Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 21, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | PROTECTIVE LIFE CORP | |
Entity Central Index Key | 355,429 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,000 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Premiums and policy fees | $ 855,088 | $ 834,544 | $ 2,583,813 | $ 2,545,287 |
Reinsurance ceded | (325,120) | (322,229) | (984,094) | (969,161) |
Net of reinsurance ceded | 529,968 | 512,315 | 1,599,719 | 1,576,126 |
Net investment income | 507,914 | 482,729 | 1,522,098 | 1,446,306 |
Realized investment gains (losses): | ||||
Derivative financial instruments | (82,341) | 116 | (260,407) | (156,749) |
All other investments | 18,150 | 24,152 | 94,708 | 194,663 |
Other-than-temporary impairment losses | (366) | (1,898) | (3,124) | (10,194) |
Portion recognized in other comprehensive income (before taxes) | 93 | (1,410) | (7,765) | 3,302 |
Net impairment losses recognized in earnings | (273) | (3,308) | (10,889) | (6,892) |
Other income | 110,970 | 107,642 | 331,523 | 313,506 |
Total revenues | 1,084,388 | 1,123,646 | 3,276,752 | 3,366,960 |
Benefits and expenses | ||||
Benefits and settlement expenses, net of reinsurance ceded: (three months: 2017 - $256,703; 2016 - $279,109; nine months: 2017 - $806,314; 2016 - $855,276) | 743,934 | 733,051 | 2,205,937 | 2,161,293 |
Amortization of deferred policy acquisition costs and value of business acquired | 3,991 | 43,392 | 47,612 | 94,899 |
Other operating expenses, net of reinsurance ceded: (three months: 2017 - $57,293; 2016 - $49,073; nine months: 2017 - $161,615; 2016 - $148,334) | 225,613 | 214,124 | 674,236 | 637,186 |
Total benefits and expenses | 973,538 | 990,567 | 2,927,785 | 2,893,378 |
Income before income tax | 110,850 | 133,079 | 348,967 | 473,582 |
Income tax expense | 28,308 | 39,785 | 106,743 | 152,820 |
Net income | $ 82,542 | $ 93,294 | $ 242,224 | $ 320,762 |
CONSOLIDATED CONDENSED STATEME3
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Benefits and settlement expenses, reinsurance ceded | $ 256,703 | $ 279,109 | $ 806,314 | $ 855,276 |
Other operating expenses, reinsurance ceded | $ 57,293 | $ 49,073 | $ 161,615 | $ 148,334 |
CONSOLIDATED CONDENSED STATEME4
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 82,542 | $ 93,294 | $ 242,224 | $ 320,762 |
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on investments, net of income tax: (three months: 2017 - $54,464; 2016 - $106,841; nine months: 2017 - $295,743; 2016 - $657,352) | 101,148 | 198,419 | 549,234 | 1,220,796 |
Reclassification adjustment for investment amounts included in net income, net of income tax: (three months: 2017 - $(146); 2016 - $575; nine months: 2017 - $631; 2016 - $(6,041)) | (271) | 1,068 | 1,174 | (11,219) |
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 months: 2017 - $452; 2016 - $1,278; nine months: 2017 - $3,837; 2016 - $(106)) | 839 | 2,374 | 7,125 | (198) |
Change in accumulated (loss) gain - derivatives, net of income tax: (three months: 2017 - $445; 2016 - $0; nine months: 2017 - $19; 2016 - $0) | 828 | 0 | 36 | 0 |
Reclassification adjustment for derivative amounts included in net income, net of income tax: (three months: 2017 - $14; 2016 - $0; nine months: 2017 - $139; 2016 - $0) | 24 | 0 | 257 | 0 |
Change in postretirement benefits liability adjustment, net of income tax: (three months: 2017 - $0; 2016 - $(874); nine months: 2017 - $0; 2016 - $(874)) | 0 | (1,624) | 0 | (1,624) |
Total other comprehensive income | 102,568 | 200,237 | 557,826 | 1,207,755 |
Total comprehensive income | $ 185,110 | $ 293,531 | $ 800,050 | $ 1,528,517 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in net unrealized gains (losses) on investments, income tax | $ 54,464 | $ 106,841 | $ 295,743 | $ 657,352 |
Reclassification adjustment for investment amounts included in net income, income tax | (146) | 575 | 631 | (6,041) |
Change in net unrealized gains (losses) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | 452 | 1,278 | 3,837 | (106) |
Change in accumulated (loss) gain - derivatives, income tax | 445 | 0 | 19 | 0 |
Reclassification adjustment for derivative amounts included in net income, income tax | 14 | 0 | 139 | 0 |
Change in postretirement benefits liability adjustment, income tax | $ 0 | $ (874) | $ 0 | $ (874) |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Fixed maturities, at fair value (amortized cost: 2017 - $41,090,638 ; 2016 - $39,832,724) | $ 40,777,816 | $ 38,183,337 |
Fixed maturities, at amortized cost (fair value: 2017 - $2,796,603; 2016 - $2,733,340) | 2,730,995 | 2,770,177 |
Equity securities, at fair value (cost: 2017 - $763,914; 2016 - $768,423) | 781,537 | 754,489 |
Mortgage loans (related to securitizations: 2017 - $245,202; 2016 - $277,964) | 6,528,890 | 6,132,125 |
Investment real estate, net of accumulated depreciation (2017 - $113; 2016 - $252) | 4,572 | 8,060 |
Policy loans | 1,625,960 | 1,650,240 |
Other long-term investments | 1,113,937 | 865,304 |
Short-term investments | 527,179 | 332,431 |
Total investments | 54,090,886 | 50,696,163 |
Cash | 257,562 | 348,182 |
Accrued investment income | 496,876 | 482,388 |
Accounts and premiums receivable | 127,007 | 118,303 |
Reinsurance receivables | 5,191,229 | 5,323,846 |
Deferred policy acquisition costs and value of business acquired | 2,158,816 | 2,019,829 |
Goodwill | 793,470 | 793,470 |
Other intangibles, net of accumulated amortization (2017 - $126,709; 2016 - $79,226) | 673,588 | 688,083 |
Property and equipment, net of accumulated depreciation (2017 - $20,185; 2016 - $17,450) | 109,671 | 106,111 |
Other assets | 218,876 | 170,004 |
Income tax receivable | 99,370 | 116,823 |
Assets related to separate accounts | ||
Variable annuity | 13,763,971 | 13,244,252 |
Variable universal life | 996,375 | 895,925 |
Total assets | 78,977,697 | 75,003,379 |
Liabilities | ||
Future policy benefits and claims | 30,801,511 | 30,511,085 |
Unearned premiums | 871,591 | 848,495 |
Total policy liabilities and accruals | 31,673,102 | 31,359,580 |
Stable value product account balances | 4,793,890 | 3,501,636 |
Annuity account balances | 10,813,795 | 10,642,115 |
Other policyholders’ funds | 1,265,500 | 1,165,749 |
Other liabilities | 2,579,308 | 1,924,155 |
Deferred income taxes | 1,987,582 | 1,599,764 |
Non-recourse funding obligations | 2,759,640 | 2,796,474 |
Secured financing liabilities | 599,556 | 797,721 |
Debt | 1,122,000 | 1,163,285 |
Subordinated debt securities | 495,255 | 441,202 |
Liabilities related to separate accounts | ||
Variable annuity | 13,763,971 | 13,244,252 |
Variable universal life | 996,375 | 895,925 |
Total liabilities | 72,849,974 | 69,531,858 |
Commitments and contingencies - Note 11 | ||
Shareowner’s equity | ||
Common Stock: 2017 and 2016 - $0.01 par value; shares authorized: 5,000; shares issued: 1,000 | 0 | 0 |
Additional paid-in-capital | 5,554,059 | 5,554,059 |
Retained earnings | 670,361 | 571,985 |
Accumulated other comprehensive income (loss): | ||
Net unrealized (losses) gains on investments, net of income tax: (2017 - $(53,167); 2016 - $(349,541)) | (98,739) | (649,147) |
Net unrealized losses relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, net of income tax: (2017 - $(27); 2016 - $(3,864)) | (50) | (7,175) |
Accumulated gain (loss) - derivatives, net of income tax: (2017 - $549; 2016 - $391) | 1,020 | 727 |
Postretirement benefits liability adjustment, net of income tax: (2017 - $578; 2016 - $578) | 1,072 | 1,072 |
Total shareowner’s equity | 6,127,723 | 5,471,521 |
Total liabilities and shareowner’s equity | $ 78,977,697 | $ 75,003,379 |
CONSOLIDATED CONDENSED BALANCE7
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Fixed maturities at fair value, amortized cost | $ 41,090,638 | $ 39,832,724 |
Fixed maturities at amortized cost, fair value | 2,796,603 | 2,733,340 |
Equity securities, cost | 763,914 | 768,423 |
Mortgage loans, related to securitizations | 245,202 | 277,964 |
Investment real estate, accumulated depreciation | 113 | 252 |
Other intangibles, accumulated amortization | 126,709 | 79,226 |
Property and equipment, accumulated depreciation | $ 20,185 | $ 17,450 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 5,000 | 5,000 |
Common Stock, shares issued (in shares) | 1,000 | 1,000 |
Net unrealized gains (losses) on investments, income tax | $ (53,167) | $ (349,541) |
Net unrealized (losses) gains relating to other-than-temporary impaired investments for which a portion has been recognized in earnings, income tax | (27) | (3,864) |
Accumulated loss - derivatives, income tax | 549 | 391 |
Postretirement benefits liability adjustment, income tax | $ 578 | $ 578 |
CONSOLIDATED CONDENSED STATEME8
CONSOLIDATED CONDENSED STATEMENTS OF SHAREOWNER'S EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In- Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2015 | $ (1,241,134) | ||||
Increase (decrease) in shareowners' equity | |||||
Other comprehensive income | 586,611 | ||||
Ending Balance at Dec. 31, 2016 | $ 5,471,521 | $ 0 | $ 5,554,059 | $ 571,985 | (654,523) |
Increase (decrease) in shareowners' equity | |||||
Net income for the nine months ended September 30, 2017 | 242,224 | 242,224 | |||
Other comprehensive income | 557,826 | 557,826 | |||
Total comprehensive income | 800,050 | ||||
Dividends to parent | (143,848) | (143,848) | |||
Ending Balance at Sep. 30, 2017 | $ 6,127,723 | $ 0 | $ 5,554,059 | $ 670,361 | $ (96,697) |
CONSOLIDATED CONDENSED STATEME9
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net income | $ 242,224 | $ 320,762 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Realized investment (gains) losses | 176,588 | (31,022) |
Amortization of DAC and VOBA | 47,612 | 94,899 |
Capitalization of DAC | (249,640) | (244,252) |
Depreciation and amortization expense | 49,227 | 42,520 |
Deferred income tax | 86,463 | 201,466 |
Accrued income tax | 17,453 | (152,402) |
Interest credited to universal life and investment products | 507,229 | 532,998 |
Policy fees assessed on universal life and investment products | (1,004,829) | (935,702) |
Change in reinsurance receivables | 132,617 | 101,284 |
Change in accrued investment income and other receivables | (17,550) | (44,655) |
Change in policy liabilities and other policyholders’ funds of traditional life and health products | (273,640) | (159,533) |
Trading securities: | ||
Maturities and principal reductions of investments | 131,563 | 93,397 |
Sale of investments | 195,733 | 390,412 |
Cost of investments acquired | (277,423) | (438,886) |
Other net change in trading securities | 17,741 | 47,879 |
Amortization of premiums and accretion of discounts on investments and mortgage loans | 232,939 | 308,249 |
Change in other liabilities | 36,239 | 338,199 |
Other, net | (58,308) | (110,243) |
Net cash (used in) provided by operating activities | (7,762) | 355,370 |
Cash flows from investing activities | ||
Maturities and principal reductions of investments, available-for-sale | 541,155 | 984,707 |
Sale of investments, available-for-sale | 1,302,576 | 1,544,558 |
Cost of investments acquired, available-for-sale | (3,248,911) | (3,962,879) |
Change in investments, held-to-maturity | 36,000 | (2,185,000) |
Mortgage loans: | ||
New lendings | (1,081,226) | (944,025) |
Repayments | 644,189 | 648,109 |
Change in investment real estate, net | 3,679 | 2,905 |
Change in policy loans, net | 24,280 | 43,425 |
Change in other long-term investments, net | (282,506) | (104,543) |
Change in short-term investments, net | (203,169) | 51,960 |
Net unsettled security transactions | 349,544 | 52,292 |
Purchase of property, equipment, and intangibles | (34,229) | (15,607) |
Amounts received from reinsurance transaction | 0 | 325,800 |
Net cash used in investing activities | (1,948,618) | (3,558,298) |
Cash flows from financing activities | ||
Borrowings under line of credit arrangements and debt | 975,000 | 220,000 |
Principal payments on line of credit arrangement and debt | (934,123) | (373,074) |
Issuance (repayment) of non-recourse funding obligations | (36,000) | 2,098,700 |
Secured financing liabilities | (198,165) | (218,728) |
Dividends to shareowner | (143,848) | (89,343) |
Investment product deposits and change in universal life deposits | 3,901,051 | 3,509,315 |
Investment product withdrawals | (1,698,062) | (1,718,670) |
Other financing activities, net | (93) | 0 |
Net cash provided by financing activities | 1,865,760 | 3,428,200 |
Change in cash | (90,620) | 225,272 |
Cash at beginning of period | 348,182 | 396,072 |
Cash at end of period | $ 257,562 | $ 621,344 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company. Prior to February 1, 2015, the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary. 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, 2017 , are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2017 . 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, 2016 . 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 in this report include the accounts of Protective Life Corporation and subsidiaries 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, 2017 | |
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, 2016 . There were no significant changes to the Company's accounting policies during the nine months ended September 30, 2017 . Accounting Pronouncements Recently Adopted ASU No. 2017-04-Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This Update simplifies the goodwill impairment test by re-defining the concept of goodwill impairment as the condition that exists when the carrying amount of a reporting unit exceeds its fair value. The Update eliminates “Step 2” of the current goodwill impairment test, which requires entities to determine goodwill impairment by calculating the implied fair value of goodwill by remeasuring to fair value the assets and liabilities of a reporting unit as if that reporting unit had been acquired in a business combination. The Company elected to adopt the amendments in the Update in the first quarter of 2017, and will apply the revised guidance to impairment tests conducted after January 1, 2017. Application of the revised guidance did not impact the Company’s financial position or results of operations and will simplify its annual goodwill impairment test, which is generally conducted in the fourth quarter. For more details regarding the Company’s goodwill assessment process, please refer to Note 9, Goodwill . 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 additional disclosures introduced in this Update have not been provided, as the short-duration lines of business to which they apply are not material to the Company’s financial statements. 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. The Company will adopt this Update using the modified retrospective approach via a cumulative effect adjustment to retained earnings as of January 1, 2018. The amendments in the Update, along with clarifying updates issued subsequent to ASU 2014-09, will impact some of the Company's smaller lines of business, specifically revenues at the Company's affiliated broker dealers and insurance agency, and certain revenues associated with the Company's Asset Protection products. However, the cumulative effect adjustment related to the Company's adoption of the revised guidance is limited to the Company's Asset Protection segment. Based on its current projections, the Company estimates that the cumulative effect adjustment as of January 1, 2018 will result in a decrease in retained earnings between $72 million and $82 million . Several application questions remain outstanding, most notably interpretive positions regarding the Update's application to certain of the Company's warranty products. The Company will also implement minor changes to its accounting and disclosures with respect to the non-insurance lines of business referenced above to ensure compliance with the revised guidance. 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 Update also introduces a single-step impairment model for equity investments without a readily determinable fair value. Additionally, the Update requires changes in instrument-specific credit risk for fair value option liabilities to be recorded in other comprehensive income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017 and will be applied on a modified retrospective basis. The Company will record a cumulative-effect adjustment at the date of adoption (January 1, 2018) transferring unrealized gains and losses on available-for-sale equity securities to retained earnings from accumulated other comprehensive income. The impact of this adjustment (had it been recorded on September 30, 2017), net of income tax, would have resulted in a $11.5 million increase to retained earnings. The Company expects to complete its review of applicable policies and procedures 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 lease asset and liability will be measured at the present value of the minimum lease payments less any upfront payments or fees. The Update also requires numerous disclosure changes for which the Company is assessing the impact. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company has completed an inventory of all leases in the organization and is currently assessing the impact of the Update and updating internal 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 current expected credit loss (“CECL”) 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 against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. 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. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. 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 using the retrospective method. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Task Force). The amendments in this update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing diversity in practice related to the presentation of these amounts. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Update is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company expects to complete its review of applicable policies and procedures to ensure compliance with the revised guidance. ASU No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business. The purpose of this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in the Update provide a specific test by which an entity may determine whether an acquisition involves a set of assets or a business. The amendments in the Update are to be applied prospectively for periods beginning after December 15, 2017. The Company has reviewed the revised requirements, and does not anticipate that the changes will impact its policies or recent conclusions related to its acquisition activities. ASU No. 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require entities to disaggregate the current-service-cost component from other components of net benefit cost and present it with other current compensation costs in the income statement. The other components of net benefit cost must be presented outside of income from operations if that subtotal is presented. In addition, the Update requires entities to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. The amendments in this update are effective for interim and annual periods beginning after December 15, 2017. As provided for in the ASU, the Company expects to apply the provisions of the statement retrospectively for components of net periodic pension costs and prospectively for capitalization of the service costs component of net periodic costs and net periodic postretirement benefits. The Update will not impact the Company’s financial position or results of operations. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this update require that premiums on callable debt securities be amortized to the first call date. This is a change from current guidance, under which premiums are amortized to the maturity date of the security. The amendments are effective for annual and interim periods beginning after December 31, 2018, and early adoption is permitted. Transition will be through a modified retrospective approach in which the cumulative effect of application is recorded to retained earnings at the beginning of the annual period in which an entity adopts the revised guidance. The Company is currently reviewing its systems and processes to determine whether early adoption of the revised guidance is practicable. ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact this standard will have on its operations and financial results. |
MONY CLOSED BLOCK OF BUSINESS
MONY CLOSED BLOCK OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
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. 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, 2017 , and December 31, 2016 , is as follows: As of September 30, 2017 December 31, 2016 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,814,527 $ 5,896,355 Policyholder dividend obligation 136,004 31,932 Other liabilities 76,176 40,007 Total closed block liabilities 6,026,707 5,968,294 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,549,322 $ 4,440,105 Mortgage loans on real estate 130,521 201,088 Policy loans 707,293 712,959 Cash 148,612 108,270 Other assets 141,740 135,794 Total closed block assets 5,677,488 5,598,216 Excess of reported closed block liabilities over closed block assets 349,219 370,078 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation: $(55,231) and $(197,450); and net of income tax: $19,331 and $69,107 — — Future earnings to be recognized from closed block assets and closed block liabilities $ 349,219 $ 370,078 Reconciliation of the policyholder dividend obligation is as follows: For The 2017 2016 (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ 31,932 $ — Applicable to net revenue (losses) (38,147 ) (36,707 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation 142,219 300,814 Policyholder dividend obligation, end of period $ 136,004 $ 264,107 Closed Block revenues and expenses were as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Revenues Premiums and other income $ 40,962 $ 44,043 $ 128,697 $ 135,282 Net investment income 50,780 53,582 153,481 156,458 Net investment gains 341 326 448 963 Total revenues 92,083 97,951 282,626 292,703 Benefits and other deductions Benefits and settlement expenses 81,721 88,143 249,319 260,227 Other operating expenses 621 537 1,216 2,214 Total benefits and other deductions 82,342 88,680 250,535 262,441 Net revenues before income taxes 9,741 9,271 32,091 30,262 Income tax expense 3,409 3,245 11,232 10,591 Net revenues $ 6,332 $ 6,026 $ 20,859 $ 19,671 |
INVESTMENT OPERATIONS
INVESTMENT OPERATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT OPERATIONS | INVESTMENT OPERATIONS Net realized gains (losses) for all other investments are summarized as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Fixed maturities $ 1,042 $ 1,665 $ 10,482 $ 24,116 Equity securities (352 ) — (1,398 ) 36 Impairments (273 ) (3,308 ) (10,889 ) (6,892 ) Modco trading portfolio 19,399 23,995 93,181 178,353 Other investments (1,939 ) (1,508 ) (7,557 ) (7,842 ) Total realized gains (losses) - investments $ 17,877 $ 20,844 $ 83,819 $ 187,771 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Gross realized gains $ 1,933 $ 3,223 $ 14,968 $ 31,023 Gross realized losses: Impairment losses $ (273 ) $ (3,308 ) $ (10,889 ) $ (6,892 ) Other realized losses $ (1,243 ) $ (1,558 ) $ (5,884 ) $ (6,871 ) 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. For The For The 2017 2016 2017 2016 (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 121,459 $ 167,272 $ 566,064 $ 990,066 Gains realized $ 1,933 $ 3,223 $ 14,967 $ 31,023 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 37,186 $ 7,105 $ 121,450 $ 67,688 Losses realized $ (1,243 ) $ (1,558 ) $ (5,884 ) $ (6,871 ) (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 are as follows: As of September 30, 2017 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 2,187,460 $ 22,141 $ (17,347 ) $ 2,192,254 $ 16 Commercial mortgage-backed securities 1,939,832 6,167 (24,570 ) 1,921,429 — Other asset-backed securities 1,186,463 17,692 (13,488 ) 1,190,667 — U.S. government-related securities 1,317,910 1,256 (26,333 ) 1,292,833 — Other government-related securities 253,026 8,145 (6,835 ) 254,336 — States, municipals, and political subdivisions 1,756,865 6,416 (59,272 ) 1,704,009 (93 ) Corporate securities 29,673,641 480,875 (705,147 ) 29,449,369 — Preferred stock 94,362 376 (2,898 ) 91,840 — 38,409,559 543,068 (855,890 ) 38,096,737 (77 ) Equity securities 758,804 24,914 (7,291 ) 776,427 — Short-term investments 482,923 — — 482,923 — $ 39,651,286 $ 567,982 $ (863,181 ) $ 39,356,087 $ (77 ) As of December 31, 2016 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 1,913,413 $ 10,737 $ (25,667 ) $ 1,898,483 $ (9 ) Commercial mortgage-backed securities 1,850,620 2,528 (41,678 ) 1,811,470 — Other asset-backed securities 1,210,490 21,741 (20,698 ) 1,211,533 — U.S. government-related securities 1,308,192 422 (40,455 ) 1,268,159 — Other government-related securities 253,182 1,536 (14,797 ) 239,921 — States, municipals, and political subdivisions 1,760,837 1,224 (105,558 ) 1,656,503 — Corporate securities 28,801,768 153,715 (1,583,918 ) 27,371,565 (11,030 ) Preferred stock 94,362 — (8,519 ) 85,843 — 37,192,864 191,903 (1,841,290 ) 35,543,477 (11,039 ) Equity securities 761,340 7,751 (21,685 ) 747,406 — Short-term investments 279,782 — — 279,782 — $ 38,233,986 $ 199,654 $ (1,862,975 ) $ 36,570,665 $ (11,039 ) (1) These amounts are included in the gross unrealized gains and gross unrealized losses columns above. As of September 30, 2017 and December 31, 2016 , the Company had an additional $2.7 billion and $2.6 billion of fixed maturities, $5.1 million and $7.1 million of equity securities, and $44.3 million and $52.6 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, 2017 , 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. Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) Due in one year or less $ 777,460 $ 778,156 $ — $ — Due after one year through five years 6,292,741 6,325,294 — — Due after five years through ten years 7,685,870 7,718,256 — — Due after ten years 23,653,488 23,275,031 2,730,995 2,796,603 $ 38,409,559 $ 38,096,737 $ 2,730,995 $ 2,796,603 The chart below summarizes the Company's other-than-temporary impairments of investments. All of the impairments were related to fixed or equity maturities. For The For The Nine Months Ended September 30, 2017 2017 Fixed Maturities Equity Securities Total Securities Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) Other-than-temporary impairments $ (366 ) $ — $ (366 ) $ (494 ) $ (2,630 ) $ (3,124 ) Non-credit impairment losses recorded in other comprehensive income 93 — 93 (7,765 ) — $ (7,765 ) Net impairment losses recognized in earnings $ (273 ) $ — $ (273 ) $ (8,259 ) $ (2,630 ) $ (10,889 ) For The For The 2016 2016 Fixed Maturities Equity Securities Total Securities Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) Other-than-temporary impairments $ (1,898 ) $ — $ (1,898 ) $ (10,194 ) $ — $ (10,194 ) Non-credit impairment losses recorded in other comprehensive income (1,410 ) — (1,410 ) 3,302 — 3,302 Net impairment losses recognized in earnings $ (3,308 ) $ — $ (3,308 ) $ (6,892 ) $ — $ (6,892 ) 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, 2017 and 2016 . 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): For The For The 2017 2016 2017 2016 (Dollars In Thousands) Beginning balance $ 2,783 $ 964 $ 12,685 $ 22,761 Additions for newly impaired securities 266 1,721 266 4,777 Additions for previously impaired securities 6 1,521 2,791 2,046 Reductions for previously impaired securities due to a change in expected cash flows (37 ) (4 ) (12,724 ) (22,763 ) Reductions for previously impaired securities that were sold in the current period (600 ) — (600 ) (2,619 ) Ending balance $ 2,418 $ 4,202 $ 2,418 $ 4,202 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, 2017 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,044,494 $ (15,210 ) $ 88,573 $ (2,137 ) $ 1,133,067 $ (17,347 ) Commercial mortgage-backed securities 1,282,643 (19,936 ) 159,684 (4,634 ) 1,442,327 (24,570 ) Other asset-backed securities 202,097 (5,064 ) 170,747 (8,424 ) 372,844 (13,488 ) U.S. government-related securities 1,090,531 (21,099 ) 85,948 (5,234 ) 1,176,479 (26,333 ) Other government-related securities 44,015 (287 ) 84,524 (6,548 ) 128,539 (6,835 ) States, municipalities, and political subdivisions 819,311 (22,392 ) 615,181 (36,880 ) 1,434,492 (59,272 ) Corporate securities 7,825,478 (151,509 ) 8,487,852 (553,638 ) 16,313,330 (705,147 ) Preferred stock 52,294 (806 ) 28,846 (2,092 ) 81,140 (2,898 ) Equities 108,502 (2,245 ) 55,006 (5,046 ) 163,508 (7,291 ) $ 12,469,365 $ (238,548 ) $ 9,776,361 $ (624,633 ) $ 22,245,726 $ (863,181 ) RMBS and CMBS had gross unrealized losses greater than twelve months of $2.1 million and $4.6 million , respectively, as of September 30, 2017 . 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 $8.4 million as of September 30, 2017 . This category predominately includes student loan backed auction rate securities whose underlying collateral 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 other government-related securities had gross unrealized losses greater than twelve months of $6.5 million as of September 30, 2017. These declines were related to changes in interest rates. The states, municipalities, and political subdivisions category had gross unrealized losses greater than twelve months of $36.9 million as of September 30, 2017 . These declines were related to changes in interest rates. The corporate securities category had gross unrealized losses greater than twelve months of $553.6 million as of September 30, 2017 . 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, 2017 , the Company had a total of 1,742 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, 2016 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,060,569 $ (21,550 ) $ 170,826 $ (4,117 ) $ 1,231,395 $ (25,667 ) Commercial mortgage-backed securities 1,452,146 (37,665 ) 100,475 (4,013 ) 1,552,621 (41,678 ) Other asset-backed securities 323,706 (9,291 ) 176,792 (11,407 ) 500,498 (20,698 ) U.S. government-related securities 1,237,942 (40,454 ) 3 (1 ) 1,237,945 (40,455 ) Other government-related securities 98,412 (2,907 ) 79,393 (11,890 ) 177,805 (14,797 ) States, municipalities, and political subdivisions 1,062,368 (63,809 ) 548,254 (41,749 ) 1,610,622 (105,558 ) Corporate securities 12,553,514 (469,189 ) 9,793,579 (1,114,729 ) 22,347,093 (1,583,918 ) Preferred stock 66,781 (6,642 ) 19,062 (1,877 ) 85,843 (8,519 ) Equities 411,845 (15,273 ) 69,497 (6,412 ) 481,342 (21,685 ) $ 18,267,283 $ (666,780 ) $ 10,957,881 $ (1,196,195 ) $ 29,225,164 $ (1,862,975 ) RMBS and CMBS had gross unrealized losses greater than twelve months of $4.1 million and $4.0 million , respectively, as of December 31, 2016 . 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 $11.4 million as of December 31, 2016 . This category predominately includes student loan backed auction rate securities whose underlying collateral is at least 97% guaranteed by the 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 other government-related securities had gross unrealized losses greater than twelve months of $11.9 million as of December 31, 2016 . These declines were related to changes in interest rates. The states, municipalities, and political subdivisions category had gross unrealized losses greater than twelve months of $41.7 million as of December 31, 2016 . These declines were related to changes in interest rates. The corporate securities category had gross unrealized losses greater than twelve months of $1.1 billion as of December 31, 2016 . 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, 2017 , 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 $1.9 billion . In addition, included in the Company’s trading portfolio, the Company held $240.7 million of securities which were rated below investment grade. Approximately $338.4 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 maturity and equity securities, classified as available-for-sale is summarized as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Fixed maturities $ 168,062 $ 295,651 $ 868,767 $ 1,777,330 Equity securities (891 ) (1,691 ) 20,512 7,749 The amortized cost and fair value of the Company’s investments classified as held-to-maturity as of September 30, 2017 and December 31, 2016 , are as follows: As of September 30, 2017 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 690,995 $ — $ (17,305 ) $ 673,690 $ — Steel City LLC 2,040,000 82,913 — 2,122,913 — $ 2,730,995 $ 82,913 $ (17,305 ) $ 2,796,603 $ — As of December 31, 2016 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 654,177 $ — $ (67,222 ) $ 586,955 $ — Steel City LLC 2,116,000 30,385 — 2,146,385 — $ 2,770,177 $ 30,385 $ (67,222 ) $ 2,733,340 $ — During the three and nine months ended September 30, 2017 and 2016 , the Company recorded no other-than-temporary impairments on held-to-maturity securities. The Company’s held-to-maturity securities had $82.9 million of gross unrecognized holding gains and $17.3 million of gross unrecognized holding losses by maturity as of September 30, 2017 . 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 $30.4 million of gross unrecognized holding gains and $67.2 million of gross unrecognized holding losses by maturity as of December 31, 2016 . 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 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 two subsidiaries as of September 30, 2017 and December 31, 2016, Red Mountain LLC ("Red Mountain") and Steel City LLC ("Steel City"), that were determined to be VIEs. 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”) in which Golden Gate V issued non-recourse funding obligations to Red Mountain and Red Mountain issued a note (the "Red Mountain Note") to Golden Gate V. For details of this transaction, see Note 10, 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, through an affiliate, 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, 2017 , no payments have been made or required related to this guarantee. Steel City, a wholly owned subsidiary of the Company, entered into a financing agreement on January 15, 2016 involving Golden Gate Captive Insurance Company, in which Golden Gate issued non-recourse funding obligations to Steel City and Steel City issued three notes (the “Steel City Notes”) to Golden Gate. Credit enhancement on the Steel City Notes is provided by unrelated third parties. For details of the financing transaction, see Note 10, Debt and Other Obligations . The activity most significant to Steel City is the issuance of the Steel City Notes. The Company had the power, via its 100% ownership, 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 parties in their function as providers of credit enhancement on the Steel City Notes. 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 Steel City’s payment obligation for the credit enhancement fee to the unrelated third party providers. As of September 30, 2017 , 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, 2017 | |
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, 2017 : Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 2,192,254 $ — $ 2,192,254 Commercial mortgage-backed securities — 1,921,429 — 1,921,429 Other asset-backed securities — 637,518 553,149 1,190,667 U.S. government-related securities 1,009,225 283,608 — 1,292,833 State, municipalities, and political subdivisions — 1,704,009 — 1,704,009 Other government-related securities — 254,336 — 254,336 Corporate securities — 28,824,816 624,553 29,449,369 Preferred stock 72,942 18,898 — 91,840 Total fixed maturity securities - available-for-sale 1,082,167 35,836,868 1,177,702 38,096,737 Fixed maturity securities - trading Residential mortgage-backed securities — 262,062 — 262,062 Commercial mortgage-backed securities — 145,653 — 145,653 Other asset-backed securities — 107,123 35,490 142,613 U.S. government-related securities 21,589 6,125 — 27,714 State, municipalities, and political subdivisions — 321,001 — 321,001 Other government-related securities — 64,067 — 64,067 Corporate securities — 1,709,216 5,524 1,714,740 Preferred stock 3,229 — — 3,229 Total fixed maturity securities - trading 24,818 2,615,247 41,014 2,681,079 Total fixed maturity securities 1,106,985 38,452,115 1,218,716 40,777,816 Equity securities 715,339 36 66,162 781,537 Other long-term investments (1) 61,072 380,512 130,352 571,936 Short-term investments 421,408 105,771 — 527,179 Total investments 2,304,804 38,938,434 1,415,230 42,658,468 Cash 257,562 — — 257,562 Other assets 29,927 — — 29,927 Assets related to separate accounts Variable annuity 13,763,971 — — 13,763,971 Variable universal life 996,375 — — 996,375 Total assets measured at fair value on a recurring basis $ 17,352,639 $ 38,938,434 $ 1,415,230 $ 57,706,303 Liabilities: Annuity account balances (2) $ — $ — $ 85,028 $ 85,028 Other liabilities (1) 23,775 206,307 736,413 966,495 Total liabilities measured at fair value on a recurring basis $ 23,775 $ 206,307 $ 821,441 $ 1,051,523 (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, 2016 : Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,898,480 $ 3 $ 1,898,483 Commercial mortgage-backed securities — 1,811,470 — 1,811,470 Other asset-backed securities — 648,929 562,604 1,211,533 U.S. government-related securities 1,002,020 266,139 — 1,268,159 State, municipalities, and political subdivisions — 1,656,503 — 1,656,503 Other government-related securities — 239,921 — 239,921 Corporate securities — 26,707,519 664,046 27,371,565 Preferred stock 66,781 19,062 — 85,843 Total fixed maturity securities - available-for-sale 1,068,801 33,248,023 1,226,653 35,543,477 Fixed maturity securities - trading Residential mortgage-backed securities — 255,027 — 255,027 Commercial mortgage-backed securities — 149,683 — 149,683 Other asset-backed securities — 115,521 84,563 200,084 U.S. government-related securities 22,424 4,537 — 26,961 State, municipalities, and political subdivisions — 316,519 — 316,519 Other government-related securities — 63,012 — 63,012 Corporate securities — 1,619,097 5,492 1,624,589 Preferred stock 3,985 — — 3,985 Total fixed maturity securities - trading 26,409 2,523,396 90,055 2,639,860 Total fixed maturity securities 1,095,210 35,771,419 1,316,708 38,183,337 Equity securities 685,443 36 69,010 754,489 Other long-term investments (1) 82,420 335,498 124,325 542,243 Short-term investments 328,829 3,602 — 332,431 Total investments 2,191,902 36,110,555 1,510,043 39,812,500 Cash 348,182 — — 348,182 Other assets 23,830 — — 23,830 Assets related to separate accounts Variable annuity 13,244,252 — — 13,244,252 Variable universal life 895,925 — — 895,925 Total assets measured at fair value on a recurring basis $ 16,704,091 $ 36,110,555 $ 1,510,043 $ 54,324,689 Liabilities: Annuity account balances (2) $ — $ — $ 87,616 $ 87,616 Other liabilities (1) 13,004 163,974 571,843 748,821 Total liabilities measured at fair value on a recurring basis $ 13,004 $ 163,974 $ 659,459 $ 836,437 (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 approximately 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, 2017 . 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, 2017 , the Company held $5.3 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, 2017 , the Company held $588.6 million of Level 3 ABS, which included $553.1 million of other asset-backed securities classified as available-for-sale and $35.5 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. In periods where market activity increases and there are transactions at a price that is not the result of a distressed or forced sale we consider those prices as part of our valuation. If the market activity during a period is solely the result of the issuer redeeming positions we consider those transactions in our valuation, but still consider them to be level three measurements due to the nature of the transaction. Corporate Securities, U.S. Government-Related Securities, States, Municipals, and Political Subdivisions, and Other Government Related Securities As of September 30, 2017 , the Company classified approximately $33.2 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, 2017 , the Company classified approximately $630.1 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, 2017 , the Company held approximately $66.2 million of equity securities classified as Level 2 and Level 3. Of this total, $65.5 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 6, 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, 2017 , 100% of derivatives based upon notional values were priced using exchange prices or independent broker quotations. 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 swaps, options, and swaptions, which are traded over-the-counter. Level 2 also includes certain centrally cleared derivatives. 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 6, Derivative Financial Instruments for more information related to each embedded derivatives gains and losses. The fair value of the GLWB 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 along with 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 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 GLWB embedded derivative is categorized as Level 3. Policyholder assumptions are reviewed on an annual 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 with 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 plus a credit spread (to represent the Company’s non-performance risk). 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 the SOA 2015 VBT Primary Tables modified with company experience, with attained age factors varying from 34% - 152% . 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). 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, 2017 , 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 $218.8 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. Annuity Account Balances The Company records a certain legacy block of FIA reserves at fair value. Based on the characteristics of these reserves, the Company believes that the fund value approximates fair value. The fair value measurement of these reserves is considered a Level 3 valuation due to the unobservable nature of the fund values. The Level 3 fair value as of September 30, 2017 is $85.0 million . 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,005 Liquidation Liquidation value $90 - $97 ($95.02) Discounted cash flow Liquidity premium 0.51% - 1.29% (0.96%) Paydown rate 10.75% - 12.75% (11.34%) Corporate securities 615,576 Discounted cash flow Spread over treasury 0.35% - 4.35% (1.57%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 131,276 Actuarial cash flow model Mortality 91.1% to 106.6% 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 0.12% - 0.86% Embedded derivative - FIA 197,378 Actuarial cash flow model Expenses $146 per policy Asset Earned Rate 4.08% - 4.66% Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.12% - 0.86% Embedded derivative - IUL 69,081 Actuarial cash flow model Mortality 34% - 152% of 2015 VBT Primary Tables Lapse 0.5% - 10%, depending on duration/distribution channel and smoking class Nonperformance risk 0.12% - 0.86% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value. The Company has considered all reasonably available quantitative inputs as of September 30, 2017 , but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $50.6 million of financial instruments being classified as Level 3 as of September 30, 2017 . Of the $50.6 million , $35.6 million are other asset-backed securities, $14.5 million are corporate securities, and $0.5 million are equity securities. In certain cases, the Company has determined that book value materially approximates fair value. As of September 30, 2017 , the Company held $65.7 million of financial instruments where book value approximates fair value which was predominantly FHLB stock. 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,308 Liquidation Liquidation value $88 - $97.25 ($95.04) Corporate securities 638,279 Discounted cash flow Spread over treasury 0.31% - 4.50% (2.04%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 115,370 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 0.18% - 1.09% Embedded derivative - FIA 147,368 Actuarial cash flow model Expenses $126 per policy Asset Earned Rate 4.08% - 4.66% 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 duration/surrender charge period Nonperformance risk 0.18% - 1.09% Embedded derivative - IUL 46,051 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% - 1.09% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. The chart above excludes Level 3 financial instruments that are valued using broker quotes and for which book value approximates fair value. The Company had considered all reasonably available quantitative inputs as of December 31, 2016 , but the valuation techniques and inputs used by some brokers in pricing certain financial instruments are not shared with the Company. This resulted in $128.2 million of financial instruments being classified as Level 3 as of December 31, 2016 . Of the $128.2 million , $93.9 million are other asset-backed securities, $31.3 million are corporate securities, and $3.1 million are equity securities. In certain cases the Company has determined that book value materially approximates fair value. As of December 31, 2016 , the Company held $65.9 million of financial instruments where book value approximates fair value which were predominantly FHLB stock. The asset-backed securities classified as Level 3 are predominantly ARS. A change in the paydown rate (the projected annual rate of principal reduction) of the ARS can significantly impact the fair value of these securities. A decrease in the paydown rate would increase the projected weighted average life of the ARS and increase the sensitivity of the ARS’ fair value to changes in interest rates. An increase in the liquidity premium would result in a decrease in the fair value of the securities, while a decrease in the liquidity premium would increase the fair value of these securities. The fair value of corporate bonds classified as Level 3 is sensitive to changes in the interest rate spread over the corresponding U.S. Treasury rate. This spread represents a risk premium that is impacted by company specific and market factors. An increase in the spread can be caused by a perceived increase in credit risk of a specific issuer and/or an increase in the overall market risk premium associated with similar securities. The fair values of corporate bonds are sensitive to changes in spread. When holding the treasury rate constant, the fair value of corporate bonds increases when spreads decrease, and decreases when spreads increase. The fair value of the GLWB embedded derivative is sensitive to changes in the discount rate which includes the Company’s nonperformance risk, volatility, lapse, and mortality assumptions. The volatility assumption is an observable input as it is based on market inputs. The Company’s nonperformance risk, lapse, and mortality are unobservable. An increase in the unobservable assumptions would result in a decrease in the fair value of the liability and conversely, if there is a decrease in the assumptions the fair value would increase. The fair value is also dependent on the assumed policyholder utilization of the GLWB where an increase in assumed utilization would result in an increase in the fair value of the liability and conversely, if there is a decrease in the assumption, the fair value would decrease. The fair value of the FIA account balance liability is predominantly impacted by observabl |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
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, 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. Derivatives Related to Foreign Currency Exchange Risk Management Derivative instruments that are used as part of the Company’s foreign currency exchange risk management strategy include foreign currency swaps, foreign currency futures, foreign equity futures, and foreign equity options. 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 • Total Return Swaps 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 • To hedge a fixed rate note denominated in a foreign currency, the Company entered into a fixed-to-fixed foreign currency swap in order to hedge the foreign currency exchange risk associated with the note. The cash flows received on the swap are identical to the cash flow paid on the note. 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 futures, equity options, total return swaps, interest rate futures, interest rate swaps, interest rate swaptions, currency futures, volatility futures, volatility options, and variance swaps to mitigate the risk related to certain guaranteed minimum benefits, including GLWB, 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 markets certain VA products with a GLWB rider. The GLWB component is considered an embedded derivative, not considered to be clearly and closely related to the host contract. 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 markets and overall volatility. • The Company markets certain fixed indexed annuity products. The FIA component is considered an embedded derivative as it is, 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 as it is, not considered to be clearly and closely related to the host contract. Other Derivatives • 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 For The For The 2017 2016 2017 2016 (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ 549 $ (7,002 ) $ 16,746 $ 62,065 Equity futures - VA (25,959 ) (41,836 ) (75,389 ) (66,392 ) Currency futures - VA (6,092 ) 934 (22,366 ) 5,888 Equity options - VA (23,307 ) (36,482 ) (76,376 ) (23,410 ) Interest rate swaptions - VA (292 ) (229 ) (2,423 ) (3,212 ) Interest rate swaps - VA 5,342 14,737 31,331 221,884 Total return swaps - VA (8,057 ) — (9,675 ) — Embedded derivative - GLWB 740 90,954 (15,904 ) (246,299 ) Total derivatives related to VA contracts (57,076 ) 21,076 (154,056 ) (49,476 ) Derivatives related to FIA contracts: Embedded derivative - FIA (18,606 ) (14,486 ) (40,351 ) (15,938 ) Equity futures - FIA 66 2,236 161 4,269 Volatility futures - FIA — — — — Equity options - FIA 11,242 6,583 29,511 1,756 Total derivatives related to FIA contracts (7,298 ) (5,667 ) (10,679 ) (9,913 ) Derivatives related to IUL contracts: Embedded derivative - IUL (297 ) 7,136 (10,958 ) 6,302 Equity futures - IUL 58 101 (878 ) (71 ) Equity options - IUL 1,975 1,607 6,437 1,821 Total derivatives related to IUL contracts 1,736 8,844 (5,399 ) 8,052 Embedded derivative - Modco reinsurance treaties (19,746 ) (24,187 ) (90,314 ) (105,362 ) Other derivatives 43 50 41 (50 ) Total realized gains (losses) - derivatives $ (82,341 ) $ 116 $ (260,407 ) $ (156,749 ) 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: 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 Realized investment expenses gains (losses) (Dollars In Thousands) For The Three Months Ended September 30, 2017 Foreign currency swaps $ 1,273 $ (38 ) $ — Total $ 1,273 $ (38 ) $ — For The Nine Months Ended September 30, 2017 0 0 0 Foreign currency swaps $ 55 $ (396 ) $ — Total $ 55 $ (396 ) $ — Based on expected cash flows of the underlying hedged items, the Company expects to reclassify $0.5 million out of accumulated other comprehensive income into earnings during the next twelve months. The table below presents 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: As of September 30, 2017 December 31, 2016 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Cash flow hedges: Foreign currency swaps $ 117,178 $ 10,125 $ 117,178 $ 132 Derivatives not designated as hedging instruments: Interest rate swaps 1,365,000 59,641 1,135,000 71,644 Total return swaps — — — — Embedded derivative - Modco reinsurance treaties 64,444 1,008 64,123 2,573 Embedded derivative - GLWB 4,710,781 129,344 4,601,633 121,752 Interest rate futures 531,447 2,267 102,587 894 Equity futures 46,334 333 654,113 5,805 Currency futures 186,047 4,010 340,058 7,883 Equity options 4,846,984 364,936 3,944,444 328,908 Interest rate swaptions 225,000 81 225,000 2,503 Other 157 191 212 149 $ 12,093,372 $ 571,936 $ 11,184,348 $ 542,243 Other liabilities Cash flow hedges: Foreign currency swaps $ — $ — $ — $ — Derivatives not designated as hedging instruments: Interest rate swaps 497,500 267 575,000 10,208 Total return swaps 347,330 3,151 — — Embedded derivative - Modco reinsurance treaties 2,408,832 209,334 2,450,692 141,301 Embedded derivative - GLWB 4,855,482 260,620 5,962,044 237,122 Embedded derivative - FIA 1,845,942 197,378 1,496,346 147,368 Embedded derivative - IUL 150,277 69,081 103,838 46,051 Interest rate futures 606,501 6,401 993,842 6,611 Equity futures 340,041 14,854 102,667 2,907 Currency futures 115,382 1,958 — — Equity options 3,055,206 203,451 2,590,160 157,253 $ 14,222,493 $ 966,495 $ 14,274,589 $ 748,821 |
OFFSETTING OF ASSETS AND LIABIL
OFFSETTING OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
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 10, Debt and Other Obligations for details of the Company’s repurchase agreement programs. The tables below present the assets and liabilities subject to master netting agreements as of September 30, 2017 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 441,393 $ — $ 441,393 $ 211,435 $ 102,913 $ 127,045 Total derivatives, subject to a master netting arrangement or similar arrangement 441,393 — 441,393 211,435 102,913 127,045 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,008 — 1,008 — — 1,008 Embedded derivative - GLWB 129,344 — 129,344 — — 129,344 Other 191 — 191 — — 191 Total derivatives, not subject to a master netting arrangement or similar arrangement 130,543 — 130,543 — — 130,543 Total derivatives 571,936 — 571,936 211,435 102,913 257,588 Total Assets $ 571,936 $ — $ 571,936 $ 211,435 $ 102,913 $ 257,588 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 230,082 $ — $ 230,082 $ 211,435 $ 18,647 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 230,082 — 230,082 211,435 18,647 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 209,334 — 209,334 — — 209,334 Embedded derivative - GLWB 260,620 — 260,620 — — 260,620 Embedded derivative - FIA 197,378 — 197,378 — — 197,378 Embedded derivative - IUL 69,081 — 69,081 — — 69,081 Total derivatives, not subject to a master netting arrangement or similar arrangement 736,413 — 736,413 — — 736,413 Total derivatives 966,495 — 966,495 211,435 18,647 736,413 Repurchase agreements (1) 493,785 — 493,785 — — 493,785 Total Liabilities $ 1,460,280 $ — $ 1,460,280 $ 211,435 $ 18,647 $ 1,230,198 (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, 2016 : Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 417,769 $ — $ 417,769 $ 171,384 $ 100,890 $ 145,495 Total derivatives, subject to a master netting arrangement or similar arrangement 417,769 — 417,769 171,384 100,890 145,495 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,573 — 2,573 — — 2,573 Embedded derivative - GLWB 121,752 — 121,752 — — 121,752 Other 149 — 149 — — 149 Total derivatives, not subject to a master netting arrangement or similar arrangement 124,474 — 124,474 — — 124,474 Total derivatives 542,243 — 542,243 171,384 100,890 269,969 Total Assets $ 542,243 $ — $ 542,243 $ 171,384 $ 100,890 $ 269,969 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 176,979 $ — $ 176,979 $ 171,384 $ 5,595 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 176,979 — 176,979 171,384 5,595 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 141,301 — 141,301 — — 141,301 Embedded derivative - GLWB 237,122 — 237,122 — — 237,122 Embedded derivative - FIA 147,368 — 147,368 — — 147,368 Embedded derivative - IUL 46,051 — 46,051 — — 46,051 Total derivatives, not subject to a master netting arrangement or similar arrangement 571,842 — 571,842 — — 571,842 Total derivatives 748,821 — 748,821 171,384 5,595 571,842 Repurchase agreements (1) 797,721 — 797,721 — — 797,721 Total Liabilities $ 1,546,542 $ — $ 1,546,542 $ 171,384 $ 5,595 $ 1,369,563 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS
MORTGAGE LOANS | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 , the Company’s mortgage loan holdings were approximately $6.5 billion . The Company has specialized in making loans on credit-oriented commercial properties, credit-anchored strip shopping centers, senior living facilities, 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 discounts and prepayment fees are reported in net investment income. Certain of the mortgage loans have call options that occur within the next 12 years. However, if interest rates were to significantly increase, the Company may be unable to exercise the call options on its existing mortgage loans commensurate with the significantly increased market rates. As of September 30, 2017 , assuming the loans are called at their next call dates, approximately $54.7 million of principal would become due for the remainder of 2017 , $976.2 million in 2018 through 2022 , $124.6 million in 2023 through 2027 , and $9.9 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, 2017 and December 31, 2016 , approximately $715.2 million and $595.2 million , respectively, of the Company’s total mortgage loans 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, 2017 and 2016, the Company recognized $14.2 million , $ 25.7 million , $3.3 million , and $15.8 million , respectively, of participating mortgage loan income. As of September 30, 2017 , approximately $3.1 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, 2017 , the Company recognized two troubled debt restructurings as a result of the Company granting a concession to a borrower which included loan terms unavailable from other lenders. These concessions were the result of agreements between the creditor and the debtor. The Company did not identify any loans whose principal was permanently impaired during the nine months ended September 30, 2017 . 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, 2017 , $3.1 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 did not foreclose on any nonperforming loans not subject to a pooling and servicing agreement during the nine months ended September 30, 2017 . As of September 30, 2017 , 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, 2017 . As of September 30, 2017 and December 31, 2016 , the Company had an allowance for mortgage loan credit losses of $1.1 million and $0.7 million , respectively. 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: For The Nine Months Ended September 30, 2017 (Dollars In Thousands) Beginning balance, December 31, 2016 $ 724 Charge offs (5,653 ) Recoveries (731 ) Provision 6,715 Ending balance, September 30, 2017 $ 1,055 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 30-59 Days 60-89 Days than 90 Days Total As of September 30, 2017 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 2,293 $ — $ 869 $ 3,162 Number of delinquent commercial mortgage loans 2 — 1 3 As of December 31, 2016 Commercial mortgage loans $ 3,669 $ — $ — $ 3,669 Number of delinquent commercial mortgage loans 4 — — 4 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 Recorded Principal Related Recorded Income Interest As of September 30, 2017 Investment Balance Allowance Investment Recognized Income (Dollars In Thousands) Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,924 1,924 1,055 1,924 18 27 As of December 31, 2016 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,819 1,819 724 1,819 96 96 Mortgage loans that were modified in a troubled debt restructuring as of September 30, 2017 and December 31, 2016 were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) As of September 30, 2017 Troubled debt restructuring: Commercial mortgage loans 2 $ 1,134 $ 1,134 As of December 31, 2016 Troubled debt restructuring: Commercial mortgage loans 1 $ 468 $ 468 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The balance of goodwill for the Company as of September 30, 2017 was $793.5 million . There has been no change to goodwill during the nine months ended September 30, 2017 . 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 2016 , the Company performed its annual evaluation of goodwill based on information as of October 1, 2016 , and determined that no adjustment to impair goodwill was necessary. During the nine months ended September 30, 2017 , 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. |
DEBT AND OTHER OBLIGATIONS
DEBT AND OTHER OBLIGATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER OBLIGATIONS | DEBT AND OTHER OBLIGATIONS Debt and Subordinated Debt Securities Debt and subordinated debt securities are summarized as follows: As of September 30, 2017 December 31, 2016 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Revolving Line of Credit $ 170,000 $ 170,000 $ 170,000 $ 170,000 Capital lease obligation 1,495 1,495 — — 6.40% Senior Notes (2007), due 2018 150,000 152,067 150,000 156,663 7.375% Senior Notes (2009), due 2019 400,000 440,569 400,000 454,688 8.45% Senior Notes (2009), due 2039 232,928 357,869 246,926 381,934 $ 954,423 $ 1,122,000 $ 966,926 $ 1,163,285 Subordinated debt securities (year of issue): 6.25% Subordinated Debentures (2012), due 2042, callable 2017 $ — $ — $ 287,500 $ 290,002 6.00% Subordinated Debentures (2012), due 2042, callable 2017 — — 150,000 151,200 5.35% Subordinated Debentures (2017), due 2052 500,000 495,255 — — $ 500,000 $ 495,255 $ 437,500 $ 441,202 During the nine months ended September 30, 2017 , the Company repurchased and subsequently extinguished $21.6 million (par value - $14.0 million ) of the Company's 8.45% Senior Notes due 2039. These repurchases resulted in a $2.0 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated condensed statements of income. During 2017, the Company issued $500.0 million of its Subordinated Debentures due 2052. These Subordinated Debentures are carried on the Company's balance sheet net of the associated deferred issuance expenses of $4.8 million . The Company used the net proceeds from the offering to call and redeem, at par, the entire $150.0 million of Subordinated Debentures due 2042 and $287.5 million of Subordinated Debentures due 2042. During the year ended December 31, 2016, the Company repurchased and subsequently extinguished $82.7 million (par value - $53.1 million ) of the Company's 8.45% Senior Notes due 2039. These repurchases resulted in a $9.8 million pre-tax gain for the Company. The gain is recorded in other income in the consolidated condensed statements of income. The Company has the ability to borrow on an unsecured basis under a Credit Facility 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 the Company’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 Funds rate , or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of the Company's Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of the Company’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that the Company is liable for the full amount of any obligations for borrowings or letters of credit, including those of PLICO, 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, 2017 . There was an outstanding balance of $170.0 million bearing interest at a rate of LIBOR plus 1.00% as of September 30, 2017 . Non-Recourse Funding Obligations Non-recourse funding obligations outstanding as of September 30, 2017 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year-to-Date (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,040,000 $ 2,040,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 50,490 2052 3.84 % Golden Gate V Vermont Captive Insurance Company (2)(3) 605,000 666,729 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,421 2024 6.19 % Total $ 2,704,691 $ 2,759,640 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Non-recourse funding obligations outstanding as of December 31, 2016 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Weighted-Avg Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,116,000 $ 2,116,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,983 2052 2.52 % Golden Gate V Vermont Captive Insurance Company (2)(3) 565,000 628,025 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,466 2024 6.19 % Total $ 2,740,691 $ 2,796,474 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Secured Financing Transactions 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, 2017 , the fair value of securities pledged under the repurchase program was $549.8 million , and the repurchase obligation of $493.8 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 118 basis points). During the nine months ended September 30, 2017 , the maximum balance outstanding at any one point in time related to these programs was $981.3 million . The average daily balance was $546.2 million (at an average borrowing rate of 89 basis points) during the nine months ended September 30, 2017 . As of December 31, 2016 , the fair value of securities pledged under the repurchase program was $861.7 million , and the repurchase obligation of $797.7 million was included in the Company's consolidated condensed balance sheets (at an average borrowing rate of 65 basis points). During 2016 , the maximum balance outstanding at any one point in time related to these programs was $1,065.8 million . The average daily balance was $505.4 million (at an average borrowing rate of 44 basis points) during the year ended December 31, 2016 . Securities Lending The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires initial collateral of 102% of the market value of the loaned securities to be separately maintained. The loaned securities’ market value is monitored on a daily basis. As of September 30, 2017, securities with a market value of $100.2 million were loaned under this program. As collateral for the loaned securities, the Company receives short-term investments, which are recorded in “short-term investments” with a corresponding liability recorded in “secured financing liabilities” to account for its obligation to return the collateral. As of September 30, 2017, the fair value of the collateral related to this program was $105.8 million and the Company has an obligation to return $105.8 million of collateral to the securities borrowers. The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of September 30, 2017 and December 31, 2016: 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, 2017 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 322,986 $ 20,006 $ — $ — $ 342,992 Mortgage loans 206,796 — — — 206,796 Total repurchase agreements and repurchase-to-maturity transactions 529,782 20,006 — — 549,788 Securities lending transactions Corporate securities 97,385 — — — 97,385 Equity securities 2,621 — — — 2,621 Preferred stock 174 — — — 174 Total securities lending transactions 100,180 — — — 100,180 Total securities $ 629,962 $ 20,006 $ — $ — $ 649,968 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2016 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 357,705 $ 23,758 $ — $ — $ 381,463 Corporate securities — — — — — Mortgage loans 480,269 — — — 480,269 Total securities $ 837,974 $ 23,758 $ — $ — $ 861,732 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company has entered into indemnity agreements with each of its current directors other than those that are employees of Dai-ichi Life that provide, among other things and subject to certain limitations, a contractual right to indemnification to the fullest extent permissible under the law. The Company has agreements with certain of its officers providing up to $10 million in indemnification. These obligations are in addition to the customary obligation to indemnify officers and directors contained in the Company’s governance documents. Under the 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. From time to time, companies may be asked to contribute amounts beyond prescribed limits. It is possible that the Company could be assessed with respect to product lines not offered by the Company. In addition, legislation may be introduced in various states with respect to guaranty fund assessment laws related to insurance products, including long term care insurance and other specialty products, that alters future premium tax offsets received in connection with guaranty fund assessments. The Company cannot predict the amount, nature or timing of any future assessments or legislation, any of which could have a material and adverse impact on the Company's financial condition or results of operations. 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 and 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. 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. 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 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 does not believe such fees, if assessed, would have a material effect on its financial statements. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Components of the net periodic benefit cost of the Company's defined benefit pension plan for the three and nine months ended September 30, 2017 and 2016 , are as follows: For The For The 2017 2016 2017 2016 Defined Defined Benefit Pension Plan Excess Benefit Plan Defined Benefit Pension Plan Excess Benefit Plan Defined (Dollars In Thousands) Service cost — benefits earned during the period $ 3,348 $ 334 $ 2,906 $ 311 $ 10,044 $ 1,002 $ 8,717 $ 1,102 Interest cost on projected benefit obligation 2,191 297 2,737 299 6,573 891 8,210 1,054 Expected return on plan assets (3,352 ) — (3,605 ) — (10,056 ) — (10,816 ) — Amortization of prior service cost — — — — — — — — Amortization of actuarial losses — 118 — 64 — 354 — 114 Preliminary net periodic benefit cost 2,187 749 2,038 674 6,561 2,247 6,111 2,270 Settlement/curtailment expense — — — 635 — — — 2,135 Total net periodic benefit costs $ 2,187 $ 749 $ 2,038 $ 1,309 $ 6,561 $ 2,247 $ 6,111 $ 4,405 During the nine months ended September 30, 2017 , the Company contributed $ 43.5 million to its defined benefit pension plan for the 2016 plan year. The Company will make contributions in future periods as necessary to at least satisfy minimum funding requirements. The Company 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, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [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, 2017 and December 31, 2016 . Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized (2) Accumulated Minimum Pension Liability Adjustment Total (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) Other comprehensive income (loss) before reclassifications 549,234 36 — 549,270 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 1,174 — — 1,174 Amounts reclassified from accumulated other comprehensive income (loss) (1) 7,125 257 — 7,382 Net current-period other comprehensive income (loss) 557,533 293 — 557,826 Ending Balance, September 30, 2017 $ (98,789 ) $ 1,020 $ 1,072 $ (96,697 ) (1) See Reclassification table below for details. (2) As of September 30, 2017, net unrealized losses reported in AOCI were offset by $93.6 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. Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized (2) Accumulated Minimum Pension Liability Adjustment Total (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) Other comprehensive income (loss) before reclassifications 606,985 688 (5,659 ) 602,014 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (6,782 ) — — (6,782 ) Amounts reclassified from accumulated other (1) (9,460 ) 39 800 (8,621 ) Net current-period other comprehensive income (loss) 590,743 727 (4,859 ) 586,611 Ending Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 and December 31, 2016, net unrealized losses reported in AOCI were offset by $623.0 million and $424.1 million, respectively, 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, 2017 and 2016 . Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Three Months Ended September 30, 2017 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (38 ) Benefits and settlement expenses, net of reinsurance ceded (38 ) Total before tax 14 Tax (expense) or benefit $ (24 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 690 Realized investment gains (losses): All other investments Impairments recognized in earnings (273 ) Net impairment losses recognized in earnings 417 Total before tax (146 ) Tax (expense) or benefit $ 271 Net of tax (1) See Note 6, Derivative Financial Instruments for additional information Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Affected Line Item in the For The Nine Months Ended September 30, 2017 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (396 ) Benefits and settlement expenses, net of reinsurance ceded (396 ) Total before tax 139 Tax (expense) or benefit $ (257 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 9,084 Realized investment gains (losses): All other investments Impairments recognized in earnings (10,889 ) Net impairment losses recognized in earnings (1,805 ) Total before tax 631 Tax (expense) or benefit $ (1,174 ) Net of tax (1) See Note 6, Derivative Financial Instruments for additional information Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Three Months Ended September 30, 2016 Income (Loss) Consolidated Condensed Statements of Income (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 Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (29 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (29 ) Total before tax 10 Tax (expense) or benefit $ (19 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Nine Months Ended September 30, 2016 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 24,152 Realized investment gains (losses): All other investments Impairments recognized in earnings (6,892 ) Net impairment losses recognized in earnings 17,260 Total before tax (6,041 ) Tax (expense) or benefit $ 11,219 Net of tax Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (29 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (29 ) Total before tax 10 Tax (expense) or benefit $ (19 ) Net of tax |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES 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. In April 2017, a routine review by Congress’ Joint Committee on Taxation was finalized without change and the Company expects to receive an approximate $6.2 million net refund in a future period. 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. There have been no material changes to the balance of unrecognized tax benefits, where the changes impact earnings, during the quarter ending September 30, 2017. The Company believes that in the next twelve months, $4.9 million of the unrecognized tax benefits at September 30, 2017 will be reduced due to an expected closure of the statute of limitations for assessment of tax. Due to ongoing examination activity, the statute of limitations period could be extended, however, which would change this twelve month outlook. In general, the Company is no longer subject to income tax examinations by taxing authorities for tax years that began before 2014. Nevertheless, certain of these pre-2014 years have pending U.S. tax refunds. Due to their size, these refunds were reviewed by Congress' Joint Committee on Taxation. In April 2017, the Company received notification that the Joint Committee review was complete and that no changes were made. The underlying federal statutes of limitations are expected to close in due course on or before September 30, 2018. Furthermore, due to the aforementioned IRS adjustments to the Company's pre-2014 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. During the year ended December 31, 2016, the Company entered into a reinsurance transaction. This transaction generated an operating loss on the Company’s consolidated 2016 U.S. 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 U.S. 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, 2017 and December 31, 2016. The Company used its respective estimates of its annual 2017 and 2016 incomes in computing its effective income tax rates for the three and nine months ended September 30, 2017 and 2016 . The effective tax rates for the three and nine months ended September 30, 2017 and 2016 , were 25.5% , 30.6% , 29.9% , and 32.3% respectively. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Sep. 30, 2017 | |
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. 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, guaranteed asset protection ("GAP") products, credit life and disability insurance, and other specialized ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft, and powersports. GAP covers the difference between the loan pay-off amount and an asset’s actual cash value in the case of a total loss. Each type of specialized ancillary product protects against damage or other loss to a particular aspect of the underlying asset. • 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 (including interest on corporate debt). This segment includes earnings from several non-strategic or runoff lines of business, various financing and investment-related transactions, and the operations of several small subsidiaries. The Company's management and Board of Directors analyzes and assesses the operating performance of each segment using "pre-tax adjusted operating income (loss)" and "after-tax adjusted operating income (loss)". Consistent with GAAP accounting guidance for segment reporting, pre-tax adjusted operating income (loss) is the Company's measure of segment performance. Pre-tax adjusted 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 GLWB embedded derivatives exclusive of the portion attributable to the economic cost of the GLWB, • actual GLWB incurred claims, and • the amortization of DAC, VOBA, and certain policy liabilities that is impacted by the exclusion of these items. The items excluded from adjusted operating income (loss) are important to understanding the overall results of operations. Pre-tax adjusted operating income (loss) and after-tax adjusted operating income (loss) are not substitutes for income before income taxes or net income (loss), respectively. These measures may not be comparable to similarly titled measures reported by other companies. The Company believes that pre-tax and after-tax adjusted 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 adjusted 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. In filings prior to the Company's 2016 Form 10-K, "Pre-tax adjusted operating income (loss)" was referred to as "Pre-tax operating income", "Operating income before tax", or "Segment operating income". In addition, we referred to "After-tax adjusted operating income (loss)" as "After-tax operating income" or "Operating earnings". The definition of these labels remains unchanged, but the Company has modified the labels to provide further clarity that these measures are non-GAAP measures. There were no significant intersegment transactions during the three and nine months ended September 30, 2017 and 2016 . The following tables presents a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Revenues Life Marketing $ 424,165 $ 409,423 $ 1,252,603 $ 1,231,397 Acquisitions 375,819 391,017 1,164,650 1,269,672 Annuities 97,488 174,798 318,452 410,455 Stable Value Products 49,933 27,380 132,863 83,519 Asset Protection 83,597 69,306 246,142 201,041 Corporate and Other 53,386 51,722 162,042 170,876 Total revenues $ 1,084,388 $ 1,123,646 $ 3,276,752 $ 3,366,960 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ 8,969 $ (1,306 ) $ 51,157 $ 36,957 Acquisitions 62,880 70,157 184,825 184,095 Annuities 62,000 53,666 161,585 164,196 Stable Value Products 27,992 14,700 74,258 44,326 Asset Protection 6,963 5,455 19,098 16,216 Corporate and Other (26,870 ) (29,774 ) (67,466 ) (60,231 ) Pre-tax adjusted operating income 141,934 112,898 423,457 385,559 Realized (losses) gains on investments and derivatives (31,084 ) 20,181 (74,490 ) 88,023 Income before income tax 110,850 133,079 348,967 473,582 Income tax expense (28,308 ) (39,785 ) (106,743 ) (152,820 ) Net income $ 82,542 $ 93,294 $ 242,224 $ 320,762 Pre-tax adjusted operating income $ 141,934 $ 112,898 $ 423,457 $ 385,559 Adjusted operating income tax (expense) benefit (39,187 ) (32,722 ) (132,815 ) (121,982 ) After-tax adjusted operating income 102,747 80,176 290,642 263,577 Realized (losses) gains on investments and derivatives (31,084 ) 20,181 (74,490 ) 88,023 Income tax benefit (expense) on adjustments 10,879 (7,063 ) 26,072 (30,838 ) Net income $ 82,542 $ 93,294 $ 242,224 $ 320,762 Realized investment (losses) gains: Derivative financial instruments $ (82,341 ) $ 116 $ (260,407 ) $ (156,749 ) All other investments 18,150 24,152 94,708 194,663 Net impairment losses recognized in earnings (273 ) (3,308 ) (10,889 ) (6,892 ) Less: related amortization (1) (12,123 ) 21,532 (38,570 ) 4,409 Less: VA GLWB economic cost (21,257 ) (20,753 ) (63,528 ) (61,410 ) Realized (losses) gains on investments and derivatives $ (31,084 ) $ 20,181 $ (74,490 ) $ 88,023 (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,700,406 $ 19,681,306 $ 20,617,917 $ 4,664,251 DAC and VOBA 1,295,708 77,157 752,540 7,605 Other intangibles 287,120 35,187 173,450 8,222 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 16,483,508 $ 19,808,174 $ 21,880,584 $ 4,793,891 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 914,658 $ 14,773,285 $ 75,351,823 DAC and VOBA 25,806 — 2,158,816 Other intangibles 135,895 33,714 673,588 Goodwill 128,182 — 793,470 Total assets $ 1,204,541 $ 14,806,999 $ 78,977,697 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,050,170 $ 19,679,690 $ 20,243,333 $ 3,373,646 DAC and VOBA 1,218,944 106,532 655,618 5,455 Other intangibles 301,399 37,103 183,449 8,722 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,770,787 $ 19,837,849 $ 21,419,077 $ 3,501,636 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,013,399 $ 13,141,759 $ 71,501,997 DAC and VOBA 33,280 — 2,019,829 Other intangibles 143,865 13,545 688,083 Goodwill 128,182 — 793,470 Total assets $ 1,318,726 $ 13,155,304 $ 75,003,379 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated the effects of events subsequent to September 30, 2017 , 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 ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation On February 1, 2015, Protective Life Corporation (the “Company”) became a wholly owned subsidiary of The Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan (now known as Dai-ichi Life Holdings, Inc., “Dai-ichi Life”), when DL Investment (Delaware), Inc. a wholly owned subsidiary of Dai-ichi Life, merged with and into the Company. Prior to February 1, 2015, the Company’s stock was publicly traded on the New York Stock Exchange. Subsequent to the Merger date, the Company remains as an SEC registrant within the United States. The Company is a holding company with subsidiaries that provide financial services through the production, distribution, and administration of insurance and investment products. The Company markets individual life insurance, credit life and disability insurance, guaranteed investment contracts, guaranteed funding agreements, fixed and variable annuities, and extended service contracts throughout the United States. The Company also maintains a separate segment devoted to the acquisition of insurance policies from other companies. Founded in 1907, Protective Life Insurance Company (“PLICO”) is the Company’s largest operating subsidiary. 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, 2017 , are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2017 . 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, 2016 . 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 in this report include the accounts of Protective Life Corporation and subsidiaries 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 ASU No. 2017-04-Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This Update simplifies the goodwill impairment test by re-defining the concept of goodwill impairment as the condition that exists when the carrying amount of a reporting unit exceeds its fair value. The Update eliminates “Step 2” of the current goodwill impairment test, which requires entities to determine goodwill impairment by calculating the implied fair value of goodwill by remeasuring to fair value the assets and liabilities of a reporting unit as if that reporting unit had been acquired in a business combination. The Company elected to adopt the amendments in the Update in the first quarter of 2017, and will apply the revised guidance to impairment tests conducted after January 1, 2017. Application of the revised guidance did not impact the Company’s financial position or results of operations and will simplify its annual goodwill impairment test, which is generally conducted in the fourth quarter. For more details regarding the Company’s goodwill assessment process, please refer to Note 9, Goodwill . 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 additional disclosures introduced in this Update have not been provided, as the short-duration lines of business to which they apply are not material to the Company’s financial statements. 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. The Company will adopt this Update using the modified retrospective approach via a cumulative effect adjustment to retained earnings as of January 1, 2018. The amendments in the Update, along with clarifying updates issued subsequent to ASU 2014-09, will impact some of the Company's smaller lines of business, specifically revenues at the Company's affiliated broker dealers and insurance agency, and certain revenues associated with the Company's Asset Protection products. However, the cumulative effect adjustment related to the Company's adoption of the revised guidance is limited to the Company's Asset Protection segment. Based on its current projections, the Company estimates that the cumulative effect adjustment as of January 1, 2018 will result in a decrease in retained earnings between $72 million and $82 million . Several application questions remain outstanding, most notably interpretive positions regarding the Update's application to certain of the Company's warranty products. The Company will also implement minor changes to its accounting and disclosures with respect to the non-insurance lines of business referenced above to ensure compliance with the revised guidance. 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 Update also introduces a single-step impairment model for equity investments without a readily determinable fair value. Additionally, the Update requires changes in instrument-specific credit risk for fair value option liabilities to be recorded in other comprehensive income. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2017 and will be applied on a modified retrospective basis. The Company will record a cumulative-effect adjustment at the date of adoption (January 1, 2018) transferring unrealized gains and losses on available-for-sale equity securities to retained earnings from accumulated other comprehensive income. The impact of this adjustment (had it been recorded on September 30, 2017), net of income tax, would have resulted in a $11.5 million increase to retained earnings. The Company expects to complete its review of applicable policies and procedures 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 lease asset and liability will be measured at the present value of the minimum lease payments less any upfront payments or fees. The Update also requires numerous disclosure changes for which the Company is assessing the impact. The amendments in the Update are effective for annual and interim periods beginning after December 15, 2018 on a modified retrospective basis. The Company has completed an inventory of all leases in the organization and is currently assessing the impact of the Update and updating internal 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 current expected credit loss (“CECL”) 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 against earnings its estimate of the contractual cash flows not expected to be collected on day one of the asset’s acquisition. The allowance may be reversed through earnings if a security recovers in value. This differs from the current impairment model, which requires recognition of credit losses when they have been incurred and recognizes a security’s subsequent recovery in value in other comprehensive income. 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. Similar to the CECL model, credit loss impairments will be recorded in an allowance against earnings that may be reversed for subsequent recoveries in value. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2019 on a modified retrospective basis. 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 using the retrospective method. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Task Force). The amendments in this update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing diversity in practice related to the presentation of these amounts. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Update is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company expects to complete its review of applicable policies and procedures to ensure compliance with the revised guidance. ASU No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business. The purpose of this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in the Update provide a specific test by which an entity may determine whether an acquisition involves a set of assets or a business. The amendments in the Update are to be applied prospectively for periods beginning after December 15, 2017. The Company has reviewed the revised requirements, and does not anticipate that the changes will impact its policies or recent conclusions related to its acquisition activities. ASU No. 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require entities to disaggregate the current-service-cost component from other components of net benefit cost and present it with other current compensation costs in the income statement. The other components of net benefit cost must be presented outside of income from operations if that subtotal is presented. In addition, the Update requires entities to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. The amendments in this update are effective for interim and annual periods beginning after December 15, 2017. As provided for in the ASU, the Company expects to apply the provisions of the statement retrospectively for components of net periodic pension costs and prospectively for capitalization of the service costs component of net periodic costs and net periodic postretirement benefits. The Update will not impact the Company’s financial position or results of operations. The Company is reviewing its policies and processes to ensure compliance with the requirements in this Update, upon adoption. ASU No. 2017-08 - Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this update require that premiums on callable debt securities be amortized to the first call date. This is a change from current guidance, under which premiums are amortized to the maturity date of the security. The amendments are effective for annual and interim periods beginning after December 31, 2018, and early adoption is permitted. Transition will be through a modified retrospective approach in which the cumulative effect of application is recorded to retained earnings at the beginning of the annual period in which an entity adopts the revised guidance. The Company is currently reviewing its systems and processes to determine whether early adoption of the revised guidance is practicable. ASU No. 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this update are designed to permit hedge accounting to be applied to a broader range of hedging strategies as well as to more closely align hedge accounting and risk management objectives. Specific provisions include requiring changes in the fair value of a hedging instrument be recorded in the same income statement line as the hedged item when it affects earnings. In addition, after a hedge has initially qualified as an effective hedge the Update permits the use of a qualitative hedge effectiveness test in subsequent periods. The amendments in this Update are effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact this standard will have on its operations and financial results. |
MONY CLOSED BLOCK OF BUSINESS (
MONY CLOSED BLOCK OF BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Closed Block Disclosure [Abstract] | |
Summary of financial information for the Closed Block | Summarized financial information for the Closed Block as of September 30, 2017 , and December 31, 2016 , is as follows: As of September 30, 2017 December 31, 2016 (Dollars In Thousands) Closed block liabilities Future policy benefits, policyholders’ account balances and other policyholder liabilities $ 5,814,527 $ 5,896,355 Policyholder dividend obligation 136,004 31,932 Other liabilities 76,176 40,007 Total closed block liabilities 6,026,707 5,968,294 Closed block assets Fixed maturities, available-for-sale, at fair value $ 4,549,322 $ 4,440,105 Mortgage loans on real estate 130,521 201,088 Policy loans 707,293 712,959 Cash 148,612 108,270 Other assets 141,740 135,794 Total closed block assets 5,677,488 5,598,216 Excess of reported closed block liabilities over closed block assets 349,219 370,078 Portion of above representing accumulated other comprehensive income: Net unrealized investment gains (losses) net of policyholder dividend obligation: $(55,231) and $(197,450); and net of income tax: $19,331 and $69,107 — — Future earnings to be recognized from closed block assets and closed block liabilities $ 349,219 $ 370,078 |
Schedule of reconciliation of the policyholder dividend obligation | Reconciliation of the policyholder dividend obligation is as follows: For The 2017 2016 (Dollars In Thousands) Policyholder dividend obligation, beginning of period $ 31,932 $ — Applicable to net revenue (losses) (38,147 ) (36,707 ) Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation 142,219 300,814 Policyholder dividend obligation, end of period $ 136,004 $ 264,107 |
Schedule of Closed Block revenues and expenses | Closed Block revenues and expenses were as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Revenues Premiums and other income $ 40,962 $ 44,043 $ 128,697 $ 135,282 Net investment income 50,780 53,582 153,481 156,458 Net investment gains 341 326 448 963 Total revenues 92,083 97,951 282,626 292,703 Benefits and other deductions Benefits and settlement expenses 81,721 88,143 249,319 260,227 Other operating expenses 621 537 1,216 2,214 Total benefits and other deductions 82,342 88,680 250,535 262,441 Net revenues before income taxes 9,741 9,271 32,091 30,262 Income tax expense 3,409 3,245 11,232 10,591 Net revenues $ 6,332 $ 6,026 $ 20,859 $ 19,671 |
INVESTMENT OPERATIONS (Tables)
INVESTMENT OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Realized Gain (Loss) on Investments | Net realized gains (losses) for all other investments are summarized as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Fixed maturities $ 1,042 $ 1,665 $ 10,482 $ 24,116 Equity securities (352 ) — (1,398 ) 36 Impairments (273 ) (3,308 ) (10,889 ) (6,892 ) Modco trading portfolio 19,399 23,995 93,181 178,353 Other investments (1,939 ) (1,508 ) (7,557 ) (7,842 ) Total realized gains (losses) - investments $ 17,877 $ 20,844 $ 83,819 $ 187,771 Gross realized gains and gross realized losses on investments available-for-sale (fixed maturities, equity securities, and short-term investments) are as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Gross realized gains $ 1,933 $ 3,223 $ 14,968 $ 31,023 Gross realized losses: Impairment losses $ (273 ) $ (3,308 ) $ (10,889 ) $ (6,892 ) Other realized losses $ (1,243 ) $ (1,558 ) $ (5,884 ) $ (6,871 ) |
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. For The For The 2017 2016 2017 2016 (Dollars In Thousands) Securities in an unrealized gain position: Fair value (proceeds) $ 121,459 $ 167,272 $ 566,064 $ 990,066 Gains realized $ 1,933 $ 3,223 $ 14,967 $ 31,023 Securities in an unrealized loss position (1) : Fair value (proceeds) $ 37,186 $ 7,105 $ 121,450 $ 67,688 Losses realized $ (1,243 ) $ (1,558 ) $ (5,884 ) $ (6,871 ) (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 December 31, 2016 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,060,569 $ (21,550 ) $ 170,826 $ (4,117 ) $ 1,231,395 $ (25,667 ) Commercial mortgage-backed securities 1,452,146 (37,665 ) 100,475 (4,013 ) 1,552,621 (41,678 ) Other asset-backed securities 323,706 (9,291 ) 176,792 (11,407 ) 500,498 (20,698 ) U.S. government-related securities 1,237,942 (40,454 ) 3 (1 ) 1,237,945 (40,455 ) Other government-related securities 98,412 (2,907 ) 79,393 (11,890 ) 177,805 (14,797 ) States, municipalities, and political subdivisions 1,062,368 (63,809 ) 548,254 (41,749 ) 1,610,622 (105,558 ) Corporate securities 12,553,514 (469,189 ) 9,793,579 (1,114,729 ) 22,347,093 (1,583,918 ) Preferred stock 66,781 (6,642 ) 19,062 (1,877 ) 85,843 (8,519 ) Equities 411,845 (15,273 ) 69,497 (6,412 ) 481,342 (21,685 ) $ 18,267,283 $ (666,780 ) $ 10,957,881 $ (1,196,195 ) $ 29,225,164 $ (1,862,975 ) 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, 2017 : Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars In Thousands) Residential mortgage-backed securities $ 1,044,494 $ (15,210 ) $ 88,573 $ (2,137 ) $ 1,133,067 $ (17,347 ) Commercial mortgage-backed securities 1,282,643 (19,936 ) 159,684 (4,634 ) 1,442,327 (24,570 ) Other asset-backed securities 202,097 (5,064 ) 170,747 (8,424 ) 372,844 (13,488 ) U.S. government-related securities 1,090,531 (21,099 ) 85,948 (5,234 ) 1,176,479 (26,333 ) Other government-related securities 44,015 (287 ) 84,524 (6,548 ) 128,539 (6,835 ) States, municipalities, and political subdivisions 819,311 (22,392 ) 615,181 (36,880 ) 1,434,492 (59,272 ) Corporate securities 7,825,478 (151,509 ) 8,487,852 (553,638 ) 16,313,330 (705,147 ) Preferred stock 52,294 (806 ) 28,846 (2,092 ) 81,140 (2,898 ) Equities 108,502 (2,245 ) 55,006 (5,046 ) 163,508 (7,291 ) $ 12,469,365 $ (238,548 ) $ 9,776,361 $ (624,633 ) $ 22,245,726 $ (863,181 ) |
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 are as follows: As of September 30, 2017 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 2,187,460 $ 22,141 $ (17,347 ) $ 2,192,254 $ 16 Commercial mortgage-backed securities 1,939,832 6,167 (24,570 ) 1,921,429 — Other asset-backed securities 1,186,463 17,692 (13,488 ) 1,190,667 — U.S. government-related securities 1,317,910 1,256 (26,333 ) 1,292,833 — Other government-related securities 253,026 8,145 (6,835 ) 254,336 — States, municipals, and political subdivisions 1,756,865 6,416 (59,272 ) 1,704,009 (93 ) Corporate securities 29,673,641 480,875 (705,147 ) 29,449,369 — Preferred stock 94,362 376 (2,898 ) 91,840 — 38,409,559 543,068 (855,890 ) 38,096,737 (77 ) Equity securities 758,804 24,914 (7,291 ) 776,427 — Short-term investments 482,923 — — 482,923 — $ 39,651,286 $ 567,982 $ (863,181 ) $ 39,356,087 $ (77 ) As of December 31, 2016 Amortized Gross Unrealized Gains Gross Unrealized Losses Fair Value Total OTTI Recognized in OCI (1) (Dollars In Thousands) Fixed maturities: Residential mortgage-backed securities $ 1,913,413 $ 10,737 $ (25,667 ) $ 1,898,483 $ (9 ) Commercial mortgage-backed securities 1,850,620 2,528 (41,678 ) 1,811,470 — Other asset-backed securities 1,210,490 21,741 (20,698 ) 1,211,533 — U.S. government-related securities 1,308,192 422 (40,455 ) 1,268,159 — Other government-related securities 253,182 1,536 (14,797 ) 239,921 — States, municipals, and political subdivisions 1,760,837 1,224 (105,558 ) 1,656,503 — Corporate securities 28,801,768 153,715 (1,583,918 ) 27,371,565 (11,030 ) Preferred stock 94,362 — (8,519 ) 85,843 — 37,192,864 191,903 (1,841,290 ) 35,543,477 (11,039 ) Equity securities 761,340 7,751 (21,685 ) 747,406 — Short-term investments 279,782 — — 279,782 — $ 38,233,986 $ 199,654 $ (1,862,975 ) $ 36,570,665 $ (11,039 ) (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 | The amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities as of September 30, 2017 , 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. Available-for-sale Held-to-maturity Amortized Cost Fair Value Amortized Cost Fair Value (Dollars In Thousands) Due in one year or less $ 777,460 $ 778,156 $ — $ — Due after one year through five years 6,292,741 6,325,294 — — Due after five years through ten years 7,685,870 7,718,256 — — Due after ten years 23,653,488 23,275,031 2,730,995 2,796,603 $ 38,409,559 $ 38,096,737 $ 2,730,995 $ 2,796,603 |
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 or equity maturities. For The For The Nine Months Ended September 30, 2017 2017 Fixed Maturities Equity Securities Total Securities Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) Other-than-temporary impairments $ (366 ) $ — $ (366 ) $ (494 ) $ (2,630 ) $ (3,124 ) Non-credit impairment losses recorded in other comprehensive income 93 — 93 (7,765 ) — $ (7,765 ) Net impairment losses recognized in earnings $ (273 ) $ — $ (273 ) $ (8,259 ) $ (2,630 ) $ (10,889 ) For The For The 2016 2016 Fixed Maturities Equity Securities Total Securities Fixed Maturities Equity Securities Total Securities (Dollars In Thousands) Other-than-temporary impairments $ (1,898 ) $ — $ (1,898 ) $ (10,194 ) $ — $ (10,194 ) Non-credit impairment losses recorded in other comprehensive income (1,410 ) — (1,410 ) 3,302 — 3,302 Net impairment losses recognized in earnings $ (3,308 ) $ — $ (3,308 ) $ (6,892 ) $ — $ (6,892 ) |
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): For The For The 2017 2016 2017 2016 (Dollars In Thousands) Beginning balance $ 2,783 $ 964 $ 12,685 $ 22,761 Additions for newly impaired securities 266 1,721 266 4,777 Additions for previously impaired securities 6 1,521 2,791 2,046 Reductions for previously impaired securities due to a change in expected cash flows (37 ) (4 ) (12,724 ) (22,763 ) Reductions for previously impaired securities that were sold in the current period (600 ) — (600 ) (2,619 ) Ending balance $ 2,418 $ 4,202 $ 2,418 $ 4,202 |
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 maturity and equity securities, classified as available-for-sale is summarized as follows: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Fixed maturities $ 168,062 $ 295,651 $ 868,767 $ 1,777,330 Equity securities (891 ) (1,691 ) 20,512 7,749 |
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, 2017 and December 31, 2016 , are as follows: As of September 30, 2017 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 690,995 $ — $ (17,305 ) $ 673,690 $ — Steel City LLC 2,040,000 82,913 — 2,122,913 — $ 2,730,995 $ 82,913 $ (17,305 ) $ 2,796,603 $ — As of December 31, 2016 Amortized Gross Holding Gross Holding Fair Total OTTI (Dollars In Thousands) Fixed maturities: Securities issued by affiliates: Red Mountain LLC $ 654,177 $ — $ (67,222 ) $ 586,955 $ — Steel City LLC 2,116,000 30,385 — 2,146,385 — $ 2,770,177 $ 30,385 $ (67,222 ) $ 2,733,340 $ — |
FAIR VALUE OF FINANCIAL INSTR29
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
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, 2017 : Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 2,192,254 $ — $ 2,192,254 Commercial mortgage-backed securities — 1,921,429 — 1,921,429 Other asset-backed securities — 637,518 553,149 1,190,667 U.S. government-related securities 1,009,225 283,608 — 1,292,833 State, municipalities, and political subdivisions — 1,704,009 — 1,704,009 Other government-related securities — 254,336 — 254,336 Corporate securities — 28,824,816 624,553 29,449,369 Preferred stock 72,942 18,898 — 91,840 Total fixed maturity securities - available-for-sale 1,082,167 35,836,868 1,177,702 38,096,737 Fixed maturity securities - trading Residential mortgage-backed securities — 262,062 — 262,062 Commercial mortgage-backed securities — 145,653 — 145,653 Other asset-backed securities — 107,123 35,490 142,613 U.S. government-related securities 21,589 6,125 — 27,714 State, municipalities, and political subdivisions — 321,001 — 321,001 Other government-related securities — 64,067 — 64,067 Corporate securities — 1,709,216 5,524 1,714,740 Preferred stock 3,229 — — 3,229 Total fixed maturity securities - trading 24,818 2,615,247 41,014 2,681,079 Total fixed maturity securities 1,106,985 38,452,115 1,218,716 40,777,816 Equity securities 715,339 36 66,162 781,537 Other long-term investments (1) 61,072 380,512 130,352 571,936 Short-term investments 421,408 105,771 — 527,179 Total investments 2,304,804 38,938,434 1,415,230 42,658,468 Cash 257,562 — — 257,562 Other assets 29,927 — — 29,927 Assets related to separate accounts Variable annuity 13,763,971 — — 13,763,971 Variable universal life 996,375 — — 996,375 Total assets measured at fair value on a recurring basis $ 17,352,639 $ 38,938,434 $ 1,415,230 $ 57,706,303 Liabilities: Annuity account balances (2) $ — $ — $ 85,028 $ 85,028 Other liabilities (1) 23,775 206,307 736,413 966,495 Total liabilities measured at fair value on a recurring basis $ 23,775 $ 206,307 $ 821,441 $ 1,051,523 (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, 2016 : Level 1 Level 2 Level 3 Total (Dollars In Thousands) Assets: Fixed maturity securities - available-for-sale Residential mortgage-backed securities $ — $ 1,898,480 $ 3 $ 1,898,483 Commercial mortgage-backed securities — 1,811,470 — 1,811,470 Other asset-backed securities — 648,929 562,604 1,211,533 U.S. government-related securities 1,002,020 266,139 — 1,268,159 State, municipalities, and political subdivisions — 1,656,503 — 1,656,503 Other government-related securities — 239,921 — 239,921 Corporate securities — 26,707,519 664,046 27,371,565 Preferred stock 66,781 19,062 — 85,843 Total fixed maturity securities - available-for-sale 1,068,801 33,248,023 1,226,653 35,543,477 Fixed maturity securities - trading Residential mortgage-backed securities — 255,027 — 255,027 Commercial mortgage-backed securities — 149,683 — 149,683 Other asset-backed securities — 115,521 84,563 200,084 U.S. government-related securities 22,424 4,537 — 26,961 State, municipalities, and political subdivisions — 316,519 — 316,519 Other government-related securities — 63,012 — 63,012 Corporate securities — 1,619,097 5,492 1,624,589 Preferred stock 3,985 — — 3,985 Total fixed maturity securities - trading 26,409 2,523,396 90,055 2,639,860 Total fixed maturity securities 1,095,210 35,771,419 1,316,708 38,183,337 Equity securities 685,443 36 69,010 754,489 Other long-term investments (1) 82,420 335,498 124,325 542,243 Short-term investments 328,829 3,602 — 332,431 Total investments 2,191,902 36,110,555 1,510,043 39,812,500 Cash 348,182 — — 348,182 Other assets 23,830 — — 23,830 Assets related to separate accounts Variable annuity 13,244,252 — — 13,244,252 Variable universal life 895,925 — — 895,925 Total assets measured at fair value on a recurring basis $ 16,704,091 $ 36,110,555 $ 1,510,043 $ 54,324,689 Liabilities: Annuity account balances (2) $ — $ — $ 87,616 $ 87,616 Other liabilities (1) 13,004 163,974 571,843 748,821 Total liabilities measured at fair value on a recurring basis $ 13,004 $ 163,974 $ 659,459 $ 836,437 (1) Includes certain freestanding and embedded derivatives. (2) Represents liabilities related to fixed indexed annuities. |
Schedule of the Valuation Method for Material Financial Instruments Included in Level 3, as well as the Unobservable Inputs Used in the Valuation of the 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,005 Liquidation Liquidation value $90 - $97 ($95.02) Discounted cash flow Liquidity premium 0.51% - 1.29% (0.96%) Paydown rate 10.75% - 12.75% (11.34%) Corporate securities 615,576 Discounted cash flow Spread over treasury 0.35% - 4.35% (1.57%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 131,276 Actuarial cash flow model Mortality 91.1% to 106.6% 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 0.12% - 0.86% Embedded derivative - FIA 197,378 Actuarial cash flow model Expenses $146 per policy Asset Earned Rate 4.08% - 4.66% Withdrawal rate 1.5% prior to age 70, 100% of the RMD for ages 70+ Mortality 1994 MGDB table with company experience Lapse 1.0% - 30.0%, depending on duration/surrender charge period Nonperformance risk 0.12% - 0.86% Embedded derivative - IUL 69,081 Actuarial cash flow model Mortality 34% - 152% of 2015 VBT Primary Tables Lapse 0.5% - 10%, depending on duration/distribution channel and smoking class Nonperformance risk 0.12% - 0.86% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. 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: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars In Thousands) Assets: Other asset-backed securities $ 553,308 Liquidation Liquidation value $88 - $97.25 ($95.04) Corporate securities 638,279 Discounted cash flow Spread over treasury 0.31% - 4.50% (2.04%) Liabilities: (1) Embedded derivatives - GLWB (2) $ 115,370 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 0.18% - 1.09% Embedded derivative - FIA 147,368 Actuarial cash flow model Expenses $126 per policy Asset Earned Rate 4.08% - 4.66% 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 duration/surrender charge period Nonperformance risk 0.18% - 1.09% Embedded derivative - IUL 46,051 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% - 1.09% (1) Excludes modified coinsurance arrangements. (2) The fair value for the GLWB embedded derivative is presented as a net liability. |
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 the nine months ended September 30, 2016 , 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 Earnings related to Instruments still held at 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 (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Commercial mortgage-backed securities — — 7 — — 25,607 — — — — (7 ) 25,607 — 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 64,561 (4,135 ) (31,742 ) 89,089 (166,327 ) — — (106,732 ) (9,416 ) 1,332,235 — 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 64,561 (5,407 ) (31,742 ) 99,997 (181,976 ) — — (126,282 ) (9,481 ) 1,483,767 4,577 Equity securities 69,763 — — — — 22 — — — (36 ) 1 69,750 — Other long-term investments (1) 96,830 22,620 — (49,399 ) — — — — — — — 70,051 (26,779 ) Total investments 1,826,883 36,427 64,561 (54,806 ) (31,742 ) 100,019 (181,976 ) — — (126,318 ) (9,480 ) 1,623,568 (22,202 ) Total assets measured at fair value on a recurring basis $ 1,826,883 $ 36,427 $ 64,561 $ (54,806 ) $ (31,742 ) $ 100,019 $ (181,976 ) $ — $ — $ (126,318 ) $ (9,480 ) $ 1,623,568 $ (22,202 ) Liabilities: Annuity account balances (2) $ 92,512 $ — $ — $ (1,831 ) $ — $ — $ — $ 529 $ 7,264 $ — $ 1,249 $ 88,857 $ — Other liabilities (1) 585,556 105,751 — (459,466 ) — — — — — — — 939,271 (353,715 ) Total liabilities measured at fair value on a recurring basis $ 678,068 $ 105,751 $ — $ (461,297 ) $ — $ — $ — $ 529 $ 7,264 $ — $ 1,249 $ 1,028,128 $ (353,715 ) (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, 2017 , 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 Earnings related to Instruments still held at 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 (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 11,862 $ — $ 83 $ — $ — $ — $ — $ — $ — $ (11,944 ) $ (1 ) $ — $ — Commercial mortgage-backed securities — — — — — — — — — — — — — Other asset-backed securities 552,963 — 1,682 — (2,285 ) 100 (109 ) — — — 798 553,149 — Corporate securities 662,654 — 8,301 — (2,222 ) 5,071 (42,242 ) — — (5,486 ) (1,523 ) 624,553 — Total fixed maturity securities - available-for-sale 1,227,479 — 10,066 — (4,507 ) 5,171 (42,351 ) — — (17,430 ) (726 ) 1,177,702 — Fixed maturity securities - trading Other asset-backed securities 54,923 — — (353 ) — — (19,188 ) — — — 108 35,490 (209 ) Corporate securities 5,520 27 — — — — — — — — (23 ) 5,524 27 Total fixed maturity securities - trading 60,443 27 — (353 ) — — (19,188 ) — — — 85 41,014 (182 ) Total fixed maturity securities 1,287,922 27 10,066 (353 ) (4,507 ) 5,171 (61,539 ) — — (17,430 ) (641 ) 1,218,716 (182 ) Equity securities 66,300 — 31 — — — (169 ) — — — — 66,162 1 Other long-term investments (1) 120,023 10,331 — (2 ) — — — — — — — 130,352 10,329 Total investments 1,474,245 10,358 10,097 (355 ) (4,507 ) 5,171 (61,708 ) — — (17,430 ) (641 ) 1,415,230 10,148 Total assets measured at fair value on a recurring basis $ 1,474,245 $ 10,358 $ 10,097 $ (355 ) $ (4,507 ) $ 5,171 $ (61,708 ) $ — $ — $ (17,430 ) $ (641 ) $ 1,415,230 $ 10,148 Liabilities: Annuity account balances (2) $ 86,094 $ — $ — $ (977 ) $ — $ — $ — $ 9 $ 2,052 $ — $ — $ 85,028 $ — Other liabilities (1) 702,218 12,201 — (46,396 ) — — — — — — — 736,413 (34,195 ) Total liabilities measured at fair value on a recurring basis $ 788,312 $ 12,201 $ — $ (47,373 ) $ — $ — $ — $ 9 $ 2,052 $ — $ — $ 821,441 $ (34,195 ) (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, 2017 , 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 Earnings related to Instruments still held at 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 (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ 83 $ — $ — $ 11,862 $ (3 ) $ — $ — $ (11,944 ) $ (1 ) $ — $ — Commercial mortgage-backed securities — — — — — — — — — — — — — Other asset-backed securities 562,604 — 5,212 — (7,373 ) 100 (2,136 ) — — (6,643 ) 1,385 553,149 — Corporate securities 664,046 — 26,099 — (2,764 ) 85,822 (135,192 ) — — (10,353 ) (3,105 ) 624,553 — Total fixed maturity securities - available-for-sale 1,226,653 — 31,394 — (10,137 ) 97,784 (137,331 ) — — (28,940 ) (1,721 ) 1,177,702 — Fixed maturity securities - trading Other asset-backed securities 84,563 3,679 — (1,154 ) — — (52,516 ) — — — 918 35,490 3,397 Corporate securities 5,492 101 — — — — — — — — (69 ) 5,524 101 Total fixed maturity securities - trading 90,055 3,780 — (1,154 ) — — (52,516 ) — — — 849 41,014 3,498 Total fixed maturity securities 1,316,708 3,780 31,394 (1,154 ) (10,137 ) 97,784 (189,847 ) — — (28,940 ) (872 ) 1,218,716 3,498 Equity securities 69,010 — 52 (2,630 ) — — (273 ) — — 3 — 66,162 2 Other long-term investments (1) 124,325 21,452 — (15,425 ) — — — — — — — 130,352 6,027 Total investments 1,510,043 25,232 31,446 (19,209 ) (10,137 ) 97,784 (190,120 ) — — (28,937 ) (872 ) 1,415,230 9,527 Total assets measured at fair value on a recurring basis $ 1,510,043 $ 25,232 $ 31,446 $ (19,209 ) $ (10,137 ) $ 97,784 $ (190,120 ) $ — $ — $ (28,937 ) $ (872 ) $ 1,415,230 $ 9,527 Liabilities: Annuity account balances (2) $ 87,616 $ — $ — $ (2,973 ) $ — $ — $ — $ 402 $ 5,963 $ — $ — $ 85,028 $ — Other liabilities (1) 571,843 56,464 — (221,034 ) — — — — — — — 736,413 (164,570 ) Total liabilities measured at fair value on a recurring basis $ 659,459 $ 56,464 $ — $ (224,007 ) $ — $ — $ — $ 402 $ 5,963 $ — $ — $ 821,441 $ (164,570 ) (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 , 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 Earnings related to Instruments still held at 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 (Dollars In Thousands) Assets: Fixed maturity securities available-for-sale Residential mortgage-backed securities $ 3 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 3 $ — Commercial mortgage-backed securities — — 7 — — 25,607 — — — — (7 ) 25,607 — 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 — 32,681 — (3,354 ) 53,934 (26,013 ) — — (36,237 ) (5,063 ) 1,332,235 — 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 32,681 (71 ) (3,354 ) 53,934 (35,379 ) — — (47,480 ) (5,043 ) 1,483,767 3,231 Equity securities 69,750 — — — — — — — — — — 69,750 — Other long-term investments (1) 48,999 21,052 — — — — — — — — — 70,051 21,052 Total investments 1,603,587 24,693 32,681 (71 ) (3,354 ) 53,934 (35,379 ) — — (47,480 ) (5,043 ) 1,623,568 24,283 Total assets measured at fair value on a recurring basis $ 1,603,587 $ 24,693 $ 32,681 $ (71 ) $ (3,354 ) $ 53,934 $ (35,379 ) $ — $ — $ (47,480 ) $ (5,043 ) $ 1,623,568 $ 24,283 Liabilities: Annuity account balances (2) $ 88,820 $ — $ — $ (735 ) $ — $ — $ — $ 279 $ 2,226 $ — $ 1,249 $ 88,857 $ — Other liabilities (1) 972,084 90,166 — (57,353 ) — — — — — — — 939,271 32,813 Total liabilities measured at fair value on a recurring basis $ 1,060,904 $ 90,166 $ — $ (58,088 ) $ — $ — $ — $ 279 $ 2,226 $ — $ 1,249 $ 1,028,128 $ 32,813 (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: As of September 30, 2017 December 31, 2016 Fair Value Level Carrying Amounts Fair Values Carrying Amounts Fair Values (Dollars In Thousands) Assets: Mortgage loans on real estate 3 $ 6,528,890 $ 6,486,449 $ 6,132,125 $ 5,930,992 Policy loans 3 1,625,960 1,625,960 1,650,240 1,650,240 Fixed maturities, held-to-maturity (1) 3 2,730,995 2,796,603 2,770,177 2,733,340 Liabilities: Stable value product account balances 3 $ 4,793,890 $ 4,816,919 $ 3,501,636 $ 3,488,877 Future policy benefits and claims (2) 3 222,079 222,079 221,634 221,658 Other policyholders' funds (3) 3 132,565 133,347 135,367 136,127 Debt: (4) Bank borrowings 3 $ 170,000 $ 170,000 $ 170,000 $ 170,000 Senior Notes 2 950,505 936,497 993,285 937,074 Subordinated debt securities 2 495,255 496,065 441,202 443,355 Non-recourse funding obligations (5) 3 2,759,640 2,824,782 2,796,474 2,765,558 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) Single premium immediate annuity without life contingencies. (3) Supplementary contracts without life contingencies. (4) Excludes capital lease obligations of $1.5 million. (5) As of September 30, 2017, $2.7 billion in carrying amount and fair value related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. As of December 31, 2016, $2.7 billion in carrying amount and fair value related to non-recourse funding obligations issued by Golden Gate and Golden Gate V. |
DERIVATIVE FINANCIAL INSTRUME30
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 For The For The 2017 2016 2017 2016 (Dollars In Thousands) Derivatives related to VA contracts: Interest rate futures - VA $ 549 $ (7,002 ) $ 16,746 $ 62,065 Equity futures - VA (25,959 ) (41,836 ) (75,389 ) (66,392 ) Currency futures - VA (6,092 ) 934 (22,366 ) 5,888 Equity options - VA (23,307 ) (36,482 ) (76,376 ) (23,410 ) Interest rate swaptions - VA (292 ) (229 ) (2,423 ) (3,212 ) Interest rate swaps - VA 5,342 14,737 31,331 221,884 Total return swaps - VA (8,057 ) — (9,675 ) — Embedded derivative - GLWB 740 90,954 (15,904 ) (246,299 ) Total derivatives related to VA contracts (57,076 ) 21,076 (154,056 ) (49,476 ) Derivatives related to FIA contracts: Embedded derivative - FIA (18,606 ) (14,486 ) (40,351 ) (15,938 ) Equity futures - FIA 66 2,236 161 4,269 Volatility futures - FIA — — — — Equity options - FIA 11,242 6,583 29,511 1,756 Total derivatives related to FIA contracts (7,298 ) (5,667 ) (10,679 ) (9,913 ) Derivatives related to IUL contracts: Embedded derivative - IUL (297 ) 7,136 (10,958 ) 6,302 Equity futures - IUL 58 101 (878 ) (71 ) Equity options - IUL 1,975 1,607 6,437 1,821 Total derivatives related to IUL contracts 1,736 8,844 (5,399 ) 8,052 Embedded derivative - Modco reinsurance treaties (19,746 ) (24,187 ) (90,314 ) (105,362 ) Other derivatives 43 50 41 (50 ) Total realized gains (losses) - derivatives $ (82,341 ) $ 116 $ (260,407 ) $ (156,749 ) |
Components of the Gain or Loss on Derivatives that Qualify 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: 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 Realized investment expenses gains (losses) (Dollars In Thousands) For The Three Months Ended September 30, 2017 Foreign currency swaps $ 1,273 $ (38 ) $ — Total $ 1,273 $ (38 ) $ — For The Nine Months Ended September 30, 2017 0 0 0 Foreign currency swaps $ 55 $ (396 ) $ — Total $ 55 $ (396 ) $ — |
Information about the Nature and Accounting Treatment of the Company's Primary Derivative Financial Instruments and Location in and Effect on the Financial Statements | The table below presents 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: As of September 30, 2017 December 31, 2016 Notional Amount Fair Value Notional Amount Fair Value (Dollars In Thousands) Other long-term investments Cash flow hedges: Foreign currency swaps $ 117,178 $ 10,125 $ 117,178 $ 132 Derivatives not designated as hedging instruments: Interest rate swaps 1,365,000 59,641 1,135,000 71,644 Total return swaps — — — — Embedded derivative - Modco reinsurance treaties 64,444 1,008 64,123 2,573 Embedded derivative - GLWB 4,710,781 129,344 4,601,633 121,752 Interest rate futures 531,447 2,267 102,587 894 Equity futures 46,334 333 654,113 5,805 Currency futures 186,047 4,010 340,058 7,883 Equity options 4,846,984 364,936 3,944,444 328,908 Interest rate swaptions 225,000 81 225,000 2,503 Other 157 191 212 149 $ 12,093,372 $ 571,936 $ 11,184,348 $ 542,243 Other liabilities Cash flow hedges: Foreign currency swaps $ — $ — $ — $ — Derivatives not designated as hedging instruments: Interest rate swaps 497,500 267 575,000 10,208 Total return swaps 347,330 3,151 — — Embedded derivative - Modco reinsurance treaties 2,408,832 209,334 2,450,692 141,301 Embedded derivative - GLWB 4,855,482 260,620 5,962,044 237,122 Embedded derivative - FIA 1,845,942 197,378 1,496,346 147,368 Embedded derivative - IUL 150,277 69,081 103,838 46,051 Interest rate futures 606,501 6,401 993,842 6,611 Equity futures 340,041 14,854 102,667 2,907 Currency futures 115,382 1,958 — — Equity options 3,055,206 203,451 2,590,160 157,253 $ 14,222,493 $ 966,495 $ 14,274,589 $ 748,821 |
OFFSETTING OF ASSETS AND LIAB31
OFFSETTING OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Offsetting [Abstract] | |
Schedule of Derivative Instruments by Assets | Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 441,393 $ — $ 441,393 $ 211,435 $ 102,913 $ 127,045 Total derivatives, subject to a master netting arrangement or similar arrangement 441,393 — 441,393 211,435 102,913 127,045 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 1,008 — 1,008 — — 1,008 Embedded derivative - GLWB 129,344 — 129,344 — — 129,344 Other 191 — 191 — — 191 Total derivatives, not subject to a master netting arrangement or similar arrangement 130,543 — 130,543 — — 130,543 Total derivatives 571,936 — 571,936 211,435 102,913 257,588 Total Assets $ 571,936 $ — $ 571,936 $ 211,435 $ 102,913 $ 257,588 Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Received Net Amount (Dollars In Thousands) Offsetting of Assets Derivatives: Free-Standing derivatives $ 417,769 $ — $ 417,769 $ 171,384 $ 100,890 $ 145,495 Total derivatives, subject to a master netting arrangement or similar arrangement 417,769 — 417,769 171,384 100,890 145,495 Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 2,573 — 2,573 — — 2,573 Embedded derivative - GLWB 121,752 — 121,752 — — 121,752 Other 149 — 149 — — 149 Total derivatives, not subject to a master netting arrangement or similar arrangement 124,474 — 124,474 — — 124,474 Total derivatives 542,243 — 542,243 171,384 100,890 269,969 Total Assets $ 542,243 $ — $ 542,243 $ 171,384 $ 100,890 $ 269,969 |
Schedule of Derivative Instruments by Liabilities | Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 176,979 $ — $ 176,979 $ 171,384 $ 5,595 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 176,979 — 176,979 171,384 5,595 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 141,301 — 141,301 — — 141,301 Embedded derivative - GLWB 237,122 — 237,122 — — 237,122 Embedded derivative - FIA 147,368 — 147,368 — — 147,368 Embedded derivative - IUL 46,051 — 46,051 — — 46,051 Total derivatives, not subject to a master netting arrangement or similar arrangement 571,842 — 571,842 — — 571,842 Total derivatives 748,821 — 748,821 171,384 5,595 571,842 Repurchase agreements (1) 797,721 — 797,721 — — 797,721 Total Liabilities $ 1,546,542 $ — $ 1,546,542 $ 171,384 $ 5,595 $ 1,369,563 (1) Borrowings under repurchase agreements are for a term less than 90 days. Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts of Liabilities Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount (Dollars In Thousands) Offsetting of Liabilities Derivatives: Free-Standing derivatives $ 230,082 $ — $ 230,082 $ 211,435 $ 18,647 $ — Total derivatives, subject to a master netting arrangement or similar arrangement 230,082 — 230,082 211,435 18,647 — Derivatives not subject to a master netting arrangement or similar arrangement Embedded derivative - Modco reinsurance treaties 209,334 — 209,334 — — 209,334 Embedded derivative - GLWB 260,620 — 260,620 — — 260,620 Embedded derivative - FIA 197,378 — 197,378 — — 197,378 Embedded derivative - IUL 69,081 — 69,081 — — 69,081 Total derivatives, not subject to a master netting arrangement or similar arrangement 736,413 — 736,413 — — 736,413 Total derivatives 966,495 — 966,495 211,435 18,647 736,413 Repurchase agreements (1) 493,785 — 493,785 — — 493,785 Total Liabilities $ 1,460,280 $ — $ 1,460,280 $ 211,435 $ 18,647 $ 1,230,198 (1) Borrowings under repurchase agreements are for a term less than 90 days. |
MORTGAGE LOANS (Tables)
MORTGAGE LOANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
MORTGAGE LOANS | |
Schedule of Changes in the Allowance for Mortgage Loan Credit Losses | 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: For The Nine Months Ended September 30, 2017 (Dollars In Thousands) Beginning balance, December 31, 2016 $ 724 Charge offs (5,653 ) Recoveries (731 ) Provision 6,715 Ending balance, September 30, 2017 $ 1,055 |
Schedule of an Analysis of the Delinquent Loans | An analysis of the delinquent loans is shown in the following chart. Greater 30-59 Days 60-89 Days than 90 Days Total As of September 30, 2017 Delinquent Delinquent Delinquent Delinquent (Dollars In Thousands) Commercial mortgage loans $ 2,293 $ — $ 869 $ 3,162 Number of delinquent commercial mortgage loans 2 — 1 3 As of December 31, 2016 Commercial mortgage loans $ 3,669 $ — $ — $ 3,669 Number of delinquent commercial mortgage loans 4 — — 4 |
Schedule of Information Regarding Impaired Loans | For information regarding impaired loans, please refer to the following chart: Unpaid Average Interest Cash Basis Recorded Principal Related Recorded Income Interest As of September 30, 2017 Investment Balance Allowance Investment Recognized Income (Dollars In Thousands) Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,924 1,924 1,055 1,924 18 27 As of December 31, 2016 Commercial mortgage loans: With no related allowance recorded $ — $ — $ — $ — $ — $ — With an allowance recorded 1,819 1,819 724 1,819 96 96 |
Schedule of Loans in Troubled Debt Restructuring | Mortgage loans that were modified in a troubled debt restructuring as of September 30, 2017 and December 31, 2016 were as follows: Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment (Dollars In Thousands) As of September 30, 2017 Troubled debt restructuring: Commercial mortgage loans 2 $ 1,134 $ 1,134 As of December 31, 2016 Troubled debt restructuring: Commercial mortgage loans 1 $ 468 $ 468 |
DEBT AND OTHER OBLIGATIONS (Tab
DEBT AND OTHER OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Debt and Subordinated Debt Securities | Debt and subordinated debt securities are summarized as follows: As of September 30, 2017 December 31, 2016 Outstanding Principal Carrying Amounts Outstanding Principal Carrying Amounts (Dollars In Thousands) Debt (year of issue): Revolving Line of Credit $ 170,000 $ 170,000 $ 170,000 $ 170,000 Capital lease obligation 1,495 1,495 — — 6.40% Senior Notes (2007), due 2018 150,000 152,067 150,000 156,663 7.375% Senior Notes (2009), due 2019 400,000 440,569 400,000 454,688 8.45% Senior Notes (2009), due 2039 232,928 357,869 246,926 381,934 $ 954,423 $ 1,122,000 $ 966,926 $ 1,163,285 Subordinated debt securities (year of issue): 6.25% Subordinated Debentures (2012), due 2042, callable 2017 $ — $ — $ 287,500 $ 290,002 6.00% Subordinated Debentures (2012), due 2042, callable 2017 — — 150,000 151,200 5.35% Subordinated Debentures (2017), due 2052 500,000 495,255 — — $ 500,000 $ 495,255 $ 437,500 $ 441,202 |
Non-recourse Funding Obligations Outstanding | Non-recourse funding obligations outstanding as of September 30, 2017 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year-to-Date (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,040,000 $ 2,040,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 50,490 2052 3.84 % Golden Gate V Vermont Captive Insurance Company (2)(3) 605,000 666,729 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,421 2024 6.19 % Total $ 2,704,691 $ 2,759,640 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations Non-recourse funding obligations outstanding as of December 31, 2016 , on a consolidated basis, are shown in the following table: Issuer Outstanding Principal Carrying Value (1) Maturity Year Year-to-Date Weighted-Avg Interest Rate (Dollars In Thousands) Golden Gate Captive Insurance Company (2)(3) $ 2,116,000 $ 2,116,000 2039 4.75 % Golden Gate II Captive Insurance Company 58,600 49,983 2052 2.52 % Golden Gate V Vermont Captive Insurance Company (2)(3) 565,000 628,025 2037 5.12 % MONY Life Insurance Company (3) 1,091 2,466 2024 6.19 % Total $ 2,740,691 $ 2,796,474 (1) Carrying values include premiums and discounts and do not represent unpaid principal balances. (2) Obligations are issued to non-consolidated subsidiaries of the Company. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of PLICO. (3) Fixed rate obligations |
Schedule of Collateral Pledged for Repurchase Agreements | The following table provides the amount by asset class of securities of collateral pledged for repurchase agreements and securities that have been loaned as part of securities lending transactions as of September 30, 2017 and December 31, 2016: 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, 2017 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 322,986 $ 20,006 $ — $ — $ 342,992 Mortgage loans 206,796 — — — 206,796 Total repurchase agreements and repurchase-to-maturity transactions 529,782 20,006 — — 549,788 Securities lending transactions Corporate securities 97,385 — — — 97,385 Equity securities 2,621 — — — 2,621 Preferred stock 174 — — — 174 Total securities lending transactions 100,180 — — — 100,180 Total securities $ 629,962 $ 20,006 $ — $ — $ 649,968 Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements As of December 31, 2016 (Dollars In Thousands) Overnight and Up to 30 days 30-90 days Greater Than Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ 357,705 $ 23,758 $ — $ — $ 381,463 Corporate securities — — — — — Mortgage loans 480,269 — — — 480,269 Total securities $ 837,974 $ 23,758 $ — $ — $ 861,732 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Components of the Net Periodic Benefit Cost of the Company's Defined Benefit Pension Plan and Unfunded Excess Benefit Plan | Components of the net periodic benefit cost of the Company's defined benefit pension plan for the three and nine months ended September 30, 2017 and 2016 , are as follows: For The For The 2017 2016 2017 2016 Defined Defined Benefit Pension Plan Excess Benefit Plan Defined Benefit Pension Plan Excess Benefit Plan Defined (Dollars In Thousands) Service cost — benefits earned during the period $ 3,348 $ 334 $ 2,906 $ 311 $ 10,044 $ 1,002 $ 8,717 $ 1,102 Interest cost on projected benefit obligation 2,191 297 2,737 299 6,573 891 8,210 1,054 Expected return on plan assets (3,352 ) — (3,605 ) — (10,056 ) — (10,816 ) — Amortization of prior service cost — — — — — — — — Amortization of actuarial losses — 118 — 64 — 354 — 114 Preliminary net periodic benefit cost 2,187 749 2,038 674 6,561 2,247 6,111 2,270 Settlement/curtailment expense — — — 635 — — — 2,135 Total net periodic benefit costs $ 2,187 $ 749 $ 2,038 $ 1,309 $ 6,561 $ 2,247 $ 6,111 $ 4,405 |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [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, 2017 and December 31, 2016 . Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized (2) Accumulated Minimum Pension Liability Adjustment Total (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) Other comprehensive income (loss) before reclassifications 549,234 36 — 549,270 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings 1,174 — — 1,174 Amounts reclassified from accumulated other comprehensive income (loss) (1) 7,125 257 — 7,382 Net current-period other comprehensive income (loss) 557,533 293 — 557,826 Ending Balance, September 30, 2017 $ (98,789 ) $ 1,020 $ 1,072 $ (96,697 ) (1) See Reclassification table below for details. (2) As of September 30, 2017, net unrealized losses reported in AOCI were offset by $93.6 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. Changes in Accumulated Other Comprehensive Income (Loss) by Component Unrealized (2) Accumulated Minimum Pension Liability Adjustment Total (Dollars In Thousands, Net of Tax) Beginning Balance, December 31, 2015 $ (1,247,065 ) $ — $ 5,931 $ (1,241,134 ) Other comprehensive income (loss) before reclassifications 606,985 688 (5,659 ) 602,014 Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings (6,782 ) — — (6,782 ) Amounts reclassified from accumulated other (1) (9,460 ) 39 800 (8,621 ) Net current-period other comprehensive income (loss) 590,743 727 (4,859 ) 586,611 Ending Balance, December 31, 2016 $ (656,322 ) $ 727 $ 1,072 $ (654,523 ) (1) See Reclassification table below for details. (2) As of December 31, 2015 and December 31, 2016, net unrealized losses reported in AOCI were offset by $623.0 million and $424.1 million, respectively, 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, 2017 and 2016 . Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Three Months Ended September 30, 2017 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (38 ) Benefits and settlement expenses, net of reinsurance ceded (38 ) Total before tax 14 Tax (expense) or benefit $ (24 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 690 Realized investment gains (losses): All other investments Impairments recognized in earnings (273 ) Net impairment losses recognized in earnings 417 Total before tax (146 ) Tax (expense) or benefit $ 271 Net of tax (1) See Note 6, Derivative Financial Instruments for additional information Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Affected Line Item in the For The Nine Months Ended September 30, 2017 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Gains and losses on derivative instruments Net settlement (expense)/benefit (1) $ (396 ) Benefits and settlement expenses, net of reinsurance ceded (396 ) Total before tax 139 Tax (expense) or benefit $ (257 ) Net of tax Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 9,084 Realized investment gains (losses): All other investments Impairments recognized in earnings (10,889 ) Net impairment losses recognized in earnings (1,805 ) Total before tax 631 Tax (expense) or benefit $ (1,174 ) Net of tax (1) See Note 6, Derivative Financial Instruments for additional information Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Three Months Ended September 30, 2016 Income (Loss) Consolidated Condensed Statements of Income (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 Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (29 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (29 ) Total before tax 10 Tax (expense) or benefit $ (19 ) Net of tax Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Amount Other Comprehensive Affected Line Item in the For The Nine Months Ended September 30, 2016 Income (Loss) Consolidated Condensed Statements of Income (Dollars In Thousands) Unrealized gains and losses on available-for-sale securities Net investment gains (losses) $ 24,152 Realized investment gains (losses): All other investments Impairments recognized in earnings (6,892 ) Net impairment losses recognized in earnings 17,260 Total before tax (6,041 ) Tax (expense) or benefit $ 11,219 Net of tax Postretirement benefits liability adjustment Amortization of net actuarial gain/(loss) $ (29 ) Other operating expenses Amortization of prior service credit/(cost) — Other operating expenses Amortization of transition asset/(obligation) — Other operating expenses (29 ) Total before tax 10 Tax (expense) or benefit $ (19 ) Net of tax |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for the Company's Segments | The following tables presents a summary of results and reconciles pre-tax adjusted operating income (loss) to consolidated income before income tax and net income: For The For The 2017 2016 2017 2016 (Dollars In Thousands) Revenues Life Marketing $ 424,165 $ 409,423 $ 1,252,603 $ 1,231,397 Acquisitions 375,819 391,017 1,164,650 1,269,672 Annuities 97,488 174,798 318,452 410,455 Stable Value Products 49,933 27,380 132,863 83,519 Asset Protection 83,597 69,306 246,142 201,041 Corporate and Other 53,386 51,722 162,042 170,876 Total revenues $ 1,084,388 $ 1,123,646 $ 3,276,752 $ 3,366,960 Pre-tax Adjusted Operating Income (Loss) Life Marketing $ 8,969 $ (1,306 ) $ 51,157 $ 36,957 Acquisitions 62,880 70,157 184,825 184,095 Annuities 62,000 53,666 161,585 164,196 Stable Value Products 27,992 14,700 74,258 44,326 Asset Protection 6,963 5,455 19,098 16,216 Corporate and Other (26,870 ) (29,774 ) (67,466 ) (60,231 ) Pre-tax adjusted operating income 141,934 112,898 423,457 385,559 Realized (losses) gains on investments and derivatives (31,084 ) 20,181 (74,490 ) 88,023 Income before income tax 110,850 133,079 348,967 473,582 Income tax expense (28,308 ) (39,785 ) (106,743 ) (152,820 ) Net income $ 82,542 $ 93,294 $ 242,224 $ 320,762 Pre-tax adjusted operating income $ 141,934 $ 112,898 $ 423,457 $ 385,559 Adjusted operating income tax (expense) benefit (39,187 ) (32,722 ) (132,815 ) (121,982 ) After-tax adjusted operating income 102,747 80,176 290,642 263,577 Realized (losses) gains on investments and derivatives (31,084 ) 20,181 (74,490 ) 88,023 Income tax benefit (expense) on adjustments 10,879 (7,063 ) 26,072 (30,838 ) Net income $ 82,542 $ 93,294 $ 242,224 $ 320,762 Realized investment (losses) gains: Derivative financial instruments $ (82,341 ) $ 116 $ (260,407 ) $ (156,749 ) All other investments 18,150 24,152 94,708 194,663 Net impairment losses recognized in earnings (273 ) (3,308 ) (10,889 ) (6,892 ) Less: related amortization (1) (12,123 ) 21,532 (38,570 ) 4,409 Less: VA GLWB economic cost (21,257 ) (20,753 ) (63,528 ) (61,410 ) Realized (losses) gains on investments and derivatives $ (31,084 ) $ 20,181 $ (74,490 ) $ 88,023 (1) Includes amortization of DAC/VOBA and benefits and settlement expenses that are impacted by realized gains (losses). Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,700,406 $ 19,681,306 $ 20,617,917 $ 4,664,251 DAC and VOBA 1,295,708 77,157 752,540 7,605 Other intangibles 287,120 35,187 173,450 8,222 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 16,483,508 $ 19,808,174 $ 21,880,584 $ 4,793,891 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 914,658 $ 14,773,285 $ 75,351,823 DAC and VOBA 25,806 — 2,158,816 Other intangibles 135,895 33,714 673,588 Goodwill 128,182 — 793,470 Total assets $ 1,204,541 $ 14,806,999 $ 78,977,697 Operating Segment Assets (Dollars In Thousands) Life Marketing Acquisitions Annuities Stable Value Products Investments and other assets $ 14,050,170 $ 19,679,690 $ 20,243,333 $ 3,373,646 DAC and VOBA 1,218,944 106,532 655,618 5,455 Other intangibles 301,399 37,103 183,449 8,722 Goodwill 200,274 14,524 336,677 113,813 Total assets $ 15,770,787 $ 19,837,849 $ 21,419,077 $ 3,501,636 Asset Protection Corporate and Other Total Consolidated Investments and other assets $ 1,013,399 $ 13,141,759 $ 71,501,997 DAC and VOBA 33,280 — 2,019,829 Other intangibles 143,865 13,545 688,083 Goodwill 128,182 — 793,470 Total assets $ 1,318,726 $ 13,155,304 $ 75,003,379 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Forecast | Jan. 01, 2018USD ($) |
ASU No. 2016-01 - Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase (decrease) to retained earnings | $ 11,500,000 |
Minimum | ASU No. 2014-09 - Revenue from Contracts with Customers | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase (decrease) to retained earnings | 72,000,000 |
Maximum | ASU No. 2014-09 - Revenue from Contracts with Customers | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase (decrease) to retained earnings | $ 82,000,000 |
MONY CLOSED BLOCK OF BUSINESS -
MONY CLOSED BLOCK OF BUSINESS - Summary of Financial Information for the Closed Block (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Closed block liabilities | ||||
Future policy benefits, policyholders’ account balances and other policyholder liabilities | $ 5,814,527 | $ 5,896,355 | ||
Policyholder dividend obligation | 136,004 | 31,932 | $ 264,107 | $ 0 |
Other liabilities | 76,176 | 40,007 | ||
Total closed block liabilities | 6,026,707 | 5,968,294 | ||
Closed block assets | ||||
Fixed maturities, available-for-sale, at fair value | 4,549,322 | 4,440,105 | ||
Mortgage loans on real estate | 130,521 | 201,088 | ||
Policy loans | 707,293 | 712,959 | ||
Cash | 148,612 | 108,270 | ||
Other assets | 141,740 | 135,794 | ||
Total closed block assets | 5,677,488 | 5,598,216 | ||
Excess of reported closed block liabilities over closed block assets | 349,219 | 370,078 | ||
Portion of above representing accumulated other comprehensive income: | ||||
Net unrealized investment gains (losses) net of policyholder dividend obligation: $(55,231) and $(197,450); and net of income tax: $19,331 and $69,107 | 0 | 0 | ||
Future earnings to be recognized from closed block assets and closed block liabilities | 349,219 | 370,078 | ||
Policyholder dividend obligation gain (loss) | (55,231) | (197,450) | ||
Income tax | $ 19,331 | $ 69,107 |
MONY CLOSED BLOCK OF BUSINESS39
MONY CLOSED BLOCK OF BUSINESS - Schedule of Reconciliation of the Policyholder Dividend Obligation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Closed Block Dividend Obligation [Roll Forward] | ||
Policyholder dividend obligation, beginning of period | $ 31,932 | $ 0 |
Applicable to net revenue (losses) | (38,147) | (36,707) |
Change in net unrealized investment gains (losses) allocated to the policyholder dividend obligation | 142,219 | 300,814 |
Policyholder dividend obligation, end of period | $ 136,004 | $ 264,107 |
MONY CLOSED BLOCK OF BUSINESS40
MONY CLOSED BLOCK OF BUSINESS - Schedule of Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Premiums and other income | $ 40,962 | $ 44,043 | $ 128,697 | $ 135,282 |
Net investment income | 50,780 | 53,582 | 153,481 | 156,458 |
Net investment gains | 341 | 326 | 448 | 963 |
Total revenues | 92,083 | 97,951 | 282,626 | 292,703 |
Benefits and other deductions | ||||
Benefits and settlement expenses | 81,721 | 88,143 | 249,319 | 260,227 |
Other operating expenses | 621 | 537 | 1,216 | 2,214 |
Total benefits and other deductions | 82,342 | 88,680 | 250,535 | 262,441 |
Net revenues before income taxes | 9,741 | 9,271 | 32,091 | 30,262 |
Income tax expense | 3,409 | 3,245 | 11,232 | 10,591 |
Net revenues | $ 6,332 | $ 6,026 | $ 20,859 | $ 19,671 |
INVESTMENT OPERATIONS - Summary
INVESTMENT OPERATIONS - Summary of Net Realized Investment Gains (Losses) for all Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Fixed maturities | $ 1,042 | $ 1,665 | $ 10,482 | $ 24,116 |
Equity securities | (352) | 0 | (1,398) | 36 |
Impairments | (273) | (3,308) | (10,889) | (6,892) |
Modco trading portfolio | 19,399 | 23,995 | 93,181 | 178,353 |
Other investments | (1,939) | (1,508) | (7,557) | (7,842) |
Total realized gains (losses) - investments | $ 17,877 | $ 20,844 | $ 83,819 | $ 187,771 |
INVESTMENT OPERATIONS - Schedul
INVESTMENT OPERATIONS - Schedule of Gross Realized Gains (Losses) on Investments Available-for-Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 1,933 | $ 3,223 | $ 14,968 | $ 31,023 |
Impairment losses | (273) | (3,308) | (10,889) | (6,892) |
Other realized losses | $ (1,243) | $ (1,558) | $ (5,884) | $ (6,871) |
INVESTMENT OPERATIONS - Sched43
INVESTMENT OPERATIONS - Schedule of Fair Value (Proceeds) and Gains (Losses) Realized on Securities Sold in an Unrealized Gain/Loss Position (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Fair value (proceeds) of securities in an unrealized gain position | $ 121,459 | $ 167,272 | $ 566,064 | $ 990,066 |
Gains realized on the sale of securities in an unrealized gain position | 1,933 | 3,223 | 14,967 | 31,023 |
Fair value (proceeds) of securities in an unrealized loss position | 37,186 | 7,105 | 121,450 | 67,688 |
Losses realized on the sale of securities in an unrealized loss position | $ (1,243) | $ (1,558) | $ (5,884) | $ (6,871) |
INVESTMENT OPERATIONS - Sched44
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||
Amortized Cost | $ 39,651,286 | $ 38,233,986 |
Gross Unrealized Gains | 567,982 | 199,654 |
Gross Unrealized Losses | (863,181) | (1,862,975) |
Fair Value | 39,356,087 | 36,570,665 |
Total OTTI Recognized in OCI | (77) | (11,039) |
Residential mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 2,187,460 | 1,913,413 |
Gross Unrealized Gains | 22,141 | 10,737 |
Gross Unrealized Losses | (17,347) | (25,667) |
Fair Value | 2,192,254 | 1,898,483 |
Total OTTI Recognized in OCI | 16 | (9) |
Commercial mortgage-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,939,832 | 1,850,620 |
Gross Unrealized Gains | 6,167 | 2,528 |
Gross Unrealized Losses | (24,570) | (41,678) |
Fair Value | 1,921,429 | 1,811,470 |
Total OTTI Recognized in OCI | 0 | 0 |
Other asset-backed securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,186,463 | 1,210,490 |
Gross Unrealized Gains | 17,692 | 21,741 |
Gross Unrealized Losses | (13,488) | (20,698) |
Fair Value | 1,190,667 | 1,211,533 |
Total OTTI Recognized in OCI | 0 | 0 |
U.S. government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 1,317,910 | 1,308,192 |
Gross Unrealized Gains | 1,256 | 422 |
Gross Unrealized Losses | (26,333) | (40,455) |
Fair Value | 1,292,833 | 1,268,159 |
Total OTTI Recognized in OCI | 0 | 0 |
Other government-related securities | ||
Investment [Line Items] | ||
Amortized Cost | 253,026 | 253,182 |
Gross Unrealized Gains | 8,145 | 1,536 |
Gross Unrealized Losses | (6,835) | (14,797) |
Fair Value | 254,336 | 239,921 |
Total OTTI Recognized in OCI | 0 | 0 |
States, municipals, and political subdivisions | ||
Investment [Line Items] | ||
Amortized Cost | 1,756,865 | 1,760,837 |
Gross Unrealized Gains | 6,416 | 1,224 |
Gross Unrealized Losses | (59,272) | (105,558) |
Fair Value | 1,704,009 | 1,656,503 |
Total OTTI Recognized in OCI | (93) | 0 |
Corporate securities | ||
Investment [Line Items] | ||
Amortized Cost | 29,673,641 | 28,801,768 |
Gross Unrealized Gains | 480,875 | 153,715 |
Gross Unrealized Losses | (705,147) | (1,583,918) |
Fair Value | 29,449,369 | 27,371,565 |
Total OTTI Recognized in OCI | 0 | (11,030) |
Preferred stock | ||
Investment [Line Items] | ||
Amortized Cost | 94,362 | 94,362 |
Gross Unrealized Gains | 376 | 0 |
Gross Unrealized Losses | (2,898) | (8,519) |
Fair Value | 91,840 | 85,843 |
Total OTTI Recognized in OCI | 0 | 0 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 38,409,559 | 37,192,864 |
Gross Unrealized Gains | 543,068 | 191,903 |
Gross Unrealized Losses | (855,890) | (1,841,290) |
Fair Value | 38,096,737 | 35,543,477 |
Total OTTI Recognized in OCI | (77) | (11,039) |
Equity securities | ||
Investment [Line Items] | ||
Amortized Cost | 758,804 | 761,340 |
Gross Unrealized Gains | 24,914 | 7,751 |
Gross Unrealized Losses | (7,291) | (21,685) |
Fair Value | 776,427 | 747,406 |
Total OTTI Recognized in OCI | 0 | 0 |
Short-term investments | ||
Investment [Line Items] | ||
Amortized Cost | 482,923 | 279,782 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 482,923 | 279,782 |
Total OTTI Recognized in OCI | $ 0 | $ 0 |
INVESTMENT OPERATIONS - Additio
INVESTMENT OPERATIONS - Additional Information (Details) | Jan. 15, 2016note | Sep. 30, 2017USD ($)positionsubsidiary | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)positionsubsidiary | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)subsidiary |
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | $ 624,633,000 | $ 624,633,000 | $ 1,196,195,000 | |||
Total positions that were in an unrealized loss position | position | 1,742 | 1,742 | ||||
Fair Value | $ 39,356,087,000 | $ 39,356,087,000 | 36,570,665,000 | |||
Available-for-sale securities, amortized cost | 39,651,286,000 | 39,651,286,000 | $ 38,233,986,000 | |||
Other-than-temporary impairments on held-to-maturity securities | $ 0 | $ 0 | $ 0 | $ 0 | ||
Red Mountain and Steel City | ||||||
Investment [Line Items] | ||||||
Number of wholly owned subsidiaries that were determined to be VIEs | subsidiary | 2 | 2 | 2 | |||
Red Mountain LLC | ||||||
Investment [Line Items] | ||||||
Ownership through an affiliate (as a percent) | 100.00% | |||||
Risk of loss related to the VIE limited to the entity's investment | $ 10,000 | $ 10,000 | ||||
Payments made | $ 0 | |||||
Steel City LLC | ||||||
Investment [Line Items] | ||||||
Ownership through an affiliate (as a percent) | 100.00% | |||||
Risk of loss related to the VIE limited to the entity's investment | 10,000 | $ 10,000 | ||||
Payments made | 0 | |||||
Number of notes issued | note | 3 | |||||
Below investment grade | ||||||
Investment [Line Items] | ||||||
Trading securities | 240,700,000 | 240,700,000 | ||||
Fair Value | 1,900,000,000 | 1,900,000,000 | ||||
Available-for-sale securities, amortized cost | 1,900,000,000 | 1,900,000,000 | ||||
Securities not publicly traded | 338,400,000 | 338,400,000 | ||||
Fixed maturities | ||||||
Investment [Line Items] | ||||||
Trading securities | 2,700,000,000 | 2,700,000,000 | $ 2,600,000,000 | |||
Other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell | 0 | 0 | 0 | 0 | ||
Fair Value | 38,096,737,000 | 38,096,737,000 | 35,543,477,000 | |||
Available-for-sale securities, amortized cost | 38,409,559,000 | 38,409,559,000 | 37,192,864,000 | |||
Gross unrecognized holding gains | 82,913,000 | 82,913,000 | 30,385,000 | |||
Gross unrecognized holding losses | 17,305,000 | 17,305,000 | 67,222,000 | |||
Equity securities | ||||||
Investment [Line Items] | ||||||
Trading securities | 5,100,000 | 5,100,000 | 7,100,000 | |||
Other-than-temporary impairments related to fixed maturities or equity securities that the Company intended to sell or expected to be required to sell | 0 | $ 0 | 0 | $ 0 | ||
Gross unrealized loss greater than twelve months | 5,046,000 | 5,046,000 | 6,412,000 | |||
Fair Value | 776,427,000 | 776,427,000 | 747,406,000 | |||
Available-for-sale securities, amortized cost | 758,804,000 | 758,804,000 | 761,340,000 | |||
Short-term investments | ||||||
Investment [Line Items] | ||||||
Trading securities | 44,300,000 | 44,300,000 | 52,600,000 | |||
Fair Value | 482,923,000 | 482,923,000 | 279,782,000 | |||
Available-for-sale securities, amortized cost | 482,923,000 | 482,923,000 | 279,782,000 | |||
Residential mortgage-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 2,137,000 | 2,137,000 | 4,117,000 | |||
Fair Value | 2,192,254,000 | 2,192,254,000 | 1,898,483,000 | |||
Available-for-sale securities, amortized cost | 2,187,460,000 | 2,187,460,000 | 1,913,413,000 | |||
Commercial mortgage-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 4,634,000 | 4,634,000 | 4,013,000 | |||
Fair Value | 1,921,429,000 | 1,921,429,000 | 1,811,470,000 | |||
Available-for-sale securities, amortized cost | 1,939,832,000 | 1,939,832,000 | 1,850,620,000 | |||
Other asset-backed securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 8,424,000 | $ 8,424,000 | $ 11,407,000 | |||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | 97.00% | ||||
Fair Value | 1,190,667,000 | $ 1,190,667,000 | $ 1,211,533,000 | |||
Available-for-sale securities, amortized cost | 1,186,463,000 | 1,186,463,000 | 1,210,490,000 | |||
Other government-related securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 6,548,000 | 6,548,000 | 11,890,000 | |||
Fair Value | 254,336,000 | 254,336,000 | 239,921,000 | |||
Available-for-sale securities, amortized cost | 253,026,000 | 253,026,000 | 253,182,000 | |||
States, municipals, and political subdivisions | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 36,880,000 | 36,880,000 | 41,749,000 | |||
Fair Value | 1,704,009,000 | 1,704,009,000 | 1,656,503,000 | |||
Available-for-sale securities, amortized cost | 1,756,865,000 | 1,756,865,000 | 1,760,837,000 | |||
Corporate securities | ||||||
Investment [Line Items] | ||||||
Gross unrealized loss greater than twelve months | 553,638,000 | 553,638,000 | 1,114,729,000 | |||
Fair Value | 29,449,369,000 | 29,449,369,000 | 27,371,565,000 | |||
Available-for-sale securities, amortized cost | $ 29,673,641,000 | $ 29,673,641,000 | $ 28,801,768,000 |
INVESTMENT OPERATIONS - Sched46
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Fixed Maturities, by Expected Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Held-to-maturity, Fair Value | ||
Fair Value | $ 2,796,603 | $ 2,733,340 |
Fixed maturities | ||
Available-for-sale, Amortized Cost | ||
Due in one year or less | 777,460 | |
Due after one year through five years | 6,292,741 | |
Due after five years through ten years | 7,685,870 | |
Due after ten years | 23,653,488 | |
Amortized Cost | 38,409,559 | |
Available-for-sale, Fair Value | ||
Due in one year or less | 778,156 | |
Due after one year through five years | 6,325,294 | |
Due after five years through ten years | 7,718,256 | |
Due after ten years | 23,275,031 | |
Fair Value | 38,096,737 | |
Held-to-maturity, Amortized Cost | ||
Due in one year or less | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 2,730,995 | |
Amortized Cost | 2,730,995 | 2,770,177 |
Held-to-maturity, Fair Value | ||
Due in one year or less | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 2,796,603 | |
Fair Value | $ 2,796,603 | $ 2,733,340 |
INVESTMENT OPERATIONS - Sched47
INVESTMENT OPERATIONS - Schedule of Other-than-Temporary Impairments of Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investment [Line Items] | ||||
Other-than-temporary impairments | $ (366) | $ (1,898) | $ (3,124) | $ (10,194) |
Non-credit impairment losses recorded in other comprehensive income | 93 | (1,410) | (7,765) | 3,302 |
Net impairment losses recognized in earnings | (273) | (3,308) | (10,889) | (6,892) |
Fixed maturities | ||||
Investment [Line Items] | ||||
Other-than-temporary impairments | (366) | (1,898) | (494) | (10,194) |
Non-credit impairment losses recorded in other comprehensive income | 93 | (1,410) | (7,765) | 3,302 |
Net impairment losses recognized in earnings | (273) | (3,308) | (8,259) | (6,892) |
Equity securities | ||||
Investment [Line Items] | ||||
Other-than-temporary impairments | 0 | 0 | (2,630) | 0 |
Non-credit impairment losses recorded in other comprehensive income | 0 | 0 | 0 | 0 |
Net impairment losses recognized in earnings | $ 0 | $ 0 | $ (2,630) | $ 0 |
INVESTMENT OPERATIONS - Sched48
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||||
Beginning balance | $ 2,783 | $ 964 | $ 12,685 | $ 22,761 |
Additions for newly impaired securities | 266 | 1,721 | 266 | 4,777 |
Additions for previously impaired securities | 6 | 1,521 | 2,791 | 2,046 |
Reductions for previously impaired securities due to a change in expected cash flows | (37) | (4) | (12,724) | (22,763) |
Reductions for previously impaired securities that were sold in the current period | (600) | 0 | (600) | (2,619) |
Ending balance | $ 2,418 | $ 4,202 | $ 2,418 | $ 4,202 |
INVESTMENT OPERATIONS - Sched49
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) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value | ||
Less Than 12 Months | $ 12,469,365 | $ 18,267,283 |
12 Months or More | 9,776,361 | 10,957,881 |
Total | 22,245,726 | 29,225,164 |
Unrealized Loss | ||
Less Than 12 Months | (238,548) | (666,780) |
12 Months or More | (624,633) | (1,196,195) |
Total | (863,181) | (1,862,975) |
Residential mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 1,044,494 | 1,060,569 |
12 Months or More | 88,573 | 170,826 |
Total | 1,133,067 | 1,231,395 |
Unrealized Loss | ||
Less Than 12 Months | (15,210) | (21,550) |
12 Months or More | (2,137) | (4,117) |
Total | (17,347) | (25,667) |
Commercial mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 1,282,643 | 1,452,146 |
12 Months or More | 159,684 | 100,475 |
Total | 1,442,327 | 1,552,621 |
Unrealized Loss | ||
Less Than 12 Months | (19,936) | (37,665) |
12 Months or More | (4,634) | (4,013) |
Total | (24,570) | (41,678) |
Other asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 202,097 | 323,706 |
12 Months or More | 170,747 | 176,792 |
Total | 372,844 | 500,498 |
Unrealized Loss | ||
Less Than 12 Months | (5,064) | (9,291) |
12 Months or More | (8,424) | (11,407) |
Total | (13,488) | (20,698) |
U.S. government-related securities | ||
Fair Value | ||
Less Than 12 Months | 1,090,531 | 1,237,942 |
12 Months or More | 85,948 | 3 |
Total | 1,176,479 | 1,237,945 |
Unrealized Loss | ||
Less Than 12 Months | (21,099) | (40,454) |
12 Months or More | (5,234) | (1) |
Total | (26,333) | (40,455) |
Other government-related securities | ||
Fair Value | ||
Less Than 12 Months | 44,015 | 98,412 |
12 Months or More | 84,524 | 79,393 |
Total | 128,539 | 177,805 |
Unrealized Loss | ||
Less Than 12 Months | (287) | (2,907) |
12 Months or More | (6,548) | (11,890) |
Total | (6,835) | (14,797) |
States, municipals, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 819,311 | 1,062,368 |
12 Months or More | 615,181 | 548,254 |
Total | 1,434,492 | 1,610,622 |
Unrealized Loss | ||
Less Than 12 Months | (22,392) | (63,809) |
12 Months or More | (36,880) | (41,749) |
Total | (59,272) | (105,558) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 7,825,478 | 12,553,514 |
12 Months or More | 8,487,852 | 9,793,579 |
Total | 16,313,330 | 22,347,093 |
Unrealized Loss | ||
Less Than 12 Months | (151,509) | (469,189) |
12 Months or More | (553,638) | (1,114,729) |
Total | (705,147) | (1,583,918) |
Preferred stock | ||
Fair Value | ||
Less Than 12 Months | 52,294 | 66,781 |
12 Months or More | 28,846 | 19,062 |
Total | 81,140 | 85,843 |
Unrealized Loss | ||
Less Than 12 Months | (806) | (6,642) |
12 Months or More | (2,092) | (1,877) |
Total | (2,898) | (8,519) |
Equities | ||
Fair Value | ||
Less Than 12 Months | 108,502 | 411,845 |
12 Months or More | 55,006 | 69,497 |
Total | 163,508 | 481,342 |
Unrealized Loss | ||
Less Than 12 Months | (2,245) | (15,273) |
12 Months or More | (5,046) | (6,412) |
Total | $ (7,291) | $ (21,685) |
INVESTMENT OPERATIONS - Summa50
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fixed maturities | ||||
Investment Holdings [Line Items] | ||||
Change in unrealized gains (losses), net of income tax | $ 168,062 | $ 295,651 | $ 868,767 | $ 1,777,330 |
Equity securities | ||||
Investment Holdings [Line Items] | ||||
Change in unrealized gains (losses), net of income tax | $ (891) | $ (1,691) | $ 20,512 | $ 7,749 |
INVESTMENT OPERATIONS - Sched51
INVESTMENT OPERATIONS - Schedule of Amortized Cost and Fair Value of the Company's Investments Classified as Held-to-Maturity (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Investment [Line Items] | ||
Fair Value | $ 2,796,603 | $ 2,733,340 |
Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 2,730,995 | 2,770,177 |
Gross Unrecognized Holding Gains | 82,913 | 30,385 |
Gross Unrecognized Holding Losses | (17,305) | (67,222) |
Fair Value | 2,796,603 | 2,733,340 |
Total OTTI Recognized in OCI | 0 | 0 |
Red Mountain LLC | Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 690,995 | 654,177 |
Gross Unrecognized Holding Gains | 0 | 0 |
Gross Unrecognized Holding Losses | (17,305) | (67,222) |
Fair Value | 673,690 | 586,955 |
Total OTTI Recognized in OCI | 0 | 0 |
Steel City LLC | Fixed maturities | ||
Investment [Line Items] | ||
Amortized Cost | 2,040,000 | 2,116,000 |
Gross Unrecognized Holding Gains | 82,913 | 30,385 |
Gross Unrecognized Holding Losses | 0 | 0 |
Fair Value | 2,122,913 | 2,146,385 |
Total OTTI Recognized in OCI | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR52
FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Fixed maturity securities - available-for-sale | $ 39,356,087 | $ 36,570,665 |
Total fixed maturity securities | 40,777,816 | 38,183,337 |
Equity securities | 781,537 | 754,489 |
Other long-term investments | 441,393 | 417,769 |
Short-term investments | 527,179 | 332,431 |
Assets related to separate accounts | ||
Variable annuity | 13,763,971 | 13,244,252 |
Variable universal life | 996,375 | 895,925 |
Liabilities: | ||
Other liabilities | 230,082 | 176,979 |
Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 38,096,737 | 35,543,477 |
Fixed maturity securities - trading | 2,700,000 | 2,600,000 |
Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 2,192,254 | 1,898,483 |
Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,921,429 | 1,811,470 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,190,667 | 1,211,533 |
States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,704,009 | 1,656,503 |
Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 254,336 | 239,921 |
Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 29,449,369 | 27,371,565 |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Total investments | 553,005 | 553,308 |
Level 3 | Corporate securities | ||
Assets: | ||
Total investments | 615,576 | 638,279 |
Measured at fair value on a recurring basis | ||
Assets: | ||
Total fixed maturity securities | 40,777,816 | 38,183,337 |
Equity securities | 781,537 | 754,489 |
Other long-term investments | 571,936 | 542,243 |
Short-term investments | 527,179 | 332,431 |
Total investments | 42,658,468 | 39,812,500 |
Cash | 257,562 | 348,182 |
Other assets | 29,927 | 23,830 |
Assets related to separate accounts | ||
Variable annuity | 13,763,971 | 13,244,252 |
Variable universal life | 996,375 | 895,925 |
Total assets measured at fair value on a recurring basis | 57,706,303 | 54,324,689 |
Liabilities: | ||
Annuity account balances | 85,028 | 87,616 |
Other liabilities | 966,495 | 748,821 |
Total liabilities measured at fair value on a recurring basis | 1,051,523 | 836,437 |
Measured at fair value on a recurring basis | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 38,096,737 | 35,543,477 |
Fixed maturity securities - trading | 2,681,079 | 2,639,860 |
Measured at fair value on a recurring basis | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 2,192,254 | 1,898,483 |
Fixed maturity securities - trading | 262,062 | 255,027 |
Measured at fair value on a recurring basis | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,921,429 | 1,811,470 |
Fixed maturity securities - trading | 145,653 | 149,683 |
Measured at fair value on a recurring basis | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,190,667 | 1,211,533 |
Fixed maturity securities - trading | 142,613 | 200,084 |
Measured at fair value on a recurring basis | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,292,833 | 1,268,159 |
Fixed maturity securities - trading | 27,714 | 26,961 |
Measured at fair value on a recurring basis | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,704,009 | 1,656,503 |
Fixed maturity securities - trading | 321,001 | 316,519 |
Measured at fair value on a recurring basis | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 254,336 | 239,921 |
Fixed maturity securities - trading | 64,067 | 63,012 |
Measured at fair value on a recurring basis | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 29,449,369 | 27,371,565 |
Fixed maturity securities - trading | 1,714,740 | 1,624,589 |
Measured at fair value on a recurring basis | Preferred stock | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 91,840 | 85,843 |
Fixed maturity securities - trading | 3,229 | 3,985 |
Measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total fixed maturity securities | 1,106,985 | 1,095,210 |
Equity securities | 715,339 | 685,443 |
Other long-term investments | 61,072 | 82,420 |
Short-term investments | 421,408 | 328,829 |
Total investments | 2,304,804 | 2,191,902 |
Cash | 257,562 | 348,182 |
Other assets | 29,927 | 23,830 |
Assets related to separate accounts | ||
Variable annuity | 13,763,971 | 13,244,252 |
Variable universal life | 996,375 | 895,925 |
Total assets measured at fair value on a recurring basis | 17,352,639 | 16,704,091 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 23,775 | 13,004 |
Total liabilities measured at fair value on a recurring basis | 23,775 | 13,004 |
Measured at fair value on a recurring basis | Level 1 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,082,167 | 1,068,801 |
Fixed maturity securities - trading | 24,818 | 26,409 |
Measured at fair value on a recurring basis | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,009,225 | 1,002,020 |
Fixed maturity securities - trading | 21,589 | 22,424 |
Measured at fair value on a recurring basis | Level 1 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 1 | Preferred stock | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 72,942 | 66,781 |
Fixed maturity securities - trading | 3,229 | 3,985 |
Measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total fixed maturity securities | 38,452,115 | 35,771,419 |
Equity securities | 36 | 36 |
Other long-term investments | 380,512 | 335,498 |
Short-term investments | 105,771 | 3,602 |
Total investments | 38,938,434 | 36,110,555 |
Cash | 0 | 0 |
Other assets | 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 | 38,938,434 | 36,110,555 |
Liabilities: | ||
Annuity account balances | 0 | 0 |
Other liabilities | 206,307 | 163,974 |
Total liabilities measured at fair value on a recurring basis | 206,307 | 163,974 |
Measured at fair value on a recurring basis | Level 2 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 35,836,868 | 33,248,023 |
Fixed maturity securities - trading | 2,615,247 | 2,523,396 |
Measured at fair value on a recurring basis | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 2,192,254 | 1,898,480 |
Fixed maturity securities - trading | 262,062 | 255,027 |
Measured at fair value on a recurring basis | Level 2 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,921,429 | 1,811,470 |
Fixed maturity securities - trading | 145,653 | 149,683 |
Measured at fair value on a recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 637,518 | 648,929 |
Fixed maturity securities - trading | 107,123 | 115,521 |
Measured at fair value on a recurring basis | Level 2 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 283,608 | 266,139 |
Fixed maturity securities - trading | 6,125 | 4,537 |
Measured at fair value on a recurring basis | Level 2 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,704,009 | 1,656,503 |
Fixed maturity securities - trading | 321,001 | 316,519 |
Measured at fair value on a recurring basis | Level 2 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 254,336 | 239,921 |
Fixed maturity securities - trading | 64,067 | 63,012 |
Measured at fair value on a recurring basis | Level 2 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 28,824,816 | 26,707,519 |
Fixed maturity securities - trading | 1,709,216 | 1,619,097 |
Measured at fair value on a recurring basis | Level 2 | Preferred stock | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 18,898 | 19,062 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Total fixed maturity securities | 1,218,716 | 1,316,708 |
Equity securities | 66,162 | 69,010 |
Other long-term investments | 130,352 | 124,325 |
Short-term investments | 0 | 0 |
Total investments | 1,415,230 | 1,510,043 |
Cash | 0 | 0 |
Other assets | 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 | 1,415,230 | 1,510,043 |
Liabilities: | ||
Annuity account balances | 85,028 | 87,616 |
Other liabilities | 736,413 | 571,843 |
Total liabilities measured at fair value on a recurring basis | 821,441 | 659,459 |
Measured at fair value on a recurring basis | Level 3 | Fixed maturities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 1,177,702 | 1,226,653 |
Fixed maturity securities - trading | 41,014 | 90,055 |
Measured at fair value on a recurring basis | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 3 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 553,149 | 562,604 |
Fixed maturity securities - trading | 35,490 | 84,563 |
Measured at fair value on a recurring basis | Level 3 | U.S. government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | States, municipals, and political subdivisions | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Other government-related securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | 0 | 0 |
Measured at fair value on a recurring basis | Level 3 | Corporate securities | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 624,553 | 664,046 |
Fixed maturity securities - trading | 5,524 | 5,492 |
Measured at fair value on a recurring basis | Level 3 | Preferred stock | ||
Assets: | ||
Fixed maturity securities - available-for-sale | 0 | 0 |
Fixed maturity securities - trading | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR53
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Assets and liabilities measured at fair value on a recurring basis | ||||||
Minimum percentage of the Company's fixed maturity securities priced by third party pricing services | 91.00% | |||||
Percentage of derivatives excluding embedded derivatives that were priced using exchange prices or independent broker quotations | 100.00% | |||||
Financial instruments with book value approximating fair value | $ 65,700 | $ 65,900 | ||||
Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Level 3 fair value | 821,441 | 659,459 | $ 788,312 | $ 1,028,128 | $ 1,060,904 | $ 678,068 |
Financial instruments that are valued using broker quotes | 50,600 | 128,200 | ||||
Level 3 | Annuity account | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Level 3 fair value | 85,028 | $ 87,616 | $ 86,094 | $ 88,857 | $ 88,820 | $ 92,512 |
Asset-backed securities | Level 2 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 5,300,000 | |||||
Asset-backed securities | Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | $ 588,600 | |||||
Other asset-backed securities | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | 97.00% | ||||
Other asset-backed securities | Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | $ 553,005 | $ 553,308 | ||||
Percentage of underlying collateral of student-loan backed auction rate securities guaranteed by the Federal Family Education Loan Program (FFELP), minimum | 97.00% | |||||
Financial instruments that are valued using broker quotes | $ 35,600 | 93,900 | ||||
Other asset-backed securities | Level 3 | Available-for-sale securities | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 553,100 | |||||
Other asset-backed securities | Level 3 | Trading securities | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 35,500 | |||||
Corporate Bonds And Securities | Level 2 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 33,200,000 | |||||
Corporate Bonds And Securities | Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 630,100 | |||||
Equity securities | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 66,200 | |||||
Federal Home Loan Bank (FHLB) Stock | 65,500 | |||||
Equity securities | Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Financial instruments that are valued using broker quotes | $ 500 | 3,100 | ||||
Embedded derivative - GLWB | Minimum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 91.10% | |||||
Embedded derivative - GLWB | Maximum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 106.60% | |||||
Embedded derivative - FIA | Minimum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 46.00% | |||||
Embedded derivative - FIA | Maximum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 113.00% | |||||
Embedded derivative - IUL | Minimum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 34.00% | |||||
Embedded derivative - IUL | Maximum | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Mortality (as a percent) | 152.00% | |||||
Embedded derivative - Modified coinsurance agreements | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Statutory policy liabilities (net of policy loans) | $ 2,400,000 | |||||
Embedded derivative - Modified coinsurance agreements | Trading securities | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 218,800 | |||||
Corporate securities | Level 3 | ||||||
Assets and liabilities measured at fair value on a recurring basis | ||||||
Fair Value | 615,576 | 638,279 | ||||
Financial instruments that are valued using broker quotes | $ 14,500 | $ 31,300 |
FAIR VALUE OF FINANCIAL INSTR54
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of Level 3 Financial Instruments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Liabilities: | ||
Fair Value | $ 966,495,000 | $ 748,821,000 |
Embedded derivative - GLWB | Minimum | ||
Unobservable input | ||
Mortality (as a percent) | 91.10% | |
Embedded derivative - GLWB | Maximum | ||
Unobservable input | ||
Mortality (as a percent) | 106.60% | |
Embedded derivative - FIA | Minimum | ||
Unobservable input | ||
Mortality (as a percent) | 46.00% | |
Embedded derivative - FIA | Maximum | ||
Unobservable input | ||
Mortality (as a percent) | 113.00% | |
Embedded derivative - IUL | Minimum | ||
Unobservable input | ||
Mortality (as a percent) | 34.00% | |
Embedded derivative - IUL | Maximum | ||
Unobservable input | ||
Mortality (as a percent) | 152.00% | |
Equity securities | ||
Assets: | ||
Fair Value | $ 66,200,000 | |
Level 3 | Other asset-backed securities | ||
Assets: | ||
Fair Value | 553,005,000 | 553,308,000 |
Level 3 | Corporate securities | ||
Assets: | ||
Fair Value | 615,576,000 | 638,279,000 |
Level 3 | Embedded derivative - GLWB | ||
Liabilities: | ||
Fair Value | 131,276,000 | 115,370,000 |
Level 3 | Embedded derivative - FIA | ||
Liabilities: | ||
Fair Value | 197,378,000 | 147,368,000 |
Level 3 | Embedded derivative - IUL | ||
Liabilities: | ||
Fair Value | 69,081,000 | 46,051,000 |
Level 3 | Liquidation Technique | Other asset-backed securities | Minimum | ||
Unobservable input | ||
Liquidation value | 90 | 88 |
Level 3 | Liquidation Technique | Other asset-backed securities | Maximum | ||
Unobservable input | ||
Liquidation value | 97 | 97.25 |
Level 3 | Liquidation Technique | Other asset-backed securities | Weighted average | ||
Unobservable input | ||
Liquidation value | $ 95.02 | $ 95.04 |
Level 3 | Discounted cash flow | Other asset-backed securities | Minimum | ||
Unobservable input | ||
Liquidity premium (as a percent) | 0.51% | |
Paydown rate (as a percent) | 10.75% | |
Level 3 | Discounted cash flow | Other asset-backed securities | Maximum | ||
Unobservable input | ||
Liquidity premium (as a percent) | 1.29% | |
Paydown rate (as a percent) | 12.75% | |
Level 3 | Discounted cash flow | Other asset-backed securities | Weighted average | ||
Unobservable input | ||
Liquidity premium (as a percent) | 0.96% | |
Paydown rate (as a percent) | 11.34% | |
Level 3 | Discounted cash flow | Corporate securities | Minimum | ||
Unobservable input | ||
Spread over treasury (as a percent) | 0.35% | 0.31% |
Level 3 | Discounted cash flow | Corporate securities | Maximum | ||
Unobservable input | ||
Spread over treasury (as a percent) | 4.35% | 4.50% |
Level 3 | Discounted cash flow | Corporate securities | Weighted average | ||
Unobservable input | ||
Spread over treasury (as a percent) | 1.57% | 2.04% |
Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | ||
Unobservable input | ||
Utilization (as a percent) | 99.00% | 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 | Actuarial cash flow model | Embedded derivative - GLWB | Minimum | ||
Unobservable input | ||
Mortality (as a percent) | 91.10% | 91.10% |
Lapse rate (as a percent) | 0.30% | 0.30% |
Nonperformance risk (as a percent) | 0.12% | 0.18% |
Level 3 | Actuarial cash flow model | Embedded derivative - GLWB | Maximum | ||
Unobservable input | ||
Mortality (as a percent) | 106.60% | 106.60% |
Lapse rate (as a percent) | 15.00% | 15.00% |
Nonperformance risk (as a percent) | 0.86% | 1.09% |
Level 3 | Actuarial cash flow model | Embedded derivative - FIA | ||
Unobservable input | ||
Expenses per Policy | $ 146 | $ 126 |
Withdrawal rate prior to age 70 (as a percent) | 1.50% | 1.00% |
Withdrawal rate for ages 70 or more (as a percent) | 100.00% | 100.00% |
Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Minimum | ||
Unobservable input | ||
Lapse rate (as a percent) | 1.00% | 2.00% |
Nonperformance risk (as a percent) | 0.12% | 0.18% |
Asset earned rate (as a percent) | 4.08% | 4.08% |
Level 3 | Actuarial cash flow model | Embedded derivative - FIA | Maximum | ||
Unobservable input | ||
Lapse rate (as a percent) | 30.00% | 40.00% |
Nonperformance risk (as a percent) | 0.86% | 1.09% |
Asset earned rate (as a percent) | 4.66% | 4.66% |
Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Minimum | ||
Unobservable input | ||
Mortality (as a percent) | 34.00% | 38.00% |
Lapse rate (as a percent) | 0.50% | 0.50% |
Nonperformance risk (as a percent) | 0.12% | 0.18% |
Level 3 | Actuarial cash flow model | Embedded derivative - IUL | Maximum | ||
Unobservable input | ||
Mortality (as a percent) | 152.00% | 153.00% |
Lapse rate (as a percent) | 10.00% | 10.00% |
Nonperformance risk (as a percent) | 0.86% | 1.09% |
FAIR VALUE OF FINANCIAL INSTR55
FAIR VALUE OF FINANCIAL INSTRUMENTS - Reconciliation of Beginning and Ending Balances for Fair Value Measurements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Transfers | ||||
Transfers into Level 3 | $ 0 | $ 0 | $ 0 | $ 71,300,000 |
Securities transferred from level 3 to level 2 | 17,400,000 | 47,500,000 | 28,900,000 | 197,700,000 |
Transfers from Level 2 to Level 1 | 0 | 0 | 0 | 12,200,000 |
Transfers from Level 1 | 0 | 0 | 0 | 100,000 |
Level 3 | ||||
Assets: | ||||
Beginning Balance | 1,474,245,000 | 1,603,587,000 | 1,510,043,000 | 1,826,883,000 |
Total Realized and Unrealized Gains Included in Earnings | 10,358,000 | 24,693,000 | 25,232,000 | 36,427,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 10,097,000 | 32,681,000 | 31,446,000 | 64,561,000 |
Total Realized and Unrealized Losses Included in Earnings | (355,000) | (71,000) | (19,209,000) | (54,806,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (4,507,000) | (3,354,000) | (10,137,000) | (31,742,000) |
Purchases | 5,171,000 | 53,934,000 | 97,784,000 | 100,019,000 |
Sales | (61,708,000) | (35,379,000) | (190,120,000) | (181,976,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (17,430,000) | (47,480,000) | (28,937,000) | (126,318,000) |
Other | (641,000) | (5,043,000) | (872,000) | (9,480,000) |
Ending Balance | 1,415,230,000 | 1,623,568,000 | 1,415,230,000 | 1,623,568,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 10,148,000 | 24,283,000 | 9,527,000 | (22,202,000) |
Liabilities: | ||||
Beginning Balance | 788,312,000 | 1,060,904,000 | 659,459,000 | 678,068,000 |
Total Realized and Unrealized Gains Included in Earnings | 12,201,000 | 90,166,000 | 56,464,000 | 105,751,000 |
Total Realized and Unrealized Gains Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (47,373,000) | (58,088,000) | (224,007,000) | (461,297,000) |
Total Realized and Unrealized Losses Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 9,000 | 279,000 | 402,000 | 529,000 |
Settlements | 2,052,000 | 2,226,000 | 5,963,000 | 7,264,000 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 1,249,000 | 0 | 1,249,000 |
Ending Balance | 821,441,000 | 1,028,128,000 | 821,441,000 | 1,028,128,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (34,195,000) | 32,813,000 | (164,570,000) | (353,715,000) |
Level 3 | Annuity account | ||||
Liabilities: | ||||
Beginning Balance | 86,094,000 | 88,820,000 | 87,616,000 | 92,512,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (977,000) | (735,000) | (2,973,000) | (1,831,000) |
Total Realized and Unrealized Losses Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 9,000 | 279,000 | 402,000 | 529,000 |
Settlements | 2,052,000 | 2,226,000 | 5,963,000 | 7,264,000 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 1,249,000 | 0 | 1,249,000 |
Ending Balance | 85,028,000 | 88,857,000 | 85,028,000 | 88,857,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Other liabilities | ||||
Liabilities: | ||||
Beginning Balance | 702,218,000 | 972,084,000 | 571,843,000 | 585,556,000 |
Total Realized and Unrealized Gains Included in Earnings | 12,201,000 | 90,166,000 | 56,464,000 | 105,751,000 |
Total Realized and Unrealized Gains Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (46,396,000) | (57,353,000) | (221,034,000) | (459,466,000) |
Total Realized and Unrealized Losses Included In Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 736,413,000 | 939,271,000 | 736,413,000 | 939,271,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (34,195,000) | 32,813,000 | (164,570,000) | (353,715,000) |
Level 3 | Total investments | ||||
Assets: | ||||
Beginning Balance | 1,474,245,000 | 1,603,587,000 | 1,510,043,000 | 1,826,883,000 |
Total Realized and Unrealized Gains Included in Earnings | 10,358,000 | 24,693,000 | 25,232,000 | 36,427,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 10,097,000 | 32,681,000 | 31,446,000 | 64,561,000 |
Total Realized and Unrealized Losses Included in Earnings | (355,000) | (71,000) | (19,209,000) | (54,806,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (4,507,000) | (3,354,000) | (10,137,000) | (31,742,000) |
Purchases | 5,171,000 | 53,934,000 | 97,784,000 | 100,019,000 |
Sales | (61,708,000) | (35,379,000) | (190,120,000) | (181,976,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (17,430,000) | (47,480,000) | (28,937,000) | (126,318,000) |
Other | (641,000) | (5,043,000) | (872,000) | (9,480,000) |
Ending Balance | 1,415,230,000 | 1,623,568,000 | 1,415,230,000 | 1,623,568,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 10,148,000 | 24,283,000 | 9,527,000 | (22,202,000) |
Level 3 | Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 1,287,922,000 | 1,484,838,000 | 1,316,708,000 | 1,660,290,000 |
Total Realized and Unrealized Gains Included in Earnings | 27,000 | 3,641,000 | 3,780,000 | 13,807,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 10,066,000 | 32,681,000 | 31,394,000 | 64,561,000 |
Total Realized and Unrealized Losses Included in Earnings | (353,000) | (71,000) | (1,154,000) | (5,407,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (4,507,000) | (3,354,000) | (10,137,000) | (31,742,000) |
Purchases | 5,171,000 | 53,934,000 | 97,784,000 | 99,997,000 |
Sales | (61,539,000) | (35,379,000) | (189,847,000) | (181,976,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (17,430,000) | (47,480,000) | (28,940,000) | (126,282,000) |
Other | (641,000) | (5,043,000) | (872,000) | (9,481,000) |
Ending Balance | 1,218,716,000 | 1,483,767,000 | 1,218,716,000 | 1,483,767,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (182,000) | 3,231,000 | 3,498,000 | 4,577,000 |
Level 3 | Equity securities | ||||
Assets: | ||||
Beginning Balance | 66,300,000 | 69,750,000 | 69,010,000 | 69,763,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 31,000 | 0 | 52,000 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | (2,630,000) | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 22,000 |
Sales | (169,000) | 0 | (273,000) | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 3,000 | (36,000) |
Other | 0 | 0 | 0 | 1,000 |
Ending Balance | 66,162,000 | 69,750,000 | 66,162,000 | 69,750,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 1,000 | 0 | 2,000 | 0 |
Level 3 | Other long-term investments | ||||
Assets: | ||||
Beginning Balance | 120,023,000 | 48,999,000 | 124,325,000 | 96,830,000 |
Total Realized and Unrealized Gains Included in Earnings | 10,331,000 | 21,052,000 | 21,452,000 | 22,620,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (2,000) | 0 | (15,425,000) | (49,399,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Ending Balance | 130,352,000 | 70,051,000 | 130,352,000 | 70,051,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 10,329,000 | 21,052,000 | 6,027,000 | (26,779,000) |
Level 3 | Available-for-sale securities | Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 1,227,479,000 | 1,316,287,000 | 1,226,653,000 | 1,489,153,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 7,784,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 10,066,000 | 32,681,000 | 31,394,000 | 64,561,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | (4,135,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (4,507,000) | (3,354,000) | (10,137,000) | (31,742,000) |
Purchases | 5,171,000 | 53,934,000 | 97,784,000 | 89,089,000 |
Sales | (42,351,000) | (26,013,000) | (137,331,000) | (166,327,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (17,430,000) | (36,237,000) | (28,940,000) | (106,732,000) |
Other | (726,000) | (5,063,000) | (1,721,000) | (9,416,000) |
Ending Balance | 1,177,702,000 | 1,332,235,000 | 1,177,702,000 | 1,332,235,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Available-for-sale securities | Residential mortgage-backed securities | ||||
Assets: | ||||
Beginning Balance | 11,862,000 | 3,000 | 3,000 | 3,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 83,000 | 0 | 83,000 | 0 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 11,862,000 | 0 |
Sales | 0 | 0 | (3,000) | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (11,944,000) | 0 | (11,944,000) | 0 |
Other | (1,000) | 0 | (1,000) | 0 |
Ending Balance | 0 | 3,000 | 0 | 3,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Available-for-sale securities | Commercial mortgage-backed securities | ||||
Assets: | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 7,000 | 0 | 7,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 25,607,000 | 0 | 25,607,000 |
Sales | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 0 |
Other | 0 | (7,000) | 0 | (7,000) |
Ending Balance | 0 | 25,607,000 | 0 | 25,607,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Available-for-sale securities | Other asset-backed securities | ||||
Assets: | ||||
Beginning Balance | 552,963,000 | 533,141,000 | 562,604,000 | 587,031,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 6,859,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 1,682,000 | 23,350,000 | 5,212,000 | 24,119,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (2,285,000) | (19,000) | (7,373,000) | (21,426,000) |
Purchases | 100,000 | 0 | 100,000 | 9,597,000 |
Sales | (109,000) | (12,000) | (2,136,000) | (58,461,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | (6,643,000) | 7,457,000 |
Other | 798,000 | (3,231,000) | 1,385,000 | (1,947,000) |
Ending Balance | 553,149,000 | 553,229,000 | 553,149,000 | 553,229,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Available-for-sale securities | Corporate securities | ||||
Assets: | ||||
Beginning Balance | 662,654,000 | 783,143,000 | 664,046,000 | 902,119,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 0 | 0 | 925,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 8,301,000 | 9,324,000 | 26,099,000 | 40,435,000 |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | (4,135,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | (2,222,000) | (3,335,000) | (2,764,000) | (10,316,000) |
Purchases | 5,071,000 | 28,327,000 | 85,822,000 | 53,885,000 |
Sales | (42,242,000) | (26,001,000) | (135,192,000) | (107,866,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | (5,486,000) | (36,237,000) | (10,353,000) | (114,189,000) |
Other | (1,523,000) | (1,825,000) | (3,105,000) | (7,462,000) |
Ending Balance | 624,553,000 | 753,396,000 | 624,553,000 | 753,396,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | 0 | 0 | 0 | 0 |
Level 3 | Trading securities | ||||
Assets: | ||||
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | |||
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | |||
Issuances | 0 | |||
Settlements | 0 | |||
Level 3 | Trading securities | Fixed maturities | ||||
Assets: | ||||
Beginning Balance | 60,443,000 | 168,551,000 | 90,055,000 | 171,137,000 |
Total Realized and Unrealized Gains Included in Earnings | 27,000 | 3,641,000 | 3,780,000 | 6,023,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (353,000) | (71,000) | (1,154,000) | (1,272,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 10,908,000 |
Sales | (19,188,000) | (9,366,000) | (52,516,000) | (15,649,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | (11,243,000) | 0 | (19,550,000) |
Other | 85,000 | 20,000 | 849,000 | (65,000) |
Ending Balance | 41,014,000 | 151,532,000 | 41,014,000 | 151,532,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (182,000) | 3,231,000 | 3,498,000 | 4,577,000 |
Level 3 | Trading securities | Other asset-backed securities | ||||
Assets: | ||||
Beginning Balance | 54,923,000 | 151,964,000 | 84,563,000 | 152,912,000 |
Total Realized and Unrealized Gains Included in Earnings | 0 | 3,260,000 | 3,679,000 | 5,310,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Losses Included in Earnings | (353,000) | (71,000) | (1,154,000) | (1,013,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | (19,188,000) | (9,366,000) | (52,516,000) | (11,578,000) |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in/out of Level 3 | 0 | 0 | 0 | 172,000 |
Other | 108,000 | 46,000 | 918,000 | 30,000 |
Ending Balance | 35,490,000 | 145,833,000 | 35,490,000 | 145,833,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | (209,000) | 3,189,000 | 3,397,000 | 4,294,000 |
Level 3 | Trading securities | Corporate securities | ||||
Assets: | ||||
Beginning Balance | 5,520,000 | 16,587,000 | 5,492,000 | 18,225,000 |
Total Realized and Unrealized Gains Included in Earnings | 27,000 | 381,000 | 101,000 | 713,000 |
Total Realized and Unrealized Gains Included in Other Comprehensive Income | 0 | 0 | 0 | |
Total Realized and Unrealized Losses Included in Earnings | 0 | 0 | 0 | (259,000) |
Total Realized and Unrealized Losses Included in Other Comprehensive Income | 0 | 0 | 0 | |
Purchases | 0 | 0 | 0 | 10,908,000 |
Sales | 0 | 0 | 0 | (4,071,000) |
Issuances | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | |
Transfers in/out of Level 3 | 0 | (11,243,000) | 0 | (19,722,000) |
Other | (23,000) | (26,000) | (69,000) | (95,000) |
Ending Balance | 5,524,000 | 5,699,000 | 5,524,000 | 5,699,000 |
Total Gains (losses) included in Earnings related to Instruments still held at the Reporting Date | $ 27,000 | $ 42,000 | $ 101,000 | $ 283,000 |
FAIR VALUE OF FINANCIAL INSTR56
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Mortgage loans on real estate | $ 6,528,890 | $ 6,132,125 |
Policy loans | 1,625,960 | 1,650,240 |
Fixed maturities, held-to-maturity, Carrying Amount | 2,730,995 | 2,770,177 |
Fixed maturities, held-to-maturity, Fair Values | 2,796,603 | 2,733,340 |
Liabilities: | ||
Stable value product account balances | 4,793,890 | 3,501,636 |
Annuity account balances | 10,813,795 | 10,642,115 |
Other policyholders’ funds | 1,265,500 | 1,165,749 |
Debt: | ||
Subordinated debt securities | 495,255 | 441,202 |
Non-recourse funding obligations | 2,759,640 | 2,796,474 |
Capital lease obligation | 1,500 | |
Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 666,729 | 628,025 |
Fixed maturities | ||
Assets: | ||
Fixed maturities, held-to-maturity, Fair Values | 2,796,603 | 2,733,340 |
Level 3 | Carrying Amounts | ||
Assets: | ||
Mortgage loans on real estate | 6,528,890 | 6,132,125 |
Policy loans | 1,625,960 | 1,650,240 |
Liabilities: | ||
Stable value product account balances | 4,793,890 | 3,501,636 |
Annuity account balances | 222,079 | 221,634 |
Other policyholders’ funds | 132,565 | 135,367 |
Debt: | ||
Bank borrowings | 170,000 | 170,000 |
Non-recourse funding obligations | 2,759,640 | 2,796,474 |
Level 3 | Carrying Amounts | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,700,000 | 2,700,000 |
Level 3 | Carrying Amounts | Fixed maturities | ||
Assets: | ||
Fixed maturities, held-to-maturity, Carrying Amount | 2,730,995 | 2,770,177 |
Level 3 | Fair Values | ||
Assets: | ||
Mortgage loans on real estate | 6,486,449 | 5,930,992 |
Policy loans | 1,625,960 | 1,650,240 |
Liabilities: | ||
Stable value product account balances | 4,816,919 | 3,488,877 |
Annuity account balances | 222,079 | 221,658 |
Other policyholders’ funds | 133,347 | 136,127 |
Debt: | ||
Bank borrowings | 170,000 | 170,000 |
Non-recourse funding obligations | 2,824,782 | 2,765,558 |
Level 3 | Fair Values | Golden Gate V | ||
Debt: | ||
Non-recourse funding obligations | 2,700,000 | 2,700,000 |
Level 3 | Fair Values | Fixed maturities | ||
Assets: | ||
Fixed maturities, held-to-maturity, Fair Values | 2,796,603 | 2,733,340 |
Level 2 | Carrying Amounts | ||
Debt: | ||
Senior Notes | 950,505 | 993,285 |
Subordinated debt securities | 495,255 | 441,202 |
Level 2 | Fair Values | ||
Debt: | ||
Senior Notes | 936,497 | 937,074 |
Subordinated debt securities | $ 496,065 | $ 443,355 |
DERIVATIVE FINANCIAL INSTRUME57
DERIVATIVE FINANCIAL INSTRUMENTS - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ (82,341) | $ 116 | $ (260,407) | $ (156,749) |
Derivatives not designated as hedging instruments | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (82,341) | 116 | (260,407) | (156,749) |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (19,746) | (24,187) | (90,314) | (105,362) |
Derivatives not designated as hedging instruments | Other derivatives | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 43 | 50 | 41 | (50) |
Derivatives not designated as hedging instruments | VA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (57,076) | 21,076 | (154,056) | (49,476) |
Derivatives not designated as hedging instruments | VA | Interest rate futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 549 | (7,002) | 16,746 | 62,065 |
Derivatives not designated as hedging instruments | VA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (25,959) | (41,836) | (75,389) | (66,392) |
Derivatives not designated as hedging instruments | VA | Currency futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (6,092) | 934 | (22,366) | 5,888 |
Derivatives not designated as hedging instruments | VA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (23,307) | (36,482) | (76,376) | (23,410) |
Derivatives not designated as hedging instruments | VA | Interest rate swaptions | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (292) | (229) | (2,423) | (3,212) |
Derivatives not designated as hedging instruments | VA | Interest rate swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 5,342 | 14,737 | 31,331 | 221,884 |
Derivatives not designated as hedging instruments | VA | Total return swaps | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (8,057) | 0 | (9,675) | 0 |
Derivatives not designated as hedging instruments | VA | Embedded derivative - GLWB | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 740 | 90,954 | (15,904) | (246,299) |
Derivatives not designated as hedging instruments | FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (7,298) | (5,667) | (10,679) | (9,913) |
Derivatives not designated as hedging instruments | FIA | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 66 | 2,236 | 161 | 4,269 |
Derivatives not designated as hedging instruments | FIA | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 11,242 | 6,583 | 29,511 | 1,756 |
Derivatives not designated as hedging instruments | FIA | Embedded derivative - FIA | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | (18,606) | (14,486) | (40,351) | (15,938) |
Derivatives not designated as hedging instruments | FIA | Volatility futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 0 | 0 | 0 | 0 |
Derivatives not designated as hedging instruments | IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 1,736 | 8,844 | (5,399) | 8,052 |
Derivatives not designated as hedging instruments | IUL | Equity futures | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 58 | 101 | (878) | (71) |
Derivatives not designated as hedging instruments | IUL | Equity options | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | 1,975 | 1,607 | 6,437 | 1,821 |
Derivatives not designated as hedging instruments | IUL | Embedded derivative - IUL | ||||
Notional amount and fair value of the entity's derivative financial instruments | ||||
Total realized gains (losses) - derivatives | $ (297) | $ 7,136 | $ (10,958) | $ 6,302 |
DERIVATIVE FINANCIAL INSTRUME58
DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivatives in Cash Flow Hedging Relationship (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) Next 12 Months | $ 500 | |
Cash flow hedges | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | $ 1,273 | 55 |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (38) | (396) |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | 0 | 0 |
Cash flow hedges | Foreign currency swaps | ||
Gain (Loss) on Derivatives in Cash Flow Hedging Relationship | ||
Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives (Effective Portion) | 1,273 | 55 |
Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | (38) | (396) |
Amount and Location of (Losses) Recognized in Income (Loss) on Derivatives (Ineffective Portion) | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME59
DERIVATIVE FINANCIAL INSTRUMENTS - Nature and Accounting Treatment of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Other long-term investments, Fair Value | $ 441,393 | $ 417,769 |
Other liabilities, Fair Value | 230,082 | 176,979 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 117,178 | 117,178 |
Other long-term investments, Fair Value | 10,125 | 132 |
Other liabilities, Notional Amount | 0 | 0 |
Other liabilities, Fair Value | 0 | 0 |
Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 12,093,372 | 11,184,348 |
Other long-term investments, Fair Value | 571,936 | 542,243 |
Other liabilities, Notional Amount | 14,222,493 | 14,274,589 |
Other liabilities, Fair Value | 966,495 | 748,821 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 1,365,000 | 1,135,000 |
Other long-term investments, Fair Value | 59,641 | 71,644 |
Other liabilities, Notional Amount | 497,500 | 575,000 |
Other liabilities, Fair Value | 267 | 10,208 |
Derivatives not designated as hedging instruments | Total return swaps | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 0 | 0 |
Other long-term investments, Fair Value | 0 | 0 |
Other liabilities, Notional Amount | 347,330 | 0 |
Other liabilities, Fair Value | 3,151 | 0 |
Derivatives not designated as hedging instruments | Embedded derivative - Modco reinsurance treaties | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 64,444 | 64,123 |
Other long-term investments, Fair Value | 1,008 | 2,573 |
Other liabilities, Notional Amount | 2,408,832 | 2,450,692 |
Other liabilities, Fair Value | 209,334 | 141,301 |
Derivatives not designated as hedging instruments | Embedded derivative - GLWB | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 4,710,781 | 4,601,633 |
Other long-term investments, Fair Value | 129,344 | 121,752 |
Other liabilities, Notional Amount | 4,855,482 | 5,962,044 |
Other liabilities, Fair Value | 260,620 | 237,122 |
Derivatives not designated as hedging instruments | Embedded derivative - FIA | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 1,845,942 | 1,496,346 |
Other liabilities, Fair Value | 197,378 | 147,368 |
Derivatives not designated as hedging instruments | Embedded derivative - IUL | ||
Derivative [Line Items] | ||
Other liabilities, Notional Amount | 150,277 | 103,838 |
Other liabilities, Fair Value | 69,081 | 46,051 |
Derivatives not designated as hedging instruments | Interest rate futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 531,447 | 102,587 |
Other long-term investments, Fair Value | 2,267 | 894 |
Other liabilities, Notional Amount | 606,501 | 993,842 |
Other liabilities, Fair Value | 6,401 | 6,611 |
Derivatives not designated as hedging instruments | Equity futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 46,334 | 654,113 |
Other long-term investments, Fair Value | 333 | 5,805 |
Other liabilities, Notional Amount | 340,041 | 102,667 |
Other liabilities, Fair Value | 14,854 | 2,907 |
Derivatives not designated as hedging instruments | Currency futures | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 186,047 | 340,058 |
Other long-term investments, Fair Value | 4,010 | 7,883 |
Other liabilities, Notional Amount | 115,382 | 0 |
Other liabilities, Fair Value | 1,958 | 0 |
Derivatives not designated as hedging instruments | Equity options | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 4,846,984 | 3,944,444 |
Other long-term investments, Fair Value | 364,936 | 328,908 |
Other liabilities, Notional Amount | 3,055,206 | 2,590,160 |
Other liabilities, Fair Value | 203,451 | 157,253 |
Derivatives not designated as hedging instruments | Interest rate swaptions | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 225,000 | 225,000 |
Other long-term investments, Fair Value | 81 | 2,503 |
Derivatives not designated as hedging instruments | Other | ||
Derivative [Line Items] | ||
Other long-term investments, Notional Amount | 157 | 212 |
Other long-term investments, Fair Value | $ 191 | $ 149 |
OFFSETTING OF ASSETS AND LIAB60
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Subject to a master netting arrangement or similar arrangement | $ 441,393 | $ 417,769 |
Gross Amounts of Recognized Assets, Not subject to a master netting arrangement or similar arrangement | 130,543 | 124,474 |
Gross Amounts of Recognized Assets | 571,936 | 542,243 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position, Subject to a master netting arrangement or similar arrangement | 441,393 | 417,769 |
Net Amounts of Assets Presented in the Statement of Financial Position | 571,936 | 542,243 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 211,435 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash/Securities Received as Collateral | 102,913 | 100,890 |
Net Amount, Subject to a master netting arrangement or similar arrangement | 127,045 | 145,495 |
Net Amount | 257,588 | 269,969 |
Free-Standing derivatives | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Subject to a master netting arrangement or similar arrangement | 441,393 | 417,769 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets Presented in the Statement of Financial Position, Subject to a master netting arrangement or similar arrangement | 441,393 | 417,769 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 211,435 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash/Securities Received as Collateral | 102,913 | 100,890 |
Net Amount, Subject to a master netting arrangement or similar arrangement | 127,045 | 145,495 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Not subject to a master netting arrangement or similar arrangement | 1,008 | 2,573 |
Embedded derivative - GLWB | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Not subject to a master netting arrangement or similar arrangement | 129,344 | 121,752 |
Other | ||
Offsetting of Assets | ||
Gross Amounts of Recognized Assets, Not subject to a master netting arrangement or similar arrangement | $ 191 | $ 149 |
OFFSETTING OF ASSETS AND LIAB61
OFFSETTING OF ASSETS AND LIABILITIES - Schedule of Derivative Instruments by Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Subject to a master netting arrangement or similar agreement | $ 230,082 | $ 176,979 |
Gross Amounts of Recognized Liabilities, Not subject to a master netting arrangement or similar arrangement | 736,413 | 571,842 |
Gross Amounts of Recognized Liabilities | 966,495 | 748,821 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Subject to a master netting arrangement or similar arrangement | 230,082 | 176,979 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 966,495 | 748,821 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 211,435 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash/Securities Received as Collateral | 18,647 | 5,595 |
Net Amount, Subject to a master netting arrangement or similar arrangement | 0 | 0 |
Net Amount | 736,413 | 571,842 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 493,785 | 797,721 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 493,785 | 797,721 |
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 | 493,785 | 797,721 |
Total Liabilities | ||
Gross Amounts of Recognized Liabilities | 1,460,280 | 1,546,542 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,460,280 | 1,546,542 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 211,435 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Paid | 18,647 | 5,595 |
Net Amount | 1,230,198 | 1,369,563 |
Free-Standing derivatives | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Subject to a master netting arrangement or similar agreement | 230,082 | 176,979 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities Presented in the Statement of Financial Position, Subject to a master netting arrangement or similar arrangement | 230,082 | 176,979 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 211,435 | 171,384 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash/Securities Received as Collateral | 18,647 | 5,595 |
Net Amount, Subject to a master netting arrangement or similar arrangement | 0 | 0 |
Embedded derivative - Modco reinsurance treaties | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Not subject to a master netting arrangement or similar arrangement | 209,334 | 141,301 |
Embedded derivative - GLWB | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Not subject to a master netting arrangement or similar arrangement | 260,620 | 237,122 |
Embedded derivative - FIA | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Not subject to a master netting arrangement or similar arrangement | 197,378 | 147,368 |
Embedded derivative - IUL | ||
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities, Not subject to a master netting arrangement or similar arrangement | $ 69,081 | $ 46,051 |
MORTGAGE LOANS (Details)
MORTGAGE LOANS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
MORTGAGE LOANS | ||
Mortgage loans holdings | $ 6,528,890 | $ 6,132,125 |
Mortgage loan call option period | 12 years | |
Amount that would become due in remainder of 2017, if loans are called at their next call dates | $ 54,700 | |
Amount that would become due in 2018 through 2022, if loans are called at their next call dates | 976,200 | |
Amount that would become due in 2023 through 2027, if loans are called at their next call dates | 124,600 | |
Amount that would become due after 2027, if loans are called at their next call dates | $ 9,900 |
MORTGAGE LOANS - Commercial Mor
MORTGAGE LOANS - Commercial Mortgage Loans (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)restructuringcategoryloan | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)loan | Dec. 31, 2016USD ($) | |
Mortgage loans | ||||||
Loans not subject to a pooling and servicing agreement which are either nonperforming or restructured | $ 0 | |||||
Number of troubled debt restructurings | restructuring | 2 | |||||
Number of nonperforming loans which have been restructured | loan | 0 | |||||
Loans subject to a pooling and servicing agreement which are either nonperforming or restructured | loan | 0 | |||||
Commercial mortgage loans | ||||||
Mortgage loans | ||||||
Mortgage loans having participation feature | $ 715,200,000 | $ 595,200,000 | ||||
Income recognized on participating mortgage loans | $ 14,200,000 | $ 3,300,000 | $ 25,700,000 | $ 15,800,000 | ||
Loans not subject to a pooling and servicing agreement which are either nonperforming or restructured | 3,100,000 | |||||
Number of loan categories | category | 2 | |||||
Nonperforming mortgage loans, foreclosed properties and restructured loans pursuant to pooling and servicing agreements | 3,100,000 | |||||
Allowance for mortgage loan credit losses | 1,055,000 | $ 724,000 | $ 1,055,000 | $ 724,000 | ||
Change in the allowance for credit losses | ||||||
Beginning balance, December 31, 2016 | 724,000 | |||||
Charge offs | (5,653,000) | |||||
Recoveries | (731,000) | |||||
Provision | 6,715,000 | |||||
Ending balance, September 30, 2017 | $ 1,055,000 | $ 1,055,000 | ||||
Commercial mortgage loans | Maximum | ||||||
Mortgage loans | ||||||
Loan-to-value ratio with participating interest (as a percent) | 85.00% |
MORTGAGE LOANS - Delinquent Loa
MORTGAGE LOANS - Delinquent Loans (Details) - Commercial mortgage loans $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Delinquent loans | ||
Past due period at which to cease carrying accrued interest on delinquent loans | 90 days | |
Number of days accrued interest on impaired loans (less than) | 90 days | |
Past due period at which to initiate foreclosure proceedings (more than) | 90 days | |
Commercial mortgage loans | $ | $ 3,162 | $ 3,669 |
Number of delinquent commercial mortgage loans | loan | 3 | 4 |
30 to 59 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 2,293 | $ 3,669 |
Number of delinquent commercial mortgage loans | loan | 2 | 4 |
60 to 89 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 0 | $ 0 |
Number of delinquent commercial mortgage loans | loan | 0 | 0 |
Greater than 90 Days Delinquent | ||
Delinquent loans | ||
Commercial mortgage loans | $ | $ 869 | $ 0 |
Number of delinquent commercial mortgage loans | loan | 1 | 0 |
MORTGAGE LOANS - Impaired Loans
MORTGAGE LOANS - Impaired Loans (Details) - Commercial mortgage loans - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Commercial mortgage loans: | ||
Maximum number of days accrued interest on impaired loans | 90 days | |
Recorded Investment | ||
With no related allowance recorded | $ 0 | $ 0 |
With an allowance recorded | 1,924 | 1,819 |
Unpaid Principal Balance | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 1,924 | 1,819 |
Related Allowance | ||
With an allowance recorded | 1,055 | 724 |
Average Recorded Investment | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 1,924 | 1,819 |
Interest Income Recognized | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 18 | 96 |
Cash Basis Interest Income | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | $ 27 | $ 96 |
MORTGAGE LOANS - Troubled Debt
MORTGAGE LOANS - Troubled Debt Restructuring (Details) - Commercial mortgage loans $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)contract | Dec. 31, 2016USD ($)contract | |
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 2 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 1,134 | $ 468 |
Post-Modification Outstanding Recorded Investment | $ 1,134 | $ 468 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 793,470,000 | $ 793,470,000 |
Change in goodwill | $ 0 |
DEBT AND OTHER OBLIGATIONS - Su
DEBT AND OTHER OBLIGATIONS - Summary of Debt and Subordinated Debt Securities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 954,423,000 | $ 966,926,000 |
Carrying Amounts, Debt | 1,122,000,000 | 1,163,285,000 |
Carrying Amounts, Subordinated debt securities | 495,255,000 | 441,202,000 |
Capital lease obligation | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 1,495,000 | 0 |
Carrying Amounts, Debt | 1,495,000 | 0 |
Subordinated debt securities | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 500,000,000 | 437,500,000 |
Carrying Amounts, Subordinated debt securities | 495,255,000 | 441,202,000 |
6.40% Senior Notes (2007), due 2018 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 150,000,000 | 150,000,000 |
Carrying Amounts, Debt | $ 152,067,000 | $ 156,663,000 |
Stated interest rate (as a percent) | 6.40% | 6.40% |
7.375% Senior Notes (2009), due 2019 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 400,000,000 | $ 400,000,000 |
Carrying Amounts, Debt | $ 440,569,000 | $ 454,688,000 |
Stated interest rate (as a percent) | 7.375% | 7.375% |
8.45% Senior Notes (2009), due 2039 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 232,928,000 | $ 246,926,000 |
Carrying Amounts, Debt | $ 357,869,000 | $ 381,934,000 |
Stated interest rate (as a percent) | 8.45% | 8.45% |
Debt repurchased and subsequently extinguished | $ 21,600,000 | $ 82,700,000 |
Par value of extinguished debt | 14,000,000 | 53,100,000 |
Pre-tax gain (loss) on extinguishment of debt | 2,000,000 | $ 9,800,000 |
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 6.25% | |
6.25% Subordinated Debentures (2012), due 2042, callable 2017 | Subordinated debt securities | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 0 | $ 287,500,000 |
Carrying Amounts, Subordinated debt securities | 0 | $ 290,002,000 |
Debt repurchased and subsequently extinguished | 287,500,000 | |
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 6.00% | |
6.00% Subordinated Debentures (2012), due 2042, callable 2017 | Subordinated debt securities | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 0 | $ 150,000,000 |
Carrying Amounts, Subordinated debt securities | 0 | 151,200,000 |
Debt repurchased and subsequently extinguished | $ 150,000,000 | |
5.35% Subordinated Debentures (2017), due 2052 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.35% | |
5.35% Subordinated Debentures (2017), due 2052 | Subordinated debt securities | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 500,000,000 | 0 |
Carrying Amounts, Subordinated debt securities | 495,255,000 | 0 |
Deferred issuance expenses | 4,800,000 | |
Revolving Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 170,000,000 | 170,000,000 |
Carrying Amounts, Debt | 170,000,000 | $ 170,000,000 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | 1,000,000,000 | |
Line of credit, maximum borrowing capacity to be granted upon entity's request | $ 1,250,000,000 | |
Facility fee percentage | 0.125% | |
Line of credit, amount outstanding | $ 170,000,000 | |
Credit Facility | Federal Funds Rate | ||
Debt Instrument [Line Items] | ||
Interest rate added to the base rate (as a percent) | 0.50% | |
Credit Facility | One-Month LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate added to the base rate (as a percent) | 1.00% | |
Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate added to the base rate (as a percent) | 1.00% |
DEBT AND OTHER OBLIGATIONS - No
DEBT AND OTHER OBLIGATIONS - Non-Recourse Funding Obligations (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 2,704,691 | $ 2,740,691 |
Carrying Value | 2,759,640 | 2,796,474 |
Golden Gate Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 2,040,000 | 2,116,000 |
Carrying Value | $ 2,040,000 | $ 2,116,000 |
Year-to-Date Weighted-Avg Interest Rate | 4.75% | 4.75% |
Golden Gate II Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 58,600 | $ 58,600 |
Carrying Value | $ 50,490 | $ 49,983 |
Year-to-Date Weighted-Avg Interest Rate | 3.84% | 2.52% |
Golden Gate V Vermont Captive Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 605,000 | $ 565,000 |
Carrying Value | $ 666,729 | $ 628,025 |
Year-to-Date Weighted-Avg Interest Rate | 5.12% | 5.12% |
MONY Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 1,091 | $ 1,091 |
Carrying Value | $ 2,421 | $ 2,466 |
Year-to-Date Weighted-Avg Interest Rate | 6.19% | 6.19% |
DEBT AND OTHER OBLIGATIONS - Re
DEBT AND OTHER OBLIGATIONS - Repurchase Program Borrowings (Details) - Repurchase Program Borrowings - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Fair value of securities pledged under the repurchase program | $ 549.8 | $ 861.7 |
Secured financing liabilities | 493.8 | 797.7 |
Maximum balance outstanding | $ 981.3 | $ 1,065.8 |
Average daily balance, average borrowing rate (as a percent) | 0.89% | 0.44% |
Average borrowing rate (as a percent) | 1.18% | 0.65% |
Average daily balance | $ 546.2 | $ 505.4 |
Maximum | ||
Debt Instrument [Line Items] | ||
Term of financing agreement | 90 days |
DEBT AND OTHER OBLIGATIONS - Am
DEBT AND OTHER OBLIGATIONS - Amount of Collateral Pledged for Repurchase Agreements and Securities Lending Transactions, Grouped by Asset Class (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Initial collateral (as a percent) | 102.00% | |
Fair value of collateral | $ 105,800 | |
Obligation to return securities | 105,800 | |
Repurchase agreements and repurchase-to-maturity transactions | 549,788 | $ 861,732 |
Securities lending transactions | 100,180 | |
Total securities | 649,968 | |
Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 529,782 | 837,974 |
Securities lending transactions | 100,180 | |
Total securities | 629,962 | |
Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 20,006 | 23,758 |
Securities lending transactions | 0 | |
Total securities | 20,006 | |
30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | |
Total securities | 0 | |
Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Securities lending transactions | 0 | |
Total securities | 0 | |
U.S. Treasury and agency securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 342,992 | 381,463 |
U.S. Treasury and agency securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 322,986 | 357,705 |
U.S. Treasury and agency securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 20,006 | 23,758 |
U.S. Treasury and agency securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
U.S. Treasury and agency securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Mortgage loans | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 206,796 | 480,269 |
Mortgage loans | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 206,796 | 480,269 |
Mortgage loans | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Mortgage loans | 30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Mortgage loans | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | 0 |
Corporate securities | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 97,385 | |
Corporate securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 97,385 | |
Corporate securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 0 | |
Corporate securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | 0 | |
Securities lending transactions | 0 | |
Corporate securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Repurchase agreements and repurchase-to-maturity transactions | $ 0 | |
Securities lending transactions | 0 | |
Equity securities | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2,621 | |
Equity securities | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 2,621 | |
Equity securities | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Equity securities | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Equity securities | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Preferred stock | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 174 | |
Preferred stock | Overnight and Continuous | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 174 | |
Preferred stock | Up to 30 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Preferred stock | 30-90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | 0 | |
Preferred stock | Greater Than 90 days | ||
Debt Instrument [Line Items] | ||
Securities lending transactions | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2017USD ($) |
Indemnification Agreement | |
Commitments and contingencies | |
Indemnification agreement with certain officers, maximum | $ 10,000,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
EMPLOYEE BENEFIT PLANS | ||||
Company contribution | $ 43,500 | |||
Defined Benefit Pension Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost — benefits earned during the period | $ 3,348 | $ 2,906 | 10,044 | $ 8,717 |
Interest cost on projected benefit obligation | 2,191 | 2,737 | 6,573 | 8,210 |
Expected return on plan assets | (3,352) | (3,605) | (10,056) | (10,816) |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Amortization of actuarial losses | 0 | 0 | 0 | 0 |
Preliminary net periodic benefit cost | 2,187 | 2,038 | 6,561 | 6,111 |
Settlement/curtailment expense | 0 | 0 | 0 | 0 |
Total net periodic benefit costs | 2,187 | 2,038 | $ 6,561 | 6,111 |
Defined Benefit Pension Plan | Minimum | ||||
EMPLOYEE BENEFIT PLANS | ||||
Adjusted funding target percentage to be maintained | 80.00% | |||
Excess Benefit Plan | ||||
EMPLOYEE BENEFIT PLANS | ||||
Service cost — benefits earned during the period | 334 | 311 | $ 1,002 | 1,102 |
Interest cost on projected benefit obligation | 297 | 299 | 891 | 1,054 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Amortization of actuarial losses | 118 | 64 | 354 | 114 |
Preliminary net periodic benefit cost | 749 | 674 | 2,247 | 2,270 |
Settlement/curtailment expense | 0 | 635 | 0 | 2,135 |
Total net periodic benefit costs | $ 749 | $ 1,309 | $ 2,247 | $ 4,405 |
ACCUMULATED OTHER COMPREHENSI74
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning Balance | $ 5,471,521 | |||||
Total other comprehensive income | $ 102,568 | $ 200,237 | 557,826 | $ 1,207,755 | ||
Ending Balance | 6,127,723 | 6,127,723 | $ 5,471,521 | |||
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 | 93,600 | 424,100 | $ 623,000 | |||
Accumulated Other Comprehensive Income (Loss) | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning Balance | (654,523) | (1,241,134) | (1,241,134) | |||
Other comprehensive income (loss) before reclassifications | 549,270 | 602,014 | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 1,174 | (6,782) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 7,382 | (8,621) | ||||
Total other comprehensive income | 557,826 | 586,611 | ||||
Ending Balance | (96,697) | (96,697) | (654,523) | (1,241,134) | ||
Unrealized Gains and Losses on Investments | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning Balance | (656,322) | (1,247,065) | (1,247,065) | |||
Other comprehensive income (loss) before reclassifications | 549,234 | 606,985 | ||||
Other comprehensive income (loss) relating to other-than-temporary impaired investments for which a portion has been recognized in earnings | 1,174 | (6,782) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 7,125 | (9,460) | ||||
Total other comprehensive income | 557,533 | 590,743 | ||||
Ending Balance | (98,789) | (98,789) | (656,322) | (1,247,065) | ||
Accumulated Gain and Loss Derivatives | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning Balance | 727 | 0 | 0 | |||
Other comprehensive income (loss) before reclassifications | 36 | 688 | ||||
Other comprehensive income (loss) 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) | 257 | 39 | ||||
Total other comprehensive income | 293 | 727 | ||||
Ending Balance | 1,020 | 1,020 | 727 | 0 | ||
Minimum Pension Liability Adjustment | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning Balance | 1,072 | $ 5,931 | 5,931 | |||
Other comprehensive income (loss) before reclassifications | 0 | (5,659) | ||||
Other comprehensive income (loss) 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 | 800 | ||||
Total other comprehensive income | 0 | (4,859) | ||||
Ending Balance | $ 1,072 | $ 1,072 | $ 1,072 | $ 5,931 |
ACCUMULATED OTHER COMPREHENSI75
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Benefits and settlement expenses, net of reinsurance ceded | $ (743,934) | $ (733,051) | $ (2,205,937) | $ (2,161,293) |
Realized investment gains (losses): All other investments | 18,150 | 24,152 | 94,708 | 194,663 |
Net impairment losses recognized in earnings | (273) | (3,308) | (10,889) | (6,892) |
Income before income tax | 110,850 | 133,079 | 348,967 | 473,582 |
Tax benefit (expense) | (28,308) | (39,785) | (106,743) | (152,820) |
Net income | 82,542 | 93,294 | 242,224 | 320,762 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Gains and losses on derivative instruments | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Benefits and settlement expenses, net of reinsurance ceded | (38) | (396) | ||
Income before income tax | (38) | (396) | ||
Tax benefit (expense) | 14 | 139 | ||
Net income | (24) | (257) | ||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized gains and losses on available-for-sale securities | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Realized investment gains (losses): All other investments | 690 | 1,665 | 9,084 | 24,152 |
Net impairment losses recognized in earnings | (273) | (3,308) | (10,889) | (6,892) |
Income before income tax | 417 | (1,643) | (1,805) | 17,260 |
Tax benefit (expense) | (146) | 575 | 631 | (6,041) |
Net income | $ 271 | (1,068) | $ (1,174) | 11,219 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Postretirement benefits liability adjustment | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Amortization of net actuarial gain/(loss) | (29) | (29) | ||
Amortization of prior service credit/(cost) | 0 | 0 | ||
Amortization of transition asset/(obligation) | 0 | 0 | ||
Income before income tax | (29) | (29) | ||
Tax benefit (expense) | 10 | 10 | ||
Net income | $ (19) | $ (19) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Expected net refund in future period | $ 6.2 | ||||
Reduction in unrecognized tax benefits | $ 4.9 | $ 4.9 | |||
Effective tax rate (as a percent) | 25.50% | 29.90% | 30.60% | 32.30% |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Summarized financial information for the company's segments | |||||
Revenues | $ 1,084,388 | $ 1,123,646 | $ 3,276,752 | $ 3,366,960 | |
Pre-tax Adjusted Operating Income (Loss) | 141,934 | 112,898 | 423,457 | 385,559 | |
Realized (losses) gains on investments and derivatives | (31,084) | 20,181 | (74,490) | 88,023 | |
Income before income tax | 110,850 | 133,079 | 348,967 | 473,582 | |
Income tax (expense) benefit | (28,308) | (39,785) | (106,743) | (152,820) | |
Net income | 82,542 | 93,294 | 242,224 | 320,762 | |
Adjusted operating income tax (expense) benefit | (39,187) | (32,722) | (132,815) | (121,982) | |
After-tax adjusted operating income | 102,747 | 80,176 | 290,642 | 263,577 | |
Income tax benefit (expense) on adjustments | 10,879 | (7,063) | 26,072 | (30,838) | |
Realized investment (losses) gains: | |||||
Derivative financial instruments | (82,341) | 116 | (260,407) | (156,749) | |
All other investments | 18,150 | 24,152 | 94,708 | 194,663 | |
Net impairment losses recognized in earnings | (273) | (3,308) | (10,889) | (6,892) | |
Less: related amortization | (12,123) | 21,532 | (38,570) | 4,409 | |
Less: VA GLWB economic cost | (21,257) | (20,753) | (63,528) | (61,410) | |
Operating Segment Assets | |||||
Investments and other assets | 75,351,823 | 75,351,823 | $ 71,501,997 | ||
Deferred policy acquisition costs and value of business acquired | 2,158,816 | 2,158,816 | 2,019,829 | ||
Other intangibles | 673,588 | 673,588 | 688,083 | ||
Goodwill | 793,470 | 793,470 | 793,470 | ||
Total assets | 78,977,697 | 78,977,697 | 75,003,379 | ||
Life Marketing | |||||
Summarized financial information for the company's segments | |||||
Revenues | 424,165 | 409,423 | 1,252,603 | 1,231,397 | |
Pre-tax Adjusted Operating Income (Loss) | 8,969 | (1,306) | 51,157 | 36,957 | |
Operating Segment Assets | |||||
Investments and other assets | 14,700,406 | 14,700,406 | 14,050,170 | ||
Deferred policy acquisition costs and value of business acquired | 1,295,708 | 1,295,708 | 1,218,944 | ||
Other intangibles | 287,120 | 287,120 | 301,399 | ||
Goodwill | 200,274 | 200,274 | 200,274 | ||
Total assets | 16,483,508 | 16,483,508 | 15,770,787 | ||
Acquisitions | |||||
Summarized financial information for the company's segments | |||||
Revenues | 375,819 | 391,017 | 1,164,650 | 1,269,672 | |
Pre-tax Adjusted Operating Income (Loss) | 62,880 | 70,157 | 184,825 | 184,095 | |
Operating Segment Assets | |||||
Investments and other assets | 19,681,306 | 19,681,306 | 19,679,690 | ||
Deferred policy acquisition costs and value of business acquired | 77,157 | 77,157 | 106,532 | ||
Other intangibles | 35,187 | 35,187 | 37,103 | ||
Goodwill | 14,524 | 14,524 | 14,524 | ||
Total assets | 19,808,174 | 19,808,174 | 19,837,849 | ||
Annuities | |||||
Summarized financial information for the company's segments | |||||
Revenues | 97,488 | 174,798 | 318,452 | 410,455 | |
Pre-tax Adjusted Operating Income (Loss) | 62,000 | 53,666 | 161,585 | 164,196 | |
Operating Segment Assets | |||||
Investments and other assets | 20,617,917 | 20,617,917 | 20,243,333 | ||
Deferred policy acquisition costs and value of business acquired | 752,540 | 752,540 | 655,618 | ||
Other intangibles | 173,450 | 173,450 | 183,449 | ||
Goodwill | 336,677 | 336,677 | 336,677 | ||
Total assets | 21,880,584 | 21,880,584 | 21,419,077 | ||
Stable Value Products | |||||
Summarized financial information for the company's segments | |||||
Revenues | 49,933 | 27,380 | 132,863 | 83,519 | |
Pre-tax Adjusted Operating Income (Loss) | 27,992 | 14,700 | 74,258 | 44,326 | |
Operating Segment Assets | |||||
Investments and other assets | 4,664,251 | 4,664,251 | 3,373,646 | ||
Deferred policy acquisition costs and value of business acquired | 7,605 | 7,605 | 5,455 | ||
Other intangibles | 8,222 | 8,222 | 8,722 | ||
Goodwill | 113,813 | 113,813 | 113,813 | ||
Total assets | 4,793,891 | 4,793,891 | 3,501,636 | ||
Asset Protection | |||||
Summarized financial information for the company's segments | |||||
Revenues | 83,597 | 69,306 | 246,142 | 201,041 | |
Pre-tax Adjusted Operating Income (Loss) | 6,963 | 5,455 | 19,098 | 16,216 | |
Operating Segment Assets | |||||
Investments and other assets | 914,658 | 914,658 | 1,013,399 | ||
Deferred policy acquisition costs and value of business acquired | 25,806 | 25,806 | 33,280 | ||
Other intangibles | 135,895 | 135,895 | 143,865 | ||
Goodwill | 128,182 | 128,182 | 128,182 | ||
Total assets | 1,204,541 | 1,204,541 | 1,318,726 | ||
Corporate and Other | |||||
Summarized financial information for the company's segments | |||||
Revenues | 53,386 | 51,722 | 162,042 | 170,876 | |
Pre-tax Adjusted Operating Income (Loss) | (26,870) | $ (29,774) | (67,466) | $ (60,231) | |
Operating Segment Assets | |||||
Investments and other assets | 14,773,285 | 14,773,285 | 13,141,759 | ||
Deferred policy acquisition costs and value of business acquired | 0 | 0 | 0 | ||
Other intangibles | 33,714 | 33,714 | 13,545 | ||
Goodwill | 0 | 0 | 0 | ||
Total assets | $ 14,806,999 | $ 14,806,999 | $ 13,155,304 |