized Gains Included in Earnings | 25,674,000 | 40,032,000 | 46,166,000 | ||
Total Realized and Unrealized Losses Included in Earnings | (1,445,000) | (44,769,000) | (48,482,000) | (28,830,000) | |
Purchases | 1,429,000 | ||||
Ending Balance | 64,200,000 | 87,149,000 | 55,750,000 | 55,750,000 | 87,149,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | $ 24,229,000 | $ (44,769,000) | (8,450,000) | $ 17,336,000 | |
Level 3 | Predecessor | |||||
Assets: | |||||
Beginning Balance | 2,198,843,000 | 2,221,953,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 17,805,000 | ||||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 12,282,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (15,501,000) | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (26,896,000) | ||||
Sales | (7,586,000) | ||||
Transfers in and/or out of Level 3 | 43,205,000 | ||||
Other | (199,000) | ||||
Ending Balance | 2,221,953,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 2,304,000 | ||||
Liabilities: | |||||
Beginning Balance | 604,168,000 | 730,226,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 61,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (126,531,000) | ||||
Issuances | 7,000 | ||||
Settlements | 419,000 | ||||
Ending Balance | 730,226,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (125,934,000) | ||||
Level 3 | Predecessor | Annuity account | |||||
Liabilities: | |||||
Beginning Balance | 97,825,000 | 97,949,000 | |||
Total Realized and Unrealized Losses Included in Earnings | (536,000) | ||||
Issuances | 7,000 | ||||
Settlements | 419,000 | ||||
Ending Balance | 97,949,000 | ||||
Level 3 | Predecessor | Other liabilities | |||||
Liabilities: | |||||
Beginning Balance | 506,343,000 | 632,277,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 61,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (125,995,000) | ||||
Ending Balance | 632,277,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (125,934,000) | ||||
Level 3 | Predecessor | Total investments | |||||
Assets: | |||||
Beginning Balance | 2,198,843,000 | 2,221,953,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 17,805,000 | ||||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 12,282,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (15,501,000) | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (26,896,000) | ||||
Sales | (7,586,000) | ||||
Transfers in and/or out of Level 3 | 43,205,000 | ||||
Other | (199,000) | ||||
Ending Balance | 2,221,953,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 2,304,000 | ||||
Level 3 | Predecessor | Fixed maturities | |||||
Assets: | |||||
Beginning Balance | 2,087,527,000 | 2,109,186,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 1,188,000 | ||||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 12,282,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (335,000) | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (26,896,000) | ||||
Sales | (7,586,000) | ||||
Transfers in and/or out of Level 3 | 43,205,000 | ||||
Other | (199,000) | ||||
Ending Balance | 2,109,186,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 853,000 | ||||
Level 3 | Predecessor | Fixed maturities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 1,893,322,000 | 1,914,583,000 | |||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 12,282,000 | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (26,896,000) | ||||
Sales | (7,094,000) | ||||
Transfers in and/or out of Level 3 | 43,205,000 | ||||
Other | (236,000) | ||||
Ending Balance | 1,914,583,000 | ||||
Level 3 | Predecessor | Fixed maturities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 194,205,000 | 194,603,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 1,188,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (335,000) | ||||
Sales | (492,000) | ||||
Other | 37,000 | ||||
Ending Balance | 194,603,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 853,000 | ||||
Level 3 | Predecessor | Residential mortgage-backed securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 3,000 | 3,000 | |||
Ending Balance | 3,000 | ||||
Level 3 | Predecessor | Other asset-backed securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 563,961,000 | 603,646,000 | |||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (3,867,000) | ||||
Sales | (32,000) | ||||
Transfers in and/or out of Level 3 | 43,205,000 | ||||
Other | 379,000 | ||||
Ending Balance | 603,646,000 | ||||
Level 3 | Predecessor | Other asset-backed securities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 169,461,000 | 169,473,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 586,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (139,000) | ||||
Sales | (472,000) | ||||
Other | 37,000 | ||||
Ending Balance | 169,473,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 447,000 | ||||
Level 3 | Predecessor | States, municipals, and political subdivisions | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 3,675,000 | 3,675,000 | |||
Ending Balance | 3,675,000 | ||||
Level 3 | Predecessor | Corporate securities | Available-for-sale securities | |||||
Assets: | |||||
Beginning Balance | 1,325,683,000 | 1,307,259,000 | |||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 12,282,000 | ||||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (23,029,000) | ||||
Sales | (7,062,000) | ||||
Other | (615,000) | ||||
Ending Balance | 1,307,259,000 | ||||
Level 3 | Predecessor | Corporate securities | Trading Securities | |||||
Assets: | |||||
Beginning Balance | 24,744,000 | 25,130,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 602,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (196,000) | ||||
Sales | (20,000) | ||||
Ending Balance | 25,130,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 406,000 | ||||
Level 3 | Predecessor | Equity securities | |||||
Assets: | |||||
Beginning Balance | 66,691,000 | 66,691,000 | |||
Ending Balance | 66,691,000 | ||||
Level 3 | Predecessor | Other long-term investments. | |||||
Assets: | |||||
Beginning Balance | 44,625,000 | $ 46,076,000 | |||
Total Realized and Unrealized Gains Included in Earnings | 16,617,000 | ||||
Total Realized and Unrealized Losses Included in Earnings | (15,166,000) | ||||
Ending Balance | 46,076,000 | ||||
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | $ 1,451,000 |
FAIR VALUE OF FINANCIAL INSTR62
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Mortgage loan holdings | $ 5,912,683 | $ 5,662,812 |
Policy loans | 1,656,083 | 1,699,508 |
Fixed maturities, held-to-maturity | 2,775,230 | 593,314 |
Liabilities: | ||
Stable value product account balances | 3,412,041 | 2,131,822 |
Annuity account balances | 10,679,011 | 10,719,862 |
Debt | ||
Non-recourse funding obligations | 2,978,052 | 1,951,563 |
Golden Gate V | ||
Debt | ||
Non-recourse funding obligations | 613,447 | |
Carrying Amounts | Golden Gate V | ||
Debt | ||
Non-recourse funding obligations | 2,700,000 | 500,000 |
Fair Values | Golden Gate V | ||
Debt | ||
Non-recourse funding obligations | 2,900,000 | 495,500 |
Level 3 | Carrying Amounts | ||
Assets: | ||
Mortgage loan holdings | 5,912,683 | 5,662,812 |
Policy loans | 1,656,083 | 1,699,508 |
Liabilities: | ||
Stable value product account balances | 3,412,041 | 2,131,822 |
Annuity account balances | 10,679,011 | 10,719,862 |
Debt | ||
Non-recourse funding obligations | 2,978,052 | 1,951,563 |
Level 3 | Carrying Amounts | Fixed maturities | ||
Assets: | ||
Fixed maturities, held-to-maturity | 2,775,230 | 593,314 |
Level 3 | Fair Values | ||
Assets: | ||
Mortgage loan holdings | 5,946,153 | 5,529,803 |
Policy loans | 1,656,083 | 1,699,508 |
Liabilities: | ||
Stable value product account balances | 3,436,797 | 2,124,712 |
Annuity account balances | 10,288,929 | 10,274,571 |
Debt | ||
Non-recourse funding obligations | 3,093,432 | 1,621,773 |
Level 3 | Fair Values | Fixed maturities | ||
Assets: | ||
Fixed maturities, held-to-maturity | $ 2,894,615 | $ 515,000 |
DERIVATIVE FINANCIAL INSTRUME63
DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details) | Sep. 30, 2016positionportfolio_maintenance_agreementsupport_agreement | Jan. 31, 2016portfolio_maintenance_agreement | Oct. 31, 2012portfolio_maintenance_agreement |
Derivative [Line Items] | |||
Number of premium support agreements | support_agreement | 2 | ||
Successor | Designated as hedging instrument | Interest rate swaps | |||
Derivative [Line Items] | |||
Derivative, number of instruments held | 0 | ||
Successor | Derivatives not designated as hedging instruments | Interest rate swaps | |||
Derivative [Line Items] | |||
Derivative, number of instruments held | 0 | ||
PLC | |||
Derivative [Line Items] | |||
Number of portfolio maintenance agreements | portfolio_maintenance_agreement | 3 | 1 | 2 |
DERIVATIVE FINANCIAL INSTRUME64
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investments Gains and Losses (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Successor | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | $ 532 | $ 41,895 | $ 47,513 | $ 75,988 | ||
Fair Value, Other long-term investments | 673,817 | 673,817 | $ 323,570 | |||
Successor | Embedded derivative - GMWB | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Fair Value, Other long-term investments | 33,675 | 33,675 | 49,007 | |||
Successor | Embedded derivative - Modco reinsurance treaties | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Fair Value, Other long-term investments | 2,787 | 2,787 | 1,215 | |||
Successor | Derivatives with PLC | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Fair Value, Other long-term investments | 50,687 | 50,687 | 18,161 | |||
Successor | Derivatives not designated as hedging instruments | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 532 | 41,895 | 47,513 | 75,988 | ||
Notional Amount, Other long-term investments | 10,672,953 | 10,672,953 | 8,037,250 | |||
Fair Value, Other long-term investments | 673,817 | 673,817 | 323,570 | |||
Notional Amount, Other liabilities | 11,948,629 | 11,948,629 | 9,380,020 | |||
Fair Value, Other Liabilities | 846,911 | 846,911 | 522,225 | |||
Successor | Derivatives not designated as hedging instruments | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 45,261 | 45,261 | 262,485 | |||
Fair Value, Other long-term investments | 556 | 556 | 1,275 | |||
Notional Amount, Other liabilities | 862,034 | 862,034 | 233,412 | |||
Fair Value, Other Liabilities | 9,504 | 9,504 | 2,599 | |||
Successor | Derivatives not designated as hedging instruments | Currency futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 321,917 | 321,917 | 226,936 | |||
Fair Value, Other long-term investments | 4,735 | 4,735 | 2,499 | |||
Notional Amount, Other liabilities | 81,768 | 81,768 | 46,692 | |||
Fair Value, Other Liabilities | 447 | 447 | 1,115 | |||
Successor | Derivatives not designated as hedging instruments | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 3,542,544 | 3,542,544 | 2,198,340 | |||
Fair Value, Other long-term investments | 311,158 | 311,158 | 179,458 | |||
Notional Amount, Other liabilities | 2,202,799 | 2,202,799 | 1,205,204 | |||
Fair Value, Other Liabilities | 110,712 | 110,712 | 22,167 | |||
Successor | Derivatives not designated as hedging instruments | Interest rate swaptions | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 225,000 | 225,000 | 225,000 | |||
Fair Value, Other long-term investments | 451 | 451 | 3,663 | |||
Successor | Derivatives not designated as hedging instruments | Interest rate swaps | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 1,640,000 | 1,640,000 | 1,435,000 | |||
Fair Value, Other long-term investments | 267,389 | 267,389 | 66,408 | |||
Notional Amount, Other liabilities | 70,000 | 70,000 | 475,000 | |||
Fair Value, Other Liabilities | 1,658 | 1,658 | 16,579 | |||
Successor | Derivatives not designated as hedging instruments | Embedded derivative - GMWB | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 1,155,640 | 1,155,640 | 1,723,081 | |||
Fair Value, Other long-term investments | 33,675 | 33,675 | 49,007 | |||
Notional Amount, Other liabilities | 2,670,968 | 2,670,968 | 1,834,308 | |||
Fair Value, Other Liabilities | 162,543 | 162,543 | 67,528 | |||
Successor | Derivatives not designated as hedging instruments | Funds withheld derivative | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other liabilities | 1,625,725 | 1,625,725 | 1,149,664 | |||
Fair Value, Other Liabilities | 112,344 | 112,344 | 102,378 | |||
Successor | Derivatives not designated as hedging instruments | Embedded derivative - FIA | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other liabilities | 1,408,469 | 1,408,469 | 1,110,790 | |||
Fair Value, Other Liabilities | 141,651 | 141,651 | 100,329 | |||
Successor | Derivatives not designated as hedging instruments | Embedded derivative - IUL | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other liabilities | 90,848 | 90,848 | 57,760 | |||
Fair Value, Other Liabilities | 46,348 | 46,348 | 29,629 | |||
Successor | Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (24,187) | (9,817) | 131,505 | (105,362) | ||
Notional Amount, Other long-term investments | 64,411 | 64,411 | 64,593 | |||
Fair Value, Other long-term investments | 2,787 | 2,787 | 1,215 | |||
Notional Amount, Other liabilities | 2,455,121 | 2,455,121 | 2,473,427 | |||
Fair Value, Other Liabilities | 254,285 | 254,285 | 178,362 | |||
Successor | Derivatives not designated as hedging instruments | Derivatives with PLC | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 13,387 | (12,978) | (16,096) | 31,098 | ||
Notional Amount, Other long-term investments | 2,881,274 | 2,881,274 | 1,619,200 | |||
Fair Value, Other long-term investments | 50,687 | 50,687 | 18,161 | |||
Successor | Derivatives not designated as hedging instruments | Other derivatives | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 49 | (50) | 33 | (51) | ||
Notional Amount, Other long-term investments | 212 | 212 | 242 | |||
Fair Value, Other long-term investments | 123 | 123 | 347 | |||
Successor | Derivatives not designated as hedging instruments | Interest rate futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Notional Amount, Other long-term investments | 796,694 | 796,694 | 282,373 | |||
Fair Value, Other long-term investments | 2,256 | 2,256 | 1,537 | |||
Notional Amount, Other liabilities | 480,897 | 480,897 | 793,763 | |||
Fair Value, Other Liabilities | 7,419 | 7,419 | $ 1,539 | |||
Successor | Derivatives not designated as hedging instruments | Annuity account | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 8,106 | 64,632 | (73,560) | 152,164 | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Interest rate futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (7,002) | 12,140 | (2,091) | 62,065 | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (41,836) | 40,951 | 3,215 | (66,392) | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Currency futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 934 | 4,000 | 1,428 | 5,888 | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (36,482) | 33,519 | 8,195 | (23,410) | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaptions | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (229) | (3,618) | (12,399) | (3,212) | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaps | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 14,737 | 101,808 | (74,150) | 221,884 | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Embedded derivative - GMWB | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 24,150 | (71,296) | 10,543 | (108,545) | ||
Successor | Derivatives not designated as hedging instruments | Annuity account | Funds withheld derivative | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 53,834 | (52,872) | (8,301) | 63,886 | ||
Successor | Derivatives not designated as hedging instruments | FIA | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (5,667) | (86) | 3,558 | (9,913) | ||
Successor | Derivatives not designated as hedging instruments | FIA | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 2,236 | 709 | 1,016 | 4,269 | ||
Successor | Derivatives not designated as hedging instruments | FIA | Volatility futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 0 | (24) | 6 | 0 | ||
Successor | Derivatives not designated as hedging instruments | FIA | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 6,583 | (12,099) | (6,499) | 1,756 | ||
Successor | Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (14,486) | 11,328 | 9,035 | (15,938) | ||
Successor | Derivatives not designated as hedging instruments | IUL | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 8,844 | 194 | 2,073 | 8,052 | ||
Successor | Derivatives not designated as hedging instruments | IUL | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 101 | 17 | 39 | (71) | ||
Successor | Derivatives not designated as hedging instruments | IUL | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 1,607 | (1,110) | (1,048) | 1,821 | ||
Successor | Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | $ 7,136 | $ 1,287 | $ 3,082 | $ 6,302 | ||
Predecessor | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | $ 22,031 | |||||
Predecessor | Derivatives not designated as hedging instruments | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 22,031 | |||||
Predecessor | Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (68,026) | |||||
Predecessor | Derivatives not designated as hedging instruments | Derivatives with PLC | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 15,863 | |||||
Predecessor | Derivatives not designated as hedging instruments | Other derivatives | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (37) | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 75,861 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 1,413 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 9,221 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Currency futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 7,778 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 3,047 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaptions | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 9,268 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Interest rate swaps | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 122,710 | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Embedded derivative - GMWB | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (68,503) | |||||
Predecessor | Derivatives not designated as hedging instruments | Annuity account | Funds withheld derivative | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (9,073) | |||||
Predecessor | Derivatives not designated as hedging instruments | FIA | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (1,032) | |||||
Predecessor | Derivatives not designated as hedging instruments | FIA | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (184) | |||||
Predecessor | Derivatives not designated as hedging instruments | FIA | Volatility futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 0 | |||||
Predecessor | Derivatives not designated as hedging instruments | FIA | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (2,617) | |||||
Predecessor | Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 1,769 | |||||
Predecessor | Derivatives not designated as hedging instruments | IUL | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (598) | |||||
Predecessor | Derivatives not designated as hedging instruments | IUL | Equity futures | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | 3 | |||||
Predecessor | Derivatives not designated as hedging instruments | IUL | Equity options | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | (115) | |||||
Predecessor | Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL | ||||||
Notional amount and fair value of the entity's derivative financial instruments | ||||||
Realized investment gains (losses) - derivatives, gross | $ (486) |
DERIVATIVE FINANCIAL INSTRUME65
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains and Losses for the Modco Trading Portfolio that is Included in Realized Investment Gains (Losses) - All Other Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Realized investment gains (losses) - all other investments | |||||
Modco trading portfolio | $ 23,995 | $ 8,377 | $ (133,524) | $ 178,353 | |
Predecessor | |||||
Realized investment gains (losses) - all other investments | |||||
Modco trading portfolio | $ 73,062 |
DERIVATIVE FINANCIAL INSTRUME66
DERIVATIVE FINANCIAL INSTRUMENTS - Components of the Gain or Loss on Derivatives that Quality as a Cash Flow Hedging Relationship (Details) - Cash flow hedges - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended |
Jan. 31, 2015 | Sep. 30, 2015 | |
Successor | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | $ (131) | |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (131) | |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | 73 | |
Successor | Inflation | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | (131) | |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (131) | |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | $ 73 | |
Predecessor | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | $ 13 | |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (36) | |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | (7) | |
Predecessor | Inflation | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | 13 | |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (36) | |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | $ (7) |
OFFSETTING OF ASSETS AND LIAB67
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | $ 673,817 | $ 323,570 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 673,817 | 323,570 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 299,819 | 105,842 |
Net Amount | 259,030 | 175,346 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Derivatives Subject to Master Netting Arrangement, Gross Amounts of Recognized Assets | 586,545 | 254,840 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 586,545 | 254,840 |
Derivatives Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 299,819 | 105,842 |
Net Amount | 171,758 | 106,616 |
Free-Standing derivatives | ||
Offsetting of Derivative Assets | ||
Derivatives Subject to Master Netting Arrangement, Gross Amounts of Recognized Assets | 586,545 | 254,840 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 586,545 | 254,840 |
Derivatives Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 299,819 | 105,842 |
Net Amount | 171,758 | 106,616 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | 87,272 | 68,730 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 87,272 | 68,730 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | 87,272 | 68,730 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | 2,787 | 1,215 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 2,787 | 1,215 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | 2,787 | 1,215 |
Embedded derivative - GMWB | ||
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | 33,675 | 49,007 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 33,675 | 49,007 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | 33,675 | 49,007 |
Derivatives with PLC | ||
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | 50,687 | 18,161 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 50,687 | 18,161 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | 50,687 | 18,161 |
Other | ||
Offsetting of Derivative Assets | ||
Derivatives Not Subject to Master Netting Arrangement. Gross Amounts of Recognized Assets | 123 | 347 |
Gross Amounts Offset in the Settlement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position | 123 | 347 |
Derivatives Not Subject to Master Netting Arrangement, Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | $ 123 | $ 347 |
OFFSETTING OF ASSETS AND LIAB68
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - Successor - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | $ 846,911 | $ 522,225 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 846,911 | 522,225 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 14,772 | 1,617 |
Net Amount | 717,171 | 478,226 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 219,457 | 438,185 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 219,457 | 438,185 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 219,457 | 438,185 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 1,066,368 | 960,410 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,066,368 | 960,410 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 14,772 | 1,617 |
Net Amount | 936,628 | 916,411 |
Total derivatives, subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Fair Value, Other Liabilities | 129,740 | 43,999 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 129,740 | 43,999 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 14,772 | 1,617 |
Net Amount | 0 | 0 |
Free-Standing derivatives | ||
Offsetting of Derivative Liabilities: | ||
Fair Value, Other Liabilities | 129,740 | 43,999 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 129,740 | 43,999 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 114,968 | 42,382 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 14,772 | 1,617 |
Net Amount | 0 | 0 |
Total derivatives, not subject to a master netting arrangement or similar arrangement | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 717,171 | 478,226 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 717,171 | 478,226 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 717,171 | 478,226 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 254,285 | 178,362 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 254,285 | 178,362 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 254,285 | 178,362 |
Funds withheld derivative | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 112,344 | 102,378 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 112,344 | 102,378 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 112,344 | 102,378 |
Embedded derivative - GMWB | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 162,543 | 67,528 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 162,543 | 67,528 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 162,543 | 67,528 |
Embedded derivative - FIA | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 141,651 | 100,329 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 141,651 | 100,329 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | 141,651 | 100,329 |
Embedded derivative - IUL | ||
Offsetting of Derivative Liabilities: | ||
Gross Amounts of Recognized Liabilities | 46,348 | 29,629 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 46,348 | 29,629 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 0 | 0 |
Net Amount | $ 46,348 | $ 29,629 |
MORTGAGE LOANS (Details)
MORTGAGE LOANS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Mortgage loans | ||
Period for exercise of call options or interest rate reset options | 12 years | |
Successor | ||
Mortgage loans | ||
Mortgage loan holdings | $ 5,912,683 | $ 5,662,812 |
Amount that would become due in remainder of 2016, if loans are called at their next call dates | 28,100 | |
Amount that would become due in 2017 through 2021, if loans are called at their next call dates | 972,700 | |
Amount that would become due in 2022 through 2026, if loans are called at their next call dates | 235,000 | |
Amount that would become due after 2026, if loans are called at their next call dates | $ 11,000 |
MORTGAGE LOANS (Details 2)
MORTGAGE LOANS (Details 2) - Commercial mortgage loans | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||
Jan. 31, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)category | Sep. 30, 2016USD ($)loan | Dec. 31, 2015USD ($) | |
Mortgage loans | |||||||
Number of loan categories | category | 2 | ||||||
Maximum | |||||||
Mortgage loans | |||||||
Loan-to-value ratio with participating interest (as a percent) | 85.00% | ||||||
Successor | |||||||
Mortgage loans | |||||||
Mortgage loans having participation feature | $ 549,200,000 | $ 449,200,000 | |||||
Income recognized on participating mortgage loans | $ 3,300,000 | $ 3,300,000 | $ 8,400,000 | $ 15,800,000 | |||
Nonperforming mortgage loans, foreclosed properties and restructured loans to invested assets | 1,000,000 | ||||||
Financing receivable not subject to pooling and servicing agreement, non performing or restructured amount | $ 1,000,000 | ||||||
Mortgage loans foreclosed | 1,000,000 | ||||||
Loans subject to a pooling and servicing agreement which are either nonperforming or restructured | loan | 0 | ||||||
Allowance for mortgage loan credit losses | $ 0 | 3,446,000 | 0 | 0 | 0 | $ 3,446,000 | $ 0 |
Change in the allowance for credit losses | |||||||
Beginning balance | 0 | 0 | |||||
Charge offs | (2,561,000) | (1,950,000) | |||||
Recoveries | (638,000) | 0 | |||||
Provision | 3,199,000 | 5,396,000 | |||||
Ending balance | 0 | $ 3,446,000 | $ 0 | 0 | $ 3,446,000 | ||
Predecessor | |||||||
Mortgage loans | |||||||
Income recognized on participating mortgage loans | 100,000 | ||||||
Allowance for mortgage loan credit losses | 5,720,000 | 2,500,000 | |||||
Change in the allowance for credit losses | |||||||
Beginning balance | 5,720,000 | $ 2,500,000 | |||||
Charge offs | (861,000) | ||||||
Recoveries | (2,359,000) | ||||||
Provision | 0 | ||||||
Ending balance | $ 2,500,000 |
MORTGAGE LOANS (Details 3)
MORTGAGE LOANS (Details 3) - Commercial mortgage loans $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)loan | Dec. 31, 2015USD ($)loan | |
Delinquent loans | ||
Past due period at which to cease carrying accrued interest on delinquent loans | 90 days | |
Past due period at which to initiate foreclosure proceedings | 90 days | |
Successor | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 2,894 | $ 7,035 |
Number of delinquent commercial mortgage loans | loan | 2 | 7 |
Successor | 30-59 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 2,894 | $ 6,002 |
Number of delinquent commercial mortgage loans | loan | 2 | 6 |
Successor | 60 to 89 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 0 | $ 1,033 |
Number of delinquent commercial mortgage loans | loan | 0 | 1 |
Successor | Greater than 90 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 0 | $ 0 |
Number of delinquent commercial mortgage loans | loan | 0 | 0 |
MORTGAGE LOANS (Details 4)
MORTGAGE LOANS (Details 4) - Commercial mortgage loans - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Commercial mortgage loans: | ||
Maximum number of days accrued interest on impaired loans | 90 days | |
Successor | ||
Recorded Investment | ||
With no related allowance recorded | $ 0 | $ 1,694 |
With an allowance recorded | 10,693 | 0 |
Unpaid Principal Balance | ||
With no related allowance recorded | 0 | 1,728 |
With an allowance recorded | 11,060 | 0 |
Related Allowance | ||
With an allowance recorded | 3,446 | 0 |
Average Recorded Investment | ||
With no related allowance recorded | 0 | 847 |
With an allowance recorded | 3,564 | 0 |
Interest Income Recognized | ||
With no related allowance recorded | 0 | 104 |
With an allowance recorded | 352 | 0 |
Cash Basis Interest Income | ||
With no related allowance recorded | 0 | 117 |
With an allowance recorded | $ 343 | $ 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 9 Months Ended | 11 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Feb. 01, 2015 | |
Changes in the carrying amount of goodwill | |||
Goodwill | $ 735,700,000 | ||
Successor | |||
Changes in the carrying amount of goodwill | |||
Goodwill | $ 732,443,000 | $ 732,443,000 | $ 735,700,000 |
Decrease to goodwill | 0 | ||
Goodwill impairment | $ 0 | ||
Successor | Life Marketing | |||
Changes in the carrying amount of goodwill | |||
Decrease to goodwill | $ 3,300,000 |
DEBT AND OTHER OBLIGATIONS - De
DEBT AND OTHER OBLIGATIONS - Debt and Subordinated Debt Securities (Details) - USD ($) $ in Millions | Feb. 03, 2015 | Feb. 02, 2015 | Sep. 30, 2016 |
2015 Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 1,000 | ||
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,250 | ||
Base of floating rate interest payments | LIBOR | ||
Facility fee percentage | 0.125% | 0.15% | |
2015 Credit Facility | Prime rate | |||
Debt Instrument [Line Items] | |||
Base of floating rate interest payments | prime rate | ||
2015 Credit Facility | Federal funds rate | |||
Debt Instrument [Line Items] | |||
Base of floating rate interest payments | Federal Funds rate | ||
Interest rate added to the base rate (as a percent) | 0.50% | ||
2015 Credit Facility | LIBOR One-Month Rate | |||
Debt Instrument [Line Items] | |||
Base of floating rate interest payments | one-month LIBOR | ||
Interest rate added to the base rate (as a percent) | 1.00% | ||
Successor | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Outstanding letters of credit (LOC) | $ 30 | ||
Successor | PLC | 2015 Credit Facility | |||
Debt Instrument [Line Items] | |||
Base of floating rate interest payments | LIBOR | ||
Interest rate added to the base rate (as a percent) | 1.00% | ||
Line of credit, amount outstanding | $ 385 |
DEBT AND OTHER OBLIGATIONS - No
DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details) | Jan. 15, 2016USD ($) | Oct. 10, 2012USD ($) | Jan. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($)reinsurer |
Debt Instrument [Line Items] | ||||||
Non-recourse funding obligation, carrying value | $ 1,150,000,000 | |||||
Financing Arrangement with Golden Gate and Syndicate if Risk Takers | ||||||
Debt Instrument [Line Items] | ||||||
Term of financing agreement | 18 years | |||||
Financing capacity under the arrangement | $ 2,188,000,000 | |||||
Golden Gate | Non-recourse Funding Obligations Series | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | 800,000,000 | |||||
Golden Gate | Surplus Notes | Steel City Notes | ||||||
Debt Instrument [Line Items] | ||||||
Amount of debt issued | 2,188,000,000 | |||||
Steel City | Surplus Notes | Golden Gate Surplus Notes | ||||||
Debt Instrument [Line Items] | ||||||
Amount of debt issued | $ 2,188,000,000 | |||||
Golden Gate V and Red Mountain | ||||||
Debt Instrument [Line Items] | ||||||
Transaction period of financing for reserves related to a block of universal life insurance policies with secondary guarantees | 20 years | |||||
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees | $ 945,000,000 | |||||
Red Mountain | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees | 945,000,000 | |||||
Initial principal amount of note for deposit to a reinsurance trust | $ 275,000,000 | |||||
Successor | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations repurchased at a discount | $ (50,000,000) | $ (2,173,700,000) | ||||
Non-recourse funding obligations | 2,978,052,000 | $ 1,951,563,000 | ||||
Successor | Golden Gate | ||||||
Debt Instrument [Line Items] | ||||||
Payments made under the agreements | 0 | |||||
Successor | Golden Gate | Steel City Notes | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | $ 2,135,000,000 | |||||
Fixed interest rate (as a percent) | 4.75% | |||||
Successor | Golden Gate | Non-recourse Funding Obligations Series | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | 800,000,000 | |||||
Successor | Golden Gate | Series A1 Non-recourse Funding Obligation | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | $ 400,000,000 | |||||
Fixed interest rate (as a percent) | 7.375% | |||||
Successor | Golden Gate | Series A2 Non-recourse Funding Obligation | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | $ 100,000,000 | |||||
Fixed interest rate (as a percent) | 8.00% | |||||
Successor | Golden Gate | Series A3 Non-recourse Funding Obligation | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations | $ 300,000,000 | |||||
Fixed interest rate (as a percent) | 8.45% | |||||
Successor | Golden Gate | Surplus Notes | Steel City Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 2,135,000,000 | |||||
Successor | Golden Gate Captive Insurance Company | ||||||
Debt Instrument [Line Items] | ||||||
Non-recourse funding obligations | $ 2,135,000,000 | |||||
Non-recourse funding obligation, year-to-date weighted-average interest rate | 4.75% | |||||
Successor | Golden Gate Captive Insurance Company | Non Recourse Funding Obligations | ||||||
Debt Instrument [Line Items] | ||||||
Number of series of non-recourse funding obligations | reinsurer | 3 | |||||
Successor | Golden Gate I I | ||||||
Debt Instrument [Line Items] | ||||||
Nonrecourse Funding Obligations, Outstanding Principal | $ 278,949,000 | |||||
Outstanding non-recourse funding obligations | 575,000,000 | |||||
Non-recourse funding obligations held by external parties | 58,600,000 | |||||
Non-recourse funding obligations held by nonconsolidated affiliates | 220,300,000 | |||||
Non-recourse funding obligations held by consolidated subsidiaries of the Company | 296,100,000 | |||||
Payments made under the agreements | 0 | |||||
Amount of collateralized support agreement obligations by PLC | 1,500,000 | |||||
Outstanding non-recourse funding obligations repurchased at a discount | $ 0 | 11,300,000 | ||||
Non-recourse funding obligations | $ 227,124,000 | |||||
Non-recourse funding obligation, year-to-date weighted-average interest rate | 1.28% | |||||
Successor | Golden Gate V and Red Mountain | ||||||
Debt Instrument [Line Items] | ||||||
Payments made under the agreements | $ 0 | |||||
Successor | Red Mountain | ||||||
Debt Instrument [Line Items] | ||||||
Initial principal amount of note for deposit to a reinsurance trust | 550,000,000 | |||||
Future scheduled capital contributions to prefund credit enhancements fees amount | 134,200,000 | |||||
Successor | Golden Gate V | ||||||
Debt Instrument [Line Items] | ||||||
Nonrecourse Funding Obligations, Outstanding Principal | 550,000,000 | |||||
Outstanding non-recourse funding obligations | $ 550,000,000 | |||||
Fixed interest rate (as a percent) | 6.25% | |||||
Maximum amount to be financed for reserves related to a block of universal life insurance policies with secondary guarantees | $ 945,000,000 | |||||
Non-recourse funding obligations | $ 613,447,000 | |||||
Non-recourse funding obligation, year-to-date weighted-average interest rate | 5.12% | |||||
Successor | MONY | ||||||
Debt Instrument [Line Items] | ||||||
Nonrecourse Funding Obligations, Outstanding Principal | $ 1,091,000 | |||||
Non-recourse funding obligations | $ 2,481,000 | |||||
Non-recourse funding obligation, year-to-date weighted-average interest rate | 6.19% | |||||
Predecessor | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations repurchased at a discount | $ 0 | |||||
Predecessor | Golden Gate I I | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding non-recourse funding obligations repurchased at a discount | $ 0 |
DEBT AND OTHER OBLIGATIONS - Le
DEBT AND OTHER OBLIGATIONS - Letters of Credit (Details) | 9 Months Ended | ||||
Sep. 30, 2016USD ($)installment | Jun. 25, 2014USD ($) | Aug. 07, 2013USD ($) | Dec. 10, 2010USD ($) | Apr. 23, 2010USD ($) | |
Golden Gate III | |||||
Debt Instrument [Line Items] | |||||
Maximum LOC borrowing capacity | $ 915,000,000 | $ 710,000,000 | $ 505,000,000 | ||
Maximum stated amount up to which LOC may be increased | $ 935,000,000 | $ 720,000,000 | $ 610,000,000 | ||
Letter of credit term | 15 years | ||||
Future scheduled capital contributions to prefund credit enhancements fees amount | $ 122,500,000 | ||||
Number of installments for payment of capital contributions amount | installment | 3 | ||||
Golden Gate IV | |||||
Debt Instrument [Line Items] | |||||
Maximum LOC borrowing capacity | $ 270,000,000 | ||||
Letter of credit term | 12 years | ||||
Successor | Golden Gate III | |||||
Debt Instrument [Line Items] | |||||
Outstanding letters of credit (LOC) | $ 935,000,000 | ||||
Successor | Golden Gate IV | |||||
Debt Instrument [Line Items] | |||||
Maximum LOC borrowing capacity | 790,000,000 | ||||
Payments made under the agreements | $ 0 |
DEBT AND OTHER OBLIGATIONS - Re
DEBT AND OTHER OBLIGATIONS - Repurchase Program Borrowings (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 11 Months Ended |
Jan. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Maximum | Repurchase Program Borrowings | |||
Debt Instrument [Line Items] | |||
Term of financing agreement | 90 days | ||
Successor | |||
Debt Instrument [Line Items] | |||
Repurchase program borrowings | $ 219,457 | $ 438,185 | |
Successor | Repurchase Program Borrowings | |||
Debt Instrument [Line Items] | |||
Fair value of securities pledged under the repurchase program | 224,800 | 479,900 | |
Repurchase program borrowings | $ 219,500 | 438,200 | |
Average borrowing rate (as a percent) | 0.43% | ||
Maximum outstanding balance | $ 725,000 | 912,700 | |
Average daily balance | $ 453,000 | $ 540,300 | |
Average borrowing rate (as a percent) | 0.41% | 0.20% | |
Predecessor | Repurchase Program Borrowings | |||
Debt Instrument [Line Items] | |||
Average daily balance | $ 77,400 | ||
Average borrowing rate (as a percent) | 0.16% |
DEBT AND OTHER OBLIGATIONS - Am
DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements, Grouped by Asset Class (Details) - Successor $ in Thousands | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | $ 224,767 |
Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 224,767 |
Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
U.S. Treasury and agency securities | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
U.S. Treasury and agency securities | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
U.S. Treasury and agency securities | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
U.S. Treasury and agency securities | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
U.S. Treasury and agency securities | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
State and municipal securities | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
State and municipal securities | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
State and municipal securities | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
State and municipal securities | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
State and municipal securities | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Other asset-backed securities | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Other asset-backed securities | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Other asset-backed securities | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Other asset-backed securities | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Other asset-backed securities | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Corporate securities | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Corporate securities | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Corporate securities | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Corporate securities | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Corporate securities | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Equity securities | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Equity securities | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Equity securities | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Equity securities | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Equity securities | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Non-U.S. sovereign debt | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Non-U.S. sovereign debt | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Non-U.S. sovereign debt | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Non-U.S. sovereign debt | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Non-U.S. sovereign debt | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Mortgage loans | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 224,767 |
Mortgage loans | Overnight and Continuous | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 224,767 |
Mortgage loans | Up to 30 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Mortgage loans | 30-90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | 0 |
Mortgage loans | Greater Than 90 days | |
Debt Instrument [Line Items] | |
Collateral pledged for repurchase agreements | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Sep. 30, 2016USD ($) |
Commitment and contingency | |
Estimated tax refund | $ 6.2 |
Targeted multi-state examination | |
Commitment and contingency | |
Administrative and/or examination fees which the insurance regulators could demand, minimum | 0 |
Administrative and/or examination fees which the insurance regulators could demand, maximum | $ 4.5 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Defined Benefit Pension Plan | Minimum | |||||
EMPLOYEE BENEFIT PLANS | |||||
Adjusted funding target percentage to be maintained | 80.00% | ||||
Successor | Defined Benefit Pension Plan | |||||
EMPLOYEE BENEFIT PLANS | |||||
Service cost — benefits earned during the period | $ 2,906 | $ 2,973 | $ 7,928 | $ 8,717 | |
Interest cost on projected benefit obligation | 2,737 | 2,433 | 6,488 | 8,210 | |
Expected return on plan assets | (3,605) | (3,642) | (9,712) | (10,816) | |
Amortization of prior service cost | 0 | 0 | 0 | 0 | |
Amortization of actuarial losses | 0 | 0 | 0 | 0 | |
Preliminary net periodic benefit cost | 2,038 | 1,764 | 4,704 | 6,111 | |
Settlement/curtailment expense | 0 | 0 | 0 | 0 | |
Total net periodic benefit costs | 2,038 | 1,764 | 4,704 | 6,111 | |
Successor | Excess Benefit Plan | |||||
EMPLOYEE BENEFIT PLANS | |||||
Service cost — benefits earned during the period | 311 | 333 | 888 | 1,102 | |
Interest cost on projected benefit obligation | 299 | 408 | 1,088 | 1,054 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Amortization of prior service cost | 0 | 0 | 0 | 0 | |
Amortization of actuarial losses | 64 | 0 | 0 | 114 | |
Preliminary net periodic benefit cost | 674 | 741 | 1,976 | 2,270 | |
Settlement/curtailment expense | 635 | 0 | 0 | 2,135 | |
Total net periodic benefit costs | $ 1,309 | $ 741 | $ 1,976 | 4,405 | |
Predecessor | Defined Benefit Pension Plan | |||||
EMPLOYEE BENEFIT PLANS | |||||
Service cost — benefits earned during the period | $ 974 | ||||
Interest cost on projected benefit obligation | 1,002 | ||||
Expected return on plan assets | (1,293) | ||||
Amortization of prior service cost | (33) | ||||
Amortization of actuarial losses | 668 | ||||
Preliminary net periodic benefit cost | 1,318 | ||||
Settlement/curtailment expense | 0 | ||||
Total net periodic benefit costs | 1,318 | ||||
Predecessor | Excess Benefit Plan | |||||
EMPLOYEE BENEFIT PLANS | |||||
Service cost — benefits earned during the period | 95 | ||||
Interest cost on projected benefit obligation | 140 | ||||
Expected return on plan assets | 0 | ||||
Amortization of prior service cost | 1 | ||||
Amortization of actuarial losses | 138 | ||||
Preliminary net periodic benefit cost | 374 | ||||
Settlement/curtailment expense | 0 | ||||
Total net periodic benefit costs | $ 374 | ||||
PLC | Successor | |||||
EMPLOYEE BENEFIT PLANS | |||||
Pension contributions | $ 1,900 |
ACCUMULATED OTHER COMPREHENSI81
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | 11 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Successor | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | $ 0 | $ (1,246,391) | $ 0 | |||
Other comprehensive income (loss) before reclassifications | 1,215,021 | (1,263,453) | ||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | $ 2,374 | $ 1,451 | (3,115) | (198) | (393) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (11,206) | 17,455 | ||||
Net current-period other comprehensive income (loss) | 1,203,617 | (1,246,391) | ||||
Ending Balance | $ 0 | (42,774) | (42,774) | (1,246,391) | ||
Successor | Unrealized Gains and Losses on Investments | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | 0 | (1,246,391) | 0 | |||
Other comprehensive income (loss) before reclassifications | 1,215,021 | (1,263,367) | ||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (198) | (393) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (11,206) | 17,369 | ||||
Net current-period other comprehensive income (loss) | 1,203,617 | (1,246,391) | ||||
Ending Balance | 0 | (42,774) | (42,774) | (1,246,391) | ||
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income | 47,300 | 623,000 | ||||
Successor | Accumulated Gain and Loss Derivatives | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | 0 | 0 | 0 | |||
Other comprehensive income (loss) before reclassifications | 0 | (86) | ||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 86 | ||||
Net current-period other comprehensive income (loss) | 0 | 0 | ||||
Ending Balance | 0 | $ 0 | $ 0 | 0 | ||
Predecessor | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | 1,483,211 | 1,960,977 | 1,960,977 | |||
Other comprehensive income (loss) before reclassifications | 482,152 | |||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (243) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (4,143) | |||||
Net current-period other comprehensive income (loss) | 477,766 | |||||
Ending Balance | 1,960,977 | |||||
Predecessor | Unrealized Gains and Losses on Investments | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | 1,483,293 | 1,961,027 | 1,961,027 | |||
Other comprehensive income (loss) before reclassifications | 482,143 | |||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | (243) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | (4,166) | |||||
Net current-period other comprehensive income (loss) | 477,734 | |||||
Ending Balance | 1,961,027 | |||||
Offset of net unrealized losses in AOCI due to impact those net unrealized losses would have on certain of the Company's insurance assets and liabilities had the net unrealized losses been recognized in net income | (492,600) | |||||
Predecessor | Accumulated Gain and Loss Derivatives | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Beginning Balance | (82) | $ (50) | $ (50) | |||
Other comprehensive income (loss) before reclassifications | 9 | |||||
Other comprehensive income relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 0 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 23 | |||||
Net current-period other comprehensive income (loss) | 32 | |||||
Ending Balance | $ (50) |
ACCUMULATED OTHER COMPREHENSI82
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Benefits and settlement expenses, net of reinsurance ceded | $ (732,339) | $ (674,815) | $ (1,853,631) | $ (2,158,007) | |
Realized investment gains (losses): All other investments | 24,152 | 5,309 | (132,094) | 194,644 | |
Net impairment losses recognized in earnings | (3,308) | (10,064) | (15,798) | (6,892) | |
Income before income tax | 94,267 | 156,121 | 145,090 | 589,826 | |
Tax (expense) or benefit | (20,965) | (42,542) | (40,667) | (185,114) | |
Net income | 73,302 | 113,579 | 104,423 | 404,712 | |
Successor | Gains and losses on derivative instruments | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Benefits and settlement expenses, net of reinsurance ceded | (131) | ||||
Income before income tax | (131) | ||||
Tax (expense) or benefit | 45 | ||||
Net income | (86) | ||||
Successor | Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Realized investment gains (losses): All other investments | 1,665 | 2,470 | |||
Net impairment losses recognized in earnings | (3,308) | (15,798) | |||
Income before income tax | (1,643) | (11,317) | (13,328) | 17,241 | |
Tax (expense) or benefit | 575 | 4,664 | |||
Net income | $ (1,068) | $ (7,356) | $ (8,664) | $ 11,206 | |
Predecessor | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Benefits and settlement expenses, net of reinsurance ceded | $ (266,575) | ||||
Realized investment gains (losses): All other investments | 81,153 | ||||
Net impairment losses recognized in earnings | (481) | ||||
Income before income tax | 132,847 | ||||
Tax (expense) or benefit | (44,325) | ||||
Net income | 88,522 | ||||
Predecessor | Gains and losses on derivative instruments | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Benefits and settlement expenses, net of reinsurance ceded | (36) | ||||
Income before income tax | (36) | ||||
Tax (expense) or benefit | 13 | ||||
Net income | (23) | ||||
Predecessor | Unrealized gains and losses on available-for-sale securities | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | |||||
Realized investment gains (losses): All other investments | 6,891 | ||||
Net impairment losses recognized in earnings | (481) | ||||
Income before income tax | 6,410 | ||||
Tax (expense) or benefit | (2,244) | ||||
Net income | $ 4,166 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | 11 Months Ended | |
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Reductions of tax positions of prior years: | ||||||
Decrease in unrecognized tax benefits is reasonably possible | $ 0 | $ 0 | ||||
Successor | ||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||
Balance, beginning of period | $ 105,850,000 | 8,937,000 | $ 105,850,000 | |||
Additions for tax positions of the current year | 2,085,000 | 2,213,000 | ||||
Additions for tax positions of prior years | 1,031,000 | 1,812,000 | ||||
Reductions of tax positions of prior years: | ||||||
Changes in judgment | (687,000) | (644,000) | ||||
Settlements during the period | (1,546,000) | (100,294,000) | ||||
Lapses of applicable statute of limitations | 0 | 0 | ||||
Balance, end of period | $ 105,850,000 | $ 9,820,000 | $ 9,820,000 | 8,937,000 | ||
Effective income tax rate (as a percent) | 22.20% | 27.30% | 28.00% | 31.40% | ||
Predecessor | ||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||
Balance, beginning of period | 168,076,000 | $ 105,850,000 | $ 105,850,000 | |||
Additions for tax positions of the current year | (5,010,000) | |||||
Additions for tax positions of prior years | 1,149,000 | |||||
Reductions of tax positions of prior years: | ||||||
Changes in judgment | (58,365,000) | |||||
Settlements during the period | 0 | |||||
Lapses of applicable statute of limitations | 0 | |||||
Balance, end of period | $ 105,850,000 | |||||
Effective income tax rate (as a percent) | 32.80% |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Feb. 01, 2015 | |
Operating Segment Assets | |||||||
Goodwill | $ 735,700 | ||||||
Successor | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | $ 1,053,788 | $ 1,006,671 | $ 2,510,585 | $ 3,388,532 | |||
Pre-tax Operating Income (Loss) | 84,968 | 97,507 | 226,948 | 302,919 | |||
Realized investment gains (losses) - investments | (688) | 8,586 | (150,063) | 183,343 | |||
Realized investment gains (losses) - derivatives | 9,987 | 50,028 | 68,205 | 103,564 | |||
Income before income tax | 94,267 | 156,121 | 145,090 | 589,826 | |||
Income tax expense | (20,965) | (42,542) | (40,667) | (185,114) | |||
Net income | 73,302 | 113,579 | 104,423 | 404,712 | |||
Realized gain (losses) on investments | |||||||
All other investment gains (losses) | 20,844 | (4,755) | (147,892) | 187,752 | |||
Less: amortization related to DAC/VOBA and benefits and settlement expenses | 21,532 | (13,341) | 2,171 | 4,409 | |||
Realized investment gains (losses) - investments | (688) | 8,586 | (150,063) | 183,343 | |||
Realized gain (losses) on derivatives | |||||||
Derivative financial instruments gains (losses) | 532 | 41,895 | 47,513 | 75,988 | |||
Less: VA GMWB economic cost | (9,455) | (8,133) | (20,692) | (27,576) | |||
Realized investment gains (losses) - derivatives | 9,987 | 50,028 | 68,205 | 103,564 | |||
Other-than-temporary impairments | 3,308 | 10,064 | 15,798 | 6,892 | |||
Operating Segment Assets | |||||||
Investments and other assets | 72,312,665 | 72,312,665 | $ 65,091,991 | ||||
Deferred policy acquisition costs and value of business acquired | 1,914,388 | 1,914,388 | 1,562,373 | ||||
Other intangibles | 614,147 | 614,147 | 645,131 | ||||
Goodwill | 732,443 | 732,443 | 732,443 | $ 735,700 | |||
Total assets | 75,573,643 | 75,573,643 | 68,031,938 | ||||
Successor | Operating | Life Marketing | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 382,224 | 358,194 | 960,807 | 1,148,121 | |||
Pre-tax Operating Income (Loss) | (512) | 18,758 | 28,711 | 37,712 | |||
Operating Segment Assets | |||||||
Investments and other assets | 14,171,442 | 14,171,442 | 13,258,639 | ||||
Deferred policy acquisition costs and value of business acquired | 1,155,759 | 1,155,759 | 1,119,515 | ||||
Other intangibles | 305,403 | 305,403 | 319,623 | ||||
Goodwill | 200,274 | 200,274 | 200,274 | ||||
Total assets | 15,832,878 | 15,832,878 | 14,898,051 | ||||
Successor | Operating | Acquisitions | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 391,017 | 352,141 | 974,915 | 1,269,672 | |||
Pre-tax Operating Income (Loss) | 70,157 | 59,016 | 132,962 | 184,095 | |||
Operating Segment Assets | |||||||
Investments and other assets | 19,986,370 | 19,986,370 | 19,879,988 | ||||
Deferred policy acquisition costs and value of business acquired | 82,803 | 82,803 | (178,662) | ||||
Other intangibles | 37,741 | 37,741 | 39,658 | ||||
Goodwill | 14,524 | 14,524 | 14,524 | ||||
Total assets | 20,121,438 | 20,121,438 | 19,755,508 | ||||
Successor | Operating | Annuities | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 139,265 | 200,798 | 293,610 | 546,378 | |||
Pre-tax Operating Income (Loss) | 43,033 | 37,090 | 108,976 | 135,789 | |||
Operating Segment Assets | |||||||
Investments and other assets | 20,166,335 | 20,166,335 | 19,715,901 | ||||
Deferred policy acquisition costs and value of business acquired | 634,820 | 634,820 | 578,742 | ||||
Other intangibles | 186,781 | 186,781 | 196,780 | ||||
Goodwill | 336,677 | 336,677 | 336,677 | ||||
Total assets | 21,324,613 | 21,324,613 | 20,828,100 | ||||
Successor | Operating | Stable Value Products | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 27,380 | 17,065 | 44,063 | 83,519 | |||
Pre-tax Operating Income (Loss) | 14,700 | 12,785 | 28,249 | 44,326 | |||
Operating Segment Assets | |||||||
Investments and other assets | 3,283,420 | 3,283,420 | 2,006,263 | ||||
Deferred policy acquisition costs and value of business acquired | 5,919 | 5,919 | 2,357 | ||||
Other intangibles | 8,889 | 8,889 | 9,389 | ||||
Goodwill | 113,813 | 113,813 | 113,813 | ||||
Total assets | 3,412,041 | 3,412,041 | 2,131,822 | ||||
Successor | Operating | Asset Protection | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 79,030 | 77,476 | 204,397 | 229,128 | |||
Pre-tax Operating Income (Loss) | 4,099 | 4,415 | 12,938 | 12,496 | |||
Operating Segment Assets | |||||||
Investments and other assets | 828,946 | 828,946 | 766,294 | ||||
Deferred policy acquisition costs and value of business acquired | 35,087 | 35,087 | 40,421 | ||||
Other intangibles | 75,333 | 75,333 | 79,681 | ||||
Goodwill | 67,155 | 67,155 | 67,155 | ||||
Total assets | 1,006,521 | 1,006,521 | 953,551 | ||||
Successor | Operating | Corporate and Other | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 34,872 | 997 | 32,793 | 111,714 | |||
Pre-tax Operating Income (Loss) | (46,509) | $ (34,557) | $ (84,888) | (111,499) | |||
Operating Segment Assets | |||||||
Investments and other assets | 13,876,152 | 13,876,152 | 9,464,906 | ||||
Deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | ||||
Other intangibles | 0 | 0 | 0 | ||||
Goodwill | 0 | 0 | 0 | ||||
Total assets | $ 13,876,152 | $ 13,876,152 | $ 9,464,906 | ||||
Predecessor | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | $ 459,646 | ||||||
Pre-tax Operating Income (Loss) | 19,000 | ||||||
Realized investment gains (losses) - investments | 89,414 | ||||||
Realized investment gains (losses) - derivatives | 24,433 | ||||||
Income before income tax | 132,847 | ||||||
Income tax expense | (44,325) | ||||||
Net income | 88,522 | ||||||
Realized gain (losses) on investments | |||||||
All other investment gains (losses) | 80,672 | ||||||
Less: amortization related to DAC/VOBA and benefits and settlement expenses | (8,742) | ||||||
Realized investment gains (losses) - investments | 89,414 | ||||||
Realized gain (losses) on derivatives | |||||||
Derivative financial instruments gains (losses) | 22,031 | ||||||
Less: VA GMWB economic cost | (2,402) | ||||||
Realized investment gains (losses) - derivatives | 24,433 | ||||||
Other-than-temporary impairments | 481 | ||||||
Predecessor | Operating | Life Marketing | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 133,361 | ||||||
Pre-tax Operating Income (Loss) | (2,271) | ||||||
Predecessor | Operating | Acquisitions | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 139,761 | ||||||
Pre-tax Operating Income (Loss) | 20,134 | ||||||
Predecessor | Operating | Annuities | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 130,918 | ||||||
Pre-tax Operating Income (Loss) | 11,363 | ||||||
Predecessor | Operating | Stable Value Products | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 8,181 | ||||||
Pre-tax Operating Income (Loss) | 4,529 | ||||||
Predecessor | Operating | Asset Protection | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 24,566 | ||||||
Pre-tax Operating Income (Loss) | 1,907 | ||||||
Predecessor | Operating | Corporate and Other | |||||||
Summarized financial information for the company's segments | |||||||
Revenues | 22,859 | ||||||
Pre-tax Operating Income (Loss) | $ (16,662) |